TaxTMI 
TaxTMI 
2021 (3) TMI 1366
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.... LLP", 2. The Corporate Insolvency Resolution Process ("CIR Process") of the corporate debtor was initiated vide order of this Tribunal dated 29.05.2018 upon admission of an application filed by the Operational Creditor under Section 9 of the Code and Mr. Pramod Kumar Sharma was appointed as the IRP who was later confirmed as RP during 2nd COC meeting held on 07.07.2018. 3. It is stated by the Ld. Counsel for the applicant that the applicant has prepared a list of creditors after verification of claim received pursuant to the public announcement made within 7 days from the last date of receipt of the claims and made the list of creditors available for inspection. 4. Further the RP has filed an interlocutory application as IA No. 288/2018 before this Tribunal for extension of CIR Process by 90 days beyond 180 days which was approved by this Tribunal. 5. Further stated that in spite of tremendous efforts and receipt of no. of EOI's no resolution was submitted and in absence of any resolution plan, the applicant convened 91h COC meeting on 18% February,2019 in which COC approved the Resolution for liquidation of the corporate debtor and authorized the Resolution Profes....
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.... rights has passed the Resolution for approval of the Resolution Plan and to present the Application before this Adjudicating Tribunal to approve the same. 10.In objection to the approved Resolution plan, the counsel for the operational creditor i.e M/s Rana Saria Polypack Pvt. Ltd has stated that they are neither against the approval of Resolution Plan nor does it wish to stall the CIRP of the Corporate Debtor. But CoC has approved the Plan without considering the legality of the plan as the Resolution Plan approved by the COC makes a provisions of Rs. 8 crores to meet the CIRP expenses however, RP has failed to furnish the categorical item wise breakup or complete details of CIRP cost to the extent of Rs.8 crores thus making it an exorbitant amount. Further submitted that the Resolution Plan is also silent about the current assets of the Corporate Debtor and is also not in accordance with the settlement agreement dated 13.11.2017 which was entered into by the promoter of the Corporate Debtor from the business by selling their assets/shares, waiving of their rights and relinquish their investments and outstanding dues in the Corporate Debtor to meet the third party allegations.....
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....been considered by the successful Resolution Applicant. Further the refinery plant is non operational since June, 2017 and there are no major current assets available with the corporate debtor which can be realized in the ordinary course of business. Thereby, the plan had not assigned any value to the current assets and the same was approved by the COC. It is further submitted that the Resolution Plan submitted by successful Resolution Applicant is in no manner bound to be in accordance with the settlement agreement as claimed by the Operational Creditor as the agreement is over 3 years old and has lost its commercial and legal validity and Resolution applicant and COC are governed under the provisions of IB Code and not bound by the private agreement between the shareholders. Further, the working is mainly meant for procurement and inventory of raw sugar, packing materials, coal, consumables and financing of finished goods and receivables for operating business, payments to the suppliers is required after the revival period of Corporate Debtor. All the Operational Creditors, subject to their quality, competitiveness and willingness can become the supplier, however no amount can be....
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.... as approved by the committee of creditors under sub-section (4) of section 30 meets the requirements as referred to in sub-section (2) of section 30, it shall by order approve the resolution plan which shall be binding on the corporate debtor and its employees, members, creditors, guarantors and other stakeholders involved in the resolution plan. (2) Where the Adjudicating Authority is satisfied that the resolution plan does not confirm to the requirements referred to in sub-section (1), it may, by an order, reject the resolution plan. (3) After the order of approval under sub-section (1),- (a) the moratorium order passed by the Adjudicating Authority under section 14 shall cease to have effect; and (b) the resolution professional shall forward all records relating to the conduct of the corporate insolvency resolution process and the resolution plan to the Board to be recorded on its database." 17. It is observed that the Resolution Professional has examined the Resolution Plan and has found it to be in compliance with Section 30 (2) of the IBC read with Regulation 38 of the CIRP Regulations. In accordance with Regulation 39 (4) of the CIRP R....
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....s formation and functioning of regarding the the Corporate Debtor, its business and affairs, as a going approval of the resolution plan concern after the as set forth in Clause 6 of the Resolution Plan d) Implementation and Supervision of resolution plan The Implementation Provisions Are Mentioned In The Resolution Plan And Outlined Clauses 7 The Implementation Of The Plan Until The Final Payment Shall Be Jointly Supervised By The Monitoring Committee Till The Final Payment Of Resolution Plan. The Committee shall comprises of Monitoring • a representative or an advisor of the financial creditors (COC) other than related party) • a representative of the resolution applicant and • Resolution Professional e) Plan does not contravene any of the provisions of the law for the time being in force. The Resolution Plan submitted by the Resolution Applicant does not contravene any provisions of law for the time being in force. f) Confirms To Such Other Requirements As May Be Specified By The Board The Resolution Plan confirms to all such other requirements as may be specified by the Board under the Code and....
