TaxTMI 
TaxTMI 
2021 (12) TMI 1334
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....100% CoC on 08.02.2021. The said Application came up for hearing on 27.09.2021 when the Applicant/RP was directed to file proper Memo of Parties. In compliance of the said order dated 27.09.2021, the Applicant/RP filed the proper Memo of parties on 30.09.2021. This application was thereafter heard and reserved for orders on 20.10.2021. 1.4. The underlying Company Petition being CP (IB) No. 458/ALD/2019 was filed by Siemens Financial Services Private Limited against the Corporate Debtor under section 7 of the Code which was admitted into Corporate Insolvency Resolution Process ("CIRP") by an order dated 03.09.2020. During the pendency of the section 7 petition, an application in IA 148/2020 was filed for substituting the name of the Financial Creditor with that of Alchemist Asset Reconstruction Company Limited, as the assignee. This was also allowed vide order dated 03.09.2020 1.5. Mr. Devendra Singh was appointed as the Interim Resolution Professional ("IRP"), and the Committee of Creditors ("CoC") in its meeting held on 03.10.2020, confirmed the appointment of Mr. Devendra Singh [IBBI/IPA-002/IP-N00001/2016-17/10001] as the Resolution Professional ("RP") with 100% voting. ....
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.... interested in submitting a plan for revival of the Corporate Debtor. Vide order dated 09.12.2020, this Adjudicating Authority directed the Applicant to place the proposal before the CoC. Accordingly, the proposal was placed before the CoC at its 4th meeting held on 15.12.2020, the CoC rejected the same. 2.7. After the Applicant received confidentiality undertaking from the eligible prospective Resolution Applicants on 24.12.2020, the Applicant issued the final list of eligible prospective Resolution Applicants. However, the Applicant received the plan only from one Resolution Applicant, i.e., City Hospital. 2.8. A copy of the Compliance Certificate dated 20.02.2021 in Form H as required by regulation 39(4) of CIRP Regulations is also filed by the Applicant. Page 450 of the Application Evaluation and voting 2.9. The CoC also enquired from the Resolution Applicant if there is any chance of any revision or improvement in the resolution bid amount for the Financial Creditors. The Resolution Applicant submitted that as the equipment and instruments of the Corporate Debtor are obsolete and are required to be replaced, it would be difficult for them to revise or improve the b....
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....r. Chapter VI, Page 91 of the Application. (b) The amount payable to the financial creditors under a resolution plan, who have a right to vote under section 21(2) and did not vote in favour of the resolution plan shall be paid in priority over financial creditors who voted in favour of the Plan. NA, as there is only one Financial Creditor. 38(1A) A resolution plan shall include a statement as to how it has dealt with the interests of all stakeholders, including financial creditors and operational creditors of the corporate debtor. Chapter VI, Page 92 of the Application. 38(1B) A resolution plan shall include a statement giving details of the resolution applicant or any of its related parties has failed to implement or contributed to the failure of implementation of any other resolution plan approved by the Adjudicating Authority at any time in the past. Chapter VI, Page 102 of the Application. 38(2) A resolution plan shall provide: (a) the term of the plan and its implementation schedule; Chapter VI, Page 103 of the Application. (b) the management and control of the business of the corporate debtor during its term; and Chapter VI, Page 1....
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....nd and one only) inclusive of Future Capex of Rs. 30.00 crore. 5.3. The Resolution Plan defines "Effective Date" as the date on which the Adjudicating Authority approves the Resolution Plan. Under the Resolution Plan, payments towards the CIRP Cost, Operational Creditors and the Financial Creditors would be made within 90 days from the approval of the plan from the Adjudicating Authority. Page 84 of the Application The Resolution Professional states that the 100% CoC member (AARC) had voted in favour of the Plan and has accepted this proposal in the sixth CoC Meeting. 6. Details on Management/Implementation and Relief as per the Resolution Plan-Salient Features 6.1. The Resolution Plan also provides for- a. The Resolution Applicant together with its nominees shall hold 100.00% shareholding in the restructured Share Capital of Corporate Debtor after resolution Page 87 of the Application, Page 110 & 111 of the Application (Clause (c)(i) at internal page No. 59 of the plan); b. Management of Company after resolution (Clause (c)(ii) at internal page No. 59 of the plan); c. Term of the Resolution Plan Page 87 of the Application (Phase 1 and Phase 2 at....
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....me-tax Act, 1961, including, without limitation waiver of MAT and income tax implication arising due to write back/write off of liabilities in the books of accounts of Corporate Debtor without any impact on brought forward tax and book loss/depreciation, pursuant to this Resolution Plan. In Ghanashyam Mishra & Sons Pvt. Ltd. v. Edelweiss Asset Reconstruction Company Ltd., decided on 13.04.2021 the Hon'ble Supreme Court held in para 95(i) that once a Resolution Plan is approved, a creditor cannot initiate proceedings for recovery of claims which are not part of the Resolution Plan. The provisions of section 32A of the IBC will also apply. Therefore, the reliefs sought for are granted, in terms of the judgment of the Hon'ble Supreme Court in so far as extinguishment of liabilities that are not part of the resolution plan. (b) The Central Board of Direct Taxes not to take any other actions with respect to the transactions contemplated under this Plan under Section 281 of the IT Act. In Ghanashyam Mishra & Sons Pvt. Ltd. v. Edelweiss Asset Reconstruction Company Ltd. decided on 13.04.2021 the Hon'ble Supreme Court held in para 95(i) that once a Resolution ....
