TaxTMI 
TaxTMI 
2022 (6) TMI 542
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.... CP (IB) No. 1138/MB/2017 on the applications of the Appellant. The Adjudicating Authority vide the impugned order was pleased to dismiss the Company Application being IA No. 1327 of 2020 filed by the Appellant and partly allowed the Company Application being IA No. 661 of 2020 filed by the Appellant. 2. The Appellant has sought the following relief: (a) Set aside the direction of the Ld. Adjudicating Authority (in paragraph 17 & 20 of the order dated 30.04.2021) passed vide impugned order dated 30.04.2021 qua levying of interest @ 12% per annum upon the Appellant from the date it became due and payable as per the Resolution Plan and directing the Appellant to pay the same; (b) Direct the Respondent to take immediate steps and expedite removal of all attachments, liens, charges, encumbrances etc. from the assets of the Corporate Debtor. (c) Set aside the direction contained in the impugned order (paragraph 18) for fastening the liability to remove the attachment, lien, charge, encumbrance etc. over the assets of the Corporate Debtor upon the Appellant; (d) Pass order permitting the Appellant to make payment of the balance amount under the Reso....
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....n error that had stated to have been occurred in the order dated 26.11.2019. 27.01.2020 Ld. Adjudicating Authority was pleased to allow the said application (M.A. No. 3977 of 2019) filed by the Respondent and carried out certain rectification in the order dated 26.11.2019. Accordingly, the time period mentioned in paragraph 18(g) of the order dated 26.11.2019 was revised to 3 months from the date of approval of the Resolution Plan by the Ld. Adjudicating Authority in place of 30 months as originally mentioned in the order dated 26.11.2019. The Appellant was never served with the copy of the MA No. 3977 of 2019. 11.02.2020 The Respondent sent to the Appellant a copy of the order dated 27.01.2020 when the Respondent was enquired about any further proceedings/orders passed by the Ld. Adjudicating Authority. 20.02.2020 Appellant was constrained to approach the Ld. Adjudicating Authority by filing an application being I.A. No. 661 of 2020 requesting the Ld. Adjudicating Authority to pass certain orders/directions including order that the time period mentioned in paragraph 18(g) of the order dated 25.11.2019 be reckoned from 27.01.2020 as the order dated 27.01.2020 was ....
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.... being the Successful Resolution Applicant is entitled to take over the assets and properties of the Corporate Debtor free from attachments, charges, encumbrances, liens and it was the duty of the Resolution Professional Mr. Anil Kohli of Corporate Debtor to implement the plan and give the assets of the Corporate Debtor free from attachments, Liens, Charges, encumbrances. 6. The Applicant has also submitted that it will be a miscarriage of justice and take over the assets of the Corporate Debtor with the attachments, liens, encumbrances and take legal steps to remove them. The basic responsibility to implement this is on the Resolution Professional and hence the present Appeal. 7. The Appellant in this Appeal is also aggrieved with the Adjudicating Authority as it has allowed partly the Company Application being IA No. 661 of 2020 particularly the direction giving the Appellant to pay interest @ 12% p.a. from the date it became due and payable as per the Resolution Plan. 8. It was also submitted by the Ld. Sr. Counsel of the Appellant that payment of interest ordered to be paid by the Appellant is contrary to the terms of Resolution Plan and also contrary to the Magnate of....
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....so stated that the Appellant filed an application IA No. 1327 of 2020 pointed out the new development in the matter and the problem related to the existence of the attachments, liens, charges, encumbrances, courts cases on the assets of the Corporate Debtor and uncertainty about the lifting of all such encumbrances etc. 15. Ld. Sr. Counsel of the Appellant went on to submit that the HDFC Bank which has agreed to fund Resolution Plan refused to fund due to existence of such attachments/encumbrances etc. HDFC Bank vide its letter dated 10.03.2020 also informed that the Appellants proposal for funding could be processed only after receipt of NOC from the MPID Court and ED etc. and that the charges on the property are satisfied. The Appellant vide IA No. 1327 of 2020 as stated above also highlighted all the problems of attachment of properties by ED, Mumbai under Prevention of Money Laundering Act and various Constitutional Courts etc. 16. It was also stated emphatically by the Ld. Sr. Counsel that the Resolution Plan approved by the order dated 26.11.2019 also granted liberty for filing Miscellaneous Application if required in connection with implementation of the Resolution Pla....
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....s certain typographical errors had inadvertently crept into the order dated 26.11.2019 passed by the Adjudicating Authority and accordingly, the Adjudicating Authority was constrained to correct such error which were rectified by order dated 27.01.2020 in MA No. 3977 of 2019 and that's why time granted for making payment under the Resolution Plan was permitted to be reckoned from 27.01.2020 instead of 26.11.2019. (e) The Ld. Sr. Counsel for R-1/RP has also submitted that the Appellants stand to arrange funds keeping in mind 30 months time for making the payment is on the face of the Plan is wrong as the Resolution Plan itself an ambiguously mentions that the payment of balance amount will be made within three months from the approval of Resolution Plan by Adjudicating Authority. (f) The Appellant himself has signed the unconditional Letter of Intent dated 04.06.2019 issued pursuant to the approval of the Resolution Plan by the CoC, and therefore the Appellant is estopped in law from raising any condition precedent to make payment under the terms of the approved Resolution Plan. (g) Section 32(A) of the Code already provides relief to the Appellant qua the....
