TaxTMI 
TaxTMI 
2023 (12) TMI 1517
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....t Services Limited (hereafter called as the "Successful Resolution Applicant/SRA") under the provisions of Section 31(1) of the code, for resolution of Reliance Communications Infrastructure Limited (hereinafter called as the "Corporate Debtor") and for passing order/appropriate direction that this Tribunal may deem fit in the present matter. Brief Facts 2. The CIRP was initiated against the Corporate debtor vide Order dated 25.09.2019. Mr. Anish Niranjan Nanavaty was appointed as the Interim Resolution Professional (hereinafter referred to as the "IRP"). 3. The IRP published a Public Announcement in Form-A on 28.09.2019 inviting claims from the creditors of the Corporate Debtor. After the receipt of claims, the CoC was constituted by the IRP on 17.10.2019. 4. The Applicant submits that till the date of filing of the present Application, a total of 18 (Eighteen) CoC meetings of the Corporate Debtor have been held from time to time. 5. The Committee of Creditors ("CoC") in its 1st meeting held on 22.10.2019 confirmed the appointment of the IRP as the Resolution Professional ("RP") and appointed Duff & Phelps as the Process Advisor. 6. At the 1st CoC Meeting, the Co....
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....List of PRAs on 25.11.2019 and the Final List of PRAs on 09.12.2019. However, EOIs were received from 4 additional entities, including the Respondent herein, beyond the prescribed timeline. The CoC, pursuant to meetings dated 19.12.2019, 27.05.2020 and 25.06.2020 approved the condonation for delay in submission of EOI by these entities and their inclusion in the Final List of PRAs. The RP issued the revised Final List of PRAs on 01.07.2020. 10. The last date of submission of Resolution Plan in terms of the RFRP was 17.12.2019. The said date was extended from time to time, as per COC approval, pursuant to which the last date of submissions of Resolution Plan was 31.07.2020. The Applicant received Resolution Plans from the below mentioned PRAs which were opened at the 11th CoC meeting held on 03.08.2020: a) Sify Technologies Limited b) Reliance Projects & Property Management Services Limited, through its division, Infrastructure Projects c) Asia Connectivity Pte Limited d) UV Asset Reconstruction Company Ltd. 11. The RP and its advisors were engaged in discussions with the PRAs in order to provide comments from the perspective of ensuring com....
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.... CoC meeting, held on 05.08.2021, the RP presented the Resolution Plan of the Respondent before the CoC for its approval. Thereafter, between 11.08.2021 and 27.08.2021, e-voting was conducted for the approval of the Resolution Plan by the COC and for issuance of the Letter of Intent ("LOI") to the Resolution Applicant in compliance with the RFRP. Upon request by certain lenders, the e-voting was extended till 30th August, 4pm. 18. The e-voting was concluded on 30.08.2021. As per the e-voting result, the COC by a majority of 67.97% approved the Resolution Plan of the Respondent and authorised the RP to issue the LOI. 19. Pursuant to the approval of the Resolution Plan by the CoC, the Successful Resolution Applicant has unconditionally accepted the Letter of Intent dated 30.08.2021 in accordance with the RFRP and the Successful Resolution Applicant has issued a Performance Bank Guarantee for a sum of INR 2.04 Crores (Rupees Two Crores and Four Lakhs Only) dated 30.08.2021. 20. The Applicant submits that the Resolution Plan and the approval of the Resolution Plan are in accordance with all the provisions of the Code and CIRP Regulations and that it does not contravene any of ....
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....Identified Real Estate Assets (as defined in the Resolution Plan), timely maintenance to deliver required service levels, as considered appropriate by the Resolution Applicant, at its sole discretion. The Resolution Applicant expects operational efficiencies through synergy with existing business. Since the Corporate Debtor has no operations currently, any business opportunities in the Corporate Debtor will be examined once the Resolution Applicant takes over the Corporate Debtor in accordance with this Plan. The Resolution Applicant has the required operational expertise to implement the turnaround strategy. To this effect, the following action plan has been provided in the Plan - (i) Working Capital: The Resolution Applicant will facilitate the Corporate Debtor in raising working capital facilities as per the operational requirements of the Corporate Debtor, which will help in running the Corporate Debtor at optimal utilization levels. (ii) Capital Expenditure: The Resolution Applicant will leverage the proven track record of the Reliance Industries Group of "best in class project execution" to ensure upgradation of the infrastructure, if deemed necessary by the....
