TaxTMI 
TaxTMI 
2022 (1) TMI 110
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....019 being dissatisfied with the with order dated 20.8.2019 in CA (IB)No.709/KB/2019 in CP(IB)No.570/KB/2018 passed by the 'Adjudicating Authority' (National Company Law Tribunal, Kolkata Bench, Kolkata). 2. The 'Adjudicating Authority' (National Company Law Tribunal, Kolkata Bench) while passing the impugned order dated 20.08.2019 in CA (IB)No.709/KB/2019 in CP(IB)No.570/KB/2018 (Filed by the Resolution Professional under Section 30(6) and 31 of the I&B Code, 2016 r/w Regulation 39(4) of the Insolvency & Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 at paragraph 8 to 15 had observed the following:- 8. "We have given our thoughtful consideration to the submission made by the Ld. Counsel for the Canara Bank. We hold that order passed by NCLAT in case of Standard Chartered Bank Vs Satish Kumar Gupta RP of Essar Steel Ltd and Ors is now the subject to appeal before Hon'ble Supreme Court. Hon'ble Supreme Court stayed the execution of that order. Secondly, the facts before Hon'ble NCLAT and point for consideration was whether Operational Creditor can be treated in discriminatory manner while distributing assets of the Corpor....
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....and implementation of the plan. Provision is also made to pay resolution costs. The resolution fund appears to be equally distributed among all the Financial Creditors giving them equal share i.e. 23.43%. RP has certified the plan and compliance Certificate is produced as Annexure F. The affidavit of resolution applicant is also produced stating that they are not disqualified under Section 25A of Insolvency and Bankruptcy Code, 2016. 15. Perusal of plan shows that it does not contravene any provision of law time being in force and it complies all requirement of Insolvency and Bankruptcy Board of India (in short IBBI)." accepted and approved the Resolution Plan of M/s Jagannath Financial Advisory Pvt Ltd. APPELLANT'S SUBMISSIONS: 3. The Learned Counsel for the Appellant/Bank submits that the 'Adjudicating Authority' while passing the impugned order dated 20.8.2019 in CA (IB)No.709/KB/2019 in CP(IB)No.570/KB/2018 had failed to consider that there is no equal treatment between the 'Financial Creditors' while distributing 'Funds' under the Resolution Plan. 4. The Learned Counsel for the Appellant contends that the 'Resolution Plan' approved by the 'Adjudicating Aut....
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....at 'The Office of Industries Department Bamuni Maidan, Guwahati informed our officer that the subsidy amount of Rs. 2.03 crores has been confirmed by your good office to our aforesaid office and further informed that your good office have adjusted the aforesaid subsidy amount towards their liability'. 8. The Learned Counsel for the Appellant brings to the notice of this Tribunal that the Resolution Professional had not raised any objection in respect of the 2nd Respondent's claim, as the 'Subsidy Amount' was adjusted by the Respondent against the claim filed in CIRP of the Corporate Debtor. 9. The plea of the Appellant is that despite the realisable value of the Corporate Debtor's securities exclusively charged with the Appellant was Rs. 4.36 crores, the 'Liquidation Value' made by the 'Valuers' was pegged at a low valuation of Rs. 1.38 crores and there was no explanation in this regard. 10. The Learned Counsel for the Appellant contends that the Commercial Wisdom of the 'Committee of Creditors' shall be considered by the 'Adjudicating Authority', only when the Members of the 'Committee of Creditors' really discuss the aspect of distribution of funds in their Meeting, appl....
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....1.2019 in Swiss Ribbons Pvt Ltd & Another V Union of India and Others (Vide Writ Petition (Civil) No.99/2018) wherein at paragraph at 58 and 61 it is observed as under:- 58. It is clear from a reading of the Code as well as the Regulations that the resolution professional has no adjudicatory powers." "61. Unlike the liquidator, the resolution professional cannot act in a number of matters without the approval of the committee of creditors under Section 28 of the Code, which can, by a two-thirds majority, replace one resolution professional with another, in case they are unhappy with his performance. Thus, the resolution professional is really a facilitator of the resolution process, whose administrative functions are overseen by the committee of creditors and by the Adjudicating Authority." 14. The Learned Counsel for the 1st Respondent refers to the Judgement of the Hon'ble Supreme Court dated 4.10.2018 in Arcelor Mittal India Pvt Ltd V. Satish Kumar Gupta and others (Civil Appeal No. 9402-9405/2018) wherein at paragraph 77 it is observed as under: "The Resolution Professional is not required to take any decision, but merely to ensure that the resolut....
