Tribunal approves resolution plan by Mangalam Worldwide with 95.23% creditor vote

The Tribunal approved the resolution plan submitted by Mangalam Worldwide Private Limited, which was approved by the Committee of Creditors with 95.23% voting. The plan included payments to secured, unsecured financial, and operational creditors, resulting in an 80.2% haircut. Liabilities for offences committed prior to the commencement of CIRP were extinguished post-approval, and waivers for non-compliance fees, penalties, and income tax were granted. Guarantees and liabilities were extinguished, pending matters/litigation before Labor Court/Authorities were disposed of, and the resolution plan became effective immediately.

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Issues Involved:
1. Approval of the resolution plan under section 30(6) read with section 31 and section 60(5) of the Insolvency and Bankruptcy Code, 2016.
2. Exclusion of liabilities for offences committed prior to the commencement of CIRP.
3. Waiver of non-compliance fees, penalties, or additional duties by Government Authorities.
4. Waiver of income tax on waiver of principal and interests.
5. Extinguishing guarantees and liabilities post-approval of the resolution plan.
6. Disposal of pending matters/litigation before Labour Court/Authorities.

Detailed Analysis:

1. Approval of the Resolution Plan:
- The application was filed by the Resolution Professional for approval of the resolution plan after it was approved by the Committee of Creditors (COC) with 95.23% voting.
- The Corporate Debtor was admitted into CIRP on 16.03.2020, and the moratorium was declared with the appointment of Mr. Pawan Kumar Ramdhan Agarwal as the Interim Resolution Professional (IRP).
- The COC resolved to replace the IRP with Mr. Rishabh Chand Lodha as the Resolution Professional.
- The resolution plan was submitted by Mangalam Worldwide Private Limited and approved by the COC on 07.05.2021.
- The amounts provided under the resolution plan include Rs. 4792.7 Lakhs for secured creditors, Rs. 5 Lakhs for unsecured financial creditors, and Rs. 20 Lakhs for operational creditors.
- The total claim made by all claimants was Rs. 24355.87 Lakhs, with the proposed payment under the plan being Rs. 4817.7 Lakhs, resulting in an 80.2% haircut.
- The resolution plan was found to comply with all requirements of Section 30(2) of the IBC, 2016, and relevant CIRP Regulations, 2016.

2. Exclusion of Liabilities for Offences Committed Prior to CIRP:
- The Successful Resolution Applicant sought to exclude liabilities for offences committed prior to the commencement of CIRP, except for the liability of the Suspended Director or Suspended Management of the Company.
- The Tribunal held that all liabilities of the stakeholders would be extinguished after the approval of the resolution plan, including claims of Government/Statutory Authorities.

3. Waiver of Non-compliance Fees, Penalties, or Additional Duties:
- The Successful Resolution Applicant requested the waiver of non-compliance fees, penalties, or additional duties by Government Authorities.
- The Tribunal allowed the applicant to approach the concerned authorities for such reliefs, which would be considered as per applicable laws.

4. Waiver of Income Tax on Waiver of Principal and Interests:
- The applicant sought the waiver of income tax on the waiver of principal and interests by banks/institutions.
- The Tribunal directed the Corporate Debtor/Resolution Applicant to approach the Income Tax Authorities, who would decide on the relief and concessions as per the provisions of the Income Tax Act, 1961.

5. Extinguishing Guarantees and Liabilities Post-Approval:
- The applicant sought to extinguish all guarantees and liabilities post-approval of the resolution plan.
- The Tribunal directed that all encumbrances on the assets of the Corporate Debtor prior to the plan would be permanently extinguished upon completion of procedural formalities as per the Companies Act, 2013.

6. Disposal of Pending Matters/Litigation Before Labour Court/Authorities:
- The applicant sought the disposal of all pending matters/litigation before Labour Court/Authorities.
- The Tribunal held that the liabilities arising from orders/proceedings of the Labour Tribunal/Authorities would be extinguished from the appointed date of the plan.

Additional Directions:
- The approved resolution plan would become effective from the date of passing of the order.
- The order of moratorium passed under Section 14 of the IB Code, 2016, would cease to have effect from the date of passing of the order.
- The Resolution Applicant was granted liberty to approach competent authorities for any concession, relief, or dispensation required for the effective implementation of the plan.
- The duties of the Resolution Professional, Mr. Rishabh Chand Lodha, were discharged.

Conclusion:
The Tribunal approved the resolution plan, binding on the Corporate Debtor and all stakeholders, and provided specific directions for the implementation and reliefs sought by the Successful Resolution Applicant.

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