TaxTMI 
TaxTMI 
2020 (2) TMI 917
X X X X Extracts X X X X
X X X X Extracts X X X X
....s. Henna George, Mr. Kartikey Kanojiya and Ms. Sukanya Singh, Advocates., Mr. Rajiv Ranjan, Senior Advocate with Mr. Nikhil Palli, Ms. Aliya Durafshan, Advocates, Mr. Dhruv Mehta, Senior Advocate with Mr. Kumar Shashank Shekhar, Mr. Diwakar Maheshwari and Ms. Pratiksha Mishra, Advocates., Mr. Abhijeet Sinha, Mr. Sidhartha Sharma, Mr. Arjun Asthana and Ms. Sreenita Ghosh, Advocates., Mr. Manu Beri, and Mr. Varun Varma, Advocates., Mr. Rana Mukherjee, Senior Advocate with Ms. Kirti Mishra, Ms. Kanika Sharma and Ms. Apurva Upmanyu, Advocates. For Respondents: - Mr. Abhinav Vasisht, Senior Advocate with Mr. Saurav Panda, Mr. Shantanu Chaturvedi, Ms. Charu Bansal, Ms. Mahima Sareen, Ms. Priya Singh and Mr. Shreyas Gupta, Advocates for 'Resolution Professional', Mr. Kapil Sibal, Mr. Arun Kathpalia and Mr. Neeraj Kishan Kaul, Senior Advocates with Mr. Manmeet Singh, Mr. Anugrah Robin Frey, Ms. Nishtha Chaturvedi, Ms. Kauser Husain, Ms. Diksha, Mr. Deepak Joshi and Ms. Abhilasha Khanna, Advocates., Mr. Ramji Srinivasan, Senior Advocate with Mr. Spandan Biswal, Mr. Bishwajit Dubey, Ms. Srideepa, Advocates for CoC. Mr. Ramji Srinivasan, Senior Advocate with Mr. Spandan Biswal, Mr. Bish....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f the above discussion, CA No- 254(PB)/ 2019 is allowed and the resolution plan of JSW-H1 Resolution Plan Applicant is accepted. The objections raised by the Ex-Directors cum Promoters of the Corporate Debtor and Operational Creditors are hereby over-ruled. However, the acceptance and approval of the resolution plan shall be subject to the following: xxx xxx xxx (e) We also approve the appointment of Monitoring Agency from the date of this order until the closing date. Accordingly, the CoC and the RP would continue as Monitoring Agency. (f) The power of the Board of Directors of the Corporate Debtor shall remain suspended until the closing date. (g) Various reliefs sought from the statutory authorities under the Income Tax Act, 1961, Ministry of Corporate Affairs, Department of Registration and Stamps, Reserve Bank of India and others are also disposed of. We do not feel persuaded to accept the prayer made in the resolution plan yet the resolution plan applicant may file appropriate applications before the competent authorities which would be considered in accordance with law because it would not be competent for the Adjudicating Authority-NCLT t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....th Department of Financial Services and the Banks, the following statement has been made in support of stand taken by Union of India: "3) That pursuant to the captioned notice, the Ministry had called for meeting of the officials of Department of Financial Services and the Banks who were members of the Committee of Creditors on October 3rd, 2019 to ascertain their views and formalize the response of this Ministry, in view of rippling effects it would have in this case as well as other cases as well. In the meeting, it was unanimously recognized that the rights of Secured Financial Creditors are to be protected in the resolution of the Corporate Debtor and the incumbent resolution applicant is bona fide investor who acquires and takes over the Non-performing Assets (NPA) company as a going concern and facilitates maximization of the value of assets of the corporate debtor, revival of a failing company and realization of dues of creditors to the extent possible under an open, transparent National Company Law Tribunal (NCLT) supervised process. 4) It is submitted that under the process envisaged under the Insolvency & Bankruptcy Code, 2016("IBC"), once a Resolution P....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the Resolution Plan is in compliance with the provisions of the law, approves the Plan. The CIR Process is desired to ensure that undesirable persons do not take control of the Corporate Debtor by virtue of Section 29A of the IBC. The purpose and scheme of the CIR process is to hand over the company of the corporate debtor to a bona fide new resolution applicant. Any threat of attachment of the assets of the corporate debtor or subjecting the corporate debtor to proceedings by investigating agencies for wrong doing of the previous management will defeat the very purpose and scheme of CIR process, which inter-alia includes resolution of insolvency and revival of the company, and the efforts of the bank to realise dues from their NPAs would get derailed. Otherwise too, the money realised by way of resolution plan is invariably recovered by the banks and public financial institutions and other creditors who have lent money to the erstwhile promoters to recover their dues which they have lent to the erstwhile management for creation of moveable or immoveable assets of the corporate debtor in question and therefore, to attach such an asset in the hands of new promoters or resolution app....
