12th February, 2024 Approval of Resolution Plan - Fabtech Sugar Limited [I.A. No. 3246 of 2022 in C.P. No. 1398 of 2020] (934.32 KB)
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IN THE NATIONAL COMPANY LAW TRIBUNAL MUMBAI BENCH, COURT-V
I.A. No. 3246 of 2022
IN C.P. No. 1398 of 2020
In the matter of an Application under Section 30(6) and Section 31 of the Insolvency and Bankruptcy Code, 2016.
Mr. Srigini Rajat Naidu
(Resolution Professional of M/s Fabtech
Sugar Limited)
…Applicant/Resolution Professional
In the matter of M/s Autade Sugars Private Limited
… Financial Creditor
V/s.
M/s Fabtech Sugar Limited
Order Dated:09.02.2024
Coram:
Hon’ble Reeta Kohli, Member (Judicial)
Hon’ble Madhu Sinha, Member (Technical)
Appearance: Physical For the Applicant: Adv. Prajakta Menezes a/w Adv. Rakesh Gupta (Bank of India) For RP: Sr. Adv. Guarav Joshi a/w Prakhar Tandon i/b Agam Maloo (VC)
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C.P. No.1398 of 2020
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ORDER
Per: Madhu Sinha, Member (Technical)
The above captioned Application was filed under Section 30(6) and Section 31, of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as the “Code”) by the Resolution Professional (hereinafter referred as (“Applicant”), seeking approval of the Resolution Plan, submitted by the Resolution Applicant – M/s Autade Sugars Private Limited, which was approved with voting shares of 76.63% by the members of the Committee of Creditors (hereinafter referred to as ‘COC’). The facts leading to the Application are as under:
The Corporate Insolvency Resolution Process (CIRP) of the Corporate Debtor was initiated, vide an order dated 13.05.2021, under Section 7 of the Insolvency and Bankruptcy Code 2016 (hereinafter referred to as ‘the Code’) (Admission Order) and Mr. Ritesh R. Mahajan, was appointed as Interim Resolution Professional. The IRP, constituted the Committee of Creditors. The Applicant published a Public Announcement in Form A in accordance with Section 15 of the Code, on 20.05.2021, in the Indian Express (English Language), Loksatta (Marathi Language), Pune editions, Punya Nagri and Lokmat (Marathi Language), Solapur edition inviting claims from the creditors of the Corporate Debtor. 3. The IRP conducted the 1st Meeting of COC on 11th June 2021 and the same has been adjourned on 17th June 2021. An Interlocutory
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Application No. 1489 of 2021 was filed for the replacement of IRP. Thereafter, Mr. Srigini Rajat Naidu was appointed as the RP of the Corporate Debtor vide order dated 2nd December 2021 of this Tribunal. 4. Based on the claims received and verified the Committee of Creditors was constituted as under:
- The COC in its 3rd meeting held on 6th July 2021 approved the
invitation of EOI in Form-G. The IRP published the Invitation of
EOI on 16th July 2021 in the leading newspapers, Financial
express (English Language) (PAN India) and in Pudhari (Marathi
language) (All over Maharashtra) with last date of receipt of EOI
been 31st July 2021.
Sr
No.
Financial Creditors Amount Claimed (Rs.) Amount Admitted (Rs.) Voting Rights (%)
IDBI Bank
52,31,68,165/-
24,29,79,059/-
14.32%
2.
Indian
Overseas
Bank
38,82,86,296/-
19,93,48,946/-
11.75%
3.
State Bank of India
50,26,97,801/-
27,33,34,166/-
16.11%
4.
Autade
Sugars
Private Limited
40,13,52,832/-
27,34,22,589
16.12%
5.
Bank of Baroda
46,54,06,265/-
24,06,12,045/-
14.18%
6.
Bank
of
India
(Term Loan)
36,95,12,000/-
46,66,70,476/-
27.51% 7. Bank of India (H&T Loan) and (Bank Guarantee) 46,80,50,053/-
TOTAL 311,84,73,411/- 169,63,67,281/
100%
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- In the 4th meeting held on 23rd July 2021, the evaluation Matrix was approved by the CoC members. Accordingly, two registered valuers for each class i.e. Securities and Financial Assets, Plant and Machinery and Land and Building were appointed. The Registered Valuers submitted their valuation reports to the IRP:
Particul-ars of Assets Valuation 1 Valuation 2 Average Valuation
Fair Value Liquidation Value Fair Value Liquidation Value Fair Value Liquidation Value
Rs. Rs. Rs. Rs. Rs. Rs. LAND AND BUILDINGS 558,000,000 446,400,000 603,500,000 482,800,000 580,750,000 464,600,000 SECURITIES OR FINANCIAL ASSETS 24,224,000 18,674,000 25,093,000 20,243,000 24,658,500 19,458,00 PLANT AND MACHINERY 1,315,000,00 0 854,750,000 1,250,382,500 875,000,000 1,282,691,250 864,875,000
1,897,224,00 0
1,319,824,000 1,878,975,500 1,378,043,00 0 1,888,099,750 1,348,933,500 AVERAGE FAIR AND LIQUIDATION VALUE 1,888,099,750 1,348,933,500
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Pursuant to the FORM G, six responses were received. The IRP in the 4th meeting of CoC circulated the Final List of Prospective Resolution Applicant to all the members of COC. The IRP received the Resolution Plan from 2 out of 3 PRAs.
-
Thereafter, both the Resolution plans were the kept open for discussion with the PRAs and the CoC members during the 5th CoC meeting held on 15th September 2021. The PRAs were requested to revise and amend the resolution plan. The Amended Resolution plan was kept open for discussion in the 6th CoC meeting held on 4th October 2021. The said Resolution Plans did not receive requisite votes and failed in the 9th CoC meeting dated 10th December 2021. Pursuant to the above the
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CoC members in their commercial wisdom decided that the CIRP
should be re-run in the 10th CoC meeting dated 20th December
2021. Four applications were received in response to the fresh
Invitation EOI published on 27th December, 2021.
9. Subsequently two Resolution Plans were received which were
discussed in the 15th CoC meeting dated 8th April 2022. The said
Resolution plan of Shri S.M. Autade Pvt. Ltd was accepted after
some financial improvements. Meanwhile the RP took an
extension by filing an Interlocutory Application having IA no.
590 of 2022 before this Hon’ble NCLT Mumbai Bench, seeking
extension of 60 days beyond the period of 270 days.
