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TMI Blog2023 (7) TMI 1375X X X X Extracts X X X X X X X X Extracts X X X X ..... of Gujrat and Central Excise, Government of India. There were statutory dues of also Gujarat Industrial Development Corporation and Surat Municipal Corporation. Claims of the statutory dues were reflected in the Information Memorandum. Under the Resolution Plan payment to Gujarat Industrial Development Corporation and Surat Municipal Corporation to keep the Corporate Debtor as a going concern. There can be no dispute to the law as laid down by the Hon ble Supreme Court in COMMITTEE OF CREDITORS OF ESSAR STEEL INDIA LIMITED THROUGH AUTHORISED SIGNATORY VERSUS SATISH KUMAR GUPTA OTHERS [ 2019 (11) TMI 731 - SUPREME COURT ] where it was held that there can be differential payment in payment of debts of Financial Creditors and Operationa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall be distributed on prorata basis between all Operational Creditors. - Justice Ashok Bhushan, Chairperson and Barun Mitra, Member (Technical) For Appellant: Mr. Abhijeet Sinha, Mr. Karan Valecha, Mr. Ravi Pahwa, and Mr. Saikat Sarkar, Advocates. For Respondents: Mr. Samaksh Goyal, for R-1 (RP). Mr. Ankit Raj, Mr. Piyush Beriwal and Mr. Shashank Shekhar, Advocates for R-2 (PNB). Mr. Aditya Wadhwa and Mr. Yash Giri, Advocates for R-3. ORDER Heard learned counsel for the Appellant as well as learned counsel appearing for the Respondents. This Appeal has been filed against the order dated 23.08.2022 by which order the Adjudicating Authority has rejected the application filed by the Resolution Professional being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted the submission of learned counsel for the Appellant and contends that the Resolution Professional has rightly filed the application for approval of the plan. The payments made to the two entities were for the purpose of keeping the Corporate Debtor going concern and as per Section 53 waterfall mechanism, none of the other creditors were entitle for payment. In fact, the Financial Creditor from its own entitlement has agreed to give amount to two entities so that the Corporate Debtor may run. 4. Learned counsel for the Dissenting Financial Creditor i.e. Respondent No.3 has opposed the submission of the learned counsel for the Appellant as well as learned counsel for the Resolution Professional and submits that there cannot be any disc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s fallen into grave error. Paragraph 76 clearly refers to the UNCITRAL Legislative Guide which makes it clear beyond any doubt that equitable treatment is only of similarly situated creditors. This being so, the observation in paragraph 77 cannot be read to mean that financial and operational creditors must be paid the same amounts in any resolution plan before it can pass muster. On the contrary, paragraph 77 itself makes it clear that there is a difference in payment of the debts of financial and operational creditors, operational creditors having to receive a minimum payment, being not less than liquidation value, which does not apply to financial creditors. The amended Regulation 38 set out in paragraph 77 again does not lead to the con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y 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 Operation Creditors, there cannot be any discrimination between payment of one class of Creditors. 8. As far as the submission that payment was made to Gujarat Industrial Development Corporation and Surat Municipal Corporation to keep the Corporate Debtor as a going concern, the said payment can very well be made by the Corporate Debtor but not in the manner as adopted in the Resolution Plan. In the present case, the Resolution Plan was approved by the CoC on 06.08.2021 with 99.84% vote share, however, t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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