TaxTMI 
TaxTMI 
2018 (9) TMI 55
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....11. On 17 July 2011 the company was declared sick in terms of section 2(1)(o) of SICA. Business operations of the corporate debtor have remained suspended since August 2015 and the unit has been closed with effect from 1st July 2017. Subsequently M/s Amit Spinning Industries Limited filed an application under Section 10 of the Code read with Rule 7 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 for initiation of Corporate Insolvency Resolution Process in respect of the corporate debtor itself. The said application was admitted by this Bench vide order dated 01.08.2017 passed in CP (IB) No. 131 (PB)/2017 wherein moratorium was issued and Mr. Parveen Bansal bearing Registration. No. IBBI/IPA-001/IP- P00175/2017-18/10344 was appointed as Interim Resolution Professional. 4. Thereafter, public announcement in Form A as prescribed under Regulation 6 of the Regulations in Jan Satta, Financial Express and Free Press Journal on 03.08.2017 and in Maharashtra Times on 04.08.2017 were made by Interim Resolution Professional for intimation of commencement of corporate Insolvency Resolution Process of the Corporate Debtor and for calling the creditors to ....
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....posed by the Resolution Applicants should be a binding offer and the Resolution Applicants should deposit a sum of Rs. 50 Lakh in escrow account. Copy of the minutes of 4th meeting of CoC has been placed on record. 10. It is stated that as per the provisions of section 12(1) of the Code, the Corporate Insolvency Resolution Process was due for completion on 28.01.2018 and there was no time left for the members of CoC to consider the Resolution Plan proposed by the two Resolution Applicants. Therefore, the Resolution professional filed an application before the Tribunal under section 12(2) of the Code, requesting for extension of time of 50 days which was allowed on 29.01.2018 by the Tribunal under section 12(3) of the Code. 11. The 5th Meeting of CoC was held on 16.02.2018, wherein it was informed by the Resolution Professional that the Resolution Applicants who submitted their offers on the last meeting of CoC were invited to attend the meeting. M/s Bhavya Financial Services Limited has not shown any interest to peruse the proposal and M/s Tawade Patil & Associates have shown their inability to attend the meeting. However, they confirmed that last proposed offer continue to r....
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....fessional and resolution applicants were circulated to resolution applicants on 12-04-2018. 16. Subsequently, the Resolution professional requested to the resolution applicants to complete their due diligence and submit their unconditional and binding resolution plan without financial offer along with a demand draft of Rs. 50 lakhs by 16-04-2018. The Resolution plans without financial offer were received from all the resolution applicants and the same were circulated to members of committee of creditors on 17-04-2018. The resolution professional further requested to resolution applicants to submit their affidavits in compliance of section 29A of the Insolvency and Bankruptcy Code, 2016 for Declaration, information for verification of eligibility, information to support qualitative parameters of evaluation matrix by 13.04.2018. It is stated that most of the information / documents were received from all resolution applicants. 17. Thereafter the 8th meeting of CoC was held on 18-04-2018. The Resolution Professional invited all the resolution applicants to attend the meeting for submission of their resolution plans with financial offer and participate in the bidding process. ....
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....epak Choudhri and Mr. Jitendra Goutamchand Chopra 74.41 11.55 85.96 H1 22. Finally, Mr Deepak Chaganlal Choudhri and Mr Jitendra Kumar Goutamchand Chopra were declared H1 bidders and were requested to submit their revised resolution plan based on final bid amount. The Copies of minutes of 8th meeting, Revised Evaluation Matrix with assigned scores and bidding sheet have been placed on record. 23. Thereafter, the 9th meeting of CoC was held on 26-04-2018. Committee of creditors allocated the offered amount as follows: Sl. No. Head of Account Allocated Amount (Rs. Crores) 1. CIRP Cost 0.80 2. Due to Operational Creditors (Workers) 6.16 3. Due to dissenting creditors NIL 4. Secured Financial Creditor 22.04 29.00 24. The CoC decided for distribution among Axis Bank and JMF Assets Reconstruction Company Limited to allocate amount available for secured financial creditors in the ratio of 72.5% and 27.5% respectively. 25. Mr Deepak Chaganlal Choudhri and Mr Jitendra Goutamchand Chopra submitted their binding resolution plan to the committee of creditors, which was approved by Committee of credit....
