Tribunal Approves Resolution Plan for NCIRCLE EXIM LLP

The Tribunal approved the resolution plan submitted by "NCIRCLE EXIM LLP" under Sections 30(6) and 31(1) of the Insolvency and Bankruptcy Code. Despite objections raised by the Operational Creditor, the plan was deemed compliant with the IBC and CIRP Regulations. The Tribunal upheld the commercial wisdom of the Committee of Creditors, stating it was not subject to judicial review. The resolution plan was found equitable towards all stakeholders, meeting legal requirements. The plan was approved with 100% voting rights, binding on all parties, and the moratorium order was lifted, with pending applications deemed infructuous.

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Issues Involved:
1. Approval of the Resolution Plan under Section 30(6) and 31(1) of the Insolvency and Bankruptcy Code (IBC), 2016.
2. Compliance with the requirements of the IBC and CIRP Regulations.
3. Objections raised by the Operational Creditor regarding the Resolution Plan.
4. Commercial wisdom of the Committee of Creditors (CoC) and judicial review.

Detailed Analysis:

1. Approval of the Resolution Plan:
The application was filed under Section 30(6) and 31(1) of the IBC, 2016, seeking approval of the resolution plan submitted by "NCIRCLE EXIM LLP." The Corporate Insolvency Resolution Process (CIRP) of the corporate debtor was initiated by the Tribunal on 29.05.2018. Despite efforts, no resolution plan was initially submitted, leading to a liquidation resolution by the CoC. However, the Tribunal granted another opportunity to the suspended management. Eventually, the CoC approved the resolution plan of NCIRCLE EXIM LLP with 100% voting rights on 27th October 2020.

2. Compliance with IBC and CIRP Regulations:
The Resolution Professional (RP) confirmed that the resolution plan complied with Section 30(2) of the IBC and Regulation 38 of the CIRP Regulations. The plan was approved by the CoC by 100% voting share. The RP also submitted a compliance certificate in Form-H, certifying the eligibility of the resolution applicant under Section 29A of the Code and the feasibility and viability of the resolution plan. The resolution plan met all mandatory contents as specified in Regulation 38 and 39 of the CIRP Regulations.

3. Objections by the Operational Creditor:
The Operational Creditor raised objections, stating that the CoC approved the plan without considering the legality and providing a categorical item-wise breakup of CIRP costs amounting to Rs. 8 crores. They also argued that the plan did not align with a prior settlement agreement and failed to consider the forensic auditor's report. The Tribunal observed that the resolution plan provided for payment of 18.84% of the admitted claims of operational creditors, which was more than the liquidation value. The Tribunal held that the plan had dealt with the interests of all stakeholders as per Section 53 of the IBC, and the operational creditors were treated equitably.

4. Commercial Wisdom of the CoC and Judicial Review:
The Tribunal emphasized the principle that the commercial wisdom of the CoC is not subject to judicial review. Citing the Supreme Court's judgment in "K. Sashidhar vs. Indian Overseas Bank," the Tribunal reiterated that the decision of the CoC cannot be interfered with if it meets the requirements of Section 30(2) of the IBC. The Tribunal found that the resolution plan was neither discriminatory nor perverse and met the requirements of the Code and regulations.

Conclusion:
The Tribunal approved the resolution plan submitted by "NCIRCLE EXIM LLP," finding it in conformity with Section 30(2) of the IBC. The plan was binding on all stakeholders, and the moratorium order ceased to have effect. The RP was directed to forward all records to the Insolvency and Bankruptcy Board of India (IBBI). All pending applications were disposed of as infructuous.

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