10. The COC, in its 20th meeting held on 27th July 2022, approved
Resolution Plan submitted by Shri S.M. Autade Pvt. Ltd. a voting
share of 76.63%. Thereafter, the Applicant has issued
compliance certificate in Form “H”.
THE SALIENT FEATURES OF THE RESOLUTION PLAN ARE AS UNDER:
A. BRIEF BACKGROUND OF THE COMPANY / CORPORATE DEBTOR
i. M/s FABTECH SUGAR LIMITED [“Corporate Debtor”] a public company and classified as a “company limited by shares” was incorporated on 14th October, 2010. The registered office of the Corporate Debtor is located at J 504, MIDC Bhosari Pune MH 411026 IN.
ii. M/s FABTECH SUGAR LIMITED (FSL) is a Sugar Manufacturing Company, Fabtech Sugar Ltd has grown
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itself into Sugar Manufacturing firm with interests in Sugar, Rectified Spirits, Extra Neutral Alcohol and Ethanol businesses in Maharashtra. The Sugar and Allied products business unit of the company has expertise in manufacturing of sugar and uses the by products of sugar production - Molasses, Bagasse and Press-mud for manufacturing of high value products such as Rectified Spirit, Extra Neutral Alcohol, Ethanol and Fertilizers. The company started operations with one Sugar Plant of 50000 TCD.
iii. The Corporate Insolvency Resolution Process (“CIRP”) of M/s FABTECH SUGAR LIMITED was initiated as per the provisions of the Insolvency and Bankruptcy Code (“IBC”) under Section 7. The application was moved before the Hon’ble National Company Law Tribunal, Mumbai Bench (“NCLT”) and was admitted vide its order dated 13.05.2021 (“CIRP Order”). Pursuant to such order, Mr. Ritesh R. Mahajan, (having IP Registration No. IBBI/IPA- 002/IP- N00048/2017-18/10132), Insolvency Professional, was appointed as the Interim Resolution Professional (IRP). The CoC in its first meeting held on 17.06.2021 with 93% resolved to appoint Mr. Srigini Rajat Naidu having IP Registration No. IBBI/IPA-003/IPA- 003/IP-N00137/2017-18/11513) as Resolution Professional. Subsequently an Interlocutory Application having IA No. 1489 Of 2021 under Section 22 (3) (b) of IBC, 2016 was filed before the Hon'ble NCLT, Mumbai Bench for appointment of Mr. Srigini Raja Naidu, Applicant as the Resolution Professional of the CD and was admitted. Mr. Srigini Rajat Naidu, Applicant was
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appointed as the Resolution Professional of the CD vide order dated 02nd December 2021.
B. BACKGROUND OF THE RESOLUTION APPLICANT
SHRI S. M. AUTADE PRIVATE LIMITED is a closely held Company, which was incorporated in the year 2014. It is into the business of infrastructure projects. Over these years, the Company has grown into a large establishment, thus, carving a niche of its own in the infrastructure industry. The Company has acquired considerable domain and technical expertise in the field of infrastructure development like Earthwork, Structures, Dams, Canals, Roads, Highways, KT Weir, and Buildings and B.O.T etc. The registered office of the Resolution Applicant Plot No.17, CTS No.1620 Giriraj Co-operative Housing Society, Aundh, Pune – 411007, Maharashtra.
The said Prospective Resolution Applicant is eligible to act as a Resolution Applicant of the Corporate Debtor and is not ineligible under section 29A of Insolvency and Bankruptcy Code and also satisfies the eligibility criterion as mentioned in clause (h) of sub- section (2) of section 25 of the Code. C. SUMMARY OF PAYMENTS UNDER THE RESOLUTION PLAN
Payment Towards
Amount
(Rs.)
CIRP Cost
1,20,00,000
Secured
Financial
Creditor
(Including
consideration
for
147,75,55,437
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assignment of balance debt and
underlying securities.)
Unsecured Financial Creditor
(Including
consideration
for
assignment of balance debt and
underlying securities.)
21,42,31,605
Operational Creditor
10,17,931
Employees and Workmen
38,50,897
Infusion in Company for capital
expenditure and working capital.
32,00,00,000
Total
202,86,55,870
D.SOURCES OF FUNDS:
Stage Amount (in Rs.) Source 1.
Upfront Amount to be paid within
60 days from the date of approval
of the resolution plan by Hon’ble
NCLT
40,45,02,396
Out of the Free Reserves of the Resolution Applicant 2.
Upfront amount within 60 days from the date of approval of the resolution plan by Hon’ble NCLT 10,71,15,802
Out of the Free Reserves of the Resolution Applicant 3.
Within 12 months from the date of the Hon’ble NCLT order approving the Resolution Plan (including Working Capital) 82,95,37,671
Out of the Free Reserves of the Resolution Applicant 4.
Within 24 months from the date of the Hon’ble NCLT order approving the Resolution Plan 53,75,00,000
Out of the free reserves and current
year’s profit from the operations of
the Resolution Applicant
5.
Within 36 months from the date of
the Hon’ble NCLT order approving
the Resolution Plan
15,00,00,000
Out of the free reserves and current year’s profit from the operations of the Resolution Applicant
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Total 2,02,86,55,870
As set out above there will be total induction of Rs.202,86,55,870/- (Rupees Two Hundred Two Crore Eighty-Six Lakh Fifty Five Thousand Eight Hundred and Seventy only) being the plan value out of which Rs. 170,86,55,870/- (Rupees One Hundred Seventy Crore Eighty Six Lakh Fifty Five Thousand Eight Hundred Seventy Only) is paid to the stakeholders and balance Rs. 32,00,00,000/- (Rupees Thirty Two Crore Only) is for capital expenditure and working capital.
E. PAYMENTS PROPOSALS OF THE VARIOUS STAKEHOLDERS UNDER THE RESOLUTION PLAN:
- Proposal for payment to the Financial Creditors
Total amount of outstanding due to Secured Financial Creditors of Fabtech Sugar Limited as per the Information Memorandum being Rs. 303,54,05,058/- (Rupees Three Hundred and Three Crore Fifty Four Lacs Five Thousand and Fifty Eight Only), claim received and admitted for, as per table given below:
Secured Creditors- Fabtech Sugar Limited Sr. No. Name Amount Claimed (Rs.) Amount Admitted (Rs.) 1 Canara Bank
91,53,34,849
91,53,34,849
2
Bank of India (Term Loan)
36,95,12,300
36,95,12,300
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3 State Bank of India
50,26,97,801
50,26,97,801
4
Bank of India (Bank Guarantee)
1,78,10,470
5 Bank of Baroda
38,98,92,990
38,98,92,990
6
Indian Overseas Bank
38,82,86,296
38,82,86,296
7
IFCI Limited
11,25,88,166
11,25,88,166
8
Union Bank of India (erstwhile
Andhra Bank)
35,70,92,656
35,70,92,656
Total
3,05,32,15,528 3,03,54,05,058
The Terms of Payment: The SRA shall make the payment in the following time schedule:-
i.
