TaxTMI 
TaxTMI 
2022 (6) TMI 1326
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.... (IB) No.228/BB/ 2018 filed by the Operational Creditor i.e. Indu Corporation Private Limited u/s 9 of the Code for initiation of the Corporate Insolvency Resolution Process (CIRP) in respect of the Corporate Debtor, namely, M/s. Bhuwalka. Steel Industries Limited, was admitted by this Adjudicating Authority, vide order dated 08.04.2019, and the CIRP of the Corporate Debtor was initiated by appointing Mr. Shivadutt Bannanjee as the Interim Resolution Professional and he was directed to take necessary actions in accordance with relevant provisions of the Code and Regulations made thereunder. (b) Pursuant to Regulation 6 of the IBBI (IRP for Corporate Persons) Regulations, 2016, the IRP had issued public announcement in Form-A in 'Financial Express' (English) and 'Vishwavani' (Kannada) on 18.04.2019 calling upon various creditors of the Corporate Debtor to submit their claims with proof on or before 29.04.2019. (c) During the 1st Committee of Creditors (CoC) meeting held on 06.05.2019, it was informed that the Committee is constituted with two Financial Creditors based on the claims received i.e. Canara Bank (68.72% voting share) and IDBI Bank (31.28% voting share).....
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....lation 35 of the CIRP Regulations. The average liquidation value of the Corporate Debtor as arrived at by the registered Valuers is Rs.91.25 Crores arid the fair market value is Rs. 131.25 Crores. Copy of the valuation report has been annexed as Annexure-8. (i) It is stated that 5^th meeting of the CoC was conducted on 31.10.2019, where the Committee was re-constituted as under: Sr.No. Name of the Financial Creditor Voting Percentage 1. Canara Bank 65.69% 2. IDBI Bank 29.89% 3. SBI Global Factors Limited 4.24% 4. Indian Overseas Bank 0.18% In the said meeting, the time limit for submission of the Resolution Plan was further extended upto 06.11.2019. However, the RP informed the Committee that one Resolution Plan had been received. The Committee directed the RP to keep the same under seal and to inform the concerned Resolution Applicant that they are free to submit the revised Resolution Plan, if any, before the due date. (j) In the said meeting, the RP placed the two new EoIs received from M/s.Saligram Power & Steel Pvt. Ltd. and G.K. Ispat Pvt. Ltd. on 30.10.2019 and 29.10.2019, respectively, before ....
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....mary of the Resolution Plan(s) received from the Resolution Applicants, which is as follows: Name of the Resolution Applicant Amount proposed for the Revival (Rs.) Upfront Cash (Rs.) Time period within which the deferred payments to be made PP Metallix 40 Crores 4 Crores 1-3 years Starteck Finance Ltd. 60 Crores 20 Crores 1 -6 years Bipin Textile Processing Industries Limited 69.24 Crores 2 Crores 1-7 months (o) CoC in its meeting held on 21.01.2020 discussed the representations made by the respective Resolution Applicants and decided that the Resolution Plans needs to be revised and granted time till 29.01.2020 for submission of the same. CoC in its meeting held on 30.01.2020 was briefed about the revised bids and the terms of which are as follows: CoC in its meeting held on 30.01.2020 inter alia observed as under: "The Committee of Creditors preliminary observed the conditional offer made by one of the Resolution Applicants i.e. M/s. PP Mcta lux and informed the Resolution Professional to write to them requesting them to revise the plan and making it unconditional stating the amount that will be ....
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....eceived certain claims after the Resolution Plan has been opened. The RP hereby admits those claims which are as follows: (t) The RP certified that the Resolution Plan complies with all the provisions of the Code, the CIRP Regulations and further does not contravene any of the provisions of the law for the time being in force. Further, a copy of the Form H - Compliance Certificate under Regulation 39(4) of the IBBI (IRP for Corporate Persons) Regulations, 2016 along with an affidavit is annexed as Annexure 24. Also, the Resolution Applicant i.e. Starteck Finance Ltd. has submitted an Affidavit pursuant to Section 30(1) of the Code confirming its eligibility u/ s 29A of the Code to submit the Resolution Plan and the same has been annexed as Annexure 25. (u) Summary of the Financial Proposal of Resolution Plan is as under: (v) The Resolution Applicant has sought certain reliefs and concessions as set out in the Resolution Plan (Annexure 26) by inter alia stating that all creditors of the Corporate Debtor shall withdraw all legal proceedings commenced against the Corporate Debtor in relation to claims, including all criminal proceedings, arbitral proceedings....
