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2026 (3) TMI 310
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....ad with Section 61 of the I & B Code, 2016, by preferring the instant company appeal and agitating their grievances, being aggrieved by the impugned order dated 02.05.2024, that was passed by the Ld. NCLT Kochi Bench while considering IA(IBC)(PLAN)/01/KOB/2024, as preferred in CP(IB)/48/KOB/2022. The resultant effect of the impugned order was that the Resolution Plan, as submitted by Respondent No. 3 to the company appeal, was approved in the terms and conditions as referred to in the impugned order. 2. Before venturing on the factual and intricate matrix of the instant company appeal, a few facts which would be relevant to refer to herein at this moment are not in dispute, and rather have emerged during the course of argument, that out of the total 24 Appellants herein, almost 9 Appellants whose names appear at Serial Nos. 1, 2, 3, 8, 12, 13, 14, 15, and 16, had already unconditionally accepted the benefits as determined to be paid to them and other similar workmen in relation to their service dues pertaining to provident fund, gratuity, etc., without raising any objection to the quantification and the remittance of the amount to them. In that eventuality, insofar as the afores....
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....sideration of the claims was undertaken in adherence to Regulation 36A (1) of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016: Respondent No. 1 published Form G on 18.06.2023, thereby inviting Expressions of Interest (EoI) from Prospective Resolution Applicants. (v) In the follow-up to the invitation published on 18.06.2023, the last date for submission of the Resolution Plan was prescribed as 03.07.2023. As a consequence of the EoI invitation, two Prospective Resolution Applicants submitted Expressions of Interest. (vi) The Committee of Creditors, having considered the EoIs submitted by the two Prospective Resolution Applicants, found them unsatisfactory. After deliberations, it was decided in the 5th CoC meeting to issue a fresh Form G inviting a fresh EoI. (vii) Pursuant to that decision, a 2nd publication was made on 30.07.2023, inviting fresh Expressions of Interest. (viii) As per the publication of 30.07.2023, the last date for submission of EoI was fixed as 14.08.2023. In response, two EoIs were received, including one by Respondent No. 3. (ix) Respondent No. 1, after verification of the EoIs recei....
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....meeting, the final Resolution Plan submitted by Respondent No. 3 on 08.12.2023 was discussed. By the decision in the 9th CoC meeting dated 11.12.2023, the Resolution Plan submitted by Respondent No. 3 was approved with 100% voting of the CoC with a proposed outlay of Rs. 2962 Lakhs. (xix) On 03.01.2024, a Letter of Intent was issued to the Successful Resolution Applicant as determined by the 9th CoC meeting dated 11.12.2023. The Successful Resolution Applicant was to furnish performance security of Rs. 2.97 Crores as provided under the RFRP, which was furnished within the given time.(xxi) In furtherance of Regulation 36B(4A) of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, the Successful Resolution Applicant deposited a performance bank guarantee issued by IDBI. In compliance, Respondent No. 1 filed the compliance certificate (Form H) under Regulation 39(4) of the IBBI Regulations. Upon receipt of the performance bank guarantee, proceedings continued for approval of the Resolution Plan of the Successful Resolution Applicant. 5. One aspect relevant to remark at this stage is that when claims were invited, the claims furnished by the Ap....
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.... of Rs. 1060.50 Lakhs was admitted by the Resolution Professional at Rs. 534.72 Lakhs, and the amount proposed under the plan was further reduced to Rs. 446 Lakhs. As the Appellants admittedly did not challenge the RP's partial admission/rejection of their claims under Section 42, the partial admission by the RP and denial of the balance could not be the basis of their present challenge. 11. The Appellants further contended that approval of the Resolution Plan itself was defective because it did not consider statutory claims and working capital reserves necessary for revival under the plan. They also alleged the approval was maliciously oriented and that the Successful Resolution Applicant intended to sell the Corporate Debtor's assets, being engaged in real estate. 12. Further, the Appellants submitted that the approval proceedings suffered from vices due to lack of a monitoring committee to supervise implementation of the Resolution Plan. Reliance was placed on the principles in Swiss Ribbons Pvt. Ltd. & Anr. v. Union of India & Ors. (Writ Petition (Civil) No. 99 of 2018) and it was argued that debts in the shape of service benefits owed to employees had not been provided f....
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.... by Regulation 19(1) read with 19(3) and Schedule II. There is nothing on record by way of the proof of claim required under Regulation 19 to substantiate their claims. Consequently, determination of the claims in the plan, as per the impugned order, cannot be faulted as cryptic; nor can the approval be questioned on the grounds advanced by the Appellants when they did not substantiate their claims under Regulation 19 read with Schedule II. 18. Giving a holistic approach to the controversy, particularly in light of the issues raised by the Appellants about consideration and quantification of their claims in the Resolution Plan, the statute requires consolidation and verification of claims under Section 38 and verification under Section 39. The Liquidator, after considering rival contentions and documents produced in accordance with Regulation 19(2 & 3), partially rejected the Appellants' claim by order in September 2023, which was not challenged by the Appellants. Such partial rejection and non-challenge amounts to satisfactory consideration of the Appellants' claims based on the documents accepted by them. 19. It is at that stage before the Liquidator or under Section 42 whe....
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....o the findings recorded, it was observed that CIRP costs remaining unpaid after utilisation of available cash, which were payable under the Resolution Plan, were disbursed and adjusted from amounts proposed for settlement of Secured Financial Creditors. The amount payable to the Secured Financial Creditor was reduced to the extent of such adjustments in order to meet mandatory payments required under Section 53 read with Section 36(4)(a)(iii) of the I & B Code, 2016, i.e., sums payable towards workmen and employees from the Provident Fund, Pension Fund and Gratuity Fund, in order to meet the total resolution amount and its payability under Section 53. 23. The Ld. Tribunal, while considering the compliance certificate in Form H for affirmation of the Resolution Plan, dealt with the various payment covenants and the satisfaction required for remittance of dues under Regulation 38(1) and 38(1A) of the IBBI Regulations, 2016, which pertain to priority payment to Operational Creditors over Financial Creditors, and recorded specific findings in that regard. 24. The Ld. Tribunal rightly observed that, given the documentation before it, the compliance certificate in Form H and the Ba....
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.... Aircraft Maintenance Engineers Welfare Association), which was considered. 29. The Respondents, by reference to para 3(c) of the reply affidavit, contend that the plan itself provides for payment of statutory dues as required by law and under the Resolution Plan's conditions governing payment to workmen and employees. 30. Having considered the findings in the impugned order, Respondent No. 3 has accepted liability and entitlement of the Appellants for Provident Fund and Gratuity as per statute and the plan. It is not in controversy that the entire EPF amount claimed of Rs. 91,60,270/- (as per the Apex Court's pronouncement) has already been paid in full. 31. The only controversy remaining relates to payment of the Gratuity Fund and Earned Leave. The Appellants contend that books show a balance of Rs. 1,53,51,332/- payable towards Gratuity and Earned Leave (apart from Provident Fund). The plan observed this amount and the Parties' counsel have suggested the actual amount may be approximately Rs. 1.86 Crores. They stated they would accept adjustment since the amount has been or will be adjusted from cash recovery of Secured Financial Creditors. Thus, the Appellants are not ....