TaxTMI 
TaxTMI 
2021 (6) TMI 1089
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....r Section 30(6) of the Insolvency and Bankruptcy Code, 2016 (the Code), seeking approval of the Resolution Plan submitted by consortium of Mr Murari Lal Jalan and Mr Florian Fritsch (Jalan Fritsch Consortium / Resolution Applicant). 2. The facts leading to the Application may be stated as under. a. Corporate Insolvency Resolution Process (CIRP) of Jet Airways (India) Limited (Corporate Debtor) was initiated by this Bench by order dated 20.06.2019 (Admission Order) and Mr. Ashish Chhawchharia, present Applicant, was appointed as Interim Resolution Professional (IRP). In the 1st meeting of the Committee of Creditors (CoC) held on 16.07.2019, the IRP was confirmed as the Resolution Professional (RP). b. The Applicant made an advertisement on 20.07.2019 (First Round) for invitation of Expression of Interest (EoI). In response thereto the Applicant received two EoIs from Prospective Resolution Applicants (PRAs) on 03.08.2019. In view of the fact that some more credible applicants were interested in participating in the bidding process and based on the instructions received from the CoC, the time for submission of EoIs was extended till 31.08.2019 vide advertisements....
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....l vide order dated 18.03.2020 and the CIRP period of the Corporate Debtor was further extended till 13.06.2020. h. Thereafter, in or around April 2020, the RP received informal EoIs from two individuals namely Mr. Claude Bothello and Mr. Siva Rasiah. This was brought to the CoC's notice. However, no EoI or eligibility documents were submitted by either of them. Their credibility and seriousness was neither established nor enquired into. i. Thereafter, at the 11th meeting held on 06.05.2020, the CoC cancelled and annulled the Third Round. It approved and revised the eligibility criteria in the EoI process document. Upon approval from the CoC, the Applicant published fresh advertisement on 13.05.2020 (Fourth Round) for invitation of EoI in Form G. Pursuant thereto the Applicant received EoIs from the following PRAs: i. Jalan Fritsch Consortium; ii. Consortium of Imperial Capital Investments LLC (ICIL), Flight Simulation Technique, Centre Private Limited (FSTCPL) and Big Charter Private Limited (Imperial Consortium); iii. Mr. Sivakumar Rasiah; iv. Alpha Airways; v. Mr. Brijesh Singhla; and vi. Synergy. On....
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....were also brought in to the Regulations by insertion of Regulation 40C. The CIRP period for the Corporate Debtor was extended to 13.06.2020 by this Tribunal vide order dated 18.03.2020. On 13.06.2020 the whole country continued to be under lockdown, such lockdown was in force on 05.11.2020 when the present Application was filed. Though no objection was taken to the delayed, if any, filing of the Application, we feel and accept the Application to be in time under the circumstances. 4. The profile of the Successful Resolution Applicant: a. The Jalan Fritsch Consortium is a consortium of (a) Mr. Murari Lal Jalan, a Non-Resident Indian based in United Arab Emirates (UAE) and (b) Mr. Florian Fritsch, the former being the lead Partner. Mr. Jalan will hold shares in the Corporate Debtor in his personal capacity and Mr. Florian Fritsch will hold shares therein through his investment holding company - Kalrock Capital Partners Ltd, Cayman (KCPL). KCPL will incorporate a wholly owned subsidiary in the UAE (Kalrock Co), which will hold and manage Mr. Florian's share in the Corporate Debtor. b. Business interests of Mr. Jalan are spread over in the UAE, Federative Republic ....
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....Dutch Admin) 10,000 100% - Other Creditors (other than FCs and OCs) 10,000 100% - Shareholders (promoters, Etihad and PNB) 10,000 100% - Contingency Fund 8 Cr 100% Established JPPL Offer from RA to acquire 50.01% shareholding in JPPL from Etihad. The said sum of Rs.. 25 Crores will be infused by the RA in addition to the above-mentioned amounts. 25 Cr - 100% TOTAL 475 Cr + 25 Cr *FCs = Financial Creditors. **OCs = Operational Creditors. B. SUMMARY OF INFUSION OF FUNDS AND UTILIZATION: The infusion of funds for Resolution Plan would be met from the own sources of the SRA and from banks and financial institutions outside India. The mode of finance and utilization is as under: Infusion Timelines (in days) Amount (in Rs..) Purpose/Utilization As Equity As ECB* Upfront (within 180 days) 350,00,00,000 - CIRP Costs, Contingency Fund, Payment to Financial Creditors, Operational Creditors, Other Creditors, and ot....
