Garden Silk Mills Ltd Resolution Plan Approved under Insolvency Code

The Tribunal approved the Resolution Plan for Garden Silk Mills Limited under Section 30(6) of the Insolvency and Bankruptcy Code, 2016, as it met all statutory requirements. The plan was unanimously approved by the Committee of Creditors and complied with Section 29A. Revised claims from creditors were acknowledged, and the plan included detailed implementation steps. Various reliefs and concessions sought by the Resolution Applicant were granted, and arrangements regarding land parcels at Jolwa and rights of Surat Textile Mills Ltd were approved. The Resolution Plan was declared binding on all relevant parties.

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Issues Involved:
1. Approval of Resolution Plan under Section 30(6) of the Insolvency and Bankruptcy Code, 2016.
2. Compliance with Section 29A of the Insolvency and Bankruptcy Code, 2016.
3. Revision and admission of claims from creditors.
4. Implementation and execution of the Resolution Plan.
5. Reliefs and concessions sought by the Resolution Applicant.
6. Transfer and ownership of land parcels at Jolwa.
7. Rights and obligations concerning Surat Textile Mills Ltd.

Detailed Analysis:

1. Approval of Resolution Plan under Section 30(6) of the Insolvency and Bankruptcy Code, 2016:
The application for approval of the Resolution Plan for Garden Silk Mills Limited was filed under Section 30(6) read with Section 31 of the Insolvency and Bankruptcy Code, 2016. The Resolution Plan was approved unanimously by the Committee of Creditors (CoC) in its 6th meeting dated 23rd September 2020. The Resolution Professional certified that the plan complied with all requirements under Section 30(2) of the IBC, 2016 and relevant regulations. The Tribunal approved the Resolution Plan, noting that it met all statutory requirements and was not in contravention of any provisions of the law.

2. Compliance with Section 29A of the Insolvency and Bankruptcy Code, 2016:
The Resolution Applicant and its Special Purpose Vehicle (SPV) submitted affidavits confirming compliance with Section 29A of the IBC, 2016. The Tribunal noted that the Resolution Plan included necessary affidavits and undertakings from the Resolution Applicant and SPV, ensuring they met the eligibility criteria under Section 29A.

3. Revision and admission of claims from creditors:
During the hearing, it was noted that there was a minor change in the amount due to Operational Creditors. The revised claims were updated in IA No. 813 of 2020. The Tribunal acknowledged the revised claims and ensured that the Resolution Plan accounted for these changes. The updated claims included amounts for Financial Creditors, Operational Creditors (Workmen and Employees), Statutory Dues, and other creditors.

4. Implementation and execution of the Resolution Plan:
The Resolution Plan outlined a detailed implementation schedule, including the incorporation of an SPV, delisting of shares, reconstitution of the Board, capitalization, assignment of debt, and merger of the SPV with the Corporate Debtor. The Tribunal approved the steps for implementation and emphasized that any actions proposed by the Successful Resolution Applicant for the implementation of the Resolution Plan would be undertaken by the SPV.

5. Reliefs and concessions sought by the Resolution Applicant:
The Resolution Applicant sought various reliefs and concessions, including the extinguishment of past debts and claims, continuation of licenses and approvals, and exemptions from certain statutory obligations. The Tribunal granted these reliefs and concessions, subject to compliance with the scheme and provisions of the IBC, 2016, and relevant regulations. The Tribunal emphasized that the approval of the Resolution Plan did not automatically waive or abate pending legal proceedings, and the Corporate Debtor or Resolution Applicant could approach competent authorities for any necessary concessions or waivers.

6. Transfer and ownership of land parcels at Jolwa:
The Tribunal addressed the issue of seven parcels of land at Jolwa, noting that the promoters and related parties were the owners of six parcels, while one parcel was owned by a third party. The promoters provided undertakings that they had no right, title, or interest in the land and would cooperate in transferring the title to the Corporate Debtor. The Tribunal approved the arrangement, stating that the costs of the transfer, including any penalties or premiums, would be borne by the Corporate Debtor.

7. Rights and obligations concerning Surat Textile Mills Ltd:
The Tribunal considered the interdependence between Garden Silk Mills Ltd and Surat Textile Mills Ltd (STML). It was agreed that STML would have a perpetual right of way over a portion of GSML's land, and this arrangement would be binding on both entities. The Tribunal approved this arrangement and clarified that GSML would also have the right of access without any hindrance from STML.

Conclusion:
The Tribunal approved the Resolution Plan for Garden Silk Mills Limited, noting that it complied with all statutory requirements and addressed the interests of all stakeholders. The Tribunal granted various reliefs and concessions sought by the Resolution Applicant, subject to compliance with the IBC, 2016, and relevant regulations. The Tribunal also addressed specific issues concerning the transfer of land parcels at Jolwa and the rights of Surat Textile Mills Ltd. The Resolution Plan was declared binding on the Corporate Debtor, its employees, members, creditors, guarantors, and other stakeholders.

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