TaxTMI 
TaxTMI 
2019 (4) TMI 2175
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....fter considering the merits of the case, the said Petition was Admitted vide an Order dated 06.02.2018 (CP No.1554/I&BP/NCLT/MB/2017). Ms. Charu Desai was appointed as IRP. 3. The applicant submits that the resolution applicant is a consortium of two companies, namely M/s. Khilari Infrastructure Pvt. Ltd. and M/s Topnotch Chemicals Pvt. Ltd. M/s. Topnotch is the current supplier of the Corporate Debtor and M/s. Khilari is engaged in the business of solid waste management. 4. It is stated that the Resolution Plan submitted by the Resolution Applicant has been approved by the Committee of Creditors ('CoC') by a vote of 77.8% (being more than 66% as laid down in Sec.30(4) of the Code) of the voting shares, during e-voting held between 26-30 October, 2018. CoC consists of eighteen Financial Creditors. An Information Memorandum, was prepared by the RP and provided to all CoC members on 07.04.2018. Expression of Interest was invited from prospective Resolution Applicants for submission of Resolution Plans for the Corporate Debtor by way of an advertisement which was published in 'The Economic Times' newspaper on 12.04.2018 and was also put on the website of the Corp....
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.... 7 Canara Bank 6, 407. 76 6, 396.07 8 Corporation Bank 6,093.04 6, 093. 55 9 IDBI 4, 564.43 4, 564. 44 10 Oriental Bank of Commerce 4,463. 18 4,463. 18 11 Bank of Maharashtra 4,383.39 4,371. 10 12 UCO Bank 3,624.32 3,624.32 13 SBI Global Factors 1,061. 50 1,061.50 14 Bank of Bahrain and Kuwait 924. 90 924. 90 15 Dena Bank 865. 00 865.00 16 Indian Bank 870. 38 800. 83 17 Kotak Mahindra Bank 802. 32 797. 93 18 Can Bank Factors (unsecured) 314.85 314.85 Total 142, 081. 48 141, 834. 83 Note: This is as per the claim sheet given in the Data Room / Information Memorandum. The total amount given in the provisional balance sheet as on 31st March 2018 is INR 1,421.04 Crores. 2. Trade Payables (forming part of Operational Creditors) (in INR Lacs) S. No. Name of Vendors Claim Submitted Admitted Amount 1 CSPC OUYI Pharmaceutical Co. Ltd 1,871.43 1,488.67 2 Nexchem Pharmaceuticals Co. Ltd. 276. 69 276.69 3 Aromatic and Industrial Chemicals Limit....
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....Services Pvt. Ltd. 1. 06 0. 87 51 AIR SOURCE TECHNOLOGY 1. 06 0. 48 52 Shreeji Enterprises 0. 99 0.99 53 Ambika Trading Co. 0. 99 0. 74 54 EPS WORLDWIDE 0. 97 0. 71 55 Transcreek Engineers Pvt. Ltd. 0. 94 0. 83 56 Painter & Painters 0. 89 0. 89 57 Mayur Enterprise 0. 89 0. 89 58 Educational Book Centre 0. 82 0. 82 59 Airtech 0. 82 0. 45 60 Promas Research Laboratories Pvt Ltd 0. 77 0. 60 61 Orion Scientific Suppliers Pvt Ltd 0. 72 0. 72 62 BadriprasadVishwakarma 0. 67 0.67 63 ACCUMAN CAL-VAL SERVICES 0.65 0. 60 64 Tushar Elevators 0. 64 0. 64 65 Gautam Trading Company 0. 58 0. 46 66 Perfect Pollucon Services 0. 57 0. 57 67 Mohit Chemical & Pharmaceuticals 0. 57 0. 57 68 Ash Traders 0. 48 0.47 69 Daman Research & Testing Center 0.46 0. 46 70 Gaurav Composite Containers 0. 38 0. 38 71 Petroleum Engineers 0. 36 0. 36 72 UNIPHOS ENVIROTRONIC PVT. LTD. 0. 35 0. 20 73 Suresh D Shenoy 0. 34 0. 29 74 MANAVI....
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....0.31 Unsecured loan payable Smitesh Shah Key Management Personnel 2,359.05 Unsecured loan payable AlpanaDoshi Relatives of Key Management Personnel 31.63 Unsecured loan payable Parul Shah Relatives of Key Management Personnel 1.05 Unsecured loan payable Saumini Shah Relatives of Key Management Personnel 0.53 Unsecured loan payable Singind Life Sciences Pte. Ltd Subsidiary Company 527.92 Advance received Singind Life Sciences Pte. Ltd Subsidiary Company 424.85 Operational debt Total 11,421.17 Note: This is as per the claim sheet given in the Data Room / Information Memorandum. The total amount given in the provisional balance sheet as on 31st March 2018 is INR 109.78Crores 5. Statutory Dues The Company has the following statutory dues, summary is as below: Sr. No. Statute Amount (in INR Lacs) 1 GST Claim - 2 TDS Claim 57.93 3 CST and VAT Claim 2,112.49 4 Customs Claim 7,847.69 5 Income Tax 1,832.71 Total 11,850.81 ....
