TaxTMI 
TaxTMI 
2024 (4) TMI 1363
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....oard of India (Insolvency Resolution Process for Corporate Person) Regulation ("the CIRP Regulations"). The Resolution Plan was duly approved by 100% of the Committee of Creditors (CoC) on 22.06.2023. 2. The Applicant submits that Asset Reconstruction Company (India) Limited, the Financial Creditor initiated the Corporate Insolvency Resolution Process ('CIRP') against V Hotels Ltd. (hereinafter called 'the Corporate Debtor') under Section 7 of the Code. This Tribunal vide order dated 31.05.2019 initiated CIRP against the Corporate Debtor and appointed Mr. Anish Niranjan Nanavaty, the Applicant herein as the Interim Resolution Professional (IRP). Thereafter, the admission order was set aside by the Hon'ble National Company Appellate Tribunal (NCLAT) on 11.12.2019 thereby releasing the Corporate Debtor from the rigors of CIRP. However, the Hon'ble NCLAT's order was set aside by Hon'ble Supreme Court on 01.08.2022 and the management and affairs of the Corporate Debtor again came to be vested with the Applicant. 3. The Applicant filed an application for exclusion of time period from 31.05.2019 to 01.08.2022 from the CIRP period which was allowed on....
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.... 11. In the 24th CoC meeting held on 15.05.2023, the Applicant invited the PRAs to present their Resolution Plans to the CoC. Out of four PRAs, only three Applicants made their presentations to the CoC. Subsequently, in the 25th CoC meeting held on 29.05.2023, the Applicant updated the members of the CoC on legal compliances of the proposed Resolution Plans and the deadline to submit the Resolution Plan was set as 05.06.2023. 12. Thereafter, on request of the two PRAs namely ORL and GHV, the deadline to submit the Resolution Plan was revised and extended to 07.06.2023. In the 26th CoC meeting held on 07.06.2023, only three PRAs submitted Earnest Money Deposit along with the Resolution Plan. Further, certain clarifications were sought from the three PRAs. The clarifications were received from ORL and MDL vide Affidavit dated 14.06.2023 and from GHV on 07.06.2023 by way of a letter. 13. The Applicant confirmed that the revised Resolution Plans received from three PRAs were compliant with the requirements of Section 30, 31 of the Code. In view of the above, the Resolution Plans were put to vote and the voting lines for approval of the Resolution Plans were kept open till 22.0....
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....ther than (a) above 32,15,29,347 31,20,31,336 31,20,313 1.00 % (i) who did not vote in favour of the Resolution Plan - - - - (ii) who voted in favour of the Resolution Plan 32,15,29,347 31,20,31,336 31,20,313 1.00 % Total a+b 6,31,98,07,687 2,58,10,31,336 31,20,313 0.12 % 3 Operation al Creditors (a) Related Party of Corporate Debtor - - - 0.00 % (b) Other than (a) above 82,20,31,854 62,70,91,827 75,00,809 1.20 % (i) Government 53,74,88,435 37,66,06,382 37,72,469 1.00 % (ii) Workmen - - - - (iii) Employees - - - - (iv) Operational Creditors (other than Workmen and Employees and Government Dues) 28,45,43,419 25,04,85,445 37,28,340 1.49 % Total a+b 82,20,31,854 62,70,91,827 75,00,809 1.20 % 4 . Other debts and dues 68,21,31,80,063 1,03,75,46,960 1,04,00,000 1.00 % Grand Total 96,21,44,52,6....
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.... such balance amount shall, at the option of the Resolution Applicant, be refunded back to the Resolution Applicant or the Corporate Debtor. II. Payments to the Operational Creditors : i. The Resolution Applicant proposes to pay an amount of Rs. 75,00,809/- to the Operational Creditors. ii. The payment due to the Operational Creditors whether secured or unsecured, statutory, Governmental Authorities, trade creditors, should not be less than as prescribed under Section 30 payout to them i.e. not less than the amount payable to such Operational Creditors in the event of liquidation of the Corporate Debtor under Section 53 of the Code and the amount that would be have been paid to such Operational Creditors, if the amount to be distributed under the Resolution Plan is distributed in accordance with the order of priority in sub-section 1 of Section 53 whichever is higher. The Operational Creditors is required to be paid in priority over the payments to Financial Creditors. iii. In order to maintain the status of the Corporate Debtor as operational and for running the business of the Corporate Debtor as a going concern, the Resolution Applicant propos....
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....reditors. A claim amount from two unsecured Financial Creditors namely Tulip Star Hotels and Tulip Hotels Private Limited has been verified by the RP as the admitted claims. ii. Further, some of the claims of the Unsecured Financial Creditors are related party claims which have been made by entities belonging to the promoters or other related parties and some of the claims are under verification for want of documents, and the Resolution Applicant has dealt with those claims in the Resolution Plan. iii. The treatment given to the Unsecured Financial Creditors is based on the status of admission of their claim as well as their relation with the Corporate Debtor. On the closing date, utilizing a portion of the Funds, the Unsecured Financial Creditors shall be paid an aggregate amount of Rs. 31,20,313/- towards their full and final settlement against the Corporate Debtor in the following manner: Category Unsecured Financial Creditor payout a. Admitted claim - Non-Related Parties 31,20,313/- b. Admitted claim - Related Parties NIL c. Pending admission/rejected claim - Related parties NIL iv. The Unsecured FC payout shall be distributed ....
