2019 (6) TMI 1152 - Tri - Insolvency and Bankruptcy

Tribunal approves resolution plan in CA No.339/2018, dismisses plea for impleadment in CA No.477/2018.

Punjab National Bank Versus Rishi Ganga Power Corporation Limited

Punjab National Bank Versus Rishi Ganga Power Corporation Limited - TMI Issues Involved:1. Impleadment of Ex-Director as Respondent/Objector.2. Approval of the Resolution Plan.Issue-wise Detailed Analysis:1. Impleadment of Ex-Director as Respondent/Objector:The ex-Director filed CA No.477/2018 under Section 60(5) of the Insolvency and Bankruptcy Code, 2016 (the Code) for impleadment as respondent/objector in CA No.339/2018. The ex-Director claimed entitlement to attend the Committee of Creditors (CoC) meetings as a shareholder of the corporate debtor. The Tribunal noted that under Section 24 of the Code, the ex-Director is entitled to attend but not vote in CoC meetings. The ex-Director attended only the second CoC meeting, and no objections were raised by rival resolution applicants. The Tribunal found no merit in the plea for impleadment but allowed the ex-Director's counsel to be heard regarding objections to the resolution plan. Consequently, CA No.477/2018 was disposed of without accepting the impleadment plea.2. Approval of the Resolution Plan:CA No.339/2018 was filed by the Resolution Professional (RP) seeking sanction of the resolution plan under Sections 30(6) and 31 of the Code. The insolvency petition initiated by Punjab National Bank was admitted on 25.01.2018, and the Interim Resolution Professional (IRP) was appointed on 30.01.2018. The IRP issued a public announcement inviting claims, constituted the CoC, and appointed two valuers to determine the liquidation value, which was assessed at Rs. 15.39 crores. The CoC resolved to continue the IRP as the RP and approved the evaluation matrix for resolution plans.The RP received three resolution plans from M/s. Kundan Care Products Ltd., M/s. Ajanta Energy Pvt. Ltd., and M/s. Agam Pulp and Papers Pvt. Ltd. The CoC adopted the Swiss Challenge Method, leading to the final bid of Rs. 45.12 crores by M/s. Kundan Care Products Ltd., which was adjudged the successful resolution applicant. The CoC approved the resolution plan by 100% voting share.The ex-Director raised objections, including allegations of haste and malafide intentions, inadequate publicity, and undervaluation of assets. The Tribunal found these objections unsubstantiated and noted that the resolution plan complied with Section 30(2) of the Code, providing for insolvency resolution process costs, repayment of operational creditors, management and implementation of the resolution plan, and adherence to legal provisions.The Tribunal examined the compliance of the resolution plan with the Code and Regulations, including the feasibility and viability of the plan, and found it satisfactory. The RP certified that the resolution plan met all requirements, and the CoC approved it after considering its feasibility and viability.The Tribunal approved the resolution plan submitted by M/s. Kundan Care Products Ltd., binding on all stakeholders, with directions for the resolution applicant to deposit an additional Rs. 50,00,000 for operational creditors and abide by any directions or orders regarding the corporate debtor's assets. The moratorium order ceased to have effect, and the RP was directed to forward all records to the Board.Conclusion:The Tribunal disposed of CA No.477/2018 without accepting the plea for impleadment but heard the ex-Director's objections. The Tribunal approved the resolution plan in CA No.339/2018, binding on all stakeholders, with specific directions for the resolution applicant and cessation of the moratorium order.