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....TAL 100.00% Promoters and Directors of Khilari The current directors and promoters of Khilari are (i) Mr.AayushSahebraoKhilari; and (ii) Mr. Anjali SahebraoKhilari. The (i) certificate of incorporation and certificate of incorporation pursuant to name change;(ii) memorandum of association; (iii) articles of association of Khilari and (iv) certificate from a chartered accountant confirming the shareholding pattern of Khilari are hereto enclosed collectively as Annexure 2. 2. TOPNOTCH: Topnotch, is a private limited company incorporated under the (Indian) Companies Act, 1956 having its registered office at Plot No. C-116, Pawana Village T.T.C Industrial Area, Thane, Road, Belapur Navi Mumbai - 400 703 with CIN U99999MH1988PTC049651. Topnotchis, inter alia, engaged in the business of manufacturing, developing, supplying and exporting highly effective range of chemicals. These chemicals are acknowledged for their accurate formulation, purity, stability and long shelf life. The expertise of Topnotch allows them to develop finest quality and safest range of chemicals in different grades, as per the application requirements of their clients.....
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....evelopers Partnership Firm Mr. Sahebrao Khilari is a partner in the Connected Person, and in the management of Khilari. 11. K.K. Enterprise Partnership Firm Mr. Sahebrao Khilari is a partner in the Connected Person, and in the management of Khilari. 1.1.2 Topnotch S. No. Name of Connected Persons Legal Status Relationship with Resolution Applicant Mr. Khandu Varal Individual Director in Topnotch Mr. Vasant Jain Individual Director in Topnotch AmrutTulsi Industries Pvt. Ltd Private Company person Mr. Khandu Varal and Mr. Vasant Jain, who are directors in Topnotch, are also directors in the connected Amrut Chemicals Partnership Firm Mr. Khandu Varal and Mr. Vasant Jain, who are directors in Topnotch, are Partners in the connected person Saj Vision Developers Partnership Firm Mr. Khandu Varal and Mr. Vasant Jain, who are directors in Topnotch, are Partners in the connected person The identity documents of the Resolution Applicant is already enclosed herewith as Annexures 2 and 3 respectively. Identity documents for directors, shareholders and c....
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....sional balance sheet of the Company or reflected in the Data Room, as the case may be. 2. CAPITAL RESTRUCTURING, FUNDING AND UTILIZATION The Resolution Applicant proposes to invest into the Company by (i) subscribing (through their name as well as their nominees) to 1,00,000equity shares of INR 10 each ("New Equity Shares"), for a total consideration of INR 10 Lacs ("Share Subscription Consideration")as on the Closing Date and (ii)subscribing to unsecured optionally convertible debentures ("OCDs") for a consideration ("OCD Consideration"), within a period of 60 (sixty) days from the Closing Date. The 60(sixty)day period is the maximum time period we envisage for completing issuance of OCDs. However, if the process is completed earlier, the funding and utilisation will also take place earlier. The utilisation of the Share Subscription Consideration and OCD Consideration shall be made in the manner set out hereinafter in this Chapter. On the Closing Date, the Equity Shares held by the erstwhile Shareholders would stand extinguished by way of reduction in capital of the Company. All 1,64,13,473 Equity Shares of the Company held by the erstwhile Shareholders ....
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....ndian Rupees Twelve Crore only) (collectively "Guarantees") shall remain with the Resolution Professional post issue of Letter of Intent. Further, once the payments envisaged to Financial Creditors in the table above are complete, the Guarantees (worth INR 12 Crores) shall be unconditionally released and returned to the Resolution Applicant. The Guarantees shall be provided by the banker of the Resolution Applicant being Oriental Bank of Commerce. The Performance Bank Guarantee above would include the following language: "If the Resolution Applicant commits default in adhering to any tranche of the payment terms as mentioned in the Resolution Plan i.e. the total upfront amount of INR 68.30 Crores within 60 days from Closing Date in the following manner: a) 50% of the amount within 30 days of Closing Date and b) balance 50% of the amount within 60 days of Closing Date, State Bank of India has got absolute rights to invoke and encash this bank guarantee without recourse to us." Post-dated cheques of value not exceeding INR 68.30 crore issued in favour of a mutually agreed person, be provided by the Resolution Applicant on....
