TaxTMI 
TaxTMI 
2023 (5) TMI 1082
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....ued certain directions to the Appellant for implementation of the approved Resolution Plan. Aggrieved by the order and directions issued by the Adjudicating Authority, the Appellant has come up in this Appeal. 2. Brief facts of the case for deciding the Appeal are: (i) M/S MBL Infrastructures Ltd. was set-up by one Mr. A. K. Lakhotia. Certain financial facilities were extended to M/S MBL Infrastructures Ltd. in which default was committed, resulting in initiation of proceedings under Section 7 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as the "Code"). On 30.03.2017, Section 7 Application was admitted and Corporate Insolvency Resolution Process ("CIRP") begun. (ii) Mr. A.K. Lakhotia, submitted a Resolution Plan. After submission of Plan by Mr. A.K. Lakhotia, Section 29A was introduced in the Code with effect from 23.11.2017. The Adjudicating Authority declared the Resolution Applicant eligible vide order dated 18.12.2017, which was challenged by Punjab National Bank by way of an Appeal, where an interim order was passed that without prior approval of the Appellate Tribunal, no Plan shall be accepted. An Appeal was also filed by the RBL Bank. (iii) Th....
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....apital consortium to take steps for implementation of the approved resolution plan by executing working capital consortium documents; i. By executing capital consortium documents; ii. By issuing Bank guarantee and letters of credit as per approved resolution plan iii. By issuing certificate regarding availability of line of credit as per approved resolution plan iv. And by issuing net worth certificate/ solvency certificate required for bidding in tenders for public section infrastructure projects. 12. It is further directed that meeting available Non Fund Based limits and execution of documentation in respect thereof, shall form an integral part of the approved plan. It is further ordered that the period from 18th April, 2018 till 18th January, 2022 when the Hon'ble Supreme Court passed the judgment and order shall be formally excluded from calculation of the period for implementation of the plan and all dates mentioned in the resolution plan are consequentially extended for implementation of the resolution plan. 13. We understand the concern of the State Bank of India as submitted by the Ld. Counsel, and we direct that forensic audit on the issues like whether the app....
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....n. The SBI is a public financial institution and it cannot disburse finance to entities without satisfying itself that financial affairs of the entities are not mismanaged. The SBI and other Financial Creditors were unable to further finance the Corporate Debtor as the implementation requirement under the Resolution Plan, the Resolution Applicant never cooperated for a proper forensic audit. The forensic audit conducted by the erstwhile Resolution Professional remined inconclusive and unsatisfactory for the Lenders. The Lenders appointed new Forensic Auditor on 04.10.2019. The new Forensic Auditor also could not provide a conclusive report. The Lenders appointed another Forensic Auditor - M/s BDO LLP, but the Corporate Debtor did not cooperate with the Forensic Auditor. 5. The learned Counsel for the Respondents, refuting the submissions of the learned Counsel for the Appellant submits that it is the Appellant and other Lenders, who were never interested in implementing the Plan and the order of the approval dated 18.04.2018 was challenged by many Lenders including the State Bank of India. Challenge by the Lenders, culminated in dismissal of Civil Appeal by Hon'ble Supreme Court o....
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.... the exclusion of the subject period during which period was Lenders themselves, who were challenging the approval of the Plan. The Corporate Debtor is an infrastructure company executing civil engineering projects particularly roads and highways. Before approving the Plan, a TEV Study Report was got conducted by PNB Investment Services Ltd. There was an economic viability study much before approval of the Resolution Plan. As per the Techno Economic Viability Report for effective implementation of the Resolution Plan availability of Bank Guarantees, Letters of Credit and working capital facility by the Working Capital Consortium was essential. By approving the Plan, assenting working capital Banks agreed to continue to make available Non-Fund Based ("NFB") facilities (Bank Guarantees and Letters of Credit) of Rs.303.63 crores. After approval of the Plan erstwhile Resolution Professional handed over the management to the Board of Directors of the Company in terms of the approved Plan. A new working capital consortium comprising of six assenting Banks was constituted with the Appellant-SBI as the lead Bank. The Bank got conducted forensic audit, in which audit report, nothing adverse....
