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TMI Blog2022 (12) TMI 1054X X X X Extracts X X X X X X X X Extracts X X X X ..... ting Authority', (`National Company Law Tribunal', Hyderabad Bench, Hyderabad) in IA/746/2021 in CP (IB) No.326/7/HDB/2020, as the 'impugned order', pertains to the 'Approval' of the 'Resolution Plan', submitted by the 2nd Respondent. 3. It is the stand of the 'Petitioner' / 'Appellant' that it is the 'Statutory Authority' and 'Creditor' to the 'Corporate Debtor' and the 'grievance' of the 'Petitioner' / 'Appellant' is that its 'Claim', was 'not paid', 'in entirety' and 'in priority', in the 'Resolution Plan', and hence, the 'Petitioner' / 'Appellant' prays for 'Allowing' IA/471/2022 in Comp. App. (AT)(CH) (INS) No.215/2022. 4. Considering the fact that the 'Petitioner' / 'Appellant' is 'not a Party' to the 'Proceedings', before the 'Adjudicating Authority', (`National Company Law Tribunal', Hyderabad Bench, Hyderabad) in IA/746/2021 in CP (IB) No.326/7/HDB/2020, and in view of the grievance of the 'Petitioner' / 'Appellant', that it was 'not paid' in 'Full', and in 'Priority', in the 'Resolution Plan', this 'Tribunal', grants 'Leave' to the 'Petitioner' / 'Appellant', to prefer the instant Comp. App. (AT)(CH) (INS) No.215/2022 and, accordingly, 'allows' the IA/471/2022 in Comp. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2.2019 in Civil Appeal No.10673/ 2018 with CA Nos.10719/2018, 10971/2018 and SLP(C) No.29181/2018, the Hon'b1e Supreme Court, noticing the provisions of section 30(4), held that if the CoC had approved the reso1ution plan by requisite percent of voting share, then as per section 30(6) of the Code, it is imperative for the resolution professional to submit the same to the adjudicating authority (NCLT). On receipt of such a proposal, the adjudicating authority (NCLT) is required to satisfy itself that the resolution plan as approved by CoC meets the requirements specified in Section 30(2). No more and no less. 18. In the said judgment, in para 35, the Hon'ble Supreme Court held that the discretion of the adjudicating authority is circumscribed by Section 31 and is limited to scrutiny of the resolution plan "as approved" by the requisite percent of voting share of financial creditors. Even in that enquiry, the grounds on which the adjudicating authority can reject the resolution plan is in reference to matters specified in Section 30(2) when the resolution plan does not conform to the stated requirements. 19. In the recent judgement in Essar Steel (Civil Appeal No.8766-67 of 2019) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and record as prescribed. While approving the 'Resolution Plan', as mentioned above, it is clarified that the Resolution Applicant shall pursuant to the Resolution Plan approved under Sub-Section (1) of Section 31 of the I&B Code, 2016, obtain all the necessary approvals as may be required under any law for the time being in force within the period as provided for in such law. Etc.," and 'disposed of' the 'Interlocutory Application'. Appellant's contentions: 7. Challenging the 'impugned order' in IA No.746/2021 in CP (IB) No.326/7/HDB/2020 passed by the 'Adjudicating Authority', (National Company Law Tribunal, Hyderabad Bench, Hyderabad), the Learned Counsel for the 'Appellant' / 'EPFO' submits that the 'Corporate Debtor', is 'Chronic Defaulter', and had 'not paid' the 'EPF dues', promptly and had committed 'default', in payment of certain 'EPF dues' / 'damages' / 'interest', including the 'Employees' share of contributions', for the period from 08/199 to 02/2021, amounting to Rs.40,09,102/-. 8. The Learned Counsel for the 'Appellant' points out that the 'short remittance' was of Rs.18,46,674/-, the 'pending dues' amounts to Rs.1,06,014/-, the 'Revenue Recovery Default' was of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... getting an 'Approval', which was approved, through an 'Order' dated 10.01.2022. 