TaxTMI 
TaxTMI 
2021 (3) TMI 64
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....ocess (hereinafter referred as "CIRP") against the corporate debtor which was admitted on January 16, 2020 by this Adjudicating Authority. Mr. Saurabh Zaveri was appointed as the interim resolution professional (hereinafter referred as "IRP"). 2.2 That the committee of creditors (hereinafter referred as "CoC") was formed and in its second meeting held on February 25, 2019 decided for replacement of the IRP. An application for replacement of the IRP was filed before this Adjudicating Authority and the order was passed on March 16, 2020 replacing the IRP and appointing Shri Premraj Ramratan Laddha as resolution professional (hereinafter referred as "RP"). 2.3 The RP called for expression of interest (hereinafter referred as "EoI"), in compliance of the resolution passed in third CoC meeting, vide publication dated March 24, 2020. It is stated by the applicant that inquiries were made regarding the EoI. However, due to Covid-19 situation and various notifications of IBBI and guidelines issued by the Government, CoC advised to extend the timeline to comply the eligibility criteria by July 7, 2020. 2.4 Pursuant to the calling of EoI, only one resolution plan was received from t....
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....cy resolution of "Twenty First Century Castings P. Ltd.". 5. The applicant stated the financial proposal with bid value and also, proposes to infuse further amount of approx. rupees one crore towards the expenses for revival of the unit to keep it as going concern which shall be paid by the resolution applicant in the manner as mentioned below : Particulars Upfront payment (within 90 days from year from National Company Law Tribunal approval) Payment of (within one year from National Company Law Tribunal approval) Payment of bid value 100% - Revival expenses - 100% 6. The applicant also submitted that the bid value shall be appropriated among the creditors of the corporate debtor and revival of the corporate debtor strictly in the manner as mentioned below : (Amount in Rs.) Sl. No. Particulars Total admitted amount Amount proposed for payment Terms of payment from date of approval of resolution plan by National Company Law Tribunal 1. CIRP cost* (Note 1) 10,00,000 10,00,000 Up front within 90 days 2. Workmen and employees - - - 3. Secured financial creditors 26,13,27,227 3,90,05,000 Up f....
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....yment of debts of operational creditors in such manner as may be specified by the Board which shall not be less than- (i) the amount to be paid to such creditors in the event of a liquidation of the corporate debtor under section 53 ; or (ii) the amount that would have been paid to such creditors, if the amount to be distributed under the resolution plan had been dis tributed in accordance with the order of priority in sub-section (1) of section 53, whichever is higher, and provides for the payment of debts of financial creditors, who do not vote in favour of the resolution plan, in such manner as may be specified by the Board, which shall not be less than the amount to be paid to such creditors in accordance with sub-section (1) of section 53 in the event of a liquidation of the corporate debtor. Explanation 1.-For removal of doubts, it is hereby clarified that a distribution in accordance with the provisions of this clause shall be fair and equitable to such creditors. Explanation 2.-For the purpose of this clause, it is hereby declared that on and from the date of commencement of the Insol vency and Bankruptcy Code (Amendment) Act, 20....
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....such payment is made before any recoveries are made by the financial creditors who voted in favour of the resolution plan. "(1A) A resolution plan shall include a statement as to how it has dealt with the interests of all stakeholders, including financial creditors and operational creditors, of the corporate debtor". (2) A resolution plan shall provide : (a) the term of the plan and its implementation schedule ; (b) the management and control of the business of the corporate debtor during its term ; and (c) adequate means for supervising its implementation." 10. Further, from the object of the IBC, it is amply clear that the "resolution is rule and the liquidation is an exception". Liquidation brings the life of a corporate to an end. It destroys organizational capital and renders resources idle till reallocation to alternate uses. Further, it is inequitable as it considers the claims of a set of stakeholders only, if there is any surplus after satisfying the claims of a prior set of stakeholders fully. The IB Code, therefore, does not allow liquidation of a corporate debtor directly. It allows liquidation only on failure of corporate....
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....th regards to clause 5.5, i. e., Relief and Concessions (page No. 69 of the application), the Adjudicating Authority is of the opinion that not allowing clause 5.5 of the resolution plan, is not going to make any hindrance for proper implementation of the resolution plan as those are the subject-matter of the concerned/appropriate competent authorities. The resolution applicant(s) has/have liberty to approach competent authorities for any concession, relief or dispensation as the case may be, as and when required for proper and effective implementation of the plan. 13. It is needless to mention herein that approval of the resolution plan does not mean automatic waiver or abatement 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(s) on approval of the plan may approach those competent authorities/courts/legal forums/offices-Government or semi Government/State or Central Government, for appropriate relief(s) sought for in "clause 5.4 and 5.5" of the resolutio....