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....m or a demand in respect of agreements/arrangements/purchase orders/ work orders between the Corporate Debtor and such person with respect to any event or a cause of action whether or not known to the counterparty or not raised by the counterparty but other than the creditors covered in other clauses relating to a period prior to the closing date shall be settled at an amount as it would have been payable to such creditors in the event of Liquidation and if such amount not provided for hereinabove, then shall be paid out of the SFC consideration amount. ii. On and from the closing date, the Company shall have no liabilities towards the persons currently classified as Promoter or Promoter group, persons acting in concert with promoters, holding companies, subsidiary companies, step-down subsidiary companies, associate companies, group companies or any related party of the aforesaid will be settled at NIL and stand extinguished. However, all claims of the Company against such related parties and all liabilities of such related parties towards Company shall remain outstanding, due and payable in accordance with their terms. VIII. Cash Balance : The cash and ....
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....) two representatives of the Resolution Applicant and (c) the Managing Agency (as defined under the Resolution Plan) within one day from the Tribunal approving the Resolution Plan. Further, the SFC Nominee and the Resolution Applicant Nominees shall be voting members of the Steering Committee with one vote each and the Managing Agency shall be a non-voting member. i. Implementation of the Resolution Plan: The Resolution Applicant proposes to implement the Resolution Plan within a period of 60 days from the Plan approval date by this Tribunal or such other extended date as may be agreed in writing between the Secured Financial Creditors and the Resolution Applicant (Closing Date). j. Recoveries from Preferential/Fraudulent Transaction: The proceedings initiated by the Resolution Professional under Section 43,45,47, 49, 50 and 66 of the Code, which have not attained finality, shall be pursued by the Resolution Applicant. Any proceeds received from the transactions in terms of Sections 43,45,47,49,50 or 66 of the Code, the same shall be paid to the Secured Financial Creditors in a pro-rata manner based on their portion of the admitted Secured Financ....
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..... The Resolution Applicant submitted its addendum to the Resolution Plan dated 09.12.2023 and the same was approved by the members of the CoC in its 32nd CoC meeting held on 13.12.2023. 22. The claims of the Secured Financial Creditors had been recalculated and the admitted outstanding claim amount is Rs. 1,143,56,33,920/- (Rupees One Thousand One Hundred Forty-Three Crore Fifty-Six Lakh Thirty-Three Thousand Nine Hundred Twenty Only). The total amount payable to the Secured Financial Creditors is Rs. 888,69,78,878/- (Rupees Eight Hundred Eighty-Eight Crores Sixty-Nine Lakhs Seventy-Eight Lakhs Eight Hundred and Seventy-Eight Only) and the Resolution Applicant has proposed no change to the said amount in the Resolution Plan. 23. As referred to the above summary of the Resolution Plan, we are satisfied that all the requirements of Section 30(2) are fulfilled and no provision of law for the time being in force appears to have been contravened. 24. Section 30(4) of the Code reads as follows: "(4) The committee of creditors may approve a resolution plan by a vote of not less than sixty six percent of voting share of the financial creditors, after considering its feasi....
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....at the Resolution Plan, as approved by the CoC, meets the requirements specified in Section 30(2). The Hon'ble Apex Court further observed that the role of the NCLT is 'no more and no less'. The Hon'ble Apex further held that the discretion of the Adjudicating Authority is circumscribed by Section 31 and is limited to scrutiny of the Resolution Plan 'as approved' by the requisite percent of voting share of financial creditors. Even in that enquiry the grounds on which the Adjudicating Authority can reject the Resolution Plan is in reference to matters specified in Section 30(2) when the Resolution Plan does not conform to the stated requirements. The legislature, consciously, has not provided any other ground to challenge the commercial wisdom of the individual financial creditors or their collective decision before the Adjudicating Authority. 28. In CoC of Essar Steel India Limited vs. Satish Kumar Gupta and Ors (2020) 8 SCC 531 the Hon'ble Apex Court clearly held that the Adjudicating Authority would not have the power to modify the Resolution Plan which the CoC in their commercial wisdom has approved. In para 42, the Hon'ble Court observed as u....
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....e Resolution Plan with regards to the termination of the 11 tenancy agreements executed by the Corporate Debtor with the employees of the associate companies of the Corporate Debtor, the same shall not be treated to have been terminated automatically with the approval of the Resolution Plan. However, the Resolution Applicant shall be at liberty to take appropriate legal steps before any competent forum/court etc. in the light of the terms and conditions of the contracts of employment with such employees occupying properties of the Corporate Debtor. 33. Any exemption as sought for in relation to the payment of Income Tax Returns, waivers from applicability of any section under the Income Tax Act, 1961, the Central Goods and Services Tax Act, 2017 and other indirect taxes arising out of the implementation of the Resolution Plan is not granted. However, the Resolution Applicant is at liberty to approach competent Authorities for the exemptions if permitted under the law. 34. With respect to the grant of license/Government approval, if the license or approval is terminated, suspended or revoked, the Resolution Applicant may approach the concerned Authorities for such approvals, r....