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....f employees on its payrolls, which are otherwise not required by the RP for the day-to-day affairs of the company. Since such employees were not required for the day-to-day business of the Corporate Debtor, the RP has not accounted the salaries and other benefits due to such employees (estimated at approx. Rs.. 715 Crores as of September 2020) as CIRP cost. d. SRA submits that it has assumed that the amounts standing to the credit of the bank account of the Corporate Debtor (including amounts estimated to be received subsequently) are sufficient to cover the CIRP cost (excluding parking charges, rental charges, employee dues, taxes etc). Accordingly, the SRA has set aside a sum of Rs.. 25 Crores as CIRP cost towards payment of any such costs until the Approval Date. Any expenses incurred by the Corporate Debtor from the Approval Date until the Effective Date will be incurred out of the positive bank balance of the Corporate Debtor. e. It is submitted that if the airport and parking charges are over Rs..245 Crores, then amounts over and above Rs.. 245 Crores will be first paid out of Rs.. 25 Crores reserved as CIRP cost (if there are no outstanding CIRP cost) and t....
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....ach, aggregating to Rs.. 300 Crores with guaranteed Net Present Value (NPV) of Rs.. 391 Crores for AFCs (using the discount rate specified in the Evaluation Matrix). The NCDs will carry an interest rate of 0.001% from Allotment Date until Redemption Date. The NCDs shall only be redeemed after Closing Date and within five years from the Effective Date. The issuer of NCDs shall redeem the NCDs by repaying the outstanding Subscription Amount together with such Redemption Premium which ensures a Guaranteed NPV of Rs.. 391 Crores as of Effective Date for the AFCs. The NCDs will be secured by Mortgage over Dubai Property No. 1, Mortgage over Dubai Property No. 2, Mortgage over Dubai Property No. 3 (Commercial Property located at Plot No. 1290, Jebel Ali Industrial First, Dubai, UAE) valued over Rs.. 50 Crores and Floating charge by way of hypothecation on India POS Credit Card receivables of the Corporate Debtor for Rs.. 350 Crores or the total outstanding dues of the AFCs, whichever is lower. iv. Upside on Sale of Aircrafts - The SRA will pay to the AFCs an upside on sale of 11 aircrafts (Five 777s; Three 737s; and Three A330s) owned by the Corporate Debtor through issue of 6,0....
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....ircraft Spares - The SRA proposes to sell the Aircraft Spares (Spares) and share an upside on such sale with the AFCs through issue of 5,00,000 'Series D ZCBs' of the face value of Rs.. 1,000/- each, aggregating to Rs.. 50 Crores. The ZCBs will be secured by entire existing Spares in possession of the Corporate Debtor. The upside amount will be calculated in the following manner: a) Base Value of Spares has been taken at Rs.. 50 Crores i.e. no amounts are payable when Spares are sold for amounts up to Rs.. 50 Crores, other than face value of Rs.. 50 Crores. b) 80% upside of any amounts realized from the sale of Spares will be shared with the AFCs as redemption premium, if any. c) Costs and charges towards effecting such sale, including airport parking charges, brokerage, warehousing charges (if any), maintenance costs etc. accruing with effect from the Approval Date until the actual date of sale and not exceeding 12% of the sale consideration will be reduced from the sale price before payment. vii. Upside on BKC Property - The SRA proposes to pay to the AFCs an upfront payment of Rs.. 10 Crores for the BKC Property and pay all savings derived out....
