Tribunal approves Resolution Plan under Insolvency Code

The Tribunal allowed the application for approval of the Resolution Plan under Section 30(6) of the Insolvency and Bankruptcy Code, 2016. The Resolution Plan submitted by the Respondent was approved by the Committee of Creditors with 67.08% of votes in favor. The Tribunal found the Plan compliant with the relevant provisions of the Code and directed its immediate implementation, subject to existing laws and approvals, with the Resolution Professional instructed to submit all records to the Insolvency and Bankruptcy Board of India.

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Issues Involved:
1. Approval of the Resolution Plan under Section 30(6) of the Insolvency and Bankruptcy Code, 2016.
2. Compliance with the provisions of the Insolvency and Bankruptcy Code, 2016 and related regulations.
3. Eligibility of the Resolution Applicant under Section 29A of the Code.
4. Voting and approval process by the Committee of Creditors (CoC).
5. Distribution of payments to various creditors and stakeholders.
6. Implementation and supervision of the Resolution Plan.
7. Legal proceedings and reliefs sought by the Resolution Applicant.

Detailed Analysis:

1. Approval of the Resolution Plan under Section 30(6) of the Insolvency and Bankruptcy Code, 2016:
The application IA No. 352 of 2019 was filed by the Resolution Professional (RP) of the Corporate Debtor, M/s. Shaifali Rolls Limited, seeking approval of the Resolution Plan submitted by Respondent No. 3. The Resolution Plan was approved by the CoC with 67.08% votes in favor, as per the provisions of the Code.

2. Compliance with the provisions of the Insolvency and Bankruptcy Code, 2016 and related regulations:
The RP made a public announcement inviting claims from creditors and constituted the CoC as per Section 21 of the Code. The CoC approved the eligibility criteria for inviting Expression of Interest (EoI) and extended the CIRP period by 90 days beyond 180 days. The RP received two resolution plans, and the plan from M/s. Fitcast was discussed and approved by the CoC.

3. Eligibility of the Resolution Applicant under Section 29A of the Code:
The CoC discussed the eligibility of M/s. Fitcast, considering the declaration of the Corporate Debtor and its directors as willful defaulters. A legal opinion was obtained, which gave a positive conclusion over the selection of M/s. Fitcast as a prospective Resolution Applicant.

4. Voting and approval process by the Committee of Creditors (CoC):
The CoC held multiple meetings to discuss and negotiate the Resolution Plan. The final revised plan was submitted on 24th May 2019 and was E-voted till 8 PM on 4th June 2019, with a voting summary showing 67.08% in favor. The RP confirmed the compliance of the Resolution Plan with Section 30(2) of the Code and Regulation 38A of the CIRP Regulations.

5. Distribution of payments to various creditors and stakeholders:
The Resolution Plan proposed payments to CIRP costs, workmen and employees' dues, operational creditors, financial creditors, and statutory creditors. The total payment proposed was Rs. 19,20,00,000. The plan also included provisions for additional capital expenditure and operating expenses.

6. Implementation and supervision of the Resolution Plan:
A Monitoring Committee was to be formed, including members of the new management and the present RP as Chairman, to monitor the activities of the Corporate Debtor until the final payment. The existing equity and preference shares were to be re-rated and reorganized.

7. Legal proceedings and reliefs sought by the Resolution Applicant:
The approval of the Resolution Plan does not mean automatic waiver or abatement of any legal proceedings pending by or against the Company/Corporate Debtor. The Resolution Applicant may approach competent authorities for appropriate reliefs sought in the Resolution Plan.

Conclusion:
The Tribunal, after reviewing the compliance with Section 30(2) of the Code and the approval by the CoC, allowed the application IA 352 of 2019. The Resolution Plan was found to meet the requirements of Section 31 r/w Section 30(2) of the Code, and the Tribunal directed that the approved Resolution Plan shall come into force immediately, subject to existing laws and necessary approvals. The Resolution Professional was also directed to forward all records to the Insolvency and Bankruptcy Board of India. Any other pending IAs were disposed of as infructuous.

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