TaxTMI 
TaxTMI 
2019 (12) TMI 1137
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....der Section 7 of the Code for initiation of Corporate Insolvency Resolution Process against M/s. Sunstar Overseas Limited ("Corporate Debtor"). The application was admitted on 20.07.2018 imposing moratorium under Section 14 of the Code and the applicant, Mr. Gian Chand Narang was appointed as the Interim Resolution Professional. 3. Thereafter, in terms of Regulation 6(1) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 ("CIRP Regulations"), the Interim Resolution Professional made a public announcement in FORM A dated 24.07.2018 in the following newspapers: Newspaper Date Language Edition Business Standard 24.07.2018 English Delhi/NCR covering Sonepat Rashtriya Sahara 24.07.2018 Hindi Delhi/NCR covering Sonepat Region The Economic Times 24.07.2018 English Chandigarh Edition covering Armritsar Region Daily Charhdikala 24.07.2018 Punjabi Amritsar Edition 4. Subsequently, in terms of Section 18(1)(a) of the Code, the Interim Resolution Professional collated all claims submitted by the creditors pursuant to the public announcement and constituted a Co....
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.... time for submission of resolution plan till 18.03.2019 with direction to the CoC to consider the same in accordance with the provisions of the Code. 11. In the tenth meeting of the Committee of Creditors convened on 27.03.2019 resolution professional apprised the CoC members that four out of the five Resolution Applicants (RAs) whose resolution plans were presented before the CoC in the last meeting and were given a chance to rectify their shortcomings had submitted their revised resolution plans. The revised resolution plans submitted by the Resolution Applicants were discussed with their representatives. The Resolution Applicants were again asked to submit a letter of declaration/affirmation in a sealed envelope addressing the issues discussed with them i.e. the plan shall contain no conditions precedent; final improved financial consideration and terms of payment and undertaking to furnish performance security to the extent of 25% of consideration payable within 3 days of approval of their resolution plan by CoC. Three out of the five Resolution Applicants, namely M/s. GP Global Asphalt Pvt. Limited, M/s. Jatalia Global Venture Limited and Umaiza Infracon LLP (SPV of Ajay Ya....
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....ernment or any local authority to whom a debt in respect of the payment of dues arising under any law for the time being in force, such as authorities to whom statutory dues are owed, guarantors and other stakeholders involved in the resolution plan. Provided that the Adjudicating Authority shall, before passing an order for approval of resolution plan under this sub-section, satisfy that the resolution plan has provisions for its effective implementation. (2) Where the Adjudicating Authority is satisfied that the resolution plan does not confirm to the requirements referred to in sub-section (1), it may, by an order, reject the resolution plan. (3) After the order of approval under sub-section (a) the moratorium order passed by the Adjudicating Authority under section 14 shall cease to have effect; and (b) the resolution professional shall forward all records relating to the conduct of the corporate insolvency resolution process and the resolution plan to the Board to be recorded on its database. (4) The resolution applicant shall, pursuant to the resolution plan approved under sub-section (1), obtain the necessary approval req....
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....ion process of a corporate debtor- (i) where a resolution plan has not been approved or rejected by the Adjudicating Authority; (ii) where an appeal has been preferred under section 61 or section 62 or such an appeal is not time barred under any provision of law for the time being in force; or (iii) where a legal proceeding has been initiated in any Court against the decision of the Adjudicating Authority in respect of a resolution plan; (c) provides for the management of the affairs of the Corporate debtor after approval of the resolution plan; (d) The implementation and supervision of the resolution plan; (e) does not contravene any of the provisions of the law for the time being in force; (f) confirms to such other requirements as may be specified by the Board. Explanation. -For the purposes of clause (e), if any approval of shareholders is required under the Companies Act, 2013 (18 of 2013) or any other law for the time being in force for the implementation of actions under the resolution plan, such approval shall be deemed to have been given and it shall not be a contravention of that Act or law. ....
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....bts of operational creditors in such manner as may be specified by the Board which shall not be less than the amount to be paid to the operational creditors in the event of a liquidation of the corporate debtor under Section 53. 26. During hearing it was placed before us that the corporate debtor, being a going concern no workmen and employees' dues are outstanding. Nevertheless clause 6.3.2 (a) of the resolution plan provides for full and final discharge of the dues of workmen of the corporate debtor for the period of 24 months preceding the insolvency commencement date. On behalf of resolution applicant, it was confirmed that workmen's dues for the period of 24 months preceding the insolvency commencement date shall be paid in its entirety in terms of water fall provisions of Section 53 of the Code. 27. As per Form-H, financial creditors are provided 17.858% of their dues in equal proportion of their voting share. Other operational creditors, excepting workers, are provided equally at 0.1098% of their dues. Accordingly, there appears to be no discrimination in respective class of creditors, as same treatment is provided to similarly situated each class of creditors.....
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....larly, resolution applicant has undertaken at Clause 13.7.1 of the Resolution Plan that 'the resolution plan is not in contravention of the provisions of any applicable laws.' In terms of clauses (e) & (f) of sub-section (2) of Section 30 of the Code, we make it clear that the Resolution Applicant shall comply with all applicable laws under the proposed Resolution Plan, whether or not specifically provided therein. 34. It is pertinent to state here that Section 29A of the Code prescribes certain eligibility criteria and disqualifications for persons who submit a resolution plan. Resolution applicant has given adequate declaration and undertaking on their eligibility to submit the Resolution Plan. Resolution Professional has also confirmed that the Resolution Applicant M/s. Ajay Yadav & Co. through its SVP Umaiza Infracon LLP has submitted affidavit in this regard and are eligible to submit resolution plan and does not fall under any of the category as mentioned in Section 29A of the Code. 35. Regulation 36B(4A) of the CIRP Regulations requires that the Resolution Applicant shall provide a performance security. Resolution professional has certified that the Resolution ....
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....ove the statutory requirement of 66% in terms of Section 30(4) of the Code and has the requisite statutory voting share. Besides the decision of CoC is a reasoned and self-speaking one as required under proviso to Regulation 39(3) of the CIRP Regulations, 2016. Needless to state here that the Resolution Plan cannot take care of total outstanding dues of the creditors in its entirety. It is however seen that the resolution applicant proposes to pay the total consideration amount of Rs. 196 Crores within 30 days from the date of approval of the resolution plan, which is higher than the liquidation value. 42. It is well settled proposition of law that commercial and business decisions of CoC are not open to judicial review. Adjudicating Authority cannot enquire into the commercial wisdom of CoC. The ground for rejection is limited to the matter specified under Section 30(2). It is however reiterated that the resolution plan in question meets the requirements specified in Section 30(2) of the Code and the reasoned commercial decision of CoC is neither discriminatory nor perverse. 43. In the facts we are satisfied that the requirements as per the Code and regulations have been com....