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....c sum of Rs.. 25 Crores as CIRP cost. The SRA proposes to transfer the un-utilized portion of such CIRP cost to the AFCs on the Effective Date. xii. Contingency Fund - The SRA has earmarked a specific sum of Rs.. 8 Crores as Contingency Fund. The SRA proposes to transfer the un-utilized portion of the Contingency Fund to the AFCs on the Closing Date. xiii. Stake in Jet Lite (India) Limited (Jet Lite) - The SRA proposes to offer 100% stake held by the Corporate Debtor in Jet Lite to the AFCs on the Approval Date. If this proposal is not acceptable to AFCs, then the SRA shall liquidate Jet Lite immediately after the Approval Date. III. Treatment of Dissenting Financial Creditors: The SRA undertakes that any Dissenting Financial Creditor would be paid the liquidation value due to them in priority to other financial creditors in terms of Section 30(2) of the Code read with Regulation 38(1)(b) of the Regulations, out of the amounts reserved for the Financial Creditors in terms of this Resolution Plan. IV. Treatment of Employees and Workmen: a. It is submitted that Corporate Debtor currently has large number of employees and workmen o....
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....stake in, and management control of AGSL to the Trust after the Approval Date. Therefore, the Trust will own majority stake and control in AGSL and its business. (iv) Cash Payment for Employees and Workmen - In addition to the amounts proposed to be paid to the Operational Creditors (Workmen and Employees, including Authorized Representatives of Workmen and Employees) for claims up to ICD, the SRA proposes to make the following payments to employees and workmen of the Corporate Debtor. Such payments will be made within 180 days from the Effective Date and the manner of payment and process will be detailed on the website of the Corporate Debtor. a. Cash payment for employees - The SRA proposes to pay a token sum of Rs.. 11,000 in cash to each employee of the Corporate Debtor. b. Cash payment for workmen - The SRA proposes to pay the following to each workman of the Corporate Debtor: i. Rs.. 11,000/- cash to each workmen of the Corporate Debtor. ii. Rs.. 5,100/- cash as medical expense reimbursement for the parents of the workmen of the Corporate Debtor. iii. Rs.. 5,100/- cash as school fee reimbursement for children of t....
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....ncing its domestic operations. Tickets can be availed during April-June Quarters and August-October Quarters on sectors where the Corporate Debtor flies. (vii) Key Terms: It is stated in the Resolution Plan that this proposal to Employees and Workmen (i.e. equity stake in the Corporate Debtor; equity stake in AGSL, cash payment for employees and workmen, IT Assets and Free Tickets) is valid only if at least 95% of the employees and workmen of the Corporate Debtor (as on ICD) support this Resolution Plan by not contesting or challenging its approval by the Adjudicating Authority (the Authority) and/or its implementation in the manner approved by the Authority. If the above proposal is not accepted by the employees and workmen within 30 days from the Approval Date, then no other creditor will have the right to seek such benefits or any part thereof and such proposal shall stand withdrawn. After expiry of the said period of 30 days from the Approval Date, the equity stake of 0.50%, and cash payments of up to Rs.. 8 Crores currently earmarked for employees and workmen will be given to the AFCs. The proposal with respect to ticket credits, equity stake in AGSL and handover of I....
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....her submitted that as part of such demerger, all the past dues towards salaries and other benefits (such as PF dues, leave encashment, retirement benefits, notice pay, termination dues etc.) of the Demerged Employees for the period after the ICD and until the Approval Date and/or retirement benefits accruing to Demerged Employees which have arisen after the ICD, shall also stand demerged from the Corporate Debtor to AGSL with effect from the Approval Date and the Corporate Debtor shall absorb no liability or responsibility for such payments as the RP has not accounted such salaries and other benefits as CIRP cost. iv. The Corporate Debtor will offer 76% of its shareholding in AGSL to the Employees' Trust and retain the remaining 24% shareholding. If the Trust fails to exercise or refuses to accept such offer within 30 (thirty) days from the Approval Date or challenges the implementation of this Resolution Plan, then the Corporate Debtor will retain 100% shareholding in AGSL as indicated supra. V. Treatment of Operational Creditors: a. Liquidation Value - It is stated by the SRA that the net worth of the Corporate Debtor would be insufficient to cover even....
