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TMI Blog2022 (6) TMI 542X X X X Extracts X X X X X X X X Extracts X X X X ..... e taken in legal proceedings - Liability for prior offences etc. particularly removing/lifting attachments/liens/charges/encumbrances existing prior to CIRP needs to be dealt with in accordance with the provisions of Section 32(A) of the Code. It is very much clear that the Resolution Applicant has got the Corporate Debtor in less than 10% of the value of the admitted claim practically 90% is the waiver. However, this issue cannot be reckoned now but it can have a leverage impact on levy of interest @ 12% p.a. for delay in releasing the balance payment. The interest is to be paid for the period from 27.01.2020 to 15.11.2021. As it looks from the Written Submissions of the SBI submitted to the Registry of this tribunal vide diary no. 33701 dated 21.02.2022. This period also comprises the period resulting from global pandemic covid-19 - Since the Successful Resolution Applicant/Appellant has paid the full amount so now there is no question of going back and hence, perhaps this is the area where the question involved is now as far as whether the interest rate be reduced to be made at par of RBI base rate for lending to banks with additional 2% margin subject to a limit of 12% p.a. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liability to remove the attachment, lien, charge, encumbrance etc. over the assets of the Corporate Debtor upon the Appellant; (d) Pass order permitting the Appellant to make payment of the balance amount under the Resolution Plan within a period of 2 months from lifting/removing all the attachment, charges, encumbrances and lien from the assets of the Corporate Debtor; (e) Direct the Respondent/ Monitoring Professional Respondent to take urgent steps to get all attachment, charges, encumbrances, lien on the assets of the Corporate Debtor lifted and removed expeditiously; (f) Pass an ex-parte ad-interim order in favour of the Appellant staying the operation of the order dated 30.04.2021 passed by the Ld. Adjudicating Authority qua the direction to the Appellant to pay interest @ 12% per annum from the date it became due and payable as per the Resolution Plan; (g) Stay the direction contained in para 18 of the impugned order giving the Appellant liberty to approach the concerned authority for lifting the attachment and encumbrances over the assets of the Corporate Debtor; etc. 3. The Appellant has provided the chronology of events commenced from 22.12.2017 to 28.05.20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gs/orders passed by the Ld. Adjudicating Authority. 20.02.2020 Appellant was constrained to approach the Ld. Adjudicating Authority by filing an application being I.A. No. 661 of 2020 requesting the Ld. Adjudicating Authority to pass certain orders/directions including order that the time period mentioned in paragraph 18(g) of the order dated 25.11.2019 be reckoned from 27.01.2020 as the order dated 27.01.2020 was made available only on 11.02.2020. 20.02.2020 The arguments before the Ld. Adjudicating Authority on the aforesaid application (IA no. 661 of 2020) was heard and the same was reserved for passing of orders. 10.07.2020 The Financial Creditor of Dunar Foods Ltd. filed an application being I.A. No. 1114 of 2020 for pronouncement of order in I.A. No. 661 of 2020. 10.08.2020 The Ld. Adjudicating Authority was pleased to pass an order directing de novo hearing of the matter, noting reconstitution of the Hon ble Bench of the Ld. Adjudicating Authority. 19.08.2020 The Appellant appeared before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th the attachments, liens, encumbrances and take legal steps to remove them. The basic responsibility to implement this is on the Resolution Professional and hence the present Appeal. 7. The Appellant in this Appeal is also aggrieved with the Adjudicating Authority as it has allowed partly the Company Application being IA No. 661 of 2020 particularly the direction giving the Appellant to pay interest @ 12% p.a. from the date it became due and payable as per the Resolution Plan. 8. It was also submitted by the Ld. Sr. Counsel of the Appellant that payment of interest ordered to be paid by the Appellant is contrary to the terms of Resolution Plan and also contrary to the Magnate of the Code (IBC, 2016). 9. It was also submitted by the Ld. Sr. Counsel for the Appellant that there are charges on the properties of the Corporate Debtor amounting to Rs. 5,600 Crores by MPID Court, Rs. 141.61 crores by Central Excise Authority, the Enforcement Directorate has attached the property of Corporate Debtor- Dunar Foods Ltd. under the provisions of the Prevention of Money-Laundering Act, 2002. 