Financial creditors must issue no-objection certificate for Resolution Plan implementation within six weeks. The Court directed financial creditors to issue a no-objection certificate as per the Resolution Plan, instructing the Successful Resolution Applicant to ...
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Financial creditors must issue no-objection certificate for Resolution Plan implementation within six weeks.
The Court directed financial creditors to issue a no-objection certificate as per the Resolution Plan, instructing the Successful Resolution Applicant to implement the plan diligently within six weeks. The Court emphasized the need for proper facilitation of the Resolution Plan and instructed the Interim Monitoring Committee to supervise the implementation. Personal guarantors could be pursued for recovery, excluding properties disposed of under the Plan. The Court stressed timely actions and compliance to prevent delays or liquidation, allowing the application and providing specific directions for effective plan implementation.
Issues: Interlocutory Application under section 60 (5) of the Insolvency and Bankruptcy Code, 2016 for various reliefs including issuance of a no-objection certificate and facilitation of premises transfer.
Detailed Analysis:
1. Facts of the Case: The Corporate Insolvency Resolution Process (CIRP) of a company was initiated, and the Resolution Plan submitted by a Successful Resolution Applicant was approved by the CoC. However, due to payment delays by the Successful Resolution Applicant, the matter was recommended for liquidation.
2. Applicant's Submissions: The Applicant sought the issuance of a no-objection certificate for the sale of non-business assets of the Corporate Debtor, as per the Resolution Plan. The Applicant alleged that the Respondents acted unfairly by delaying the issuance of the required certificate.
3. Respondent's Submissions: The Respondents did not file a reply affidavit but mentioned during hearings that approvals from competent authorities were pending for the sale of properties proposed by the Applicant.
4. Court's Analysis and Finding: The Court noted that despite an upfront payment, delays occurred in further payments due to various reasons, including the pandemic and non-handover of business units. The Court found that the IMC did not properly facilitate the Resolution Plan implementation.
5. Court's Order: The Court directed the financial creditors to issue a clear no-objection certificate as per the Resolution Plan. The Successful Resolution Applicant was instructed to implement the plan diligently within six weeks. The IMC was tasked with supervising the plan's implementation and filing a status report. The Court clarified that personal guarantors could be pursued for recovery, but not the properties being disposed of under the Resolution Plan.
6. Conclusion: The application was allowed, and specific directions were given to ensure the effective implementation of the Resolution Plan. The Court emphasized the importance of timely actions and compliance with the approved plan to avoid further delays or liquidation proceedings.
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