Tribunal Approves Resolution Plan in Corporate Debtor's Best Interest

The Tribunal approved the Resolution Plan submitted by the Resolution Professional, meeting Section 30(2) requirements and CIRP Regulations. The objection by the Operational Creditor was dismissed, affirming the Resolution Plan's approval in the Corporate Debtor's best interest. The CoC's commercial wisdom prevailed, emphasizing limited judicial intervention. The moratorium order ended, instructing the Resolution Professional to transfer records to the IBBI. The Resolution Plan took effect immediately upon approval.

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Issues Involved:
1. Approval of the Resolution Plan under Section 30(6) and 31 of the Insolvency & Bankruptcy Code, 2016.
2. Objection to the Resolution Plan by the Operational Creditor under Section 60(5) of the Insolvency and Bankruptcy Code, 2016.

Issue-Wise Detailed Analysis:

1. Approval of the Resolution Plan:

The petition (IA-2946/2021) was filed by the Resolution Professional (RP) seeking approval of the Resolution Plan approved by the Committee of Creditors (CoC). The Corporate Debtor, M/s. VINAYAK RATHI STEELS ROLLING MILLS PRIVATE LIMITED, underwent the Corporate Insolvency Resolution Process (CIRP) initiated on 16.06.2020. The sole Financial Creditor (FC), JAMMU & KASHMIR BANK, constituted the CoC with 100% voting rights. The RP conducted the necessary public announcements, invited claims, and constituted the CoC. The CoC approved the publication of Form G and invited Expressions of Interest (EoI), leading to the submission of a Resolution Plan by Mr. Subhash Bhati & Ashok Kumar Bhati.

The CoC approved the final Resolution Plan with 100% voting shares in its 14th meeting held on 08.07.2021. The RP submitted compliance certificates and affidavits of eligibility under Section 29A of the Code. The Resolution Plan included provisions for the payment of insolvency resolution process costs, management of the Corporate Debtor's affairs, and the formation of a Monitoring Committee for implementation and supervision.

The Tribunal examined the Resolution Plan under Section 30(2) of the Code and found that it met all the requirements, including the payment of insolvency resolution process costs and management provisions. The Resolution Plan was found to be in compliance with the CIRP Regulations and did not contravene any provisions of the law. The Tribunal emphasized that the commercial wisdom of the CoC should prevail, and the Adjudicating Authority has a limited role in approving or rejecting the Resolution Plan.

2. Objection to the Resolution Plan by the Operational Creditor:

The objection (IA-4103/2021) was filed by the Operational Creditor, M/s. RAJATMETAAL POLYCHEM PVT. LTD., under Section 60(5) of the Code. The Operational Creditor claimed Rs. 1,54,64,926/-, including Rs. 93,00,564/- as the principal amount and Rs. 61,00,000/- as interest. The RP admitted the principal amount but rejected the interest. The Operational Creditor argued that the Resolution Plan did not provide for the payment of debts to operational creditors, which should be at least the liquidation value as per Section 30(2)(b) of the Code.

The Tribunal noted that the Resolution Plan had no provision for the payment to Operational Creditors and provided the entire payment plan to the Financial Creditor. The Tribunal emphasized that the Resolution Plan must comply with Section 30(2) of the Code and the CIRP Regulations. The Tribunal found that the Resolution Plan was approved by the CoC with 100% voting and was in the best interest of the Corporate Debtor.

The Tribunal concluded that the Resolution Plan did not contravene any provisions of the Code and was approved with due diligence. The objection by the Operational Creditor was rejected, and the Resolution Plan was approved.

Conclusion:

The Tribunal approved the Resolution Plan submitted by the Resolution Professional, fulfilling the requirements of Section 30(2) of the Code and ensuring compliance with the CIRP Regulations. The objection by the Operational Creditor was dismissed, and the Resolution Plan was deemed to be in the best interest of the Corporate Debtor, emphasizing the commercial wisdom of the CoC. The moratorium order ceased to have effect, and the Resolution Professional was directed to forward all records to the IBBI. The approved Resolution Plan became effective from the date of the order.

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