TaxTMI 
TaxTMI 
2017 (8) TMI 1384
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....cess ('CIRP') by the Corporate Debtor i.e. Synergies Dooray Automotive Ltd. ('SDAL') under Sections 30(6) and 31 of the Insolvency and Bankruptcy Code, 2016 ('IBC') read with Regulation 39(4) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 ('Regulations') seeking approval of the Resolution Plan, as submitted by Synergies Castings Ltd., as duly approved by the Committee of Creditors in the 2nd meeting of the Committee of Creditors held on 24-06-2017. 2. Brief facts of case, as submitted by the Resolution Professional, which are relevant to the issue in question, are as follows: i. The Tribunal vide its order dated 23-01-2017 admitted the Petition filed by the Corporate Debtor seeking initiation of the Corporate Insolvency Resolution Process, under Section 10 of the IBC, to appoint Applicant herein as the Interim Resolution Professional ('IRP'). As per Section 12 of the IBC, the CIRP period ends on 21-07-2017 (180 days). ii. That pursuant to the above, the Applicant herein issued a public announcement and invited claims from the creditors of the Corporate Debtor as envisaged in the IBC. On re....
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....ate in the meeting of the Committee of Creditors dated 24-06-2017 and extend full cooperation to the Resolution Professional. And further directed the Resolution Professional to expedite the matter and prepare a Comprehensive Plan by the next date of hearing while listing the matter for hearing on 11-07-2017. vii. Accordingly, the 2nd meeting of the Committee of Creditors was convened on 24-06-2017, wherein, in the Agenda, the only List of Issues to be voted upon was the presentation, consideration and approval of the Resolution Plans submitted by the Resolution Applicants, with or without modifications. The Resolution Plans submitted by SMB Ashes Industries and Suiyas Industries Pvt. Ltd., placed before the meeting held on 24-06-2017 was unanimously rejected by the Members of the Committee of Creditors. However, Resolution Plan submitted by Synergies Castings Ltd. (SCL) was approved by a majority vote of 90.16% (EARC abstained from voting), with certain modifications (duly reflected in the minutes) and the above item was declared as approved/passed by the requisite majority by the Applicant herein. The minutes of the 2nd meeting of Committee of Creditors dated 24-06-2017 ....
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....red dues to all the secured financial creditors of SDAL. II. Cost of Scheme and Means of Finance As per the proposed settlement and payments envisaged to various creditors of SDAL and also the payment of the Insolvency Process Cost, the total cost of scheme is arrived at Rs. 5,408.21 lakhs. The same is proposed to be funded by way of induction of long term funds and through the operational accruals of SCL. The gist of scheme and means of finance are tabulated below: Particulars Total (Rs. in Lakhs) Insolvency Resolution Cost 50.00 Payment of EARC 489.00 Payment of AARC 686.75 Payment of MFL 3,791.75 Total Secured Payments 5,017.52 Deferred Sales Tax dues 351.69 Current Liabilities 1.16 Statutory dues 37.84 Total Payment 5,408.21 Means of Financing Total (Rs. In Lakhs) Receivables from other corporate debtors 2,548.26 Internal Accruals from operations 2,859.95 Total 5,408.21 III. Payment plan to Financial Creditors and the Operational Creditors - The plan for making payment of the amount mentioned in Clause 5.1 to financial creditors and other class of....
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....f the Income Tax Act, 1961 with respect to business losses incurred by SDAL. SCL shall be entitled to carry forward and set off the accumulated losses and unabsorbed depreciation as per provisions of Section 72A of the Income Tax Act, 1961. To exempt SCL from the applicability of and payment of Tax under Section 115(JB) of the Income Tax Act, 1961, to accept the repayment of outstanding amount of Rs. 5.29 lakhs TDS dues in three equal annual instalments without any interest, damages, penal interest etc. iv. The Company will have the option to pre pay the dues of the Banks/Financial Institutions/Creditors, without any additional levies. v. In the event of failure on the part of the Company to adhere to make payments to Financial Creditors for an amount and in the manner and in accordance with the terms as envisaged in the scheme, the financial creditors will be entitled to reinstate their dues to the original status as per the admitted claims by the Resolution professional along with the security available to them as on COD. However, the principal outstanding of each lender shall stand reduced by the amounts actually paid by the Company, till such date. vi....
