TaxTMI 
TaxTMI 
2020 (7) TMI 766
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....s for Corporate Persons) Regulations, 2016 (in short, "Regulation") seeking the approval of the Resolution Plan submitted by the successful Resolution Applicant viz., UV Asset Reconstruction Company Limited and WL Structures Private Limited. 2. The Learned Counsel for the Resolution Professional submitted that one M/s. Reliance Capital Limited, in the capacity as a Financial Creditor has filed an Application under Section 7 of IBC, 2016, against the Corporate Debtor viz. GVR Infra Projects Limited and this Authority vide order dated 15.10.2018 admitted the said Application and initiated Corporate Insolvency Resolution Process (CIRP) as against the Corporate Debtor by appointing one Mr. Arumugam Arumugam as the Interim Resolution Professional (IRP). 3. The First Committee of Creditors (CoC) meeting, it is seen was held on 16.11.2018 wherein was it decided that the IRP was to be replaced by an RP and thereafter the COC through the lead bank i.e. State Bank of India had filed an application under section 22(3)(b) of IBC, 2016, and this Authority vide order dated 21.12.2018 appointed the Applicant as the Resolution Professional (RP) of the Corporate Debtor. 4. The Learned Coun....
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....held on 06.02.2019 that three (3) EOIs had been received in response to the invitation published on 19.01.2019. However, as there was a possibility to receive few more EOIs, it is seen that the RP had suggested to extend the last date for submission of EOIs in relation to the CIRP and accordingly the last date was extended till 23.02.2019, to which suggestion, the CoC has also accorded its consent and accordingly the RP had published a corrigendum to Form-G dated 08.02.2019 in the Financial Express (Circulated in English). 6. Further, at the Fourth meeting of COC held on 05.03.2019, the COC was apprised that as on the cut-off date i.e. 23.02.2019, as many as Nine (9) EOIs had been received and a provisional list of prospective RAs was published same day. It is pertinent to note that RPG Asset Management Pvt. Ltd (in short "RPG") had submitted its EOI on 22.02.2019 and UV Asset Reconstruction Company Limited (in short "UVARC") had submitted its EOI on 25.01.2019. 7. Thereafter, a total five (5) RAs has confirmed their participation in the process by submitting their confidentiality undertaking to access Virtual Data Room for the purpose of scrutinizing the documents of the Cor....
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.... the IBC, 2016, before this Tribunal, for directing a non-cooperating employee to comply with the instructions of the RP and to cooperate with her in collection of information and management of the Corporate Debtor; this Tribunal vide order dated 17th July, 2019 has disposed the said application by directing the employee to cooperate with the Applicant. 12. Pursuant to the Request for Resolution Plan (In short 'RFRP'), two entities submitted their respective resolution plans, namely, (i) RPG Asset Management Private Limited (hereinafter referred to as "RPG") having its registered office at 2, 1st Main road, Shashtri Nagar, Adyar, Chennai 600020 on 30 July 2019 and (ii) a consortium of UV Asset Reconstruction Company Limited, (hereinafter referred to as the "Lead Member"), a company incorporated under the provisions of Companies Act, 1956 and having its registered office at 704, 7th Floor, Deepali Building, 92 Nehru Place, New Delhi and WL Structures Private Limited, a company incorporated under the provisions of Companies Act, 2013 and having its registered office at No. 33, 3rd Floor, Rutland Towers, Shafee Mohammed Road, Chennai, Tamil Nadu 600006 on 19 July 2019 (hereinafter ....
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....luated the aforementioned resolution plan submitted by the successful RA, however, despite the best efforts of the RP and CoC, the said plan could not be approved by the CoC as the CoC did not find the same as feasible and viable. That a majority of the CoC, on 09.09.2019, voted against the said resolution plan (88.16% against and 9.94% for) and consequently on 10.09.20 19, the Applicant filed an application (numbered as SR/1077/2019) seeking an order for liquidation of the Corporate Debtor as a going concern as it was in the best interest of the Corporate Debtor. This Tribunal heard the parties on 19.11.2019 and pursuant thereto, the said application was withdrawn by the Applicant on the said date. 17. It is submitted that the RP and the CoC have taken adequate care to ensure that fair and equal opportunities were given to all resolution applicants [in this case there were only two (2)] to submit their respective resolution plans for the Corporate Debtor. The two (2) resolution applicants were also requested to be available for discussions with the CoC at various occasions at the venue of the meeting of the CoC. However, despite the best efforts of the RP and CoC, the sole reso....
