2022 (1) TMI 770 - Tri - Insolvency and Bankruptcy

Tribunal Approves Resolution Plan & Amalgamation Scheme under IBC 2016

The Tribunal approved the Resolution Plan and Scheme of Amalgamation under the IBC, 2016. The plan addressed creditor payments, exemptions sought by the ... Approval of the Resolution Plan along with the Scheme of Amalgamation - Section 30(6) read with Section 31 of Insolvency & Bankruptcy Code, 2016 (IBC, 2016) read with Regulation 39(4) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 - HELD THAT:- It is noted that Form H has been filed by Resolution Professional wherein all information/details as regard to conduct of CIRP as well as process adopted for Resolution Plan has been given. The Resolution Applicant has proposed to pay the financial creditor ₹ 77,10,00,000/- against its total admitted claim of ₹ 95,03,71,082/-. The amount of ₹ 12,32,44,348/- has been proposed in the Resolution Plan to pay to the Operational Creditor against the total admitted claim of ₹ 12,32,44,348/- including the Statutory Dues and Employees/Workmen which is 100% of the total admitted amount - in respect to CIRP cost, the resolution applicant has proposed to pay the CIRP cost from the cash from of the business of the Corporate Debtor, but is also proposed that in case of short fall of CIRP cost from the operational cash flow, it shall be additionally infused by the Resolution Applicant. The resolution applicant is providing ₹ 89,47,44,348/- plus equity or preference shares under the Resolution Plan against the liquidation value of ₹ 8300.75 lakhs - as regard to the eligibility of resolution applicant under Section 29A along with an undertaking of the resolution applicant to this effect has been filed. Also Regulation 36 to 39 of CIRP Regulations, 2016 has been complied with. The resolution plan addresses the cause for failure and also contains measures to run the Corporate Debtor in future and that the resolution plan is both feasible and viable as held by CoC and it also contains provisions for its effective implementation - the resolution plan is approved. Application allowed. Issues Involved:1. Approval of the Resolution Plan and Scheme of Amalgamation under IBC, 2016.2. Compliance with CIRP Regulations and IBC provisions.3. Payment to creditors and stakeholders.4. Exemptions and waivers sought by the Resolution Applicant.5. Transfer of management and reconstitution of the Board of Directors.6. Reliefs and concessions sought from various authorities.Issue-wise Analysis:1. Approval of the Resolution Plan and Scheme of Amalgamation under IBC, 2016:The application was filed by the Resolution Professional (RP) for the approval of the Resolution Plan along with the Scheme of Amalgamation under Section 30(6) read with Section 31 of IBC, 2016, and Regulation 39(4) of CIRP Regulations. The Corporate Debtor was admitted into CIRP by the Adjudicating Authority on 09.03.2021, and the RP received the Resolution Plan on 02.06.2021. The Committee of Creditors (CoC) approved the plan with 100% votes on 30.06.2021.2. Compliance with CIRP Regulations and IBC provisions:The RP prepared the Information Memorandum as per Section 29 of the IB Code and shared it with the CoC members and the resolution applicant. The Resolution Plan was discussed and modified as per CoC's directions to ensure compliance with the IB Code. The plan was found to comply with Section 30(2) of IBC, 2016, and Regulation 38(3A) of the CIRP Regulations. The Tribunal noted that the Resolution Plan addressed the cause for failure and contained measures for the future operation of the Corporate Debtor.3. Payment to creditors and stakeholders:The Resolution Applicant proposed to pay the financial creditor Rs. 77,10,00,000/- against a total admitted claim of Rs. 95,03,71,082/-. The plan also proposed Rs. 12,32,44,348/- for the Operational Creditor, covering 100% of the total admitted amount, including statutory dues and employees/workmen. The plan included issuing equity and preference shares and covering the CIRP cost from the Corporate Debtor's operational cash flow.4. Exemptions and waivers sought by the Resolution Applicant:The Resolution Applicant sought various exemptions, including stamp duty, taxes, and other levies, and requested that no further liabilities be imposed beyond those mentioned in the Resolution Plan. The applicant also requested the carry forward of accumulated losses and unabsorbed depreciation under Section 72A of the Income Tax Act, 1961. The Tribunal directed the Resolution Applicant to approach the concerned authorities for reliefs and concessions under various statutes.5. Transfer of management and reconstitution of the Board of Directors:The Tribunal ordered the management of the Corporate Debtor to be handed over to the Board of Directors nominated by the Resolution Applicant. The Board of Directors of the Corporate Debtor was to be reconstituted, and procedural compliances were to be completed to effectuate this reconstitution.6. Reliefs and concessions sought from various authorities:The Tribunal granted specific reliefs and concessions, including the extinguishment of liabilities and claims not provided in the plan, the removal of encumbrances on the Corporate Debtor's assets, and the direction to approach relevant authorities for environmental clearances and stamp duty exemptions. The Tribunal also allowed the Resolution Applicant to review, revise, or terminate existing agreements and contracts.Conclusion:The Tribunal approved the Resolution Plan and Scheme of Amalgamation, making it effective from the date of the order. The moratorium order ceased, and the Resolution Plan became binding on all stakeholders. The monitoring committee was constituted to supervise the plan's implementation, and the RP was released from duties. The Tribunal granted specific reliefs and directed the Resolution Applicant to seek further concessions from relevant authorities as per applicable laws.