TaxTMI 
TaxTMI 
2021 (5) TMI 574
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....lans for consideration by the Committee of Creditors as the Resolution Applicant failed to implement the Resolution Plan as approved by the Hon'ble NCLT on 25.11.2019, in blatant violation of the Orders of the Hon'ble NCLT dated 18.02.2020 and the Hon'ble NCLAT dated 25.06.2020. Facts of the case: 2. The Applicant submits that a Petition under Section 7 of the Code read with Rule 4 of Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 was admitted by this Tribunal vide its order dated 20.04.2018 and the Applicant herein was appointed as the interim resolution professional of the Corporate Debtor Company. Thereafter pursuant to the first Committee of Creditors held on 25.05.2018, the Applicant was appointed as Resolution Professional ("RP"). 3. The public announcement was made on 27.04.2018 and 28.04.2018 where the Resolution Professional received claims of Rs. 9,553.55 crores from 23 financial creditors out of which Rs. 7,237.39 crores from 19 financial creditors were admitted. Further, the Resolution Professional received claims for Rs. 3,781.73 from 1,153 operational creditors out of which Rs. 284.76 crores were admitted, Rs. 795.47....
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....the Resolution Plan, the Resolution Applicant did not implement the Plan instead it resorted to seek the modification to the approved Resolution Plan. 8. The Resolution Applicant time and again on various occasions requested the Applicant herein to amend the approved Resolution Plan. The Applicant herein intimated to the Resolution Applicant that amendment to the Resolution Plan was not possible and as the Plan was approved, amendment would have required consent of large number of stakeholders. In the 3rd Meeting of the Steering Committee held on 07.01.2020, the persistent allegations made by the Resolution Applicant were discussed and denied. The Resolution Applicant was further informed that the information sought by them is being collected and such information sought by the Resolution Applicant was never a condition precedent to the implementation of the Resolution Plan and therefore the Resolution Applicant did not have any basis to delay the implementation of the Resolution Plan. The Resolution Applicant was informed that failure to implement the Resolution Plan by 10.01.2020, would be considered as breach of the Resolution Plan and the lenders would approach the Tribunal t....
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....le. It has also been brought in the Application that as per the Resolution Plan within 30 business days from the date of approval of the Plan, i.e. 25.11.2019 the Resolution Applicant has to bring the upfront payment which is Rs. 420 crores in this instant case. As per the calculation of the business days and as mentioned in the Application, the 30 business days has expired on January 10, 2020. However, this Bench notes that the upfront payment has not been made by the Resolution Applicant and also the NCDs of Rs. 480 crores has not been issued to the Financial Creditors. This Bench takes a very serious note of it and is also of the view that such type of non-compliance by the Resolution Applicant cannot be allowed" 11. Thereafter, an appeal from the Order dated 18.02.2020 being Appeal bearing No. 327 of 2020 was filed by the Resolution Applicant before the NCLAT. The said Appeal was filed on the grounds that the Order dated 18.02.2020 could not have been passed by the Hon'ble erstwhile Bench II in view of the Order dated 12.02.2020 already passed by the Hon'ble reconstituted Bench II of NCLT. Further, despite the lapse of 90 days from the order of the NCLT directing RPI....
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....ent at paragraph 6 had stated that it had always shown its willingness and ability to execute the approved 'Resolution Plan' etc. As such, this Tribunal is of the earnest opinion that the Appellant/Respondent cannot avoid/evade/or circumvent its 'solemn responsibility' to implement the 'Resolution Plan' unconditionally in stricto sensu of the term, without any further procrastination." 14. The Applicant vide email dated 26.06.2020, informed the Resolution Applicant about the Order dated 25.06.2020 passed by the Hon'ble NCLAT upholding the Order of the NCLT dated 18.02.2020. The Applicant also informed the Resolution Applicant about the Order passed by Hon'ble NCLT dated 18.02.2020 directing the Resolution Applicant to implement the Resolution Plan in a week's time, however, as the time period provided by Hon'ble NCLT for implementation of the Resolution Plan had already expired, the Resolution Applicant was called upon to implement the Resolution Plan immediately. The Applicant repeatedly reminded the Resolution Applicant to implement the Resolution Plan. 15. The Resolution Applicant informed the Applicant that as they are an overseas b....