13. The 'Grievance of the Appellant', is that the '2nd Respondent' / 'Resolution Applicant', in the 'Resolution Plan', had provided for 2.51% of the amount, admitted to all the 'Operational Creditors' of the 'Corporate Debtor', and 'allotted' a total amount of Rs.20,00,000/- to 'pay off' 'Debts', towards the 'Operational Creditor'. In fact, the 1st Respondent through an 'E-mail' dated 04.02.2022 had intimated the 'Appellant', about the 'approval' of the 'Resolution Plan', attaching the 'impugned order', mentioning that it was uploaded on the website of the 'Adjudicating Authority', (National Company Law Tribunal, Hyderabad Bench, Hyderabad), only on 04.02.2022, etc. 14. According to the 'Appellant', as per the 'approved Resolution Plan', a sum of Rs.46,400/- was paid to the 'Appellant', through a 'Cheque dated 10.02.2022' and further, that, the 'allocation' of a such amount to the 'Appellant', under the 'Resolution Plan', is 'gross injustice', done to the 'Appellant', in violation of Section 11 of the 'Employees Provident Fund and Miscellaneous Provisions Act, 1952'. 15. It is represented on behalf o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the 'Appellant', is not included in the 'Liquidation Assets' of the 'Corporate Debtor', being 'all sums due' to any 'workmen or employees' from the Provident Fund. 19. The Learned Counsel for the 'Appellant', refers to the 'Judgment' of this 'Tribunal', in Regional Provident Fund Commissioner - I v Ramachandra D. Choudhary vide Comp. App. (AT) (Ins) No.1001 of 2019, wherein it was observed that Section 14B & 7Q and other PF dues, cannot be diluted by the 'Resolution Applicant' and the same is as under: - 44. "However, as no provisions of the 'Employees Provident Funds and Miscellaneous Provision Act, 1952' is in conflict with any of the provisions of the 'I&B Code' and, on the other hand, in terms of Section 36 (4) (iii), the 'provident fund' and the gratuity fund' are not the assets of the 'Corporate Debtor', there being specific provisions, the application of Section 238 of the 'I&B Code' does not arise. 45. Therefore, we direct the 'Successful Resolution Applicant' - 2nd Respondent ('Kushal Limited') to release full provident fund and interest thereof in terms of the provisions of the 'Employees Provident Funds and Miscellaneous Provision Act, 1952' immediately, as it does ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 56 3,68,54,47,256 2. IDBI Bank Limited 2,31,49,63,100 2,31,49,63,100 3. UCO Bank (Asset Management Branch) 17,38,14,812 17,38,14,812 Total 6,17,42,24,968 6,17,42,24,968 Operational Creditors:- (Amount in Rupees) Sl. No. Name of the Operational Creditor Amount of Claim Amount Admitted by IRP 1. Employees Provident Fund Organization 40,09,102 18,46, 674 2. Goods and Services Tax 7,12,98,098 7,12,98,098 3. Exercise and Taxation Officer, Panchkula 64,54,711 64,54,711 Total 8,17,61,911 7,95,99,483 Grand Total (i + ii) 6,25,59,86,879 6,25,38,24,451 That besides these claims no other claims were received within the stipulated time. c. That valuation of the Corporate Debtor as ascertained from the Registered Valuers by the RP is as under: - S. No. Asset Class Name of the Valuer Liquidation Value in (Rs.) Average Liquidation Value in (Rs.) 1. Land and Building Aradhi Rama Rao Venkata Krishna 1,12,37,000 1,16,69,500 2. Land and Buildings Sai Vara Prasad Siddabathuni l ,21,02,OOO 3. Plant and Machinery Poinasetty Kanak Rao 19,88,261 19,59,521 4. Plant and Machinery P Madhu 19,30,780 5. Financial Assets Gotta Koteswara Rao 2,68 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Creditors 617,42,24,968/- 5,50,00,000/- Operational Creditors (Statutory Dues) 7,95,99,483/- 20,00,000/- Total 625,68,24,451/- 6,00,00,000/- 29. As a matter of fact, the 'Implementation Schedule', is described as follows: - S.No. Actionable Time Lines (in days unless specifically mentioned) 1. Date of the Adjudicating Authority's approval of the Resolution Plan and constitution of the Supervisory Committee X 2. Opening / Identification of Designated Account in the name of the Corporate Debtor X+3 3. Change in Management of the Corporate Debtor, by appointment of Directors nominated by RA on the Board of the Corporate Debtor X+10 4. Mobilization of Upfront Resolution Fund into the Corporate Debtor X+7 5. Re-organization of Share Capital as per clause 3* X+7 6 Payment of Insolvency Resolution Process Cost as per Clause 5.1 and Operational Creditors (Statutory dues) as per Clause 5.4 X+7 7 Payment of consideration to secured Financial Creditors X+30 30. The 'Resolution Professional', is to ensure, that a 'Resolution Plan', is 'complete', in all respects, and to conduct a 'due diligence', with a view to 'R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion Applicant', satisfies the 'requirements', mentioned in 'Section 30 (2)' of the I&B Code, 2016. 