An aggregate amount of Rs.147,75,55,437/- (Rupees
One Hundred Forty Seven Crore Seventy Five Lakh
Fifty Five Thousand Four Hundred and Thirty Seven
only) (Herein after to be referred as “Resolution
Amount”) is proposed to be paid to the Secured
Financial Creditor (“SFC”).
ii.
Aforementioned Resolution Amount will be bifurcated
in Two portion. First portion will comprise of Rs.
140,75,55,437/- (Rupees One Hundred Forty Crore
Seventy Five Lakh Fifty Five Thousand Four Hundred
and Thirty Seven Only) towards the assets of the
Corporate Debtor. Second portion of Rs.7,00,00,000/-
(Rupees Seven Crore Only) will be towards
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assignment of Balance Debt along with underlying guarantees and securities of the secured financial creditors. Mechanism for payment of aforementioned amount to secured Financial Creditor –
a. The first portion amounting to Rs. 140,75,55,437/- (Rupees One Hundred Forty Crore Seventy Five Lakh Fifty Five Thousand Four Hundred and Thirty Seven Only) will be paid upfront to the Secured Financial Creditors in the following manner:
b. Within a period of 58 days of the order of the Hon’ble NCLT approving the Resolution Plan, the amount of Rs. 36,05,17,766 /- (Rupees Thirty Six Crores Five Lacs Seventeen Thousand Seven Hundred and Sixty Six Only) will be paid to SFC which shall be appropriated among the lenders in following manner –
Secured Creditors- Fabtech Sugar Limited
Sr.
No.
Name
Amount Distributed
1
Canara Bank
10,87,15,137
2
Bank of India (Term Loan)
4,38,87,305
3
State Bank of India
5,97,05,866
4
Bank of Baroda
4,63,07,938
5
Indian Overseas Bank
4,61,17,110
6
IFCI Limited
1,33,72,197
7
Union Bank of India (erstwhile
Andhra Bank)
4,24,12,213
Total
36,05,17,766
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c. Within a period of 58+1 days of the order of the Hon’ble NCLT approving the Resolution Plan, Fully Secured, Non- Convertible, Fully Redeemable Debentures (“Secured NCD”) for an aggregate amount of Rs. 104,70,37,671/- (Rupees One Hundred and Four Crores Seventy Lacs Thirty Seven Thousand Six Hundred and Seventy One Only), including the interest (at the rate of simple interest of 0.01% as contemplated herein above) amount (payable at the time of redemption), will be issued to SFC by ATPL on behalf of RA. Redemption amount of these debenture and tenure will be as follows:
FIRST TRANCH REDEEMABLE
(12 MONTHS FROM NCLT ORDER)
Secured Creditors- Fabtech Sugar Limited
Sr.
No.
Name
Debenture
Redemption
Amount (Excluding
Interest at the rate
of 0.01%)
1
Canara Bank
15,36,52,504
2
Bank of India (Term
Loan)
6,20,28,109
3
State Bank of India
8,43,85,267
4
Bank of Baroda
6,54,49,310
5
Indian Overseas Bank
6,51,79,602
6
IFCI Limited
1,88,99,590
7
Union Bank of India
(erstwhile
Andhra
Bank)
5,99,43,288
Total
50,95,37,671
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SECOND TRANCH REDEEMABLE
(24 MONTHS FROM NCLT ORDER)
Secured Creditors- Fabtech Sugar Limited
Sr.
No.
Name
Debenture
Redemption
Amount (Excluding
Interest at the rate
of 0.01%)
1
Canara Bank
16,20,84,622
2
Bank of India (Term
Loan)
6,54,32,078
3
State Bank of India
8,90,16,149
4
Bank of Baroda
6,90,41,027
5
Indian Overseas Bank
6,87,56,519
6
IFCI Limited
1,99,36,759
7
Union Bank of India
(erstwhile
Andhra
Bank)
6,32,32,847
Total
53,75,00,000
d. The Second portion amounting to Rs. 7,00,00,000/- (Rupees Seven Crore Only) will be paid to the Secured Financial Creditors in the following manner:
a) In addition to cash up front and Secured NCDs, an Asset Reconstruction Company (ARC) or any other entity as may be identified by the RA and allowed by the Financial Creditor shall pay an amount of Rs. 3,00,00,000/- (Rupees Three Crore only) towards the consideration for assignment of debt, 1 day after payment of
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aforementioned cash amount and issuing Secured NCDs i.e.59+1 day.
b) The amount of Rs. 3,00,00,000/- (Rupees Three Crore
only) shall be distributed in following manner –
Secured Creditors- Fabtech Sugar Limited
Sr.
No.
Name
Assignment
Amount
1
Canara Bank
90,46,584
2
Bank of India (Term
Loan)
36,52,023
3
State Bank of India
49,68,343
5
Bank of Baroda
38,53,453
6
Indian Overseas Bank
38,37,573
7
IFCI Limited
11,12,749
8
Union Bank of India
(erstwhile
Andhra
Bank)
35,29,275
Total
3,00,00,000
c) Within a period of 59+1 day of the order of the Hon’ble NCLT approving the Resolution Plan, Fully Secured, Non- Convertible Fully Redeemable Debentures (“Secured NCD”) for an aggregate amount of Rs.4,00,00,000/- (Rupees Four Crore only), including the interest (at the rate of 0.01% as contemplated herein above) amount(payable at the time of redemption), will be issued to SFC by ATPL on behalf of RA. These NCD’s will be redeemed on or before the end of 3rd year from the date of order of Hon’ble NCLT approving the Resolution Plan.
