Tribunal Approves GMSPL Resolution Plan, Dismisses Objections

The tribunal approved the resolution plan of Ghanashyam Mishra & Sons Private Limited (GMSPL) as it complied with all legal requirements. The plan garnered over 89.23% of the financial creditors' voting share, ensuring the corporate debtor's management continuity. Claims by Edelweiss Asset Reconstruction Company Limited (EARC) and the District Mining Officer (DMO) of Jharkhand were not admitted due to lack of documentation and matured claims. The tribunal dismissed objections raised by EARC and DMO, deeming them unsustainable under the law. The RP was commended for successfully concluding the Corporate Insolvency Resolution Process (CIRP) and obtaining plan approval.

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Issues Involved:
1. Legality and propriety of not ranking Edelweiss Asset Reconstruction Company Limited (EARC) as H1 applicant.
2. Legality and propriety of not admitting claims submitted by EARC and District Mining Officer (DMO) of Jharkhand.
3. Approval of the resolution plan of Ghanashyam Mishra & Sons Private Limited (GMSPL).

Issue-wise Analysis:

1. Legality and Propriety of Not Ranking EARC as H1 Applicant:
The resolution professional (RP) initiated two bidding processes. In the initial round, EARC was declared H1 but was reluctant to remove certain conditions in its plan, leading to the annulment of the first bidding process. In the second bidding process, GMSPL was ranked H1, SREI Infrastructure Finance Ltd. as H2, and EARC as H3. The comparative chart showed GMSPL's offer was better than others. The reduction of EARC's offer from Rs. 350 Crore to Rs. 282 Crore indicated a lack of competitive intent. The tribunal found no violation of the evaluation matrix or the Code and Regulations in ranking GMSPL as H1.

2. Legality and Propriety of Not Admitting Claims Submitted by EARC and DMO of Jharkhand:
- EARC's Claims:
EARC's claim based on an uninvoked corporate guarantee was not admitted. The RP repeatedly asked EARC to clarify if the guarantee was invoked, but received no response until February 21, 2018, confirming it was uninvoked. The tribunal held that an uninvoked corporate guarantee cannot be considered a matured claim. The invocation of the pledge on April 30, 2018, during the moratorium period, was also deemed illegal.

- DMO of Jharkhand's Claims:
DMO's claim was not admitted due to inadequate supporting documents. Despite repeated requests, DMO failed to provide necessary documentation. The tribunal found that DMO's claim did not constitute more than 10% of the entire claim and thus was not entitled to participate in the CoC meetings. The tribunal also found no violation of the Hon'ble Supreme Court's directions or the Code and Regulations by the RP.

3. Approval of the Resolution Plan of GMSPL:
The tribunal found that the RP complied with all requirements under Section 30(2) of the Code and Regulations 37 and 38 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. The resolution plan of GMSPL was approved by more than 89.23% of the voting share of financial creditors. The plan provided for the management of the corporate debtor post-CIRP, ensuring the business continued as a going concern. The tribunal approved the resolution plan, binding on all stakeholders, and dismissed the objections raised by EARC and DMO of Jharkhand as unsustainable under law.

Orders:
1. CA(IB) No. 402/KB/2018: The resolution plan of GMSPL is approved.
2. CA(IB) No. 398/KB/2018: Dismissed without costs.
3. CA(IB) No. 470/KB/2018: Dismissed with costs of Rs. 100,000.
4. CA(IB) No. 509/KB/2018: Dismissed with costs of Rs. 100,000.

The tribunal appreciated the RP, Mr. Sumit Binani, for successfully completing the CIRP and ensuring the approval of the resolution plan.

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