NCLT approves resolution plan under Section 31(1) IBC 2016 for corporate debtor revival after creditor committee approval

The NCLT Bengaluru approved a resolution plan under Section 31(1) of IBC, 2016 for revival of a corporate debtor. The plan was previously approved by the Committee of Creditors on 21.08.2020 with requisite majority for the resolution applicant and co-applicants. The tribunal found the plan satisfied all stakeholder requirements and met necessary conditions for approval. The application was disposed of with the resolution plan being approved.

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Issues Involved:
1. Approval of the Resolution Plan u/s 30(6) of I&B Code, 2016.
2. Compliance with Section 30(2) of the Code.
3. Voting and approval by the Committee of Creditors (COC).
4. Distribution of payments to various stakeholders.
5. Implementation and supervision of the Resolution Plan.
6. Exemptions and reliefs sought by the Resolution Applicants.

Summary:

1. Approval of the Resolution Plan u/s 30(6) of I&B Code, 2016:
- LA. No. 394 of 2020 was filed by the Resolution Professional (RP) seeking approval of the Resolution Plan submitted by Mr. Sanjay Punglia and co-applicants, approved by the COC on 21.08.2020.

2. Compliance with Section 30(2) of the Code:
- The RP examined the Resolution Plan to ensure it meets the requirements of Section 30(2), including payment of insolvency resolution process costs, operational creditors, management of corporate debtor's affairs, implementation, and supervision of the plan, and compliance with the law.

3. Voting and approval by the Committee of Creditors (COC):
- The COC, consisting of two operational creditors, approved the Resolution Plan with 100% voting share during the meeting on 21.08.2020.

4. Distribution of payments to various stakeholders:
- The Resolution Plan included payments for statutory dues, operational creditors, financial creditors, workmen and employees, and equity shareholders. Specific amounts and schedules were detailed, including upfront payments and deferred payments.

5. Implementation and supervision of the Resolution Plan:
- The RP submitted various documents and statements confirming compliance with the Code and regulations. The RP also certified that the Resolution Plan does not contravene any law and has been approved by the COC with 100% voting share.

6. Exemptions and reliefs sought by the Resolution Applicants:
- The Resolution Plan sought exemptions and reliefs, including immunity from past liabilities, no requirement for further approvals for share capital reconstitution, and adjustments for payments made after CIRP commencement.

Judgment:
- The Tribunal approved the Resolution Plan submitted by Mr. Sanjay Punglia and co-applicants, binding on the Corporate Debtor and all stakeholders.
- The moratorium imposed on 02.03.2020 ceased to have effect.
- The RP was directed to hand over management control to the Resolution Applicants and forward all CIRP records to the Board.
- The Resolution Applicants were given one year to obtain necessary approvals under applicable laws.
- Liberty was granted to file miscellaneous applications for clarifications in implementing the Resolution Plan.
- No order as to costs.

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