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d) Redemption amount of these debenture and tenure will be as follows: Sr . N o. Name of Secured Financial Creditor At the end of 3rd Year of NCLT Order For Assignment of debt along 1 Canara Bank 1,20,62,111 2 Bank of India(Term Loan) 48,69,364 3 State Bank of India 66,24,458 4 Bank of Baroda 51,37,937 5 Indian Overseas Bank 51,16,764 6 IFCI Limited 14,83,666 7 Union Bank of India (erst while Andhra Bank) 47,05,700 Total 4,00,00,000
e) Accordingly, each assenting Secured financial creditor shall receive following amount –
Sr . No . Nameof Secure dFinan cialCre ditor Upfront At theendof 1stYearofN CLTOrder At theendof 2nd YearofNCL TOrder At theendof 3rdYearofN CLTOrder TotalRe solution Amount TotalAssi gnmentA mount TotalAmount ForAss ignment ForAssi gnment 1 Canara 108,715,136 9,046,584 153,652,504 162,084,622 12,062,111 424,452,26 21,108,695 445,560,957 2 Bank of India(TermL ) 43,887,305 3,652,023 62,028,109 65,432,078 4,869,364 171,347,49 3 8,521,387 179,868,880 3 State BankofIndi 59,705,866 4,968,343 84,385,267 89,016,149 6,624,458 233,107,28 2 11,592,80 1 244,700,083 4 Banko fBarod 46,307,938 3,853,453 65,449,310 69,041,027 5,137,937 180,798,27 8,991,390 189,789,664 5 IndianO verseas Bank 46,117,110 3,837,573 65,179,602 68,756,519 5,116,764 180,053,23 1 8,954,337 189,007,568 6 IFCILimited 13,372,197 1,112,749 18,899,590 19,936,759 1,483,666 52,208,546 2,596,415 54,804,961
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7 UnionBank of India (erstwhile Andhra Bank) 42,412,213 3,529,275 59,943,288 63,232,847 4,705,700 165,588,34 8 8,234,975 173,823,324 360,517,766 30,000,000 509,537,671 537,500,000 40,000,000 1,407,555,437 70,000,000 1,477,555,437
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Proposal for payment to the Unsecured Financial Creditors
-
Total amount of outstanding due to Unsecured Financial Creditors of Fabtech Sugar Limited as per the Information Memorandum being Rs. 298,47,73,219/- (Rupees Two Hundred Ninety Eight Crore Forty Seven Lacs Seventy Three Thousand Two Hundred and Nineteen only), claim received and admitted claim of Rs. 226,13,40,648/- (Rupees Two Hundred Twenty Six Crore Thirteen Lacs Forty Thousand Six Hundred and Forty Eight only) as per table given below:
Sr.
No.
Name
Amount Claimed
Rs.
Admitted
Amount
Rs.
1.
Canara Bank
1,26,18,84,500
1,26,18,84,500
2.
IDBI Bank Limited
52,31,68,165
52,31,68,165
3
Bank of Baroda
7,55,13,274
7,49,35,151
4
Autade Sugars Pvt. Ltd.
40,13,52,832
40,13,52,832
5
Bank of India (H & T Loan)
45,02,39,583
45,02,39,583
6
DhanashriMahilaGraminBigarsheti Sahakari Patsanstha
25,86,14,865
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Fabtech Projects & Engineers Limited
1,40,00,000
Total
298,47,73,219
271,15,80,231
- The Terms of payment of Unsecured financial creditors:
A. An aggregate amount of Rs. 21,42,31,605/- (Rupees
Twenty One Crore Forty Two Lakh Thirty One Thousand
Six Hundred and Five only) (Herein after to be referred
as “Resolution Amount”) is proposed to be paid to the
Unsecured Financial Creditors (“UFC”).
B. Aforementioned Resolution Amount will be bifurcated in
Three Portion. First portion will comprise of Rs.
5,42,31,605/-(Rupees Five Crore Forty Two Lakh Thirty
One Thousand Six Hundred and Fiveonly) towards
unsecured debt (including Corporate Guarantee, H&T
and Crop Loans and other Unsecured Loans) and
assignment of residual debt (H&T and Crop Loans and
other Unsecured Loans). Second portion of Rs.
11,00,00,000/-(Rupees Eleven Crore only) will be
towards
unsecured
debt
(including
Corporate
Guarantee, H&T and Crop Loans and other Unsecured
Loans) and assignment of residual debt (H&T and Crop
Loans and other Unsecured Loans).Third portion of Rs.
5,00,00,000/- (Rupees Five Crore only) will be towards
assignment of all the residual unsecured debt alongwith
the underlying exclusive securities and guarantees of
the H & T Loan in favor of the RA.
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- Mechanism for payment of aforementioned amount to unsecured financial creditors:
4.1 The first portion amounting to Rs. 5,42,31,605/-(Rupees Five Crore Forty Two Lakh Thirty One Thousand Six Hundred and Five only) consist of two components of Rs. 2,71,15,802/- (Rupees Two Crore Seventy One Lakh Fifteen Thousand Eight Hundred and Two Only) each. The first component of Rs. 2,71,15,802/- (Rupees Two Crore Seventy One Lakh Fifteen Thousand Eight Hundred and Two Only) is towards settlement of the unsecured debt (Corporate Guarantee). The second component of Rs. 2,71,15,802 (Rupees Two Crore Seventy One Lakh Fifteen Thousand Eight Hundred and Two Only) is towards assignment of residual debt (H&T Loan, Corp Loan and any other Unsecured Loan) will be paid upfront within 58 days of the order of the Hon’ble NCLT approving the Resolution Plan to the Unsecured Financial Creditors in the following manner: Sr. No. Name of Unsecured Financial Creditor Upfront Assignment 1% Resolution Amount for CG 1% 1 Canara Bank 12,618,845 12,618,845 2 IDBI Bank Limited 5,231,682 5,231,682 3 Bank of India (H & T Loan) 4,502,396 4,502,396 4 Bank of Baroda 749,352 749,352 5 Autade Sugars Private Limited 4,013,528 4,013,528
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4.2 The Second portion amounting to Rs. 11,00,00,000/- (Rupees Eleven Crore only) consist of two components of Rs. 5,50,00,000/- (Rupees Five Crore and Fifty Lakh Only) each. The first component of Rs. 5,50,00,000/- (Rupees Five Crore and Fifty Lakh Only) is towards the repayment of unsecured debt (including Corporate Guarantee, H&T and Crop Loans and any other Unsecured Loans) and The Second component of Rs. 5,50,00,000/- (Rupees Five Crore and Fifty Lakh Only) is towards the consideration for the assignment of residual debt (H&T and Crop Loans and any other Unsecured Loans). The aforesaid amount will be settled in form of issuance of Fully Secured, Non-convertible Fully redeemable NCDs equivalent to Rs.11,00,00,000/- (Rupees Eleven Crore only) to the Unsecured Financial Creditors bearing simple interest at the rate of 0.01% within a period of 58+1 days of the order of the Hon’ble NCLT approving the Resolution Plan to the Unsecured Financial Creditors in the following manner:
