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TMI Blog2021 (12) TMI 1355X X X X Extracts X X X X X X X X Extracts X X X X ..... ate Debtor. 1.3. The underlying company petition bearing CP (IB) No. 993/KB/2018 was filed by Switching AVO Electro Power Limited against Ambient Computronics Private Limited, the Corporate Debtor, under section 9 of the Insolvency and Bankruptcy Code, 2016 which was admitted vide order dated 10.12.2020. 1.4. Mr. Subodh Kumar Agarwal having registration no. IBBI/IPA-001/IP-P00087/2017-18/10183 was appointed as the Interim Resolution Professional (IRP). The IRP was later confirmed as the Resolution Professional (RP) of the Corporate Debtor at the eighth meeting of the Committee of Creditors (CoC) dated 10.04.2021 by way of e-voting on 11.04.2021. 1.5. It is submitted that due to nationwide lockdown imposed, the CoC in its tenth CoC meeting held on 17.05.2021 resolved to extend the CIRP for a further period of 90 days. Accordingly, the RP filed an application with this Adjudicating Authority for approval of the extension of CIRP period by 90 days under section 12(2). This Adjudicating Authority vide order dated 14.06.2021 passed in IA (IB) No. 509/KB/2021, allowed the extension of CIRP period by 90 days. 2. Constitution of CoC 2.1. The IRP made public announcements dated 12.12.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Form 'G' for Expressions of Interest ("EoI") from potential resolution applicants was published in "Financial Express", All India edition and "Morning India", Patna Edition, "Sanmarg" (Jharkhand & Ranchi) and "Rashtriya Sahara (Delhi, Lucknow and Varanasi) Editions on 11.03.2021 for submission of resolution plans for the Corporate Debtor, in terms of the provisions 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. It was also published on the website of the Corporate Debtor and IBBI. 4.2. It is submitted that in response to the EoI published on 11.03.2021, the Applicant received an EoI from Mr Sujeet Kumar, one of the suspended Board of Directors of the Corporate Debtor. The last date of submission of Resolution Plan was 29.04.2021 which was extended to 14.05.2021 and then to 04.06.2021. The prospective Resolution Applicant submitted his plan on 04.06.2021. 4.3. The Resolution Plan was placed and opened before the CoC in its 12th CoC meeting held on 25.06.2021. The liquidation value and fair value was informed to the CoC. The Resolution Plan was ve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nbsp; (ii) Plan must provide for repayment of debts of OCs in such manner as may be specified by the Board which shall not be less than 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 order of priority in sub-section (1) of section 53, whichever is higher; Section III at Page 14 of the Resolution Plan. (Compliance Chart) (iii) provides for payment of debts of financial creditors who do not vote in favour of the resolution plan, in such manner as may be specified by the Board. Not proposed in the Resolution Plan. (c) Management of the affairs of the Corporate Debtor after approval of the Resolution Plan. Section VII at Pages 32-34 of the Resolution Plan. (d) Implementation and Supervision Section V at Pages 25-26 and Section X at Pages 43-45 of the Resolution Plan. (e) Plan does not contravene any of the provisions of the law for the time being in force. Section IV at Page 23 of the Resolution Plan. (f) Conforms to such other requirements as may be specified by the Board. Section IV at Page 23 of the Resolution Plan. II. Measures require ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olution Plan. (Compliance Chart) (n) obtaining necessary approvals from the Central and State Governments and other authorities. Section XI at Page 47 of the Resolution Plan. III. Mandatory contents of Resolution Plan in terms of regulation 38 of CIRP Regulations: Ref to relevant reg. Requirement How Dealt with in the Plan 38(1) The amount due to the operational creditors under a resolution plan shall be given priority in payment over financial creditors. Not Applicable as there are no Financial Creditors. 38(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. Section IV at Page 23 of the Resolution Plan. 38(1B) A resolution plan shall include a statement giving details if the resolution applicant or any of its related parties has failed to implement or contributed to the failure of implementation of any other resolution plan approved by the adjudicating authority at any time in the past. Section IV at Page 23 of the Resolution Plan. 38(2) A Resolution Plan shall provide: * The term of the plan and its i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Admissible Debt to be paid to Operational Creditor viz. Elnova Private Limited, Unitech Enterprises, Jupiter Electronics & Telecom Systems, Manmohan Dubey and R S Industries Payment of Rs.44,94,286/-, 25% of Rs.44,94,286/- i.e. Rs.11,23,571/- to be paid within 30 days of approval of plan by the Adjudicating Authority. Rest of the payment to Elnova Private Limited shall be made in 18 equal instalments on monthly basis starting from one month after Effective Date Rest of the payment to Unitech Enterprises, Jupiter Electronics & Telecom System, Mr. Manmohan Dubey & R. S. Industries will be made in 6 equal instalments on monthly basis starting from one month after Effective Date. CAPEX and Working capital Additional sum of Rs.10,00,000/- [Rs.5,00,000/- for margin money for working capital and Rs.5,00,000/- for CAPEX] within 12-16 months from the Effective Date. TOTAL Rs.63,18,270/- 7.2. The Resolution Plan defines "Effective Date" as "time period of thirty days from the date of certified copy of order for approval of resolution plan by the Hon'ble Tribunal." Details on Management/ Implementation and Reliefs as per the Resolution Plan: 7.3. The Resolution Plan also prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or continue any proceedings in respect to a claim, which is not part of the resolution plan. The Hon'ble Supreme Court also held that all the dues including the statutory dues owed to the Central Govt, any State Govt or any local authority, if not part of the resolution plan, shall stand extinguished and no proceedings in respect of such dues for the period prior to the date on which the Adjudicating Authority grants its approval under section 31 could be continued. 