NCLT approves JSW Steel's resolution plan under Insolvency Code, dismisses Ex-Management request

The National Company Law Tribunal (NCLT) approved the resolution plan submitted by JSW Steel Limited, subject to compliance with the amended Section 30(2) of the Insolvency and Bankruptcy Code, 2016. The plan included concessions, upfront equity infusion, repayment of operational creditors, and post-approval management of the Corporate Debtor. The NCLT dismissed the applications for supplying copies of the resolution plan to the Ex-Management and rejected a settlement proposal by Mr. Sanjay Singal under Section 12A. The approved plan was deemed fair and compliant, ensuring the revival and continuity of the Corporate Debtor.

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Issues Involved:
1. Approval of the Resolution Plan submitted by JSW Steel Limited.
2. Supply of copies of the resolution plan to the Ex-Management of the Corporate Debtor.
3. Claims by Operational Creditors.
4. Settlement proposal by Mr. Sanjay Singal under Section 12A of the Insolvency and Bankruptcy Code, 2016.

Issue-Wise Detailed Analysis:

1. Approval of the Resolution Plan submitted by JSW Steel Limited:
The National Company Law Tribunal (NCLT) considered the resolution plan submitted by JSW Steel Limited under Sections 30(6) & 31(1) of the Insolvency and Bankruptcy Code, 2016. The plan was approved by the Committee of Creditors (CoC) and included various concessions. The plan was evaluated extensively in CoC meetings, and JSW Steel emerged as the highest evaluated plan. The plan proposed significant upfront equity for improving the operations of the Corporate Debtor and provided for the payment of insolvency resolution process costs, repayment of operational creditors, and management of the Corporate Debtor’s affairs post-approval. The NCLT approved the plan subject to compliance with the amended Section 30(2) of the Code, ensuring fair treatment of operational creditors, and adherence to applicable laws.

2. Supply of copies of the resolution plan to the Ex-Management of the Corporate Debtor:
The Ex-Management argued for the supply of the resolution plan based on the Supreme Court’s judgment in Vijay Kumar Jain v. Standard Chartered Bank. The NCLT noted that the Ex-Management had been given adequate opportunities to inspect the resolution plans and had acknowledged their satisfaction. The tribunal held that substantial compliance with the requirement of providing access to the resolution plan had been made, and no prejudice was caused to the Ex-Management. The tribunal dismissed the application for supplying copies of the resolution plan with costs imposed on the Ex-Management.

3. Claims by Operational Creditors:
The tribunal examined the treatment of operational creditors under the resolution plan, ensuring no discrimination between financial and operational creditors. The plan provided for the payment of 50% of the admitted claims of operational creditors, subject to a maximum cap, and 10% for contingent creditors. The tribunal found that the classification of contingent creditors was justified and complied with the law. The plan ensured that operational creditors were treated fairly, and their claims were addressed in accordance with the amended Section 30(2) of the Code.

4. Settlement proposal by Mr. Sanjay Singal under Section 12A of the Insolvency and Bankruptcy Code, 2016:
Mr. Sanjay Singal filed a settlement proposal under Section 12A, which requires approval from 90% of the CoC’s voting share. The proposal was rejected by major financial creditors, including Punjab National Bank and State Bank of India. The tribunal held that the settlement proposal did not meet the requirements of Section 12A and Regulation 30A of the CIRP Regulations, 2016. The application for placing the settlement proposal before the CoC was dismissed.

Conclusion:
The NCLT approved the resolution plan submitted by JSW Steel Limited, subject to compliance with the amended Section 30(2) of the Code and other applicable laws. The tribunal dismissed the applications for supplying copies of the resolution plan to the Ex-Management and the settlement proposal under Section 12A. The resolution plan was found to be fair and compliant with the legal requirements, ensuring the revival and continuation of the Corporate Debtor.

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