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.... had the intent to implement the Approved Resolution Plan and has defrauded the creditors. 19. The Applicant submits that as the Resolution Applicant has willfully refused to implement the Resolution Plan, it would be unfair to push the Corporate Debtor into liquidation for no fault of its own. The Applicant further apprised the erstwhile members of the CoC of the failure by the Resolution Applicant to implement the Approved Resolution Plan despite directions by the Hon'ble NCLT and NCLAT. 20. The Applicant states that, the Corporate Debtor has undertaken various projects which are ongoing in nature and as a result of which there is a cash flow in the Corporate Debtor and it is a going concern. The Corporate Debtor has a business for which there was active competition from prospective bidders. The Applicant submits that the Corporate Debtor continues to have the value for prospective bidders. Therefore, the Corporate Debtor and its stakeholders should not be made to suffer by initiating Liquidation process due to the willful and mala fide actions of the Resolution Applicant. 21. The Applicant therefore seeks directions from this Hon'ble Tribunal to reinstate the "C....
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....ribunal is of the earnest opinion that the Appellant/Respondent cannot avoid/evade/or circumvent its 'solemn responsibility' to implement the 'Resolution Plan' unconditionally in stricto sensu of the term, without any further procrastination." 26. After the approval was granted by NCLT, the Resolution Professional (RP), the Monitoring Agency repeatedly refused to accept the request of the resolution applicant as well as his unilateral, unreasonable terms, unlawful modifications in the plan especially with regard to major terms and conditions such as upfront consideration, deferred consideration and treatment of cash balances available with the Corporate Debtor, total consideration and also management and control of the Corporate Debtor. In spite of granting various opportunities by NCLT, Hon'ble NCLAT, the Steering Committee, the Resolution Applicant did not, willfully not implemented the resolution plan there by putting all the stakeholders in jeopardy, affecting the interest of various stakeholders viz Financial Creditors, Operational Creditors, Employees, Workmen of the Corporate Debtor etc. In the above background we have no other option but to direct the....
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....r exercising its Commercial Wisdom. Therefore, after elapse of more than one year, the Resolution Professional cannot seek such a direction, prayer since from the beginning only two PRAs have shown interest, submitted plan therefore the contention of the RP that liquidation maybe avoided does not hold much water. 31. As per I & B code if no Resolution Plan is approved by the COC/Adjudicating Authority within the prescribed timeline, the extended timeline the natural corollary, automatic next step is only Liquidation of the Corporate Debtor therefore in the instant case the Adjudicating Authority did not satisfy to grant additional time to complete the resolution process as prayed for instead this Adjudicating Authority is completely satisfied to pass an order for Liquidation of the Corporate Debtor. 32. The entire CIRP process has been carried out by exercising the Commercial Wisdom of the COC therefore the failure to implement the plan by the successful Resolution Applicant after carrying out the required due diligence, various approval process including valuation matrix, financial matrix etc therefore there is no need to grant additional time to start the process once again....
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....ss against the Corporate Debtor. b. Therefore, this Bench hereby appoints Mr. Abhijit Guhathakurta [Reg. No. IBBI/IPA-003/IP-N000103/2017-2018/11158] having office at : Unit No. 502, Kaatyayni Business Centre, Off Mahakali Caves Road, MIDC, Marol Bus Depot, Andheri East, Mumbai - 400093, as the Liquidator in terms of section 34(1) of the Code from the panel of names made available by the Insolvency and Bankruptcy Board of India (IBBI). His fees shall be regulated in terms of Regulation 4(3) of the IBBI (Liquidation Process) Regulations, 2016. c. The Liquidator shall initiate the liquidation process as envisaged under Chapter-III of the Code and the IBBI (Liquidation Process) Regulations, 2016; d. Public Notice shall be issued in two newspapers, viz., in Times of India (English) and Navshakti (Marathi), having wide circulation stating that the Corporate Debtor is in liquidation, as required in terms of section 33(1) of the Code; e. The moratorium declared under Section 14 of the I & B Code shall cease to operate here from. f. All the powers of the Board of Directors and key managerial persons of the Corporate Debtor shall cease to exist. ....