TaxTMI 
TaxTMI 
2024 (8) TMI 1605
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....Applicant") which was approved by the Committee of Creditors ("CoC") in its 7th Meeting held on 01.09.2022 with 100% voting under section 30(4) of the Code. Relevant Facts: 2. On an application under Section 7 of the Code, M/s Nirmal Lifestyle Realty Pvt. Ltd. ("Corporate Debtor") was admitted into Corporate Insolvency Resolution Process ("CIRP"), vide Order dated 06.12.2021 and Mr. Arun Kapoor was appointed as Interim Resolution Professional ("IRP"). 3. In accordance with Regulation 6(1) of the CIRP Regulations, on 21.12.2021, the IRP issued the Public Announcement inviting claims from all the creditors. On collation of the claims, the IRP formed the CoC and scheduled the first CoC meeting on 18.01.2022. 4. During the 1st CoC Meeting, it was resolved to appoint 2 (two) Registered Valuers to determine the Fair Value and Liquidation Value of assets of the Corporate Debtor as per Regulation 27 of CIRP Regulations. The CoC also unanimously approved the replacement of IRP with Jayesh Natvarlal Sanghrajka as the RP and same was approved by this Tribunal vide order dated 07.03.2022. 5. In the 2nd CoC meeting, the appointment of M/s. N V Dand and Associates was approved for....
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....esolution Plan. The same has been submitted by the Resolution Applicant on 16.09.2022. In case of any noncompliance with the Resolution Plan Process by the Successful Resolution Applicant, such performance bank guarantee shall be forfeited. 14. Meanwhile, on 09.09.2022, this Tribunal granted the exclusion of 36 days from the period of CIRP (14 days from 06.12.2021 to 20.12.2021 and 22 days from 07.03.2021 to 29.03.2021). Valuation of the Corporate Debtor: 15. The Valuations Reports are annexed to the application. The average Fair Value of the Corporate Debtor is as follows: Sr. No. Assets Valuer Amount (INR) 1. Land and Building Valuer 1 3,70,32,00,000 Valuer 2 3,62,25,92,311 2. Securities or Financial Assets Valuer 1 42,97,59,402 Valuer 2 35,62,43,227 Further, the Liquidation Value of the Corporate Debtor is as follows: Sr. No. Assets Valuer Amount (INR) 1. Land and Building Valuer 1 3,14,77,00,000 Valuer 2 2,89,80,73,849 2. Securities or Financial Assets Valuer 1 25,84,92,475 Valuer 2 19,66,50,167 Background of the Successful Resolution Applicant: 16. The said Resolut....
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....pplicant in its sole discretion, in full and final settlement of amounts due and payable to it, whether claimed or otherwise. The detailed terms and conditions of the financial proposal pertaining to Aasan is set forth in Section 3.2(A)(1) of Resolution Plan. 22. Operational Creditors (Workmen): The Authorized Representative of 101 and 575 Ralliwolf workmen submitted a claim, which was partly admitted and rest was rejected by the Resolution Professional. The details are as follows: Name of Creditor Claim filed Claims verified and admitted Claims not admitted The said 575 Ralliwolf Workmen (represented by their Authorized Representative Mr. Sandesh Raut) 98,49,40,577/- 62,44,43,284/- 36,04,97,293/- The said 101 Ralliwolf workmen (represented by their Authorized Representative Mr. Naresh Kadam) 21,01,54,205/- 16,65,71,083/- 4,35,83,122/- Total 1,19,50,94,782/- 79,10,14,367/- 40,40,80,415/- 23. The Resolution Applicant proposed to make payment of the entire admitted Claim of the said 575 Ralliwolf Workmen and the said 101 Ralliwolf Workmen i.e. the Admitted Workmen Debt amounting to Rs. 79,10,14,367/- (Rupees Seventy Nine Crore Ten....
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....nt and submitted that the orders passed in both IAs (filed by the Workmen) by this tribunal stipulate that both Provident Fund and Gratuity are to be paid in full as per the provisions of the EPF and MP Act, 1952 and the Payment of Gratuity Act, 1972. She emphasized that, in addition to the amount proposed in the Resolution Plan, the workmen should also be paid the entire Gratuity amount as decided by this Tribunal. In response to this, the Resolution Professional again submitted that the entire amount of Gratuity would be paid, then too the amount proposed for workmen exceeds the minimum entitlement under law. 28. Additionally, the Resolution Professional tendered a calculation sheet detailing how the aforementioned amounts were arrived at. The Calculation sheet is reproduced below: - A. As per Section 53(1)(b)(i) of IBC; Workmen's dues for the period of Twenty Four months preceding the CIRP period is as follows: 575 workmen 24 months wages prior to CIRP commencement (as per Industrial Court Order dated 2nd May 2019 as modified by the Order dated 21^st November 2019) Rs. 14,59,30,608/- 101 workmen 24 months wages prior to CIRP commencement (as per Industria....