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....t July 1, 2017. The objective of resolution applicants is to settle the liabilities and claims of corporate debtors and resume the production of yarn at the unit. b. Resolution Applicants have proposed to acquire 90 % of ownership of the corporate debtor after restructuring of share capital / allotment of share. Balance 10% of share capital will continue to be held by public shareholders. Resolution Applicants have sought exemption from the requirement of maintaining minimum shareholding for the period permitted by SEBI, waivers from seeking approvals for reduction in face value of equity shares and consolidation of equity shares. c. Resolution applicants has offered resolution amount of Rs. 29 crores and has offered to pay in two instalments: d. Workmen -Dues for 24 Months (estimated liability) (No proof of claim received) 12.39 6.16 6.23 Balance amount is sought to be waived off Wages and any unpaid dues owed to employees other than workmen for the period of 12 months preceding the liquidation commencement date (estimated liability) (admitted claim - Rs. 1.43 lakhs) 1.17 NIL 1.17 100% waiver sought Unsecur....
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....r of the resolutions together with the accompanying documents have been attached with the application. 28. The certificate of the Resolution Professional dated 26.04.2018 has also been placed on record, which is reproduced below for ready reference: " Resolution Professional Certificate I, the undersigned, Parveen Bansal, duly registered Insolvency Professional, registered with IBBI vide Reg. no.-IBBI/IPA-001/IP-00175/2017-18/10344, do hereby certify to the best of my knowledge and belief that: 1. Resolution Applicants - Mr Deepak. Chaganlal Chaudhari resident of CNP No. 114 I, 272/1, Subhash Road, 9th Lane, Jaysingpur - 416101, Maharashtra having the experience and expertise in managing and operating the textile mills, which are in spinning, weaving and processing etc. since 2010 and Mr. Jitendra Kumar Chopra residents of C-2, Swapnil Apartment, Awade Nagar, Ichalkaranji, Kolhapur - 416115, Maharashtra are in the business of yarn manufacturing and fabric processing business since 2009. 2. I have examined the resolution plan received from Resolution Applicants to confirm and verify that the resolution plan provides for and is compliant to sub-....
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....Insolvency Resolution Process for Corporate Persons) Regulations, 2016. The source of payment of CIRP Cost has been identified and the payment would be made in priority to any other payment which would be made under the Resolution Plan. The CIRP cost would be paid by resolution applicant in priority to any other creditor and the source of funds would be contribution by a resolution applicant. 11. The claims of all the Operational creditors whether received or not during the period of corporate insolvency resolution period is envisaged to be waived off. 12. That the resolution plan has provided for: a. The term of the plan and its implementation schedule; b. The management and control of the business of the corporate debtor during the term of resolution plan shall lie with the resolution applicant and the persons nominated by it for running day to day operations of the Corporate Debtor. c. adequate means for supervising its implementation during the resolution plan. 13. The resolution plan does not contravene any provisions of the law for the time being in force. 14. We have relied on financial information including stat....
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....der sub-section (4) of section 30 meets the requirements as referred to in sub-section (2) of section 30, it shall by 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. Provided that the Adjudicating Authority shall, before passing an order for approval of resolution plan under this sub-section, satisfy that the resolution plan has provisions for its effective implementation. (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 resolution plan. (3) After the order of approval under sub-section (1),- (a) the moratorium order passed by the Adjudicating Authority under section 14 shall cease to have effect; and (b) the resolution professional shall forward all records relating to the conduct of the corporate insolvency resolution process and the resolution plan to the Board to be recorded on its database. (4) The resolution applicant shall, pursuant to the resolution plan appro....
