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TMI Blog2025 (3) TMI 974X X X X Extracts X X X X X X X X Extracts X X X X ..... peals were filed challenging the Order of the Adjudicating Authority rejecting the resolution plan and the orders passed in the other connected IAs. The objection to the plan was raised by the dissenting financial creditors. The present is a case where Clause 21 of the plan itself contemplates mechanism of payment to the assenting financial creditor and dissenting financial creditor. Liquidation value of dissenting financial creditor is provided to be paid prior to any recovery are made by assenting financial creditor, hence there is no indication in the resolution plan that the dissenting financial creditor has to be paid as per instalment i.e., for period of 10 years. The decision by dissenting financial creditor not to approve the plan was on the premise that they were not agreeable to receive the 100% payment of their claim within 10 years period rather they were satisfied to receive only lesser amount i.e., 15% in case of IDBI as liquidation value before any payment is made to the assenting financial creditor. Judgment of this Tribunal in Puro Natural Sugars JV, does not come to the aid of the appellant in the facts of the present case where payment to dissenting financial cr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding that dissenting financial creditor were entitled to receive their full payment before any recovery is made by the assenting financial creditor. vii. The application filed by dissenting financial creditor were opposed by learned counsel appearing for the SRA. viii. Adjudicating Authority after hearing both the parties had allowed the application by the impugned order dated 20.12.2024. Adjudicating Authority directed that the dissenting financial creditor be paid before any payment is made to the assenting financial creditor. ix. Aggrieved by the said order, the SRA has filed this appeal. 3. We have heard Ms. Anusuya Salwan counsel appearing for the appellant. Learned Sr. counsel, Mr. Krishnendu Datta has appeared for Respondent Nos. 1 to 5. Learned Sr. counsel, Mr. Abhijeet Sinha has appeared for Respondent No. 6, the State Bank of India (SBI). 4. Learned counsel for the appellant in support of the appeal submits that under the resolution plan, the payment to the financial creditor is spread into 10 years instalments. The plan having been approved payment to all financial creditors, including assenting and dissenting financial creditor has to be made as per the same sch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the assenting financial creditors are being paid their 100% percent of exposure although within 10 years, but dissenting financial creditors has dissented since they did not agree for receiving the payment in 10 years. Hence, they dissented it so that they may receive the liquidation value before payment is made to the assenting financial creditors. The plan never contemplated that dissenting financial creditor shall also be paid in the instalments. The assenting financial creditor is getting recovery of their 100% percent of exposure, whereas, IDBI Bank is receiving only less than 15% of the exposure. If the payment of the said 15% is allowed to be spread in 10 years, the dissenting financial creditor shall suffer inseparable loss. They decided to dissent so that they may receive the liquidation value immediately. Clause 21 of the resolution plan is clear that liquidation value of dissenting financial creditor will be made before any recovery are made by the financial creditors who voted in favour of the resolution plan. Thus, the plan clearly contemplated that dissenting financial creditor will receive their liquidation value before any recoveries are made. Thus, before any re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch contains repayment schedule has been extracted and reproduced hereinbelow : March June September December 2024 - - 0.125% 0.125% 2025 0.125% 0.125% 0.250% 0.250% 2026 0.250% 0.250% 0.250% 0.250% 2027 0.250% 0.250% 0.250% 0.250% 2028 0.250% 0.250% 0.500% 0.500% 2029 0.500% 0.500% 1.500% 1.500% 2030 1.500% 1.500% 3.125% 3.125% 2031 3.125% 3.125% 5.500% 5.500% 2032 5.500% 5.500% 6.750% 6.750% 2033 6.750% 6.750% 9.000% 9.000% 2034 9.000% Since Respondent 1 is refusing to pay in full to the Applicants before any payment could be made to the assenting Financial Creditors this application seeking reliefs mentioned in Paragraph No. 3 above." 10. Applicant's (dissenting financial creditors) case has been captured by Adjudicating Authority in paragraph 10, whereas, the IDBI Bank's case is that as per the share of liquidation, it will be receiving 14.27 Crore and if the said payment is computed as assenting lenders, he would be receiving 95.5 Crore. Learned counsel for the dissenting financial creditor has submitted that the dissenting financi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... receiving the 100% dues in 10 years period. Dissenting financial creditor, relying on Clause 21 of the plan dissented in accepting the amount in 10 years period and agreed to receive the liquidation value before any recoveries are made to the assenting financial creditor. Adjudicating Authority after noticing the relevant clause and considering the submissions has interpreted Clause 21 in paragraph 44 and 45 in the following words: "44. Clause 21 clearly contemplates payment to the dissenting financial creditors before any recoveries are made by financial creditors who voted in favour of the resolution plan. "Ld. Counsel for respondents vehemently argued that the words "in proportion to the liquidation value" arrived in the clause 21 of the Resolution Plan means that the "proportionate value in instalments". 45. We are of the view of the view that "in proportion to the liquidation value mentioned in this clause would only mean the liquidation value applicable to dissenting financial creditors as contemplated under Section 30(2)(b)(ii). The words "before any recoveries are made by the financial creditors who voted in favour of the resolution plan" makes it abundantly clear tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ses clearly provided for payment to dissenting Financial Creditor in priority, since the payment in favour of the dissenting Financial Creditor has to be made prior to payment to the assenting creditors, be it upfront payment or payment by installments. The submission of the learned Counsel for Respondent Nos.1 and 2 that they were entitled for upfront payment and provision of not providing upfront payment violates the provision of IBC and CIRP Regulations cannot be accepted. The provisions of Resolution Plan in C-3(V) providing for payment to dissenting Financial Creditors are not in contravention of any provisions of Section 30, sub-section (2) or CIRP Regulations. We, however, have already noticed the clarification made by the Successful Resolution Applicant before the Adjudicating Authority that entire payment to the dissenting Financial Creditors shall be paid upfront within 90 days from the date of approval of the Plan. The learned Counsel appearing for Successful Resolution Applicant has also made same submission before us that entire payment to the dissenting Financial Creditor shall be made upfront within 90 days, which clarification was given before the Adjudicating Autho ..... X X X X Extracts X X X X X X X X Extracts X X X X
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