TaxTMI 
TaxTMI 
2018 (6) TMI 1586
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....nd Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (hereafter referred to as Regulations). 2. The Company Petition bearing C.P. No.52/Chd/Hry/2017 was filed by State Bank of India / Financial Creditor under Section 7 of the Code for initiating Corporate Insolvency Resolution Process ( in short CIRP ) of MOR Farms Pvt. Limited / Corporate Debtor. This Tribunal vide order dated 04.09.2017 admitted the petition and by subsequent order dated 12.09.2017 (Annexure A-2, Page No.37) appointed Mr. Anil Kohli as the Interim Resolution Professional (IRP) with necessary directions and to file regular reports of events. The Resolution Professional made a public announcement in terms of Regulation 6 (1) of the Regulations in two newspapers inviting claims. 3. In terms of section 18 (1) (a) of the Code, the Resolution Professional collated all claims submitted by the creditors pursuant to the Public Announcement and after determination of the financial position of the Corporate Debtor constituted a Committee of Creditors comprising of both the financial creditors, namely; (i) State Bank of India having voting share of 96.22% and Bank of Indi....
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....sp; 5 30-Jun-18 15% 63.75 6 31-Aug-18 15% 63.75 7 31-Oct-18 15% 63.75 8 31-Dec-18 15% 63.75 Total 100% Rs.425.00 It was noted by the CoC that although many terms and conditions were stipulated in the resolution plan but the main condition precedent for the resolution plan was that all lands on which the poultry farm is located (not in name of the company but mortgaged with the banks) to be transferred to the company / Resolution Applicant. The land was owned by the promoters and not in name of company. Without the lands, the poultry farm is of no use. The Resolution Applicant proposed to pay additional Rs.100 Lakhs for these two lands, which is equivalent to the market value of the land. This amount shall, however, be over and above the Resolution Plan amount of Rs.425 Lakhs. The stand of State Bank of India, however, was that since the land is agricultural no action under Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act, 2002) could be initiated by the bank. It is further contended that agric....
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....aforementioned plans were submitted to the members/banks for taking internal approvals and the CoC directed the Resolution Professional to submit the Resolution Plan to the CoC in the next meeting after checking compliances and completion of Transaction Audit Review. 15. It is further submitted by learned counsel for Resolution Professional that by email dated 16.12.2017 (Annexure A-17, Page No. 346) requested the Resolution Applicant to submit a net-worth certificate and a certificate from the Bank in which the Resolution Applicant is maintaining bank account. The Resolution Applicant submitted both certificates, which have also been placed on record by the Resolution Professional. 16. The Resolution Applicant submitted revised resolution plan in terms of the modifications sought during the meeting of the CoC convened on 13.12.2017. Details of revised plan is as under:- Proposed Offer The Resolution Plan provides that out of total resolution plan consideration of Rs. 450 lakhs, CIRP cost shall be paid in priority and the balance amount shall be distributed among the Financial Creditors. All Operational creditors will be paid in the normal course of business. All ....
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.... (b) Rs.4.05 crores will be paid on or before 31.03.2018 (c) Bank of India's claim of Rs.0.01.23 crores, be paid out of Resolution Plan amount of Rs.4.50 crores on the basis of proportionate share of the total claims of the secured creditors. (d) Cost of CIRP to the tune of Rs.0.30 crores approximately being borne/paid by us will be deducted first from the resolution amount of Rs.4.50 crores. (e) Investor M/s. Harsh Poultry Farms will also purchase the land at villages Morkhi and Ludana where the units are situated and the proceed of Rs.1.00 crore in lieu thereof will have to be deposited with us. 18. In the last meeting of CoC held on 06.02.2018 (Annexure A-22, Page No. 374), the resolution plan submitted by the Resolution Applicant was considered. The CoC further deliberated on the contents of the resolution plan and suggested the Resolution Applicant to reconsider the following conditions and incorporate them in the resolution plan by way of revised / modified plan or addendum to the plan already submitted a) Release of Company's assets/charge will take place on full & final payment under the resolution plan by RA and in case the Re....