Sr.No. Name of Bank For Assignment of all Residual Debt(H&TL oan) For Resolution of Debt(Corporate Guarantee) 1 Canara Bank 2,55,89,821 2,55,89,821 2 IDBI Bank Limited 1,06,09,354 1,06,09,354 Total 27,115,802 27,115,802
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3 Bank of India (H & T Loan) 91,30,432 91,30,432 4 Bank of Baroda 15,31,338 15,31,338 5 Autade Sugars Private Limited 81,39,055 81,39,055 Total 5,50,00,000 5,50,00,000
5 These NCD’s will be redeemed on or before the end of 3rd year from the date of order of Hon’ble NCLT. 6 Unsecured Financial Creditors (having exclusive charge on the assets of guarantors) a) The third portion amounting to Rs. 5,00,00,000/- (Rupees Five Crore only) is towards the assignment of all the residual unsecured debt along with the underlying exclusive securities and guarantees of the H & T Loan in favor of the RA, which shall be paid to Canara Bank within 60 days from the order of Hon’ble NCLT approving the Resolution Plan, as there are lands to the tune of 119 Acres in Revatgaon, Dist. Vijayapura in Karnataka State and Katral and Kagast villages of Solapur District in the state of Maharashtra, which are exclusively mortgaged to Canara Bank against the H & T Loan. 7 Each Assenting (i.e. those financial creditors who vote in favour of the Resolution Plan) Unsecured Financial Creditor shall get its share in the following manner: Sr. No. NameofU nsecured Financial Creditor Upfront At theendof 3rdYearofN CLTOrder At theendof 3rdYearo fNCLTOr der Considerat ionofassign mentofexcl usiveUnder lyingsecuri ties TotalResol utionAmou nt TotalAssig nmentAmo unt TotalA mount Assignment 1% ResolutionAm ountforCG1% Assignment ForUns ecuredD ebt(CG)
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1 CanaraBank 12,618,845 12,618,845 25,589,821 25,589,82 50,000,000 28,903,277 97,514,056 126,417,333 2 IDBIBan k 5,231,682 5,231,682 10,609,354 10,609,35
11,983,089 19,698,983 31,682,072 3 Bank ofIndia (H 4,502,396 4,502,396 9,130,432 9,130,432
10,312,671 16,952,985 27,265,655 4 Bank ofBaroda 749,352 749,352 1,531,338 1,531,338
1,723,839 2,837,539 4,561,378 5 AutadeSugar s 4,013,528 4,013,528 8,139,055 8,139,055
9,192,927 15,112,240 24,305,166 27,115,802 27,115,802 55,000,000 55,000,00 0 50,000,000 62,115,802 152,115,802 214,231,605
F. TREATMENT OF ALL CLAIM IN GENERAL
i.
All other claims or demands made by or liabilities or
obligations owed or payable to (including any demand for
any losses or damages, principal, interest, compound
interest, penal interest, liquidated damages, notional or
crystallized mark to market losses on derivatives and other
charges already accrued/ accruing or in connection with
any third party claims) any actual or potential Secured
financial creditors of the Corporate Debtor or in connection
with any financial debt of the Corporate Debtor (including
any transactions in derivatives), whether admitted or not,
due or contingent, asserted or unasserted, crystallized or
uncrystallized, known or unknown, secured or unsecured,
disputed or undisputed, present or future, whether or not
set out in the profit and loss statement, the balance sheets
of the Corporate Debtor, arising on account of the
acquisition of control by the Resolution Applicant over the
Corporate Debtor pursuant to this Resolution Plan, shall
be written off in full and shall stand permanently
extinguished and the Corporate Debtor or the Resolution
Applicant shall at no point of time be, directly or indirectly,
held responsible or liable in relation thereto.
ii.
Any and all rights and entitlements of any actual or
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22
potential financial creditor, operational creditor, other creditor or any stakeholder, of the Corporate Debtor not addressed herein above, whether admitted or not, due or contingent, asserted or unasserted, crystallised or uncrystallised, known or unknown, disputed or undisputed, present or future, in relation to any period prior to the acquisition of control by the Resolution Applicant over the Corporate Debtor pursuant to this Resolution Plan or arising on account of the acquisition of control by the Resolution Applicant over the Corporate Debtor pursuant to this Resolution Plan, shall stand permanently extinguished and the Corporate Debtor or the Resolution Applicant shall at no point of time, directly or indirectly, have any obligation, liability or duty in relation thereto. iii. Promoters, guarantors, mortgagors or any other person shall not be entitled to make any claim against the Corporate Debtor or Resolution Applicant, towards the money they have paid or will be required to be paid by them to the Bank or Financial Institution or Assignor of debt of Bank or Financial Institution in past or future. Resolution Applicant or Corporate Debtor will not be liable for any claim of subrogation or damages or compensation for the liability the guarantor, mortgagor or any other person who has promised to pay the money on behalf of Corporate Debtor will incur in future.
G. DISSENTING FINANCIAL CREDITORS
-
Payment to the dissenting Financial Creditors (Secured and Unsecured)
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23
a. The dissenting Financial Creditors (i.e. those Financial
Creditors who vote against, or abstain from voting for,
the Resolution Plan approved by the CoC) shall be paid
an amount not less than an amount to be paid to them
in accordance with Sec 53(1) in the event of Liquidation
of the Corporate Debtor.
b. In terms of the code, if there are any dissenting
Financial Creditors, then in such circumstances they
shall be paid in accordance with Sec 30(2) along with
Sec 53(1) of the Code.
c. In the event there are dissenting financial creditors who
will be paid as above, the remaining part of the
proposed resolution amount as per Clause III-C (2) and
Clause III-D (2) will be distributed among the class of
Secured creditors in proportion to the amount of their
claim admitted.
d. The payments to the Dissenting Financial Creditors will
be made in priority over the assenting financial
creditors proportionately. These payments shall be
made to the dissenting financial creditors one day prior
to the payment to the Assenting Financial Creditors.