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....68.30 Nil b. The sum of INR 68.30 Crores as the payment to Financial Creditors (as per the above table) shall be paid to the Financial Creditors in full and final settlement of all their claims against the Company. Such payment shall be made as follows; i. 50% of the FC Payment shall be paid within 30 days from the Closing Date; and ii. Balance 50% of the FC Payment shall be paid within 60 days from the Closing Date. c. The Guarantees shall remain with the Resolution Professional post issue of Letter of Intent. d. Further, once the payments envisaged to Financial Creditors in the table above are complete, the Guarantees (worth INR 12 Crores) shall be unconditionally released and returned to the Resolution Applicant. The Guarantees shall be provided by the banker of the Resolution Applicant being Oriental Bank of Commerce. e. Post-dated cheques of value not exceeding INR 68.30 crore issued in favour of a mutually agreed person, be provided by the Resolution Applicant one working day after the Closing Date. On full payment of the FC Payment (as defined below) to Financial Creditors within the timeline stipulated in the table ab....
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....ious forums including courts, tribunals, NCLT, any Governmental Authority, or any other Person, a list whereof is annexed as Annexure 6. Notwithstanding the above, the Financial Creditors shall however be entitled to proceed with the enforcement actions, SARFAESI notices, suits and cases against the erstwhile promoters / personal guarantors of the Company. Within 2 (two) weeks of, the later of, payment of the upfront amounts to the Financial Creditors as stipulated in Part C of this Chapter IV, the Financial Creditors shall make appropriate filings with the Ministry of Corporate Affairs/ Registrar of Companies for releasing the charges and satisfaction of all the charges (in terms of payments agreed to be made herein) on Company Securities and also issue a "Letter of Confirmation" to the Company, in the form set out at Annexure 11, confirming that no dues are pending from the Company towards Financial Creditors (including but not limited to in respect of payment of principal, interest, delayed interest, default interest, damages and any other charges). Further the "Letter of Confirmation" to state that notwithstanding anything to the contrary stated in the Indian Contract ....
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....us * 2.57 1.11 5 Gratuity (Paid on accrual basis) ** 2.56 2.56 Total 6.29 4.83 Note *: Net Salary + Leave Encashment + Bonus of all employees and workmen to the extent of amount allotted above shall be paid as per annexure 7, on discharge of relevant Workman or Employee from Employment or within 2 years from Closing Date, whichever is earlier **: The Statutory Liabilities towards the Workmen and Employees will be paid in full c. The Resolution Applicant proposes to pay an upfront sum of INR 1.16 Crores, ("Workmen Payment") within 30 days from the Closing Date, towards PF, PT & TDS. Gratuity (currently provisioned for INR 2.56 Crores) will be paid as and when due, in accordance with the Applicable Law. Also, Net Salary, Leave Encashment, Bonus of all employees and workmen to the extent of INR 1.11 Crores shall be paid as per Annexure 7, on discharge of relevant Workman or Employee from Employment or within 2 years from Closing Date, whichever is earlier. The aforesaid amounts will be full and final amount and one time settlement of all workmen and employees dues as on Insolvency Commencement Date. While the Res....
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....nts or rights to Equity Shares have been granted to workmen/ employees pursuant to any employee stock option plan/ policy of the Company, such options/ warrants/ rights, whether vested or unvested, exercised or un-exercised shall stand revoked with no claims or liabilities against the Company or the Resolution Applicant. d. Payment To Other Operational Creditors (other than Workmen and Employee) and Residuary Liabilities a. As per the Information Memorandum, the admitted claims of the Operational Creditors (i.e. Trade Payables) other than workmen are INR 24.95 Crores. While the Resolution Applicant is not aware of the liquidation value of the Company, for the purpose of this Resolution Plan, the underlying assumption of the Resolution Applicant is that the liquidation value due to the Operational Creditors (Trade Payables) (other than the workmen) in accordance with the liquidation waterfall under the Code is NIL. Accordingly, the requirement of Section 30(2)(b) of the Code to pay atleast liquidation value to Operational Creditors does not apply in this case. Inspite thereof, it is proposed that the claims of the Operational Creditors - Trade Payables (other than ....
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....s disclosed in the Data Room along with details of proportionate share for payment is below: Summary of Statutory Liabilities S. No. Statute Total Liabilities - including contingent liabilities (INR in Crores) Proportionate share in payment (INR in Crores) 1 GST Claim - - 2 TDS Claim Other than TDS towards the Workmen and Employees 0.58 ** 0.01 3 CST and VAT Claim 21.12 0.45 4 Customs Claim 78.48 1.66 5 Income Tax* 18.33 0.39 Total 118.51 2.50 * Payment towards income tax liability if and when, a Claim is submitted. If no claim is submitted till the NCLT Approval Date then no payment shall be made against Income Tax dues and this sum of money will be retained by the Resolution Applicant. ** Excluding the TDS amount towards Workmen and Employees. The sum of INR2.50 Crores will be paid within 60 (sixty) days of Closing Date by the Company. Notwithstanding anything else contained herein, all claims on the Company by ANY Governmental Authority for payment of ANY statutory dues or tax, and all liabilities of the Company towards such Governmental Authority, fo....