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....for voting. 6. The details of stakeholders and the amounts provided for them under the Resolution Plan given in Para No.7 of Form H are as under: 7. The compliance of the Resolution Plan has been given in Para No.9 of 8. The approval of the resolution plan has been sought under Section 31(1) of the Code, which reads as under: "If the Adjudicating Authority is satisfied that the resolution plan 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, including the Central Government, any State Government or any local authority to whom a debt in respect of the payment of dues arising under any law for the time being in force, such as authorities to whom statutory dues are owed, guarantors and other stakeholders involved in the resolution plan. Provided that the Adjudicating Authority shall, before passing an order for approval of resolution plan under this sub-section, satisfy that the resolution plan has provisions for its effective im....
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....provisions of this clause shall also apply to the corporate insolvency resolution process of a corporate debtor (i) where a resolution plan has not been approved or rejected by the Adjudicating Authority; (ii) where an appeal has been preferred under section 61 or section 62 or such an appeal is not time barred under any provision of law for the time being in force; or (iii) where a legal proceeding has been initiated in any court against the decision of the Adjudicating Authority in respect of a resolution plan; (c) provides for the management of the affairs of the Corporate debtor after approval of the resolution plan; (d) The implementation and supervision of the resolution plan; (e) does not contravene any of the provisions of the law for the time being in force (f) conforms to such other requirements as may be specified by the Board." 12. The compliance of Section 30(2) of the Code is given in Para No.9 of Form- H (supra). The same is being further examined as under: Section 30(2)(a): As regards the payment of insolvency resolution process costs, the Resolution Plan at Page Nos.302 and 318 of the Application ....
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....e powers of the board of directors vested in it. With effect from the Plan Approval Date, the supervision of management of the affairs of the Corporate Debtor shall inter alia vest with the Monitoring Committee. The business and operations of the Corporate Debtor shall be managed, supervised and controlled jointly by the Insolvency Professional (who shall act in accordance with the instructions of the Monitoring Committee) and the Monitoring Committee in good health, in trust and for the benefit of the Creditors and in furtherance of acquisition of the Corporate Debtor by the Resolution Applicant pursuant to this Resolution Plan. An amount of Rs.42 Crores towards fresh funds infusion to be made by the Resolution Applicant to meet working capital / property development expenses I capital requirements of the Corporate Debtor. Section 30(2)(d): As regards the implementation and supervision of the Resolution Plan, it is inter alia stated in Page No.316 of the Application that during the period from the Plan Approval Date till the Effective Date, the Insolvency Professional and Monitoring Committee shall supervise implementation of the Resolution Plan; support and assist the Resoluti....
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....e in good health, in trust and for the benefit of the Creditors and in furtherance of acquisition of the Corporate Debtor by the Resolution Applicant pursuant to this Resolution Plan. 14. As regards the Sources of Funding, at Page No. 324 of the Application, the sources of funds required to meet the payment obligations of the Resolution Applicant under this Resolution Plan have been set out herein below: 15. We have discussed above that the requirements under section 31(1) of the Code are satisfied in the present case. In para 4 of Form H, the Resolution Professional has certified that the Resolution Plan complies with all the provisions of the Insolvency and Bankruptcy Code, 2016 (Code), the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (CIRP Regulations) and does not contravene any of the provisions of the law for the time being in force. The RP has also certified that the Resolution Applicant i.e. Starteck Finance Limited has submitted an affidavit pursuant to section 30(1) of the Code confirming its eligibility u/s 29A of the Code to submit the Resolution Plan and the contents of the said Affidavit ....