X X X X Extracts X X X X
X X X X Extracts X X X X
....may file claim in terms of the Insolvency and Bankruptcy Code, 2016. To give an opportunity to the different wings/ Departments of the Central Government, we adjourn the matter. Post these appeals 'for orders' on 18th November, 2019 at 2.00 p.m. on the top of the list. In the meantime, the Respondents may file their respective reply affidavit within 10 days and rejoinder, if any, be filed within a week thereof." 10. The matter was adjourned and finally the Hon'ble the President of India promulgated an Ordinance making further amendment in the 'Insolvency and Bankruptcy Code, 2016', published in the Gazette of India extraordinary Part II- Section 1, dated 28th December, 2019, to resolve the issue. 11. The preamble of Ordinance making further amendment in the 'Insolvency and Bankruptcy Code, 2016' reads as follows: "WHEREAS a need was felt to give the highest priority in repayment to last mile funding to corporate debtors to present insolvency in case the company goes into corporate insolvency resolution process or liquidation, to provide immunity against prosecution of the corporate debtor, to prevent action against the property of such corp....
X X X X Extracts X X X X
X X X X Extracts X X X X
....manner in-charge of, or responsible to the corporate debtor for the conduct of its business or associated with the corporate debtor in any manner and who was directly or indirectly involved in the commission of such offence as per the report submitted or complaint filed by the investigating authority, shall continue to be liable to be prosecuted and punished for such an offence committed by the corporate debtor notwithstanding that the corporate debtor's liability has ceased under this sub-section. (2) No action shall be taken against the property of the corporate debtor in relation to an offence committed prior to the commencement of the corporate insolvency resolution process of the corporate debtor, where such property is covered under a resolution plan approved by the Adjudicating Authority under section 31, which a person, or sale of liquidation assets under the provisions of Chapter III of Part II of this Code to a person, who was not- (i) a promoter or in the management or control of the corporate debtor or a related party of such a person; or (ii) a person with regard to whom the relevant investigating authority has, on the basis of material in it....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ited' (Resolution Applicant) does satisfy the conditions prescribed under Section 32A and cannot be held to be ineligible in terms of Section 32A (2) (i) as quoted hereunder: "7) That in light of the aforementioned provisions of the IBC, the Code does not envisage any role of the Central Government to check that the Resolution Plan submitted during the course of a corporate insolvency resolution process, satisfies the conditions as set forth in Section 29A, 30, 31 and 32A. Specifically with respect to Section 32A, the onus has been placed by the Code on the Adjudicating Authority and the Investigating Authorities to ensure that conditions prescribed under 32A are met, before approval is granted for any resolution plan. 8) The instant Affidavit is made bona fide, clarifying the stance of Respondent No.03 on the notice dated 13/01/2020, passed by the Hon'ble Appellate Tribunal. This Affidavit is filed without the stand of the Central Bureau of Investigation ("CBI"), which is an independent investigating authority. The order dated 13/01/2020 of the Hon'ble Appellate Tribunal has been forwarded to the CBI on 16/01/2020 by the answering respondent with a request to tak....