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.... the Appellant/ Respondents, the record produced before us, the extant provisions of the law on the subject including the citations available/ produced by the parties at different point of time and are having following observations: (a) It is not in dispute that the Resolution Plan has not been approved on 26.11.2019. (b) It is also not in dispute that the Resolution Plan per se was not mentioning three months time period for releasing the balance payment from the date of the approval of the Resolution Plan. (c) The correction of the mistake apparent from record erupting in the impugned order of 30 months instead of 3 months and should also not be a bone of contention because typographical error is a part of human error and needs correction and so almost all the laws allow the same including the NCLT Rules 2016 (clause 154). Any clerical or arithmetical mistakes in any order of the tribunal or error arising from any accidental omission of slip may at any time can be corrected by the tribunal on its own motion. Hence, for such correction if notice has not been issued which is not an irregular activity or unenforceable activity. 25. It is no doubt a matt....
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....by the Adjudicating Authority under section 31, if the resolution plan results in the change in the management or control of the corporate debtor to a person who was not- (a) a promoter or in the management or control of the corporate debtor or a related party of such a person; or (b) a person with regard to whom the relevant investigating authority has, on the basis of material in its possession, reason to believe that he had abetted or conspired for the commission of the offence, and has submitted or filed a report or a complaint to the relevant statutory authority or court: Provided that if a prosecution had been instituted during the corporate insolvency resolution process against such corporate debtor, it shall stand discharged from the date of approval of the resolution plan subject to requirements of this sub-section having been fulfilled: Provided further that every person who was a "designated partner" as defined in clause (j) of section 2 of the Limited Liability Partnership Act, 2008 (6 of 2009), or an "officer who is in default", as defined in clause (60) of section 2 of the Companies Act, 2013, or was in any manner in charge of, or responsibl....
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....pplicable to such corporate debtor or person, shall extend all assistance and co-operation to any authority investigating an offence committed prior to the commencement of the corporate insolvency resolution process."] 28. It is also not in dispute that the object of the IBC would be defeated if the responsibility for prior offences is put on the Resolution Appellant. The Resolution Appellant is supposed to get a clean slate and all dues of the Corporate Debtor prior to commencement of CIRP stand extinguished. 29. It is also necessary to extract from the Resolution Plan as available in the 'Appeal Paper Book' from pg. 158 to 159 that the Successful Resolution Applicant is supposed to get all the assets of the Corporate Debtor free from any encumbrances and would be available for use by the Resolution Applicant without any fetters or brevity and clarity. The Terms and Conditions appearing at pg. 158 to 159 is given below: "G. Terms and Conditions Shareholding The Ownership along with 100% shareholding without any interference of existing promoters/existing shareholders (individual as well as Corporate)/Financial Creditors shall be transferred to Reso....
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....is not expected to be fully paid out from the value of assets, any claim related to statutory dues (taxes/duties/cess, etc) arise in future pertaining to business/event/transactions before acquisition of the Corporate Debtor shall not be paid by the Resolution applicant. Further, no payment shall be made by Resolution Applicant in future post acquisition of the Corporate Debtor, if claims arise on account of past transactions/business made pre acquisition of the corporate debtor. Any other dues and Claims As per Information Memorandum, 17 matters are pending before various judicial forums (9 NSEL related matters+ 2 Central Excise related matters + 1 Enforcement Directorate+ 2 shareholders related matter+1 statutory Auditor related matter+ 2 Corporate Creditor related matter). There are two Income Tax related matters against the corporate debtor. The claims of two corporate creditors matter have been admitted by the Resolution Professional as per the Information Memorandum and are accordingly addressed in the Financial Proposal accompanied. Claims arising from the Operational Creditors are also addressed in the Financial Proposal. However, claims arising f....
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....ial and Operational Creditors is given below: Financial Creditors Admitted claim (Rs.) Amount Provided under Plan (Rs.) State Bank of India 783,19,47,562 68,35,52,204 Bank of Baroda 109,23,98,141 9,53,41,695 Canara Bank 56,04,69,901 4,89,16,369 IDBI Bank Ltd. 30,08,92,804 2,62,61,149 Total 983,67,64,090 85,40,71,417 Operational Creditors Admitted Claim (Rs.) Amount provided under Plan (Rs.) Punjab State Power Corporation 60,03,020 19,176 Additional Commissioner of ITP (Income Tax) 30,70,41,687 9,80,824 Total 31,30,44,707 10,00,000 (c) It is submitted by the Resolution Professional that the net worth of the Resolution Applicant is around Rs. 30.29 Crore. The Resolution Applicant holds property worth Rs. 16.51 Crore. The Resolution Applicant intends to get the funding of the Resolution Plan from HDFC Bank Ltd. In support of the same, the Resolution Applicant has also furnished an Expression of Interest for funding issued by HDFC Bank Ltd. The Letter dated 14.01.2019 issued by HDFC Bank Ltd. For funding of loan of Rs. 77 Crore is annexed in the application. The RP further submi....
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....Applicant has got the Corporate Debtor in less than 10% of the value of the admitted claim practically 90% is the waiver. However, this issue cannot be reckoned now but it can have a leverage impact on levy of interest @ 12% p.a. for delay in releasing the balance payment. The interest is to be paid for the period from 27.01.2020 to 15.11.2021. As it looks from the Written Submissions of the SBI submitted to the Registry of this tribunal vide diary no. 33701 dated 21.02.2022. This period also comprises the period resulting from global pandemic covid-19. 32. Since the Successful Resolution Applicant/Appellant has paid the full amount so now there is no question of going back and hence, perhaps this is the area where the question involved is now as far as whether the interest rate be reduced to be made at par of RBI base rate for lending to banks with additional 2% margin subject to a limit of 12% p.a. or otherwise. Hence, we hereby approve a rate of interest of RBI base rate for lending to Banks + 2% margin as per the rate of interest applicable between 27.01.2020 to 15.11.2021 subject to a limit of 12% p.a. 33. It has been made amply care in the "CoC of Essar steel India Ltd.....