TaxTMI 
TaxTMI 
2021 (9) TMI 788
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.... P. Ltd. 2. The facts leading to the application are as under : (a) The corporate insolvency resolution process (CIRP) of the corporate debtor was initiated by this Bench by order dated September 29, 2017 (admission order) and Mrs. Charu Desai was appointed as interim resolution professional (IRP), who was subsequently confirmed as the resolution professional (RP). (b) On November 30, 2018 in M. A. No. 692 of 2018, this Tribunal approved the resolution plan submitted by Formation Textiles LLC (FTL). FTL took over the management/control of the affairs of the corporate debtor on January 31, 2019. However, after taking over the management/ control of the corporate debtor, FTL did not implement the resolution plan as per its terms. FTL after taking over the corporate debtor (Mandhana Industries Ltd.) changed its name. The corporate debtor since August 20, 2019 accordingly is known as "GB Global Ltd". This Tribunal by order dated December 5, 2019 as an interim measure, directed restoration of CIRP and directed FTL to hand over the possession of the corporate debtor to the CoC and the erstwhile RP. Accordingly, in the meeting of the CoC held on January 8, 2020 FTL ha....
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....and the liquidation value of the corporate debtor as on July 31, 2020 is as under : (Amounts in INR crores) Particulars Kakode and Associates Garg and Associates Average value Liquidation value 179.77 190.88 184.92 Fair value 394.48 364.82 379.65 (g) By September 10, 2020 the resolution plan was received from one PRA, viz., DLH. In the 33rd meeting of the CoC, held on September 11, 2020 the representatives of DLH were invited to present the resolution plan before the CoC. After the presentation, it was decided that the RP along with her advisors would review the resolution plan to check its compliance with the Code and request for resolution plan (RFRP) document, and formally table a Code-compliant plan before the CoC. Thereafter, various rounds of negotiations were held with the resolution applicant and the resolution plan was revised from time to time to address the comments and concerns of the RP and CoC members. (h) In the 37th meeting of the CoC, held on November 10, 2020 the revised resolution plan submitted by DLH was placed for consideration. The CoC members discussed and considered the resolution plan as pe....
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....st experience in various residential, commercial complexes and retail spaces in western suburbs of Mumbai including JVPD (Juhu), Bandra, Khar, Andheri and Thane. The RA has completed more than 60 projects across Mumbai and multiple projects are ongoing. (ii) The RA with a net worth of Rs. 130.07 crores as on March 31, 2020 is managed by Mr. Vijay Thakkar who is the major shareholder with 97.7 per cent. shareholding. The balance shareholding remains with his friends and family members. (B) Term of resolution plan : The term of the resolution plan shall commence on the plan approval date and shall continue until the discharge date, i. e., 12 months from Infusion date. (C) Capital reduction and equity infusion : The plan provides for reduction of existing equity share capital and issue of new shares to the resolution applicant. Thereupon the RA will hold 99.94 per cent. of share capital of the company. The RA shall infuse Rs. 50 crores as share application money into the corporate debtor by utilizing certain fixed deposits available with the RA which were utilized for pro viding the PBG as required under the RFRP. Simultaneously and immedia....
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..... 20.65 crores (CIRP costs from July, 2020 till the approval of the resolution plan) will be borne by the financial creditors by making a cut from their share proposed. (iv) Pay-out proposed for financial creditors as per clause 12.5.2 of the resolution plan is as under : Financial creditors Category Admitted amount Allotted amount % Secured financial creditors Dissenting 389.63 72.41 19 Assenting 774.14 78.59 10 Unsecured financial creditors Dissenting NA NA 0 Assenting 17.17 - 0 Total 1180.95 151.00 13 (E) Source of funds : The SRA proposes to make payments to the creditors of the corporate debtor by infusing funds into the corporate debtor as follow : (a) Upfront equity infusion-Rs. 50 crores through share application money. (b) Upfront unsecured loan-Rs. 5 crores. (c) Sale of assets (of the corporate debtor described in clause 5.3(c) of the resolution plan)-SRA assumes Rs. 20 crores will be received within year-1. However, no value can be given as of now as the value will depend on the sale consideration to be recei....