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.... To this point, the remaining members of the CoC mentioned that the Resolution Plan as received from the Resolution Applicant, contains the provision of distribution of funds amongst the financial creditors in ratio of voting percentage of the respective financial creditor of CoC. This Resolution Plan has been discussed several times in the CoC Meeting clause by clause and point by point, including the distribution mechanism therein, they mentioned that it has always been the understanding from the day Resolution Plan has come that the sharing will be done as per voting share of the respective Financial Creditor in the CoC and that each of the meeting was attended by all the CoC members, all the time. The Representative of Canara Bank took note of the same." 17. As a matter of fact, in the 12th Meeting of the 'Committee of Creditors' it was recorded as under:- "That Canara Bank had got its own valuation done and as per the last valuation done by Canara Bank in the year 2017, the realizable value of the corporate debtor's securities exclusively charged with it was Rs. 4.36 crores. However, the liquidation value done by the Valuers currently has been pegged at Rs. 1.38 ....
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....al Creditors were treated equally as per the voting shares of each Financial Creditor in the Committee of Creditors. The Resolution Fund was equally distributed among all the Financial Creditors giving them equal share i.e. 23.43% of the claim amount. Later the Resolution Plan was filed by the 1^st Respondent/Resolution Professional in CA (IB)No.709/KB/2019 under Section 31 of the I&B Code before the Adjudicating Authority (NCLT Kolkata Bench) for approval of the Resolution Plan of M/s Jagannath Financial Advisory P Ltd. Indeed, the Appellant/Bank raised the plea that the distribution of the Resolution Fund was improper and it was to get due share considering the fact that they hold 80% of the assets of the Corporate Debtor. The valuation made by the Appellant/Bank in the year 2017 was made by its own Valuer and hence it is disputable. 21. The valuation was made by the approved valuer and there will be always a difference between a realizable value as a 'Going Concern' and 'Liquidation Value' and this was approved by all the "Members of the COC' and the same was noted by the Appellant/Bank in the 12th Meeting. The NEDFI has its charge not only on the land of the Agartala U....
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....undable deposit, and attract penal action under the Code. (1A) A resolution plan which does not comply with the provisions of sub-Regulation (1) shall be rejected. (2) The resolution professional shall submit to the committee all resolution plans which comply with the requirements of the Code and Regulations made thereunder along with the details of following transactions, if any, observed, found or determined by him; (a) preferential transactions under section 43; (b) undervalued transactions under section 45; (c) extortionate credit transactions under section 50; and (d) fraudulent transactions under section 66, and the orders, if any, of the adjudicating authority in respect of such transactions. (3) The committee shall evaluate the resolution plans received under sub-Regulation (1) strictly as per the evaluation matrix to identify the best resolution plan and may approve it with such modifications as it deems fit; Provided that the committee shall record the reasons for approving or rejecting a resolution plan. (4) The resolution applicant shall endeavour to submit a resolution plan approved by the Committe....
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....quitable division of the amount. 26. Even assuming that the distribution was made on the basis of the security interest available with the 'Financial Creditor' the Appellant, having the least due amount would have ended up with almost full recovery. However, the other two Financial Creditors, including the Respondent Bank would have been paid a negligible amount would have to take to a major haircut, even when they have the maximum dues. 27. The Learned Counsel for the 3rd Respondent/Bank cites the decision of Hon'ble Supreme Court in India Resurgence ARC Private Ltd V M/s Amit Metaliks Limited & Anr. reported in 2021 SCC OnLine SC 409 wherein at paragraph 17, 19 21, 22 and 23 it is observed as under:- "17. Thus, what amount is to be paid to different classes or subclasses of creditors in accordance with provisions of the Code and the related Regulations, is essentially the commercial wisdom of the Committee of Creditors; and a dissenting secured creditor like the appellant cannot suggest a higher amount to be paid to it with reference to the value of the security interest. 14. In the case of Jaypee Kensington (supra), the 19. In Jaypee Kensington(supra), th....
