TaxTMI 
TaxTMI 
2021 (5) TMI 10
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....ef as follows:- i) To allow the revision of the resolution plan as regards the amended shareholding pattern necessitated on account of the changed infusion mechanics, without affecting the rights of the stakeholders to the resolution process; ii) To exclude the time period from the date of rejection of the Applicant's request by the RBI i.e. August 19, 2020 till the date of order of this Tribunal, from the calculation of the timelines envisaged under the approved resolution plan; iii) To enable the applicant to comply with the implementation of the Resolution Pan approved by this Tribunal in MA/1433/2019 in CP/941/IB/2018 vide order dated 20th July 2020 with necessary revision as sought for in prayer(a); and iv) For such other reliefs as this Tribunal deems fit and as the nature and circumstances of the present case may require. 2. By an order dated 15th October 2018 this Tribunal initiated CIRP in relation to the Corporate Debtor and appointed one Mr. Arumugam as the Interim Resolution Professional. The said IRP was thereafter replaced by one Ms. Vandana Garg as the Resolution Professional of the Corporate Debtor vide order dated 21.10.20....
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....e 60 days' time period for implementation as provided in the Approved Resolution Plan expired on 19.09.2020. 7. It was submitted by the Learned Senior Counsel for the Applicant that as per the Approved Resolution Plan, the Applicant has proposed an amount aggregating to Rs. 353.3 Crore (Resolution Amount), payable towards resolution of the Corporate Debtor including infusion for working capital requirements. It was further submitted that in terms of the Resolution Plan and as part of the Resolution Amount, the Applicant is required to infuse an aggregate amount of Rs. 31.50 crore (Upfront Payment) into a special purpose Vehicle (SPV) wholly owned and controlled by the Applicant which shall be amalgamated into the Corporate Debtor on and from the date on which such upfront payment is infused in the SPV. The summary of the amount to be distributed to the claimants of the Corporate Debtor as follows; 8. The timelines for the implementation schedule as provided in Clause-1 of section 4, part A of the Approved Resolution Plan is extracted as follows:- 9. It was submitted by the Learned Senior Counsel for the Applicant that all the actions up to Sl. No. 4 of the above table ....
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....mitted under the SARFAESI Act, 2002, UVARC had immediately upon approval of the resolution plan by the CoC in their 16th meeting on 20.11.2019, issued a letter to the RBI on 05.12.2019 by way of abundant caution for seeking permission from the RBI for direct infusing of funds into the SPV by way of equity share capital. A copy of letter dated 05.12.2019 is attached as Annexure 4. However, no reply was forthcoming. (v) It has been further stated that soon after the order of this Tribunal dated 20th July 2020, approving the resolution plan, UVARC had again written a letter to RBI dated 27th July 2020, inter alia, for seeking permission from the RBI to go ahead with implementation of the Approved Resolution Plan through direct investment into the SPV by way of equity shares. (vi) The Applicant further stated that the RBI vide its letter dated 19th August 2020 replied to UVARC in which it has stated (while referring to the letter issued by it on 28th August 2019) in respect of similar permission sought by UVARC as part of implementation of the resolution plan for another insolvent company, wherein the RBI had stated that the request of UVARC to submit the resolution p....
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....ding the instruments through which such funds are required to be raised, either in SPV or in the Corporate Debtor. The relevant portion is extracted below for reference: (Refer to Clause 3.5(b) of Section 1 of Part B; Clause 6(a)(v) of Section 1 of Part B of the Approved Resolution Plan (Pg. 120 & 127). "3.5 [........] (b) The Resolution Applicant reserves the right to arrange the financing from alternate sources including but not limited to other banks, non-banking finance companies, corporate houses, fund houses and financial institutions subject to prior intimation by the Resolution Applicant in regard to the Monitoring Committee. The Resolution Applicant is at liberty to change the mode and manner of source of funding including the instruments through which such funds are required to be raised either in SPV or in the Corporate Debtor and also to extend encumbrance on the assets of the Corporate Debtor, subject to release of existing charge on such assets, or on the assets of Resolution Applicant or each of the Consortium Members or on the assets of SPV, if any. Provided that the Resolution Applicant shall be entitled to exercise this right without any further concurren....
