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TMI Blog2021 (12) TMI 1334X X X X Extracts X X X X X X X X Extracts X X X X ..... nd 31 of the Code and also complies with regulations 37, 38 and 39 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. No circumstances exist that militate against grant of approval for the Resolution Plan. The Resolution plan is approved - application allowed. - IA (IB) No. 98/ALD/2021 in CP (IB) No. 458/ALD/2019 - - - Dated:- 14-12-2021 - RAJASEKHAR V.K., MEMBER (J) AND BALRAJ JOSHI, MEMBER (T) For Appearing Parties: Ashu Kansal, Zain Abbas, Rahul Chaudhary and Shatadru Chakraborty, Advocates ORDER Rajasekhar V.K., Member (J) 1. Preliminary 1.1. This Court convened through video conferencing. 1.2. This Application - IA (IBC) No. 98/ALD/2021 - was filed by Mr. Devendra Singh, Resolution Professional (RP) of Panacealife Healthzone Private Limited (CIN: U85191UP2013PTC058988) under section 30(6) read with section 31(1) of the Insolvency and Bankruptcy Code, 2016 ( the Code or IBC ) for approval of the Resolution Plan in respect of Panacealife Healthzone Private Limited ( the Corporate Debtor ). 1.3. The Applicant/RP filed the present application for approval of the Resolution Plan on 22.02.2021, which was approv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olution Plan and the Form H (₹ 3,30,54,689/-) placed before us. It is for the Resolution Professional to clarify which of these figures is correct. 2.3. The Applicant submits that a total of seven CoC meetings have been held during CIRP period as follows: Particulars Date of Coc meeting 1st Coc meeting 03-10-2020 2nd Coc meeting 14-10-2021 3rd Coc meeting 12-11-2020 4th Coc meeting 15-12-2020 5th Coc meeting 29-01-2021 6th Coc meeting 03-02-2021 2.4. Invitation in Form 'G' for Expression of Interest ( EoI ) from potential resolution applicants was published on 14.11.2020 for submission of resolution plans for the Corporate Debtor, in terms of section 25(2)(h) of the Code read with regulation 36A(1) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 ( CIRP Regulations ), Business Standard (English) in Lucknow Region, De ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... verage liquidation value. 3.3. The key financial proposals envisaged in the Resolution Plan are tabulated at 5.1 infra. 4. Compliance of the successful Resolution Plan with various provisions 4.1. The Applicant has submitted the details of various compliances as envisaged by the Code and the CIRP Regulations which a Resolution Plan is required to adhere to, as follows: Compliance with section 30(2) of the Code: Clause of sec. 30(2) Requirement How dealt with in the Plan (a) Provides for the payment of Insolvency Resolution Process Cost. Chapter VI Clause a, Page 84 of the Application. (b) Plan must provide for repayment of debts of Operational Creditors in such manner as may be specified by the Board which shall not be less than-the amount payable to such creditors in the event of liquidation under section 53; or Chapter VI Clause b, Page 85 of the Application. (c) Management of the affairs of the Corporate Debtor after approval of the Resolution Plan. Chapte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (c) Adequate means for supervising its implementation Chapter VI, Page 106 of the Application. 38(3) A resolution plan shall demonstrate that- (a) it addresses the cause of default; Chapter VI, Page 107 of the Application. (b) it is feasible and viable; Chapter VI, Page 108 of the Application. (c) it has provisions for its effective implementation; Chapter VI, Page 108 of the Application. (d) it has provisions for approvals required and the timeline for the same; and Chapter VI, Page 108 of the Application. (e) the Resolution Applicant has the capability to implement the resolution plan. Chapter VI, Page 109 of the Application. 4.2. The Applicant submits that the successful resolution applicant has submitted a certificate of eligibility under section 29A of the Code, as required by regulation 39(1)(a) of the CIRP Regulations. An undertaking has also been submitted by the successful Resolution Applicant, as m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 84 of the Application The Resolution Professional states that the 100% CoC member (AARC) had voted in favour of the Plan and has accepted this proposal in the sixth CoC Meeting. 