Approval of Resolution Plan under Insolvency Code emphasizes promoting resolution over creditor interference

The Resolution Plan under Section 30(6) of the Insolvency and Bankruptcy Code, 2016 was approved by the Adjudicating Authority, emphasizing the importance of promoting resolution and not interfering with commercial wisdom of the Committee of Creditors. Various creditors' claims were adjudicated, with some accepted based on enforceable arbitral awards and others rejected for being belated or fraudulent. The Resolution Plan was found compliant with statutory requirements, and the Resolution Professional's role was clarified as administrative, not adjudicatory. Disputed claims were directed to the appropriate forum for adjudication, and the approved Resolution Plan became effective, ending the moratorium order.

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Issues Involved:
1. Approval of the Resolution Plan under Section 30(6) of the Insolvency and Bankruptcy Code, 2016.
2. Claims of various creditors and their treatment under the Resolution Plan.
3. Compliance with statutory requirements and provisions of the Code.
4. Jurisdiction and role of the Resolution Professional.
5. Adjudication of disputed claims.

Detailed Analysis:

1. Approval of the Resolution Plan:
The application was filed by the Resolution Professional under Section 30(6) of the Insolvency and Bankruptcy Code, 2016, seeking approval of the Resolution Plan. The Resolution Plan was approved by the Committee of Creditors (CoC) with a majority vote of 89.92%. The Adjudicating Authority emphasized that it is not expected to substitute its view with the commercial wisdom of the CoC unless the plan is contrary to the express provision of law and public interest. The object of the Code is to promote resolution and every effort must be made to try and see that resolution is made possible.

2. Claims of Various Creditors:
- Bagai Steel Syndicate (CA 38 (PB)/2019): The claim amounting to Rs. 6,39,03,187.84/- was allowed as it was based on an enforceable arbitral award.
- M/s. Kanti Bijlee Utpadan Nigam Ltd. (CA No. 1219 (PB)/2018): The claims were rejected as they were belated and based on unascertained notional unilateral calculations.
- M/s. Sree Shanthosh Steels Pvt. Limited (CA No. 557 (PB)/2018): The claim was rejected as barred by limitation and alleged to be fraudulent.
- Pending Adjudication Claims (CA No. 828 (PB)/2018, CA No. 938 (PB)/2018, CA No. 357 (PB)/2018): These claims were pending adjudication before the Hon’ble High Court of Delhi and could not be over-ridden by the Resolution Professional.
- CBRE South Asia Private Limited (CA No. 939 (PB)/2018): The claim was partially accepted, and the applicant was advised to move the appropriate forum for the disputed amount.
- SAIL (CA No. 556 (PB)/2018): The claims were pending adjudication and would be dealt with in accordance with the law after final adjudication.
- Other Claims (CA No. 824 (PB)/2018, CA No. 940 (PB)/2018, CA No. 603 (PB)/2018): These claims were either belated or pending adjudication and were advised to be moved to the appropriate forum.

3. Compliance with Statutory Requirements:
The Resolution Plan was examined for compliance with Section 30(2) of the Code. The Resolution Professional confirmed that the plan provided for the payment of insolvency resolution process costs, the payment of debts of operational creditors, management of the corporate debtor’s affairs, implementation and supervision of the plan, and did not contravene any provisions of the law. The plan also included a performance security of Rs. 5 crores as stipulated by the CoC.

4. Jurisdiction and Role of the Resolution Professional:
The Resolution Professional’s role is administrative and not adjudicatory. The Resolution Professional determines claims based on available records for the constitution of the CoC and voting share. The determination of claims by the Resolution Professional is open to correction, and disputed claims require proper trial and cannot be decided by the Adjudicating Authority under sub-section (5) of Section 60 of the Code.

5. Adjudication of Disputed Claims:
The Adjudicating Authority emphasized that it cannot adjudicate disputed claims and that such claims should be moved to the appropriate forum for adjudication. The decision of the Resolution Professional does not amount to rejection of the claim but determination for the constitution of the CoC.

Conclusion:
The Resolution Plan was approved as it met the requirements of Section 30(2) of the Code and had provisions for its effective implementation. The plan was binding on the corporate debtor, its employees, members, creditors, guarantors, and other stakeholders involved. The moratorium order ceased to have effect from the date of the order, and the Resolution Professional was directed to forward all records to the Insolvency and Bankruptcy Board of India (IBBI). The approved Resolution Plan became effective from the date of passing of the order, and all pending applications were disposed of accordingly.

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