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....ndment to the shareholding pattern, is being proposed only to allow the Resolution Applicant to implement the Approved Resolution Plan. A comparative table setting out the original provisions under the Approved Resolution Plan and the proposed revisions is provided in Annexure 7. All payments to the creditors envisaged under the Approved Resolution Plan shall be preserved. The change in the infusion structure, which is expressly permitted under the Approved Resolution Plan, and a change in the shareholding pattern, shall not prejudice the interests of any of the stakeholders, and in fact will ensure implementation of the Approved Resolution Plan and resolution of the Corporate Debtor which will be in the best interests of the all stakeholders. B. Relaxation of timelines in the Approved Resolution Plan: viii) As submitted above, the Applicant is fully committed and is willing to implement the Approved Resolution Plan. However, the Applicant has not been able to proceed with the implementation on account of the RBI prohibiting the direct equity infusion by UVARC into the SPV and the view taken by the RBI that the submission of the Approved Resolution Plan is not in ....
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....e Applicant to implement the Approved Resolution Plan within the envisaged timelines and the Applicant does not seek any deviation from/extension of the timelines prescribed in the Approved Resolution Plan. 12. The Monitoring Agent Ms. Vandana Garg had filed an Affidavit on 22.12.2020 and stated that in the 6th Monitoring Committee meeting held on 18.12.2020, it was unanimously observed by the Monitoring Committee members that the Approved Resolution Plan ought to be implemented at the earliest and funds be infused and other stakeholder also agreed in the best interest of the Corporate Debtor to keep it as a going concern. 13. The Learned Senior Counsel for the Applicant relied on the judgments of Kridhan Infrastructure Pvt. Ltd. v. Venkatesan Sankaranarayanan & Ors. Civil Appeal No. 3299/2020, and Sunil Kumar Agarwal, RP of Digjam Ltd. vs. Suspended Board of Directors of Digjam Ltd. & Ors. IA No. 144 of 2020 in CP(IB) No. 594/NCLT/AHM/2018(NCLT Ahmedabad) and Swiss Ribbons Pvt. Ltd. & Anr. Vs. Union of India & Ors. AIR 2019 SC 739, it was observed that: "What is interesting to note is that the Preamble does not, in any manner, refer to liquidation, which is only availed of a....
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....ction Companies" dated 28th April, 2017. c) RBI notification "Conversion of debt into equity - Review" dated 23rd November 2017. d) RBI Master Direction - Fit and Proper Criteria for Sponsors-Asset Reconstruction Companies (Reserved Bank) Directions, 2018 dated 25th October, 2018. e) RBI notification "Permission to acquire financial asset from other Asset Reconstruction Companies (ARCs)" dated 28th June 2019. f) RBI notification "Acquisition of financial assets by Asset Reconstruction Companies from sponsors and lenders" dated 6th December 2019. g) RBI Fair Practices Code dated 16th July 2020 for Asset Reconstruction Companies. h) Sujana Universal Industries Limited, order of NCLT Hyderabad dated 24th December 2020 approving resolution plan by ARC. 18. The Learned Senior Counsel for the Applicant has also filed an affidavit dated 05.04.2021 by the Authorized Representative for UVARCL and WLSPL, wherein they have reasserted the position that WLSPL shall infuse funds into the Project and successfully implement the approved Resolution Plan. 19. In page No. 4 of the Affidavit filed by the Applicant, they have sought for the fo....
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.... 23. The Applicant should strictly stick on to the timings as mandated for the implementation of the Approved Resolution Plan. As stated in para 8. We hereby direct the Applicant shall take the necessary steps to implement the Approved Resolution Plan within the timelines prescribed therein. 24. As stated above, no material terms of the Approved Resolution Plan are sought to be altered and all terms of the Approved Resolution Plan in relation to the rights of the stakeholders are preserved without any modification and all statutory requirements would be complied with for implementation of the Approved Resolution Plan. 25. It is observed that the proposed changes are for the benefit of all the stakeholders of the Corporate Debtor, which also includes operational creditors/workmen & employees of the Corporate Debtor. It is imperative that the proposed changes are allowed, so that a feasible resolution plan which is capable of reviving the Corporate Debtor and continuing its business as a going concern, is expected to benefit all stakeholders on a long-term basis. Accordingly, revision of the resolution plan as regards the amended shareholding pattern necessitated on account ....