H. PROVISION FOR OPERATIONAL CREDITORS OF CORPORATE
DEBTOR:
-
The amount due to the Operational Creditors of Corporate Debtor as per Information Memorandum and further communication by the RP is Rs. 10,17,93,053/- (Rupees
In
24
Ten Crore Seventeen Lacs Ninety Three Thousand and Fifty
Three only) which is as mentioned below:
Sr. No.
Name of Creditors
Amount
Claimed
Net Amount
Admitted
1.
DharmarayaBasannaKhavekar
16,979,961.00
12,513,956.00
2.
Maharashtra
Goods
&
Service
Tax
Department
59,662,666.00
59,662,666.00
3.
Saikrupa Construction
17,663,235.00
4,209,401.00
4.
Dnyanal Engineers
124,101.00
96,577.00
5.
Shivam Engineers
767,898.00
676,537.00
6.
Matin Sales Corporation
29,383.00
28,344.00
7.
SBICAP Trustee Company Limited
948,858.00
948,858.00
8.
Fabtech Projects & engineers Limited
488,344,949.64
-
9.
Indotech Organics
919,520.00
919,520.00
10.
MallikarjunIrappaBanne
764,565.50
764,565.50
11.
DevappadasharathKhandekar
729,393.00
667,588.00
12.
Swamiraj Electricals
220,861.60
128,620.00
13.
Alfaenzyme Life Science
453,249.99
453,173.00
14.
HedaCehmicals
939,923.00
939,923.00
15.
Thirumala Chemicals & Allied
807,120.00
807,120.00
16.
Praj Industries
5,987,500.00
5,987,500.00
17.
Deccan Industrial Company
486,880.00
233,414.00
18.
A D Automations
146,287.00
107,935.00
19.
Onkar Trading Company
132,510.00
132,417.00
20.
Suneel Textiles
40,602.52
40,602.52
21.
Risansi Industrial Ltd
1,404,036.00
363,256.00
22.
Amruta Threads
223,979.00
223,659.00
23.
Jagtap&Jagtap LLP
1,145,485.00
-
24.
Unique Infra
3,670,575.00
2,394,543.00
25.
Utkarsh Private Limited
12,812,415.00
6,921,040.69
26.
RMM Associates
426,116.00
308,323.00
27.
Malu Industries
21,028.00
9,456.00
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25
- The terms of payment to Operational Creditors:
a. The Operational Creditors will assign the entire receivable from the Corporate Debtor to the Resolution Applicant for a consideration of Rs. 10,17,931/-(Rupees Ten Lacs Seventeen Thousands Nine Hundred and Thirty One only). b. Total Resolution amount being Rs. 10,17,931/-(Rupees Ten Lacs Seventeen Thousand Nine Hundred and Thirty One only)would be settled by Resolution Applicant in the under mentioned manner:
Sr. No. Name of Creditors Amount Admitted (Rs.)
Resolution
Amount
(Rs.)
1
DharmarayaBasannaKhavekar
1,25,13,956
1,25,140
2
Maharashtra Goods & Service
Tax Department
5,96,62,666
5,96,627
3
MSEB (Refer Note b. below)
16,652
4
Saikrupa Construction
42,09,401
42,094
5
Dnyanal Engineers
96,577
966
6
Shivam Engineers
6,76,537
6,765
28.
RajuKallappaWaghamode
160,913.00
160,913.00
29.
Kolhapur Auto Works
713,151.00
-
30.
ShanteshKallappaWaghamode
227,903.00
227,903.00
31.
Shankar International
9,331,023.00
200,000.00
Total
62,62,86,088.25
10,01,27,811
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26
7 Matin Sales Corporation
28,344
283
8
SBICAP
Trustee
Company
Limited
9,48,858
9,489
9
Fabtech Projects & engineers
Limited
10 Indotech Organics
9,19,520
9,195
11
MallikarjunIrappaBanne
7,64,566
7,646
12
DevappadasharathKhandekar
6,67,588
6,676
13
Swamiraj Electricals
1,28,620
1,286
14
Alfaenzyme Life Science
4,53,173
4,532
15
HedaCehmicals
9,39,923
9,399
16
Thirumala Chemicals & Allied
8,07,120
8,071
17
Praj Industries
59,87,500
59,875
18
Deccan Industrial Company
2,33,414
2,334
19
A D Automations
1,07,935
1,079
20
Onkar Trading Company
1,32,417
1,324
21
Suneel Textiles
40,603
406
22
Risansi Industrial Ltd
3,63,256
3,633
23
Amruta Threads
2,23,659
2,237
24
Jagtap&Jagtap LLP
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27
25 Unique Infra
23,94,543
23,945
26
Utkarsh Private Limited
69,21,041
69,210
27
RMM Associates
3,08,323
3,083
28
Malu Industries
9,456
95
29
RajuKallappaWaghamode
1,60,913
1,609
30
Kolhapur Auto Works
31 ShanteshKallappaWaghamode
2,27,903
2,279
32
Shankar Internatiuonal
2,00,000
2,000
Total
10,01,27,811 10,17,931
Note:
a. Those claims which are kept under verification by IRP in Information Memorandum are not paid any Resolution Amount. However if IRP/ RP admits the said claims, amount equivalent to 1.00% of their admitted claim shall be paid to the respective Operational Creditor. b. The MSEB department has not filed their claim but intimated to the IRP that the dues amounting to Rs 16,65,242/- are outstanding therefore we have considered the said amount and provided for the resolution amount of Rs. 16,652/-. 3. Resolution Applicant proposes to pay a sum of Rs.10,17,931/-(Rupees Ten Lacs Seventeen Thousand Nine
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28
Hundred and Thirty One only). The amount shall be paid upfront within 57 days from the date of approval of the NCLT order approving the Resolution Plan. 4. All the Operational Creditors as listed above shall be paid as mentioned in the table above as and by way of full and final settlement on assignment of their dues against Corporate Debtor upon approval of Resolution Plan by the NCLT as in the aforesaid manner and no further claim/liability (whether contingent or otherwise) shall be allowed for the same. 5. All the operational creditors are being paid in priority over the payments to the Financial Creditors of the Corporate Debtor. The payments to the Operational Creditors will be made one day prior to the payment to the Secured and Unsecured Financial Creditors. 6. All the admitted operational debts shall be assigned to the RA or nominated party by the RA against the consideration of the settlement amount as proposed in the Resolution plan already submitted. 7. In case there is any addition in the list of Operational Creditors before the order of Hon’ble NCLT approving the Resolution Plan, the Resolution Amount shall be paid to the Operational Creditor as per the treatment proposed to the class of Operational creditors in the Resolution Plan, thereby increasing the Resolution Amount to such extent. Admitted operational debt of such creditor shall be assigned to the RA or nominated party by the RA against the consideration of the settlement amount. 8. The payments to the operational creditors will not be less than the amount to be paid to such creditors in the event of a
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liquidation of the corporate debtor under section 53 or the amount that would have been paid to such creditors, if the amount to be distributed under the resolution plan had been distributed in accordance with the order of priority in sub- section (1) of section 53. 9. Liability of Corporate Debtor for Operating Creditors shall be restricted to the Claims notified and accepted by Interim Resolution Professional /Resolution Professional and forming parts of Information Memorandum. All other claims of Operational Creditors other than mentioned in Information Memorandum shall be extinguished as per Extinguishment of Claim (III - N of this Resolution Plan). 10. In case there is any addition in the list of Operational Creditor, by virtue of order of Hon’ble NCLT /NCLAT / or any other Appropriate Adjudicating authority in any pending application, The resolution amount shall be paid to such Operational creditors as per the treatment proposed to such class of operational creditors in the resolution plan, thereby increasing the resolution amount to such extent.