X X X X Extracts X X X X
X X X X Extracts X X X X
....' reads as follows: "31. Approval of resolution plan.─ (1) If the Adjudicating Authority is satisfied that the resolution plan as approved by the committee of creditors under sub-section (4) of section 30 meets the requirements as referred to in sub-section (2) of section 30, it shall by order approve the resolution plan which shall be binding on the corporate debtor and its employees, members, creditors, including the Central Government, any State Government 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 the order for approval of resolution plan under this sub-section, satisfy that the resolution plan has provisions for its effective implementation." 24. The 'Resolution Plan' having approved by impugned order dated 5th September, 2019, is binding on 'Corporate Debtor' (Successful Resolution Applicant herein), its employees, creditors including the Central Government, any State Government or any local....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... or partner of the corporate debtor or a relative of a director or partner of the corporate debtor; (b) a key managerial personnel of the corporate debtor or a relative of a key managerial personnel of the corporate debtor; (c) a limited liability partnership or a partnership firm in which a director, partner, or manager of the corporate debtor or his relative is a partner; (d) a private company in which a director, partner or manager of the corporate debtor is a director and holds along with his relatives, more than two per cent. of its share capital; (e) a public company in which a director, partner or manager of the corporate debtor is a director and holds along with relatives, more than two per cent. of its paid-up share capital; (f) anybody corporate whose board of directors, managing director or manager, in the ordinary course of business, acts on the advice, directions or instructions of a director, partner or manager of the corporate debtor; (g) any limited liability partnership or a partnership firm whose partners or employees in the ordinary course of business, acts on the advice, directions or instructions of a direct....
X X X X Extracts X X X X
X X X X Extracts X X X X
....by a person or persons acting individually or in concert, directly or indirectly, as under: "2. Definitions.─ ...........(27) "control" shall include the right to appoint majority of the directors or to control the management or policy decisions exercisable by a person or persons acting individually or in concert, directly or indirectly, including by virtue of their shareholding or management rights or shareholders agreements or voting agreements or in any other manner." 32. It is stated that during the course of PMLA investigation, it has come to notice that M/s. 'Bhushan Power & Steel Limited'- ('Corporate Debtor') and 'M/s. JSW Steel Limited' are associated as shareholders holding 24.09% and 49% equity respectively in a Joint venture company namely 'M/s. Rohne Coal Company Private Limited'. The composition of the equity shareholding as per annual return filed with Ministry of Corporate Affairs is as follows: S. No. Name of the Company CIN/FCRN Holding/ Subsidiary/ Associate/ Joint Venture % of shares held 1 JSW Steel Ltd. L2710MH1994PLC152925 Joint Venture 49.00 2 BPSL U27100DL1999PLC108350 Joint Venture 24.09 3 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eriod of one year has lapsed from the date of such classification till the date of commencement of the corporate insolvency resolution process of the corporate debtor: Provided that the person shall be eligible to submit a resolution plan if such person makes payment of all overdue amounts with interest thereon and charges relating to nonperforming asset accounts before submission of resolution plan: Provided further that nothing in this clause shall apply to a resolution applicant where such applicant is a financial entity and is not a related party to the corporate debtor. Explanation I.- For the purposes of this proviso, the expression "related party" shall not include a financial entity, regulated by a financial sector regulator, if it is a financial creditor of the corporate debtor and is a related party of the corporate debtor solely on account of conversion or substitution of debt into equity shares or instruments convertible into equity shares or completion of such transactions as may be prescribed, prior to the insolvency commencement date. Explanation II.