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....discharged, released, extinguished and settled without any consequences and/or liability (tax, interest, fine, penalty, etc.) to the Company or the Resolution Applicant. The Resolution Applicant or Company shall not, in any manner whatsoever be directly or indirectly responsible or liable for any such claims, interest, rights or liability. ii. All liabilities (statutory or otherwise) of the Company, arising from any contractual arrangements entered into by the Company, any claims against the Company, or liabilities of the Company, arising or having crystallized prior to the NCLT Approval Date and not specifically dealt with in this Chapter, shall be deemed to be waived, cancelled and extinguished on the NCLT Approval Date pursuant to NCLT Approval Order. iii. Further, any claim against the Company, arising from any contractual arrangements, whether set out herein or not, whether admitted or not, due or contingent, asserted or un-asserted, present or future, whether or not set out in the Information Memorandum and/ or Data Room, the balance sheet or the books of accounts of the Corporate Debtor, in relation to any period prior to the NCLT Approval Date, will be dee....
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....tinguished qua the Company and accordingly, all such proceedings, inquiries, investigations, etc. against the Company shall be disposed of and all liabilities or obligations in relation thereto, whether or not set out in the balance sheets of the Company or the profit and loss account statements of the Company, will be deemed to have been paid in full and permanently extinguished qua the Company by virtue of the NCLT Approval Order and the Resolution Applicant or the Company shall at no point of time be, directly or indirectly, held responsible or liable in relation thereto. The respective petitioners / applicants / claimants or any other person who has initiated such inquiries, investigations, notices, causes of action, suits, claims, disputes, litigation, arbitration or other judicial, regulatory or administrative proceedings against the Company would take all steps to ensure that these proceedings and inquiries stand withdrawn and disposed of accordingly. ii. By virtue of the NCLT Approval Order, new inquiries, investigations, notices, suits, claims, disputes, litigation, arbitration or other judicial, regulatory or administrative proceedings will not lie and be sustain....
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....ies and/ or claims that arise between the Insolvency Commencement Date and the NCLT Approval Date shall stand waived, extinguished, abated, discharged in perpetuity as on the NCLT Approval Date, pursuant to the NCLT Approval Order, except any liability incurred strictly in the ordinary course of business. Further, except as specifically provided herein, no interest shall be paid on any claim against the Company (as on the Insolvency Commencement Date) be it of the Financial Creditor, Operational Creditor or any other claim arising on account of any financial liability, operational liability or any other contingent liability or dues, demands in connection with or against the Company. g. Treatment of debts barred by limitation Any debt owed by the Company to any Person, which is barred by limitation under Applicable Law as of the Closing Date, shall immediately, irrevocably and unconditionally stand extinguished, waived and withdrawn on and from the Closing Date, and no person shall have any further rights or claims against the Company in this regard. h. Payments made during CIRP Notwithstanding anything contained hereinabove, the dues incurred by ....
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....hares). 4. Additionally, all the original documents pertaining to immovable assets currently in the custody of the Financial Creditors shall be duly handed over to the Company. 5. After the payment to the Financial Creditors, necessary steps shall be taken by the Financial Creditors to update CIBIL and CRILC to show the account as "Standard Account" and brought out of NPA category. 6. Notwithstanding anything to the contrary stated in the Indian Contract Act, 1872, the securities and guarantees/contractual comforts provided by existing Shareholders/ erstwhile promoters in respect of the debt of the Company (except any Encumbrance on the Equity Shares, if any) SHALL NOT BE EXTINGUISHED by virtue of this Resolution Plan. It is clarified that no right of subrogation shall be available to Shareholders/ erstwhile promoters, in case of invocation of/ payment by Shareholders/ promoters under their existing securities or guarantees/contractual comforts and all such rights shall stand waived/ extinguished as on the NCLT Approval Date, pursuant to NCLT Approval Order. It is further stated that upon approval of this Resolution Plan by the NCLT, notwithstanding the p....
