TaxTMI 
TaxTMI 
2019 (5) TMI 480
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....e Resolution Plan and pass such other order/orders direction/directions as may deem just and proper in terms of Section 31(1) of Insolvency and Bankruptcy Code, 2016 and grant relief as prayed in Para 7. b. The applicant further prayed that leave maybe granted to add or modify any of the relief. c. And for this act of kindness, the Petitioners shall as in duty-bound every pray. 3. Before considering the Resolution Plan approved by the CoC, the detail of which will be noted in the subsequent Paras, it is necessary to place on record that in relation to the Corporate Debtor there are about 33 stakeholders as has been indicated by the Resolution Professional to whom the notices were ordered to be issued to provide an opportunity of being heard in the interest of justice. 4. During the course of hearing, objections have been filed by the following stakeholders:- (i) The Assistant Commissioner, Municipal Corporation, Tirunelveli; (ii) The Chief Manager of ICICI Bank Ltd.; (iii) SKR Wind Energy, LLP; (iv) The Employees' State Insurance Corporation; and (v) The Superintending Engineer, Electricity Distribution Circle....
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....n the Resolution Plan is only amounting to Rs. 5 Lakhs for the purpose of payment. The Counsel for the Objector/operational creditor further contended that the Resolution Plan did not strike balance between the Financial Creditors and the Operational Creditors as the Financial Creditors are getting higher percentage of payments and the Operational Creditors are being treated discriminatory. The Counsel for the Objector /Operational Creditor has referred to the judgment passed by Hon'ble NCLAT in Binani Industries Ltd. v. Bank of Baroda and ors. dated 14-11-2018, whereby under Para 48 of the judgment, it has been observed that "...it is necessary to balance the 'Financial Creditors' and the 'Operational Creditors" while emphasizing on maximization of assets of the 'Corporate Debtors'. It has further been observed that "Any 'Resolution Plan' if shown to be discriminatory against one or other 'Financial Creditor' or the 'Operational Creditor', such Plan can be held to be against the provisions of I&B Code." The Counsel has further made a reference to the ruling of Hon'ble Apex Court handed down by their Lordships in Swiss Ribbons (P.....
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.... (iv) Objection raised by the Employees' State Insurance Corporation: The objection filed by the Employees' State Insurance Corporation reveals that the allocation of total costs towards the Employees' State Insurance made in the Resolution Plan is Rs. 4,43,402/- as shown under the head 'proposed payment' is stated to be ambiguous and there is no clarity about payment of interest for the delayed payment of contribution by the employer in the Resolution Plan submitted. In reply to the above objection raised, the Resolution Professional has submitted that the provision made in the Resolution Plan is equivalent to the amount which the Objector could have received in the event of liquidation of Corporate Debtor as per the waterfall mechanism provided under Section 53 of the I&B Code, 2016. In view of the submissions made by the Resolution Professional, the objection raised by the Employees' State Insurance Corporation stands rejected. (v) The Objection raised by the Superintending Engineer, Electricity Distribution Circle, Tirunelveli; The Superintending Engineer, Electricity Distribution Circle, Thyagaraja Nagar, Tirunel....
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....sal for 'Expression of Interest' ('EoI') was approved by the CoC and the Resolution Professional had made newspaper publications inviting 'EoI' on 13.06.2018 and 15.06.2018 for submitting the Resolution Plans in respect of the Corporate Debtor. 11. In response to the said advertisements, only one Resolution Applicant viz., H. M. Textiles Pvt. Ltd., Coimbatore has submitted the Resolution Plan to the Resolution Professional in respect of Corporate Debtor. The Resolution Plan submitted by the Resolution Applicant along with the valuation reports and evaluation matrix was placed by the Resolution Professional before the CoC in its 3rd Meeting held on 02.08.2018 for deliberations. The CoC has taken a decision that the Resolution Plan needs improvement upon valuation and elaboration of its implementation and the Resolution Applicant had agreed to submit a revised Resolution Plan. In the meantime, on an Application filed by the Resolution Professional, the time period of CIR Process was extended beyond 180 days by this Authority for further period of 60 days from 30.09.2018 to 29.11.2018. 12. In the 5th Meeting of CoC held on 01.11.2018, one of the CoC's....
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....lution Plan before the Hon'ble NCLT, Chennai Bench". 16. The perusal of the 'Resolution Plan' shows that with the object of expanding the business, the Resolution Applicant proposes to take-over the Corporate Debtor's company by settling the outstanding dues of Financial/Operational Creditors by way of debt to implement the 'Resolution Plan'. The salient features of the Resolution Applicant's offer described in the Resolution Plan are as follows:- * The outstanding Insolvency Resolution Process Costs would be paid in priority to all the other debts of the Corporate Debtor; * All the payments to the Financial Creditors (Secured and Unsecured) would be paid as per the terms mentioned in the proposal; * Provisions have also been made in the Resolution Plan to settle the outstanding dues of the Operational Creditor as per the terms mentioned in the proposal; * Provisions have also been made to pay all the dues of the workman and employees: Gratuity, Employees State Insurance, and Labour Law suit as per the terms mentioned in the proposal; * No provisions have been made to the dues outstanding towards the Statut....
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.... or priority to any Operational Creditor on any basis) Other Operational Creditor ....... 6 Total 96,30,05,738 22,76,94,583 The liquidation value of the Corporate Debtor is Rs. 25,07,09,500/-. The total debt due to Secured Creditor and the workmen is Rs. 55,61,83,618/- and the Resolution Process Costs is Rs. 1,71,00,805/-. Therefore, as per the liquidation value of the Corporate Debtor and the waterfall mechanism provided under Section 53 of I&B Code, no amount will be liable to be paid to persons other than resolution process cost, secured creditors and wages to workmen. 18. The 'Resolution Plan' provides for payments to the creditors within the stipulated time as follows:- (a) Resolution Process Cost within 30 days of Effective Date; (b) Running cost of the Corporate Debtor to keep it as the growing concern during the CIRP period within 30 days of Effective Date; (c) Amount due to the Operational Creditor within the 30 days of Effective Date ( this will be paid in proportion to the claims of Operational Creditors without any preference or priority to any Operational Creditor on any basis); (d) Paymen....
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....corresponding effect of reduction of capital as aforesaid shall be given to General Reserves of the corporate debtor. (iv) Infusion of fresh funds by the promoters:- Of the amount specified as above, the Resolution Applicant will borrow from scheduled commercial Banks or Financial Institutions a sum of Rs. 10,00,00,000/- and bring the balance out of funds available with them / raised by them through their internal sources. The amount to be brought in by the Resolution Applicant from their own sources will be brought in three equal monthly parts from and request will be made to lending Bank or Financial Institution to disburse the loan amount of Rs. 10,00,00,000/- too in three equal monthly parts. (v) The implementation of the Resolution Plan:- The implementation of the Resolution Plan will be monitored by the secured Financial Creditor namely viz., City Union Bank as per Regulation 38 (2) (c) of Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations. 20. The Resolution Applicant has prayed for various reliefs as enumerated under the Resolution Plan approved by the CoC. Therefore, permission under Sections 6....