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TMI Blog2022 (12) TMI 1434X X X X Extracts X X X X X X X X Extracts X X X X ..... cease to have effect from the date of this order. Application allowed. - Dr. Deepti Mukesh, Hon ble Member (Judicial) Ajai Das Mehrotra, Hon ble Member (Technical) For the Appellant : Mr. Devang Nanavati, Sr. Advocate And Mr. Monaal Davawala, Advocate For the Respondent : Mr. Bishwajit Dubey, Advocate For the Suspended Management: Mr. Prachiti Shah, Advocate For the CoC : Mr. Rahul Sarda, Advocate ORDER 1. This application has been filed by Mr. Avil Menezes , Resolution Professional of the Corporate Debtor AMW Motors Ltd. under Section 30(6) read with Section 31(1) of the Insolvency Bankruptcy Code, 2016 ( Code ) 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. 2. The facts in brief are that the Corporate Debtor was admitted into Corporate Insolvency Resolution Process ( CIRP ) by this Adjudicating Authority vide order dated 01.09.2020, in an application filed by the financial creditor Indian Overseas Bank under Section 7 of the Code triggering the moratorium and the Applicant herein ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... days and vide order dated 19.02.2021 extention was allowed. The CoC also resolved to extend the timeline for submission of resolution plan by 30 days, i.e. till 17.02.2021 and thereafter twice resolved to further extend the last date for submission of resolution plan to 20.04.2021. 5. It is submitted that extention of CIRP period by 60 days beyond 270 days was allowed vide order dated 31.05.2021. In the 12 th CoC meeting held on 18.05.2021 the resolution plan submitted by Gladiator Consortium was discussed and after due deliberation CoC directed Applicant Resolution Professional to inform prospective resolution applicant to improve the financial plan / commercial offer of the resolution plan. The CoC in its 14 th meeting resolved to file an application for exclusion of 8 weeks on account of Covid-19 pandemic and the application by Resolution Professional for this exclusion was allowed vide order dated 26.07.2021. Despite various opportunities given to the prospective resolution applicant, Gladiator Consortium to revise the plan, no revised resolution plan was submitted. Thus, the CoC in its 18th meeting held on 10.08.2021 discussed the commercials of the resolution plan submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that. 7. The prospective resolution applicant Triton Electric Vehicle LLC has submitted its resolution plan and the same was discussed in 25th and 26th CoC meetings held on 23.03.2022 and 04.04.2022. The CoC in 26th meeting through e-voting held from 05.04.2022 to 29.04.2022 approved the resolution plan of Triton Electric Vehicle LLC by 99.6% voting share. The resolution passed by CoC is reproduced hereunder: RESOLVED THAT the Resolution Plan dated February 23, 2022, and as amended from time to time and submitted on March 28, 2022 along with First Addendum to the Resolution Plan submitted on April 04, 2022 by Triton Electric Vehicle LLC ( Triton Resolution Plan ) is hereby approved by the Committee of Creditors of the AMW Motors Limited pursuant to Section 30(4) of the Insolvency and Bankruptcy Code, 2016 and the rules and regulations thereunder. The copy of the e-voting is also annexed with the application. 8. As per Form-H annexed by the Applicant, the Fair Value and Liquidation Value of the Corporate Debtor are Rs. 271.43/- Crores and Rs. 162.59/- crores, respectively. The present Resolution Plan offers an amount of Rs. 210 crores including CIRP cost of Rs. 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... costs shall be paid at actuals from the upfront cash in priority to any other debt and / or creditor of the Corporate Debtor. 13. The sources of funds for making payments to various stakeholders by the Resolution Applicant as provided at clause 5.01 of the Resolution plan is reproduced below: a) The Upfront Cash and any subsequent working capital infusion shall be brought in by the Resolution Applicant/ its Nominee(s) and shall be contributed to the Corporate Debtor as a mix of equity capital or preference capital or loans or other instrument by the Resolution Applicant/ its Nominee(s). b) The portion of the Upfront Cash to be paid to the Financial Creditors as part of the assignment of the Financial Debt, if any, as per the terms of the Resolution Plan may be paid directly by the Resolution Applicant/ its Nominee(s) to the Financial Creditors simultaneously along with the assignment. c) The Resolution Applicant has sufficient liquid funds to honour its commitment to pay the Upfront Cash in accordance with this Resolution Plan. However, the Resolution Applicant retains the right to arrange the requisite funds from various sources including but not limited to inv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an Operational Creditor is reclassified as a Financial Creditor such a Creditor shall then be payable from the amounts set out in Section 4.06 above on a proportionate basis. It was further submitted that only the Assistant Commissioner, Special Circle-II Udaipur Rajasthan, had filed its claim arising under the Rajasthan Value Added Tax Act, 2003 which has a provision for first charge similar to GVAT Act. Thus, being a secured government dues, under a summary of payments to be made to different classes of creditors and stakeholders of the Corporate Debtor under resolution plan, the percentage of amount provided to secured government dues is similar to the percentage of amount provided to secured financial creditors i.e. 5.33%. (The revised summary is given in page 19 of the affidavit bifurcating government dues into secured and unsecured categories.) Clarification 2 : As per Form-H (page 767), no provision for payment is made for unsecured Financial Creditors who have not voted in favour of the Resolution Plan whereas those who have voted in favour of the Resolution Plan are being paid 6.71% of the admitted claims. This is apparently a violation of Sub-section (2) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Resolution Applicant would not have been bound by the terms of the Resolution Plan. However, the Resolution Plan has already been approved by the CoC on 29.04.2022 i.e. prior to 22.08.2022. Therefore, this clause is not a condition to the implementation of the Resolution Plan and the Resolution Plan and / or its validity remains unaffected by the above said clause. The Resolution Professional has further, submitted that, In any event, I say that during the hearing dated December 9, 2022, the Ld. Counsel Mr. Nanavati, appearing on behalf of the Resolution Applicant made a statement on record that the Resolution Applicant is ready and willing to implement the Resolution Plan in terms of the above mentioned clause. Therefore, the clause is not an impediment to the sanctity / implementation of the Resolution Plan. 18. It is noted that certificate as regard to eligibility of resolution applicant under Section 29A alongwith undertaking of the Resolution Applicant to this effect has been filed in the form of affidavit. We have perused the contents of Resolution Plan and we are of the view that all requirements provided under Section 30(2) of Code and Regulation 36 to 39 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces on the assets of the Corporate Debtor before the plan shall stand permanently extinguished. d) For reliefs and concessions sought from the Government/Statutory Authorities in connection with the implementation of the Resolution plan, we direct the resolution applicant to approach the concerned Authorities. The concerned Authorities may decide the matter as per applicable provisions of law for effective implementation of the Resolution Plan. e) The management of the Corporate Debtor shall be handed over to the Board of Directors as may be nominated by the Successful Resolution Applicant for proper running operations of the business of the Corporate Debtor; f) The Board of Directors of the Corporate Debtor shall also be reconstituted and procedural compliances shall be done to give effect to such reconstitution; g) The resolution applicant shall, pursuant to the resolution plan approved under Section 31(1) of the Code, obtain necessary approvals required under any law for the time being in force within a period of one year from the date of approval of the resolution plan by the Adjudicating Authority under Section 31 or within such period as provided for in such law, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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