- For the purposes of this clause, where a resolution applicant has an account, or ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ch creditor has been admitted under this Code and such guarantee has been invoked by the creditor and remains unpaid in full or part; (i) is subject to any disability, corresponding to clauses (a) to (h), under any law in a jurisdiction outside India; or (j) has a connected person not eligible under clauses (a) to (i). Explanation I . - For the purposes of this clause, the expression "connected person" means- (i) any person who is the promoter or in the management or control of the resolution applicant; or (ii) any person who shall be the promoter or in management or control of the business of the corporate debtor during the implementation of the resolution plan; or (iii) the holding company, subsidiary company, associate company or related party of a person referred to in clauses (i) and (ii): Provided that nothing in clause (iii) of Explanation I shall apply to a resolution applicant where such applicant is a financial entity and is not a related party of the corporate debtor: Provided further that the expression "related party" shall not include a financial entity, regulated by a financial sector regulator, if it is ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ans- xxx xxx xxx (i) a body corporate which is a holding, subsidiary or any associate company of the corporate debtor, or a subsidiary of a holding company to which a corporate debtor is a subsidiary......." 41. Upon a perusal of Section 32A (1) (a) of the 'I&B Code' read with the aforesaid definition, it is ex facie evident that the 'JSW Steel Limited' is not an associate company/ related party of the 'Corporate Debtor'. While 'Rohne Coal Company Private Limited' is an 'associate company' of the 'Corporate Debtor' as well as of the 'JSW Steel Limited', but by virtue of both having investment in such downstream joint venture company i.e. 'Rohne Coal Company Private Limited', the 'JSW Steel Limited' and the 'Corporate Debtor' do not become related parties of each other. 42. The Directorate of Enforcement is interpretation that Section 32A of the 'I&B Code' is prospective in nature and the benefit of such provision cannot be claimed by the Appellant is wrong and misplaced. 43. A plain reading of Section 32A(1) and (2) clearly suggests that the Directorate of Enforcement/ other investigating agencies do not have the powers to attach assets of a 'Corporate Debtor',....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the Corporate Debtor by virtue of Section 29A of the IBC. The purpose and scheme of the CIR Process is to hand over the company of the corporate debtor to a bona fide new resolution applicant. Any threat of attachment of the assets of the corporate debtor or subjecting the corporate debtor to proceedings by investigating agencies for wrong doing of the previous management will defeat the very purpose and scheme of CIR Process, which inter-alia includes resolution of insolvency and revival of the company, and the efforts of the bank to realise dues from their NPAs would get derailed. Otherwise too, the money realised by way of resolution plan is invariably recovered by the banks and public financial institutions and other creditors who have lent money to the erstwhile promoters to recover their dues which they have lent to the erstwhile management for creation of moveable or immoveable assets of the corporate debtor in question and therefore, to attach such an asset in the hands of new promoters of resolution applicant would only negate the very purpose of IBC and eventually destroy the value of assets. 8). In light of the above, the ED while conducting investigation under ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rectorate of Enforcement that in a private company in which a director, partner or manager of the 'Bhushan Power and Steel Limited' was a director and 'JSW Steel Limited' holds more than two per cent of its share capital. 49. The allegation is not that 'JSW Steel Limited' a public company of which a director, partner or manager of the 'Corporate Debtor' is a director and holds along with relatives, more than two per cent of its paidup share capital. 50. The allegation is that in a joint venture Company namely- 'M/s. Rohne Coal Company Private Limited', 'Bhushan Power and Steel Limited' and 'JSW Steel Limited' are holding 24.09% and 49% equity respectively. 51. 'JSW Steel Limited' has taken specific plea that it is not a 'related party' of erstwhile 'Bhushan Power and Steel Limited'- ('Corporate Debtor') and placed on record the following facts: "II. The Appellant is not related party of the Corporate Debtor 10. The basis of ED's submissions that the Appellant is a related party of the Corporate Debtor is the existence of a company namely Rohne Coal Company Private Limited ("RCCPL") which was incorporated in 2008 as a joint venture amongst (i) JSW Steel Lt....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eimbursement of costs incurred by RCCPL for development of the mine until it was cancelled." 52. The Appellant- 'JSW Steel Limited' had fully disclosed its association with 'Rohne Coal Company Private Limited' in the 'Resolution Plan'. It has also disclosed the association of the 'Corporate Debtor' with 'Rohne Coal Company Private Limited'. 53. After taking into account the disclosures made by 'JSW Steel Limited', the 'Resolution Professional' had confirmed that the Appellant- 'JSW Steel Limited' is not disqualified under Section 29A of the 'I&B Code' to submit its 'Resolution Plan', which was also accepted by the 'Committee of Creditors' who approved the plan. The Adjudicating Authority also had gone into the question of ineligibility and approved the plan. 54. The Notification of Government of India through Ministry of Coal dated 9th April, 2017 shows that 'JSW Steel Limited' in its individual capacity applied for allocation of 'Rohne Coking Coal Block' in its favour. However, there being more applicants, the Central Government contemplated to make joint allocation of Rohne coking coal block in favour of 'M/s. JSW Steel Ltd.', 'M./s. Bhushan Power & Steel Ltd.' and 'M/s.