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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 ..... nciple, in Law, that before approving the Resolution Plan, the Adjudicating Authority, (National Company Law Tribunal, Hyderabad Bench, Hyderabad) is to apply his mind and come to a conclusion, that the same satisfies the requirements adumbrated under Section 30 (2) of the I B Code, 2016 - Undoubtedly, an approval of Resolution Plan, is to be Judged, with due diligence, by an Adjudicating Authority. In fact, the Resolution Plan is not a Sale / Auction/ Not Recovery / Not Liquidation. The Creditors will be bound by the Sums, stated to be Payable, under the Resolution Plan, of course, in accordance with Section 31, of the Insolvency Bankruptcy Code, 2016. The pros and cons of the Scheme / Resolution Plan, is required to be thoroughly scrutinised, regarding a subjective satisfaction, being arrived at, by an Adjudicating Authority. A Resolution Professional is to find out, whether the Resolution Plan of a Resolution Applicant, satisfies the requirements, mentioned in Section 30 (2) of the I B Code, 2016 - In the instant case, the Adjudicating Authority, (National Company Law Tribunal, Hyderabad Bench, Hyderabad) came to the conclusion, that the Resolution Plan, satisfies the requi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appellant , it was 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, 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th 97.18% votes cast in favour of Approval of Resolution Plan. 17. In K Sashidhar Vs. Indian Overseas Bank Others, decided on 05.02.2019 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Limited Versus Edelweiss Asset Reconstruction Company Limited. 22. Accordingly, the MoA and AoA shall be amended and filed with the RoC for information 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 C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dent was approved by the Committee of Creditors , and the same was submitted before the Adjudicating Authority , (National Company Law Tribunal, Hyderabad Bench, Hyderabad) for 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 , ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lation of Section 30 (2) (b) of the I B Code, 2016, as the Appellant , would have received, the whole claim sum , in accordance with Section 53 of the I B Code, 2016, as the Claim of 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 ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dmitted the same. The said details run as under: - Financial Creditors: - (Amount in Rupees) S. No. Name of Financial Creditor Amount of Claim Amount Admitted by IRP 1. State Bank of India 3,68,54,47,056 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is no dispute of the fact that the 2nd Respondent / M/s. Harsha Constructions Pvt. Ltd. / Successful Resolution Applicant , submitted its Resolution Plan , to the Committee of Creditors , in the meeting , that took place on 27.09.2021. Furthermore, the 2nd Respondent / `M/s. Harsha Constructions Pvt. Ltd. , was advised to improve the Offer , in the 8th Committee of Creditors Meeting , that took place on 27.10.2021. 27. At this juncture, it is useful for this Tribunal , to advert to the essential ingredients of the Resolution Plan , furnished by the 2nd Respondent / Successful Resolution Applicant and the same is as follows: - Sl. No. Category of Stakeholder Amount claimed (Rs) Amount Admitted (Rs) Amount Provided under the Plan Amount Provided to the Amount Admitted (%) 1. Secured Financial Creditors 6,17,42,24,968 6,17,42,24,968 5,50,00,000 0.89% 2. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Report , to the Committee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cant , 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 , Full ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accordance 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ound that the Resolution 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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