I. PROVISION FOR EMPLOYEES AND WORKMEN OF CORPORATE DEBTOR:
-
Total amount of outstanding due to Employees and Workmen of Corporate Debtor as per Information Memorandum and communication with IRP being Rs.38,50,897/- (Rupees Thirty Eight Lacs Fifty Thousand Eight Hundred and Ninety Seven only) as per table given below:
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30
Sr.
No.
Particulars
Admitted
Amount
Rs.
Resolution
Amount
Rs.
Payment Terms
1
Employees and
Workmen Dues
38,50,897 38,50,897 Within 60 Days from the date of the NCLT order approving the Resolution Plan
Payment schedule of employees and workmen of corporate debtor:
a. Total amount of dues towards employees and workers of Corporate Debtor as per claim admitted by IRP is Rs.38,50,897/- (Rupees Thirty-Eight Lacs Fifty Thousand Eight Hundred and Ninety Seven only). The said sum shall be paid within 57Daysfrom the date of the NCLT order approving the Resolution Plan.
b. All Workers and Employees of the Corporate Debtor will cease to be employees of the Corporate Debtor on the approval of this Resolution Plan. The said workers and employees maybe appointed afresh by the resolution applicant on its sole discretion, on new terms and condition for such employment.
J. PROVISION FOR STATUTORY DUES PERTAINING TO PROVIDENT FUND
There are no outstanding Statutory Dues pertaining to Provident Fund as per Information Memorandum.
K. PROVISION FOR PAYMENT TOWARDS WORKING CAPITAL
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AND CAPITAL EXPENDITURE
The fresh fund of Rs. 32,00,00,000/- (Rupees Thirty-Two Crores only) will be introduced as and when required, as equity/quasi equity or by way of Inter Corporate Deposit in the Company. This capital is required for running the business of the CD for the purpose of capital expenditure and working capital requirement as per the business needs at the discretion of the RA. These funds would be required for maintenance and overhauling of the plant and machinery of the CD to make them operational, replacement of missing parts of the plant and machinery of the CD. Also the funds would be required for pre- operational activities like signing contracts with H & T Contractors, labors and operational expenses for first crushing season of the CD post approval of the Resolution Plan. L. PROVISION FOR CONTINGENT LIABILITIES OF CORPORATE DEBTOR
- All the contingent liabilities which may or may not have been confirmed in past, during or before the CIRP or even may be confirmed in the time to come are proposed to be waived off fully.
- Even any other known or unknown liabilities (whether recorded or not recorded in books) are proposed to be waived off fully.
M. THE INTEREST OF ALL THE STAKEHOLDERS OF THE CORPORATE DEBTOR HAS BEEN DEALT WITH IN THE FOLLOWING MANNER:
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32
Sr.No.
Particulars of
Claim
Type of
Claim
Admitted
Amount INR
Resolution
Amount (INR)
Term of Payment
1 CIRP Cost
At actual
120,00,000
120,00,000
Upfront payment within
57 days from the date of
the NCLT order approving
the Resolution Plan.
2
Secured
Financial
Creditors
Secured
303,54,05,058 140,75,55,437 25.61% Within 58 days from the date of the NCLT order approving the Resolution Plan and balance 74.39% by issue of NCDs, which will be redeemed as per clause III- C(3)
For Assignment of balance debt Secured
7,00,00,000 Upfront payment within 59+1 days from the date of the NCLT order approving the Resolution Plan through the ARC and/or entity nominated by RA 3 Unsecured Financial Creditors Unsecured 271,15,80,231 13,21,15,803 Upfront payment within 58days and 58+1 days from the date of the NCLT order approving the Resolution Plan. For Assignment of balance debt Unsecured
8,21,15,802 Upfront payment within 58 days and 58+1 days from the date of the NCLT order approving the Resolution Planthrough the ARC and/or entity nominated by RA 4 Operational Creditors Unsecured
10,01,27,811
10,17,931
Upfront payment within
57 days from the date of
the NCLT order approving
the Resolution Plan
5
Workmen
and
Employees
Unsecured
38,50,897
38,50,897
Upfront payment within
57 days from the date of
the NCLT order approving
the Resolution Plan
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6 Working Capital required UnSecured
32,00,00,000
Working capital required
for
the
purpose
of
installing
missing
machinery
parts,
maintenance of Plant and
Machinery and Advance to
be paid to H&T vendors
Total
586,29,63,997 202,86,55,870
N. PROVISION FOR MANAGEMENT AND CONTROL OF BUSINESS OF THE CORPORATE DEBTOR AND IMMUNITY TO RESOLUTION APPLICANT:
The management and control of Corporate Debtor shall be handed over to the Board of Directors of Resolution Applicant for proper running and operational of the plant of the Corporate Debtor subject to approval of Committee of Creditors and Adjudicating Authority.
O. PROVISION for SUPERVISION OF RESOLUTION PLAN AND ITS IMPLEMENTATION:
-
Once the resolution plan is approved by the Committee of Creditors and Adjudicating Authorities, the Monitoring Committee shall supervise the implementation and execution of Resolution Plan.