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....y released and discharged on the NCLT Approval Date. 7. INTERESTS OF ALL STAKEHOLDERS The Resolution Plan proposed by the Resolution Applicant adequately deals with the interests of all stakeholders, including Employees and Workmen, Financial Creditors and Operational Creditors, of the Company, in the following manner: 1. Employees/Workmen: The workmen and employees shall be paid their dues as stated above. Apart from Net salary, this sum shall also include statutory liability of the Company arising out of payment of PT, PF, TDS and Gratuity. Further, the workmen/ employee will benefit from continued employment. 2. Financial Creditors: Financial Creditors shall be paid a sum of INR 68.30 Crores towards full and final settlement of their claims as stated above, against the Company. All existing securities, guarantees and comforts provided by the Company shall stand released and discharged upon payment of INR 68.30 Crore to the Financial Creditors, in accordance with Clause 2.1 of this Chapter and all encumbrances on the assets of the Company shall cease to exist in accordance hereof. All existing securities, guarantees and comforts provided by ers....
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.... the rights of the Company to recover from and/or assert claims or rights against any Person and there shall be no set off of any such amounts recoverable by the Company. No liability of a third party towards the Company shall stand extinguished, settled, waived, reduced, or dealt with any manner to the prejudice of the Company, pursuant to this Resolution Plan. 9. HANDOVER OF ASSETS All movable and immovable fixed assets and tangible inventories such as stocks and spares of the Company shall be reconciled, identified and provided for in the custody of the Company or Resolution Applicant, free of any Encumbrances (except as provided herein). 10. EXISTING RELATIONSHIP AND FUTURE (i) Existing affiliation between the Resolution Applicant and the Company a. Topnotch (one of the consortium member) is an existing supplier of raw materials to the Company for past 3 years and shares a cordial relationship with the existing management of the Company. b. It is to be noted that Topnotch had advanced INR 34.50 Lacs to the Company during a very critical situation when the electricity connection of the Company was to be disconnected. Addition....
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..... This will help in seamless transition for reviving the Company. d. The Resolution Applicant would also infuse INR 10 Crores for refurbishment of fixed assets and additional INR 37 Crores towards meeting the working capital requirements. e. Topnotch is an existing supplier of intermediate chemicals to the Company and this acquisition will be a forward integration for the Resolution Applicant. f. This will in turn result in having cost synergies for both Company and the Resolution Applicant, which will help the Company in acquiring higher market shares and boosting revenues. g. The total revenue generated for the Company from February 2018 to June 2018 is INR 13.72 Crores and with additional working capital infusion, we project to reach a turnover of INR 165 Crores and EBITDA of INR 16.54 Crores (10.02%) in the 1 year of the takeover of the Company. (i) Also, we project the average Y-o-Y growth of turnover is 25% for next 5 years to reach turnover of INR 469.94 Crores. Also it will achieve average EBITDA margin of 15% over the period of next 5 years without incurring any additional research and development cost (ii) Topnotch is ....
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..... Khandu Varal 100 0.1% TOTAL 1,00,000 100.00% 8. On the day of issuance of New Equity Shares as mentioned above and simultaneously with the issuance, the entire Equity Shares of the Company, held by the existing Shareholders shall stand cancelled. 9. All the assets, properties, rights and interests of every kind, nature and description, tangible or intangible, and wherever situated and by whomsoever possessed or held, that are owned, used, occupied or held by or for the benefit of the business of the Company or even otherwise by or on behalf of the Company shall remain to be so owned, occupied or possessed, as the case may be, as on the Insolvency Commencement Date of the Company and during CIRP and as on the NCLT Approval Date, and shall continue to be so owned, occupied or possessed, as the case may be, until the Closing Date except as disposed of in the ordinary course of business of the Company 10. The Resolution Applicant are acquiring New Equity Shares in the Company and the business of the Company will continue to be carried on as usual during the process of such acquisition. 1. Final Shareholding Pattern ....
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.... and shall be entitled to undertake corporate action/ pass resolutions for implementation of the Resolution Plan (including issuance and reduction of share capital and appointment of directors). On and from the Closing Date, all the existing Directors, shall vacate their respective offices. On the Closing Date, a new Board of the Company shall be formed by the Resolution Applicants in the manner provided in Chapter VI. 7. On the Closing Date, the Resolution Applicant shall appoint the statutory and internal auditor of the Company, in accordance with the Applicable Law. 8. The Company will continue with the existing employees and may employ new employees /workmen to carry on the business of the Company after the Closing Date, in accordance with Applicable Law. 9. The Resolution Applicant shall provide to the Financial Creditors, Income statement for the 1st year after the NCLT Approval Date and thereafter for every quarter starting from completion of 1 year from NCLT Approval date, applicant shall provide an QIS (Quarterly Income Statement). Any further request from the Financial Creditors for information (not being confidential information) about the Comp....
