2022 (9) TMI 680 - Tri - Insolvency and Bankruptcy

Tribunal Approves Resolution Plan for NRS Projects Pvt Ltd under IBC

Mr. Ravi Kapoor, RP of M/s. NRS Projects Pvt. Ltd., Fedbank Financial Services Ltd. Versus M/s. NRS Projects Pvt. Ltd.

The Tribunal approved the resolution plan for the Corporate Debtor, M/s NRS Projects Private Limited, in compliance with IBC provisions. The plan, ... Approval of resolution plan - whether Mr. Nimit Sangani, the Resolution Applicant can get benefit of Section 240A of IBC? - HELD THAT:- It is not in dispute that the Corporate Debtor is MSME. It is also not in dispute that Mr. Nimit Sangani, one of the Promoters of the Corporate Debtor has submitted the resolution plan in his individual capacity. In view of the statement of law as made by Hon'ble NCLAT, it is held that Mr. Nimit Sangani, one of the Promoters of the Corporate Debtor is not ineligible to submit the resolution plan though he is a related party of the Corporate Debtor in view of the Section 240A of the IBC because he is paying debt of all the stakeholders in equitable manner. The term of the plan is in between 180 days to 720 days. In view of material on record, it is held that the resolution plan as submitted for our approval complies the provisions of Section 30(2),Section 31 and Regulation 30 of IBBI (CIRP of Corporate Person) Regulations 2016. This Resolution Plan is approved - application allowed. Issues:Approval of resolution plan by COC, Compliance with IBC provisions, Eligibility of Promoter to submit resolution planApproval of Resolution Plan by COC:The resolution plan submitted by one of the Promoters of the Corporate Debtor was approved by the Committee of Creditors (COC) in a meeting with 73.03% votes, despite opposition from all Financial Creditors except Home Buyers. The plan was approved in accordance with Section 30(4) of the Insolvency and Bankruptcy Code (IBC), which requires a minimum of 66% voting share for approval. The commercial feasibility and viability of the plan were considered by the COC, leading to its approval. The plan was analyzed in light of Section 30(2) and 31 of IBC along with Regulation 38 of IBBI Regulations.Compliance with IBC Provisions:The resolution plan ensured priority payments to Operational Creditors and dissenting Financial Creditors after setting aside funds for Corporate Insolvency Resolution Process (CIRP) costs. The plan included provisions for debt payments to all dissenting Financial Creditors, treating them equitably by paying 100% of their claims. Despite full debt repayment, the dissenting Financial Creditors opposed the plan, possibly due to security interests in project flats. The plan also established a Management Committee to oversee the Corporate Debtor's operations post-approval, meeting the requirements of Section 30(2)(c) and 30(2)(d) of IBC.Eligibility of Promoter to Submit Resolution Plan:The eligibility of the Promoter to submit the resolution plan was questioned under Section 29A of IBC, as the Promoter was considered a related party. However, it was argued that the Promoter, being part of an MSME, could benefit from Section 240A of IBC. Citing a precedent, it was established that if the Promoter satisfies all creditors and can maintain the Corporate Debtor as a going concern, the plan can be accepted. The Tribunal found the Promoter eligible to submit the plan, as he paid debts equitably to all stakeholders.The Tribunal approved the resolution plan for the Corporate Debtor, M/s NRS Projects Private Limited, in compliance with IBC provisions. The plan was deemed effective from the date of the order, lifting the moratorium and directing the Resolution Professional to notify all relevant parties. All records related to the insolvency process and plan were to be forwarded to the Insolvency and Bankruptcy Board of India for documentation. The application was allowed and disposed of as per the specified directions.