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....BC, and the same was not passed with vote of 75% of voting shares of financial creditors. (b) The Respondent No.2 (MFL) was wrongly included in the COC as financial creditor of Corporate Debtor basing on the alleged three assignment agreements evenly dated 24-11-2016 are not executed in accordance with law. Moreover, Respondent No.3 is a related party of Corporate Debtor assigned more than 90% of its debt holding in the Corporate Debtor to the Respondent No.2 (MFL). And these agreements were executed immediately prior to the coming to the effect of SICA Repeal Act in November, 2016. (c) They have earlier filed C.A.Nos. 43,56, 57 and 124 of 2017 by questioning the constitution of the COC, related party issue etc. and all CAs are pending for adjudication before this Tribunal. (d) In spite of the objection raised by the Respondent No. l, the IRP/RP steadfastly maintained that as a RP, she does not have power to enter into enquiries regarding the validity of documents or inter se disputes amongst the creditors of Corporate Debtor. (e) It is further alleged that no consideration has been paid by the Respondent No.2 to Respondents No.3. (f) Th....
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....n by a vote of not less than seventy-five per cent of voting share of the financial creditors. (5) The resolution application may attend the meeting of the committee of creditors in which the resolution plan of the applicant is considered; Provided that the resolution applicant shall not have a right to vote at the meeting of the committee of creditors, unless such resolution applicant is also a financial creditor. (6) The resolution professional shall submit the resolution plan as approved by the committee of creditors to the Adjudicating authority. 31(1) If the Adjudicating Authority is satisfied that the resolution plan as approved by the committee of creditors under sub-section (4) of section 30 meets the requirements as referred to in sub-section (2) of section 30, it shall be order approve the resolution plan which shall be binding on the corporate debtor and its employees, members, creditors, guarantors and other stakeholders involved in the resolution plan. (2) Where the Adjudicating Authority is satisfied that the resolution plan does not confirm to the requirements referred to in sub-section (1), it may, by an order, reject the....
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....ted 02-08-2017 by rejecting all those contentions as not meritorious. 12. We have carefully perused the Resolution Plan submitted by SCL, to the Resolution Professional vide letter dated 05-07-2017 (Exhibit A -Page 17 of material papers). An undertaking dated 05-07-2017 is also given by SCL (Page 18 of the material papers) by undertaking to take care of issues relating to stamp duty, implications, staggered payment to the revenue authorities as and when they arise in compliance with the assurances given by them during second COC held on 24-06-2017, and also undertakes to comply with all provisions of law relevant to the Company and to infuse fresh funds as when need arises, and finally declared that the resolution plan in question is strictly in accordance with extant law. 13. The Resolution plan provides compliance of all the requirements of Section 30 of IBC, and main contents of the plan are as follows: (a) Amalgamation of Synergies Dooray Automative Limited with Synergies Castings Limited; (b) Payment of Insolvency Resolution Process Cost in priority to all other debts of the Corporate Debtor; (c) Payment to all the Financial Creditors of corpor....
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....icant of resolution plan) in the past has settled dues pertaining to 5 banks of the Corporate Debtor, which constituted 93% of the borrowings of corporate debtor. And the same was also recognized by BIFR in one of its proceedings. The applicant has proven track record of optimum utilization of the infrastructure and manufacturing facilities of the corporate debtor and it has successfully provide continued and meaning employment to direct/indirect work force of over 1500 employees. Most of these employees are absorbed by the applicant when the corporate debtor ceased operations. It is currently single largest employer of extremely skilled and unskilled persons in the Zone and more than 1500-2000 families depend on the applicant. 16. In the light of the above benefits, apart from others as provided in the resolution plan, it would be in the best interest of the Company, its employees in particular, public in general, and also in the interest of financial creditors to accept the Resolution plan in question. We are unanimous in accepting Resolution plan in question as it meets all parameters including legal and moral. 17. In the result, the Company application bearing C.A. No. 12....