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....solution process costs, provides for the payment of the debts of the operational creditors in such manner as may be specified, provides for the management of the affairs of the corporate debtor after approval of the Resolution Plan; the implementation and supervision of the Resolution Plan, that the Resolution Plan does not contravene any of the provisions of the law, and that the Resolution Plan conforms to such other requirements as may be specified by the Board. The Resolution Professional has certified in detail that he has examined and verified the Resolution Plan approved by the CoC, in the light of the requirements of the Code and Regulations and that it is compliant to the relevant provisions of the Code and Regulations. The Resolution Professional has placed the Resolution Plan for our approval. 34. It is pertinent to record here that no one has come forward to object the Resolution Plan. However, in terms of section 31(1) of the Code, Adjudicating Authority has also to examine whether the requirements of sub-section (2) of Section 30 have been complied with or not. 35. Firstly, the resolution plan approved by the CoC must provide for the payment of insolvency resolu....
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....us clear allocation of fund and protection, and therefore this condition stands satisfied. 37. The third requirement in terms of Section 30(2)(c) provides for management of affairs of the corporate debtor after approval of the Resolution Plan. The term of Plan and its implementation schedule as per Regulation 38(2)(a) has been provided at para (d) of Part G of the Resolution Plan. Resolution Applicant has proposed to acquire 90 % of ownership of the corporate debtor after restructuring of share capital / allotment of share. Balance 10% of share capital will continue to be held by public shareholders as detailed in the Plan. Resolution Applicant has also proposed to appoint three directors out of which 1 will be Non-executive Director and 2 will be Executive Directors from the date of approval of resolution plan. Mr Jitendra Kumar Goutamchand Chopra and Mr Deepak Chaganlal Choudhari has been proposed to be appointed as Managing Director and joint Managing Director respectively and Mrs Sharmila Devi J Chopra will be the Non-executive Director on the Board. It has been stated that the objective of resolution applicant is to settle the liabilities and claims of corporate debtors and....
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....he category as mentioned in Section 29A as inserted by the Insolvency and Bankruptcy Code (Amendment) Act, 2017. He has further certified that it has dealt with the interests of all stake holders. Neither any one objected to the plan nor any infirmity have been brought out upon screening of the Resolution Plan. 42. In view of the above we are satisfied that all the requirements of Section 30(2) are fulfilled and no provision of the law for the time being in force has been contravened. 43. The second aspect as to whether the resolution plan has provisions for its effective implementation is required to be ensured by the Adjudicating Authority in terms of the proviso to sub-section (1) of section 31 of the Code. 44. It is stated in the Plan that the objective of resolution applicant is to settle the liabilities and claims of corporate debtors to the extent mentioned in the Resolution Plan and to resume the production of yarn at the unit. Resolution Applicant have proposed to appoint three directors out of which 1 will be Non-executive Director and 2 will be Executive Directors from the date of approval of resolution plan. Mr Jitendra Kumar Goutamchand Chopra and Mr Deepak Ch....
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....te means for supervising its implementation during the resolution plan. 49. It is accordingly submitted that the Resolution Plan provides for term of the plan, its implementation schedule, the management and control of the business of the corporate debtor during the term of plan and adequate means for supervising its implementation. 50. In the facts, it is seen that the Resolution Plan meets the requirements of Section 30(2) of the Code and that the resolution plan has provisions for its effective implementation. 51. We also grant Liberty to the monitoring committee to apply to the Tribunal for any further direction in order to ensure effective implementation of the plan, if such a necessity arises. 52. As a sequel to the above discussion we are satisfied that the requirements as per the Code and regulations have been complied with. 53. Moreover, the Resolution Plan has been unanimously approved by the CoC and has been submitted in compliance of Section 30 of the Code for approval. Resolution Professional has confirmed that the Resolution Plan is compliant to sub-section (a) to (f) of Section 30(2) of the Code and also comply Regulation 38 of Insolvency and Bankruptc....