TaxTMI 
TaxTMI 
2019 (4) TMI 251
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....BI/IPA-001/IP-P00714/ 2017-2018/11222) was appointed as the Interim Resolution Professional (IRP). The CIRP period commenced thereafter. 2. The IRP, so appointed had informed the action taken towards commencement of CIRP as under: - (a) published the public announcement of CIRP in Form A dated 04.02.2018 in two newspapers and invited claims from the financial / operational creditors and workers / employees of the company in terms of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016; (b) Constituted the committee of creditors (CoC) on the basis of the claims received by him; (c) Appointed two valuers, namely, Mr Avinash Pendse and Delta Valuers & Appraisers LLP, to determine the liquidation value of the corporate debtor in accordance with Regulation 27 read with Regulation 35 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016; (d) Prepared and circulated the initial information memorandum containing matters referred to in Regulation 36(1)(a) of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 and circulated the sam....
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....Singh Sabharwal along with M/s Max Spare Ltd (in short MSL) (Resolution Applicant) on 13.06.2018; and (b) Rajdeep Plastics Containers (I) Pvt Ltd on 30.06.2018. The said resolution plans were discussed at the CoC meeting held on 10.07.2018 and advised to revise their respective resolution plans. In accordance with the said meeting, the RP received revised resolution plans from Mr. Jagmeet Singh Sabharwal; Ms. Sheetal Jagmeet Singh Sabharwal along with Max Spare Ltd on 17.07.2018. Rajdeep Plastics Containers (I) Pvt. Ltd did not give its resolution plan. On perusal of the said revised resolution plan it was suggested Mr. Jagmeet Singh Sabharwal; Ms. Sheetal Jagmeet Singh Sabharwal along with M/s Max Spare Ltd (hereinafter referred to as the "resolution applicant") to revise the said plan once again as certain provisions were not in accordance with the Code and related regulations. Accordingly, a final revised Resolution Plan was submitted on 14.08.2018, which was put up for due consideration by CoC at the meeting commenced on 01.09.2018. The said resolution plan was put to vote at the said meeting, which was approved by 100% of the voting share of CoC. The resolution plan preferred ....
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.... An active member of Young Entrepreneurs Organization (YEO), India Chapter Chapter Chair-EO Bombay Chapter for 2008-2009 Manufacturing company. (CIN: U32109MH1967PLC013711) Net Worth 197 Crores 15.64 Crores 49.6 Crores Name of the Company in which Applicant is a Director (a) Max Spare Ltd. (b) United Van Der Horst Ltd., (c) B.R. Steels Pvt. Ltd. (d) Inco Color Pvt. Ltd. (a) Max Spare Ltd. (b) United Van Der Horst Ltd., (c) B.R. Steels Pvt. Ltd. (d) Inco Color Pvt. Ltd. *Max Spare Limited shall act as a co-applicant to Mr. Jagmeet Singh Sabharwal and Mrs. Sheetal Jagmeet Singh Sabharwal. 9.1 The details of the company in which applicants are directors, informed as under: a. United Vn Der Horst Ltd. (UVDHL) UVDHL is an engineering company with turnover of Rs. 3.83 Cr in FY 18. It was earlier a loss-making Company which Mr Jagmeet Sabharwal turned into a profit-making unit. It was a listed company but trading was suspended due to penal reasons which were made good and trading was resumed on BSE w.e.f. 30th May, 2018. Its plant is located at Taloja with app market value of Rs. 56 Cr. It has a good business pot....
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....s and speedy delivery at a competitive price. A deep-rooted sales and service network covering all major Indian cities allows us to respond in a short time. Max Spare Ltd. has been serving to all the major sectors of the Indian Economy, some of them. Max Spare Ltd has been aggressive in delivering stock items within 24 hours. Its current plant at Wagle Estate in Thane has reached its saturation point in terms of manufacturing capacity. The company's vision is to expand its products and business. For this, Company has been looking for new premises in its vicinity. 10. Balance sheet/Performance /Net worth of MSL are summarized hereunder:- (Rs in lakhs) FINANCIAL PERFORMANCE Particulars Financial Year 2014-15 2015-16 2016-17 2017-18 Sales 8,440 7,075 8,529 11,101 Profit after tax 469 278 342 576 Net-worth 4,516 4,508 4,786 4,960 (Amt in Rs ) FINANCIAL POSITION Sl. No Particulars FY 2014-15 FY 2015-16 FY 2016-17 A Shareholders Fund Share Capital 4,95,60,000 4,95,60,000 4,95,60,000 Reserve & Surplus ....
