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TMI Blog2022 (3) TMI 1515X X X X Extracts X X X X X X X X Extracts X X X X ..... n Plan, the CoC shall forfeit the EMD amount already paid by the Resolution Applicant. Subject to the observations made in this Order, the Resolution Plan in question is hereby approved - application allowed. - IA (IB) No.374/ALD/2021 in CP (IB) No.355/ALD/2019 - - - Dated:- 22-3-2022 - Shri Rajasekhar V.K. : Member (Judicial) And Shri Virendra Kumar Gupta : Member (Technical) For the RP : Ms. Babita Jain, Advocate ORDER Per: Virendra Kumar Gupta, Member (Technical) Preliminary 1. This Application IA (IB) No.374/Ald/2021 was moved on behalf of Sumit Shukla , Resolution Professional ( RP ) of Trimurti Concast Private Limited (CIN:U27104UP1989PTC011063), invoking the provisions of section30(6) of the Insolvency BankruptcyCode,2016 [hereinafter referred to as the Code or IBC ] read with regulation 39(4) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 ( CIRP Regulations ) for approval of the Resolution Plan in respect of Trimurti Concast Private Limited ( the Corporate Debtor )which was approved by 100% CoC on 18th COC meeting held on 17.11.2021. 2. The underlying Compan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 05.10.2020 6thCoC Meeting 05.12.2020 7thCoC Meeting 12.02.2021 8thCoC Meeting 23.02.2021 9thCoC Meeting 08.03.2021 10thCoC Meeting 18.03.2021 11thCoC Meeting 25.03.2021 12thCoC Meeting 07.05.2021 13thCoC Meeting 15.05.2021 14thCoC Meeting 19.06.2021 15thCoCMeeting 31.07.2021 16th COC meeting 27.08.2021 17th COC meeting 13.10.2021 18th COC meeting 17.11.2021 7. The Applicant submits that the 1st Form G was published by the IRP and no resolution plan was received primarily due to nation wide lock down on account of COVID Pandemic and accordingly as per the decision of the COC member the RP published 2nd Form G on 17th August 2020 by the RP and one resolution plan from the PRA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vt Ltd further revised the resolution plan by way of addendum affidavit on 4th August 2021. 12. That 15th COC meeting of the COC member was held on 31st July 2021 COC deliberated upon all the four resolution plans which were subsequently put for the voting process and sole COC member had approved the Resolution Plan submitted by Sarvottam Rolling Mills Pvt Ltd with 100% vote on 19th August 2021. However on 20th August 2021 Sarvottam Rolling Mills Pvt Ltd sent an email to the applicant resolution professional intimating the withdrawal as well as seeking the refund of the deposit whereas the RP informed Sarvottam Rolling Mills Pvt Ltd that resolution plan submitted by them has been approved by the COC and requested to deposit the performance security as per the terms of the RFRP but in response the Sarvottam Rolling Mills Pvt Ltd reiterated their email decision dated 20th August 2021. Taking note of the email of withdrawal of plan by Sarvottam Rolling Mills Pvt Ltd, on 25th August 2021 the applicant called for the 16th meeting of the COC member on 27th August 2021. Based upon the discussions held in the meeting, the RP file an application before this Adjudicating Authority seeking ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reditors based upon the outcome of the application filed by the RP regarding the claim Nil 5. Operational Creditors (statutory authorities) Rs 3 lakhs upfront 6. Operational Creditors excluding statutory liabilities (workmen, employees, trade payables) Rs 4 lakhs upfront 7. Payments to statutory authorities towards contingent claims NIL Total Rs 1132.00 lakhs 17. The Applicant has also placed the liquidation value which takes note in Form H, Page 174 of the Application and also the Fair Value. Valuers were appointed by the IRP and on account of the significant variations in the valuation, 3rd valuer was appointed and the closest two valuations has been considered to arrive at fair and liquidation value. RP informed the COC regarding the fair and liquidation value. Computation of the valuations are given as below: Compliance of the successful Resolution Plan with various provisions 18. The Applicant has submitted the details of various compliances ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... page 73 application seeking approval on the resolution plan (e) Provides for the implementation and supervision of the resolution plan? Propsoed in Para 1(e) of the Resolution plan, page 71 and page 74 application seeking approval on the resolution plan (f) Contravenes any of the provisions of the law for the time being in force? Provided in Para 1(g)(ii) of the Resolution Plan, page 77 application seeking approval on the resolution plan Mandatory contents of Resolution Plan in terms of regulation 37 of CIRP Regulations: A resolution plan shall provide for the measures, as may be necessary, for insolvency resolution of the corporate debtor for maximization of value of its assets, including but not limited to the following: - (a) transfer of all or part of the assets of the corporate debtor to one or more persons; Provided (b) sale of all or part of the assets whether subject to any security interest or not; Plan does not provide for sale of any assets of the Corpora ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (k) change in technology used by the corporate debtor; and No such specific proposal has been made (l) obtaining necessary approvals from the Central and State Governments and other authorities.] As provided in Annexure 2, Page 88 of the application for approval of resolution plan which provides