TaxTMI 
TaxTMI 
2019 (3) TMI 1771
X X X X Extracts X X X X
X X X X Extracts X X X X
.... No. 668/(IB)/CB/2017 under section 7 of the I and B Code, 2016 read with rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, was filed by the Union Bank of India Ltd. (in short, "financial creditor") against M/s. Star Agro Marine Exports P. Ltd. (in short, "corporate debtor") and the same was admitted on January 8, 2018 under which CIR process was initiated against the corporate debtor, moratorium was declared and the IRP was appointed. 3. The IRP took over the management and affairs of the corporate debtor and caused public announcement under regulation 6 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, for filing the claims by the creditors. After verification of the claims received, the IRP constituted the committee of creditors (CoCs). 4. In first meeting of the CoCs held on March 3, 2018 the IRP, viz., Mr. S. Rajendran, was recommended for appointment as the resolution professional. The time period of the CIR process was extended by this Authority for a period of 90 days, i. e., from July 7, 2018 to October 4, 2018 under section 12 of the I and B Code, 2016 by pa....
X X X X Extracts X X X X
X X X X Extracts X X X X
....o submit the duly approved resolution plan to the National Company Law Tribunal and complete all necessary formalities as are required in this connection." 7. Based on the assumptions that the corporate debtor provides for the financial performance, estimated cash flow for consecutive three years and technical aspects such as it is having well equipped machine room and 100 per cent. power back up arrangement, etc., the resolution applicant has proposed the "resolution plan" which provides that various works are to be performed by the resolution applicant such as to continue to operate the unit on job work basis by executing the orders of ITC Ltd. ; to enhance the capacity utilization and increase production to the extent of 40 tons per day by completing the balance-work. The human resource shall be planed based on the requirements from time-to-time and working capital to be met out of equity and internal accruals and through additional sources, i. e., debt. The "resolution plan" further provides for the payment of the dues for workmen and employees of the corporate debtor. It provides the details of the liabilities and borrowings, debtors and loans of the company, the position of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ovision has to be made in the resolution plan in favour of the operational creditors which shall not be less than the amount to be paid to them in the event of liquidation of the corporate debtor under section 53. Here emerged two situations, e.g., first, in the event of liquidation of the corporate debtor, if the assets of the corporate debtor are sufficient to meet out the liability of the all the stakeholders including the operational creditors then a provision could be made, which shall not be less than the amount to be paid to them in the event of liquidation of the corporate debtor under section 53, second, if the assets of the corporate debtor are not sufficient to meet out the liability of the operational creditors in the event of liquidation of the corporate debtor, then no provision could be made as provided under section 30(2)(b) of the IBC. Therefore, under second situation the claims of the operational creditors like Income-tax Department, Sales Tax Department or any of the other statutory authorities cannot be met out of the sale of the assets of the corporate debtor in the event of liquidation. In the said situation no provision could be possible to be made in the "r....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t to issue notice to the operational creditor(s) or any other 'creditors' for approving a 'resolution plan' under section 31 of the I and B Code, having already approved by the committee of creditors by majority voting share and in absence of any violation of section 30(2) of the I and B Code." Therefore, the issue raised hereinabove stands answered in affirmative. 10. The resolution applicant has proposed to invest a sum of Rs. 50.46 crores for taking over the business of the corporate debtor. The amount proposed by the resolution applicant, viz., SIDPL in the resolution plan and final allocation made by the CoC are as below : Particulars of creditor/Expenses Amount proposed by SIDPL (Rs. crores) Amount allocated by CoC (Rs. crores) CIRP 0.95 0.95 Operational creditors Workmen 0.11 0.11 Employees 0.78 0.78 Audit fees 0.06 0.06 Director's remuneration 0.19 Combat Security Services 0.06 0.06 ESIC 0.09 0.09 PF 0.11 0.11 Essae Teraoka P. Ltd. 0.02 0.02 Secured financial creditors-Union Bank of India 45.86 45.86 Unsecured financial creditor-ICICI Bank 2.23 2.23 Allocation towards statutory dues 0.1....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... Therefore, for successful implement of the resolution plan as approved by the CoC, the resolution applicant and its nominees will take over the management of the company and if the resolution application is saddled with statutory liabilities then the resolution plan will get frustrated and the company has to face the liquidation under the IBC, 2016. Therefore, there must not be any financial obligations other than as provided in the resolution plan to be met by the resolution applicant and the corporate debtor till the resolution plan is implemented in its length and breath. 13. From the plan approval date, all inquiries, investigation and proceedings, whether civil or criminal, suits, claims, disputes, proceedings in connection with the corporate debtor or affairs of the corporate debtor, pending or threatened, present or future in relation to any period prior to the plan approval date, or arising on account of implementation of this resolution plan shall stand withdrawn and dismissed. 14. In short, the "resolution plan" approved by the CoCs with 100 per cent. voting share and placed before this authority appears to be in line with the object and purport of the I and B Code, 2....