TaxTMI 
TaxTMI 
2020 (5) TMI 663
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....vency Resolution Process against Digiam Ltd. (herein after referred as "Corporate Debtor" which said application was admitted on 26/04/2019 by this Adjudicating Authority and accordingly IRP was appointed. 2.2. That IRP, so appointed made a public announcement in the newspapers inviting the claims from different creditors /stakeholders of the company on 07-05-2019.The IRP received claims from the creditors/stakeholders of the Corporate Debtor and in pursuant to section 21 of the Code, Committee of Creditors (herein after referred as "COC") was constituted, the report of the said constitution of the COC submitted before the Adjudicating Authority on 18/11/2019. On constitution of the COC IRP has received claim from different creditors/stakeholders amounting to Rs. 2,64,03,04,295.53 but had admitted the claims for an amount of Rs. 1,41,76,23,683.06 only, which said list of the claimants/creditors are annexed along with the application as Annexure 2.3. As on 12-02-2020 the member of the COC are UCO Bank as well as SBI, the detail of the Financial Creditor and their voting share is given here under : Sr. No Financial Creditors Votingshares 1 UCO Bank , Zonal office....
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....l and Resolution Applicant (through its representative) in persons at length, gone through and examined the Resolution Plan along with documents and annexures. On perusal, it is found that the Resolution Plan is in compliance of the statutory requirements, as per IBC Code, for the sake of brevity the same is produced here in below:- Sr. No. Section of the Code/ Regulation No. Requirement with respect to Resolution Plan Clause of Resolution Plan Compliance (yes/no) 1. Section25(2)h Whether the resolution applicant meets the criteria approved by the COC having regard to the complexity and scale of operations of the business of the CD? Clause 3 Yes 2. Section 29A Whether the resolution applicant is eligible to submit resolution plan as per final list of Resolution Professional or order, if any, of the Adjudicating Authority? Yes Yes 3. Section 30(1) Whether the resolution applicant has submitted an affidavit stating that is eligible? Yes Yes 4. Section 30(2) Whether the Resolution Plan : a) Provides for the payment insolvency of resolution process costs? &nb....
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....Undertaking received Yes 11. Regulation 38(2) Whether the Resolution Plan provides: (a) The term of the plan and its implementation schedule? (b) For the management and control of the business of the corporate debtor during its term? (c) Adequate means for supervising implementation? 5 5 7 Yes Yes Yes 12. Regulation 38(3) Whether the resolution plan demonstrates that - (a) It addresses the cause of default? (b) It is feasible and viable? (c) It has provisions for its effective implementation? (d) It has provisions for approval required and the timeline for the same? (e) The resolution applicant has the capability to resolution plan? 4.2.1 Yes Yes Yes Yes Yes 13. Regulation 39(2) Whether the RP has filed applications in respect of transactions observed, found or determined by him? No Yes 14. Regulation 39(4) Provide details of performance security received, as referred to in sub- regulation (4A) of regulation 36B. BG OF Rs. 6.25 Crores Yes 5. On perusal....
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....her 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; f) Confirms to such other requirements as may be specified by the Board. Regulation 38 of CIRP Regulations: (I) The amount payable under the resolution plan- a) to the operational creditors shall be paid in priority over the financial creditors as set out in Para 4.2.3 of Plan; b) to the financial creditors, who have a right to vote under sub- section (2) of section 21 and did not vote in favour of the resolution plan, shall be paid in priority over financial creditors who voted in favour of the plan as set out in Para 4.2.3 of Plan; 1 (a). The resolution plan includes a statement as to how it has dealt with the interest of all stakeholders, including financial creditors and operational creditors, of the corporate debtor as set out in Para 4.18 of Plan. (2) The plan provides for: a) the term of the plan and its implementation schedule as set out in Para 5 of the Plan; b) management and control of the bus....