10. The Ld. Sr. Counsel for the Appellant has also mentioned that the Resolution Applicant i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etc. HDFC Bank vide its letter dated 10.03.2020 also informed that the Appellants proposal for funding could be processed only after receipt of NOC from the MPID Court and ED etc. and that the charges on the property are satisfied. The Appellant vide IA No. 1327 of 2020 as stated above also highlighted all the problems of attachment of properties by ED, Mumbai under Prevention of Money Laundering Act and various Constitutional Courts etc. 16. It was also stated emphatically by the Ld. Sr. Counsel that the Resolution Plan approved by the order dated 26.11.2019 also granted liberty for filing Miscellaneous Application if required in connection with implementation of the Resolution Plan. 17. The record of reveals vide para 21 of the order dated 26.11.2019 as follows: 21. As far as question of waiver of outstanding statutory dues and other claims as on the date of approval of the Resolution Plan is concerned, the Resolution Applicant, who will step into the shoes of Corporate Debtor subsequent to approval of Resolution Plan by the Bench, shall not be held responsible for any outstanding statutory dues and other claims for the period before commencement of CIRP. 18. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 months time for making the payment is on the face of the Plan is wrong as the Resolution Plan itself an ambiguously mentions that the payment of balance amount will be made within three months from the approval of Resolution Plan by Adjudicating Authority. (f) The Appellant himself has signed the unconditional Letter of Intent dated 04.06.2019 issued pursuant to the approval of the Resolution Plan by the CoC, and therefore the Appellant is estopped in law from raising any condition precedent to make payment under the terms of the approved Resolution Plan. (g) Section 32(A) of the Code already provides relief to the Appellant qua the removal of attachments and consequential reliefs therein and the immunity granted to the Appellant, hence there is no infirmity on the order. Manish Kumar v. Union of India Anr. Writ Petition (C) No. 26 of 2020. 23. Ld. Sr. Counsel for the Respondent No.2 i.e. SBI has made the following submissions: (a) The total amount claimed by the Financial Creditor is Rs. 978,57,08,408/- out of that the amount relating to SBI is Rs. 783,19,47,562/-. (b) The Resolution Plan has been approved by 100% of the CoC Members and also by the Adjudicating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the impugned order of 30 months instead of 3 months and should also not be a bone of contention because typographical error is a part of human error and needs correction and so almost all the laws allow the same including the NCLT Rules 2016 (clause 154). Any clerical or arithmetical mistakes in any order of the tribunal or error arising from any accidental omission of slip may at any time can be corrected by the tribunal on its own motion. Hence, for such correction if notice has not been issued which is not an irregular activity or unenforceable activity. 25. It is no doubt a matter of concern that the CIRP which commenced on 22.12.2017 is still in litigation on one pretext or the other. Section 12 provides time limit for completion of Insolvency Resolution Process. For brevity and clarity, the same is reproduced below: Section 12: Time-limit for completion of Insolvency Resolution Process. 12. (1) Subject to sub-section (2), the corporate insolvency resolution process shall be completed within a period of one hundred and eighty days from the date of admission of the application to initiate such process. (2) The resolution professional shall file an application ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... secution had been instituted during the corporate insolvency resolution process against such corporate debtor, it shall stand discharged from the date of approval of the resolution plan subject to requirements of this sub-section having been fulfilled: Provided further that every person who was a designated partner as defined in clause (j) of section 2 of the Limited Liability Partnership Act, 2008 (6 of 2009), or an officer who is in default , as defined in clause (60) of section 2 of the Companies Act, 2013, or was in any manner in charge of, or responsible to the corporate debtor for the conduct of its business or associated with the corporate debtor in any manner and who was directly or indirectly involved in the commission of such offence as per the report submitted or complaint filed by the investigating authority, shall continue to be liable to be prosecuted and punished for such an offence committed by the corporate debtor notwithstanding that the corporate debtor s liability has ceased under this sub-section. (2) No action shall be taken against the property of the corporate debtor in relation to an offence committed prior to the