TATA Steel's Plan Approved with High Vote Share; L&T's Claim Rejected, Costs Imposed

The Tribunal approved the resolution plan submitted by TATA Steel Limited with a 99.80% affirmative voting share by the Committee of Creditors. Larsen & Toubro Limited's claim as a secured creditor was rejected, and they were directed to pay a cost of Rs. 1 lakh. Objections raised by Bhushan Employees were dismissed, with a cost of Rs. 1 lakh imposed on Mr. Rahul Sengupta personally. The Tribunal directed the Ex-Management to cooperate with the Resolution Professional and rejected objections by Bhushan Energy Limited regarding power purchase agreements. All other applications were disposed of accordingly.

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Issues Involved:
1. Acceptance of the resolution plan under Sections 30 & 31 of the Insolvency and Bankruptcy Code, 2016.
2. Status of Larsen & Toubro Limited as a secured creditor.
3. Objections raised by Bhushan Employees regarding the eligibility of the HI Resolution Applicant.
4. Application under Section 19(2) of the Code by the Resolution Professional.
5. Objections by Bhushan Energy Limited regarding the termination of power purchase agreements.

Issue-wise Detailed Analysis:

1. Acceptance of the Resolution Plan:
The Tribunal examined the resolution plan submitted by TATA Steel Limited (TSL) and approved by the Committee of Creditors (CoC). The plan was submitted under Sections 30 & 31 of the Insolvency and Bankruptcy Code, 2016. The Tribunal confirmed that the resolution plan met all requirements under Section 30(2) of the Code, including the payment of insolvency resolution process costs, repayment of operational creditors, management of the corporate debtor's affairs, and compliance with the law. The plan was approved with an affirmative voting share of 99.80% by the CoC. The Tribunal also addressed the reliefs and concessions sought by the resolution applicant, directing that they be considered by the relevant authorities in accordance with the law.

2. Status of Larsen & Toubro Limited as a Secured Creditor:
Larsen & Toubro Limited (L&T) filed an application seeking to be treated as a secured creditor. The Tribunal rejected this claim, stating that L&T, as a supplier of goods and services, falls under the category of operational creditors. The Tribunal emphasized that there was no document showing the creation of a charge or security warranting L&T to be regarded as a secured creditor. The Tribunal dismissed L&T's application with a cost of Rs. 1 lakh to be deposited in the account of the Corporate Debtor.

3. Objections Raised by Bhushan Employees:
Bhushan Employees raised objections regarding the eligibility of the HI Resolution Applicant under Section 29A of the Code. The Tribunal examined the objections, including allegations about the conviction of Tata Steel UK and the involvement of Mr. C. Sivasankaran. The Tribunal found that Tata Steel UK's conviction did not attract disqualification under Section 29A(d) of the Code, as the provision applies to natural persons and not juristic persons. The Tribunal also dismissed the allegations regarding Mr. Sivasankaran, stating that there was no evidence to show that he or his company was a connected person. The Tribunal dismissed the application filed by Bhushan Employees with a cost of Rs. 1 lakh to be paid by Mr. Rahul Sengupta personally.

4. Application under Section 19(2) of the Code by the Resolution Professional:
The Resolution Professional (RP) filed an application under Section 19(2) of the Code, seeking cooperation from the Ex-Management. The Tribunal directed the Ex-Management to cooperate in all respects during the implementation of the resolution plan. The Tribunal granted liberty to the Monitoring Agency to apply for further directions against the Ex-Management if necessary.

5. Objections by Bhushan Energy Limited:
Bhushan Energy Limited (BEL) objected to the resolution plan, claiming that it unlawfully terminated power purchase agreements (PPAs) with the Corporate Debtor. The Tribunal rejected BEL's objections, stating that the resolution plan, approved by the CoC, takes effect notwithstanding the requirement of consent from members or partners of the Corporate Debtor. The Tribunal held that the termination of PPAs was within the commercial wisdom of the CoC and did not violate any legal provisions.

Conclusion:
The Tribunal approved the resolution plan submitted by TSL and dismissed the applications filed by L&T and Bhushan Employees. The objections raised by BEL were also rejected. The Tribunal directed the Ex-Management to cooperate during the implementation of the resolution plan and granted liberty to the Monitoring Agency to seek further directions if needed. All other applications were disposed of.

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