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....well as of the 'JSW Steel Limited', but by virtue of both having investment in such downstream joint venture company, the 'JSW Steel Limited' and the 'Corporate Debtor' do not become related parties of each other. 61. The 'Resolution Professional' and the 'Committee of Creditors' vide their joint additional reply dated 22nd January, 2020 filed before this Appellate Tribunal, have yet again certified that the Appellant- 'JSW Steel Limited' and the 'Corporate Debtor' are not related parties. 62. The question arises as to who are the Competent Authorities to decide ineligibility of the 'Resolution Applicant' under Section 29A or 32A (1) (a) and to find out whether it comes within the meaning of 'related party' for the purpose of ineligibility. 63. As per Section 30(1), the 'Resolution Applicant' while submitting 'Resolution Plan' has to file an Affidavit stating clearly that he is eligible or not eligible under Section 29A. 64. As per Section 30(3), the 'Resolution Professional' shall present to the 'Committee of Creditors for its approval such 'Resolution Plans' which confirm the conditions referred to in sub-section (2). It is only thereafter the 'Committee of Creditors'....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nt) Ordinance, 2018." 65. It is only thereafter under Section 31, the Adjudicating Authority is to satisfy that the 'Resolution Plan' as approved by the 'Committee of Creditors' under sub-section (4) of Section 30 meets the requirements as referred to in sub-section (2) of Section 30. 66. The aforesaid provisions show that the following persons/ Authorities are empowered to decide whether a 'Resolution Applicant' is ineligible being 'related party' in terms of Section 29A or not: (i) The 'Resolution Professional' in terms of Section 30(1) is to find out whether such statement has been made or not; (ii) The 'Committee of Creditors' is empowered to decide whether the 'Resolution Applicant' is ineligible in terms of Section 29A. Thereby the 'Committee of Creditors' is also required to decide whether it is related party to the 'Corporate Debtor' or not. (iii) The Adjudicating Authority while passing order under Section 31 can find out whether the 'Resolution Applicant' fulfils the conditions under Section 30(2) which includes Section 30(2) (e) and in terms of Section 29A can decide whether the 'Resolution Applicant' is a 'related party' to the 'Corporat....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lant (Promoter) is rejected. 76. In fact, Mr. Sanjay Singal and Anr. cannot take plea that they are involved in the matter under the PMLA Act, 2002. If their argument is accepted then it is to be accepted that they have been rightly made accused by the Directorate of Enforcement in money laundering case. 77. As the Appellants- Mr. Sanjay Singal and Anr. have not pleaded that the assets of the 'Corporate Debtor' is from 'proceeds of crime' and this Appellate Tribunal is not empowered to decide such issue, we hold that the Appellant- Mr. Sanjay Singal and Anr. should not raise such issue for determination by this Appellate Tribunal. 78. It was submitted that neither the 'RFP' nor the 'Resolution Professional' stated that distribution of profit/ earnings before interest tax depreciation amortization generated by the 'Corporate Debtor' during the 'Corporate Insolvency Resolution Process' ("CIRP EBITDA") shall go to the 'Resolution Applicant'. According to them, the 'Committee of Creditors' has accepted that distribution of profit/ earnings before interest tax depreciation amortization generated by the 'Corporate Debtor' during the 'Corporate Insolvency Resolution Process' ("CI....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s already been discussed and decided in the preceding paragraphs which is reiterated. We find no merit in this appeal. The appeal preferred by 'Mr. Sanjay Singal and Anr.' is dismissed. Appellant- Jaldhi Overseas Pte. Ltd.' 83. The Appellant is a company incorporated in Singapore engaged in the business of freight and ship chartering operations and claims to be an 'Operational Creditor' of the 'Corporate Debtor' with the largest claim of Rs. 151.37 Crores (in view of three International Arbitral Awards, pending execution as on the Insolvency Commencement Date). 84. Learned counsel for the Appellant submitted that even though the claim of the Appellant was admitted, suddenly in the third list of 'Operational Creditors' published by the 'Resolution Professional' on 21st September, 2017 the said admitted claim was unilaterally reduced to Rs. 70,31,538. In view thereof, the Appellant was constrained to approach the Adjudicating Authority seeking direction to the 'Resolution Professional' to rectify the gross error as the 'Resolution Professional' had failed to rectify the same despite follow up by the Appellant. Accordingly, the admitted claim was corrected by the 'Resoluti....
