Approval of Resolution Plan for Sri Balaji Forest Products Pvt Ltd under Insolvency and Bankruptcy Code

The Resolution Plan for Sri Balaji Forest Products Private Limited was approved under Sections 30 and 31 of the Insolvency and Bankruptcy Code, 2016, with a 93.46% voting share from the Committee of Creditors. The plan complied with CIRP Regulations and IBC provisions, addressing objections raised by stakeholders and granting reliefs to the Successful Resolution Applicant. The plan was found viable and feasible for the revival of the Corporate Debtor, leading to its approval and termination of the moratorium. The Resolution Professional was discharged, and the Resolution Applicant was authorized to commence operations under the plan.

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Issues Involved:
1. Approval of the Resolution Plan under Section 30(6) and Section 31 of the Insolvency and Bankruptcy Code, 2016.
2. Compliance with CIRP Regulations and IBC provisions.
3. Objections raised by stakeholders.
4. Reliefs and concessions sought by the Successful Resolution Applicant.
5. Implementation and supervision of the Resolution Plan.

Detailed Analysis:

1. Approval of the Resolution Plan:
The application was filed under Section 30(6) and Section 31 of the Insolvency and Bankruptcy Code, 2016, seeking approval of the Resolution Plan for Sri Balaji Forest Products Private Limited. The Resolution Plan was approved by the Committee of Creditors (CoC) with a 93.46% voting share, meeting the requirements for being viable and feasible for the revival of the Corporate Debtor.

2. Compliance with CIRP Regulations and IBC Provisions:
The Resolution Professional (RP) complied with various provisions of the IBC and CIRP Regulations. Public announcements were made, and claims were invited from creditors. The RP appointed valuers to determine the fair market value and liquidation value of the Corporate Debtor's assets. The Resolution Plan adhered to the mandatory contents as specified under Regulation 38 and 39 of the CIRP Regulations, ensuring priority payment to operational creditors and addressing the interests of all stakeholders.

3. Objections Raised by Stakeholders:
One objection was raised by Sri Balaji Logs Private Limited regarding ingress and egress rights, arguing that there was no recorded agreement and that it was an encroachment. The tribunal found that the approach road was essential for accessing the Corporate Debtor's premises and granted the Successful Resolution Applicant the right of way. Additionally, the inclusion of the property of the suspended board of directors and guarantors in the Resolution Plan was contested. The tribunal upheld the inclusion, citing the Vanguard Credit & Holdings Pvt. Ltd. case and the binding nature of the approved Resolution Plan on all stakeholders, including guarantors.

4. Reliefs and Concessions Sought by the Successful Resolution Applicant:
The Successful Resolution Applicant sought various reliefs and concessions, including exemptions from taxes, renewal of licenses, waiver of past non-compliances, and extinguishment of liabilities not part of the Resolution Plan. The tribunal granted these reliefs, subject to compliance with applicable laws and regulations. Specific reliefs included exemptions from stamp duty, renewal of pollution control consents, and regularization of accounts by the Reserve Bank of India.

5. Implementation and Supervision of the Resolution Plan:
The tribunal directed the Successful Resolution Applicant to comply with statutory obligations and seek necessary sanctions from governmental authorities within one year. The RP was instructed to hand over all records and premises to the Resolution Applicant for the commencement of operations. The tribunal also provided for the formation of a Monitoring Committee comprising secured financial creditors and the Chairman to facilitate the implementation of the Resolution Plan.

Findings:
The tribunal found that the Resolution Plan complied with sections 30 and 31 of the IBC and regulations 38 and 39 of the CIRP Regulations. The plan was deemed viable and feasible for the revival of the Corporate Debtor. The tribunal approved the Resolution Plan, making it binding on the Corporate Debtor and all stakeholders. The moratorium imposed under section 14 ceased to have effect from the date of the order.

Conclusion:
The Resolution Plan for Sri Balaji Forest Products Private Limited was approved, subject to the observations made in the order. The RP was discharged from duties, and the Successful Resolution Applicant was granted access to all necessary records and premises to finalize the further line of action required for starting operations. The tribunal provided liberty for any application required in connection with the implementation of the Resolution Plan.

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