TaxTMI 
TaxTMI 
TaxTMI 
2020 (4) TMI 385
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....handranwith Ms. Sumesh Dhawan, Advocates, Mr. R.P Agarwal and Mr Nitish Kumar,Advocate And Others JUDGMENT DR. ASHOK KUMAR MISHRA, TECHNICAL MEMBER 1. In all these appeals as common impugned order dated 22.07.2019 ('Impugned Order-1') read with 03.07.2019 ('Impugned Order-2') passed by Adjudicating Authority - National Company Law Tribunal, Mumbai Bench ('Adjudicating Authority') is under challenge and common question of law beinginvolved, these appeals were heard together and are being disposed of by this common judgment. 2. Company Appeal(AT) (Insolvency) No. 871-872 of 2019has been preferred by the workers of the paper unit and solvent extraction industrial units of Murli Industries Ltd.(Corporate Debtor).The brief case of the Appellant is that the Adjudicating Authority has erroneously approved the Resolution Plan submitted by the Successful Resolution Applicant - DalmiaCement (Bharat) Limited (R-2) vide the impugned order. The approved Resolution Plan has been alleged to be discriminatory and threatening the livelihood of 1184 workers of the paper unit and solvent extraction industrial units of Murli Industries Ltd. ('Corporate Debtor') by not paying outstanding wages and ....
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....e resolution of the Corporate Debtor. Therefore, as per the RP the Adjudicating Authority was well within its jurisdiction while approving the resolution plan. 7. The Respondent-2 submits that the Appellant is neither aggrieved nor treated in an unfair manner or at all prejudiced under the Resolution Plan. It was submitted by Respondent -2 that the Resolution Plan never envisaged any retrenchment in contravention of the provisions of the Industrial Disputes Act, 1947 ('ID Act') and on the contrary under the plan the Corporate Debtor was required to obtain consent of the concerned statutory authorities under the ID Act. Further, it was submitted by the Respondent -2 that the Adjudicating Authority had expressed its observations and suggested certain modifications to the Resolution Plan with a direction to the RP seeking acceptance of the said plan from Respondent -2, which were duly complied with. It was submitted by Respondent - 2 that the conditions with regard to consents, reliefs and concessions contained in Schedule 2of the Resolution Plan were essential and indispensable for revival of the Corporate Debtor and hence, Respondent - 2 had requested the Adjudicating Authority for....
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....nt of various conditions, approvals from various authorities etc. and the same is provided in schedule 2 of the Resolution Plan. The said reliefs and concessions are not granted. The Resolution Plan shall be implemented immediately on receipt of the required permissions/licenses as specified under item 2 and 3 of the Schedule 2 of the resolution plan. The Successful Resolution Applicant may apply to the relevant authority under the applicable law for the reliefs sought in the Schedule 2 and the relevant authority to consider the application of the Successful Resolution Applicant/Corporate Debtor, on its own merits. The Successful Resolution Applicant shall comply with the applicable laws and directions of the relevant authority. Extinguishment of Claims The Resolution Applicant has sought extinguishment of all claims. However, it is clarified that only crystallized liabilities of the Corporate Debtor shall stand extinguished on the approval of this resolution plan. The contingent liabilities shall exist, and no waiver can be provided for them. All claims that were either not filed or not admitted during CIRP in terms of the provisions of the Insolvency and Bankruptcy Code, 2016 ....
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.... interior region of Nagpur, Maharashtra where internet and email access is sparsely available. The grievance of the Appellants in these two appeals is with regard to non-consideration of their claims by the Resolution Professional ('RP') and the consequent non-inclusion in the Resolution Plan as well as the non-adjudication of their claims by the Adjudicating Authority. The RP in response to the said claim form sent via email dated 13.05.2017 and 15.11.2017 to the appellant, whereby the RP directed the appellant to file its claim in a proper claim form. It is submitted by the Resolution Professional that the appellant's averment that the Resolution Professional is bound to respond by postal services and not by mail is frivolous and respondent contented that the appellant had in its own proof of claim filed in the year 2017 i.e. initial claim and there the appellant had mentioned the email address wherein it can be contacted /communicated and hence the defense of the appellant that it did not have access to the email and computers is frivolous and devoid of any merit. It is also submitted by the respondent that appellant had at sub-paragraph 7.9 to the appeal clearly accepted that ....
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....ere also insufficient to decide their claim as stated. It is also stated that the resolution professional is not empowered to adjudicate upon a disputed claim and that the purported debt of the Appellant herein could not be established from a prima facie perusal of documents hence it was not within the capacity of respondent no.1 as resolution professional of corporate debtor to either admit or reject the Appellants claim. 12. Company Appeal(AT) (Insolvency) No. 880 -881 of 2019 has been preferred by Mr. Lalchand Maloo, Promoter/Director and Guarantor of Murli Industries and a member of the suspended board of director under section 32 read with section 61(3) , IBC against the order dated 03.07.2019 and 22.07.2019 passed by Ld. Adjudicating Authority whereby the Adjudicating Authority has approved the Resolution Plan submitted by Dalmia Cement(Bharat) i.e. Respondent No.2. 13. The Appellant submits that the Adjudicating Authority by its order dated 22.07.2019 erroneously, illegally and in excess of its jurisdiction has modified its order dated 03.07.2019 and has approved the Approved the Resolution Plan Submitted by Dalmia Cement. It is submitted that the Adjudicating Authority ha....