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....lation 39(4) of the CIRP Regulations, has enclosed the compliance certificate in Form-H of the Schedule and the evidence of receipt of performance security required under sub-regulation (4A) of regulation 36B. 25. It is evident from Form-H that the Resolution Applicant has submitted his revised Resolution plan before the Committee of Creditors on 27.11.20 19 and in the 16th CoC meeting the Committee of Creditors have approved the Resolution Plan with the following distribution of voting share; S. No. Name of Creditor Voting Share (%) Voting for Resolution Plan 1 State Bank of India Chennai Bench 30.10 Assented 2 Punjab National Bank 17.40 Dissented 3 Bank of Baroda Erstwhile Vijaya Bank 11.12 Assented 4 I DB I Bank 11.15 Assented 5 Axis Bank 2.70 Dissented 6 Federal Bank 1.16 Dissented 7 ICICI Bank 1.14 Assented 8 Lakshmi Villas Bank 1.10 Dissented 9 Canara Bank 3.28 Assented 10 Bank of India 2.68 11 Allahabad Bank 0.74 Assented 12 Tamilnadu Mercantile Bank Limited 189 Abstained 13 Bank of Maharashra 5.09 ....
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....nt. 29. As per Clause 7A of Part B of the Resolution Plan, the payment of Rs. 3 Crores which is to be paid to the Operational Creditor as against their total claim of Rs. 175.13 Crores, will be paid within 60 days from the Effective Date. 30. As per Clause 7B of Part B of the Resolution Plan, the payment of Rs. 3 Crores, which is to be paid to Workmen and Employees of the Corporate Debtor as against the claim of Rs. 20.34 Crores, will be paid within 60 days from the Effective Date. 31. In relation to distribution of Rs. 352 Crores to the Financial Creditors as contemplated under the resolution plan, the following position emerges upon a combined reading of the Resolution plan along with documents annexed thereunder with this application which is as follows:- Executive summary para (2) of B and Schedule XI of the Resolution Plan: i) The total admitted claims of the Financial Creditors of Rs. 2271.08 Crores (Indian Rupees Two Thousand two Hundred and Seventy One Crores and Eight Lacs only) are proposed to be settled for an amount of Rs. 352 Crores (Indian Rupees Three Hundred and Fifty Two Crores only). Out of the said amount of Rs. 352 Crores (Indian Rupees Three Hund....
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..... 392.19 Crore, bank guarantees worth Rs. 160.15 Crores (Indian Rupees One Hundred and Sixty Crores and Fifteen Lacs Only) are specified in Schedule-X. Out of the bank guarantees worth Rs. 160.15 Crores (Indian Rupees One Hundred and Sixty Crores and Fifteen Lacs), the Resolution Applicant commits that the outstanding bank guarantees worth Rs. 135 Crores (Indian Rupees One Hundred and Thirty Five Crores Only) shall be returned to the respective financial creditors in the manner provided under this Resolution Plan. 33. In relation to utilization of the Upfront Payment Out of the total Bid Amount, the Resolution Applicant shall make an Upfront Payment of Rs. 31.5 Crores (Indian Rupees Thirty One Crores and Fifty Lacs Only) out of the internal accruals of the Resolution Applicant, which shall be infused, by way of equity share capital and debt infusion, in to a Special Purpose Vehicle (In short "SPV") wholly owned and controlled by the Resolution Applicant, which shall be amalgamated with and into the Corporate Debtor on and from the date on which amount of Upfront Payment is infused in the SPV. 34. The Resolution Professional has filed Form-H compliance and from that the Fair V....