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....sales of Max Spare Ltd. Max Spare Ltd has proficiency in acquisition of raw materials, labour, staff, utilities, etc. The acquisition of The Rubber Products Ltd will help increase the production and sales of Max Spare Ltd. This acquisition will also generate employment to labour and staff. It will also increase the revenue to the Govt. by developing this unit in terms of GST. 11. GIST OF RESOLUTION PLAN - TOTAL DEBT AND AMOUNT OFFERED TO BE PAID (FORM H) 11.1 In the Resolution Plan submitted by the successful Resolution Applicant, means of finance to be arranged are as under: SOURCES OF FINANCING RESOLUTION PLAN Amount(Rs) I. Unsecured loan by Resolution Applicant (a) For acquisition of Rubber Products Limited 21,25,00,000 (b) Margin money for revival/expansion 1,50,00,000 II. Bank loan for revival/expansion 3,50,00,000 TOTAL: 26,25,00,000 11.2 MEANS OF FINANCE (Rs. in Lakhs) Sl. No Nature 0-30 days 2-6 months 7-12 months 13-24 months 25-36 months 37 month Total 1. Existing Business of Resolution Applicant Unse....
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....itor Amount Claimed Amount Admitted 1. State Bank of India 4,65,26,171 4,65,26,171 2. Sucharita Hegede 11,258,071 11,258,071 3. Sameer Sadanand Shetty 27,258,891 26,858,228 4. B Fouress Pvt. Ltd. 11,600,000 5,000,000 5. Fouress Engineering (I) Pvt. Ltd. 7,468,798 7,468,798 Total 10,41,11,931 9,71,11,268 Operational Creditors Sl. No. Name of the Creditors Amount Claimed Amount Admitted 1. Karkhanis & Kothari 121,573 121,573 2. Samruddhi Enterprises 637,476 637,476 3. Zenish Reclamation 410,535 410,535 4. JR Jain & Co. 4,862,227 3,693,627 5. Supersil Chemich als (I) Pvt. Ltd. 193,690 193,690 6. Black Industries 587,861 398,749 7. Tasc Chemical Industries Pvt Ltd 131,164 123,281 8. Adroit Corporate Services Pvt Ltd 124,931 96,847 9. Rockchem Products 1,249,345 678,187 10. Royal Engineers 796,504 608,751 11. Shreeji Multitrade 192,138 166,080 12. Fiba Shipping Agency 891,985 891,985 13. Zeal Pharmachem 3,870,277 3,870,277 14. M.....
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....ions, 2016. iv. Majority of the operational creditors have not submitted their claims at all. v. Wherever the claims are not submitted by the operational creditors, their claims may be referred from the books of accounts of the company. vi. The claim amount includes the principal amount and interest as per the contract/agreement/terms on invoice. 13.0 SUMMARY OF VALUATION AND COMPARISON BETWEEN VALUATION AND RESOLUTION PLAN 13.1 RP had appointed two valuers, namely, Mr. Avinash Pendse and Delta Valuers & Appraisers LLP, to determine the liquidation value of the corporate debtor in accordance with Regulation 27 read with Regulation 35 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. The details of fair and liquidation value are as depicted in the following table:- 1 Fair Value Rs. 30,38,19,397.85 (Average value determined by two valuers) 2 Liquidation value Rs. 19,66,46,250.30 (Average value determined by two valuers) 13.2 It is observed from the above table that as against the liquidation value of the assets and properties of the CD amounting to Rs. 19,66,46,250/- the successful RA undertaken ....
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....nd viable, according to the CoC? (b) has been approved by the CoC with 66% voting share? - (a) Yes (b) Yes Section 31(1) Whether the Resolution Plan has provisions for its effective implementation plan, according to the CoC? Section 8 (point 8.1 - sub point a) and Section 19 Yes Regulation 35A Where the resolution professional 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? - Yes Regulation38 (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? (a) Section 4 (Point 4.1) (b) Section 4 (Point 4.1 - point B of table) Yes (c) liquidation value due to dissenting financial creditors? (C) Section 4 (Point 4.1 - point C of table) Section of the Code / Regulation No. Requirement with respect to Resolution Plan Clause of Resolution Plan Compliance (Yes / No) Regulation 38(1A) ....