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....d amount in addition to the gratuity amount cannot be sustained, as the minimum amount to be paid as per law comes to Rs. 35,93,62,049/- whereas, the amount proposed to workmen under the resolution plan is Rs. 79,10,14,367/-, which exceeds the minimum guaranteed amount entitled under the law. 30. Thus, we note from the additional affidavit dated 04.07.2024 and Calculation sheet that the orders dated 04.07.2024 of this Tribunal has been complied with and the entire gratuity is being paid to the workmen. We agree with the submission of the Resolution Professional that- (i) The amount offered to workmen includes the entire gratuity amount. (ii) And the amount offered to workmen is not less than what they would have got under as per Section 53 of IBC (24 months' wages). 31. The reference is also made to the relevant clause for payment to Workmen in Resolution Plan is as follows: Section 3 "The Admitted Workmen Debt will be paid in full to the said 575 Ralliwolf Workmen and the said 101 Ralliwolf Workmen on the Effective Date ("Workmen Payment"), in full and final settlement towards all amounts due and payable to them (whether towards retirement....
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.....) As set out in the table in Clause 3.1(A) above, the said 101 Ralliwolf Workmen have submitted a claim for Rs. 21,01,54,205/- out of which an amount of Rs. 4,35,83,122/- has been rejected by the Resolution Professional for the reasons set forth in the List of Creditors. The Resolution Applicant hereby clarifies that in the event such amount is subsequently admitted by the Resolution Professional for any reason, including on account of any orders subsequently passed by any court or competent authority, or the aforesaid amount of is held to be valid claim, then the Resolution Applicant will not make any further payments, since the payment of their admitted claim of Rs. 16,65,71,083/- proposed to be made by the Resolution Applicant, with the approval of the COC, is more than their mandatory entitlement under the Code. (b.) Subject to sub-clause 2(a) above, in the event there is a reduction in the amount of the admitted debt of the said 101 Ralliwolf Workmen being Rs. 16,65,71,083, for any reason whatsoever, then the Resolution Applicant. will make payment of such reduced amount only, and if an excess amount has been paid then the Resolution Applicant will be entitled to a r....
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....l. The detailed terms and conditions of the financial proposal pertaining to the EPFO is set forth in Section 3.2(A)(3.1)(ii) of the Resolution Plan. Without prejudice to anything contained above, any other debt of the Operational Creditors (Government Dues) and or any other Government and Statutory Authority appearing in the books of account of the Corporate Debtor, whether or not a claim has been filed in relation thereto, whether admitted or not, under verification, contingent or otherwise, asserted or unasserted, secured or unsecured shall stand permanently extinguished. This will be in full and final settlement. 36. Operational Creditors (other than Workmen and Employees and Government Dues): The Resolution Applicant will make payment of the entire admitted Claim of the Other Operational Creditors i.e. the Admitted Other Operational Creditor Debt totally amounting to Rs. 15,81,740 (Rupees Fifteen Lakh Eighty One Thousand Seven Hundred Forty Only) and as per the table specified in Clause 3.2(A)(3.1) of Resolution Plan, in full and final settlement towards all amounts due and payable to them, whether claimed or otherwise. The Other Operational Creditors shall be deemed to hav....
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....erim Committee shall be responsible for supervision and implementation of the Resolution Plan, conducting the business of the Corporate Debtor as a going concern, and protecting and safeguarding the interest of the Corporate Debtor. 6.6 On the Effective Date, all the existing Directors of the Corporate Debtor, without any further action being required on the part of any Person, shall be deemed to have resigned from the Board of the Corporate Debtor, and the Board of the Corporate Debtor will be reconstituted to comprise the members of the Resolution Applicant ("Reconstituted Board"), and will be responsible for the supervision of the day to day affairs of the Corporate Debtor and to oversee the management of the affairs of the Corporate Debtor. 39. The interests of existing shareholders have been altered by the resolution Plan as under: Sr. No. Category of Share Holder No. of Shares held before CIRP No.of Shares held after the CIRP Voting Share(%) held before CIRP Voting Share (%) held after CIRP 1. Equity 50000 equity shares of Rs. 10 each. Nil 100 Nil The existing pre- CIRP shareholding (including equity shares....
