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TaxTMI 
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2018 (11) TMI 338
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.... on insolvency commencement date i.e. 11.07.2017. It is stated that contract agreement dated 17.02.2014 reference No. RHPPL/2014/E&M-KBL/Supplies was entered into between the applicant and Rajpur Hydro Power Pvt. Ltd. (Corporate Debtor) and that after the contract, the applicant started design and procurement process; the corporate debtor was irregular in releasing payments since the beginning; the corporate debtor was supposed to open a letter of credit in favour of the applicant before the commencement of manufacturing; this was not done and despite this, the applicant started manufacturing to support the project activities on assurance of the corporate debtor to release the payment. It is submitted that the applicant has already despatched certain material at site against which some ad hoc payment was released; the applicant insisted for the letter of credit of the entire value as per the contract conditions which the corporate debtor did not do so; the applicant has withheld the further supply of pending material of Rs.6,94,22,164/- which is still lying idle at the works of the applicant; the said equipment are manufactured/procured after receiving manufacturing clearances and ....
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....gainst the corporate debtor forms the very foundation of the applicant's rights as the lead operational creditor of the corporate debtor. The applicant has prayed that the RP be directed to verify and admit the entire claim of operational debt of the applicant amounting to Rs.35,42,18,964/- on the insolvency commencement date and direct the RP not to constitute any meetings of the COC of the corporate debtor till the final disposal of the present application. 5. Vide order dated 31.07.2018, notice of the application was issued to the RP. The RP filed reply to the application by diary No.3297 dated 04.09.2018 stating that he has checked the books of account and financial statements of the corporate debtor in regard to the account of the applicant and from the perusal of the ledger and financial statements, it is very much clear that the corporate debtor has made a total payment of Rs.2,95,66,024/- to the applicant and against this payment, the corporate debtor has received facilities/goods/material to the tune of Rs.1,35,36,799/- only from the applicant and an amount of Rs.1,60,29,225/- is still outstanding and recoverable from the applicant in the books of the corporate debtor. It....
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....ch some ad hoc payment was released and that the applicant insisted for the letter of credit of the entire value as per the contract conditions which the corporate debtor did not do so and that the applicant withheld the further supply of pending material which is to the tune of Rs.6,94,22,164/-, which is still lying idle at the works of the applicant in lieu of the letter of credit. The claim would therefore be more in the nature of a breach of contract. Claim is defined in Section 3(6) of the Code as follows:- "claim" means - (a) a right to payment, whether or not such right is reduced to judgement, fixed, disputed, undisputed, legal, equitable, secured or unsecured; (b) right to remedy for breach of contract under any law or the time being in force, if such breach gives rise to a right to payment, whether or not such right is reduced to judgement, fixed, matured, unmatured, disputed, undisputed, secured or unsecured. 8. Section 3(6) (a) would not be applicable since the applicant has not proved that he has a right to payment. We have noted above that the pending material of Rs.6,94,22,164/- is stated by the applicant to be withheld and still lying idle at its works. The....
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....in the application that pursuant to appointment as Interim Resolution Professional, public announcement dated 14.07.2017 (published in newspaper on 15.07.2017) under Section 15 of the Code was issued and claims from the creditors of the corporate debtor were invited and on receiving the claims, the COC was constituted. It is further stated that Valuation Reports dated 27.10.2017 and 28.10.2017 were obtained from Dheeraj Basantani and Associates, Chartered Accountants and M/s S. Madnani and Associates, Chartered Accountants respectively. 16. It is stated that in the second meeting of COC on 9.11.2017, the minimum eligibility criteria for prospective resolution applicants was fixed and in the 4th meeting of COC on 25.01.2018, the RP informed the members of COC that pursuant to issue of Expression of Interest (EOI) on 11.11.2017, EOI was received from eight applicants and that after ensuring that the respective applicants met the eligibility criterial as laid in the EOI, the RP issued offer documents to all the prospective resolution applicants with 12.01.2018 as the extended last date for submission of resolution plan. It is stated that consequent to promulgation of Insolvency and B....
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....ndia Financial Services Ltd. (Financial Creditor having 99.6% voting share), limitation on the future liabilities of corporate debtor etc. and accordingly, the resolution plan submitted by Mahalaxmi Continental Ltd. did not find favour with the COC. The resolution plan submitted by Dolphin Energy Enterprises is stated to have been put up for voting of members of the COC and in the e-voting, the COC with a full majority of 100% of the voting share agreed for approval of the resolution plan submitted by Dolphin Energy Enterprises on 07.03.2018 read with clarification made vide e-mails dated 17.03.2018 and 28.03.2018. It is prayed that the resolution plan of Dolphin Enterprises may be approved. 18. During the course of hearing on 22.05.2018, it was noted that the members of COC be called for hearing and that the resolution professional filed requisite certificate for compliance of the provisions of the Code and the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (hereinafter referred to as Regulations). CA No.196/2018 was filed by Mr. Rajshekar Totakura promoter director for supplying copy of resolution plan so that he ....