X X X X Extracts X X X X
X X X X Extracts X X X X
....olution Process' is also against the scheme of the 'I&B Code', as per which all past dues/ liabilities of the 'Corporate Debtor' cannot be recovered by the creditors during 'Corporate Insolvency Resolution Process' and become subject to the final 'Resolution Plan' approved by the 'Committee of Creditors' and the Adjudicating Authority. (ii) The Insolvency and Bankruptcy Board of India's Circular No. IBBI/IP/013/2018 wherein it has been clarified that Insolvency Resolution Process Cost cannot include cost incurred, 'pre- Corporate Insolvency Resolution Process' or 'post- Corporate Insolvency Resolution Process' (iii) Explanation to Section 14(2) of 'I&B Code' added by way of Ordinance dated 28th December, 2019, further emphasises that 'Operational Creditors' can only be paid towards supplies made by them during 'Corporate Insolvency Resolution Process'. The said provision is as below: "Where the IRP, or the RP as the case may be considers the supply of goods and services critical to protect and preserve the value of the Corporate Debtor and manage the operations of such Corporate Debtor as a going concern, then the supplier of such goods or services shall ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ust, 2019. There is thus no contravention of law under Section 30 (2) (e) of the 'I&B Code". On the contrary, the said amendment, reverberates the ratio of the judgement passed by this Appellate Tribunal in Binani Industries, as the amendment clarifies that the distribution should be fair and equitable amongst creditors. 91. Learned counsel for the Appellant- 'Jaldhi Overseas Pte. Ltd.' submitted that the Appellant has been categorized as a 'contingent creditor' even though the 'Resolution Professional' has admitted the claim in full. In addition to the above discrimination, the 'Resolution Plan' approved by the Adjudicating Authority also further discriminates the Appellant. This is because while the 'Resolution Plan' proposes payment of 50% of all admitted claims of 'Operational Creditors' with a cap of Rs. 350 Cr, the Appellant (which is the largest admitted 'Operational Creditor') was malafidely put in a different class namely 'identified contingent creditors'. As per the 'Resolution Plan', such identified contingent creditors (totalling to approximately Rs. 5000 Crores) are to receive 10% of their claim, only and only if their claim crystalizes within a period of two years ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lant, the Appellant was identified as a critical trade creditor on the basis of criticality of services, the Appellant provided to the 'Corporate Debtor' during the 'Corporate Insolvency Resolution Process' on the advice of Technical Advisor. 96. Accordingly, the 'Resolution Professional' in order to incentivize the Appellant, entered into an agreement with the Appellant to clear its outstanding dues arising out of the transportation works carried before commencement of 'Corporate Insolvency Resolution Process' as a consideration for carrying out transportation works during the 'Corporate Insolvency Resolution Process' of the 'Corporate Debtor', so that the final goods could be transported to the buyers to keep the 'Corporate Debtor' as a going concern. 97. As per the said agreement, the 'pre-Corporate Insolvency Resolution Process' dues of the Appellant were cleared by the 'Resolution Professional' in a span of around 10 months from 27th July, 2017 and numerous payments were issued reflecting the invoice against which payments were made. Payments were released to the Appellant only after following the detailed 21 steps procedure in the Indent Processing. It is stated that af....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... never shared with the 'Operational Creditors'. 104. In the present case, there is nothing on the record to suggest that the Appellant in its individual capacity as 'Operational Creditor' had more than 10% of the dues of the 'Operational Creditors' to remain present during the meeting of the 'Committee of Creditors'. Therefore, the question of supplying the complete copy of the relevant documents and 'Resolution Plan' does not arise. 105. The other ground taken in that 'JSW Steel Limited' is hit by Section 29A of the 'I&B Code' as it is a 'related party' of 'M/s. Bhushan Power & Steel Limited'. However, such plea cannot be accepted in view of the findings already recorded above. We find no merit in this appeal preferred by Appellant- 'Kalyani Transco'. It is accordingly, dismissed. Appellant- State of Odisha 106. According to Appellant- 'State of Odisha', it is legally entitled to recover a sum of approx. Rs. 139,15,80,504/- on account of entry tax dues in view of the finality of the issue with regard to the legality of the levy upheld by the Hon'ble Supreme Court vide Judgment reported in (2017) 12 SCC 1. The said case filed by State of Orissa wherein 'Bhushan Power....