commencement of the corporate inso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uccessful Resolution Applicant is supposed to get all the assets of the Corporate Debtor free from any encumbrances and would be available for use by the Resolution Applicant without any fetters or brevity and clarity. The Terms and Conditions appearing at pg. 158 to 159 is given below: G. Terms and Conditions Shareholding The Ownership along with 100% shareholding without any interference of existing promoters/existing shareholders (individual as well as Corporate)/Financial Creditors shall be transferred to Resolution Applicant upon receipt of complete payment as per terms of the approved Resolution Plan. It will be responsibility of the Lenders to get the complete issued shareholding of the Corporate Debtor transferred in the name of Resolution Applicant including his nominee. Upon receipt of complete payment as per terms of the Resolution Plan entire shareholding of the Corporate Debtor shall vest with the Resolution Applicant i.e. the entire paid up share capital of the Corporate Debtor will stand transferred in the name of the Resolution Applicant or its nominee. Entire security including pledge of shares shall be released by the Lenders and the same will ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te+ 2 shareholders related matter+1 statutory Auditor related matter+ 2 Corporate Creditor related matter). There are two Income Tax related matters against the corporate debtor. The claims of two corporate creditors matter have been admitted by the Resolution Professional as per the Information Memorandum and are accordingly addressed in the Financial Proposal accompanied. Claims arising from the Operational Creditors are also addressed in the Financial Proposal. However, claims arising from other pending matters have not been crystallized and admitted by the Resolution Professional therefore no payment has been assigned towards them as a part of this Resolution Plan. The Adjudicating Authority under the Insolvency and Bankruptcy Code has wide powers and Section 238 of the Code providing the widest possible non obstante clause, makes is clear that the decision of the Hon ble Adjudicating Authority under the code shall have effect notwithstanding any provision of another law which is inconsistent. Therefore, it is expected and understood that upon the approval of the Resolution Plan by the Hon ble Adjudicating Authority under Section 31 of the IBC, no future claims would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Creditors Admitted Claim (Rs.) Amount provided under Plan (Rs.) Punjab State Power Corporation 60,03,020 19,176 Additional Commissioner of ITP (Income Tax) 30,70,41,687 9,80,824 Total 31,30,44,707 10,00,000 (c) It is submitted by the Resolution Professional that the net worth of the Resolution Applicant is around Rs. 30.29 Crore. The Resolution Applicant holds property worth Rs. 16.51 Crore. The Resolution Applicant intends to get the funding of the Resolution Plan from HDFC Bank Ltd. In support of the same, the Resolution Applicant has also furnished an Expression of Interest for funding issued by HDFC Bank Ltd. The Letter dated 14.01.2019 issued by HDFC Bank Ltd. For funding of loan of Rs. 77 Crore is annexed in the application. The RP further submits that the Resolution Applicant has already deposited a sum of Rs. 29.25 Crores (Rs. 10 Crore for EMD and Rs. 19.25 Crore as performance Security) i.e. 25% of the Resolution Amount. (d)The Resolution Applicant has sought a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance payment. The interest is to be paid for the period from 27.01.2020 to 15.11.2021. As it looks from the Written Submissions of the SBI submitted to the Registry of this tribunal vide diary no. 33701 dated 21.02.2022. This period also comprises the period resulting from global pandemic covid-19. 32. Since the Successful Resolution Applicant/Appellant has paid the full amount so now there is no question of going back and hence, perhaps this is the area where the question involved is now as far as whether the interest rate be reduced to be made at par of RBI base rate for lending to banks with additional 2% margin subject to a limit of 12% p.a. or otherwise. Hence, we hereby approve a rate of interest of RBI base rate for lending to Banks + 2% margin as per the rate of interest applicable between 27.01.2020 to 15.11.2021 subject to a limit of 12% p.a. 33. It has been made amply care in the CoC of Essar steel India Ltd. v. Satish Kumar Gupta Ors. that the SRA cannot suddenly be faced with undecided claims. After the Resolution Plan submitted by him has been accepted. It is the responsibility of the Resolution Professional to compile the claims submitted to him or observed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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