Tribunal Approves Resolution Plan under Insolvency Code, Prioritizing Creditor Payments

The Tribunal approved the Resolution Plan under Sections 31(1) and 60(5) of the Insolvency and Bankruptcy Code, 2016, finding it compliant with relevant regulations. The Plan included payment allocations to creditors, exceeded the liquidation value, prioritized CIRP costs, and established a monitoring committee for implementation. Concessions and waivers were granted, and compliance with Section 29A of the IBC was confirmed. The Resolution Plan was deemed feasible and viable, binding all stakeholders and effective immediately upon approval.

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Issues Involved:
1. Approval of the Resolution Plan under Sections 31(1) and 60(5) of the Insolvency and Bankruptcy Code, 2016.
2. Compliance with the Insolvency and Bankruptcy Code, 2016, and relevant regulations.
3. Distribution of payment to creditors.
4. Evaluation of the Resolution Plan against liquidation value.
5. CIRP costs and their prioritization.
6. Implementation and supervision of the Resolution Plan.
7. Concessions and waivers requested by the Resolution Applicant.
8. Compliance with Section 29A of the IBC.
9. Compliance with Section 30(2) of the IBC and relevant regulations.

Detailed Analysis:

1. Approval of the Resolution Plan:
The Resolution Professional, Mr. Manish Agarwal, submitted the Resolution Plan approved by the Committee of Creditors (CoC) and sought its approval under Sections 31(1) and 60(5) of the IBC, 2016, read with Regulation 39 of the CIRP Regulations, 2016. The Tribunal approved the Resolution Plan, making it binding on all stakeholders, including the Corporate Debtor, its employees, members, creditors, and statutory authorities.

2. Compliance with IBC and Relevant Regulations:
The Resolution Plan was evaluated for compliance with Section 30(2) of the IBC, 2016, and relevant regulations. The Resolution Professional confirmed that the Plan met all requisite conditions, including the submission of Form-H and evidence of receipt of performance security.

3. Distribution of Payment to Creditors:
The Resolution Plan proposed a total payment of Rs. 4.5 Crore, with Rs. 4 Crore allocated to the Financial Creditor (SASF - IDBI Bank Ltd) and Rs. 50 Lakhs to the Operational Creditor (Noida SEZ). These payments were to be made within 30 days of the Plan's approval.

4. Evaluation Against Liquidation Value:
The Resolution Plan offered Rs. 4.5 Crore, which exceeded the Liquidation Value of Rs. 4.25 Crores but was below the Average Fair Value of Rs. 6.10 Crores. The Tribunal noted that the amount offered was more than the Liquidation Value, thus satisfying one of the critical requirements.

5. CIRP Costs and Prioritization:
The Resolution Plan provided for the full payment of CIRP costs in priority to all other creditors. These costs were to be paid within 30 days of the Plan's approval.

6. Implementation and Supervision:
The Plan outlined the formation of a Monitoring Committee comprising representatives from the Financial Creditor, the Resolution Applicant, and the Resolution Professional. This committee was tasked with supervising the implementation of the Plan.

7. Concessions and Waivers:
The Plan included various concessions and waivers, such as the withdrawal of all inquiries, investigations, and proceedings related to the Corporate Debtor. It also allowed the Corporate Debtor to carry forward accumulated business losses and unabsorbed depreciation.

8. Compliance with Section 29A of the IBC:
The Resolution Applicant submitted an affidavit confirming that neither they nor any connected person was disqualified under Section 29A of the IBC. The Tribunal verified this compliance as part of the approval process.

9. Compliance with Section 30(2) of the IBC and Relevant Regulations:
The Resolution Plan complied with all the requirements set out in Section 30(2) of the IBC and relevant regulations. This included the payment of CIRP costs, addressing the interests of all stakeholders, and ensuring the Plan's feasibility and viability.

Conclusion:
The Tribunal approved the Resolution Plan submitted by the Resolution Professional, making it binding on all involved parties. 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 send a copy of the Order to all participants and the Resolution Applicant.

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