6. Details on Management/Implementation and Relief as per the Resolution Plan-Salient Features 6.1. The Resolution Plan also provides for- a. The Resolution Applicant together with its nominees shall hold 100.00% shareholding in the restructured Share Capital of Corporate Debtor after resolution Page 87 of the Application, Page 110 111 of the Application (Clause (c)(i) at internal page No. 59 of the plan); b. Management of Company after resolution (Clause (c)(ii) at internal page No. 59 of the plan); c. Term of the Resolution Plan Page 87 of the Application (Phase 1 and Phase 2 at internal page No. 59 of the plan); d. Implementation and Supervision of the resolution plan Page 89 - 90 of the Application. (Clause (d)(i) at internal page No. 61 62 of the plan). 7. Waivers, Reliefs and Exemptions 7.1. The reliefs and concessions sought by the Resolution Applicant from the Adjudicating Authority are set out below for the successful implementation of the Resolution Plan. The orders t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to write back/write off of liabilities in the books of accounts of Corporate Debtor without any impact on brought forward tax and book loss/depreciation, pursuant to this Resolution Plan. In Ghanashyam Mishra Sons Pvt. Ltd. v. Edelweiss Asset Reconstruction Company Ltd., decided on 13.04.2021 the Hon'ble Supreme Court held in para 95(i) that once a Resolution Plan is approved, a creditor cannot initiate proceedings for recovery of claims which are not part of the Resolution Plan. The provisions of section 32A of the IBC will also apply. Therefore, the reliefs sought for are granted, in terms of the judgment of the Hon'ble Supreme Court in so far as extinguishment of liabilities that are not part of the resolution plan. (b) The Central Board of Direct Taxes not to take any other actions with respect to the transactions contemplated under this Plan under Section 281 of the IT Act. In Ghanashyam Mishra Sons Pvt. Ltd. v. Edelweiss Asset Reconstruction Company Ltd. decided on 13.04.2021 the Hon'ble Supreme Court held in para 95(i) that once a Resolution Plan is approved, a creditor cannot in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y law for the time being in force within a period of one year from the date of approval of the resolution plan by the Adjudicating Authority under sub-section (1) or within such period as provided for in such law, whichever is later. (e) From the Effective Date, all inquiries, investigations and proceedings, whether civil or criminal, suits, claims, disputes, proceedings in connection with Corporate Debtor or affairs of Corporate Debtor (including those initiated by Government/Statutory Authorities), pending or threatened, present or future in relation to any period prior to the Effective Date, or arising on account of implementation of this Resolution Plan shall stand settled/waived off/withdrawn/dismissed and all liabilities and obligations therefore, whether or not set out in the balance sheets of Corporate Debtor or the profit and loss account statements of Corporate Debtor will be deemed to have been written off fully, and permanently extinguished and no adverse orders passed in the said matters would apply to CD or the Resolution Applicant. Upon approval of this Resolution Plan, all new inquiries, investigations, notices, suits, claims, d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and employees appointed as on or after the Effective Date shall be liable for any violations, liabilities, penalties, interests on statutory payments and/or fines with respect to or pursuant to any order of any Government/Statutory Authority or on account of non-compliance of Applicable Laws by Corporate Debtor or due to Corporate Debtor not having in place requisite approvals and licenses to undertake its business as per Applicable Law. Granted in terms of section 32A of the Code. (c) The business Permits/licences/or any statutory order(s) which were possessed by the Corporate Debtor to conduct the business shall deem in continuation on the date of final approval of NCLT as it were prior to the Insolvency Commencement Date by All or any one of the applicable Statutory/Government Authority (s) for the time being in force for ensuring the economic viability and financial sustainability of the business of Corporate Debtor. This shall be in terms of section 32A of the Code. (d) Since the Resolution Applicant has been provided with limited information in relation to the Business Pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Adjudicating Authority in accordance with Applicable Law, and (ii) applicable directions of the Adjudicating Authority and/or Hon'ble