Tribunal Approves Liberty House Group's Plan under Insolvency Code, Moratorium Lifted

The Tribunal approved the Resolution Plan submitted by Liberty House Group Pte. Ltd., finding it compliant with the Insolvency and Bankruptcy Code. The plan was deemed binding on all relevant parties, and the moratorium order was lifted. The Resolution Professional was instructed to transfer all records to the Insolvency and Bankruptcy Board of India. The objections raised by MSTC Limited and the Workers Union were dismissed, with no costs awarded. The Tribunal commended the Resolution Professional for effectively resolving the corporate debtor's distressed assets.

---

---

Issues Involved:
1. Approval of the Resolution Plan under Section 31(1) and Sub-section (5) of Section 60 of the Insolvency and Bankruptcy Code, 2016.
2. Objection by MSTC Limited regarding the non-consideration of its claim as insolvency resolution process costs.
3. Objection by the Workers Union regarding non-payment of wages and increment.

Issue-wise Detailed Analysis:

1. Approval of the Resolution Plan:
The Resolution Professional (RP) filed an application under Sub-section (6) of Section 30 and Section 31 of the Insolvency and Bankruptcy Code, 2016, for the approval of the Resolution Plan. The RP, Mr. Sumit Binani, was appointed as the Interim Resolution Professional by the Committee of Creditors (CoC) and continued with the Corporate Insolvency Resolution Process (CIRP). The CoC received and considered multiple resolution plans, ultimately approving the plan submitted by Liberty House Group Pte. Ltd. with a vote share of 99.94%. The RP verified that the plan met all the requirements under Section 30(2) of the I&B Code and filed it with the necessary certifications.

2. Objection by MSTC Limited:
MSTC Limited, a Public Sector Undertaking, objected to the approval of the Resolution Plan, claiming that it incurred costs amounting to Rs. 343.43 crores for facilitating the procurement of raw materials during the CIRP period, out of which only Rs. 244.12 crores had been paid. MSTC argued that the remaining amount should be considered as insolvency resolution process costs. The RP countered that MSTC's claim was for an operational debt and not for resolution costs, and that the resolution costs had already been cleared. The Tribunal found that MSTC, being a facilitator, did not own the raw materials and that its claim for pre-CIRP dues fell under operational debt. The Tribunal dismissed MSTC's application, stating that the claim was unsustainable and devoid of merit.

3. Objection by the Workers Union:
The Workers Union, representing 578 workmen, filed an application under Sub-section (5) of Section 60 of the I&B Code, contending that the workers were not paid wages for May 2018 and that increments agreed upon in the Memorandum of Settlement were not considered. The RP admitted the claim for wages but argued that the arrears could not be disbursed due to insufficient funds and that the resolution applicant would pay the wages within 30 days of the plan's approval. The Tribunal found that the RP's non-consideration of the increment was justified due to the lack of funds and dismissed the Workers Union's application, stating that the relief sought could not be entertained before the approval of the resolution plan.

Final Judgment:
The Tribunal approved the Resolution Plan submitted by Liberty House Group Pte. Ltd., stating that it met all the requirements under Section 30(2) of the I&B Code. The plan was binding on the corporate debtor, its employees, members, creditors, guarantors, and other stakeholders. The moratorium order ceased to have effect, and the RP was directed to forward all records to the Insolvency and Bankruptcy Board of India. The Tribunal appreciated the RP's efforts in successfully resolving the corporate debtor's stressed assets. Both objections, CA(IB) No. 614/KB/2018 by MSTC and CA(IB) No. 595/KB/2018 by the Workers Union, were dismissed with no order as to costs.

Orders:
1. The Resolution Plan of Liberty House Group Pte. Ltd. is approved and binding on all stakeholders.
2. The revival plan of the company shall come into force immediately.
3. The moratorium order under Section 14 shall cease to have effect.
4. The RP shall forward all records to the Insolvency and Bankruptcy Board of India.
5. Appreciation was extended to the RP for the successful resolution process.
6. CA(IB) No. 614/KB/2018 and CA(IB) No. 595/KB/2018 are dismissed with no order as to costs.
7. CP(IB) No. 373/LB/2017 and all related applications are disposed of.

---