TaxTMI 
TaxTMI 
2021 (11) TMI 949
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....g Authority under section 31 of the I&B Code. 2. The Applicant submits that the Hangji Global Limited, Operational Creditor initiated the Corporate Insolvency Resolution process (CIRP) against Globecon Commercial Services Private Limited under Section 9 of the Code and was admitted vide an order dated 25.01.2021 and the Applicant herein was appointed as the Interim Resolution professional (IRP) of the Corporate Debtor. 3. The Applicant submits that Public Announcement dated 29.01.2021 in Form A was published on the website of the IBBI and in Free Press Journal (Mumbai Edition - English Language) and Nav Shakti (Mumbai Edition - Marathi Language) newspapers on 29.01.2021. 4. The first meeting of the Committee of Creditors (CoC) was held on 23rd February, 2021 wherein the IRP apprised the members of the CoC regarding the steps taken as the IRP. Further, the IRP Mr. Ajit Gyanchand Jain was confirmed as the Resolution (RP) of the Corporate Debtor. The Applicant further submits that the report certifying the Constitution of Committee of Creditors was filed by the Applicant on 17th February 2021 with this Tribunal and post submission of the report, the Applicant received further....
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....Consortium of Investor. 7. That the Applicant published Form G- Invitation for Expression of Interest on 8th April 2021 in 2 newspapers namely Free Press Journal (English Daily) and Navshakti (Marathi Daily) of Mumbai Edition and also uploaded on the IBBI website, whereby the last date for receipt of expression of interest (hereinafter referred to as "EOI") was 23rd April 2021 and the last date for submission of the Resolution Plan was 7th June 2021. 8. In the 4th meeting of the CoC held on 29th April 2021 the Applicant apprised the CoC members regarding the dates of issuance of the Form G and about receiving two (2) EOI's from PRAs i.e M/s PP Metalix Limited and M/s Hangji Global Limited. The members were informed that the Resolution Professional had received 2 (two) emails from the interested parties i.e. M/s Prabhatam Investment vide email dated 19th April 2021 and from Mr. Sambhav Jain on 27th April 2021 (i.e., after the last date for submission of EOI) expressing their interest in submitting EOI, however a formal EOI and supporting documents as per the detailed EOI was not received from them. However, due to the ongoing restrictions in the State of Maharashtra in view of....
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..... Further, the authorized representative of the Financial Creditor i.e. Unnao Trading Private Limited and the Sales Tax Department of Maharashtra, Operational Creditor (Statutory/Government Authority) stated that the amount offered by the Resolution Applicant in the proposed plan is very less and should be reconsidered, to which the Resolution Applicant stated that they intend to restructure the distribution under the proposed resolution plan wherein the amount proposed under the Resolution Plan will be first attributed towards payment of the CIRP cost and the balance amount will be distributed amongst the Creditors proportionately to the amount of claim admitted in the total debt of the Corporate Debtor. He further added that the only asset the Corporate Debtor has is the Steel Slag, that would be used to extract different kinds of metals, considering the same the amount offered by the Resolution Applicant is the maximum and he further added that if the CIRP cost is reduced then the amount left to be distributed to all the stakeholders will gradually be increased. 14. That the Applicant states that the liquidation value and fair value as per the valuation reports submitted by t....
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....increase the percentage of the amount to be distributed amongst the creditors gradually. The members of the CoC opined same and the Applicant also agreed to the amount as proposed by the members of the CoC. 17. Further, in the same CoC meeting the Applicant informed the members of the CoC that he will issue a compliance certificate in accordance with the provisions of the Code. The Applicant presented the payments proposed to various stakeholders under the resolution plan which had been modified based on the observations pointed out by the CoC and the RP in the previous CoC meeting regarding the distribution structure after payment of CIRP cost and the amount available for distribution to the other creditors. The Applicant further submits that the Resolution for approval of Resolution Plan submitted by Hangji was put up for e-voting and the voting window was kept open from 7th July 2021 till 9th July 2021. The Resolution Plan submitted by Hangji was approved by 100% of the voting share of the members of the CoC. SALIENT FEATURES OF THE APPROVED RESOLUTION PLAN 18. The Resolution Professional submits that the Resolution Applicant proposes a total Financial proposal of Rs. 4....
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....nal settlement of claims, if any, of the Workmen and or Employees, an amount equivalent to the higher of the following shall be paid : Aggregate amount of INR 5,000 to be distributed on pari- passu basis; or The amount that would have been paid to such workmen and/or Employees under Section 53 of the Code in the event of liquidation of the Corporate Debtor; or The amount that would have been paid to such workmen and/or employees if the Resolution Amount had been distributed in accordance with the manner of priority set out under Section 53 of the Code. It is hereby clarified that any payment to the Workmen and or Employees shall be made out of the entitlement of the Operational Creditors in the Resolution Amount. 6. Upfront cash payment to the Operational Creditors (Other than the Government The Resolution Applicant has proposed Creditors and the Workmen and the Employees) that the Resolution Amount (after the CIRP Costs have been paid in ....