High Court and/or Hon'ble Supreme Court, if any, all obligations and commitments, financial or otherwise, undertaken by it under this Resolution Plan towards any stakeholder, shall be binding on it, and shall subsist and be in full force and effect irrespective of whether any reliefs, waivers or concessions as mentioned in this chapter of this resolution plan sought by the Resolution Applicant are granted by the Adjudicating authority, the Hon'ble NCLAT, the Hon'ble High Court, the Hon'ble Supreme Court or any other judicial, quasi-judicial, regulatory or administrative entity, department or authority. Page 118 of the Application 7.3. The Resolution Applicant shall be bound by the undertaking given supra. 7.4. Chapter VI of the Plan Page 100 of the Application (internal page 71 of the plan) provides for the extinguishment of claims and entitlements as follows:- Sl. No. Extinguishment of Claims/Entitlements Orders thereon 1. The R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al of the Resolution Plan by the Adjudicating Authority, the same would be treated as having been settled/waived/written off/extinguished with respect to the CD and/or RA In Ghanshyam Mishra Sons Pvt. Ltd. v. Edelweiss Asset Reconstruction Company Ltd. decided on 13.04.2021 the Hon'ble Supreme Court held in para 95(i) that once a Resolution Plan is approved, a creditor cannot initiate proceedings for recovery of claims which are not part of the Resolution Plan. Therefore, the reliefs sought for are granted, in terms of the judgment of the Hon'ble Supreme Court in so far as extinguishment of liabilities that are not part of the resolution plan. 3. By virtue of the Hon'ble NCLT Approval Order, on the Effective Date, all assets of Corporate Debtor, that are subject to any encumbrance, security and/or lien, whether in favour of the lenders of Corporate Debtor or in favour of any third party, shall stand settled/waived/written off/extinguished with respect to the Corporate Debtor and/or the Resolution Applicant. This would inter alia include: the security mentioned in the Information memorandum of Corporate Debtor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... others, (2021) 9 SCC 321 the Hon'ble Supreme Court held in para 125 that approval of a resolution plan does not ipso facto discharge a personal guarantor of her or his liabilities under the contract of guarantee, which arises out of an independent contract. The provisions of section 32A of the IBC will also apply. 8. In accordance with the forgoing, all claims (whether final or contingent, whether disputed or undisputed and whether notified/claimed or not against Corporate Debtor) of all Taxes, Duties, dues of the Government Statutory Authorities relating to the period prior to the Effective Date, shall stand settled /waived/written off/extinguished with respect to the Corporate Debtor/Resolution Applicant. In Ghanshyam Mishra Sons Pvt. Ltd. v. Edelweiss Asset Reconstruction Company Ltd., the Hon'ble Supreme Court held in para 95(i) that once a Resolution Plan is approved, a creditor cannot initiate proceedings for recovery of claims which are not part of the Resolution Plan. This is binding law under Article 141 of the Constitution. 9. Any and all Legal/Administrative proceed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate or arise on account of the acquisition of control by the Resolution Applicant over Corporate Debtor pursuant to this Resolution Plan, against Corporate Debtor or any of its employees or directors who are appointed or who remain in employment or directorship after the acquisition of control by the Resolution Applicant over Corporate Debtor or pursuant to the implementation of the Resolution Plan. Granted. 13. In case any claim is raised relating to the period prior to the approval of the Resolution Plan by the Adjudicating Authority, the same would be treated as having been settled/waived/written off/extinguished with respect to the Corporate Debtor/Resolution Applicant. Granted. 8. Findings 8.1. On hearing the submissions made by the learned Counsel for the Resolution Professional, and perusing the records, we find that the Resolution Plan has been approved with 100% voting share. As per the CoC, the Plan meets the requirement of being viable and feasible for revival of the Corporate Debtor. By and large, all the compliances have been done by the RP and the Resolution Applicant for making th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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