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....ot possible should liquidation follow." 23. Viewed from any angle, the submissions made on behalf of the appellant do not merit acceptance and are required to be rejected." 4th RESPONDENT'S PLEAS. 28 The approved Resolution Plan is in complete consensus of the objective of the Code and the same is proposed for an effective and viable time bound Resolution, which not only achieve maximization of the value of the assets of the Corporate Debtor but as also taken care of all the stakeholders of the Corporate Debtor. The instant Appeal filed by the Appellant/Dissenting Financial Creditor is not maintainable because of the fact the Resolution Plan of the 4th Respondent was approved by a majority of the Committee of Creditors i.e. by 75.70% of 'Members of the Committee of Creditors'. 29. The present Appeal is barred by Limitation, as the impugned order approving the 'Resolution Plan' was on 20.08.2019 and that the Appeal is filed on 03.12.2019, beyond the statutory period of 30 days, as well as even beyond the extended period of 45 days, as specified under the Code. A plea is taken on behalf of the Appellant that the certified copy of the impugned order was obtained on 2....
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....rs' and as per Section 30(3) of the Code the Resolution Professional shall present to the 'Committee of Creditors' for its approval, such Resolution Plans which confirms the condition mentioned in sub-section (2). 34. A 'Resolution Professional' is to scrutinise that the Resolution Plan furnished by numerous applicants is complete in all aspects, before presenting it to the Committee of Creditors. A 'Resolution Professional' is not required to take any decision but he is to confirm that the Resolution Plan does not violate any of the provisions of Law for the time being in force (including Section 29A of I&B Code). Suffice for this 'Tribunal' to pertinently point out that an 'ex-facie' opinion is to be offered to the 'Committee of Creditors' by the 'Resolution Professional' that the Law was not violated. 35. It is the duty of the 'Resolution Professional' to determine as to whether the eligibility criteria of Resolution Applicants prescribed in Section 29-A of the Code are satisfied. He is to consider the objections brought to his notice prior to the submission of the Resolution Plan to the 'Committee of Creditors'. As per Section 30(2) of the I & B Code, the Resolution Profe....
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....Pvt. Ltd had furnished an unconditioned Performance Deposit in the form Demand Draft amounting to Rs. 30 lakhs, drawn in favour of the 'Corporate Debtor i.e., 'Aristo Texon Private Limited' dated 22.05.2019 in regard to the implantation of the 'Successful Resolution Plan'. Moreover, the Performance Deposit was given together with an undertaking towards the maintaining the Instruments validity for a period of atleast six months from the date of communication of approval of the Resolution Plan by the Resolution Professional or till the end of the Resolution Plan, implementation period whichever is later. 41. At this junction, this Tribunal pertinently points out that Section 30(2)(b) of the I&B Code (amended as on 16.08.2018) runs as under 39(2)(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 that- (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 or....
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....ution of Resolution Fund' was discriminatory as against them and despite its plea that it was entitled to the equal and share in regard to the distribution of the Resolution Fund on the footing that the Bank held more than 80% of the assents of the 'Corporate Debtor' as security, the fact of the matter is that the 'Committee of Creditors' had approved the Resolution Plan of Jagannth Financial Advisory Pvt. Ltd by 75.70% of votes. 45. It cannot be gainsaid that the 'Resolution Fund' was equally distributed among all the 'Financial Creditors' showring them equal share i.e., 23.43 % and that the 1st Respondent/Resolution Professional had certified the plan and the compliance certificate was furnished. There is no illegality in the Resolution Plan as opined by this Tribunal, it comes to be known that the Successful Resolution Applicant/Respondent No. 4 had implemented the Resolution Plan in part and made part payments quite in tune with the 'Approved Resolution Plan'. 46. Besides the above, at this juncture, this 'Tribunal' aptly points out the decision of Hon'ble Supreme Court in India Resurgence ARC Pvt. Ltd. V. Amit Metalks & Anr. 2021 SCC online SC 409 wherein a paragraph 21 ....