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TMI Blog2023 (8) TMI 798X X X X Extracts X X X X X X X X Extracts X X X X ..... entitlement as per Section 30(2)(b). There is no dispute that liquidation value of the Appellant in the present case is nil. The submission of the Appellant that there is a discrimination between the payment of assenting unsecured financial creditor and dissenting unsecured financial creditor cannot be accepted and on the ground, as urged by the Appellant in this Appeal, the Resolution Plan approved by the Adjudicating Authority cannot be held to be discriminatory. There is no error in the order of the Adjudicating Authority approving the Resolution Plan - there is no merit in the Appeal - appeal dismissed. - [ Justice Ashok Bhushan ] Chairperson And [ Barun Mitra ] Member ( Technical ) For the Appellant : Mr. Ankur Kashyap, Mr. Ajith S. Ranganathan, Mr. Rohit Rajershi, Mr. Aman Bajaj and Ms. Gloria Gomies, Advocates. For the Respondents : Mr. Prateek Kumar, Mr. Siddharth Srivastava, Ms. Raveena Rai, Ms. Apeksha Dhananjay, Advocates for R-1. Ms. Srideep Bhatttacharya and Ms. Neha Shivhare, Advocates for R-5. Mr. Gopal Jain, Sr. Advocate for R-5. JUDGMENT Ashok Bhushan, J. 1. This Appeal has been filed by a dissenting Financial Creditor c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nancial Services Pvt. Ltd. are unsecured Financial Creditors. Although Indian Factoring and Financial Services Pvt. Ltd. who assented the plan is being paid INR 1.48 Cr. but the Appellant who abstained from voting is being proposed nil . Learned Counsel for the Appellant submits that the legislative history of the IBC and the amendments made therein indicate that legislature never intended any discrimination between one class of Financial Creditor. Referring to the judgment of this Tribunal in Central Bank of India v. Resolution Professional of the Sirpur Paper Mills Ltd.- (2018) SCC OnLine NCLAT 1034 , it is submitted that the amendments were made in the Regulations 2016 dated 05.10.2018 deleting the definition of Dissenting Financial Creditor . Liquidation value being paid to Dissenting Financial Creditors were specifically omitted from the CIRP Regulations as in Regulation 38(1)(c). Amendments were brought into IBC in August 2019 by Insolvency and Bankruptcy Code (Amendment) Act, 2019 amending Section 30(2)(b) providing certain additional provision that at least a minimum amount (not nil) is paid to the Dissenting Financial Creditors and the distribution must be fair a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ors is also not correct. Another financial creditor who assented the plan has been paid as per the payment envisaged in the plan. Approval of the plan by the CoC is the commercial wisdom of the CoC does not warrant any interference by this Tribunal. 6. We have considered the submissions of the Learned Counsel for the parties and perused the record. 7. The Resolution Plan giving rise to this Appeal has been approved by the CoC on 16.11.2022 which ultimately was approved by the Adjudicating Authority on 17.05.2023. We may first notice the relevant provisions of the statute which were applicable at the time when Resolution Plan was presented and came for approval before the Adjudicating Authority. 8. Section 30(2)(b) of the IBC Code came to be amended by Act 26 of 2019 w.e.f. 16.08.2019. Section 30(2)(b) is as follows:- 30. Submission of resolution plan. -(2) The resolution professional shall examine each resolution plan received by him to confirm that each resolution plan ****** (b) provides for the payment of debts of operational creditors in such manner as may be specified by the Board which shall not be less than (i) the amount to be paid to such cr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... When we look into Section 30(2)(b), it specifically contemplates about the payment of debts of financial creditors who do not vote in favour of the Resolution Plan which shall not be less than the amount to be paid to such creditors in accordance with sub-section (1) of Section 53 in the event of a liquidation of the Corporate Debtor. Thus, the statute clearly contemplates that minimum payment to such creditor who do not vote in favour of the Resolution Plan as payable to such creditor in accordance with sub-section (1) of Section 53 in the event of a liquidation of the Corporate Debtor. Regulation 38 (a) (b) provides that the financial creditors, who did not vote in favour of the Resolution Plan, shall be paid in priority over financial creditors who voted in favour of the plan. The priority in payment is a different aspect than the amount to which the creditor who does not vote in favour of the plan is entitled. Regulation has to be read in consonance with the provisions of the IBC, as per Section 240 of the IBC Code which empower the Board to make Regulations consistent with the Code and to carry out the provisions of this Code. A dissenting financial creditor is entitled for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... covery percentage as financial creditors. So long as the provisions of the Code and the Regulations have been met, it is the commercial wisdom of the requisite majority of the Committee of Creditors which is to negotiate and accept a resolution plan, which may involve differential payment to different classes of creditors, together with negotiating with a prospective resolution applicant for better or different terms which may also involve differences in distribution of amounts between different classes of creditors. 12. It was further noticed the amendment made in Section 30(2)(b) by amending Act, 2019 has also been noticed by the Hon ble Supreme Court and it was observed that the provision is a beneficial provision in favour of the Operational Creditors and dissenting Financial Creditors as they are now to be paid a certain minimum amount, the minimum amount in case of dissenting financial creditor has to be paid as contemplated in the statute. In paragraphs 128 129 of the Hon ble Supreme Court has laid down following:- 128. When it comes to the validity of the substitution of Section 30(2) (b) by Section 6 of the Amending Act of 2019, it is clear that the substituted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t it is otherwise in conformity with the provisions of the Code and the Regulations, as has been laid down by this judgment. 13. Learned Counsel for the Appellant has referred to judgment of this Tribunal in Central Bank of India v. Resolution Professional of the Sirpur Paper Mills Ltd. (supra). The above judgment of this Tribunal was considering the Regulation 38 as it existed prior to amendment made in Regulation 38 on 27.11.2019. The observations made by this Tribunal in paragraph 9 regarding Regulation 38 as existing at that time is not relevant as on date when the Regulations have been amended. The submission of Counsel for the Appellant that legislative amendments in IBC Code and Regulations indicate that legislature always intended to make payment to assenting financial creditor and dissenting financial creditor the same amount is clearly not reflected in the expressed provision of the IBC as noticed above. 14. Learned Counsel for the Appellant has also relied on the judgment of this Tribunal in Facor Alloys Limited and Anr. vs. Bhuvan Madan and Ors. (supra) in which case this Tribunal had occasion to consider issue as to whether the Resolution Plan approved by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... editor was nil but even if Resolution Plan proposed any payment to the Operational Creditor there could not have any discrimination between one class of creditors. Following was observed in paragraph 7:- 7. Present is a case where admittedly the claims of two Operational Creditors- State Tax, Government of Gujrat and Central Excise, Government of India were filed as has been admitted by the learned counsel for the Resolution Professional. It was open for the Resolution Applicant not to allocate any amount to any of the Operational Creditor since under Section 53 no entitlement was there in accordance with the total amount available for distribution. However, when the Successful Resolution Applicant was making payment to other two Operational Creditors, there cannot be any discrimination between payment of one class of Creditors. 17. The above judgment does not help the Appellant in the present case since present is a case where Appellant is claiming discrimination between assenting unsecured and dissenting unsecured Financial Creditors. 18. In the above reference, we may also notice Form-H under Regulations 2016 as amended by Notification dated 27.11.2019. Clause 7 of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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