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....ncial creditors. The legislature has not envisaged challenge to the "commercial/business decision" of the financial creditors taken collectively or for that matter their individual opinion, as the case may be, on this count." 37. Further, the Hon'ble Supreme Court of India in the matter of Committee of Creditors of Essar Steels -Vs- Satish Kumar Gupta & Ors. in Civil Appeal No. 8766-67 of 2019 at para 42 has held as follows; 42, .........Thus, it is clear that the limited judicial review available, which can in no circumstance trespass upon a business decision of the majority of the Committee of Creditors, has to be within the four corners of Section 30(2) of the Code, insofar as the Adjudicating Authority is concerned, and Section 32 read with Section 61(3) of the Code, insofar as the Appellate Tribunal is concerned, the parameters of such review having been clearly laid down in K. Sashidhar (supra). 38. This Authority has in the light of the above noted judgements and thereby giving credence to the commercial decision of the COC in approving the Resolution Plan has perused the Resolution Plan in light of the same. Further, it is seen that the Resolution Applicant has sou....
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....able in relation thereto. In this regard, this Authority is guided by the decision of the Hon'ble NCLAT in the matter of JSW Steel Limitect - Vs- Ashok Kumar Gulla & Ors. in Company Appeal (AT) Insolvency No. 467 of 2019 dated 04.12.2019, wherein it has been held that once the "Successful Resolution Applicant" takes over the "Corporate Debtor", it is for the "Corporate Debtor" to decide whether they will continue with such right over the "Subsidiaries" or "Associate Companies" or "Joint Ventures" and others. For such right, the Adjudicating Authority is not required to make any such suggestion nor can lay down any condition. 42. As to the Monitoring Committee', is concerned, as stated in the Resolution Plan, the Monitoring Committee shall consist of the following members; (a) Two Representatives of the Financial Creditor's (b) A Monitoring Agent; i.e. the RP viz. Vandana Garg 43. Since prima facie, we do not find inconsistency in relation to the Resolution plan vis-a-vis the provisions of section 30(2) of IBC, 2016 in light of the discussions above, the Resolution Plan is hereby approved and it shall be binding on the Corporate Debtor and other stakeholders involved so ....
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....of the Resolution Plan. On the one hand it is seen that the Applicant has approved the Resolution plan submitted by the Resolution Applicant before the CoC and on the other hand the Applicant is challenging the manner of distribution of the amount among the stakeholders before this Tribunal delving into the commercial aspects by the COC after deliberation and as such the Applicant is trying to approbate and reprobate at the same time. The decision of the Hon'ble Supreme Court as made in the K. Sasidhar's case as well as Committee of Creditors of Essar Steel case and the ratio as extracted in paragraph 34 (supra) apply on all fours and in view of the same as well as the paradoxical stand of the applicant in MA/99/2020, the prayer as sought for by the Applicant is not tenable and liable to be rejected and as such the MA/99/2020 stands dismissed. Thus, MA/1433/2019 filed by the Resolution Professional for the approval of the Resolution Plan stands allowed. ============= Document 1 S. Name of Financial Total Admitted Admitte claim Admitted claim No. Creditor Claim Against excluding CG (INR in invocation of invoke for % share in Total Ad....
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.... company from operations and from award of claims under arbitration G. Amount of live 65 70 135 bank Guarantees committed to be returned in terms of this Resolution Plan TOTAL 31.5 137 185 353.5 Document 4 MANDATORY COMPLIANCE UNDER IBC CODE AND REGULATIONS S. 30(1) -Resolution Applicant to submit an affidavit stating that he is eligible under Sec.29A of the Code, 2016 S. 30(2)(a) Payment of Insolvency and Resolution cost in the manner specified by the Board S. 30(2)(b) Payment of debts of Operational Creditors in such manner as may be specified by the Board, which shall not be less than that of the amount to be paid to the Operational Creditors in the event of a liquidation of the Corporate Debtor under Sec. 53 The COMPLIANCE UNDER RESOLUTION PLAN Affidavit of the Resolution Applicant (RA) is placed on record and the RP in Form H has certified that the RA has submitted an affidavit and the said affidavit is in order. Clause 5 (ii) of Section 1 of Part B of the Resolution Plan provides for the payment of CIRP costs and the same ....