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....ts will be provided as per actual admitted claim amounts. ii. For claims above Rs.. 15,000, credit for future tickets will be provided subject to a maximum of Rs.. 15,000. iii. Credit for future tickets will be issued in the form of redeemable vouchers in the multiples of Rs.. 1,000/- (equivalent to Rs.. 1,000 worth of credit for future tickets). iv. Vouchers will be transferable in nature (prior to issuance of any ticket). No tickets will be transferable in nature. v. Vouchers can be redeemed against more than 1 (one) ticket. vi. Booking of tickets against redemption of such vouchers must be completed within 30 Days of the Corporate Debtor recommencing (Jet 2.0) its domestic operations. vii. Tickets can be availed during April-June Quarter and AugustOctober Quarter on any sector where Jet 2.0 flies. d. Settlement of Dutch Administrator's claim - The SRA will settle the outstanding claims of the Dutch Administrator, if any, against payment of a maximum sum of Rs.. 10,000/- subject to Dutch laws. VI. Treatment of Other Creditors (other than financial and operational creditors): It is submitted that if t....
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....be first paid out of Rs.. 25 Crores reserved as CIRP cost (if there are no outstanding CIRP cost) and then out of the positive cash flows of the Corporate Debtor. Any amounts over and above such amounts will be shared between the SRA and the AFCs in equal proportion. The amounts payable by AFCs towards airport and parking dues will be deducted out of the amounts payable by the SRA to them and if there are any outstanding payable by the AFCs after such deduction, then such amounts shall be paid by them to the SRA. vi. Any amount received from sale of BKC Property (over and above Rs.. 245 Crores) will be shared between the AFCs and the SRA in equal proportion. vii. If the SRA decides to retain the ownership of the BKC Property, then at the end of Year 2, the SRA will pay to the AFCs, 50% of the market value of BKC Property (over and above Rs.. 245 Crores). The market value will be derived by a Tier 1 Brokerage Firm appointed by the Asset Sales Committee (ASC) on a willing buyer and willing seller basis and the entire sale process will be run under the overall supervision of the ASC. viii. This proposal regarding the BKC Property is subject to the SRA being ....
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....blic Shareholders of the Corporate Debtor equivalent to Rs.. 28,39,93,460/- divided into 2,83,99,346 equity shares shall stand reduced from face value of Rs.. 10/- each to face value of Rs.. 1/- each (Reduction in Share Capital). After this reduction, the shareholding pattern of the Corporate Debtor will be: Proposed No. of Shares Share Capital (In Rs..) Shareholding % Face Value (In Rs..) Promoters - - - - Etihad - - - - Financial Institution - - - - Public Shareholders 2,83,99,346 2,83,99,346 100% 1.00 Total 2,83,99,346 2,83,99,346 100% c. Consolidation of Share Capital: Immediately upon the Reduction in Share Capital, the shares shall be consolidated into equity shares with face value of Rs.. 10/- each (Consolidation of Share Capital). Any fractional entitlements of equity shares resulting from such consolidation shall be rounded off to the nearest whole integer. An indicative table, assuming no rounding up is required on account of fractional entitlement, is set out below: Proposed No. of Shares Share Capital (In Rs..) Shareholding % Face Value (In R....
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....reholding in the Corporate Debtor through issuance of fresh shares of the Corporate Debtor to the public, at market price, by way of a FPO, which process shall be carried out in compliance with applicable laws. F. TIMELINES AND IMPLEMENTATION SCHEDULE OF THE RESOLUTION PLAN: The SRA shall take the following steps in the order of sequence as an integral part of the Resolution Plan. The procedure, timelines and the sequence of steps listed below are only indicative and they may be rearranged / changed as may be required or directed based on discussions with the necessary Governmental Authorities / stock exchange (on account of past non-compliances of the Corporate Debtor or otherwise) or for the purposes of advancing any payments to the stakeholders, and at all times in compliance with Applicable Laws: Step Activity Days 1. Receipt of approval from the Competition Commission of India under the provisions of the Competition Act, 2002 read with the provisions of the IBC. Before approval of Resolution Plan by CoC 2. Declaration of the Successful Resolution Applicant and Receipt of LoI from the CoC X 3. Unconditional acceptance of the Lo....
