TaxTMI 
TaxTMI 
2022 (7) TMI 299
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.... the resolution plan by the Committee of Creditors ["CoC"]. 3. This Application was moved by Mr. Aditya Kumar Tibrewal, Resolution Professional of Sri Balaji Forest Products Private Limited (CIN: U20101WB1997PTC085819), by invoking the provisions of Section 30(6) and Section 31 of the Insolvency and Bankruptcy Code, 2016 [hereinafter referred to as "the Code" or "IBC"] read with regulation 39(4) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 [hereinafter referred to as "CIRP Regulations"] for approval of a Resolution Plan in respect of Sri Balaji Forest Products Private Limited. 4. The underlying Company Petition in C.P. (IB) No. 518/KB/2018 was filed by Bank of India against Sri Balaji Forest Products Private Limited, the Corporate Debtor, under section 7 of the Insolvency and Bankruptcy Code, 2016 which was admitted vide order dated 18.10.2019 in C.P. (IB) No. 518/KB/2018. 5. Initially, the Applicant herein, Mr. Aditya Kumar Tibrewal (IBBI Reg. No. IBBI/IPA-002/IP-P00743/2017-2018/11249) was appointed as the Interim Resolution Professional. He was later confirmed as the Resolution Professional of th....
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.... Assets Class Valuer Fair Market Value (Rs./Cr.) Liquidation Value (Rs./Cr.) a) Land and Building Sandeep Goyal 37,70,92,757 24,20,50,020 Nand Kishore Bharswaj 32,59,00,000 26,07,20,000 Deepak Bansal 35,21,58,293 22,47,94,171 Aggregate Value (A) 36,46,25,525 23,34,22,096 b) Plant and machinery Alok Kaushik 2,84,90,257 2,02,74,126 Rajesh Gupta 3,84,69,319 2,26,39,592 Aggregate Value (B) 3,34,79,788 2,26,39,592 c) Financial Assets Gautam Maurya 36,940 36,940 Sandeep Agarwal 37,26,000 18,84,000 Aggregate Value (C) 18,81,470 9,60,470 Total Average Value (A+B+C) 39,99,86,783 25,70,22,157 11. It is stated that pursuant to expiry of the last date for submission of EoI by any prospective resolution applicant, one M/s. Swadeshi Marketing Private Limited filed an application being I.A. (IB) No. 1290/KB/2020 for consideration of their resolution plan by the Committee of Creditors. This Tribunal, vide its orde....
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.... Creditors of Sri Balaji Forest Products Private Limited in the 14th meeting of the CoC held on 30.12.2020. Pursuant to series of deliberations and negotiations amongst the members of the Committee of Creditors and the Resolution Applicant, the final resolution plan of the Resolution Applicant was duly put to voting on 14.02.2021 and the voting was kept open until 21.02.2021. However, one of the constituents of the CoC, namely, Bank of Baroda, requested the Applicant/ Resolution Professional to extend the last date for voting for a further period of 48 hours, i.e. till 23.02.2021, and the same was duly extended by the Applicant/ RP. However, on request of Bank of Baroda, holding 59.79% of voting rights in the Committee of creditors, the last date for voting was extended to 08.03.2021 till 08:00 p.m. 17. The Committee of Creditors duly approved the Resolution Plan of M/s. Swadeshi Marketing Private Limited by 93.46% voting on 09.03.2021. ICICI Bank Limited, being one of the members of the CoC, having voting share of 6.54% has voted against the approval of the Resolution Plan of the successful resolution applicant. 18. Applicant further submits that the Successful Resolution Ap....
