AI Drafter 
TaxTMI 
TaxTMI 
2019 (10) TMI 102
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....ws :- (i) approve and give effect to the resolution plan submitted by the successful resolution applicant being Embassy Property Developments Private Limited, Bangalore; and/or (ii) pass such other orders or further orders in this regard as this Hon'ble Tribunal may deem fit and proper and thus render justice. 3. Initially, CP/39/IB/2018 was filed under Section 7 of I&B Code, 2016 read with Rule 4 of the Insolvency Bankruptcy (Application to Adjudicating Authority) Rules, 2016, by M/s. Udhyaman Investments Private Limited (in short, 'Financial Creditor') against M/s. Tiffins Barytes Asbestos & Paints Limited, (in short, 'Corporate Debtor'). CP/39/IB/2018 has been admitted on 12.03.2018 under which CIR Process was initiated against the Corporate Debtor, moratorium was declared and the Applicant was appointed as IRP. 4. It is averred that the Corporate Debtor viz., M/s. Tiffins Barytes Asbestos & Paints Limited, has a mining lease for iron ore in the state of Karnataka at Bellary and mining lease for Baryte mines in the state of Andhra Pradesh at Kadapa. It is further averred that the Corporate Debtor owns inter alia (a) factory for processing iron ore and red....
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....an apprehension about the chaos at the time of convening the meetings of the CoC for approval of the Resolution Plan owing to fact that certain Applications were pending before this Authority for deciding the status of some of the financial creditors and voting rights. This Authority vide Order dated 19.02.2019 directed to conduct the CoC meeting for approval of the Resolution Plan by 2 sets of votings - the 1st set excluding 5 members of the CoC and the 2nd set with all CoC members and this Authority directed the CoC not give effect to the decisions without the leave of this Authority. 10. It is averred that during the CoC meeting held on 27.02.2019, the Resolution Professional had circulated a copy of the Resolution Plan along with Resolution Professional's certificate of compliance of Section 30 (2) of the I&B Code, 2016. It is further averred that the Resolution Professional had placed both the Plans before the CoC for their deliberations and each of the Resolution Applicants was given an opportunity to present their respective plans before the CoC. The CoC members after detailed discussions with the representatives of both the Resolution Applicants reviewed and noted the sc....
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.... time of approval of the Resolution Plan. However, due to the subsequent development, a revised Form H has been filed by the Resolution Professional. The ground for filing the revised Form H is that three Financial Creditors have been declared as Operational Creditors by this Authority due to which the total voting percentage became 96.45%. 14. During the course of hearing one of the shareholders and a dissenting financial creditor have filed the objections to the resolution plan. The gist of the objections and findings thereon are noted below:- I. The objections filed by shareholder viz., Mr. Ravi Shankar Vedam: The Objector viz., Mr. Ravi Shankar Vedam is the shareholder of the Corporate Debtor viz., M/s. Tiffins Barytes Asbestos and Paints Ltd., and is the absolute owner of 35,590 shares and upon his father's intestate demise in April 2013, he and his brother viz., Mr.Sriram Vedam, inherited the 12,938 shares and therefore has a substantial interest in the Corporate Debtor. The objector has alleged that the Resolution Professional has not shared the documents with him which is in violation of the Principles of Natural Justice. The decision of the Committee o....
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....ion plan must be deferred till the disposal of pending Applications. It is further stated that the issues that were raised in the meeting of the COC have neither been clarified by the Resolution Professional or the Resolution Applicant and the Resolution Applicant is a related party, who has played different roles in the past in relation to the Corporate Debtor. The objector alleged that the Resolution Applicant lacks mining industry experience and the prayer for extinguishing and abating of claims as set out in the Resolution Plan is contrary to the Provisions of the applicable Law. It is noted that the Objector is a dissenting Financial Creditor having 1.82% voting right in the meetings of the CoC in which the Resolution Plan was approved with 96.45% voting share of the Financial Creditors. The dissenting Financial Creditor being the part of the CoC has availed sufficient opportunities to raise the issues, which did not find favour with majority of the Financial Creditors and they proceeded to approve the Resolution Plan. Therefore, this authority is not required to go into such details of the objections raised, as this Authority is not possessed with the powers of the j....
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.... 3(a) Indian Overseas Bank 14,20,25,914 3(b) Other Financial Creditors 48,77,53,319 4. Operational Creditors (Other than Employees, Workmen, Statutory Authorities) 14,19,57,961 5. Other than Financial Creditors and Operational Creditors (including Statutory Authorities) Nil 6. Working Capital 2,50,00,000 Grand Total 89,43,05,699 18. The "Resolution Plan' offered by the Resolution Applicant viz., M/s. EPDPL provides for the management of the business and operations of the Corporate Debtor from the 'Approval Date' till the 'Effective Date' and on or after 'Effective Date', in the manner set out as under.: * A Monitoring Committee is to be formed comprising of existing Resolution Professional, 1 representative of Financial Creditors and 2 representatives of Resolution Applicant ("Monitoring Committee"). The Resolution Professional shall be paid the Resolution Professional' Costs as mutually agreeable in consideration of fulfilling his obligations under this Plan. The constitution of the Monitoring Committee, including its reconstitution from time to time, shall be at mutually agreed terms with CoC Members for the perio....