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....ed from the Approval Date until the Closing Date and the implementation of the Resolution Plan will be supervised by it during such period. (ii) The Monitoring Committee shall comprise of 7 (seven) members: (a) 3 (three) appointed by the Resolution Applicant; (b) 3 (three) appointed by the Financial Creditors having highest share in the CoC; and (c) an independent insolvency professional appointed by the Financial Creditors (preferably retain the existing RP). The SRA and the Financial Creditors reserve the right to change their appointees to the Monitoring Committee, if required, for better and effective management of the assets. (iii) The duties of the Monitoring Committee shall be in accordance with clause 7.8.5 of the Resolution Plan. b. Asset Sale Committee: It is stated that, if the Series B, Series C and Series D ZCBs are not redeemed by the Closing Date, then the Monitoring Committee shall, on the Closing Date, form an ASC of 3 (three) members, comprising of any 2 (two) members appointed by the Financial Creditors on the Monitoring Committee and the insolvency professional appointed on the Monitoring Committee, to supervise the sale of as....
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....ction 30(2)(e)]. g) The Resolution Plan is in compliance with Section 30(2)(f) of the Code as it confirms to such requirements as specified by the Board. h) Provides that the amount due to the operational creditors under the resolution plan shall be given priority in payment over financial creditors (clause 6.4.2 read with 6.4.3, 6.4.10; and 7.7) [Regulation 38(1)(a)]. i) Provides for the payment to the dissenting financial creditors, in priority over financial creditors who voted in favour of the plan (clause 6.4.4) [Regulation 38(1)(b)]. j) Provides a statement as to how it has dealt with the interests of all stakeholders, including financial creditors and operational creditors of the company (clause 6.4.10) [Regulation 38(1A)]. k) Provides a statement giving details that neither the Resolution Applicant nor any of its related parties have failed to implement or contributed to the failure of implementation of any other resolution plan approved by the Authority at any time in the past (clause 7.2) [Regulation 38(1B)]. l) Provides for the term of the resolution plan and its implementation schedule (clause 7.1 read with 7.7) [Reg....
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.... to be restored to it. In this connection reliance is placed on Union of India v. Vijaykumar V. Iyer, Company Appeal (AT) (Insolvency) No. 733 of 2020 decided on 13.04.2021/Aircel Judgment. The relevant portion of the Judgment may profitably be referred to. 10. The Hon'ble NCLAT observed at para 59 of the Judgment that 'asset' is defined as a present economic resource controlled by an entity as a result of past events. An economic resource is a right that has potential to produce economic benefits (emphasis supplied). Going by this definition, it is unambiguously clear that if as a result of past events a present economic resource is controlled by the entity clothing it with a right that has potential of generating income, it falls within the purview of an 'asset'. The Hon'ble NCLAT discussing the National Telecom Policy and the procedure for grant of spectrum to a Telecom Company observed as follows:- "60... ...So long as the licence is not suspended, revoked or terminated or until the expiration of period of licence, the Access Service Provider/ Licensee continues to have right to trade subject to observance of the Spectrum Trading Guidelines and terms and co....
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....t is essentially a clarification. Therefore, the purpose of protecting the licenses and concessions was inherent in Section 14(1)(d). It is therefore submitted that the allotment of slots remained protected in view of the moratorium coming into effect i.e. from 20.06.2019. The Hon'ble NCLAT in the Judgment have observed that the protection of the licenses and concessions from being terminated has the object of ensuring maintenance of the substratum of the licenses of the Corporate Debtor during the CIRP period and keeping the Corporate Debtor as a 'going concern'. 12. Admittedly the Corporate Debtor ceased its operations from 17.04.2019. On the date of insolvency commencement i.e. on 20.06.2019, the Corporate Debtor was not in operation. It is not in dispute that the Corporate Debtor was not run as a going concern during the CIRP. Therefore, the protection of the licenses and concessions from termination or suspension would not be available to the Corporate Debtor. In the case of Aircel (supra) the spectrum continued to be with the Telecom Company during the CIRP. In the instant case the slots cannot be regarded as 'present economic resource' of the Corporate Debtor. That being ....
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....le airport and air transport operations. 2. An airport should be categorized into different levels by a responsible authority and by following a thorough demand and capacity analysis, and full consultation with all stakeholders. The airport should be designated as Level 3 only if this analysis and consultation concludes that the demand for airport infrastructure significantly exceeds available capacity and there is no practical way to alleviate the problem in the short term. The airport capacity should be made available in the public domain thorough websites. 3. For Level 3 airports, a Coordinator is required to be designated to allocate slots to airlines and other aircrafts operators using or planning to use the airport as a means of managing available capacity. An airport slot would therefore mean a permission given by a Coordinator for a planned operation to use the full range of airport infrastructure necessary to arrive or depart at a Level 3 airport on a specific date and time. The procedure should be devised in a manner that there is enough appellate mechanism inbuilt in the system. 4. It may be understood that coordination is not a solution to the....
