TaxTMI 
TaxTMI 
2022 (3) TMI 1515
X X X X Extracts X X X X
X X X X Extracts X X X X
....e Limited ("the Corporate Debtor")which was approved by 100% CoC on 18th COC meeting held on 17.11.2021. 2. The underlying Company Petition in CP(IB)No. 355/ALD/2019 was filed by Ram Alloys Casting Pvt Ltd against the Corporate Debtor herein under section 7 of the Insolvency and Bankruptcy Code 2016, which was admitted vide order dated 24.12.2019. Mr. Sanjay Kumar Dewani was appointed as the Interim Resolution Professional ("IRP")vide order dated 24.12.2019 who was later replaced by Mr. Sumit Shukla (IBBI Reg.No. IBBI/IPA-003/IP-N00064/2017-2018/10550) as the Resolution Professional vide order dated 05.05.2020. 3. In the present matter, the period of 180-days of CIRP of the Corporate Debtor had expired on 21-06.2020, after extension of 90 days as well as exclusion of 97 days granted by this Adjudicating Authority vide order dated 09.09.2020. Further an exclusion of 91 days was granted by this Adjudicating Authority vide order dated 23.12.2020 and another exclusion of 60 days was granted vide order dated 09.07.2021and further exclusion was granted for 60 days on 25.08.2021. IBC Compliance 4. The IRP made public announcement on 27.12.2019 in Times of India (English) and A....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Dehradun), the Hindustan Times in English (Western UP and Uttrakhand) as well as on the IBBI website as per the provisions of the Code. 8. The Applicant submits that in response to the Form G the following PRAs had submitted the Expression of Interests: * Sarvottam Rolling Mills Pvt Ltd. * Shree Shailja Iron and Steels Pvt Ltd. * Ammadoes Trading & Consultants Pvt Ltd * Vishal Aggarwal, Pankaj Agarwal & Amit Garg, joint RA. 9. The Applicant issued the final list of prospective resolution applicants on 16.05.2021 wherein four prospective resolution applicants, i.e.,Sarvottam Rolling Mills Pvt Ltd., Shree Shailja Iron and Steels Pvt Ltd., Ammadoes Trading & Consultants Pvt Ltd and Vishal Aggarwal, Pankaj Agarwal & Amit Garg, joint RA were eligible to submit Resolution Plan. The last date for submission of Resolution Plan as per latest revised EOI was 05.06.2021. 10. The COC members held discussions and negotiations with all the four resolution applicants in the 14th COC meeting held on 19th June 2021 wherein the COC member asked all the resolution applicants to revise their respective plans by way of addendum affidavit. Thereafter subsequ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... wherein after discussions with the COC member, the said RA agreed to revise its resolution plan by way of Addendum affidavit. However other two Resolution applicants i.e. Ammadoes Trading & Consultants Pvt Ltd and Vishal Aggarwal, Pankaj Agarwal & Amit Garg, joint RA neither replied to RP's email dated 9th Oct 2021 nor attended the 17th COC meeting. 14. Thereafter the RA Shree Shailja Iron and Steels Pvt Ltd further revised its resolution plan by way of addendum Affidavits dated 27th Oct 2021 and 15th Nov 2021. 15. On 17.11.2021, the RP in the 18th meeting of COC discussed the Plan and placed it for voting and the same was concluded on 25.11.2021 . The Plan was approved by 100% voting of CoC. Salient features of the approved Resolution Plan 16. The Successful Resolution Applicant has confirmed that the payment of CIRP Cost, Operational Creditors and Financial Creditors in the following manner which are tabulated as below Page 37 of the Application Sl. No. Types of debts Proposed Amount and timelines 1. CIRP Cost 50 Lakhs/- upfront 2. Secured Financial Creditors Rs 1075 Lakhs (Rs 226 lakhs upfront, Rs 283 Lakhs within 180 days and 566 lakhs wi....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Workmen, employees & trade payable (c) Provides for the payment to the financial creditors who did not vote in favour of the resolution plan? Para 1(c) of the Resolution Plan on page 70 of the application seeking approval on the resolution plan providing for the Proposal for the dissenting financial creditors other than those who are related parties. Only one financial creditor who has voted in favor of the Plan. The other financial creditor (mentioned under the category of the loan from directors & relatives in the audited financial statements of FY 2017-18) also the applicant financial creditor of the CP No 355/2019 did not remove the defects / reply to the queries of the IRP / RP with respect to the claim filed by them. The directions of this Hon'ble Tribunal vide IA No 228 while disposed of on 11/8/2021 are not being complied with by the respondents and therefore the IA no 331/2021 was filed which is pending for the disposal. (d) Provides for the management of the affairs of the corporate debtor? Proposed in para 1(f) of the Resolution Plan at page 73 application seeking approval on the resolution plan (e) Provides for the implementation and....