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.... compliance of the regulation 38 of the Regulations in terms of section 30(2)(f) of the Code as under : (a) Provides for payment due to the operational creditor in priority over financial creditor (regulation 38(1)(a)) as per clause 4.3(iv)(d). (b) Provides for payment due to the dissenting financial creditors in priority over assenting financial creditor (regulation 38(1)(b)) as per clause 4.3(iii)(c). (c) Declaration by the resolution applicant that the resolution plan has considered the interest of all the stakeholders of the corporate debtor, keeping in view the objectives of the Code (regulation 38(1A)) as per clause 4.5. (d) Declaration by the resolution applicant that neither the resolution applicant nor any of its related party has either failed or contributed to the failure of the implementation of any other approved resolution plan (regulation 38(1B)) as per clause 2.9(iii). (e) Provides for term and implementation schedule, management and control of the corporate debtor and adequate means for supervising its implementation (regulation 38(2)) as per clauses 8.1, 5.1(vii), 6.1, 6.2 and 6.3. (f) Demonstrates that it has ....
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.... PBG of Rs. 50 crores shall be valid until the earlier of : (i) all the dues pay able by the SRA in relation to the resolution plan and/or under the virtue of the RFRP have been fully paid and its claim satisfied or discharged ; or (ii) till the CoC and/or if the CoC as a body does not subsist, by the financial creditors having more than 51 per cent. voting share in the CoC, certifies that the resolution plan has been effected to the satisfaction of the CoC and/or, if the CoC as a body does not subsist, by the financial creditors having more than 51 per cent. voting share in the CoC ; or (iii) such other period as may be required by the CoC (as assisted by the resolution professional) and/or if the CoC as a body does not subsist, by the financial creditors having more than 51 per cent. voting share in the CoC. The CoC in its commercial wisdom has permitted the SRA to take back the PBG immediately on the approval of the resolution plan by this Authority so that the fixed deposits on the security of which PBG was issued can be utilized for infusion. We do not want to interfere with such decision of the CoC, even if this is a diversion from the requirements of the RFRP. (K) U....
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....lution plan submitted by him has been accepted as this would amount to a hydra head popping up which would throw into uncertainty amounts payable by a prospective resolution applicant who successfully take over the business of the corporate debtor. All claims must be submitted to and decided by the resolution professional so that a prospective resolution applicant knows exactly what has to be paid in order that it may then take over and run the business of the corporate debtor. This the successful resolution applicant does on a fresh slate, as has been pointed out by us hereinabove." 5. In view of the above ruling of the apex court, the resolution applicant takes over the corporate debtor with all its assets and liabilities as specified in the resolution plan subject to orders passed herein. As already indicated the resolution plan has been approved by the CoC with 67.01 per cent. votes in its meeting held on December 31, 2020. 6. In K. Sashidhar v. Indian Overseas Bank [2019] 213 Comp Cas 356 (SC) ; [2019] SCC Online SC 257 ; [2019] 12 SCC 150 the hon'ble apex court held that if the CoC had approved the resolution plan by requisite percent of voting share, then as per se....
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....xed to the application is hereby approved. It shall become effective from this date and shall form part of this order : (i) It shall be binding on the corporate debtor, its employees, members, creditors, including the Central Government, any State Government or any local authority to whom a debt in respect of the payment of dues arising under any law for the time being in force is due, guarantors and other stakeholders involved in the resolution plan. (ii) As far as the permits held by the corporate debtor and the rights and benefits accrued therein, the corporate debtor (under the new management) needs to approach the authorities concerned for renewal and that the same may have to be considered by them favourably, subject to relevant Laws and Rules, so that the implementation of plan becomes smooth. (iii) With regard to the reliefs and concessions sought by the resolution applicant in respect of the corporate debtor, the Monitoring Committee or the new management, as the case maybe may approach the respective authorities and departments for such reliefs. The authorities concerned may favourably consider such applications as deemed proper under law, keepi....