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....members, employees and other stakeholders of the Company. (See Part G of Chapter IV of this Resolution Plan) 2. The Resolution Plan demonstrate that - a. it addresses the cause of default The company went into stress owing to the following reasons: 1. In order to succeed in the Contract Research and Manufacturing Services business, the Company made accumulated expenditure (capital expenditure and regular expenses) of more than INR 110 Crore during FY 2008-2009-FY 2012- 2013 in its research and development infrastructure which did not yield the desired results. 2. In September 2012, the Company filed for an initial public offering (IPO) to raise fund which could not fructify due to continued subdued state of the IPO market and not getting the necessary permission from the erstwhile Foreign Investment Promotion Board (FIPB). It led to dependence on high cost debt to fund the business. 3. In FY2013, key customers of the Company like Arch Pharma, Avon Life Sciences, Unimark Remedies, Sharon, Ind-Swift, Unimark&Anjaneya came under financial distress. It made sizeable amount of Company's receivables uncertain and unrealized. Subse....
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....elieves that there is an immense potential to market the current product portfolio of the company, without incurring further sunk costs c. it has provisions for its effective implementation; (See Part B and C of Chapter VI of this Resolution Plan) d. it has provisions for approvals required and the timeline for the same; and (See Part D and E of Chapter VI of this Resolution Plan) e. the resolution applicant has the capability to implement the resolution plan. (See Part C and J of Chapter IV of this Resolution Plan) 7. IMPLEMENTATION OF THE PLAN Under the Resolution Plan, all payments (as outlined in Chapter IV), shall be made within a period of 60 days from the Closing Date unless otherwise specified in this Resolution Plan. Hence, the term of the Resolution Plan shall be 60 (sixty) days from the Closing Date. The plan shall be implemented in the following phases: 1. Prior to Closing Date; 2. On Closing Date; and 3. Post-Closing Date; Monitoring Agency 1. In order to ensure that the Resolution Plan is implemented in accordance hereof and that the obligations undertaken herein are adhered to i....
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.... Closing Date, and shall be exercised by the Monitoring Agency. 8. It is clarified that until the Closing Date, the Company or the Monitoring Agency shall not make any payments (including interest) towards the claims of the Financial Creditors, Operational Creditors or the other creditors except those claims arising out of the liabilities incurred in ordinary course of business of the Company during the period from Insolvency Commencement Date to Closing Date. 9. The Company and all its facilities shall continue to receive supply of essential goods and services (as defined under the Code and the CIRP Regulations) on an uninterrupted basis, and shall not be for any reason shut down or restricted in activities in any manner. The Monitoring Agency shall be entitled to make an application to the Adjudicating Authority directing local law enforcement authorities and local district administration authorities to maintain law and order with regard to various premises owned and/ or used by the Company, and to assist in the implementation of the Resolution Plan. The Committee of Creditors, the Monitoring Agency, the Company, its existing management, employees, Shareholders ....
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....n shall be taken on record; 3. all documents necessary for the aforesaid issuance and allotment shall be executed; 4. allotment letter of the New Equity Shares to be issued in favour of the Resolution Applicants and their nominees; 5. the name of the Resolution Applicant and their nominees who are the new shareholders in the Company, is entered into the register of members of the Company; 6. two independent directors nominated by the Resolution Applicants and (i) Mr. Aayush Khilari; (ii) Mrs. Anjali Khilari; (iii) Mr. Khandu Varal and Mr. Vasant Jain, shall be appointed to the Board of directors of the Company; 7. the resignation of the existing directors from the Board of directors of the Company is taken on record; 8. the amended memorandum of association and amended articles of association are approved and adopted, if any; 4.2.2 The Company shall convene a meeting of its new shareholders and do all other acts as may be required to give effect to the terms of this Resolution Plan; 4.2.3 All power of attorney/ies and/ or other corporate authorisations or mandates issued by the Company to any person to enable s....
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....ESS From the submission of this Resolution Plan until the Closing Date no liabilities other than in the ordinary course of business of the Company shall be incurred by the Company or on its behalf. Further, during the said period there shall be no disposal of asset or assets of the Company other than in the ordinary course of business of the Company. 6. APPROVALS REQUIRED FOR THE PLAN AND COMPLIANCE WITH LAW 1. NCLT Approval The Resolution Plan of the Applicant shall be required to be approved by the Committee of Creditors, and thereafter, by the Adjudicating Authority under Section 31of the Code. 2. Companies Act 2013 Pursuant to the Explanation to section 30(2)(e) of the Code, if any approval of shareholders is required under the Companies Act, 2013 or any other law for the time being in force for the implementation of actions under the resolution plan, such approval shall be deemed to have been given and it shall not be a contravention of that Act or law. 3. INDICATIVE TIMELINE FOR IMPLEMENTATION S. No. Event Timeline NCLT Approval Date X :selected: Closing Date to include inter ....
