2021 (4) TMI 53 - Tri - Insolvency and Bankruptcy

Resolution Plan Approved by Tribunal for P K Hospitality - Moratorium Ceases

The National Company Law Tribunal, Mumbai Bench, approved the Resolution Plan submitted by P K Hospitality Services Private Limited. The plan is effective ... Approval of the Resolution Plan - Section 30(6) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- In K. Sashidhar v. Indian Overseas Bank & Others [2019 (2) TMI 1043 - SUPREME COURT] the Hon’ble Apex Court held that if the CoC had approved the Resolution Plan with requisite percent of voting share, then as per section 30(6) of the Code, it is imperative for the Resolution Professional to submit the same to the Adjudicating Authority (NCLT). On receipt of such a proposal, the Adjudicating Authority is required to satisfy itself that the Resolution Plan as approved by CoC meets the requirements specified in Section 30(2). The Hon’ble Court observed that the role of the NCLT is ‘no more and no less’. The Resolution Plan as approved by the CoC under Section 30(4) of the Code meets the requirements of Section 30(2) of the Code and Regulations 37 to 39 of the Regulations. The Resolution Plan is not in contravention of any of the provisions of Section 29A of the Code and is in accordance with law. The same needs to be approved as provided under Section 31 of the Code. Application allowed. Issues Involved:1. Approval of the Resolution Plan under Section 30(6) of the Insolvency and Bankruptcy Code, 2016.2. Compliance with the Insolvency and Bankruptcy Code and CIRP Regulations.3. Voting and approval process by the Committee of Creditors (CoC).4. Financial terms and obligations under the Resolution Plan.5. Management and supervision of the Corporate Debtor post-approval.6. Waivers and concessions requested by the Successful Resolution Applicant (SRA).Issue-wise Detailed Analysis:1. Approval of the Resolution Plan under Section 30(6) of the Insolvency and Bankruptcy Code, 2016:The application seeks approval of the Resolution Plan submitted by P K Hospitality Services Private Limited. The Corporate Insolvency Resolution Process (CIRP) was initiated by an order dated 16.06.2017, and the Resolution Plan was approved by the CoC with a voting share of 88.78% in its 18th meeting held on 08.01.2021.2. Compliance with the Insolvency and Bankruptcy Code and CIRP Regulations:The Resolution Plan was thoroughly checked for compliance with the Code and Regulations 38 and 39 of the Insolvency and Bankruptcy Board of India (Corporate Insolvency Resolution Process) Regulations, 2016. The plan meets the requirements of Section 30(2) of the Code, ensuring payment of CIRP costs, operational creditors, and abstaining financial creditors as per Section 53 of the Code. The plan is not in contravention of any provisions of Section 29A of the Code.3. Voting and approval process by the Committee of Creditors (CoC):The CoC considered and approved the Resolution Plan of P K Hospitality Services Private Limited with a voting share of 88.78%. Detailed voting shares of each financial creditor were provided, showing the majority approval required under the Code.4. Financial terms and obligations under the Resolution Plan:The financial terms include a total amount of INR 31.59 Crores, with SRA infusing INR 26.06 Crores as Share Capital and INR 5.53 Crores as Unsecured Loan. The plan also proposes the reduction of the paid-up share capital of the Corporate Debtor from INR 26,16,41,500 to INR 10,46,570. Payment to financial creditors is structured to occur within 180 days from the date of approval of the Resolution Plan.5. Management and supervision of the Corporate Debtor post-approval:The SRA proposes to appoint new directors and establish a Monitoring Agency consisting of representatives of Edelweiss ARC and the Applicant to oversee the implementation of the Resolution Plan. This agency will monitor daily operations until the plan is fully executed and a new Board of Directors is in place.6. Waivers and concessions requested by the Successful Resolution Applicant (SRA):The SRA sought waivers for statutory liabilities and other contingent liabilities, which were not granted by the Tribunal. The SRA must approach relevant authorities for these waivers, and any decisions will be made in accordance with the law. The Tribunal also referred to the Supreme Court's ruling in the Committee of Creditors of Essar Steel India Limited Vs. Satish Kumar Gupta & Ors., emphasizing that the SRA takes over the Corporate Debtor with all specified assets and liabilities.Conclusion:The National Company Law Tribunal, Mumbai Bench, approved the Resolution Plan submitted by P K Hospitality Services Private Limited. The plan is effective immediately and binding on all stakeholders, including the Corporate Debtor, its employees, members, creditors, and relevant government authorities. The moratorium under Section 14 of the Code ceases to have effect from the date of this order. The Applicant is tasked with supervising the implementation of the Resolution Plan and filing periodic status reports. The Tribunal emphasized compliance with the Code and the necessity for the SRA to obtain necessary approvals for effective implementation.