Tribunal dismisses interim applications in CIRP, to decide Resolution Plan separately

The tribunal dismissed all interim applications and company applications related to the treatment of dissenting financial creditors, allegations of fraudulent removal of pledged stock, and payment of pending salary during the Corporate Insolvency Resolution Process. The approval of the Resolution Plan would be decided separately in the main case.

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Issues Involved:
1. Treatment of dissenting financial creditors in the Resolution Plan.
2. Allegations of fraudulent and wrongful removal of pledged stock.
3. Payment of pending salary to an employee during the Corporate Insolvency Resolution Process (CIRP).
4. Disposal of the application seeking approval of the Resolution Plan.

Issue-wise Detailed Analysis:

1. Treatment of Dissenting Financial Creditors in the Resolution Plan:
- IA No.195/2020: The Small Industries Development Bank of India (SIDBI) filed an application to intervene in CA No.389/2019, seeking either an amendment to the Resolution Plan or its rejection. SIDBI, a financial creditor of M/s Parabolic Drugs Limited, abstained from voting on the Resolution Plan and argued that it should have been treated as a dissenting financial creditor under Section 30(2)(b) of the Insolvency and Bankruptcy Code, 2016 (the Code). The applicant claimed that the Resolution Plan failed to earmark the minimum value required for dissenting creditors and did not prioritize their payments as mandated by Regulation 38 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (2016 Regulations).

- Judgment: The tribunal noted that the Resolution Professional and Resolution Applicant acknowledged an error in treating SIDBI as an assenting creditor. They agreed to pay the differential amount of Rs. 15,42,300/- to SIDBI. As SIDBI did not dispute this willingness, the tribunal found no merit in the application regarding this ground and dismissed it. The tribunal also held that the issue of prioritizing payments to dissenting creditors would be considered while deciding CA No.389/2019, as it falls under Section 31(1) of the Code.

- IA No.199/2020 and IA No.200/2020: These applications, filed by Export Import Bank of India and Central Bank of India respectively, sought identical reliefs as IA No.195/2020. Both applications were dismissed for the same reasons as IA No.195/2020.

2. Allegations of Fraudulent and Wrongful Removal of Pledged Stock:
- CA No.493/2019 and IA No.196/2020: PEC Limited, a financial creditor, alleged that the directors and officers of the corporate debtor fraudulently removed pledged stock during the CIRP, violating the moratorium. PEC sought directions for action against the directors, a fresh inventory report, and a stay on the approval of the Resolution Plan until these issues were resolved.

- Judgment: The tribunal noted that the Resolution Professional had already filed CA No.74/2019 addressing similar issues under Sections 43 to 51 and 66 of the Code. This application would continue even after the approval or rejection of the Resolution Plan. Therefore, the tribunal found no merit in CA No.493/2019 and IA No.196/2020 and dismissed both applications.

3. Payment of Pending Salary to an Employee During CIRP:
- CA No.1194/2019: An employee, who was the Vice President (International Marketing Formulations), sought payment of pending salary for services rendered during the CIRP. The employee claimed that he was not paid except for a part payment and that his total outstanding dues amounted to Rs. 44,78,931/-.

- Judgment: The tribunal found that the employee's claim for salary dues prior to the CIRP was admitted and included in the Resolution Plan. However, the employee failed to provide sufficient proof of working during the CIRP period, especially since the corporate debtor's operations were shut down. The tribunal dismissed the application, finding no merit in the employee's claims for additional payment.

4. Disposal of the Application Seeking Approval of the Resolution Plan:
- IA No.194/2020: The Resolution Applicant filed this application seeking the disposal of CA No.389/2019, which was pending approval of the Resolution Plan.

- Judgment: The tribunal noted that since the applications seeking to prevent the pronouncement of orders in CA No.389/2019 were dismissed, CA No.389/2019 would be decided in accordance with the law. The tribunal disposed of IA No.194/2020 as no further orders were necessary.

Conclusion:
The tribunal dismissed all the interim applications (IAs) and company applications (CAs) related to the treatment of dissenting financial creditors, allegations of fraudulent removal of pledged stock, and payment of pending salary during the CIRP. The tribunal indicated that the approval of the Resolution Plan would be decided separately in CA No.389/2019.

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