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.... compliance 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 employees appointed on and as of Closing Date be liable for any violation, liabilities, penalties or fines with respect to or pursuant to the Company not having in place the 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 Closing Date, for the Resolution Applicant to assess the status of any non-compliances under the Applicable Laws including and to procure that the Company regularizes such non-compliances under the Applicable Law existing prior to the Closing Date. (c) The Department of Registration and Stamps of the relevant state and the Ministry of Corporate Affairs shall exempt the Resolution Applicant and the Company, from the levy of stamp duty and fees applicable in relation to this Resolution Plan and its implementation including but not limited to reduction of share capital of t....
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....te, including in relation to non-fulfilment of export obligation in respect of customs incentive including but not limited to imports under specific import licenses or schemes, non-submission of forms for concessional duty rates, non-fulfilment of conditions relating to grant of state incentives etc. (j) The Adjudicating Authority shall direct the Ministry of Corporate Affairs to waive the requirements under Section 140 of the Companies Act, 2013 in respect of the removal of the existing auditors of the Company. (k) Waiver from the requirement of obtaining a no objection certificate under Section 281 of the Income-tax Act, 1961 and provisions of taking over predecessor's tax liability under Section 170 of the Income-tax Act, 1961 Act shall not be applicable. (l) The Company and the Resolution Applicant shall be granted an exemption from all taxes, levies, fees, transfer charges, transfer premiums, and surcharges that arise from or relate to implementation of the Resolution Plan, since payment of these amounts may make the Resolution Plan unviable. (m) To the extent not paid and settled under this Resolution Plan, waiver of any income-tax and ....
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.... 1.1 any liability, fees, penalties of any kind payable to any Governmental Authority by the Company for any non-compliance or default, breach, violation prior to the NCLT Approval Date, under Foreign Exchange Management Act, 1999, Foreign Trade Policy of the Government of India, 100% Export Oriented Unit related regulations, Companies Act, 1956 and Companies Act, 2013. 1.2 Liability under litigation for FY 2009-10 is pending with Appellate Authorities under Maharashtra Value Added Tax, 2005 and litigation for FY 2004-05 is pending with Appellate Authorities under Maharashtra Sales Tax Act; 1.3 Liability under on-going/pending income-tax proceedings before Assessing Officer and/or before Appellate Authorities as under: Sr. No. Financial Year Assessment Year Amount (in Lakhs) 1 2004-05 2005-06 0.11 2 2007-08 2008-09 7.37 3 2008-09 2009-10 47.11 4 2009-10 2010-11 69.65 5 2011-12 2012-13 77.67 6 2012-13 2013-14 1,583.89 7 2008-09 2009-10 3.62 8 2005-06 2006-07 43.29 Total 1,832.71 (r) From the NCLT Approval Date, all ....
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....tion Memorandum, (ii) information provided by the Resolution Professional to the Resolution Applicant in the Data Room, (iii) on the assumptions set out in this Chapter, (iv) acceptance and approval of this Resolution Plan in its entirety including but not limited to grant of approval for directions, reliefs and concessions by the Adjudicating Authority; (v) extinguishment of claims and liabilities in the manner detailed in this Resolution Plan. B. Without prejudice to the generality of Clause C.1 above, this Resolution Plan has been prepared relying on some specific assumptions, set forth below: 2.1 The information provided by the Resolution Professional in connection with the affairs of the Company, including but not limited to the Information Memorandum and other documents available in the Data Room are true and correct; 2.2 This Resolution Plan is confidential, and the Resolution Professional, the Committee of Creditors, the Company and their respective Affiliates, directors, officers, employees, agents, advisors, and representative shall not, without the prior written consent of the Resolution Applicants, make any disclosure of any information pertai....
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....ll rights of the Company and in relation to the land owned by the Company shall continue to vest with the Company, notwithstanding the change in ownership and/ or management of the Company without the requirement for any express approval or consent of any Person; 2.10 There are no liabilities against the Company, present, or expected, apart from those disclosed in the Data Room; 2.11 Without prejudice to the extinguishment of liabilities set out in this Resolution Plan, all agreements/ arrangements / purchase orders/ work orders, etc. between the Company and any person shall continue in full force and effect and shall remain valid and binding against the Company and relevant counterparty(ies) (notwithstanding that corporate insolvency resolution proceedings have been initiated against the Company and/ or a change in control of the Company has been effected). However it is clarified that all claims of the Company against such counter parties (and all liabilities of such counter parties towards the Company) shall remain outstanding, due and payable in accordance with their terms. It is clarified that any agreements, arrangements between the Company and any ....