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.... Resolution Plan for filing with Adjudicating Authority i.e. Hon'ble NCLT The resolution plan was put to CoC for their approval and voting and accordingly it was; "Resolved that the consent of members of committee of creditors, subject to the Bank of India getting approval from higher authority which shall be communicated by them via email by 7th of February, 2018 be and is hereby accorded to approve the resolution plan for filing with Adjudicating Authority i.e. Hon'ble NCLT." 20. It was also stated that Bank of India vide its email dated 09.02.2018 (Annexure A-24) gave its consent to the resolution plan and confirmed that its competent authority has approved their consent to the resolution plan. The Resolution Applicant as required under the resolution plan has deposited an amount of Rs.22.50 lacs with the financial creditor, which was confirmed by State Bank of India vide its email dated 09.02.2018 (Annexure A-23, Page 380). The Resolution Applicant as on 09.02.2018 has deposited a total of Rs.45 lakhs with State Bank of India. 21. We have heard the learned counsel for the Resolution Professional, Financial Creditors, the Resolution Applicant and the lear....
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....ds owned by the promoters and not in name of company. Without the lands, the poultry farm is no use. We will pay additional Rs.100 Lakhs for these two lands, which is the market value of these lands at this point of time. This amount will be over and above the Resolution Plan amount of Rs.450 Lakhs. i. Agriculture land admeasuring 23K-08M, on which infrastructure has already constructed, situated at village Ludana, near Gohana Jind road, Tehsil Safidon, District Jind Haryana owned by Sh. Raj Kumar, Sh. Anil Kumar and Sh. Shamsher Singh ii. Agriculture land admeasuring 31K-04M (03K- 04M & 28K-0M) at village Ludana, near Gohana Jind road, Tehsil Safidon, District Jind Haryana owned by Smt. Sudesh, Smt. Santosh, Smt. Seema, Sh. Raj Kumar, Sh. Anil Kumar and Sh. Shamsher Singh d) Acceptance letter in the form of Affidavits from the co-owners of two lands on which poultry farm is constructed, for the purchase of lands to be provides to us. e) All plots in the name of the company to be taken over book value. Sources of Funds The money for implementation of the Resolution Plan will be arranged by the Resolution Applicant. The Resolution Applicant has agricult....
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....tered as C.A. No. 171 of 2018. 24. The Resolution Applicant in the resolution plan has sought the following two waivers:- (a) with regard to liability to any taxation dues for previous periods, that may arise in future; and (b) the export obligations in lieu of the benefit of duty on import of the machines with the following particulars:- EPCG LICENCE NO. DATE EXPORT OBLIGATION (FIXED) USD 3330002447 16.08.2012 338511.87 3330002488 07.09.2012 485943.34 3330002534 25.09.2012 326013.09 3330002806 12.04.2013 112787.32 3330003178 11.02.2014 139120.90 TOTAL 1402376.52 25. During the hearing, it was observed that the personal guarantors have entered into a settlement with the State Bank of India for release of their personal guarantees and have agreed to sell the land to the Resolution Applicant. The personal guarantors have filed their affidavits (Page No. 362-373) before us to the effect that they have agreed to sell the land to the Resolution Applicant and the amount settled with the Bank shall be paid within 1 year. 26. The learned Counsel for the Resolution Professional submits that the ....
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....se the Resolution Plan has been unanimously approved by the members of the CoC in the meeting dated 06.02.2018. The Resolution Plan has been approved by the CoC within the stipulated period of 180 days from the date of admission of the application under Section 7 of the Code. 31. We have gone through the contents of Resolution Plan submitted for approval which contains statements dealing with the interest of all stakeholders, including financial creditors, operational creditors and employees of the Corporate Debtor as to the proposal for payment of their dues. The Resolution Plan further deals with the provisions for the Insolvency Resolution Process cost as per Regulation 38(1) of the Regulations. The Resolution Plan also provides for the term and its implementation schedule, management and control of business of the Corporate Debtor during the term of the Resolution Plan and adequate means for supervision its implementation. The provisions and implementation of the Resolution Plan shall be as under:- "The above resolution plan will be implemented and supervised by the existing resolution professional at a fee mutually agreed between us and resolution professional. The....
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....r on fulfilling certain conditions including payments to the Financial Creditors as agreed upon and the plan must be implemented free of any such conditions. 34. It is also important to note that there is no haircut for the payment obligations to the operational creditor and as they are to be paid their dues in the normal course of business. Even the past employees of the corporate debtor will continue to be engaged by the Resolution Applicant without having recourse to termination of their services and shall be paid as per the existing agreement with them. The initial amount of Rs.45 lacs stands already deposited by the Resolution Applicant. 35. In view of the above discussion, the Resolution Plan Annexure A-25 stands approved granting waiver in respect of the past tax dues to the Government which may arise in future and exempt the Resolution Applicant from the export obligations, which the corporate debtor had entered. It is further stipulated that all the operational creditors shall be paid their dues in the normal course of business and the employees of the company will not be terminated and would be paid as per the existing agreement. The Resolution Plan so approved shal....