Digjam Ltd. Resolution Plan Approved under Insolvency Code: Payment Modifications Post-COVID

The Tribunal approved the Resolution Plan for M/S. Digjam Ltd., submitted by WS Finquest Financial Solutions Pvt. Ltd., under Section 30(6) of the Insolvency and Bankruptcy Code. The plan was found compliant with statutory requirements and included modifications in payment timelines due to the COVID-19 pandemic. The revised schedule for payments to creditors was approved by the Committee of Creditors, with immediate effect and subject to necessary approvals within a year. The Resolution Professional was directed to submit all records to the Insolvency and Bankruptcy Board of India, and related applications were disposed of accordingly.

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Issues Involved:
1. Approval of the Resolution Plan under Section 30(6) of the Insolvency and Bankruptcy Code (IBC) 2016.
2. Compliance of the Resolution Plan with statutory requirements.
3. Modifications in the timeline for payment due to COVID-19 pandemic.

Issue-wise Detailed Analysis:

1. Approval of the Resolution Plan under Section 30(6) of the Insolvency and Bankruptcy Code (IBC) 2016:
The application was filed by the Resolution Professional (RP) for approval of the Resolution Plan for the Corporate Debtor, M/S. Digjam Ltd. The Corporate Insolvency Resolution Process (CIRP) was initiated by an operational creditor, M/S Oman Inc., and the application was admitted on 26/04/2019. The Committee of Creditors (COC) was constituted, and the Resolution Plan submitted by WS Finquest Financial Solutions Pvt. Ltd. was approved by the COC with a 100% voting share.

2. Compliance of the Resolution Plan with statutory requirements:
The Resolution Plan was examined for compliance with various sections of the IBC and CIRP Regulations. It was found to meet the criteria under Sections 25(2)(h), 29A, 30(1), 30(2), 30(4), and 31(1) of the IBC, and Regulations 35A, 38(1), 38(1A), 38(1B), 38(2), 38(3), and 39(2) of the CIRP Regulations. The plan included provisions for payment of insolvency resolution process costs, debts of operational creditors, financial creditors, management of the corporate debtor, and implementation and supervision of the plan. It also addressed the cause of default, feasibility, viability, and capability of the resolution applicant to implement the plan.

3. Modifications in the timeline for payment due to COVID-19 pandemic:
Due to the financial difficulties arising from the COVID-19 pandemic, the Resolution Applicant sought modifications in the timeline for payments to financial and operational creditors. The revised schedule included an initial payment of Rs. 27.14 Crores within 90 days of the resolution plan approval or 15 days after the end of the lockdown, and subsequent payments of Rs. 20 Crores, Rs. 23.93 Crores, and Rs. 23.93 Crores at intervals of 180, 410, and 775 days respectively. The COC, particularly UCO Bank with an 83.31% voting share, approved the revised timeline, while SBI, holding a 16.69% share, partially agreed.

Conclusion:
The Tribunal approved the Resolution Plan with modifications in the payment timeline, emphasizing that the plan was in compliance with statutory requirements and the modifications were justified due to the pandemic. The approval was granted with immediate effect, subject to existing laws and necessary approvals to be obtained within a year. The RP was directed to forward all records to the Insolvency and Bankruptcy Board of India. The application IA 144/19 was allowed with modifications, and other pending applications were disposed of.

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