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....le (b) It is feasible and viable (c) It has provisions for its effective implementation (d) It has provisions for approval required and the timelines for the same (e) The resolution applicant has the capability to implement the resolution plan a) The Resolution applicant has addressed the cause of default of the Corporate Debtor as set forth in Clause 29 (i) & (iii) page no. 59-60 of the Resolution Plan. b) The Resolution Plan does not contain Clause 29(iv) at page 61 of the Resolution Plan. c) The Resolution Applicant has provided for the effective implementation under Clause 19 at page 57 of the Resolution Plan. d) The Resolution Applicant has provided provisions for approvals required and the timeline in Clause 12 at page 41 of the Resolution Plan. e) The Resolution Applicant has provided the statement in regards to its capability as set forth in Clause 5 at page 37 of the Resolution Plan. 39(2) The RP has filed applications in respect of transaction observed, found or determined by him Yes 20. That the compliance certificate form H to the Resolution Plan is being filed before the Hon'ble Adjudicating Authority within time. A Compliance....
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....hin 6 Months of vesting date - 8.00 - Refurbishment, Repairs of maintenance deposits and start-up expenses) Witkin 6 months of vesting date 27.00 Working Capital Margin Within 6 months of vesting date - - 81.00 Working capital borrowing/expansion It is stated that Fixed Deposit of Rs. 2.50 Crores shall be made in escrow account (opened on the approval of COC by RP) as mentioned in Clause 3.12 of RERP and the same shall be pledged as performance guarantee with resolution professional along with accepted Letter of Intent. Out of this Rs. 2.50 Crores Fixed Deposit, upfront Payment -1 shall be made after deducting Rs. 1.50 Crores of pledged fixed deposit amount. The last installment to be paid within 12 months of vesting date shall be made after deducting Rs. 1.00 Crore of pledged fixed deposit amount. The resolution Applicant will pay the installment amount at any time at interest rate of 8 % P.A. No pre-payment charges or penalty shall be charged. 22. Further as per the terms and condition of the resolution plan "The Schedule of payment of the Resolution Applicant Amount is as follows: S. No. Particulars Rs. (In cror....
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....ettled that equitable treatment can be claimed only by similarly situated creditors. Operational Creditors stand at a different footing as compared to Financial Creditors. They are entitled to receive a minimum payment being not less than liquidation value, which does not apply to Para 77 read in juxtaposition with para 76 of the judgment delivered by the Financial Creditors. Hon'ble Apex Court in "Swiss Ribbons Private Limited v. Union of India (2019) 4 SCC 1" dealing with this aspect of legal proposition clearly lays down that there is a difference in payment of the debts of Financial and Operational Creditors, Operational Creditors having to receive minimum payment, being not less than the liquidation value, which does not apply to Financial Creditors. This is elucidated in para 56 of the judgment rendered by the Hon'ble Apex Court in "Committee of Creditors of Essar Steel India Limited vs. Satish Kumar Gupta and Ors - Manu/ SC/ 1577/2019", which reads as under: - "56. By reading paragraph 77 de hors the earlier paragraphs, the Appellate Tribunal has fallen into grave error. Paragraph 76 clearly refers to the UNCITRAL Legislative Guide which makes it clear beyon....
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....the Code, is considered as nil but Resolution Plan provided for payment @ 18.84% of claim admitted amount of the operational creditors which is more than the liquidation value and all the operational creditors has been treated equally thus the prayer of the operational creditor to modify the Resolution Plan to the extent of claim of RPPL is not sustainable. 26. The RP as required under regulation 39(4) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 certified that the contents of the resolution plan meets with the requirements of the IBC and the regulations thereto and that the resolution plan has been approved by the CoC in the manner prescribed under the IBC. 27. Further referring to the Judgment of The Hon'ble Supreme Court in the case of "K. Sashidhar vs. Indian Overseas Bank" (2019 SCC Online SC 257) at para 49 of the Judgement held as below: "49. The argument, though attractive at the first blush, but if accepted, would require us to re-write the provisions of the I&B Code. It would also' result in doing violence to the legislative intent of having consciously not stipulated that as....