for various approvals / concessions sought by the Resolution Applicant Mandatory contents of Resolution Plan in terms of Regulation 38 39 of CIRP Regulations: Requirements under Regulation 38 39 of the CIRP Regulations Compliances and relevant Page number(s) of the IA No 374/2021 for the approval of the Resolution Plan. [(1) The amount payable under a resolution plan - (a) to the operational creditors shall be paid in priority over financial creditors; and On page 37 of the Application seeking approval on the resolution plan vide IA No. 374/2021 wherein RA has proposed upfront payment to operational creditors in the following manner:- (i) Rs. 3 Lakhs towards statutory Authorities and (ii) Rs. 4 Lakhs to Wor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resolution plan shall demonstrate that (a) it addresses the cause of default; (b) it is feasible and viable; (c) it has provisions for its effective implementation; (d) it has provisions for approvals required and the timeline for the same; and (e) the resolution applicant has the capability to implement the resolution plan.] Covered in Para I of the Resolution Plan placed in page 75 to 77 of the IA No 374/2021 Regulation 39 (1) A prospective resolution applicant in the final list may submit resolution plan or plans prepared in accordance with the Code and these regulations to the resolution professional electronically within the time given in the request for resolution plans under regulation 36B along with Complied (a) an affidavit stating that it is eligible under section 29A to submit resolution plans; (c) an undertaking by the prospective resolution applicant that every information and records provided in connection with or in the resolution plan is true and correct and discovery of false information and record at any time will render the applicant ineligibl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt submits that the successful Resolution Applicant has submitted a certificate of eligibility under Section 29A of the Code, which has been annexed as Annexure 10 at pages 94 to97 of the Application. 20. The applicant further submits that Resolution Applicant s undertaking which has been enclosed as Annexure 11 wherein copy of the undertaking affidavit dated 04.06.2021 submitted by the RA Shree Shailja Iron Steels Pvt. Ltd. u/s 30(1) of the Code in compliance to the provisions of Regulation 39(c) of CIRP Regulations and confidentiality undertaking. 21. The Applicant has filed a Compliance Certificate in prescribed form, i.e., Form H incompliance with regulation 39(4) of the Insolvency Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, which has been annexed as Annexure 15 at pages 174 to185 of the Application. 22. The applicant further stated that that the acquisition of the corporate debtor through revival/resolution plan do not qualify as 'Combination' define Under Section 5 of Competition Act 2002 due to threshold limit given in said section. hence, the same is not mentioned in the Resolution Plan as it does no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... position, we grant the reliefs, waiver and claims made by the Resolution Applicant in the following manner and only to this extent: - i. After the payment of the dues to the creditors, as per the resolution plan, all the liabilities of the said stakeholders shall stand permanently extinguished after the approval of the resolution plan. We further hold that other claims including Government/Statutory Authority, whether lodged during CIRP or not, shall stand extinguished after the approval of the resolution plan. We further hold that contingent/unconfirmed dues shall also stand extinguished. ii. In view of the judgment of Ghanashyam Mishra Sons Pvt Ltd v. Edelweiss Asset Reconstruction Company Ltd, 2021 SCC OnLine SC 313 decided on 13.04.2021.where the Hon'ble Supreme Court held in para 95(i) that once a Resolution Plan is approved, a creditor cannot initiate proceedings for recovery of claims which are not part of the Resolution Plan. Therefore, all claims except provided in the plan shall stand permanently extinguished. iii. On the effective date and with effect from the appointed date, all encumbrances on the assets of the Corporate Debtor prior to the plan sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his regard under the provisions of the Companies Act, 2013. xiii. For changing of name and address of the Corporate Debtor the consent of the member/shareholders is deemed to have been obtained and the resolution applicant shall approach the concerned authorities under provisions of the Companies Act, 2013 for complying with the procedural aspects. xiv. On the effective date and with effect from the appointed date, the entire existing share capital of the Corporate Debtor shall stand extinguished without any payment (including any cancelled value of the said equity shares or preference shares) to shareholders of the Corporate Debtor holding such existing share capital. The Resolution Applicant would be entitled to issue new equity share capital in accordance with the provisions of Companies Act, 2013 read with the rules and regulations made thereunder. Findings: 27. On hearing the submissions made by the Ld. Counsel for the Resolution Professional and perusing the record, we find that the Resolution Plan has been approved with100%voting share. As per the CoC, the Plan meets the requirement of being viable and feasible revival of the Corporate Debtor. By and lar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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