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....t resolution plan confirms to such other requirements as may be specified by the Board. II. Measures, as may be necessary, for insolvency resolution, in terms of Regulation 37 of CIRP Regulations: Regulation Particulars Comments Reference Regulation 37 (a) & (b) Transfer/ sale of all or part of the assets of the Company to one or more persons; The Resolution Plan envisages transfer of land of the personal guarantor mortgaged with the financial creditors, defined in detail at Clause (II) @ pg. 116 of application, in favour of the Corporate Debtor upon approval of the resolution plan Clause (40) of Annexur e 3 @ pg. 181 Regulation 37 (ba) Restructuring of the Corporate Debtor, by way of merger, amalgamation and demerger The Resolution Plan does not contemplate restructuring through merger, amalgamation and/ or demerger Annexur e 1 @ pg. 167 Regulation 37 (c) The substantial acquisition of shares of the Corporate Debtor, or the merger or consolidation of the Corporate Debtor with one more person Please refer to Annexure 1 structure for acquisition of control over the Corporate Debtor by the Resolution Applicant Annexur e 1 @ pg. 167 ....
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....rate debtor. Post Submission and approval of the Resolution Plan, the RA shall have the right to make change in technology used which may be deemed more beneficial for the Company by them Clause (IX) @ pg. 156 Regulation 37 (l) Obtaining necessary approvals from the Central and State Governments and other authorities. It shall be the Resolution Applicant's sole duty to obtain all necessary approvals for the implementation of the resolution plan from the Central Government, State Government or any local authority, provided that the resolution professional agrees, undertakes and shall be obligated to sign and approve any document required for obtaining such approvals (by virtue of the order of the Adjudicating Authority approving the resolution plan) Clause (IX) @ pg. 156 III. Mandatory contents of Resolution Plan in terms of Regulation 38 of CIRP Regulations: Reference to relevant Regulation 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 (V) (5) (c) of the Resolution Plan & Clause (II) (C) (ii) & (iii) of the Resol....
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....under the Code. Clause (IX) of the Resolution Plan 22. Applicant submits that the Successful Resolution Applicant has submitted an affidavit of eligibility under Section 29A of the Code, which has been annexed as to the Application. 23. Applicant submits that the RP has submitted the certificate certifying and confirming the eligibility of the SRA under Section 29A of the Code, which has been annexed to the Application. 24. The Applicant has filed a compliance certificate in the prescribed form, i.e., Form 'H' incompliance with Regulation 39(4) of the CIRP Regulations which has been annexed as to with the Application. Details of Resolution Plan/ Payment Schedule 25. The Applicant submits the relevant information with regard to the amount claimed, amount admitted and the amount proposed to be paid by the Successful Resolution Applicant i.e. Swadeshi Marketing Private Limited, under the said Resolution Plan is tabulated as under: S. No. Particulars Amount Claimed (in Lakh) Amount Admitted (in Lakh) Amount in the Plan (in Lakh) 1 CIRP Cost 40.00 2 Financial Creditors - Secure....
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....laji Logs Products Private Limited to clarify on the rights of the corporate debtor on the approach road owned by Sri Balaji Logs Products Private Limited by emails dated 22.11.2020 and 23.11.2020. The Resolution Professional of Sri Balaji Logs Products Private Limited expressed his inability to locate any agreement with respect to right of usage of the land of Sri Balaji Logs Products Private Limited by the corporate debtor. 31. It was further apprised that the plant and factory premises of the corporate debtor shall be disconnected from the main highway in the absence of the right to usage granted to the corporate debtor from the approach road on the land of Sri Balaji Logs Products Private Limited. The only way through which the premises of the corporate debtor can be accessed from the highway is through the approach road, which is owned by Sri Balaji Logs Products Private Limited. 32. It was thereafter contended that in accordance with Section 4 of the Easements Act, 1882, an easement is a right which the owner or occupier of certain land possesses, as such, for the beneficial enjoyment of that land, to do and continue to do something, or to prevent and continue to preven....
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....ey and Murlidhar Pandey in respect of the landed premises as mentioned in the table herein above (under SL 3. Resolution Plan Amount and Payment Thereof starting from S.N. 1 to 40, shall also be transferred in the name of the Corporate Debtor. B. The approval of the resolution plan by the Hon'ble Adjudicating Authority will be binding on the personal guarantors pursuant to Section 31(1) of the Code and the personal guarantors Mr. Satyaprakash Pandey and Mr. Murlidhar Pandey as stakeholders in respect of landed premises as mentioned in the table herein above (under St. 3. Resolution Plan Amount and Payment Thereof) starting from S.N. 1 to 40 which are included as the assets of the CD In the IM are directed to immediately (1) pass the necessary Corporate Resolutions; (ii) provide all approvals, execute all documents, deeds, instruments, notices, certificates or power of attorney in the format provided by the resolution applicant of the Corporate Debtor; (iii) do all filings and take all actions and do all registration and/or other requirements to be effected for transfer of the landed premises under the applicable laws to the Corporate Debtor; (iv) to take all actions an....
