TaxTMI 
TaxTMI 
TaxTMI 
2018 (6) TMI 1586
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....on 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 India with voting share of 3.78%. The total amount of deb....
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....c-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 agricultural land can only be sold under the proceedings before the Debts Recovery Tribunal which is a time consuming process. 11. In the aforesaid third meeting of CoC, ....
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....er 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 Employees of the corporate debtor will be retained and they will be paid as per the existing agreements. All Govt. dues including income tax, sales tax, service tax or any other amount payable to Govt. authority to be waived. Conditions * •The RA shall take over all movable fixed assets ....
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.... 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 Resolution Plan isn't implemented or fail due to any reasons then the entire amount deposited by RA shall be liable to be forfeited by financial creditors to which RA agreed. b) Submit in writing the confirmed and bonafide sources of funds for the implementation of the plan. c) Reconsider removing condition relating to waiver of the statutory dues from the resolution plan and inst....
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....n 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 learned counsel for the Promoter Directors of the Suspended Board of Directors and also the counsel representing all the guarantors of the Financial Creditors, who are stated to be the owners of agricultural land, on which the Poultry Farm is situated. 22. That the salient features of the resolution plan of the Resolution Applicant are detailed as under:- Financial Creditors Rs.450 Lakhs towards the full & final settlement of the dues o....
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....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 agriculture income and income from the poultry business and assets created out of this. The Resolution Applicant also have a balance of Rs.240 Lakhs with Bank of India in the name of Mr. Narender Singh (Proprietor- Harsh Poultry Farms). Bank statement dated 6th Feb 2018 mentioning the available amount of Rs.2,40,68,224/- is enclosed (Page No. 360). Balance funds will be arranged by us, after the resolution plan approval letter by Committee of Creditors, is received by us. The Resolution Applicant undertake to make the full payment under the res....
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....4 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 Resolution Plan (Annexure A-25, Page No. 382) approved by the CoC conforms all the requirements of sub-section (2) of section 30 of the Code. On a reference to the Resolution Plan, we are also satisfied that the plan submitted by the Resolution Applicant fulfills all the requirements of the Code. When the matter was listed on 13.06.2018, the Resolution Professional was directed to file necessary certificate for compliance of Regulation 39 (2) of IBBI (CIRP) Regulations. The Resolution Professional filed his affidavit of compliance vide diary No.2186, dated 15.06.2018. It is stated that the resolution plan conforms to ....
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.... 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 management of the company shall also report to him. Extinguishment of liability and release of Company's assets / charge will take place once Full & Final payment is made to the Financial Creditors and after this complete ownership of 100% will be transferred to us. In case Resolution Plan isn't implemented or failed due to any reasons, then the entire amount deposited by us shall liable to be forfeited by the Financial Creditors." 32. Before parting with this order, it is necessary to deal with the conditions laid down by the Resolution Applicant in the Resolution Plan, which were discussed by the CoC. One of the prayers made by the Resolution Applicant is seeking waivers of ....