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.... Date shall be paid in full in priority to all the creditors in terms of Section 30(2) of the IBC 2016. iii. The CIRP costs shall be paid at actuals by the Resolution Applicant within 30 days from the Resolution Plan Approval Date. b. Payment to Operational Creditors (Excluding Statutory Authorities and workmen and employees) i. It is submitted that the Applicant has admitted a total claim of Rs. 1,17,23,102/- (Rupees One Crore Seventeen Lakhs Twenty-Three Thousand One Hundred and Two Only) towards the claim of Operational Creditors (Excluding Statutory Authority and workmen and employees). ii. It is submitted that the claims of Operational Creditors (Excluding Statutory Authorities and workmen and employees) shall be paid in compliance with Regulation 38 of the IBBI (CIRP) Regulation, 2016. The Resolution Applicant has proposed that subject to the terms set out in the Resolution Plan and after the payment of CIRP costs in full, the balance Resolution amount shall be distributed amongst the Unrelated Financial Creditors, the Operational Creditors (Other than the Government Creditors and Workmen and Employee) and the Government Creditor on pro-rat....
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....is (A) a related Party of the Corporate Debtor, or (B) an Affiliate of the Corporate Debtor; or (C) a Group Company v. It is submitted that any claims from any person claiming to be Financial Creditors of the Corporate Debtor (Related or Unrelated) that is not admitted by the Resolution Professional as payable by the Corporate Debtor shall stand extinguished and shall no longer be payable. d. Payment to Workmen and Employees i. It is submitted that there are no dues outstanding towards the employees and workmen and no claims have been received from the workmen and Employees of the Corporate Debtor. ii. It is submitted that in the event the Resolution Professional receives and admits any claim of any Workman or Employee or the Corporate Debtor prior to the Resolution Plan Approval Date, such Workmen or Employees shall be paid, in full and final settlement of their claims, an amount equivalent to (a) INR 5,000 (Rupees Five Thousand); or (b) the amount to be paid to such Workmen and employees under Section 53 of the Code in the event of liquidation of the Corporate Debtor; or (c) the amount that would have been paid to suc....
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....at the shares held by the existing shareholders of the Corporate Debtor shall be extinguished. ii. It is submitted that under the Resolution Plan, the existing shareholders whether equity or preference shall be transferred to the Resolution Applicant for an aggregate consideration of INR 1 (Rupee One) as an integral part of this Resolution Plan without requiring any further action on the part of the Existing Equity Shareholders or the Resolution Applicant and any amount of transfer, cancellation or reduction of their share capital and any claims in relation thereto shall stand extinguished without any payment or recourse. g. Payment to other Creditors and Related Parties of the Corporate Debtor. i. The Resolution Plan does not propose to make any payment to the other Creditors and /or Related Parties of the Corporate Debtor. ii. It is submitted that all the Claims of the Related Parties against the Corporate Debtor as on the Closing Date shall stand extinguished and deemed to be fully settled against 'NIL' consideration in accordance with the Resolution Plan without any further liability or obligation of the Resolution Applicant and/or the Corpor....
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....ed by the Board in priority to the payment of other debts of the corporate debtor; b) provides for the payment of debts of operational creditors in such manner as may be specified by the Board which shall not be less than, i. the amount to be paid to such creditors in the event of a liquidation of the corporate debtor under section 53; or ii. the amount that would have been paid to such creditors, if the amount to be distributed under the resolution plan had been distributed in accordance with the order of priority in sub-section (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 - For the purpose of this section - (i) it is hereby clarified that at each stage of the distribution of proceeds in respect of a class of recipients that rank equally, each of the debts will either be paid in full, or will be paid i....
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.... the time being in force, as specified u/s 30(2)(e) of the Code. In terms of Regulation 27 of the Regulations, Liquidation value was ascertained through two registered valuers. The aggregate of the average of Fair Value of all the assets is Rs. 1,17,38,350/- (Rupees One Crore Seventeen Lakhs Thirty Eight Thousand Three Hundred Fifty Only) and that of the Liquidation Value of all the assets is Rs. 23,21,238/- (Rupees Twenty Three Lakhs Twenty One Thousand Two Hundred Thirty Eight Only). 32. One of the justifications for approval of this resolution plan is that the amount proposed under the plan is higher than liquidation value of the Corporate Debtor. 33. The RP has complied with the requirement of the Code in terms of Section 30(2)(a) to 30(2)(f) and Regulations 38(1), 38(1)(a), 38(2)(a),38(2)(b), 38(2)(c) & 38(3) of the Regulations. 34. The RP has filed Compliance Certificate in Form-H along with the Plan. On perusal the same is found to be in order. The Resolution Plan includes a statement under regulation 38(1A) of The Regulations as to how it has dealt with the interest of the stakeholders in compliance with the Code and the Regulations. 35. The Resolution Plan has ....