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....orate Debtor for maximisation of value of its assets, including but not limited to the sale of all or part of the assets whether subject to any security interest or not." 40. As per Section 31 of the Insolvency and Bankruptcy Code, 2016, the approved Resolution Plan binds all the stakeholders, including the Corporate Debtor's Guarantors. Thus, the suspended board of directors and guarantors to the corporate debtor are bound by the approved resolution plan. In light of the above discussion, we believe that the objections raised by the suspended board of directors and guarantors to the corporate debtor are not sustainable. It is also pertinent to mention here that the suspended board of directors and guarantors are the persons who have been in complete controlled the corporate debtor till initiation of Corporate Insolvency Resolution Process. 41. It is also important to point out that land is an essential part of the corporate debtor's business. The entire plant and factory of the corporate debtor is being established on the said land sought to be transferred to the successful resolution applicant by virtue of the approval of the resolution plan. Therefore, it is an ess....
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.... until renewal/extension of such licenses and approvals. The relevant Governmental Authorities will provide a reasonable period of time after the Plan Effective Date in order for the RA to assess the status of the licenses and Governmental Approvals required by the CD and to procure that the CD applies for the same. Granted, subject to the law and applicable Regulations. 4 The Collector of Stamps, Revenue Department, of any State Government and the Ministry of Corporate Affairs to exempt the RA and the CD, from the levy of stamp duty and fees applicable in relation to this Resolution Plan and its Implementation, Including any stamp duty applicable on the issue of shares or NCDs by the CD. Granted, subject to the law and applicable Regulations. 5 The relevant State Pollution Control Boards to approve renewal of the consents to operate obtained by the CD under applicable provisions of the Water (Prevention and Control of Pollution) Act, 1974, Air (Prevention and Control of Pollution) Act, 1981. Granted, subject to the law and applicable Regulations. 6 All Governmental Authorities to waive all past Non-Compliances of the CD under Applicable Laws, and the CD,....
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....iver from tax dues including interest and penalty on such litigations. Granted. 13 All Governmental Authorities to waive the Non-Compliances of the CD prior to the Plan Effective Date, including but not limited to Companies Act 2013, the Industrial Disputes Act, 1947, and the relevant shops and establishment acts and rules, circulars and regulations of each of the above legislations Granted. 14 All non-compliances under the Companies Act 2013 (including but not limited to dematerialisation of shares by the CD and transfer of shares by the CD to the resolution applicant in physical form be permitted) of the CD prior to plan effective date to be waived off. Granted. 15 The Reserve Bank of India to confirm that, on and from the Plan Effective Date, all accounts of the CD shall stand regularised and their asset classification shall be "standard" for the purposes of all Applicable Laws Granted. 16 All Governmental Authorities to grant any relief, concession or dispensation as may be required for implementation of the transactions contemplated under the Resolution Plan in accordance with its terms and conditions. Granted. 17 On the Effective D....
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...., wherein the Hon'ble Supreme Court has held in para 95(i) that once a resolution plan is duly approved by the Adjudicating Authority under subsection (1) of section 31, the claims as provided in the resolution plan shall stand frozen and will be binding on the Corporate Debtor and its employees, members, creditors, including the Central Govt, any State Govt or any local authority, guarantors and other stakeholders. 23 Any other relief can be added based on any specific issue of the corporate debtor that may arise during the process, before the plan is being approved. We hereby clarify that the same is not conditional and subject to approval from NCLT. Granted, subject to the law and applicable Regulations. 24 All the state Government authorities may be directed to not to charge any transfer fee in respect of change of ownership/control of the Company in respect of land owned by the Corporate Debtor. Granted. 25 Any and all rights and entitlements of any actual or potential Third Party, whether admitted or not, due or contingent, asserted or un-asserted, crystallized or uncrystallized, known or unknown, disputed or undisputed, present or future. In relat....
