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TMI Blog2021 (4) TMI 1313X X X X Extracts X X X X X X X X Extracts X X X X ..... cating Authority is rule as per the apex court's decision in the matter of K. Sashidhar Vs. Indian Overseas Bank Ors. [ 2019 (2) TMI 1043 - SUPREME COURT ] - The Court referred to its judgment in K Sashidhar's matter wherein it was provided that there is no provision under the Code which empowers the Adjudicating Authority to oversee the justness of the reason or the commercial decision taken by the financial creditors in approving or rejecting the proposed resolution plan. The apex court upheld the autonomy of the COC regarding the commercial matters and decisions that cannot be questioned by the AA. Extinguishment of claim, Concession and Relief in Resolution Plan - HELD THAT:- It is to be mention herein that since all the Financial Creditors, Operational Creditors and other Stakeholders have already lodged their claims during the CIRP and the same has been already considered by CoC and accordingly, Resolution Plan has been approved by CoC with majority. The claims of any Stakeholder and others, if remained unaddressed or not considered by CoC, shall not claim upon Corporate Debtor after the approval of Resolution Plan. Furthermore, if there is any proceeding pendi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to time by the Government. It is pertinent to mention herein that due the nationwide lockdown, all the activities across the country including that of the Applicant's, CoC as well as erstwhile IRP came to a complete halt from 25.03.2020 till 08.06.2020. 2.4 That one application came to be filed by the Bank of Baroda for change of the RP and appointing Applicant as the new RP, which was allowed by this Adjudicating Authority vide its order dated 26.05.2020. Further, Applicant submits that the registered office and both the manufacturing plants of the Corporate Debtor are located in Waghodia, Vadodara which was in containment zone. 2.5 That in response of Form-G, Applicant received five Expression of Interest (hereinafter referred as Eol ) and last date for submission of Resolution Plan was fixed as 17.11.2020. Since, evaluation of the Resolution Plans, so submitted by the prospective Resolution Applicant, might take some time and CIRP was ending on 23.11.2020, CoC resolved for further extension of time seeking exclusion for the lockdown period in Waghodia, Vadodara till 31.08.2020. Accordingly, Applicant filed an application seeking exclusion of period of 60 days which wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 4. On perusal of the records, it is found that the Resolution Applicant has taken account the interest of all stakeholders of the Corporate Debtor to the extent possible, as envisaged in this Resolution Plan for insolvency resolution of Sanghvi Forging and Engineering Limited . 5. The tabular summary of the payments to the creditors contemplated to be made under the approved Resolution Plan is as under: Sr. No. Name of the Stake Holders Payment 1. IRP costs NIL, as it would be fully paid out of the cash flows and revenues of the Corporate Debtor and since no payments are due as per the information provided by the Resolution Professional. Any IRP Costs that are not able to be paid out of the revenues and cash and cash equivalent lying to the account of the Corporate Debtor up to the date of approval of the Plan by NCLT due to insufficiency of cash balances in the Corporate Debtor, shall be paid by the resolution applicant. 2. Workmen and Employee Dues 100% subject to a cap of INR 6,54,511 (i.e. the verified amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o. 259 of the application, which is self explanatory. 8. In view of above Section 30(2) and 30(4) is applicable in the instant case. For sake of the convenience the amended provision is reproduced herein below- 30. Submission of Resolution Plan (1) A resolution applicant may submit a resolution plan [along with an affidavit stating that he is eligible under section 29A] to the resolution professional prepared on the basis of the information memorandum. (2) The resolution professional shall examine each resolution plan received by him to confirm that each resolution plan-- (a) provides for the payment of insolvency resolution process costs in a manner specified by the Board in priority to the [payment] of other debts of the corporate debtor; [(b) provides for the payment of debts of operational creditors in such manner as may be specified by the Board which shall not be less than- (i) the amount to be paid to such creditors in the event of a liquidation of the corporate debtor under section 53; or (ii) the amount that would have been paid to such creditors, if the amount to be distributed under the resolution plan had been distributed in accordance with the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Corporate Person) Regulations, 2016. Regulation 38 is reproduced herein under- 38. Mandatory contents of the resolution plan. (1) A resolution plan shall identify specific sources of funds that will be used to pay the- (a) insolvency resolution process costs and provide that the insolvency resolution process costs will be paid in priority to any other creditor; (b) liquidation value due to operational creditors and provide for such payment in priority to any financial creditor which shall in any event be made before the expiry of thirty days after the approval of a resolution plan by the Adjudicating Authority; and (c) liquidation value due to dissenting financial creditors and provide that such payment is made before any recoveries are made by the financial creditors who voted in favour of the resolution plan. [ (1A) A resolution plan shall include a statement as to how it has dealt with the interests of all stakeholders, including financial creditors and operational creditors, of the corporate debtor. ] (2) A resolution plan shall provide: (a) the term of the plan and its implementation schedule; (b) the management and control of the business of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Apex Court that the Adjudicating Authority can exercise only a limited judicial review in respect of any COC decision. NCLT/NCLAT does not have jurisdiction under the provisions of the Code to interfere in the merits of a business decision taken by the majority of COC. The Hon'ble Supreme Court held that the ultimate discretion of what to pay and how much to pay each class or subclass of creditors is with the CoC and that the CoC is the final authority in this regard. The Hon'ble Supreme Court restricted the role of NCLT to only adjudicate whether the CoC has complied with the objects of the Code i.e. the corporate debtor needs to keep going as a going concern during CIRP, it needs to maximize the value of the assets of the corporate debtor, and interests of all stakeholders have to be taken care of. The Court referred to its judgment in K Sashidhar's matter wherein it was provided that there is no provision under the Code which empowers the Adjudicating Authority to oversee the justness of the reason or the commercial decision taken by the financial creditors in approving or rejecting the proposed resolution plan. The apex court upheld the autonomy of the COC r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplicant(s) has/have liberty to approach Competent Authorities for any concession, relief or dispensation, as the case may be as when required for proper and effective implementation of the Plan. 16. Apart from the above observations and directions, it is further directed/observed that: i. The approved Resolution Plan shall come into force with immediate effect. ii. The Resolution Plan shall be subject to the various existing laws in force and shall also confirm to such other requirements specified by the Board and other Statutory/Competent Authorities as the case may be. iii. The Resolution Applicant(s) shall pursuant to the Resolution Plan approved under section 31(1) of the Code, obtain the necessary approvals required under any laws 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 section 31(1) or within such period as provided for in such law, whichever is later or as the case may be. iv. The Resolution Professional shall forward all records relating to the conduct of the corporate insolvency resolution process and Resolution Plan to the Insolvency and Bankruptcy Board of ..... 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