TaxTMI 
TaxTMI 
2021 (10) TMI 1329
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....(4) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 ("CIRP Regulations") for approval of the Resolution Plan in respect of Dimension Steel & Alloys Private Limited ("the Corporate Debtor"). 3. The underlying Company Petition in CP (IB) No. 832/KB/2019 was filed by Carbon Resources Private Limited against the Corporate Debtor herein under section 9 of the Insolvency and Bankruptcy Code 2016, which was admitted vide order dated 18.10.2019. 4. The 180-day period of CIRP of the Corporate Debtor had expired on 15.04.2020. After extension of 90 days as well as exclusion of 161 days granted by this Adjudicating Authority vide order dated 05.11.2020, the last date of 270 days of CIRP of the corporate debtor was 29.12.2020. Further an extension of 60 days was granted by this Adjudicating Authority vide order dated 12.02.2020. Thereafter, the last date of the CIRP of the corporate debtor post approval of exclusion of 52 days by this Adjudicating Authority vide order dated 16.03.2021 was further extended to 07.05.2021. 5. Ms. Meena Sureka was appointed as the Interim Resolution Professional ("IRP") vide order dat....
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....s 18.01.2020. Since no EOI was received, the Resolution Professional extended the last date of submission of EOI till 10.02.2020 and published the revised Form G in Financial Express-all editions and Aajkaal-Kolkata edition on 18.01.2020. Resolution Professional had sent an email on 07.02.2020 to all the CoC members for further extension of date for submission of Expression of Interest (EOI) for a period of another 21 days i.e., till 02.03.2020. Accordingly, last date of submission of EoI was extended to 02.03.2020 and it was published in Business Standard-all editions and Aajkal-Kolkata edition on 12.02.2020. However, the Applicant was of the view that more Expression of Interests needs to be scouted to reduce dependence over a single applicant. Therefore, the last time submission of EoI was further extended from 12.03.2020 to 19.11.2020 after receipt of approval by email of the Committee of Creditors. This was later ratified in the Ninth Meeting of Committee of Creditors and the Revised Form G was published in Business Standard-Kolkata Edition and Aajkaal- Kolkata Edition on 13.11.2020. 12. The Applicant submits that in response to the invitation for EoI, upto the last date, i....
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....ation for Liquidation of the corporate debtor. However, the fact that a Resolution Plan had been received on 05.02.2021 from C.P. Ispat Pvt. Ltd., a shortlisted resolution applicant, well after the cut-off date being 22.12.2020 be brought to the attention of the Adjudicating Authority for necessary directions. 15. The interlocutory application for exclusion of 52 days from the CIRP and the application filed by C.P Ispat Pvt Ltd, the Resolution Applicant were taken up for hearing on 16.03.2021. For reasons mentioned in the order dated 16.03.2021, a period of 43 days in submitting the Resolution Plan by the Prospective Resolution Plan was condoned and an exclusion of 52 days was granted from the overall period of 330 days to enable a decision to be taken on the Resolution Plan for the Corporate Debtor. 16. Thereafter the Resolution Professional convened the 12th CoC meeting on 18.03.2021 as directed by this Adjudicating Authority, wherein the Resolution Plan submitted by C.P. Ispat Pvt Ltd was placed before the CoC for consideration. 17. Modifications to the Plan were suggested at the 13th, 14th and 15th CoC meetings. The final revised Resolution Plan was received on 10.04.2....
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....r debts of the CD in the manner specified by the Board. Clause 6(b) at Page 5 of the Resolution Plan. (b) Plan must provide for repayment of debts of OCs in such manner as may be specified by the Board which shall not be less than (i) the amount payable to them in the event of liquidation u/s 53; or Clause 7(d) at Page 6 of the Resolution Plan. (ii) Plan must provide for repayment of debts of OCs in such manner as may be specified by the Board which shall not be not less than 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 order of priority in sub-section (1) of section 53, whichever is higher and Clause 7(d) at Page 6 of the Resolution Plan. (iii) provides for payment of debts of financial creditors who do not vote in favour of the resolution plan, in such manner as may be specified by the Board. Clause 8(i) at Page 11 of the Resolution Plan. (c) Management of the affairs of the Corporate Debtor after approval of the Resolution Plan. Clause 17(f) at Page 22 of the Resolution Plan. (d) Implementation and Supervision. Clause....
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....iate purpose; Not proposed by the Resolution Applicant. (l) change in portfolio of goods or services produced or rendered by the corporate debtor; Clause 12(e) at Page 17 of the Resolution Plan. (m) change in technology used by the corporate debtor; and Not proposed by the Resolution Applicant. (n) obtaining necessary approvals from the Central and State Governments and other authorities. Clause 18 at Page 24 of the Resolution Plan Mandatory contents of Resolution Plan in terms of regulation 38 of CIRP Regulations: Ref. to relevant Reg. Requirement How dealt with in the Plan 38(1) The amount due to the operational creditors under a resolution plan shall be given priority in payment over financial creditors. Clause 7(g) at Page 7 of the Resolution Plan. 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. Clause 20(a) at Page 26 of the Resolution Plan. 38(1B) A resolution plan shall include a statement giving details if the resolution applicant or any of its related parties h....