37. It is pointed out by this 'Tribunal', that 'Clause 11' of the 'Resolution Plan' (refers to the grant of the 'Reliefs', pertaining to 'Concessions' and 'Disposals', etc.), and according to the 'Resolution Professional', the same will ensure that the 'Corporate Debtor', will run as a 'Going Concern', falling in line, with the 'Aim' and 'Objectives' of the Insolvency & Bankruptcy Code, 2016. 38. In the 'instant case', the 'Adjudicating Authority', (National Company Law Tribunal, Hyderabad Bench, Hyderabad) 'came to the conclusion', that the 'Resolution Plan', satisfies the requirements of the I&B Code, 2016, and approved the said 'Plan', through an 'Order' dated 10.01.2022 in IA No.746/2021 in CP (IB) No.326/7/HDB/2020. 39. In the 'instant Case', the 'Liquidation Value', was ascertained by the 'Resolution Professional' as Rs.4,02,07,398/-, and the 'Fair Market Value', was determined at Rs.7,06,62,736/-. The 'Claim' of the 'Appellant' / 'EPFO' in this 'Appeal', is that a 'direction' to be issued to the '2nd Respondent' / 'Successful Resolution Applicant', to pay the 'remaining', 'F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce with the appropriate Authorities as per relevant Laws. We are of the considered view that if any waiver is sought in the Resolution Plan, the same shall be subject to approval by the concerned Authorities. The same has also been held by Hon'ble Supreme Court in the case of Ghanashyam Mishra and Sons Private Limited Versus Edelweiss Asset Reconstruction Company Limited." 43. In this connection, this 'Tribunal', worth 'recalls' and 'recollects' the 'decision' of the 'Hon'ble Supreme Court of India' in the matter of 'Arun Kumar Jagatramka v. Jindal Steel and Power Limited and Another (2021) 7 SCC 474', whereby and whereunder, it is observed as follows: - 95. .... "However, we do take this opportunity to offer a note of caution for NCLT and NCLAT, functioning as the adjudicatory authority and appellate authority under the IBC respectively, from judicially interfering in the framework envisaged under the IBC. As we have noted earlier in the judgment, the IBC was introduced in order to overhaul the insolvency and bankruptcy regime in India. As such, it is a carefully considered and well thought out piece of legislation which sought to shed away the practices of the past. The legis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... solution Plan', had provided for 'Management' of the affairs of the 'Corporate Debtor', after the 'approval' of the `Resolution Plan', as per Section 30 (2) (C ) of the I & B Code, 2016 without any 'qualm of doubt', this 'Tribunal', points out that the 'Adjudicating Authority', ('Tribunal') has 'power' to examine the 'Resolution Plan', as approved by the 'required percentage' of 'voting share' of the 'Financial Creditors', which is 'limited'. 'The Adjudicating Authority' / 'the Appellant Authority', cannot sit, in an 'Appeal', over the 'Commercial Wisdom' of the 'Committee of Creditors'. 46. At the risk of 'repetition', this 'Tribunal', relevantly points out that 97.18% Vote, the 'Resolution Plan', was approved by the 'Committee of Creditors', in the 'Meeting' that took place on 09.11.2021. Due weightage to the 'Commercial Wisdom' of the 'Committee of Creditors' is to be accorded by the 'Adjudicating Authority', and the 'Appellate Tribunal', in the considered opinion, of this 'Tribunal'. 47. In the instant case, the 'Appellant', was paid a sum of Rs.46,400/- through a 'Cheque' dated 10.02.2022, although its `Claim' in Form B dated 29.01.2021, in respect of the 'Corporate Debtor' ..... X X X X Extracts X X X X X X X X Extracts X X X X
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