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....e supervision of management of the affairs of the Corporate Debtor shall inter alia vest with the Monitoring Committee and that the Parties shall implement the Transaction Structure as set out in Section VI of the Resolution Plan. The Resolution Applicant/ Corporate Debtor shall make payment of the Financial Package to the Financial Creditors in the designated bank account as per the terms of the Resolution Plan. 19. Pursuant to Regulation 38(3)(d) of the CIRP Regulations regarding whether the Resolution Plan has provisions for approvals required and the timeline for the same, it is inter alia stated in the Resolution Plan (Page No.317 of the Application) that the Resolution Plan will be approved by the CoC and after the CoC approves the same, the RP shall file the Resolution Plan with the Adjudicating Authority. The Adjudicating Authority shall approve the Resolution Plan in accordance with the provisions of Sec. 31(1) of the Code. 20. Pursuant to Regulation 38(3)(e) of the CIRP Regulations regarding whether the Resolution Applicant has the capability to implement the Resolution Plan, it is inter alia stated in the Resolution Plan (Page No.301 of the Application) that the ma....
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....riate steps in accordance with Law in respect of the said reliefs and concessions and the public authorities / government authorities / any other party would duly consider the said requests / applications of the Resolution Applicant in accordance with Law. 24. In the circumstances and for the aforesaid reasons, the instant IA bearing IA No.132 of 2020 is allowed and accordingly, the Resolution Plan dated 18.02.2020 ('Resolution Plan9 as approved by the CoC and submitted by M/s. Starteck Finance Limited (annexed to the Application as Annexure 26) is hereby approved. The Resolution Plan so approved shall be binding on the Corporate Debtor and its employees, members, creditors, including the Central Government, any State Government or any local authority to whom a debt in respect of the payment of dues arising under any law for the time being in force such as authorities to whom statutory dues are owed, guarantors and other stakeholders involved in the Resolution Plan. Under the provisions of section 31(3) of the Code, we also direct as under: (a) The moratorium order passed by this Adjudicating Authority under Section 14 of the Code on 08.04.2019 in the main C.P. shall cease....
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....yment Obligation No. 1. Payment of CIRP cost Amount payable under the Plan CIRP cost to be paid on actuals, provided that any amounts payable in excess of Rs.25 lakhs under this head Document 4 2. Upfront cash payment to Financial Creditors (within 30 days of the Plan approval date or such other date as may be mutually agreed between the Applicant and the CoC) Secured Financial Creditors shall be adjusted against the upfront payable to the financial creditors. Rs.36.30 Crores Rs.0.20 Crores Unsecured Financial Creditors 3. Deferred cash payment to Financial Creditors: On the 364th day from the Plan Approval date: 4. 5. 6. 7. 9. Secured Financial Creditors Unsecured Financial Creditors On the 729th day from the Plan Approval date: Secured Financial Creditors Unsecured Financial Creditors On the 1094th day from the Plan Approval date: Secured Financial Creditors Unsecured Financial Creditors Payment to Workmen and Employees Payment to Trade Creditors (Other than the Government Creditors and Workmen and Employees) Amount towards outstanding Pro....
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....ets the criteria approved by the CoC having regard to the complexity and scale of operations of business of the CD? Whether the Resolution Applicant is eligible to submit resolution plan as per final list of Resolution Professional or Order, if any, of the Adjudicating Authority? Section 30(1) Whether the Resolution Applicant has submitted an affidavit stating that it is Section 30(2) eligible? Whether the Resolution Plan - (a) provides for the payment of insolvency resolution process costs? Clause of Resolution Plan Compliance (Yes/No) CoC as per the requirements of the EOI, the Resolution Professional shortlisted the Resolution Applicant 12.7 and affidavit has been filed by the Applicant. The copy of the same is enclosed with the Resolution Plan. 12.7 Yes Yes Yes a) Clause 5.1.1 read with 8.4.4 (b) provides for the payment of the debts of operational creditors? b) Clause 5.6 read with Yes 8.4.4(b) (c) provides for the management of the affairs of the corporate debtor? c) Clause 8.2 read with Clause 5.1.8 Section 30(4) (d) provide....