2022 (3) TMI 866 - Tri - Insolvency and Bankruptcy

Tribunal Approves Resolution Plan for Jagriti Plastics Limited, Dismisses Objections

The tribunal approved the Resolution Plan submitted by Jagriti Plastics Limited, endorsed by the Committee of Creditors with a unanimous vote. The ... Approval of Resolution plan - Seeking direction to RP to re-verify the claim of Jagriti Plastics Limited - direction for resubmission of final amounts offered by the resolution applicants to the Operational Creditors in a sealed form before this Adjudicating Authority - direction to CoC to decide over the Resolution Plans of the Ras after such incremental value is revealed - HELD THAT:- In view of Section 31 of the Code, the Adjudicating Authority, before approving the Resolution Plan, is required to examine that a Resolution Plan which is approved by the CoC under Section 30(4) of the Code meets the requirements as referred under Section 30(2) of the Code - Further, as per Regulation 38 of the CIRP Regulations, a Resolution Plan is required to contain a statement how it will deal with the interest of all the stakeholders including Financial Creditors and the Operational Creditors and if these are sufficiently provided in the Resolution Plan, the Adjudicating Authority may approve the Resolution Plan. As regards compliance of clause (b) of Section 30(2) of the Code, the applicant has certified in Form H that Part-II, clause 2 read with Part-III of the Resolution Plan provides for the payment of the debts of operational creditors which shall not be less than the amount to be paid to the operational creditors in the event of a liquidation of the Corporate Debtor under Section 53 - In terms of Section 30(2)(c), management of the affairs and control of the business of the Corporate Debtor has been provided in clause 5.1 Part-II, page 22 of the Resolution Plan. The next requirement envisaged by Section 30(2)(d) is that it must provide for the implementation and supervision of the Resolution Plan. Clause 5.1.1 Part-II of the Resolution Plan provide for the Monitoring Committee consisting of equal representation of FC, RA and Resolution Professional - Ld. Counsel appearing for the Resolution Applicant submitted that the Resolution Plan is as per the provisions contained in the Code and so, the same may be approved. In terms of Regulation 39(4) of the CIRP Regulations, the Resolution Professional has filed compliance certificate in Form-H which is annexed as Annexure-A-9 at page 139. It has been submitted in the application and in Form H duly certified by Resolution Professional that the final Resolution Plan meets the requirements as laid down in various clauses of Section 30(2) of the Code. All the requirements of Section 30(2) are fulfilled. In respect of compliances regarding CIRP Regulations especially Regulations 38 and 39, the Resolution Professional has certified in Form-H and explained in details that the Resolution Plan has complied with all the required Regulations. The Resolution Plan fulfils the requirement as referred in Section 30(2) of the Code and there are sufficient provisions in the Plan for its effective implementation as required under the proviso of Section 31(1) of the Code. The Resolution Plan has been approved by CoC with 100% favourable voting - the Resolution Plan, which was earlier approved by the CoC by the majority vote of 100% is approved - application allowed. Issues Involved:1. Re-verification of claims by the Resolution Professional (RP)2. Resubmission of final amounts offered by resolution applicants3. Decision-making by the Committee of Creditors (CoC) on revised Resolution Plans4. Approval of the Resolution Plan under Section 30(6) of the Insolvency and Bankruptcy Code, 2016Issue-wise Detailed Analysis:1. Re-verification of claims by the Resolution Professional (RP):The applicant, Mr. Nitin Gupta, requested the RP to re-verify the claim of Jagriti Plastics Limited and revise the amounts accordingly. The applicant argued that the RP had wrongly admitted the claim of Jagriti Plastics Limited as an operational creditor, which constituted 50% of the total operational debt of the corporate debtor. The RP and CoC clarified that the claims were verified by the erstwhile Interim Resolution Professional and that equal opportunities were given to all resolution applicants to revise their plans. The tribunal found no evidence to support the applicant's claim that only Jagriti Plastics Limited was allowed to revise its offer.2. Resubmission of final amounts offered by resolution applicants:The applicant sought directions for the resubmission of final amounts offered by the resolution applicants to the operational creditors in a sealed form before the Adjudicating Authority. The tribunal noted that all resolution applicants were given opportunities to revise their respective resolution plans, and the revised offers were duly recorded in the minutes of the 12th and 13th CoC meetings. The tribunal found that the applicant's contention had no basis, as all resolution applicants had clarified their final offers through emails.3. Decision-making by the Committee of Creditors (CoC) on revised Resolution Plans:The applicant raised objections against the resolution plan of Jagriti Plastics Limited, arguing that it would cause grave prejudice to other creditors and stakeholders. The respondents, including the RP and CoC, clarified that the revised resolution plans were discussed in detail, and the final decision was made based on the evaluation matrix. The tribunal found that the resolution plans were evaluated fairly, and the objections raised by the applicant did not hold merit.4. Approval of the Resolution Plan under Section 30(6) of the Insolvency and Bankruptcy Code, 2016:The RP filed an application seeking approval of the Resolution Plan under Section 30(6) of the Code. The tribunal examined the Resolution Plan to ensure it met the requirements under Section 30(2) of the Code, which includes provisions for payment of insolvency resolution process costs, payment of debts to operational creditors, management of the corporate debtor's affairs, implementation and supervision of the plan, and compliance with applicable laws. The tribunal found that the Resolution Plan fulfilled all the necessary requirements and was approved by the CoC with 100% voting shares. The tribunal approved the Resolution Plan and declared that the moratorium order under Section 14 of the Code would cease to have effect from the date of the order.Conclusion:The tribunal rejected the applicant's I.A. 265/ND/2021, finding no merit in the objections raised. The tribunal approved the Resolution Plan submitted by Jagriti Plastics Limited, which was earlier approved by the CoC with a 100% favorable vote. The tribunal emphasized the importance of adhering to all applicable laws and directed the RP to forward all records relating to the CIR Process and the Resolution Plan to the IBBI. The approved Resolution Plan became effective from the date of the order.