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..... The Applicant submits the relevant information with regard to the amount claimed, amount admitted and the amount proposed to be paid by the Resolution Applicant, i.e., C.P. Ispat Private Limited, under the said Resolution Plan is tabulated as under: (Amount in crore) Sl. No Particulars Amount Claimed Amount Admitted Amount provided under the Plan Term 1 CIRP Cost NIL NIL 1.23 Within 30 days from NCLT Approval date 2 Operational Creditors a) Operational Creditors (other than Workmen and Employees) 85.33 85.33 0.17 Within 60 days from NCLT Approval date b) Operational Creditors (Workmen and Employees) 0.02 0.02 0.02 Within 60 days from NCLT Approval date c) Other Operational Creditor - - 0.25 Within 60 days from NCLT Approval date Total (Operational Creditors) 85.35 85.35 0.44 Within 60 days from NCLT Approval 3 Financial Creditors 245.55 245.02 19.03 Overall within 18 months from NCLT Approval date, off which Rs8.18crore within 60 &n....
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...., current liability as proposed in the Resolution plan, short term & long term borrowings to the tune it is proposed in the Resolution plan and all these will be adjusted through capital reserve/ reserve and surplus or as per guidance note, if any issued by the Institute of Chartered Accountants of India and applicable accounting standards. Due to this effect the Resolution Applicant shall not be liable to pay any income tax or other statutory liability. It is for the Successful Resolution Applicant to convince the Income Tax Authorities in this regard. No orders of this Adjudicating Authority are necessary in this regard. 3. The Resolution Applicant shall be liable to pay Income Tax, GST, VAT, SEZ payments if any and other statutory dues which occur or accrue only as a going concern after the Approval Date. In Ghanshyam Mishra & Sons Pvt Ltd v. Edelweiss Asset Reconstruction Company Ltd, [2021 SCC OnLine SC 313 decided on 13.04.2021.] the Hon'ble Supreme Court held 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 app....
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....LT approving this Plan and the Company should not be liable to pay any amount against such demand. Further, any notice(s) proposing to initiate any proceedings against the company in relation to the period prior to the date of NCLT order and pending on that date, shall be considered withdrawn and should not be proceeded against. Post the order of the NCLT, no re-assessment / revision or any other proceedings under the provisions of the Income Tax Act or any other statutory Act should be initiated on the Company in relation to period prior to acquisition of control by the Resolution Applicant and any consequential demand should be considered non-existing and as not payable by the Company. Any proceedings which were kept in abeyance in view of process under the Code or otherwise should not be revived post the order of NCLT. All cases filed against the company should be deemed to be disposed off or withdrawn without any liability either on the company or on resolution applicant. In Ghanshyam Mishra & Sons Pvt Ltd v. Edelweiss Asset Reconstruction Company Ltd, [2021 SCC OnLine SC 313 decided on 13.04.2021] the Hon'ble Supreme Court held that once a Resolution Plan is approved, a....
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.... civil or criminal, by the Central Bureau of Investigation, the Enforcement Directorate or any other enforcement agency), in relation to any period prior to the Completion Date or arising on account of the acquisition of control by the Resolution Applicants over the Corporate Debtor pursuant to this Resolution Plan shall be deemed to be withdrawn or dismissed and all liabilities or obligations in relation thereto, whether or not set out in the balance sheets of the Corporate Debtor or the profit and loss account statements of the Corporate Debtor, will be deemed to have been written off in full and permanently extinguished by virtue of the order of the NCLT approving this Resolution Plan and the Company or the Resolution Applicants shall at no point of time be, directly or indirectly, held responsible or liable in relation thereto. By virtue of the order of the NCLT approving this Resolution Plan all new inquiries investigations, whether civil or criminal, notices, suits, claims, disputes, litigation, arbitration or other judicial, regulatory or administrative proceedings will be deemed to be barred and will not be initiated or admitted against the Corporate Debtor in relatio....
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.... 14. As the Resolution Applicants will acquire control over the Company pursuant to the order of the NCLT and not pursuant to the usual acquisition process which would ordinarily include a detailed due diligence and representation, warranties and indemnities in relation to the affairs of the Company from its existing promoters, the Resolution applicants, may take some time to discover all the non-compliances that may exist in relation to the Company on the date of acquisition of control by the Consortium over the Company. This is the same as Sl. No.9. 15. Any award/order/judgment/decree in any court of law/forum/panel of arbitrators or any other adjudicating authority in India as well as outside India against the company shall stand discharged. No execution proceeding for any such award/order/ judgement/decree shall remain pending or can be given effect to or allowed against the company in India or elsewhere. In Ghanshyam Mishra & Sons Pvt Ltd v. Edelweiss Asset Reconstruction Company Ltd, the Hon'ble Supreme Court held that once a Resolution Plan is approved, a creditor cannot initiate proceedings for recovery of claims which are not part of the Resoluti....
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....r. 36. The Resolution Plan is binding on the Corporate Debtor and other stakeholders involved so that revival of the Debtor Company shall come into force with immediate effect. The Electricity Service Provider is hereby directed to restore the electricity connection to the premises of the Corporate Debtor immediately upon receipt of the amount earmarked to it under the Resolution Plan, so that the operations of the Corporate Debtor can be restarted without any delay. The Corporate Debtor under the new management shall pay the applicable security deposit as for a new connection 37. The Moratorium imposed under section 14 shall cease to have effect from the date of this order. 38. The Resolution Professional shall submit the records collected during the commencement of the proceedings to the Insolvency & Bankruptcy Board of India for their record. 39. Certified copy of this Order be issued on demand to the concerned parties, upon due compliance. 40. Liberty is hereby granted for moving any application if required in connection with implementation of this Resolution Plan. 41. A copy of this Order shall be filed with the Registrar of Companies, West ....