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....ct modified its order dated 03.07.2019 to approve the resolution plan which is contravention to Section 30(2) (e) of IBC. 17. It is further submitted by the Appellant that in the year 2013 valuation of each of the business unit of the corporate debtor was carried out and the total distress value was valued at Rs. 1943,37,00,000(Rupees Nineteen Hundred Forty-Three Crores and Thirty seven Lakhs). Whereas, the Liquidation value of the corporate debtor has been calculated to be Rs. 231,10,00,000 ( Rupees Two Hundred and Thirty-one Crores and Ten Lakhs only) which is only 11.89% of the distress sale value arrived just 4 years earlier. Thus the Appellant submits that Adjudicating Authority has erroneously applying the principle of commercial wisdom approved the Resolution Plan which does not even maximize the value of the assets of Corporate Debtor. 18. The Respondent No.1 who is the Resolution professional submits that the order dated 22.07.2019 does not amount to recall or review of the order dated 03.07.2019. It is further submitted that there is no irregularity in the exercise of power by the resolution professional as alleged. It is submitted by the respondent that the CoC has in ....
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.... certificate granted to the corporate Debtor under the PSI 2007 after having waived the Non - Compliances of the corporate Debtor under the terms and conditions of the related eligibility certificate and disbursal agreement; 4. The Government of Maharashtra Industries , Energy and labour department to consider consenting to (i) the closure of the Paper Undertaking , Se undertaking and corporate office of the Corporate Debtor under Section 25(O) of the industrial dispute Act,1947 with effect from their respective Production End Dates ; and ii) Payment of only the priority workmen, as set out in schedule 8 ( Financial Plan ) towards full and final discharge of the requirement to pay closure or retrenchment compensation to relevant workmen in accordance with Industries Disputes, Act, 1947 without compliance with relevant procedures laid down for such closure and /or termination of employment and resultant compensation under the industrial and resultant compensation under the industrial disputes Act,1947; 5. The NCLT order shall contain the conditions mentioned above and the (extinguishment of claims) The respondent no.2 submits that it has accepted removal of conditions 1,4, an....
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....specified amount but later on the Corporate Debtor sought for additional time to arrange for funds and requested the Appellant to return the cheques as the Appellant was ready to pay the entire amount through RTGS. The Appellant has returned the cheques hoping that the Corporate Debtor will duly repay the amount through RTGS/NEFT at the earliest and they were in a very good relations and good understanding but unfortunately in the year 2016 when the Appellant did not get thepayment then they have filed winding up Petition before the Hon'ble High Court of Bombay, Nagpur Bench. In the meantime, the Adjudicating Authority has initiated the Corporate Insolvency Resolution Process in April 2017 and thereafter the Appellant has submitted the claim alongwith related documents. The Resolution Professional was unable to determine the existence of the Appellants' claim on account of lack of adequate supporting documents as required by him, which has not been submitted to him by the Appellant inspite of correspondences in 2017. The claim was also challenged by the Corporate Debtor before the Hon'ble High Court of Bombay, Nagpur Bench and the Resolution Professional was unable to firm up the ....
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....al plan as stated supra at para20 no doubt, but the same has been approved by Committee of Creditors in its 11thmeeting held on December 20th, 2017 as per Affidavit of Resolution Professional dated 11th January, 2020. However in the clarification asked by the Bench on 8th January, 2020, the successful Resolution Applicant vide its affidavit dated 15th January, 2020 submits that the remaining conditions 2 and 3 have been approvedin-principle by Ministry for Industries & Mining, Government of Maharashtra, vide order dated 19th September, 2019 and by the Industries, Energy and Labour Department vide Letter dated 11th September, 2019 read with Letter dated 30th September, 2019 respectively. 25. Apparently it is perceived that Mining at Zutting (18.06 hectares) Tehsil Korpana, Chandrapur is not approved by Department of Mining and Industries. It is also envisaged that the requests of successful Resolution Applicant i.e. M/s. Dalmia Bharat Cement vide its letter dated 13th September, 2019 addressed to the Secretary (Industries) Industries, Energy and Labour Department, Govt. of Maharashtra has been responded by Development Commissioner (India) Directorate of Industries, New Administrati....
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....no power to review its own order. 28. The Respondent has made a submission that order dated 03rd July, 2019 was not a final order giving finality of the Application for approval of Resolution Plan. The Adjudicating Authority has directed the answering Respondent to file additional affidavit regarding certain proposed modifications in the Resolution Plan by 12th July, 2019 and the same was complied by answering Respondent. The order of 3rd July, 2019 is reproduced below: "118.Since we have proposed certain modifications to the Resolution Plan, it further requires the acceptance by the Resolution Applicant. Therefore, Resolution Professional is directed for seeking acceptance from the Resolution Applicant regarding proposed modifications. 119. The acceptance report of the Resolution Applicant is to be filed by 12.07.2019. If acceptance of the proposed modification in the resolution plan is not submitted, then we shall proceed with the liquidation. 120.List on 12.07.2019 for filing additional affidavit of Resolution Applicant regarding acceptance of the modifications in the Resolution Plan. 121.The Registry is directed to immediately communicate this order to the Resolution P....
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....rity and Appellate Authority cannot go into the feasibility and viability of the Resolution Plan which requires commercial wisdom of the Committee of Creditors. The Adjudicating Authority and Appellate Authority has to go by the various propositions of law stated above accordingly to which they have to go by the commercial wisdom of committee of creditors while approving the Resolution Plan. The given Resolution Plan is conditional but since according to the express directions given by Supreme Court in the various cases stated above. The Adjudicating Authority per se will have to go the Commercial wisdom of Committee of Creditors. iii. Whether those claims that are not dealt under the resolution plan can be held to be extinguished under the provisions of the I&B Code? The Hon'ble Supreme Court in Essar Judgment has vividly dealt with this issue. 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 an extra amount coming up for payment after the debts have been dealt by the Resolution Applicant and the Resolution Plan has been approved. This would throw into uncerta....