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s in the constitutional documents (i) issuance of securities of the corporate debtor, for cash, property, securities, or in exchange for claims or interests, or other appropriate purpose; No such proposal during the implementation phase as proposed on page 72 application for approval of resolution plan (j) change in portfolio of goods or services produced or rendered by the corporate debtor; Page no 75 of the application for approval of resolution plan the RA has proposed for the forward integration strategy for the revival of the business since RA is in to trading of sponge iron and steel products. (k) change in technology used by the corporate debtor; and No such specific proposal has been made (l) obtaining necessary approvals from the Central and State Governments and other authorities.] As provided in Annexure 2, Page 88 of the application for approval of resolution plan which provides for various approvals / concessions sought by the Resolution Applicant Mandatory contents of Resolution Plan in terms of Regulation 38 & 39 of CIRP Regulations: Requirements under Regulation 38 & 39 of the CIRP Regulations Compliances and relevant Page number(s) ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s of the corporate debtor during its term; and (c) adequate means for supervising its implementation. Annexure 1 of the Resolution Plan (page 85-87) of IA 374/2021 Para 1(e) of the Resolution Plan on Page 71 of IA 374/2021 Para 1(g) of the Resolution Plan Page 75 of IA 374/2021 76[(3) A resolution plan shall demonstrate that - (a) it addresses the cause of default; (b) it is feasible and viable; (c) it has provisions for its effective implementation; (d) it has provisions for approvals required and the timeline for the same; and (e) the resolution applicant has the capability to implement the resolution plan.] Covered in Para I of the Resolution Plan placed in page 75 to 77 of the IA No 374/2021 Regulation 39 (1) A prospective resolution applicant in the final list may submit resolution plan or plans prepared in accordance with the Code and these regulations to the resolution professional electronically within the time given in the request for resolution plans under regulation 36B along with Complied (a) an affidavit stating that it is eligible under section 29A to submit resolution plans; (c) an undertaking by the prospec....
X X X X Extracts X X X X
X X X X Extracts X X X X
....long with the orders of Hon'ble NCLT New Delhi Bench IV dated 21/5/2019 19. The Applicant submits that the successful Resolution Applicant has submitted a certificate of eligibility under Section 29A of the Code, which has been annexed as Annexure 10 at pages 94 to97 of the Application. 20. The applicant further submits that Resolution Applicant's undertaking which has been enclosed as Annexure 11 wherein copy of the undertaking affidavit dated 04.06.2021 submitted by the RA Shree Shailja Iron & Steels Pvt. Ltd. u/s 30(1) of the Code in compliance to the provisions of Regulation 39(c) of CIRP Regulations and confidentiality undertaking. 21. The Applicant has filed a Compliance Certificate in prescribed form, i.e., Form 'H' incompliance with regulation 39(4) of the Insolvency & Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, which has been annexed as Annexure 15 at pages 174 to185 of the Application. 22. The applicant further stated that that the acquisition of the corporate debtor through revival/resolution plan do not qualify as 'Combination' define Under Section 5 of Competition Act 2002 due to threshold limit gi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cluding Government/Statutory Authority, whether lodged during CIRP or not, shall stand extinguished after the approval of the resolution plan. We further hold that contingent/unconfirmed dues shall also stand extinguished. ii. In view of the judgment of Ghanashyam Mishra & Sons Pvt Ltd v. Edelweiss Asset Reconstruction Company Ltd, 2021 SCC OnLine SC 313 decided on 13.04.2021.where the Hon'ble Supreme Court held in para 95(i) that once a Resolution Plan is approved, a creditor cannot initiate proceedings for recovery of claims which are not part of the Resolution Plan. Therefore, all claims except provided in the plan shall stand permanently extinguished. iii. On the effective date and with effect from the appointed date, all encumbrances on the assets of the Corporate Debtor prior to the plan stand permanently extinguished on completion of procedural formalities as provided in Companies Act, 2013; iv. For reliefs and concessions sought from the Government/Statutory Authorities, we direct the Resolution Applicant to approach the concerned Authorities who shall decide the issues. v. As regard to the relief prayed under various provisions of In....
X X X X Extracts X X X X
X X X X Extracts X X X X
....h the procedural aspects. xiv. On the effective date and with effect from the appointed date, the entire existing share capital of the Corporate Debtor shall stand extinguished without any payment (including any cancelled value of the said equity shares or preference shares) to shareholders of the Corporate Debtor holding such existing share capital. The Resolution Applicant would be entitled to issue new equity share capital in accordance with the provisions of Companies Act, 2013 read with the rules and regulations made thereunder. Findings: 27. On hearing the submissions made by the Ld. Counsel for the Resolution Professional and perusing the record, we find that the Resolution Plan has been approved with100%voting share. As per the CoC, the Plan meets the requirement of being viable and feasible revival of the Corporate Debtor. By and large, there are provisions for making the Plan effective after approval by this Bench. 28. On perusal of the documents on record, we are 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 Pers....