Approval of Resolution Plan under IBC 2016 with 100% Creditor Support

The Resolution Plan was approved under Section 31(1) of the Insolvency and Bankruptcy Code, 2016, with 100% voting share from the Committee of Creditors. The objections raised by the ex-management regarding property valuation and participation in COC meetings were dismissed for lack of merit. The Compliance with the IBC, 2016, and related regulations was demonstrated, emphasizing the COC's paramount role in approving the plan. The Adjudicating Authority's judicial review was limited to ensuring compliance, and specific compliance with amended Form-H and performance security requirements was confirmed. The Resolution Plan's implementation and monitoring were outlined, binding all stakeholders and ending the moratorium.

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Issues Involved:

1. Approval of the Resolution Plan under Section 31(1) of the Insolvency and Bankruptcy Code, 2016.
2. Objections raised by the ex-management regarding the valuation of properties and participation in the Committee of Creditors (COC) meetings.
3. Compliance with the provisions of the Insolvency and Bankruptcy Code, 2016, and related regulations.
4. The role of the Committee of Creditors in approving the Resolution Plan.
5. Judicial review limitations of the Adjudicating Authority over the commercial decisions of the COC.
6. Specific compliance with the amended Form-H and performance security requirements.
7. Implementation and monitoring of the Resolution Plan.

Issue-wise Detailed Analysis:

1. Approval of the Resolution Plan under Section 31(1) of the Insolvency and Bankruptcy Code, 2016:
The Resolution Professional (RP) submitted the Resolution Plan approved by the COC and sought approval under Section 31(1) of the IBC, 2016. The COC approved the plan with a 100% voting share, and the Adjudicating Authority's role was to ensure compliance with Section 30(2) of the IBC, 2016, and relevant regulations.

2. Objections raised by the ex-management regarding the valuation of properties and participation in the Committee of Creditors (COC) meetings:
The ex-management contended that the properties of the Corporate Debtor were undervalued at Rs. 143 Crores against an actual value of Rs. 490 Crores. They also claimed they were not given a chance to participate in COC meetings. The RP countered that the ex-management was informed about the CIRP commencement and COC meetings via email. The objections were found to be without merit, as the RP provided evidence of compliance and communication.

3. Compliance with the provisions of the Insolvency and Bankruptcy Code, 2016, and related regulations:
The RP demonstrated compliance with the mandatory requirements under the IBC, 2016, and CIRP Regulations. The Resolution Plan included provisions for payment of CIRP costs, operational creditors, and employees' claims. The plan also detailed the change in management and implementation schedule.

4. The role of the Committee of Creditors in approving the Resolution Plan:
The COC's commercial wisdom in approving the Resolution Plan was emphasized. The Supreme Court rulings in Swiss Ribbons Pvt Ltd & Anr Vs. Union of India & Ors., and K. Sashidhar Vs. Indian Overseas Bank & Ors., highlighted that the COC's decisions are paramount and non-justiciable. The COC's unanimous approval of the Resolution Plan was based on their assessment and expertise.

5. Judicial review limitations of the Adjudicating Authority over the commercial decisions of the COC:
The Adjudicating Authority's power of judicial review is limited to ensuring compliance with the IBC, 2016, and regulations. The Supreme Court's ruling in Committee of Creditors of Essar Steel India Limited v. Satish Kumar Gupta clarified that the NCLT or NCLAT cannot override the COC's decisions. The objections raised by the ex-management were rejected as they could not challenge the COC's commercial decisions.

6. Specific compliance with the amended Form-H and performance security requirements:
The RP was directed to file an affidavit with documentary evidence regarding the extension of performance guarantee and compliance with the amended Form-H. The RP complied with the order, providing necessary documents, including bank guarantees and comfort letters. The amended Form-H indicated compliance with IBC provisions and regulations.

7. Implementation and monitoring of the Resolution Plan:
The Resolution Plan outlined the implementation period, sources of settlement, and monitoring committee's role. The RP submitted an affidavit confirming compliance with Section 29-A of the IBC, 2016. The plan included provisions for infusing capital, managing the company's operations, and repaying related parties' debts. The RP was directed to forward all records to the IBBI and ensure the Resolution Plan's effectiveness from the date of the order.

Conclusion:
The Resolution Plan was approved, binding on all stakeholders, including the Corporate Debtor, employees, members, promoters, creditors, guarantors, and the Resolution Applicant. The moratorium ceased, and the RP was instructed to forward records to the IBBI. The order was pronounced, allowing CA-441/C-III/ND/2019 filed in CP No. 22/ND/2018.

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