2021 (7) TMI 1085

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....h, Mr. Prateek Kumar, Mr. Rajeev Vidhani, Mr. Zacarias Joseph and Ms. Snehal Kakrania, Advocates for R-2, SRA JUDGMENT A.I.S. Cheema, J. 1. The Asst. Commissioner of CGST & Central Excise, Division I, Surat has filed this Appeal against the Impugned Order dated 1st January, 2021 passed by the Adjudicating Authority (National Company Law Tribunal, Ahmedabad Bench, Court 1) in I.A. No. 661 of 2020 with I.A. No. 759 of 2020 in CP (IB) No. 453 of 2018 which was filed by Respondent No. 1-Resolution Professional and was approved by the Adjudicating Authority accepting Resolution Plan submitted by the Respondent No. 2 (MCPI Pvt. Ltd.) in the Corporate Insolvency Resolution Process( CIRP in short) of Corporate Debtor- Garden Silk Mills Ltd....

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....on 30(2)(b) of IBC the amounts payable to Operational Creditors shall not be less than the amounts to be paid to Operational Creditors in the event of Liquidation of the Corporate Debtor under Section 53 of IBC. It is argued that the Corporate Debtor has evaded huge penalty and duty payable to the Central Government in the process. Argument is that the necessary provisions of IBC and the regulations of IBC were not followed. The Government would suffer huge loss, was not considered by the Adjudicating Authority keeping in view earlier Judgment in the matter of "Binani Industries Pvt. Ltd. Vs. Bank of Baroda" passed by this Tribunal in Company Appeal (AT) (Ins.) No. 82 of 2018 on 14th November, 2018. It is stated that the plan cannot be disc....

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....es Twenty One Crore) 6. Proposal for Dissenting Financial Creditors Since there is only one Financial Creditors as per the IM, no provision for dissenting financial creditors has been made. However, in case there is any, such financial creditor shall be paid an amount as prescribed under Section 30(2)(b) of the Code and in priority over payments to assenting Financial Creditors out of the FC Consideration 7. Proposal for other stakeholders (including public shareholders and other creditors) Nil 8. Proposal for Related Parties This Resolution Plan does not propose any payment to the Related Parties of the Corporate Debtor other than those forming part of Balance CIRP Costs approved by the CoC or the Resolution Prof....

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.... in case of Liquidation and as has been set out in the approved Resolution Plan and when the Amounts payable to the Appellant as Operational Creditor were determined to be Nil, Regulation 38 of CIRP Regulations, 2016 to pay on priority would not be relevant. It is argued that the Resolution Plan was in compliance with Section 30(2) of the IBC read with Regulation 38 of CIRP, Regulations and thus it was placed before the CoC. Workmen and Employees as Operational Creditors were the continuing stakeholders and on humanitarian grounds it was required that their dues should be paid to the fullest extent and hence Resolution Plan contains corresponding allocation to them. Other Operational Creditors (Other than Workman and Employees and Statutory....

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....uidation Value of the Corporate Debtor was valued at far below the amounts due and payable even to the secured Financial Creditors. It was found that the Liquidation Value was insufficient to even meet the required value for settling the dues of secured Financial Creditors and consequently Liquidation Value was Nil for all other Creditors. Still the Resolution Plan has provisions for Workmen/Employees and Other Operational Creditors (Other than statutory Dues) and thus the plan cannot be faulted with. 6. We have heard Learned Counsel for both sides and considered the submissions made by the parties. The Reply of Respondent No. 2 Diary No. 26401 refers to the approved Resolution Plan at Annexure R-1 page 63 and reference is made to Paragr....