TaxTMI 
TaxTMI 
2021 (2) TMI 1184
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....18. The Impugned Order approved the Resolution Plan submitted by Respondent No.3 - Successful Resolution Applicant (SRA - in short) which was approved by Committee of Creditors (COC - in short). 2. The Appellant claims that it had sanctioned term loan to the Respondent No.4 - Corporate Debtor and when there was default of the financial debt, the Appellant filed Application under Section 7 of Insolvency and Bankruptcy Code, 2016 (IBC - in short). The Application under Section 7 was admitted on 21st August, 2019 and CIRP (Corporate Insolvency Resolution Process) was initiated. The Appeal gives particulars with regard to the manner in which CIRP proceeded and Respondent No.3 - Shri Sai Priya Sugars Ltd. had filed Resolution Plan. It is claimed that the Resolution Plan contemplated payment of Rs. 60 Crores out of which Rs. 54.25 Crores were proposed to be paid to all Secured Creditors on the basis of all Secured Financial Creditors relinquishing their respective securities. The amount of Rs. 54.25 Crores was to be distributed between Secured Financial Creditors based on their voting share in COC. The Appellant was proposed to be paid only Rs. 6.61 Crores as against admitted amount o....
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....ragraphs - 40 to 42 which read as under:- "40. The Punjab National Bank granted loan to the first respondent herein knowing fully well that, over the assets of the mortgagor, the appellant held the first charge. It in no uncertain terms stated that the charges created by reason of the loan agreement entered into by and between itself and the first respondent was subservient to the charges of the appellant as also the Respondent 3 and 4. The admission of the PNB in this behalf is absolutely clear and explicit. Even in the suit filed by it for recovery of the mortgage money as against the first respondent, it not only in no uncertain terms stated that the appellant and Respondents 3 and 4 herein were the first charge-holders in respect of movable and immovable properties of the first respondent, but its prayers in regard thereto were also limited, as would appear from prayer (f) made in the suit. 41. While enacting a statute, Parliament cannot be presumed to have taken away a right in property. Right to property is a constitutional right. Right to recover the money lent by enforcing a mortgage would also be a right to enforce an interest in the property. The provisi....
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....ri Darpan Garg (Sl. No.8) in the deliberations with regard to the Resolution Plan. The learned Counsel specifically referred to the following from the Minutes:- "With respect to the following points, the COC after detailed deliberations unanimously agreed and decided the following:- (i) Distribution of the proceeds under the resolution plan to the financial creditors, shall be in proportion to the share of the voting rights of the relevant financial creditor in the COC; ........" Thus, it was submitted that the COC had specifically deliberated portions of the Resolution Plan dealing with distribution of the proceeds and decided that distribution of the proceeds to the Financial Creditors shall be in proportion to the share of the voting rights of the relevant Financial Creditor in COC. The learned Counsel then referred to Page - 59 of the Reply (Diary No.23847) where in the same minutes, the COC decided to vote on approval of the Resolution Plan tendered by the Respondent No.3 (SRA). The learned Counsel for Respondent No.1 pointed out Annexure -1 - Page 19 and the summary of the e-voting done on the Resolution Plan (copy of which has been filed at Page - 22 of ....
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....n Plan has been filed and specifically referred in it to (Page - 330) portions of para - 10.2.6 where the Resolution Plan specifically mentioned distribution and specific amounts that would be paid to different Secured Financial Creditors. Relevant parts of the para - 10.2.6 may be reproduced:- "10.2.6 It is deemed that all the secured financial creditors would relinquish the security held by them, upon payment of full amount proposed to them under the Resolution Plan. The Resolution Applicant proposes to pay Rs. 54.25 Crores (Rupees Fifty four Crores and twenty Five Lakhs Only) to all Secured Financial Creditors because in our assessment the current value of the security may not yield more than the value proposed and the individual distribution is detailed in the below sub-Paras i) to viii):- ................... ................ iv. Indian Renewal Energy Development Agency Limited (IREDA) - Rs. 6.61 Crore (Rupees Six Crore and sixty one lakh only), because in our assessment the current value of the security may not yield more than the value proposed above......................" The learned Counsel argued that such Resolution Plan was specific....
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...."Essar Steel" (supra) where after referring to Section 31 of the Code, the Hon'ble Supreme Court observed:- "Thus, what is left to the majority decision of the Committee of Creditors is the "feasibility and viability" of a resolution plan, which obviously takes into account all aspects of the plan, including the manner of distribution of funds among the various classes of creditors." Reference was made to paragraphs - 91 and 92 of the Judgement which read as under:- "91. What is important to note is that when one reads the abovementioned judgment, it is a majority of 66% of the Committee of Creditors who has exercised the discretion vested in it under the Code in this particular manner, which has then correctly not been disturbed by the NCLT and NCLAT. Far from helping Shri Sibal's client, the principle that is applied in such a case is that ultimately it is the commercial wisdom of the requisite majority of the Committee of Creditors that must prevail on the facts of any given case, which would include distribution in the manner suggested in Orissa Manganese (supra). It is, therefore, not possible to accept the argument that the Adjudicatory Authority and cons....
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....al & Ors." - Company Appeal (AT) (Insolvency) No. 1187 of 2019 where it is argued that similar issues were raised and this Tribunal held:- "14. The Appellant has failed to show that any of the provisions of Section 30(2) has been violated or there is any material irregularity in the corporate insolvency resolution process period. The question of giving benefit to First Charge holder does not arise both on the question of facts and law. The Appellant cannot derive any benefit from Sections 40 or 48 of the Transfer of the Property Act, 1882." 12. Having heard Counsel for both sides, we have laid out as above the arguments in details and the above laying out of the details of the arguments itself makes the issue clear and it can be seen that the arguments of the learned Counsel for Respondents are well founded and based on law. The juxtapose of the arguments for Appellant, with the arguments of Respondents itself wanes the case of the Appellant. Admittedly, the Appellant was part of COC and the COC had in 9th Meeting deliberated and unanimously agreed that distribution of the proceeds under the Resolution Plan to the Financial Creditors shall be in proportion to the share ....