Tribunal Approves Resolution Plan under Insolvency Code with High Voting Share

The Tribunal approved the Resolution Plan submitted by M/s. Sai Baba Business Solutions Pvt. Ltd. under Section 31(1) of the Insolvency and Bankruptcy Code, 2016, with 89.51% voting share in favor. Despite reconsideration, Mr. Gagan Bothra's Expression of Interest and Resolution Plan were rejected due to lack of clarity. The Tribunal directed the treatment of unsecured creditors' claims at par, resulting in a revised payout percentage. The Resolution Plan's implementation was detailed, including the formation of an Interim Monitoring Committee. The Tribunal granted the reliefs sought by the Resolution Applicant, finding the Plan compliant with the relevant regulations.

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Issues Involved:
1. Approval of the Resolution Plan under Section 31(1) of the Insolvency and Bankruptcy Code, 2016.
2. Reconsideration of ineligible Expression of Interest (EoI).
3. Claims of unsecured creditors.
4. Objections from related parties and other creditors.
5. Implementation and management of the Resolution Plan.
6. Reliefs and concessions sought by the Resolution Applicant.

Issue-wise Detailed Analysis:

1. Approval of the Resolution Plan under Section 31(1) of the Insolvency and Bankruptcy Code, 2016:
The Resolution Professional submitted the Resolution Plan approved by the Committee of Creditors (CoC) for approval under Section 31(1) of the I&B Code, 2016. The CoC, after deliberations, approved the Resolution Plan submitted by M/s. Sai Baba Business Solutions Pvt. Ltd. for a sum of Rs. 28,55,06,654/- with 89.51% voting share in favor.

2. Reconsideration of ineligible Expression of Interest (EoI):
Initially, the EoI from Mr. Gagan Bothra was found ineligible. He filed MA/39/2019 seeking reconsideration, and the Tribunal directed the CoC to reconsider his EoI, extending the CIR Process period by 90 days. Despite multiple opportunities, Mr. Gagan Bothra’s EoI and Resolution Plan were ultimately rejected by the CoC due to lack of clarity on Plan amount and Payment terms.

3. Claims of unsecured creditors:
The Resolution Professional initially rejected claims of two unsecured creditors, Mr. Mukanchand Bothra and Mr. Jonathan Mouralidarane. The Tribunal, through Orders dated 02.07.2019 and 31.07.2019, directed the Resolution Professional to treat their claims at par with other unsecured Financial Creditors, resulting in a revised payout of 27.53% for all unsecured Financial Creditors.

4. Objections from related parties and other creditors:
Related parties and other objectors raised concerns about the payout percentage and the liquidation value of the property. The Resolution Professional clarified that related parties are treated at par with other unsecured financial creditors and the Resolution Applicant has the discretion to distribute the Resolution Plan amount within the provisions of the I&B Code, 2016.

5. Implementation and management of the Resolution Plan:
The Resolution Plan detailed the implementation process, including the formation of an Interim Monitoring Committee (IMC) consisting of the Resolution Professional, a nominee of a Secured Financial Creditor, and a nominee from the Resolution Applicant. The Plan also specified that all payments to stakeholders would be completed within 30 days from the approval date.

6. Reliefs and concessions sought by the Resolution Applicant:
The Resolution Applicant sought various reliefs, including the extinguishment of all liabilities, termination of proceedings, and exemptions from certain taxes. The Tribunal granted these reliefs, stating that they fall within the parameters of the I&B Code, 2016.

Conclusion:
The Tribunal approved the Resolution Plan, finding it compliant with Section 30(2) of the I&B Code, 2016, and relevant regulations. The Resolution Plan is binding on the Corporate Debtor and all stakeholders. The moratorium order ceased to have effect from the date of this Order, and the Resolution Professional was directed to forward all records to the IBBI. The approved Resolution Plan became effective immediately, and the Resolution Professional was instructed to notify all participants and the Resolution Applicant.

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