TaxTMI 
TaxTMI 
2022 (2) TMI 98
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....l, 2019 Corporate Insolvency Resolution Process (CIRP) was initiated against the Corporate Debtor - M/s Nijinoy Trading Pvt. Ltd. The Respondent-Parwincharan P. Dwari was appointed as Interim Resolution Professional (IRP). (ii) A public announcement was made in Form-A on 3rd May, 2019, in pursuance of which announcement, the IRP received seven claims of Financial Creditors and one claim by Appellant-Operational Creditor submitted in Form-B amounting to Rs. 10,33,415/-. (iii) The RP appointed two IBBI registered Valuers to carry out valuation of securities and financial assets of the Corporate Debtor. The two Valuers have given fair value and liquidation value as Rs. 9.19 lakhs and Rs. 8.08 lakhs respectively. (iv) Pursuant to publication of Form-G, one Resolution Plan was received from Mr. Ramesh Kumar Talkaji. (v) Modified Resolution Plan was approved with 100% majority of Committee of Creditors (CoC) on 19th October, 2019. The Resolution Plan provides for payment of Rs. 19.36 lakhs. Operational Creditors and Statutory Dues have been provided in the Plan only 0.5.%. The RP submitted an Application to the Adjudicating Authority for approval, whic....
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....of Rs. 5,00,000/- for his services, pertaining to tax matter in conducting two Appeals before KAT, Bengaluru. The Trial Court passed a Decree in the suit for Rs. 5,00,000/- and interest @ 24% per annum from the date of suit till realization. The Corporate Debtor filed a Miscellaneous Application under Order 9 Rule 13 of CPC in the above suit, which had proceeded ex-parte, the same was rejected on 6th August, 2018. After publication, the Appellant filed his claim in Form-B. The claim of the Appellant was admitted by the RP. In the reply filed by RP, the fair value and liquidation value by two registered Valuers has been referred to in Para 11. One Valuer has given a report assessing fair value and liquidation value at Rs. 9.19 lakhs and another Valuer has reported fair value and liquidation value as Rs. 8.08 lakhs. It is stated in paragraph 13 of the reply that Resolution Plan provides for payment of Rs. 19.36 lakhs. The amount admitted by the Financial Creditors is Rs. 1,24,49,127/-. There were statutory dues payable for more than Rs. 10 crores. In paragraph 13 of the reply, following details have been given regarding Resolution Plan: Particulars Amount Admitted (Rs.) A....
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.... 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 an appeal is not time barred under any provision of law for the time being in force; or (iii) where a legal proceeding has been initiated in any court against the decision of the Adjudicating Authority in respect of a resolution plan; (c) provides for the management of the affairs of the Corporate debtor after approval of the resolution plan; (d) The implementation and supervision of the resolution plan; (e) does not contravene any of the provisions of the law for the time being in force (f) confirms to such other requirements as may be specified by the Board. Explanation. - For the purposes of clause (e), if any approval of shareholders is required under the Companies Act, 2013(18 of 2013) or any other law for the time being in force for the implementation of actions under the resolution plan, such approval shall be deemed to have been given and it shall not be a contravention of that Act or law." "Insolvency and Bankruptcy Board of India (Insolvency Resolution....
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....transactions, if any, with the corporate debtor in the preceding two years. (ii) the expression 'connected persons' means- (a) persons who are promoters or in the management or control of the resolution applicant; (b) persons who will be promoters or in management or control of the business the corporate debtor during the implementation of the resolution plan; (c) holding company, subsidiary company, associate company and related party of the persons referred to in items (a) and (b)." 8. Sub-section (2) of Section 30, sub-clause (b) requires that Resolution Plan should provide for payment of debts of Operational Creditors in such manner as may be specified by the Board which shall not be less than an amount paid to such creditors under Section 53. The RP has submitted that the payment to the Operational Creditors in Liquidation shall be Nil in view of the extent of the claim of the Financial Creditors. 9. Hon'ble Supreme Court in (2020) 8 SCC 531 in Committee of Creditors of Essar Steel India Limited vs. Satish Kumar Gupta and Others had examined in detail Section 30, sub-section (2) and Regulation 38 and 39. In paragraph 70 of the judgment....
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....ad to mean that financial and operational creditors must be paid the same amounts in any resolution plan before it can pass muster. On the contrary, para 77 itself makes it clear that there is a difference in payment of the debts of financial and operational creditors, operational creditors having to receive a minimum payment, being not less than liquidation value, which does not apply to financial creditors. The amended Regulation 38 set out in para 77 again does not lead to the conclusion that financial and operational creditors, or secured and unsecured creditors, must be paid the same amounts, percentage wise, under the resolution plan before it can pass muster. Fair and equitable dealing of operational creditors' rights under the said regulation involves the resolution plan stating as to how it has dealt with the interests of operational creditors, which is not the same thing as saying that they must be paid the same amount of their debt proportionately. Also, the fact that the operational creditors are given priority in payment over all financial creditors does not lead to the conclusion that such payment must necessarily be the same recovery percentage as financial credi....