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TMI Blog2020 (5) TMI 722X X X X Extracts X X X X X X X X Extracts X X X X ..... on Plan annexed to the application. This bench is not inclined to allow any of the said reliefs and concessions prayed by the Resolution Applicant. The resolution plan is approved with modifications, which shall be binding on the Corporate Debtor and its employees, members, creditors, guarantors, Resolution Applicant and other stakeholders involved in the resolution plan - application allowed. - MA 47/2020, MA 2615/2019, MA 3444/2019, MA 3505/2019, MA 3711/2019, MA 3950/2019 in C.P. (IB) 3457/MB/2018 - - - Dated:- 4-5-2020 - Shri B.S.V. Prakash Kumar, Acting President And Shri V. Nallasenapathy, Member (Technical) For the Applicant: Sr. Counsel Mr. Zal Andhyarujina, a/w Mr Aurup Dasgupta, Ms Sonam Ghiya ms Jinal Vani, i/b Jhangiani Narula Associates. For the Resolution Professional: Sr. Counsel Mr. Gaurav Joshi, a/w Ms Pooja Mahajan, Mr Mustafa Kachwala and Ms Mahima Singh, i/b Kachwala Misar Co., Advocates. ORDER Per: V. Nallasenapathy, Member (Technical) 1. MA 47/2020 has been filed by DSM Infocom Pvt Ltd (DSM), seeking permission to submit Expression of Interest (EoI) and Resolution Plan. 2. None present on behalf of the applicant. By w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion for the Corporate Debtor and possibly, withdrawal of the Resolution Applicant from the process, to the detriment of all stakeholders, including the creditors and over 3000 employees who depend on the Corporate Debtor for their livelihood 7. The Counsel for the RP also submitted that the application is highly belated and appears to be a dilatory tactic to derail the CIRP of the Corporate Debtor. Any further delay in the process is likely to end up scuttling the CIRP at the behest of a highly-belated entrant, whose bona fides are doubtful. 8. As per CIBIL Report, DSM is a wilful defaulter and hence, in any case, it is not eligible under Section 29A of the IBC to submit any resolution plan. 9. The Counsel for the RP submits that the Resolution Applicant, viz. Ebix Software India Pvt Ltd., whose Resolution Plan is now pending adjudication before this Adjudicating Authority, has fully participated in the CIRP of the Corporate Debtor and its Resolution Plan has been approved by 75.22% of voting shares of CoC. Along with the Resolution Plan, the Resolution Applicant has also submitted a performance bank guarantee of INR 50 Crores, which demonstrates its credentials and bona ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Delhi, in the case of Deutsche Trustee Company Ltd vs. Tulip Telecom Ltd. (2017 SCC OnLine Del 11012) wherein the operation of an Escrow Account was discussed. In the said judgement, a case decided on 16.2.2013, by United States Bankruptcy Court for the Northern District of Illinois Eastern Division viz. Homer City Generation L.P vs. EME Homer City Generation L.P., Case No.12-49219, wherein the nature of Escrow Account was discussed and it was held that the money held in Escrow Account is not a property which vests in the trustee in bankruptcy. 5. In view of the said decision, we are of the view that the money in the Escrow account herein is not the exclusive property of the Corporate Debtor and it has to be shared by the Escrow participants in the agreed ratio. Hence, the Corporate Debtor is directed to honor the terms and conditions of the Escrow Agreement dated 24.1.2014 and pay Rs.11,19,82,530/- on release of amount by the e-Governance, Uttar Pradesh into Axis Bank Account No.914020004635893. 6. Accordingly, this application is allowed. ORDER Per: V. Nallasenapathy, Member (Technical) 1. MA 3444/2019 has been filed by Systel Technologies Services P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ision, we are of the view that the money in the Escrow account herein is not the exclusive property of the Corporate Debtor only and it has to be shared by the Escrow participants in the agreed ratio. 4. The facts of the case in this application are similar to the facts in the abovesaid MA. 5. Hence, the Corporate Debtor is directed to honour the terms and conditions of the Escrow Agreement dated 5.2.2014 and 14.6.2018 by issuing instruction to Kotak Mahindra Bank Ltd to apportion a sum of Rs.40,51,866/- to the Applicant out of Rs.48,18,124/- released by the Department of Information Technology and Communication, Govt of Telangana and accordingly this application is allowed. ORDER Per: V. N allasenapathy, Member (Technical) 1. MA 3505/2019 has been filed by Commercial Tax Department, Rajasthan regarding treatment of its claim.The application has been filed by the tax department seeking acceptance of its claim of INR 11.95 Crores (approx.) 2. None was present on behalf of the applicant. The Counsel for the RP submitted that when claim form (Form B) dated 23 July 2019 was received from the department, the same was examined against books and records of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lution professional by an order of this Bench dated 22.4.2019. 3. The Resolution Professional prepared the Information Memorandum as required under Section 29 of the Code read with Regulation 36 of the CIRP Regulations and placed before the CoC. 4. On 8.4.2019, in terms of Regulation 27 of the CIRP Regulations, the RP appointed two Registered Valuers, namely RNC CO and GAA Advisory LLP, to determine the fair value and liquidation value in accordance with Regulation 35 of the CIRP Regulations. 5. The Resolution Professional invited Expression of Interest (EoI) vide publication dated 25.4.2019 and the last date for submission of the EoI was 10.5.2019. Pursuant to the said publication, the RP received ten EOIs by 10.5.2019 and two EOIs after the stipulated last date for submission. After the due diligence based on the materials on record, as required under Regulation 36A(8) of the CIRP Regulations, the provisional list of eligible Prospective Resolution Applicants (PRAs) was placed before the CoC in the 3rdCoC meeting held on 17.5.2019. The CoC voted and approved the conditions pertaining to bid bond guarantee and performance security as well as the last date for submission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 19, the RP and his team presented the estimated proceeds under the Resolution Plan to be distributed among the CoC members and highlighted that the methodology of distribution of proceeds under the Resolution Plan was deliberated in detail in the last CoC meeting and approved by majority vote and the RP requested the CoC members to approve the resolution plan. E-voting was conducted from 10.11.2019 till 14.11.2019 and the resolution plan submitted by Ebix Software India Pvt Ltd was approved with 75.22% voting share. 