Tribunal Approves Resolution Plan under Insolvency Code | Creditor Rights | Financial Outlay

The Tribunal approved the Resolution Plan submitted under Section 30(6) of the Insolvency and Bankruptcy Code, 2016, by Mr. Rakesh Ranjan and M/s Equilibrated Venture CFLOW Private Limited. The Committee of Creditors approved the Plan with a 76.69% voting share, complying with the provisions of the Code and CIRP Regulations. The Plan includes a financial outlay of Rs. 64.75 Crores, with total creditor payouts of Rs. 55.25 Crores. The Tribunal emphasized adherence to legal requirements and ruled in favor of the Resolution Plan, making it binding on all stakeholders, with ongoing supervision by the Resolution Professional.

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Issues Involved:
1. Approval of the Resolution Plan under Section 30(6) of the Insolvency and Bankruptcy Code, 2016.
2. Compliance with the provisions of the Code and CIRP Regulations.
3. Payment to creditors and stakeholders.
4. Management and implementation of the Resolution Plan.
5. Legal compliance and adherence to the Code.

Issue-wise Detailed Analysis:

1. Approval of the Resolution Plan:
The application was filed by the Resolution Professional (RP) seeking approval of the Resolution Plan submitted by Mr. Rakesh Ranjan and M/s Equilibrated Venture CFLOW Private Limited under Section 30(6) of the Insolvency and Bankruptcy Code, 2016. The Plan was approved by the Committee of Creditors (CoC) with a 76.69% voting share.

2. Compliance with the Provisions of the Code and CIRP Regulations:
The RP confirmed that the Resolution Plan complies with Section 30(2) of the Code and Regulation 39(4) of the CIRP Regulations. The Plan includes a financial outlay of Rs. 64.75 Crores, with a total payout to creditors amounting to Rs. 55.25 Crores. The RP provided a compliance certificate in Form H, certifying that the Plan does not contravene any provisions of the law.

3. Payment to Creditors and Stakeholders:
The Resolution Plan outlines the payment structure, including Rs. 11.34 Crores to be paid within 180 days from the Effective Date and Rs. 46.40 Crores as Deferred Payment with applicable interest. An amount of Rs. 80 lakhs is allocated to operational creditors, to be paid within 180 days on a pro-rata basis. The Plan also includes a performance bank guarantee of Rs. 1,00,00,000/- in favor of SBI and an additional Rs. 50,00,000/- bank guarantee.

4. Management and Implementation of the Resolution Plan:
The Plan provides for the management of the Corporate Debtor's affairs post-approval and outlines the implementation and supervision mechanisms. The RP and CoC will oversee the implementation, and the Investor will infuse Rs. 10.89 Crores, with Rs. 55 Lakhs in equity and the remaining as unsecured loans.

5. Legal Compliance and Adherence to the Code:
The Tribunal observed that the Resolution Plan meets the requirements of Section 30(2) of the Code and other relevant regulations. The Plan is higher than the liquidation value of Rs. 31.54 Crores. The Tribunal referred to the Supreme Court judgments in K Sashidhar v. Indian Overseas Bank and CoC of Essar Steel, emphasizing that the Adjudicating Authority's role is limited to ensuring compliance with Section 30(2) of the Code and cannot modify the Plan approved by the CoC.

Order:
The Tribunal approved the Resolution Plan, making it binding on all stakeholders. The moratorium under Section 14 of the Code ceased, and the RP was directed to supervise the Plan's implementation and report to the Tribunal periodically. The RP was also instructed to forward all records to the IBBI and send a certified copy of the Order to the CoC and the Resolution Applicant for compliance.

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