X X X X Extracts X X X X
X X X X Extracts X X X X
....te, as has been pointed out by us hereinabove. For these reasons, the NCLAT judgment must also be set aside on this count." 110. In view of the decision of the Hon'ble Supreme Court, the 'State of Odisha' cannot recover any dues of earlier period of date of approval of the plan. 111. Apart from the fact the present appeal has been preferred by 'State of Odisha' much beyond the period of 15 days after 30 days' time of preferring the appeal. In such case also, in absence of any power of this Appellate Tribunal to condone the delay beyond 15 days after 30 days of preferring the appeal, in terms of Section 61(2) the present appeal is not maintainable. We find no merit in the appeal preferred by 'State of Odisha'. It is accordingly dismissed. Appellant- 'CJ Darcl Logistics Limited' 112. The grievance of the Appellant- 'CJ Darcl Logistics Limited' is against collation of claim by the 'Resolution Professional'. It was submitted that the Adjudicating Authority while passing the impugned order on 5th September, 2019 failed to adjudicate numerous issues pertaining to the illegal and void actions of the 'Resolution Professional' in relation to the total amount payable to the Ap....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 119. In view of the findings as detailed above, we hold that the assets of the 'Corporate Debtor' ('Bhushan Power & Steel Limited') of which 'JSW Steel Limited' is a 'Successful Resolution Applicant' is immune from attachment by the Directorate of Enforcement. 120. The requirement of Section 32A (1) (b) of the 'I&B Code' is that the investigation agency must have reason to believe that the 'Resolution Applicant' had abetted or conspired for the commission of the offence on the basis of material in its possession as on date. The phrase "on the basis of material in its possession" along with the usage of the words "has" and "reason to believe that he had abetted or conspired.." has to be necessarily construed as, the material in the possession of investigating agency as on the date when such agency is called to provide its confirmation/ certification with respect to Section 32A (1) (b) of the 'I&B Code'. 121. If the investigating agency is permitted to keep such confirmation in abeyance till the investigation is complete in all respects then the object and purpose of introducing Section 32A (1) (b) will be defeated and no 'Resolution Applicant' would come forward to impleme....
X X X X Extracts X X X X
X X X X Extracts X X X X
....& Ors.─2019 SCC OnLine SC 1478". The Hon'ble Supreme Court observed: "89. The RFP issued in terms of Section 25 of the Code and consented to by ArcelorMittal and the Committee of Creditors had provided that distribution of profits made during the corporate insolvency process will not go towards payment of debts of any creditor - see Clause 7 of the first addendum to the RFP dated 08.02.2018. On this short ground, this part of the judgment of the NCLAT is also incorrect." 126. The aforesaid decision having been reversed by the Hon'ble Supreme Court, we hold that the distribution on the profit made during the 'Corporate Insolvency Resolution Process' should be made in terms of addendum to the RFP as held by the Hon'ble Supreme Court. 127. We accordingly, set aside the part of the conditions as made in Paragraph 128 (j) of the impugned order dated 5th September, 2019 which relates to distribution of profit during the 'Corporate Insolvency Resolution Process'. The Monitoring Committee with the help of the 'Resolution Professional' will now go through the RPF issued in terms of Section 25 of the 'I&B Code' and as consented to by the 'Resolution Applicant' ('JSW Stee....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ugned order also relates to 'List A', such condition would also amount to material modification of the Resolution Plan, without the consent of the Appellant, which has otherwise been found fit for approval. 133. List A is the integral part of the Resolution, therefore, the following orders shall be deemed to have been granted by virtue of approval of the Resolution Plan: (i) approving the Capital Reduction in the manner as contemplated under the Resolution Plan; (ii) approving the Amalgamation in the manner as contemplated under the Resolution Plan; (iii) the Existing Board shall stand vacated and be replaced by the Reconstituted Board; (iv) All penalties, interest, delayed payment charges, any other liabilities for any non-compliance with statutory obligations including taxes, including delays in filing returns or payment of tax dues, against the Company shall stand settled in accordance with the provisions of this plan as approved by NCLT. (v) All penalties, interest, delayed payment charges, any other liabilities for any non-compliance with applicable labour and employment Laws shall stand settled to the extent and in the manner pr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Transactions to the Corporate Debtor and the Corporate Debtor has received such monies prior to the 3rd (third) anniversary of the Effective Date ("Recovered Monies"), then such amount of the Recovered Monies which pertain to and are prorate for the period prior to the Insolvency Commencement Date shall be paid by the Corporate Debtor to the Financial Creditors which is remaining after deducting (a) any and all costs or expenses incurred by the Corporate Debtor in relation to the recovery of such Recovered Moneys or for representing itself in any actions in relation to such Identified Transactions, including any appeals thereof, (b) any payments to be made by the Corporate Debtor pursuant to the avoidance of such Identified Transactions including any return or refund of any benefits availed or available by the Corporate Debtor, and (c) payment of any present or future potential taxes, levies and holdbacks (such balance of the Recovered Monies (pertaining to the period prior to the Insolvency Commencement Date and which is prorate for such period) hereinafter referred to as "Pass Through Monies")." 136. Para 13 of the Addendum Letter stipulates that in the event that the Adjudica....