12. Post completion of e-voting process, the RP received an email from Axis Bank stating as follows: Please refer to the captioned plan wrt Trimax IT Infrastructure and Services Ltd. and the e-voting conducted today, i.e. 14.11.2019. We had voted as dissent as our approval from senior management was pending due to pending clarifications on the plan. Post receipt of clarification on the bank guarantee protection from the resolution professional, we request you to consider our vote as a Assent on the plan and take necessary steps to effect the same. Further, we request you to ignore our vote casted through online voting portal. 13. The request of the Axis Ban ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 21. The Resolution Plan provides that this Resolution Plan is valid for a term till all the payments are made to all the stakeholders under the terms and conditions of this Resolution Plan and the obligations of the Resolution Applicant to implement the Resolution Plan shall become effective only from the Effective date. The Resolution provides that this plan shall become binding on the Corporate Debtor and its employees, members, creditors, guarantors, Central Government, any State Government, any local authority and other stakeholders involved in this Resolution Plan on the Effective Date. The Resolution Plan defines Effective Date as the date of approval of this Resolution Plan by the Hon ble National Company Law Tribunal, Mumbai. 22. The Resolution Applicant proposes following payments to various stakeholders: No Particulars Admitted Amt (Rs.) Proposed distribution from upfront Fund infusion (Rs.) Upfront payment made (as % of admitted claims) Remarks 1 CIRP Costs NA as per Remarks column ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, members, employees, government bodies and other stakeholders of the Corporate Debtor as contemplated by the Code. A Review of Interest of all stakeholders is also provided in the Resolution Plan. The Resolution Plan further states that the Resolution Applicant has provided for appropriate consideration for protecting the interests of other stakeholders such as employees, operational creditors, government dues, non-promoter shareholders, in the Resolution Plan. 26. The Resolution Plan provides for proposed board of directors, new management structure, management and control of the Corporate Debtor after its takeover by Resolution Applicant. 27. On perusal of the Resolution Plan, we find that the resolution plan has necessary provisions for its effective implementation. 28. Having gone through the resolution plan in detail it is pertinent to study the provisions of the Code and CIRP regulations to see whether the requirements of the code and regulations were fulfilled. A) Section 30 of the Code provides as below: (1) A resolution applicant may submit a resolution plan to the resolution professional prepared on the basis of the information memorandum. (2) Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (3) After the order of approval under sub-section (1),- (a) the moratorium order passed by the Adjudicating Authority under section 14 shall cease to have effect; and (b) the resolution professional shall forward all records relating to the conduct of the corporate insolvency resolution process and the resolution plan to the Board to be recorded on its database. C) Regulation 38 - Mandatory contents of the resolution plan: (1) The amount due to the operational creditors under a resolution plan shall be given priority in payment over financial creditors. (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 corporate debtor during its term; and (c) adequate means for supervising its implementation. (3) A resolution plan shall demonstrate that (a) it addresses the cause of default; (b) it is feasible and viable; (c) it has provisions for its e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oving or rejecting a resolution plan to the participants and the resolution applicant. (8) A provision in a resolution plan which would otherwise require the consent of the members or partners of the corporate debtor, as the case may be, under the terms of the constitutional documents of the corporate debtor, shareholders agreement, joint venture agreement or other document of a similar nature, shall take effect notwithstanding that such consent has not been obtained. (9) No proceedings shall be initiated against the interim resolution professional or the resolution professional, as the case may be, for any actions of the corporate debtor, prior to the insolvency commencement date. (10) A person in charge of the management or control of the business and operations of the corporate debtor after a resolution plan is approved by the Adjudicating Authority, may make an application to the Adjudicating Authority for an order seeking the assistance of the local district administration in implementing the terms of a resolution plan. 29. As discussed supra by virtue of mandatory contents of resolution plan, the same is in accordance with Section 30 and 31 of the Code, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tor without recourse to the Resolution Applicant if such bank guarantees gets invoked by the end customers in future. Thereafter, the Resolution Applicant submitted the revised resolution plan on 14.8.2019 wherein the Resolution Applicant stated that he expects the continuity of uninvoked bank guarantees by the financial Creditors subject to the resolution applicant providing counter bank guarantees through its bankers of an amount equivalent to the amount of Bank Guarantees in favour of the Bank Guarantee Lenders. However, it is also stated that the Resolution Applicant shall not be held liable for any past transactions on the continuing Bank Guarantee if those bank guarantees gets invoked in future. Finally, the Resolution Applicant submitted the revised resolution plan on 28.8.2019 and the same was approved by the CoC in the 11th meeting held on 8.11.2019. 3. The applicant submits that it was not clear on the issue of protection of uninvoked bank guarantees as the applicant has exposure to the extent of 11.87 crores in respect of uninvoked bank guarantees. As per the resolution plan, the applicant would recover an amount of Rs.4.74 crores in the event the applicant assents to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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