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....ation and examination. It was submitted by the learned counsel for RP that in view of the 100% voting share and detailed consideration of the resolution plan by the COC, the resolution plan of Dolphin Energy Enterprises be approved. 20. We have carefully considered the submissions of the learned counsel for the Resolution Professional, the learned counsel for the Resolution Applicant and the representative of financial creditor PTC India Financial Services Ltd. member of COC and have also examined the relevant records. The corporate debtor is stated to be engaged in the development and construction of 9.90 MW Hydro Energy Power Project at Noglikhad, Tehsil Rampur, District Shimla, Himachal Pradesh-172 021. The year of commencement is 2011 and as per Valuation Report of Dheeraj Basantani & Associates, Chartered Accountants (Annexure A-1 of diary No.1343 dated 01.05.2018 page 30), the year of commencement of construction is 2011 and the construction work is stated to be held up. The resolution plan submitted by M/s Dolphin Energy Enterprises is at Annexure A-10 of the application. Regulation Section 39 (4) requiring filing of compliance certificate in Form H of the Schedule by the R....
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....d by the resolution applicant to buy out the unit. In view of the vast difference between the liquidation value and the offer as per the resolution plan, we had called the members of the COC for hearing (order dated 22.05.2018). As noted above, the major voting share in COC is of PTC India Financial Services Ltd. (voting share 99.67%). The representative of PTC India Financial Services Ltd. attended the hearing before the Tribunal and stated that they had given their unqualified acceptance to the resolution plan after detailed consideration. As discussed above, the other financial creditor Seashells Infrastructures Pvt. Ltd. (voting share 0.33%) stated by e-mail dated 02.06.2018 that they have already approved the plan and the RP represents them. The liquidation value is not enough to cover the admitted claims of the two financial creditors and therefore, the liquidation value for the operational creditors and others is NIL. Both the financial creditors have voted for the resolution plan submitted by Dolphin Energy Enterprises. The decision of the two financial creditors is based upon their commercial wisdom and is therefore, not to be interfered with. Section 31 (1) of the Code ....
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....ene any of the provisions of the law for the time being in force and that the resolution applicant i.e. Dolphin Energy Enterprises has submitted an affidavit pursuant to Section 30(1) of the Code confirming its eligibility under Section 29A of the Code to submit the resolution plan and the contents of the said affidavit are in order. The compliance of the resolution plan as desired in para 9 of Form H has been given by the RP is as under:- Section of the Code /Regulation No. Requirement with respect to Resolution Plan Clause of Resolution Plan Compliance (Yes /No) 25(2)(h) Whether the Resolution Applicant meets the criteria approved by the CoC having regard to the complexity and scale of operations of business of the CD? Resolution Applicant met the criteria of minimum Net Worth fixed by CoC Yes Section 29A Whether the Resolution Applicant is eligible to submit resolution plan as per final list of Resolution Professional or Order, if any, of the Adjudicating Authority? Resolution Applicant is eligible to submit resolution plan Yes Section 30(1) Whether the Resolution Applicant has submitted an affidavit stating that it is eligible? Resolution Applicant has submitted ....
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....plication in which Resolution Plan is annexed, under para "Proposal relating to adequate means for supervising its implementation". Yes Regulation 35A Where the resolution profesional made a determination if the corporate debtor has been subjected to any transaction of the nature covered under sections 43, 45, 50 or 66, before the one hundred and fifteenth day of the insolvency commencement date, under intimation to the Board? Resolution Professional filed an Application with Hon'ble NCLT on 06.04.2018 under Section 43, 44, 45, 48, 49, 66 and 73 of Code. Yes Regulation 38 (1) Whether the Resolution Plan identifies specific sources of funds that will be used to pay the - (a) insolvency resolution process costs? (b) liquidation value due to Operational creditors? (c) liquidation value due to dissenting financial creditors? Please refer to Page 200 of Application in which Resolution Plan is annexed, it is mentioned that Funds required will be sourced from NBFC Company i.e. Gogia leasing Ltd. In this respect, Letter of Intent from NBFC for approval to grant loan upto Rs. 50 Crore is also enclosed with Resolution Plan (at Page 206 of Application) Yes Regulation 38(1A) Whe....
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....ution plan does not propose payment to operational creditors. Section 30 (2) ( c ) & (d) :- The resolution plan states that the management and control will be with management committee headed by team of professionals; the operations team will be supervised by management committee and technical advisor; persons to be involved in the management will not attract any ineligibilities as stated under Section 29A of the Code; tie up made with Dr. Hutarew and partner (India) Ltd. for managing guiding and supervising the project implementation. Organisation chart has been enclosed as Annexure-III of the resolution plan. Section 30 (2) (e):- RP has stated that this condition is complied with. The RP has also stated that the plan does not envisage any payment towards statutory dues and that the resolution applicant has sought waiver for the statutory dues failing which they have undertaken to settle the statutory dues at their own cost. This request is examined later. 25. We have examined whether the resolution plan has provisions for its effective implementation. We find in the resolution plan, it is stated that the proprietor of the resolution applicant Ms. Nishita Garg (individual) ....