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.... the Plan 195,00,00,000 (See Note 2 below) 4. Real Estate Monetization Proceeds 90,00,00,000 (See Note 3 below) 5. Upfront Equity Infusion 5,00,00,000 6. Interim Management Cost Upto 5,00,00,000 Total Upto 475,52,00,000 Notes to the table: Note 1: As per Annexure 2 of the Plan, if the mandatory payments prescribed under the Code (including the CIRP Cost, payments to Operational Creditors and Mandatory Dissenting Financial Creditors Payments) are not sufficient to be met out of the total financial outlay set out in the Plan, the RA will infuse additional funds as may be necessary to meet the shortfall in making the mandatory payments specified under the Code of up to INR 35 crores. Note 2 (Assignment of Reliance Bhutan Loan): The Corporate Debtor had extended certain loans to Reliance Bhutan Limited (a wholly owned subsidiary of RITL). As on 31.03.2020, the outstanding amount in relation to such loan is INR 195,00,00,000 ("Reliance Bhutan Loan"). The Resolution Applicant has agreed to transfer the Reliance Bhutan Loan in favour of the Approving Financial Creditors on the Effective Date by way of assignment agre....
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....ity to all other stakeholders; (ii) out of the Total Resolution Amount, payment of INR 11,90,376 payable to the workmen and employees on pro-rata basis to their admitted debt; (iii) out of the Total Resolution Amount, payment of INR 26,46,971 payable to the operational creditors (other than workmen and employees) on pro-rata basis to their admitted debt (iv) payment of mandatory amounts to dissenting financial creditors in priority to any payment to approving financial creditors in accordance with the Plan; (v) the balance amount available, after making the aforesaid payments, will be distributed between and amongst the approving financial creditors on pro-rata basis to their admitted debt. 28. The payments of the Total Resolution Amount, i.e. INR 57 crores, under this Plan shall be effected within 30 days from the date of issuance of the Closing Action Notice, subject to other provisions of the Plan. Treatment of Stakeholders under the Plan (Sl. No . Category of Stakeholder* Sub-Category of Stakeholder Amount Claimed (INR) Amount Admitted (INR) Amount Provide d under the Plan (INR) Amount Provided to the Amount Claimed....
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.... ● Note 2: Amount provided under the Plan includes estimated value of non-cash components. It is not Net Present Value ("NPV") ● Note 3: CIRP Costs: Outstanding CIRP Costs, as on 31.01.2023 (unaudited) is INR 2.85 crores, the amounts payable to all stakeholders as stated in the above table are calculated basis this amount. The CIRP Costs will be paid in full and in priority to any other creditor of the Corporate Debtor. ● Note 4: The amount set out for recoveries of the financial creditors has been based on the cash balances as on 28th February, 2021, and takes into consideration adjustments on account of interim management costs of INR 5 crores, litigation corpus of INR 5 crores, upfront equity commitment of INR 5 crores and CIRP costs of INR 4.60 crores. Statutory Compliance 29. In compliance of Section 30(2) of IBC, 2016, the Resolution Professional has examined the Resolution plan of the Successful Resolution Applicant and confirms that this Resolution Plan: a) Provides for payment of Insolvency Resolution Process cost in a manner specified by the Board in the priority to the payment of other debts of the corporate debtor; ....
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....e relevant parts of which are reproduced below : FORM H COMPLIANCE CERTIFICATE (Under Regulation 39(4) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 2. The details of the CIRP are as under: Sl. No. Particulars Description 1 Name of the CD Reliance Communications Infrastructure Limited 2 Date of Initiation of CIRP September 25, 2019 3 Date of Appointment of IRP September 25, 2019 4 Date of Publication of Public Announcement September 28, 2019 5 Date of Constitution of CoC October 17, 2019 6 Date of First Meeting of CoC October 22, 2019 7 Date of Appointment of RP October 31, 2019 8 Date of Appointment of Registered Valuers 1. Girish Pawar - November 01, 2019 2. Rakesh Narula - November 01, 2019 3. GAA Advisory LLP - June 03, 2020 9 Date of Issue of Invitation for EoI November 01, 2019 10 Date of Final List of Eligible Prospective Resolution Applicants December 09, 2019, which was further revised and issued finally on July 1, 2020. 11 Date of Invitation of Resolution Plan Novemb....