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....India As per the claim filed by State Bank of India, the amount outstanding is Rs. 4.65 Crores. Secured Financial creditors will be discharged by 100% payment of the amount due to them. (a) Upfront payment: Amount of Rs. 3,00,00,000 shall be made within 30 days of approval of Resolution Plan by NCLT. (b) Balance amount: Amount of Rs. 1,65,26,171/- shall be paid along with interest @SBI Base Rate plus 2% p.a. on reducing balance method. Principal amount of Rs. 1,65,26,171/- shall be repaid in 5 equal monthly instalment of Rs. 33,05,274/-starting from second month from the date of approval of Resolution Plan by NCLT. The interest shall be calculated at the prevailing SBI Base Rate Plus 2% during the repayment period shall be paid along with the last instalment. 3 Operational Creditor Amount claimed by various Operational Creditors which is admitted by RP - Rs. 3,11,99,769/- Particulars Amount (Rs) Operational Creditors-amount admitted by RP 3,11,99,769/- Total 3,11,99,769/- As per Regulation 38 of CIRP Regulations, liquidation value due to operational creditor shall be paid in priority to Financial Creditor within 30 days of approval of Resolution Pla....
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.... is not admitted by Resolution Professional. 8 Existing Equity Shareholders Balance amount out of total consideration of Rs. 21.25 Crore (if any) after payment of: * CIRP cost; * liquidation value due to operational creditors including workmen dues; * amount if any due to operational creditor as proposed in the Resolution Plan; * amount due to secured financial creditors as proposed in the Resolution Plan; and * Principal amount due to unsecured financial creditors as proposed in the Resolution Plan. Shall be distributed to Equity Shareholders. As per the current estimated amounts, the total amount available for Equity Shareholders is Rs. 2,92,50,363/-^*. Equity Shareholders shall be paid in two phases: Phase I: Out of upfront payment, Re 1 per share shall be paid to equity shareholders as part consideration for deemed share transfer to Resolution Applicants. Total amount paid shall be Rs. 40,88,400 only Phase II: Balance amount if any shall be paid within one month after the expiry of 3 years from approval of Resolution Plan by NCLT. As per the current estimates amount of *Rs 2,51,61,963/- ....
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.... 0 11 Others - shares held by public 12,37,817 0 0 0 40,88,400 0 0 0 PROPOSED SHARE CAPITAL STRUCTURE POST APPROVAL OF RESOLUTION PLAN Particulars No. of Shares Held Face Value Total Share Capital % holding Jagmeet Singh Sabharwal 20,43,950 10 2,04,39,500 49.994% Sheetal Jagmeet Singh Sabharwal 20,43,950 10 2,04,39,500 49.994% United Van Der Horst Ltd 100 10 1,000 0.002% Dew Drops Properties 100 10 1,000 0.002% Lata Kaimal 100 10 1,000 0.002% Akshay Velyil 100 10 1,000 0.002% Sangeeta Todkar 100 10 1,000 0.002% 40,88,400 4,08,84,000 100% 16.0 WAIVER OF LIABILITIES 16.1 With the approval of the Resolution Plan u/s 31 (1) of IBC, the following waivers shall stand approved: a. Waiver of the Statutory Liabilities/ Contingent Liabilities incurred and accrued / due to statutory authorities viz. VAT, Sales Tax, Income Tax, Excise, Customs, FEMA & Export Obligation, etc.: * The 'resolution applicant' proposes to make payment for all statutory liability as pe....
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....aimed charges, penalties, punishment, etc., if any levied by Directorate of Enforcement, Department of Revenue, RBI, Economic Offence Wing, Directorate General of Foreign Trade, Ministry of Commerce, etc. on the Corporate Debtor shall be treated according to respective Laws. * Resolution Professional/Existing Promoters/ Existing or suspended Board of Directors and staff members of RPL to handover the possession of all the assets, records and books of accounts of corporate debtor to the Resolution Applicant on approval of the resolution plan by NCLT. * Post approval of Resolution Plan by CoC, Existing Board of Directors of the Corporate Debtor and Resolution Professional shall not take any significant financial/business decision regarding corporate debtor without the prior written consent of Resolution Applicant. * Corporate Debtor shall be exempt from payment of Stamp duty which may arise on account of transfer of equity/issuance of equity as part of Resolution Plan. * No transfer fees which shall be levied by MIDC or any other authority in case of this resolution which shall change the promoters/equity shareholding of the Corporate Debtor. ....