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.... order of NCLT Kolkata regarding approval of Resolution Plan, IDBI Bank vide appeal No.194/2018 and BOI vide 235/2018 have approached NCLAT Delhi. The case has been admitted on 21.05.2018 and the next date of hearing is 20.03.2018. The NCLAT Delhi has issued orders on 09.05.2018 and directed that the execution of plan is subject to decision of NCLAT and till then the company has to ensure to protect the value of its assets. As this, SBI also filed an appeal in NCLAT, reporting ineligibility of Sh. Lakhotia u/s 29A on 03.07.2018. The Hon'ble NCLAT dismissed the appeal on the basis of limitation & did not hear the merits on request of senior lawyer from Sh. A.K. Lakhotia side. SBI has impleaded application with BOI and approached NCLAT, challenging eligibility of Sh. Lakhotia to be Resolution Applicant with suppressing the facts before NCLT Kolkata to become eligible Resolution Applicant u/s 29A on 18.12.2017. On 20.03.2019 Hon'ble NCLAT issued orders "Heard in part. We also discussed the matter with the promoters, who are also the Resolution Applicant, about improving the plan before going into the question of legality of the approved plan and the impugned order. Post the ....
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....held so, we would like to come to the last part of our order. Though the very resolution plan submitted by the Respondent No. 3, being ineligible is not maintainable, much water has flown under the bridge. The requisite percentage of voting share has been achieved. We may also note that the percentage has been brought down from 75% to 66% by way of an amendment to Section 30(4) of the Code. 62. Secondly, majority of the creditors have given their approval to the resolution plan. The adjudicating authority has rightly noted that it was accordingly approved after taking into consideration, the techno-economic report pertaining to the viability and feasibility of the plan. The plan is also put into operation since 18.04.2018, and as of now the Respondent No. 1 is an on-going concern. Though, the Respondent No.11 has taken up the plea that its offer was conditional, it has got a very minor share which may not be sufficient to impact by adding it with that of the appellant and Respondent No.7. The Respondent No.7 and the Respondent No.11 did not choose to challenge the order of the appellate tribunal. 63. We need to take note of the interest of over 23,000 shareholders and thousands....
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....ment of the Hon'ble Supreme Court in Jaypee Kensington Boulevard Apartments Welfare Association vs. NBCC (India) Ltd. - (2022) 1 SCC 401; Ebix Singapore Pvt. Ltd. vs. CoC of Educomp Solutions Ltd. -(2021) SCC OnLine 707; Committee of Creditors of Essar Steel India Ltd. vs. Satish Kumar Gupta and Ors. - (2020) 8 SCC 531 and Pratap Technocrats v. Monitoring Committee Reliance Infratel - (2021) 10 SCC 623 to support its contention that Resolution Plan cannot be modified by the Adjudicating Authority, not it can be whittled down by the Adjudicating Authority. 12. As observed above, present is not a case where Resolution Plan has been modified by the Adjudicating Authority. The Adjudicating Authority vide order dated 11.03.2022 has already granted extension by the impugned order for the period from 18.04.2018 to 18.01.2022, which period was taken in the litigation initiated by the Lenders themselves. It is also relevant to notice that while approving the Resolution Plan on 18.04.2018, the Adjudicating Authority has granted exclusion of 106 days. The Hon'ble Supreme Court in its judgment dated 18.01.2022 has approved the exclusion on account of litigation and proceedings. We may recapit....
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....f the Plan is required to be considered at the stage when Plan is to be approved by the CoC. After the Plan has been approved, the issue of viability and feasibility cannot be allowed to be raised by the Appellant. The Adjudicating Authority did not modify the Plan in any manner and exclusion of the period from 18.04.2018 to 18.01.2022, cannot be said to be any kind of modification in the Plan. 15. In the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, under Regulation 39, sub-regulation (9), a creditor is allowed to apply to Adjudicating Authority for direction in case there is any non-implementation of the Resolution Plan. At no point of time, the Appellant made an application praying for any direction to the Resolution Applicant towards implementation of the Plan alleging any non-implementation. It was the Resolution Applicant, who had filed application for contempt against the Bank and thereafter I.A. No.(IB)626/KB/2021 praying for direction to the Appellant. The directions, which have been issued by the Adjudicating Authority in paragraph 11 as noted above, are directions, which were required to be undertaken b....