Tribunal Approves Resolution Plan under Insolvency Code, Ensuring Higher Recovery for Creditors

The Tribunal approved the resolution plan filed under section 30(6) of the Insolvency and Bankruptcy Code, 2016, as it met all requirements. The plan proposed a financial bid exceeding the liquidation value, ensuring higher recovery for creditors. The resolution plan's feasibility and viability were confirmed by the Committee of Creditors, leading to the approval. The Tribunal directed the resolution professional to hand over the corporate debtor to the resolution applicant, submit all relevant records to the Insolvency and Bankruptcy Board of India, and file a compliance report. The approval rendered the resolution plan binding on all relevant parties, with specific timelines and requirements outlined for implementation.

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Issues Involved:
1. Approval of the resolution plan under section 30(6) of the Insolvency and Bankruptcy Code, 2016.
2. Compliance with the procedural requirements of the Insolvency and Bankruptcy Code, 2016.
3. Evaluation of the resolution plan's feasibility and viability.
4. Supervision and implementation of the approved resolution plan.
5. Directions for the resolution professional post-approval.

Issue-wise Detailed Analysis:

1. Approval of the Resolution Plan:
The resolution professional (RP) filed I.A. No. 730 of 2019 under section 30(6) of the Insolvency and Bankruptcy Code, 2016, seeking approval of a resolution plan that had been unanimously approved by the Committee of Creditors (CoC) with 100% voting. The plan was submitted by Shradha Buildcon P. Ltd. and included key features such as the background of the resolution applicant, financial proposals, and implementation strategies. The resolution plan proposed a financial bid of INR 23.27 crore against the liquidation value of INR 15.99 crores, indicating a higher recovery for creditors.

2. Compliance with Procedural Requirements:
The RP confirmed compliance with all procedural requirements under the Insolvency and Bankruptcy Code, 2016, and related regulations. This included the issuance of public announcements, the constitution of the CoC, and the submission of the resolution plan within the stipulated timelines. The RP also provided a compliance certificate in Form "H," certifying that the resolution plan met all legal provisions and did not contravene any laws.

3. Evaluation of Feasibility and Viability:
The CoC evaluated the feasibility and viability of the resolution plan, considering factors such as the expertise of the resolution applicant in the relevant sector, potential synergies, and future investments. The resolution plan addressed the cause of insolvency and provided a detailed financial proposal, including payments to CIRP expenses, operational creditors, and financial creditors. The plan was deemed suitable and viable by the CoC, with an average liquidation value of INR 15.99 crores and a financial bid of INR 23.27 crore.

4. Supervision and Implementation:
The resolution plan included provisions for the reconstitution of the board of directors and the management of the corporate debtor. A monitoring committee comprising the RP, the managing director of the restructured company, and nominees from the financial creditors was proposed to supervise the implementation. The plan also outlined specific sources of funds and timelines for obtaining necessary approvals.

5. Directions for the Resolution Professional:
The Tribunal directed the RP to hand over the charge of the corporate debtor to Shradha Buildcon P. Ltd. immediately, along with all records, books of account, assets, documents, and agreements. The RP was also instructed to forward all records relating to the CIRP and the resolution plan to the Insolvency and Bankruptcy Board of India (IBBI) and file a compliance report with the registry. Upon filing the compliance report, the RP would be discharged from the CIRP.

Order:
The Tribunal approved the resolution plan as it met all requirements under section 30 of the Insolvency and Bankruptcy Code, 2016. The approved resolution plan is now binding on the corporate debtor, its employees, members, creditors, guarantors, and other stakeholders. The moratorium order ceased to have effect, and the resolution applicant was directed to obtain necessary approvals within one year. The Tribunal clarified that its approval did not grant any statutory concessions or exemptions, which should be sought from appropriate government authorities. The application I.A. No. 730 of 2019 was disposed of with these directions and observations.

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