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....erminated without any further acts; deeds, or things, the Resolution Applicant shall not be bound by any of its obligations and commitments thereunder, and no claim shall lie against the Resolution Applicant, (ii) the Refundable Process Participation Deposit (as described in the Detailed EOI) shall not be liable to be forfeited and shall be returned to the Resolution Applicant within 7 (seven) days from the expiry of the aforesaid period of 180 (one hundred and eighty) days, (iii) the Earnest Money Deposit (as described in the RFRP) shall not be liable to be forfeited and shall be returned to the Resolution Applicant within 7 (seven) days from the expiry of the aforesaid period of 180 (one hundred and eighty) days, (iv) the Performance Security, if furnished, shall not be liable to be invoked and shall be returned to the Resolution Applicant, within 7(seven) days from the expiry of the aforesaid period of 180 (one hundred and eighty) days, and (v) all costs, if any, incurred by the Resolution Applicant shall be repaid in priority as CIRP Costs. It is clarified that the aforesaid termination will not be construed as a withdrawal of the Resolution Plan by the Resolution Appl....
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....the Corporate Debtor or any avoidance transactions, preferential transactions or wrongful trading, shall be to the sole account of the COC, and the Resolution Applicant will not claim any benefit therein or any right, title, or interest thereto. Further, all proceedings in respect of any avoidance transactions, preferential transactions, fraudulent transactions, undervalued transactions, extortionate transactions or wrongful trading or any other transaction with or concerning any Related Party of the Corporate Debtor, shall be pursued as may be decided by the COC. All costs incurred towards pursuing the aforesaid proceedings till the Effective Date shall constitute CIRP Costs which shall be paid in the manner provided for in this Resolution Plan, and all costs incurred towards pursuing the aforesaid proceedings on and from the Effective Date shall be solely borne by the COC." 44. The Resolution Professional filed an additional affidavit dated 25.11.2022, stating that vide email dated 24.11.2022, the Resolution Applicant submitted the Scheme of Arrangement and Amalgamation between the Corporate Debtor and Oberoi Constructions Limited to the Resolution Professional. The Resolution....
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....en and employees and Government dues 0.18 0.15 0 0 TOTAL 127.18 86.74 86.59 86.59 5. Other Debts and dues 1.25 1.25 1.25 100% Grand Total 788.83 748.39 272.84 34.59% 47. The compliance of the Resolution Plan is as under: Sr. No. Section of the Code/Regulation No. Requirement with respect to Resolution Plan Clause Resolution Plan Compliance (Yes/No) 1. 25(2)(h) Whether the Resolution Applicant meets the criteria approved by the CoC having regard to the complexity and scale of operations of business of the CD? Yes 2. Section29A 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? Yes 3. Section 30(1) Whether the Resolution Applicant has submitted an affidavit stating that it is eligible? Yes 4. Section 30(2) Whether the Resolution Plan- (a) Provides for the payment of insolvency resolution process costs? Clause 4.1 Yes (b) Provides for the payment to the Operatio....
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....egulation 38(3) Whether the resolution plan demonstrate that- (a) It addresses the cause of default? Clause 3 and 5 Yes (b) It is feasible and viable Clause 3 and 5 Yes (c) It has provisions for its effective implementation? Clause 8 Yes (d) It has provisions for approvals required and the timeline for the same Clause 4.5 Yes (e) The resolution plan applicant has the capability to implement the resolution plan? Clause 1 Yes 12. 39(2) Whether the RP has filed applications in respect of transactions observed, found or determined by him? Section H Yes 13. Regulation 39 (4) Provide details of performance security received, as referred to in sub-regulation (4A) of regulation 36B. Yes 48. The CIRP has been conducted as per the timeline indicated as under: Sr. No. Section of the Code/Regulation No. Description of Activity Latest Timeline under regulation 40A As per Regulation Actual Date 1. Section 16(1) Commencement of CIRP and Appointment of IRP T 06.12.2021 06.12.2021 and order received on 20.12.2021 2. Regulation 6(1) Publication of P....
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.... the grounds on which the Adjudicating Authority can reject the plan is in reference to matters specified in section 30(2) only when the plan does not conform to the stated requirements. 51. In view of the law laid down by Hon'ble Apex Court, the commercial wisdom of the CoC is to be given paramount importance for approval/rejection of the resolution plan. As the resolution plan meets the requirements under the Code and the Regulations, the same needs to be approved. Accordingly, the Resolution Plan is approved with following directions: i. The Resolution Plan submitted by Oberoi Constructions limited is hereby approved. It shall be binding on the Corporate Debtor, its employees, members, creditors including the Central Government, Statement 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 is due. All the stakeholders and respective authorities shall cooperate in smooth implementation of the resolution plan and revival of the Corporate Debtor. ii. The Monitoring Committee shall supervise the implementation of the Resolution Plan and shall review the operational performance of th....