2. Section IX (ii) The change in shareholding of the Corporate Debtor pursuant to the Resolution Plan shall not lead to lapse of any brought forward losses of the Corporate Debtor and the same shall be made available as per provisions of Section 79 of the Income Tax Act, 1961 and the carry forward and set off all the losses shall be allowed if the change in shareholding takes place pursuant to a resolution plan approved under the IBC 2016 after affording a reasonable opportunity of being heard to the Jurisdictional Principal Commissioner or commissioner of Income Tax Granted. 3. Section IX (iii) As the Resolution Applicant is required to take over the Corporate Debtor's Business on a "going concern ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the resolution plan shall stand frozen and will be binding on the Corporate Debtor and its employees, members, creditors, including the Central Govt, any State Govt or any local authority, guarantors and other stakeholders. On the date of approval of resolution plan by the Adjudicating Authority, all such claims, which are not a part of resolution plan, shall stand extinguished and no person will be entitled to initiate or continue any proceedings in respect to a claim, which is not part of the resolution plan. The Hon'ble Supreme Court also held that all the dues including the statutory dues owed to the Central Govt, any State Govt or any local authority, if not part of the resolution plan, shall stand extinguished and no proceedings in respect of such dues for the period prior to the date on which the Adjudicating Authority grants its approval under section 31 could be continued. 6. Section IX (vi) In the interest of keeping the Corporate Debtor a going concern, unless otherwise specified in this Resolution Plan, all contracts and agreements shall continue to remain valid and notwithstanding any lapse, non-compliance, breach or expiry of underlying terms of such contrac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entitled to initiate or continue any proceedings in respect to a claim, which is not part of the resolution plan. The Hon'ble Supreme Court also held that all the dues including the statutory dues owed to the Central Govt, any State Govt or any local authority, if not part of the resolution plan, shall stand extinguished and no proceedings in respect of such dues for the period prior to the date on which the Adjudicating Authority grants its approval under section 31 could be continued. 9. Section IX (ix) All penalties and dues arising out of any short supply of power/unfulfilled contracts/quality issues in supply in the past or till the approval of Resolution Plan by the Adjudicating Authority shall be deemed to have been extinguished and waived off on the Hon'ble NCLT Approval Date. No liability shall accrue due to this and all benefits and deposits shall be refunded fore with to the Resolution Applicant. 10. Section IX (x) All financial liabilities (including any contingent claims) relating to any investigations, inquiries, show-cause notices, causes of actions; suits, claims, disputes, litigations, arbitrations or other judicial or regulatory or administrative procee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an. The Hon'ble Supreme Court also held that all the dues including the statutory dues owed to the Central Govt, any State Govt or any local authority, if not part of the resolution plan, shall stand extinguished and no proceedings in respect of such dues for the period prior to the date on which the Adjudicating Authority grants its approval under section 31 could be continued. 12. Section IX (xii) Extinguishment and write-off of any financial liabilities against the Corporate Debtor, by the Corporate Debtor till the CIRP commencement date. 13. Section IX (xiii) Extinguishment and write-off of all financial liabilities (including past liabilities) against the Corporate Debtor that may accrue due to non-compliance with any clearance issued by any Government and Statutory Authority. 14. Section IX (xiv) Extinguishment of any other liability, investigations, inquiry pending against the Corporate Debtor due to non-compliance with any environmental clearance issued by any Government and Statutory Authority. Whatever protection is envisaged under section 32A of the Code alone is granted, nothing more and nothing less. 15. Section IX (xv) All Disputes to be initiated ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made by the Resolution Professional, and perusing the record, we find that the Resolution Plan has been approved with 99.10% 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 Resolution Professional and the Resolution Applicant for making the plan effective after approval by this Bench. 9.2. On perusal of the documents on record, we are satisfied that the Resolution Plan is in accordance with sections 30 and 31 of the IBC and also complies with regulations 38 and 39 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. 9.3. As far as the question of granting time to comply with the statutory obligations or seeking approvals from authorities is concerned, the Resolution Applicant is directed to do so within one year from the date of this order, as prescribed under section 31(4) of the Code. 9.4. In case of non-compliance of this order or withdrawal of Resolution Plan, the payments already made by the Resolution Applicant shall be liable for forfeiture. 9.5. Subject to the observations made in this Order, the Resolutio ..... 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