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....ar from the date of approval of the resolution plan by the Adjudicating Authority under sub-section (1) or within such period as provided for in such law, whichever is later. (e) From the Effective Date, all inquiries, investigations and proceedings, whether civil or criminal, suits, claims, disputes, proceedings in connection with Corporate Debtor or affairs of Corporate Debtor (including those initiated by Government/Statutory Authorities), pending or threatened, present or future in relation to any period prior to the Effective Date, or arising on account of implementation of this Resolution Plan shall stand settled/waived off/withdrawn/dismissed and all liabilities and obligations therefore, whether or not set out in the balance sheets of Corporate Debtor or the profit and loss account statements of Corporate Debtor will be deemed to have been written off fully, and permanently extinguished and no adverse orders passed in the said matters would apply to CD or the Resolution Applicant. Upon approval of this Resolution Plan, all new inquiries, investigations, notices, suits, claims, disputes, litigations, arbitrations or other judicial, regulatory or administrative proceedi....
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....atutory Authority or on account of non-compliance of Applicable Laws by Corporate Debtor or due to Corporate Debtor not having in place requisite approvals and licenses to undertake its business as per Applicable Law. Granted in terms of section 32A of the Code. (c) The business Permits/licences/or any statutory order(s) which were possessed by the Corporate Debtor to conduct the business shall deem in continuation on the date of final approval of NCLT as it were prior to the Insolvency Commencement Date by All or any one of the applicable Statutory/Government Authority (s) for the time being in force for ensuring the economic viability and financial sustainability of the business of Corporate Debtor. This shall be in terms of section 32A of the Code. (d) Since the Resolution Applicant has been provided with limited information in relation to the Business Permits, Service Licences and their current status, it is probable that some of the Business Permits, licences of the Corporate Debtor may have lapsed, expired, suspended, cancelled, revoked or terminated or the Corporate Debtor has Non-Compliances in relation thereto. Accordingly, all Government Authorities to p....
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...., waivers or concessions as mentioned in this chapter of this resolution plan sought by the Resolution Applicant are granted by the Adjudicating authority, the Hon'ble NCLAT, the Hon'ble High Court, the Hon'ble Supreme Court or any other judicial, quasi-judicial, regulatory or administrative entity, department or authority. Page 118 of the Application 7.3. The Resolution Applicant shall be bound by the undertaking given supra. 7.4. Chapter VI of the Plan Page 100 of the Application (internal page 71 of the plan) provides for the extinguishment of claims and entitlements as follows:- Sl. No. Extinguishment of Claims/Entitlements Orders thereon 1. The Resolution Professional issued a notice inviting all potential claimants to submit their proof of claim. This was published in newspapers in accordance with Applicable Law. All other liabilities of Corporate Debtor (to the extent not specified and/or dealt with in this Chapter or any other Chapter of this Resolution Plan), including but not limited to contingent liabilities, taxes, statutory liabilities, customer and any patients claims, service provider claims, duties, responsibilities and all other obl....
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....on'ble Supreme Court in so far as extinguishment of liabilities that are not part of the resolution plan. 3. By virtue of the Hon'ble NCLT Approval Order, on the Effective Date, all assets of Corporate Debtor, that are subject to any encumbrance, security and/or lien, whether in favour of the lenders of Corporate Debtor or in favour of any third party, shall stand settled/waived/written off/extinguished with respect to the Corporate Debtor and/or the Resolution Applicant. This would inter alia include: the security mentioned in the Information memorandum of Corporate Debtor except for the other collaterals, the Corporate Guarantee or the Personal Guarantees given by the erstwhile directors/suspended board/any other person Granted. 4. All corporate guarantees, indemnities, letters of comfort, undertakings (including as listed below) provided by Corporate Debtor, in respect of any third-party liability (including of Subsidiaries) till the Effective Date pursuant to approval of the Resolution Plan by the by the Adjudicating Authority shall stand settled/waived/written off/extinguished with respect to the Corporate Debtor/Resolution Applicant Granted. 5. ....
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....eiss Asset Reconstruction Company Ltd., the Hon'ble Supreme Court held in para 95(i) that once a Resolution Plan is approved, a creditor cannot initiate proceedings for recovery of claims which are not part of the Resolution Plan. This is binding law under Article 141 of the Constitution. 9. Any and all Legal/Administrative proceedings including but not limited to any notices, inquiry, investigation, adjudication proceedings, assessment proceedings, breach of contract, regulatory orders etc. initiated before any Court/Tribunal/Forum by or on behalf of any Financial Creditor/Operational Creditors/any other creditors/Government/Statutory Authorities to enforce any rights or claims against Corporate Debtor/Resolution Applicant shall stand immediately, irrevocable and unconditionally withdrawn, abated, settled, written off and/or extinguished in respect of the period prior to the Effective Date, and all such claims shall immediately, irrevocable and unconditionally stand settled/waived/written off/extinguished with respect to the Corporate Debtor/Resolution Applicant. In Ghanshyam Mishra & Sons Pvt. Ltd. v. Edelweiss Asset Reconstruction Company Ltd. decided on 13.04.2021 ....
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....le for revival of the Corporate Debtor. By and large, all the compliances have been done by the RP and the Resolution Applicant for making the Plan effective after approval by this Bench. 8.2. On perusal of the documents on record, we are satisfied that the Resolution Plan is in accordance with sections 30 and 31 of the Code and also complies with regulations 37, 38 and 39 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. No circumstances exist that militate against grant of approval for the Resolution Plan. 9. Orders 9.1. Therefore, subject to the observations made in this Order, we hereby accord our approval to the Resolution Plan. The Resolution Plan shall form part of this Order. 9.2. As far as the question of granting time to comply with the statutory obligations or seeking sanctions from governmental authorities is concerned, the Resolution Applicant is directed to do the same within one year as prescribed under section 31(4) of the Code. 9.3. Any relief sought in the Resolution Plan, where any contract, agreement, understanding, proceeding, action, notice etc. not specifically identified, or is for a future contingency, is, a....