TaxTMI 
TaxTMI 
2020 (10) TMI 1279
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....so seen the order so passed by the Member (Judicial) as well as Member (Technical). 2. The instant application is filed under section 30(6) of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred as "IB Code") with the prayer to approve the Resolution Plan under Section 31 of the IB Code submitted by Mr. Rajesh Gupta, Mr. Sanjeev Gupte and Mr. Rajendra Shinhde. 3. The brief facts of the case are: 3.1 Financial Creditor filed an application under section 7 of the IB Code for initiation of Corporate Insolvency Resolution Process (hereinafter referred as "CIRP"), which was admitted on 17.08.2018 and accordingly IRP was appointed. 3.2 The Applicant, subsequently, took the charge of the IRP and conducted the CIRP as per the provisions of the IB Code. The Applicant constituted the Committee of Creditors (hereinafter referred as "CoC") and convened meetings of the CoC timely for the further actions. 3.3 It is stated by the Applicant that vide order dated 18.02.2019, further 90 days beyond 180 days was extended by this Adjudicating Authority, which expired on 14.05.2019. 3.4 It is stated by the Applicant that only one Resolution Plan was rece....
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....ersons) Regulations, 2016 as well as Section 30 of the Code, therefore sought for approval of the Resolution Plan by this Adjudicating Authority. 5. On perusal of the records, it is found that the Resolution Applicant has taken account the interest of all stakeholders of the Corporate Debtor to the extent possible, as envisaged in this Resolution Plan for insolvency resolution of "Arya Filaments Private Limited". 6. The Applicant stated the brief summary of the priority of usage of funds towards clearance of the dues are as below: Category of creditors Particulars Categorization in books of account Amount claim admitted Amount payable as against the claim %age of the claim amount CIRP Cost** CIRP costs to be consolidate d and paid in priority to all other stakeholders - Not Applicable * NA Operation al Creditors As per list provided in IM Other Current Liabilities 22.52 Lakhs 12,57,000 5% of the Amount incl. claimed / unclaimed Secured Financial Creditors Secured Miahindra Bank & Union Bank of India Secured Creditors 21,06,59,527 6,00,00,000 (as reduced by CIRP Cost) 28.5% Employees As per list....
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....f the amount to be distributed under the resolution plan had been distributed in accordance with the order of priority in subsection (1) of section 53, whichever is higher, and provides for the payment of debts of financial creditors, who do not vote in favour of the resolution plan, in such manner as may be specified by the Board, which shall not be less than the amount to be paid to such creditors in accordance with sub-section (1) of section 53 in the event of a liquidation of the corporate debtor. Explanation 1. - For removal of doubts, it is hereby clarified that a distribution in accordance with the provisions of this clause shall be fair and equitable to such creditors. Explanation 2. - For the purpose of this clause, it is hereby declared that on and from the date of commencement of the Insolvency and Bankruptcy Code (Amendment) Act, 2019, the provisions of this clause shall also apply to the corporate insolvency resolution process of a corporate debtor- (i) where a resolution plan has not been approved or rejected by the Adjudicating Authority; (ii) where an appeal has been preferred under section 61 or section 62 or such a....
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.... (2) A resolution plan shall provide: (a) the term of the plan and its implementation schedule; (b) the management and control of the business of the corporate debtor during its term; and (c) adequate means for supervising its implementation." 10. It is to be mentioned herein that the Corporate Debtor is an MSME and falls under Section 240A of the IB Code. For the sake of convenience, the section is reproduced herein under: "240A. Application of this Code to micro, small and medium enterprises. - (1) Notwithstanding anything to the contrary contained in this Code, the provisions of clauses (c) and (h) of section 29A shall not apply to the resolution applicant in respect of corporate insolvency resolution process of any micro, small and medium enterprises. (2) Subject to sub-section (1), the Central Government may, in the public interest, by notification, direct that any of the provisions of this Code shall- (a) not apply to micro, small and medium enterprises; or (b) apply to micro, small and medium enterprises, with such modifications as may be specified in the notification. (3) A draft....
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.... that the priority is to be given to the resolution than liquidation in the larger interests of the public, workmen, stakeholders and the other employees of the corporate debtors in the interest of justice and in order to achieve the object of the Code and liquidation of a company can be only as a last resort, wherein, all efforts for brining Resolution Plan were failed or it cannot be found workable in the larger public interest. Hence, now the approval of Resolution Plan by this Adjudicating Authority is rule as per the apex court's decision in the matter of K. Sashidhar Vs. Indian Overseas Bank & Ors as discussed above. The Hon'ble Supreme Court in its recent judgment in Civil Appeal No. 10673 of 2018 in K. Sashidhar Vs. Indian Overseas Bank & Ors. comprising of Hon'ble Justice A.M. Khanwilkar and Hon'ble Justice Ajay Rastogi observed that Adjudicating Authority has no jurisdiction to interfere with the commercial wisdom of the CoC. On the backdrop of the decision taken by Hon'ble Supreme Court, it is pertinent to note herein that in the instant case, there is no interference with commercial wisdom of CoC with regard to the implementation of the Resolution Plan. However, t....
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....approved under section 31(1) of the Code, obtain the necessary approvals required under any laws for the time being in force within a period of one year from the date of approval of the Resolution Plan by the Adjudicating Authority under section 31(1) or within such period as provided for in such law, whichever is later or as the case may be. iv. The Resolution Professional shall forward all records relating to the conduct of the corporate insolvency resolution process and Resolution Plan to the Insolvency and Bankruptcy Board of India to be recorded on its database. 15. Under such facts and circumstances, we, the Adjudicating Authority, is of the considered opinion and also being satisfied that the Resolution Plan as approved by the Committee of Creditors (CoC) meets the requirements as referred to under section 30(2) of the Code. With regard to prayer (c), this Adjudicating Authority is of the opinion that the claim which are not already dealt by RP or COC during the CIRP period or filed within the statutory period cannot be reagitated before the Resolution Applicant after the approval of the Plan. 16. Accordingly, IA 280 of 2019 is allowed with the above said 1....