TaxTMI 
TaxTMI 
TaxTMI 
2024 (8) TMI 1605
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....ittee 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 conducting Transaction Audit of the Corporate Debto....
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....ant 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 Resolution Plan was approved by the CoC on 01.09.2022 and Resolution Applicant i.e. Oberoi Constructions Limited was declared as the Successful Resolut....
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....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 Lakh Fourteen Thousand Three Hundred Sixty Seven only), in full and final settlement towards all amounts due and payable to them in the priority prescribed under the Code, whether claimed or otherwise. 24. However, the 101 and 575 Ralliwolf workmen filed separate applications ....
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....olution 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 21st November 2019) Rs. 14,59,30,608/- 101 workmen 24 months wages prior to CIRP commencement (as per Industrial Court Orders passed in Recovery Applications filed by 101 workmen before Industrial Court) Rs. 2,53,80,600/- Total Entitlement of 676 workmen as per Section 53(1) of IBC Rs. 17,13,11,208/- Total Entitlement of Financial Creditor as per Section 53(1) of IBC Rs. 6,60,40,11,424/- Therefore, Total payment to be paid as per Secti....
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....al 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 benefits, gratuity, bonus, provident fund, interest, or otherwise), and shall be deemed to have relinquished any claim for any other dues and shall not have any claim against any person whatsoever. The appropriation of the Workmen Payment to the said 575 Ralliwolf Workmen and the said 101 Ralliwolf Workmen will be as per their admitted Claims. No payment will be made to the balance workmen of Ralliwolf, if any, since they have not submitted any claim to th....
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....t 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 refund from the concerned persons." 32. The above mentioned specific clause in the resolution plan states that if any additional amount is admitted by the Resolution Professional, whether due to subsequent court orders or any competent authority's decision, the Resolution Applicant will not make further payments as the amount proposed to be paid to the workmen, with the approval of the COC, already exceeds their mandatory entitlement under the Code. Therefore, no further amount shall be paid. 33. ....
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....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 have relinquished any claim for any other dues and shall be deemed to have been settled in full. The detailed terms and conditions of the financial proposal pertaining to the Other Operational Creditors is set forth in Section 3.2(A)(3.1)(iii) of Resolution Plan. Without prejudice to anything contained above, any other debt of the Other Operational Creditors/trade creditors appearing in the books of account of the Corporate Debtor, whether or not a claim has been filed in relation thereto, whether admitted or n....
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.... 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, the preference share capital of the Corporate Debtor on the CIRP Commencement Date) of the Promoters/ Promoter Group and all other existing shareholders in the Corporate Debtor (except the equity shares allotted to the Resolution Applicant pursuant to the Equity Infusion into the Corporate Debtor) shall be permanently cancelled and permanently extinguished pursuant to the Capital Reduction. The Corporate Debtor Shareholding shall be entirely cancelled and permanently extinguished ("Capital Reduction") for NIL consideration. The Resolution Applicant (along with it....
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....icant 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 Applicant. 41. In relation to this conditional clause, the Resolution Applicant also sent an email on 01.09.2022 at 11:33. Additionally, at 11:39, another email was sent stating that- "Please ignore my email of 1/Sep/2022 below. This is with reference to the Revised Resolution Plan dated 30/Aug/2022 submitted by us, and the discussion during the meeting Committee of Creditors held on 1/Sep/2022. As discussed during the aforesaid meeting, Section 8.4(ii) of the Revised Resolution Plan dated 30/Aug/2022, shall be read as under: In view of the above, prior to the expiry of 180 (one hundred and eighty) days from the N....
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....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 Plan approved by the COC provided for the amalgamation of the Corporate Debtor with the Resolution Applicant and specified that the Scheme of Arrangement and Amalgamation will be submitted separately. This Scheme of Arrangement and Amalgamation has been attached to the said affidavit. The Resolution Professional also mentioned in the affidavit that the Scheme of Arrangement and Amalgamation needs to be approved by this Hon'ble Tribunal (as a part of and along with the Resolution Plan) along with the prayer clause (a) of the Application. 45. In this context, we are of the considered view that said scheme may be filed separately under the appropriate law, which shall ....
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....idavit 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 Operational Creditors? Clause 3 and 4 Yes (c) Provides for the payment to the financial creditors who did not vote in favour of the resolution plan? Clause 3 and 4 Yes (d) Provides for the management of the affairs of the Corporate Debtor? Clause 6 Yes (e) Provides for the implementation and supervision of the resolution plan? Clause 5 and 8.5 Yes (f) Contravenes any of the provisions of the law for the time being in force? Clause 4 of Para D of the Covering Letter to the Resolution Plan No 5. Section 30(4) Whether the Resolution Plan (a) Is feasible and viable, according to the CoC? Yes (b) Has been approved by the CoC with 66% voting share? Yes 6. Section 31(1) Whether the Resolution Plan has provisions for its effective implementation plan, according to the CoC? Yes 7. Regulation 35A Where the Resolution Professional made a determination if the corporate debtor has been subjecte....
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....n 6(1) Publication of Public Announcement T+3 09.12.2021 21.12.2021 3. Section 15(1)(c)/Regulation 12 (1) Submission of Claims T+14 20.12.2021 03.01.2022 4. Regulation 13(1) Verification of Claims T+21 27.12.2021 10.01.2022 5. Section 26 (6A)/Regulation 15A Application for Appointment of Authorized Representative, if necessary T+2 29.12.2021 N.A. 6. Regulation 17(1) Filing Report Certifying Constitution of CoC T+23 29.12.2021 03.01.2022 7. Section 22(1) and Regulation 17(2) First Meeting of the CoC T+30 05.01.2022 18.01.2022 8. Regulation 35A Determination of Fraudulent and other transactions T+115 31.03.2022 31.03.2022 9. Regulation 27 Appointment of two Registered Valuers T+47 22.01.2022 20.01.2022 10. Regulation 36(1) Submission of Information Memorandum to CoC T+54 29.01.2022 17.02.2022 11. Regulation 36A Invitation of EOI T+75 19.02.2022 05.04.2022 Publicationof Form -G T+75 19.02.2022 05.04.2022 Provisional List of Resolution Applicants T+100 16.03.2022 30.04.2022 Final List of Resolution Applicant T+115 31.03.2022 15.05.2022 12. Issue of Request for Resolution Plan, which includes Evaluation Matr....
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....ences committed prior to the commencement of CIRP and as stipulated under Section 32A of IBC, 2016 iv. As per the Resolution Plan, extinguishment of existing shares of the Corporate Debtor, allotment of shares to the Successful Resolution Applicant and reduction of share capital will not require the consent of shareholders under Companies Act, 2013 or any other authorities for implementation of the Resolution Plan. Reliefs and Concessions: v. Approval of the Resolution Plan shall not be a ground for termination of any existing consents, approvals, licenses, concessions, authorizations, permits or the like that has been granted to the Corporate Debtor or for which the Corporate Debtor has made an application for renewal, permissions, sanctions, consents, approvals, allowances, exemptions etc. vi. As far as the permits held by the Corporate Debtor and the rights and benefits therein, wherever required, the Corporate Debtor has to approach the Authorities concerned for those permits and the same shall be processed in accordance with law and decision to be taken without undue delay. As resolution of Corporate Debtor in a time-bound is the Fundamental Objective of the Insolvency....