Tribunal approves Resolution Plan for Kharkia Steels under Insolvency Code

The Tribunal approved the Resolution Plan submitted by Amritvani Exim Private Limited for M/s. Kharkia Steels Private Limited under the Insolvency and Bankruptcy Code, 2016. The plan, which included an upfront payout to creditors and provisions for the company's revival, was found to meet the statutory requirements. The Committee of Creditors had previously endorsed the plan, and the Tribunal's approval made it binding on all relevant parties. Specific directions were issued for the plan's implementation, leading to the disposal of the case.

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Issues: Approval of Resolution Plan under the Insolvency and Bankruptcy Code, 2016

Detailed Analysis:

1. Application for Approval of Resolution Plan: The Resolution Professional filed an application for approval of the Resolution Plan of M/s. Amritvani Exim Private Limited under Section 60(5) and Section 30 of the Insolvency and Bankruptcy Code, 2016. The plan had been approved by the Committee of Creditors with a significant voting share.

2. Background and Initiation of CIRP: The Corporate Insolvency Resolution Process (CIRP) was initiated against M/s. Kharkia Steels Private Limited by M/s. Dena Bank (Now Bank of Baroda). Mr. Uday Narayan Mitra was appointed as the Interim Resolution Professional, later confirmed as the Resolution Professional. The CIRP commenced against the Corporate Debtor upon his appointment.

3. Details of the Resolution Plan: The Resolution Plan submitted by Amritvani Exim Private Limited included an upfront payout to creditors, a second tranche funding for new plant and machinery, and provisions for reliefs and concessions to enable the Corporate Debtor's revival. The Resolution Professional submitted a revised plan due to increased costs, which was approved by the Committee of Creditors.

4. Approval of Resolution Plan: The Committee of Creditors approved the Resolution Plan with a significant voting share. The Resolution Professional submitted the Fourth progress report for approval of the plan under Section 31(1) of the Code, but the hearing was delayed due to lockdown.

5. Urgent Hearing and Compliance: The applicant's counsel requested an urgent hearing through video conference, emphasizing the need for approval to revive the non-operational Corporate Debtor. The Resolution Plan aimed at reviving the company in compliance with the Supreme Court's judgment in a relevant case.

6. Extension of CIRP Period: An application was filed for an extension of the CIRP period, which was approved by the Committee of Creditors. The lockdown due to the Covid-19 pandemic did not count towards the CIRP period, ensuring the approval was within the stipulated time frame.

7. Compliance with Regulations: The Resolution Professional provided a Certificate in Form H as per Regulation 39(4) and ensured compliance with Regulation 38, addressing stakeholder interests, payment priorities, causes of default, feasibility, and effective implementation mechanisms.

8. Approval of Resolution Plan: The Tribunal approved the Resolution Plan as it met the requirements under Section 30(2) of the Code. The plan was found to fulfill the necessary criteria and was binding on all relevant parties as per Section 31 of the Insolvency and Bankruptcy Code, 2016.

9. Final Directions and Disposal: The Tribunal issued specific directions for the approval and implementation of the Resolution Plan, including the cessation of the moratorium order, transfer of records to the Insolvency and Bankruptcy Board of India, and communication of the order to all concerned parties. The case was disposed of accordingly.

This detailed analysis covers the key aspects of the judgment regarding the approval of the Resolution Plan under the Insolvency and Bankruptcy Code, 2016, providing a comprehensive overview of the issues involved and the Tribunal's decision.

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