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....following guidelines would be used to determine which slots are eligible for historic precedence and the number of operations required to achieve 80% usage: (a) The series of slots held on the Historic Baseline Date of 31st January (summer) and 31st August (winter) is used as the basis for determining eligibility for historic precedence. (b) For the series of slots newly allocated after the Historics Baseline Date, the number of slots in the series on the date of first allocation forms the basis of the 80% usage calculation. ...... (ii) Cancellations after the Historic Baselines Date: All cancellations made after the Historic Baseline Date are considered as nonutilization of the series of slots in the 80% usage calculation, unless the non-utilization is justified. ...... VII) Slot Allocation Determination of Historic Slots: 1. The coordination process is initiated when the coordinator provides each airline with the details of their historic slots as a Slot Historical Allocation List (SHL) message. These messages must be distributed for each airport when the historic slots are determined by the coordinator, but ....
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.... to operate or use. To ensure that scarce capacity is not wasted airlines must immediately return any slots they know they will not use. Even at short notice, it may be possible to reallocate returned slots to other operators. 2. In particular, series of slots that no airline does not intend to operate must be returned no later than the Slot Return Deadline dates of 15th January (summer) and 15th August (winter). ...... IX) Coordination after final Slot Allocation ...... 7. Slots of an airline which ceases to operate at an Airport: i) An airline that ceases operations at an airport must immediately return all of the slots allocated to it for the reminder of the season and for the next season (if already allocated) and advise the coordinator whether or not it will use the slots in the future. ii) If an airline fails to provide the necessary information by a reasonable deadline date set by the coordinator then the coordinator may withdraw and reallocate the slots. In the allocation of the withdrawn slots, preference will be given to another airline that is willing to operate on the virgin route. 8. Slots....
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....indicated a slot in a Level-3 Airport could not be left idle. The principle laid down in Aircel (supra) would accordingly be distinguishable on facts and cannot be applied to the case in hand. Though the slots are integral to the operation of an Airline, the same however cannot be held as assets of the Airline. More so when the Airline has not been using the slots in praesenti and had stopped operation prior to the insolvency commencement date. 16. It is submitted that the guidelines need to be interpreted progressively and harmoniously. If the non-utilisation of the slots are justifiable the slots of the Corporate Debtor could be restored back to it. The justifiable reason being the intervening commencement of insolvency. In this connection reference is made to para IX. 8 (ii) of the guidelines. The guidelines provide that the slots can only be held by an Airline against a valid operating license and if the Airline ceases to hold a valid operating license the slot revert to the slot pool. In case of bankruptcy (or similar proceedings) the representative of the Airline should enter into dialogue with the coordinator to disuse their future intentions for the slots and provide the....
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....that no historic rights or seasonal continuity rights of the Jet Airways slots can be claimed by the Airlines. The Hon'ble Minister in reply to a question in the Lok Sabha on 05.03.2020 stated that the slots falling vacant due to sudden closure of the operation by the Corporate Debtor have been allocated to other Airlines up to the end of summer schedule 2020 purely on temporary basis. The allocation so made are as per standard operating procedure in order to ensure transparency and equity. 18. The correspondence indicated above and the stand taken by the Government in the Parliament indicate that the slots vacated by the Corporate Debtor had to be utilised to the maximum possible extent. The slots though allotted on a temporary basis to other Airlines would have to be guided by the standard operating procedure and the guidelines for getting them restored to the Corporate Debtor. 19. The procedure under para IX. 8 (ii) of the guidelines have not been followed and as the guidelines indicate the coordinator could not have kept the slots idle for more than one month. As already indicated the Corporate Debtor did not possess or operate the slots on the date of insolvency. 2....