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....red access to the plant. Granted. 30 The relevant Governmental Authorities shall not initiate any Investigations, actions or proceeding in relation to any noncompliances with Applicable Law by the Company during the period prior to the Closing Date. Neither shall the Resolution Applicant, nor the Company, nor their respective directors, officers and employee appointed on and as of the Closing Date be liable for any violations, liabilities, penalties or fines with respect to or pursuant to the Company not having in place requisite licenses and approvals required to undertake its business as per Applicable Law, or any non-compliances of Applicable Law by the Company. Further, the relevant Governmental Authorities will provide a reasonable period of time after the Completion Date, for the Resolution Applicant to assess the status of any non-compliances under the Applicable Law (including with respect to applicable environmental laws, directions or orders by the Ministry of Environment and Forest, permits clearances and forest related clearances) and to procure that the Company regularizes such noncompliances under the Applicable Law existing prior to the Completion Date. G....
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....permanently extinguished and written off in full with effect from the Effective Date. To give effect to such waiver and extinguishment, any contract, agreement, deed or document, whether oral or written, expressed or, implied, statutory or otherwise, pursuant to which any such dues, liabilities, obligations, claims, counterclaims, demands, actions, penalties, right, title or interest in claimed (other than as specifically mentioned herein) shall stand modified with effect: from the Effective Date without any further act, deed and approval of the Resolution Plan by Adjudicating Authority shall be deemed to be sufficient notice which may be required to be given to any person for such matters and no further notice shall be required to be given. Granted in terms of the Ghanashyam Mishra and Sons Pvt Ltd v Edelweiss Asset Reconstruction Company Ltd, wherein the Hon'ble Supreme Court has held in para 95(i) that once a resolution plan is duly approved by the Adjudicating Authority under subsection (1) of section 31, the claims as provided in the resolution plan shall stand frozen and will be binding on the Corporate Debtor and its employees, members, creditors, including the Centra....
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....ing disposal of all application including section 43,44,46, 49 and 66 and all other application which are filed by RP and pending for adjudication prior to approval of plan by the Hon'ble Adjudicating Authority considering the Judgment of the Hon'ble Delhi High Court in the case of M/s. Venus Recruiters Pvt Ltd Vs Union of India & others passed in case No. WP (C) 8705 of 2019 & CM (Appeal) 36029 of 2019. Granted. 40 LAND OF THE PERSONAL GURANTOR AS MENTIONED IN THE TABLE HEREIN ABOVE (UNDER SL 3. RESOLUTION PLAN AMOUNT AND PAYMENT THEREOF) STARTING FROM S.N. 1 TO 40 WHICH HAS BEEN MADE PART OF THE ASSETS OF THE CD IN THE IM AS STATED IN DETAIL HEREIN ABOVE: A. Upon approval of the plan by the Hon'ble Adjudicating Authority, such land shall stand transferred to the Corporate Debtor and the Corporate Debtor shall be vested to be in possession of and have absolute, good and marketable title, rights and interest in the said landed premises and without any further documentary filing registration, permission, approval or other requirement to be effected by the Corporate Debtor and the personal guarantees given by Satyaprakash Pandey and Murlidhar Pandey in r....
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....ter approval by this Bench. 46. On perusal of the documents on record, we are also satisfied that the Resolution Plan is in accordance with sections 30 and 31 of the IBC and also complies with regulations 38 and 39 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. 47. As far as the question of granting time to comply with the statutory obligations/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. 48. In case of non-compliance of this order or withdrawal of Resolution Plan, the CoC shall invoke the Performance Bank Guarantee furnished by the Resolution Applicant. 49. Subject to the observations made in this Order, the Resolution Plan in question is hereby approved by this Bench. The Resolution Plan shall form part of this Order. 50. 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. 51. The Moratorium imposed under section 14 shall cease to have effect from the date of this order. 52. T....