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....rt record heading "Reliefs Sought', in this regard it directed that the Resolution Applicant have liberty to approach the relevant / Concerned /Appropriate Competent/Statutory Authority(s) or Local bodies as the case may be for any concession and relief, as sought for in clause 1 1, 11.1, (a) to (p) at page no 372 to 376 of the Plan. 11. It is needless to mention that approval of the Resolution Plan does not mean automatic waiver or abetment of legal proceedings, if any, which are pending by or against the Company/Corporate Debtor, as those are the subject matter of the concerned Competent Authorities having their proper /own jurisdiction to pass any appropriate order as the case may be. The Resolution Applicant on approval of the Plan may approach those Competent Authorities/Court/Legal Forums/Offices-Govt., or Semi- Govt./State or Central Govt., and Local Authority(s)/Body(s) for appropriate relief(s) sought in clause 11, 11.1, (a) to (p) (page no 372 to 376) (Vol-iii) of the Plan. 12. Thus, not allowing the above said "Extinguishment, Waiver of Claims, Liabilities and Reliefs Sought" as claimed by Resolution Applicant in Resolution Plan, is not going to make any hindra....
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....s of COC, which is a pan of record, duly signed by Zonal Head, forwarded to Resolution Professional. However, the other member of the COC i.e. SBI reiterated its stance which was communicated by SBI to Resolution Professional vide its e-mail dated 4.05.2020 (which is part of record), wherein, it is categorically stated as; "Although their Resolution Applicant justification for seeking 180 days extension in part payment of the First Tranche amount were not so convincing, We were prepared to accept the same. However, the reasons furnished by them for seeking extension of time by 365 days in part payment of 2nd tranche amount were not convincing at all" (sic). Thus it is found that SBI has partially agreed for concession in time frame of payment, so sought for by the Resolution Applicant, however has reservation for grant of any concession/relaxation in time line for payment towards 2nd tranche. For the sake of convenience, "The revised /modification in the time line for the payment", on account of pandemic of Covid-19 Virus as under: i. The Resolution Applicant vide in affidavit dated 29/04/2020 had sought certain modification in the timeline for the paymen....
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....fication/concession/relaxation in the time line for the payment to the Financial Creditors/OperationaI Creditors and/or other stakeholders, if any, due to pandemic of Covid-19 Virus, it is found that there is no material change in the Resolution Plan save and except modification/concession/relaxation in respect of time line of payment to the creditors and/or stakeholders. Those concession/modification/relaxation, so sought for by the Resolution Applicant appears to be genuine and bonafide in view of pandemic COVID-19 virus and consequent lock down which has global effect on the economy. 19. In the vogue of the current pandemic COVID-19 Virus, the RBI announced "Developmental and Regulatory Policy" in the public interest. The Reserve Bank of India (RBI) announced an extension of the moratorium on loan EM's by three months, i.e. August 31,2020 vide statement on Developmental and Regulatory Policies which sets out various developmental and regulatory policy measures to improve the functioning of markets and market participants; measures to support exports and imports; efforts to further ease financial stress caused by Covid-19 disruptions by providing relief on debt servicing a....
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.... 2020 to August 31, 2020. Thereafter, the normal ageing norms shall apply. NBFCs, which are required to comply with Indian Accounting Standards (IndAS), may follow the guidelines duly approved by their Boards and advisories of the Institute of Chartered Accountants of India (ICAI) in recognition of impairments. Thus, NBFCs have flexibility under the prescribed accounting standards to consider such relief to their borrowers." 20. In view of the relaxation so granted by R.B.I as "Developmental and stated above, the claim of Resolution Applicant in Regulatory Policies", respect of the concession /relaxation in the time line for payment to its Financial Creditors/Operational Creditors/Other stakeholders, if any, is genuine and bonafide, therefore, Resolution Applicant deserves relaxation/concession. Such relaxation in the time frame or timeline for payments is/are not going to change the nature and character of the Plan, moreover such concession/modification is approved by UCO Bank having 83.31% stake, while SBI is having 16.69% stake, but UCO Bank has approved the relaxation, so sought for by the resolution applicant in timeline for the payment. However, SBI though approved its fir....