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....vour. Viewed from any perspective the slots cannot be allocated to the Corporate Debtor beyond the procedure prescribed under the guidelines. Therefore, the claim of historicity advanced by the Corporate Debtor / SRA cannot be made available to it. Despite the temporary allotment of slots to the other Airlines, their restoration has to be worked out within the parameters prescribed under the guidelines. 24. The facts and circumstances would indicate that presently the slots cannot be restored to the Corporate Debtor on a historic basis. The thumb rule being 'use it or lose it'. Be that as it may, we must remember that running an Airline, much less reviving one, is not a facile business. It involves entire gamut of complex and diverse activities from land to sky and everything in between. In the present day air travel has rather become a necessity, than a luxury considered merely a decade back. Increase in the number of Airlines would encourage healthy competition and provide a level playing field to the operators. The result would only benefit the consumer. It is not in dispute that the Corporate Debtor had been one of the first leading and sought after Airlines in the Country, ....
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....elied upon the principle enunciated by the Hon'ble Apex Court in Rajendra K. Bhutta v. Maharashtra Housing and Area Development Authority & Anr.: (2020) 13 SCC 208, and submitted that the Corporate Debtor was not in possession of the slots on the date of the insolvency commencement. It accordingly cannot claim any right to the slots. 29. The Hon'ble Court in the referred judgment have taken into consideration the connotation of 'possession' and 'occupation' of property by the Corporate Debtor. Section 14(1)(d) deals with the move by the owner or lessor to recover a property in the possession or in occupation of the Corporate Debtor. The allocation of slots cannot be construed as a 'property' of the MoCA or the DGCA or for that matter the Government of India. Moreover, there has been no move by these authorities to wrest control of the slots from the Corporate Debtor. 30. It would accordingly be appropriate to refer to some of the observations of the Hon'ble Court in Rajendra K. Bhutta (supra). "7. A bare reading of Section 14(1)(d) of the Code would make it clear that it does not deal with any of the assets or legal right or beneficial interest in such assets of the ....
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..... Since the revival of the Corporate Debtor is dependent upon these factors, the CoC has approved the Resolution Plan taking into consideration the necessity of the conditions which are integral to the successful implementation of the Plan. Thus, the effective date also depends upon the conditions being fulfilled. Despite the effective date being uncertain the CoC has approved the same. Considering the peculiarity of the facts and totality of the circumstances, we feel it appropriate to agree with such decision of the CoC and its fiscal prudence, subject to the following. 33. During the hearing, the uncertainty of the time frame for implementation of the Resolution Plan was discussed. It is stated by the SRA in clause no. 7.6.2 (pdf 276) of the Resolution Plan that the effective date would mean the date of the fulfillment of all the conditions precedent as stated in clause 7.6.1 thereof. The SRA, at clause no. 7.6.4, has gone on to add that the consortium would make all endeavor to ensure all the compliances are done for the fulfillment of the conditions precedent within a period of 90 days. In the unlikely event that the conditions precedent are not complied within this period,....
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.... under the employment of the Corporate Debtor nor did they work for the Corporate Debtor during that period. Decision in that regard appears to be reasonable based on the principle of 'no work no pay'. 36. It is beneficial to refer to the observation of the Hon'ble Supreme Court in Committee of Creditors of Essar Steel India Limited Vs. Satish Kumar Gupta &Ors.: (2019) SCC OnLine SC 1478 as under: "67. .............. A successful resolution Applicant cannot suddenly be faced with "undecided" claims after the resolution 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." 37. In view of the above ruling of the Apex Court, the Resolution A....
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.... 41. In view of the discussions and the law thus settled, the instant Resolution Plan meets the requirements of Section 30(2) of the Code and Regulations 37 and 38 of the Regulations. The Resolution Plan is not in contravention of any of the provisions of Section 29A of the Code and is in accordance with law. The same needs to be approved as provided under Section 31 of the Code and subject to the observations above. Hence ordered. ORDER The Application be and the same is allowed. The Resolution Plan submitted by consortium of Mr Murari Lal Jalan and Mr Florian Fritsch annexed to the Application is hereby approved. It shall become effective from this date and shall form part of this order. a. 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 arising under any law for the time being in force is due, guarantors and other stakeholders involved in the Resolution Plan. b. The claim of two Sahara group companies has been dealt with and rejected in IA No. 2271 of 2020. The rights and liabilities of the parties in resp....