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....f the Corporate Debtor, to sign and execute various documents and/or represent the Corporate Debtor, and to operate the bank accounts of the Corporate Debtor shall stand revoked with immediate effect, and the Monitoring Committee shall be entitled to authorize such persons as it deems fit to carry out such Junctions of the Corporate Debtor, sign and execute various documents and/or represent the Corporate Debtor, and to operate the bank accounts of the Corporate Debtor. * The powers of the Board of Directors of the Corporate Debtor shall remain suspended until the Effective Date and shall be exercised by the Monitoring Committee. All existing directors of the Corporate Debtor as of the Insolvency Commencement Date would be deemed to have vacated office. * The Resolution Applicant has submitted INR 5,00,000 (Rupees Five Lakhs only) as process participation deposit as per requirement of the Process Note. The aforesaid amount shall be refunded to the Resolution Applicant on Approval Date as per the terms of the Process Note. * On the Effective Date, the Resolution Applicant shall assume Control of the management of the Corporate Debtor including to re-consti....
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....ny third party and the passwords for all the bank accounts of the Corporate Debtor, etc.) shall be handed over to the Resolution Applicant for safe-keeping on behalf of the Corporate Debtor and shall be maintained at the registered office of the Corporate Debtor. * As of the Effective Date, in the event any transaction is avoided/set aside by the NCLT in terms of Sections 43, 45, 47, 49, 50 or 66 of the Insolvency and Bankruptcy Code, 2016 and any amount is received by the Resolution Professional or the Corporate Debtor in furtherance thereof such sum shall be deemed to have been received for the benefit of Resolution Applicant. The Resolution Applicant shall cause the Corporate Debtor to render reasonable co-operation to the Resolution Professional or any Person pursuing the remedies contemplated herein, without inhibiting or interfering with the functioning of the Corporate Debtor in any manner. 19. The 'Resolution Plan' further offers the declarations of the Resolution Applicant i.e., i) the Plan is not in contravention of the provisions of the Process Note, the Code, the CIRP Regulations and other Applicable Law; ii) The Resolution Applicant has not been declared as....
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....eding the Insolvency Commencement Date and Employee Dues in excess of twelve months preceding the Insolvency Commencement Date shall be written off and the Corporate Debtor shall not be liable to meet any such payments whether such payments are in form of arrears of pay or bonuses or statutory deductions. The Workmen Dues and Employees Dues shall be paid within a period of 20 days from the 'Approval Date'. iii. The admitted claim of the Financial Creditor viz., Indian Overseas Bank (IOB) aggregates to INR 14,20,25,914 shall be paid towards full and final payment within a period of 15 days from the Approval Date. Upon payment, the security created in favour of IOB shall stand released and free from all encumbrances and no further charge shall attach on the same. As regards the other Financial Creditors, the claim admitted aggregates to INR 1,95,10,13,277, the Resolution Applicant proposes to proportionately settle upto 25% of the said claim aggregating to 48,77,53,319 as full and final settlement of all claims by operating the iron ore and barytes mines of the Corporate Debtor as a going concern and by sale of existing stock. In this manner, the Resolution Ap....
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....t of the said Operational Creditors' claims on the first anniversary of the Approval Date. 21. The Plan also provides the key actions by monitoring committee during implementation of the plan as follows:- Particulars Action by Monitoring Committee Execution of definitive agreements with CoC/RP on approval of Plan by NCLT to implement the Plan The Monitoring Committee will assist the Resolution Applicant in executing all requisite agreements with CoC/RP on approval of the Plan by NCLT Continuation of the Business Operations The Monitoring Committee should ensure continuation of the Business Operations on a going concern basis Intimation to the MCA, CoC, IBBI, RBI, Tax Authorities and various other Statutory Authorities (as applicable) The Monitoring Committee will be responsible for intimating the Statutory Authorities (as applicable) regarding the Approval of the Plan and effects of the same on implementation. Intimation to all Creditors, Existing Security Holders and other stakeholders of the Company The Monitoring Committee will be responsible for intimating the various stakeholder of the Corporate Debtor regarding the Approval of the Plan and eff....
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....any of the claims of the said claimants are allowed, their respective claims will stand satisfied within that category of the claimant, namely Financial Creditors upto 25% and Operational Creditors upto 15% and the total Resolution Plan cost is provided as Rs. 89,43,05,699/-. As such, we hereby confirm and reiterate that no claims on being allowed to be included bu the orders of the Hon'ble Tribunal will remain left out or unsatisfied within the Resolution Plan. If the admitted amount increases in terms of any such order the amount shall be shared proportionately among the respective class of creditors based on the percentage of the admitted claim amount. Any surplus available will satisfy the claims in another class." (Emphasis supplied) 23. On issue No. ii, the clarification given by the Resolution Applicant through the said Affidavit is as follows:- "that our Resolution Plan contains a detailed financial proposal in schedule 10 and a snapshot of the key financial proposal is extracted at para 4.2, page 7 of the plan and accordingly we reiterate that the value of the resolution plan stands at Rs. 89,43,05,699/-, which shall not exceed or fall short as envisaged in the....