X X X X Extracts X X X X
X X X X Extracts X X X X
....all have the sole obligation to recommend independent persons, to the Reconstituted Board. On the NCLT Approval Date, (i) the existing board of directors of the Company (the "Existing Board") shall be deemed to have resigned and board shall stand vacated; (ii) the persons recommended by the Steering Committee shall be inducted as directors of the Company ("Reconstituted Board"); (iii) the person acting erstwhile Resolution Professional shall be appointed as a monitoring professional (Monitoring Professional") who shall continue to perform the dues as were discharged by the Resolution Professional during the CIRP Period (subject to decisions of the Reconstituted Board, in accordance with Applicable Law), and the Resolution Applicant and the Company shall enter into suitable contractual arrangements with the Monitoring Professional to perform the aforementioned duties; and (iv) an independent O&M contractor (identified by the CoC from a list of O&M contractors provided by the Resolution Applicant) shall be responsible for the operation and maintenance of the Company's facilities." [Para 2(a) of Part A of the Resolution Plan at pg. 3] 141. In para 51 of the Impugned order, the Adju....
X X X X Extracts X X X X
X X X X Extracts X X X X
....C OnLine SC 1478". In the said case, the Hon'ble Supreme Court held: "88. For the same reason, the impugned NCLAT judgment in holding that claims that may exist apart from those decided on merits by the resolution professional and by the Adjudicating Authority/Appellate Tribunal can now be decided by an appropriate forum in terms of Section 60(6) of the Code, also militates against the rationale of Section 31 of the Code. A successful resolution applicant cannot suddenly be faced with "undecided" claims after the resolution plan submitted by him has been accepted as this would amount to a hydra head popping up which would throw into uncertainty amounts payable by a prospective resolution applicant who successfully take over the business of the corporate debtor. All claims must be submitted to and decided by the resolution professional so that a prospective resolution applicant knows exactly what has to be paid in order that it may then take over and run the business of the corporate debtor. This the successful resolution applicant does on a fresh slate, as has been pointed out by us hereinabove. For these reasons, the NCLAT judgment must also be set aside on this count." ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....c shareholders' of such companies. (b) If the 'Corporate Debtor' has any right over 'subsidiary companies', 'associate companies', 'joint venture companies' of the 'Corporate Debtor', once 'Successful Resolution Applicant' ('JSW Steel Limited') takes over the 'Corporate Debtor', it will be open to the 'Corporate Debtor' to decide whether it will continue with such right of 'subsidiary companies', 'associate companies', 'joint venture companies' or any other companies in which 'Corporate Debtor' has share. (c) It is further ordered that the company on approval of the 'Resolution Plan' shall stand declassified as promoter/ part of promoter/ group of promoter of any company or entity, including any 'subsidiaries companies', 'associate companies', 'joint venture companies' including 'Nova Iron Steel' in which 'Corporate Debtor' has made an investment and it is not required to follow any separate procedure for reclassification of the company as "shareholders of such companies". 148. The impugned Judgment dated 5th September, 2019 passed by the Adjudicating Authority approving the plan submitted by 'JSW Steel Limited' is approved with aforesaid modification/ clarific....
X X X X Extracts X X X X
X X X X Extracts X X X X
....agement partielpation from all the consortium partners. The production from the mine could be distributed among the consortium partners in proportion to their assessed requirement at the time of allocation, net of linkages, if any. The equity shares should be held in proportion to the assessed requirement of all the consortium partners Option-II: In this option, one allocattoe company would be designated as the leader for the block and a few other allocattees would be designated as the associated for that block. The allocation would be made to the leader and the associates but the mining lease will be granted to the leader, all investments will be made by the leader, all mining operations will be carried out by the leader and the production from the mine will be shared between the leader kind the associates in the ratio of their respective assessed requirement at the time of allocation. The paleo at which the coal will be given to the associates would be determined by the Central Governmental agency and would be called the 'transfer price'. Option-III: In this option, for each block one allocattée would be c....