2021 (6) TMI 786 - Tri - Insolvency and Bankruptcy

Tribunal Approves Wow Solutions' Resolution Plan under Insolvency Code

The Tribunal approved the Resolution Plan submitted by Wow Solutions & Systems Private Limited under Section 30(6) of the Insolvency and Bankruptcy ... Approval of the Resolution Plan - Section 30 (6) of the Insolvency and Bankruptcy Code, 2016 read with Regulation 39 (4) of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations 2016 - HELD THAT:- The RP has complied with the requirement of the Code in terms of Section 30(2)(a) to 30(2)(f) and Regulations 38(1), 38(1)(a), 38(2)(a),38(2)(b), 38(2)(c) & 38(3) of the Regulations - The RP has filed Compliance Certificate in Form-H along with the Plan. On perusal the same is found to be in order. The Resolution Plan includes a statement under regulation 38(1A) of The Regulations as to how it has dealt with the interest of the stakeholders in compliance with the Code and the Regulations - The Resolution Plan has been approved by the CoC in the 7th meeting held on 17.09.2020 with 100% votes. 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 by 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' - In COMMITTEE OF CREDITORS OF ESSAR STEEL INDIA LIMITED THROUGH AUTHORISED SIGNATORY VERSUS SATISH KUMAR GUPTA & OTHERS [2019 (11) TMI 731 - SUPREME COURT] the Hon'ble Apex Court clearly laid down that the Adjudicating Authority would not have power to modify the Resolution Plan which the CoC in their commercial wisdom have approved. The instant Resolution Plan meets the requirements of Section 30(2) of the Code and Regulations 37, 38, 38(1A) and 39 (4) 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 - 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 Regulations.3. Evaluation and approval process by the Committee of Creditors (CoC).4. Implementation and supervision of the Resolution Plan.5. Legal obligations and statutory compliance post-approval.Detailed Analysis:1. Approval of the Resolution Plan under Section 30(6) of the Insolvency and Bankruptcy Code, 2016:The Resolution Professional (RP) of Wow Solutions & Systems Private Limited sought approval for the Resolution Plan under Section 30(6) of the Insolvency and Bankruptcy Code, 2016, read with Regulation 39(4) of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. The application was filed after the CoC approved the plan with 100% voting share.2. Compliance with the Insolvency and Bankruptcy Code and Regulations:The RP confirmed compliance with Section 30(2) of the Code, which mandates:- Payment of insolvency resolution process costs in priority.- Payment of debts to operational creditors as specified.- Management of the corporate debtor's affairs post-approval.- Implementation and supervision of the resolution plan.- Adherence to all legal provisions and requirements specified by the Board.The RP also filed a Compliance Certificate in Form-H, showing compliance with the Code and Regulations.3. Evaluation and approval process by the Committee of Creditors (CoC):The CoC held multiple meetings to discuss and approve various aspects of the CIRP, including:- Evaluation Matrix and appointment of forensic auditor.- Publication of Form G and invitation of Expression of Interest (EOI).- Approval of the Resolution Plan submitted by D-Vois SSV Broadband Pvt. Ltd.The CoC approved the Resolution Plan with 100% voting share, and the plan included detailed payment schedules for financial and operational creditors, management changes, and compliance with statutory dues.4. Implementation and supervision of the Resolution Plan:The Resolution Plan outlined the infusion of funds, payment schedules, and management changes. The RP was tasked with supervising the implementation and filing status updates with the Tribunal. The plan included opening a separate escrow account for upfront consideration and transferring 100% equity shares to the resolution applicant.5. Legal obligations and statutory compliance post-approval:The Tribunal emphasized that the approval of the Resolution Plan does not waive any statutory obligations or liabilities of the corporate debtor. The MoA and AoA were to be amended and filed with the Registrar of Companies. The RP was required to forward all records related to the CIRP and Resolution Plan to the IBBI and send certified copies of the order to the CoC and the resolution applicant.Conclusion:The Tribunal approved the Resolution Plan, finding it compliant with Section 30(2) of the Code and relevant regulations. The plan's approval is binding on all stakeholders, including government authorities. The moratorium under Section 14 of the Code ceased to have effect from the date of the order, and the RP was instructed to supervise the plan's implementation and report to the Tribunal periodically.