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.... Secured Financial Creditors [Note 3] (a) Creditors not having a right to vote under sub- section (2) of section 21 NA NA NA NA (b) Other than (a) above: (i) who did not vote in favour of the resolution Plan 1,38,11,61,65, 631 1,32,27,12,64,358 3,17,49,58,99 6 2.30 % (ii) who voted in favour of the resolution plan 2,98,10,39,63, 891 2,81,38,69,41,758 1,37,92,12,31 0 0.46 % Total[(a) + (b)] 4,36,22,01,29,522 4,13,65,82,0 6,116 4,55,41,71,30 6 1.04% 2 Unsecured Financial Creditors (a) Creditors not having a right to vote under sub-section (2) of section 21 55,82,63,51,2 48 55,81,75,50,6 38 Nil Nil (b) Other than (a) above: (i) who did not vote in favour of the resolution Plan3 31,53,46,962 31,53,46,962 11,91,347 0.38 % (ii) who voted in favour of the resolution plan - - - - Total[(a) + (b)] 56,14,16,98,2 10 56,13,28,97, 600 11,91,347 0.002% [Note 11] 3 Operational Cre....
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....he mandatory payments prescribed under the Code (including the CIRP Cost, payments to Operational Creditors and Mandatory Dissenting Financial Creditors Payments) are not sufficient to be met out of the total financial outlay set out in the Resolution Plan, the Resolution Applicant will infuse such additional funds as may be necessary solely to meet the shortfall in making the mandatory payments specified under the Code of up to INR 35 crores. Note 8: The amount set out for recoveries of the financial creditors has been based on the cash balances as on February 28, 2021, and takes into consideration adjustments on account of interim management costs of INR 5 crores, litigation corpus of INR 5 crores, upfront equity commitment of INR 5 crores and CIRP costs of INR 4.60 crores. Note 9: The amounts indicated for recovery to financial creditors also includes estimated realization of the Real Estate Monetization Proceeds of approximately INR 90 crores. Actual realization may depend and/or vary on account of the factors specified in sub-section 1.2.10 (Sale of Identified Real Estate Assets and realization of Real Estate Monetization Proceeds) of Part B (Financial Propos....
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....d (RTL) by: (a) publishing the order on the website of the Corporate Debtor, RCL, RITL and RTL; and (b) communicating the order to the stock exchanges where the shares of RCL are listed to be done within 14 business days from the receipt of copy of the order of the NCLT sanctioning the Resolution Plan;" 36. The Counsel for the Applicant clarified vide Additional Affidavit dated 04.12.2023, stating that the condition precedent in clause 8.2.2(a)(iii) does not make the Resolution Plan contingent on the approval of the Resolution Plan of RCL, RITL and RTL. This Clause was incorporated for the limited purpose of communicating the order passed in the present resolution Plan to all the stakeholders of the Corporate Debtor, including RCL (i.e. the holding company of the Corporate Debtor), RITL and RTL (being group companies of RCIL), and the implementation of the present Resolution Plan is not contingent upon approval of the Resolution Plans in respect of RCL, RITL and RTL. 37. Considering the submissions, this Bench is of considered view that the Condition Precedent which is read as if plan is contingent on approval of Resolution Plans of RCL, RITL and RTL is arising on account of ....
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....ective from this date and shall form part of this order with the following directions: i. It shall be binding on the Corporate Debtor, its employees, members, creditors, including the Central Government, any State 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, guarantors and other stakeholders involved in the Resolution Plan. ii. The approval of the Resolution Plan shall not be construed as waiver of any statutory obligations/liabilities of the Corporate Debtor and shall be dealt by the appropriate Authorities in accordance with law. Any waiver sought in the Resolution Plan, shall be subject to approval by the Authorities concerned in light of the Judgment of Supreme Court in Ghanshyam Mishra and Sons Private Limited v/s. Edelweiss Asset Reconstruction Company Limited, the relevant para's of which are extracted herein below: "95. (i) Once a resolution plan is duly approved by the adjudicating authority under sub-section (1) of Section 31, the claims as provided in the resolution plan shall stand frozen and will be binding on the corporate debtor and its emplo....