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....e of the assets as may be determined by the board of directors of the Company. For this purpose, the Company shall be permitted to carry out necessary write off of assets, creation of additional liability or expenses or write back of liability or provision (as the case may be) in the books of accounts of the Company. Write back of liability or provision would be recorded in the books of accounts of Company once first payment is made towards any of the liabilities/debt, as per the Approved Resolution Plan. Pursuant to the NCLT Approval Order, any debit or credit, being the balancing figure, arising as a result of giving effect to the Resolution Plan, shall be adjusted by the Company directly in the capital reserve account. 3. Compliance: This Resolution Plan being submitted by the Resolution Applicant does not violate any provisions of the Applicable Law (including Code and the CIRP Regulations)to the best of the knowledge of the Resolution Applicant. 4. Negotiations and Modification of the Plan 1. The Resolution Applicant would be happy to meet with the Resolution Professional and the members of the Committee of Creditors to discuss this....
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....a binding proposal of the Resolution Applicant in respect of resolution of insolvency of the Company. However, the proposal of the Resolution Applicant is subject to negotiation with the Resolution Professional and the Committee of Creditors and agreement between the Resolution Applicants and the Committee of Creditors. Therefore, the terms of the Approved Resolution Plan may be different from the terms proposed herein. 3. In case the COC Approved Resolution Plan is rejected or is not approved by the Adjudicating Authority, the Resolution Applicant will not be liable in any manner whatsoever under the COC Approved Resolution Plan. Provided further that the Resolution Applicant shall be entitled to withdraw the COC Approved Resolution Plan (without any liability) in case the Adjudicating Authority directs any material amendment to the COC Approved Resolution Plan, which results in an adverse effect or increased financial liability for the Resolution Applicant and / or affects the going concern of the company. 4. In the above circumstances, the Performance Guarantee, deposited by the Resolution Applicant with the Resolution Professional shall stand revoked ....
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....hapter VI and Chapter VII to give effect to the Resolution Plan shall be deemed to have been approved by the Company, its creditors, guarantors, members, employees and other stakeholders (including the erstwhile promoters) and shall not require any separate approvals or actions of such persons. 4. There shall be no interruption or stoppage in the supply of 'essential goods and services' (as defined under Regulation 32 of the CIRP Regulations) to the Company. 5. The Company shall be permitted to continue using the trademark (along with the logos or copyrights in relation thereto) after the Closing Date, including as a part of its corporate name, product branding letterhead and invoices, documentation, domain name and as may otherwise be required for the conduct of its business, and the exiting promoter has no objection to the same. 3. Right to share NCLT Approval Order and the Resolution Plan The Resolution Applicant, and the Company (only after Closing Date), shall be entitled to share a certified copy of the Approved Resolution Plan and the NCLT Approval Order with third parties, including Governmental Authorities. 4. Standstill....
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.... visualising the advantage and disadvantage then such proposal can be termed as just and equitable fit for according satisfaction. An 'objective satisfaction' revolves around the object of enactment of the Code as enshrined in the Preamble of the I & B Code i.e. to revive the financially stressed corporate body. And the 'subjective satisfaction' depends upon logical analysis of the Financial Data supplied so as to match with the business model of the Corporate Debtor. A methodical scrutiny of Financial Statement is expected before concurring with approval of the CoC. Per contra, absence of recording of subjective satisfaction may lead to situation that, being sanctioned without judicial analysis, thus may not be sustainable in the eyes of law. There are no two views, and must not be, that this I & B Code provides greater accountability both on the Insolvency Professional, as also on CoC, mainly comprise of lender Banks. Their approval of a Resolution Plan ought to be judged with due diligence. To sum up, in our humble interpretation the recording of an analytical 'satisfaction' is a condition precedent before granting of approval. 10. To sum up the above ....
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.... act on the basis of thorough examination of the proposed resolution plan and assessment made by their team of experts. The opinion on the subject matter expressed by them after due deliberations in the CoC meetings through voting, as per voting shares, is a collective business decision. The legislature, consciously, has not provided any ground to challenge the "commercial wisdom" of the individual financial creditors or their collective decision before the adjudicating authority. That is made non-justiciable". 11. To conclude, an observation can be made in a situation when a Resolution Plan is approved by the majority voting as per the prescribed percentage by the Members of the CoC the same is required to be accepted/approved by the Adjudicating Authority. Now this view is taken, because of the latest decision of the Hon'ble Supreme Court, wherein the scope of any suggestion or alteration in the impugned resolution plan is discussed and directions issued. As far as the procedure is concerned, in this case, the same has been followed as per the provisions of the Insolvency Code, therefore, the Resolution Plan has to be approved. The Resolution Applicant has submitted an aff....