-
Proposed Composition of Monitoring Committee is as under:
Member Designation Remuneration Tenure 1 Resolution Professional Chairman 35,000/month From the date of approval of Resolution Plan 2 Resolution Applicant Member
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34
3
Resolution
Applicant
Member
by Hon’ble NCLT Till Successful Completion of Resolution Plan as certified by the Committee 4 Representative of Canara Bank (Financial Creditors) Member
5 Representative of State Bank of India (Financial Creditors) Member
- Functions of the Monitoring Committee
a. Resolution Applicant shall submit Monthly Progress Report to the Committee.
b. Conduct monthly meeting to monitor the resolution progress for effective implementation of resolution plan.
c. Take appropriate actions required for successful implementation of Resolution Plan.
d. None of the Monitoring Committee member shall be personally liable for any acts/ omissions in respect of the Resolution Plan and shall not be liable to any third party.
e. The remuneration as mentioned above shall be inclusive of all the out of pocket expenses for travel and stay, if any.
f. The Resolution Applicant shall submit a timely progress report in the format suggested by the CoC to appraise them about the supervision of the implementation of the Resolution Plan.
All the monitoring committee members may claim reimbursement of allowances for travelling, conveyance and boarding, at actual basis.
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P. THE COMPLIANCE OF THE RESOLUTION PLAN IS AS UNDER:
Section
of
the Code /
Regulation
No.
Requirement with respect to Resolution Plan
Clause
of
Resolution
Plan
Complia
nce (Yes /
No)
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
Section 29A
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?
Affidavit by
Resolution
Applicant
Yes
Section
30(1)
Whether
the
Resolution
Applicant
has
submitted an affidavit stating that it is eligible?
Affidavit by
Resolution
Applicant
Yes
Section
30(2)
Whether the Resolution Plan-
(a) provides for the payment of insolvency
resolution process costs?
(b) provides for the payment to the operational creditors?
(c) provides for the payment to the financial creditors who did not vote in favour of the resolution plan?
(d) provides for the management of the affairs of the corporate debtor?
(e) provides for the implementation and supervision of the resolution plan?
(f) contravenes any of the provisions of the law for the time being in force?
Part-III-B (Page No. 21)
Part-III-F (Page No. 38 to 41)
Part-III-E (Page No. 37)
Part-III-R (Page No. 70 to 72)
Part-III-S (Page No. 72 to 73)
Part-VI
Yes
Yes
Yes
Yes
Yes
Yes
Section
30(4)
Whether the Resolution Plan
(a) is feasible and viable, according to the
Yes,
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36
CoC?
(b) has been approved by the CoC with 66% voting share?
Annexur e No. 3 of the Resolutio n Plan
Yes, the said Resolutio n Plan has been Approved by a majority 76.63% Section 31(1) Whether the Resolution Plan has provisions for its effective implementation plan, according to the CoC? Part-III-P (Page No. 65 to 66) Yes Regulation 35A Whether the Resolution Professional made a determination if the corporate debtor has been subjected to any transaction of the nature covered under sections 43, 45, 50 or 66,before the one hundred and fifteenth day of the insolvency commencement date, under intimation to the Board?
Yes, the
IRP/RP
has
determin
ed
transacti
on of the
nature
covered
under
section
43,
66.
The said
transacti
on
have
been
intimated
to
the
Board.
Regulation3
8(1)
Whether the amount due to the operational
creditors under the resolution plan has been
given
priority
in
payment
over
financial
creditors?
Part-III-F,
Para No. 3,
4 and 5
(Page
No.
40)
Yes
Regulation
38(1A)
Whether
the
resolution
plan
includes
a
statement as to how it has dealt with the
interests of all stakeholders?
Part-III-P,
Para No. 3
(Page No. 65
to 66)
Yes
Regulation
38(1B)
(i)
Whether the Resolution Applicant or
any of its related parties has failed to
Part-VI
No
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37
implement or contributed to the failure of implementation of any resolution plan approved under the Code. (ii) If so, whether the Resolution Applicant has submitted the statement giving details of such non- implementation?
NA
NA
Regulation
38(2)
Whether the Resolution Plan provides:
(a) the term of the plan and its implementation
schedule?
(b) for the management and control of the business of the corporate debtor during its term?
(c) adequate means for supervising its implementation?
Part-III-P (Page No. 65 to 66)
Part-III-R (Page No. 70 to 72)
Part-III-S (Page No. 72 to 73)
Yes
Yes
Yes 38(3) Whether the resolution plan demonstrates that – (a) it addresses the cause of default?
(b) it is feasible and viable?
(c) it has provisions for its effective implementation?
(d) it has provisions for approvals required and the timeline for the same?
(e) The Resolution Applicant has the Capability to Implement the Resolution Plan?
Part-III-A Point No. 3 (Page No. 18 to 19)
Part-III-P and Part-III- S
Part-III-L Point No. 5 (Page No. 55 to 56)
Yes
Yes
Yes
Yes
Yes 39(2) Whether the RP has filed applications in respect of transactions observed, found or determined by him?
Yes
Regulation
39(4)
Provide details of performance security received,
as referred to in sub-regulation (4A) of regulation
RA undertak
In
38
36B.
e
to
provide
performa
nce
security
within 7
working
days
of
Issuance
of Letter
of Intent
i.e. on or
before
18/08/2
022
Regulation
39(1) C
An
undertaking
by
the
prospective
resolution applicant that
every information
and records provided in connection with or in
the resolution plan is true and correct and
discovery of false information and record at
any time will render the applicant ineligible to
continue
in
the
corporate
insolvency
resolution process, forfeit any refundable
deposit, and attract penal actionunder the Code
Affidavit by
Resolution
Applicant
Yes
- OBSERVATIONS AND FINDINGS:
i. As per IBC Code 30(2)(a) – A Resolution Plan provides for the payment of insolvency resolution process costs in a manner specified by the Board in priority to the payment of other debts of the corporate debtor. ii. As per Section 30(2)(b), the Respondent has agreed to pay Operational Creditors an amount which shall not be less than liquidation value or the amount that would have been paid to such creditors if the amount to be distributed under the Resolution Plan is distributed in accordance with priority under Section 53(1), whichever is higher. iii. The Resolution Applicant has also agreed that dissenting financial creditors shall be paid in priority.
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39
iv. The plan provides for the management of the affairs of the Corporate Debtor after approval of the Resolution Plan. Section 30(2)(d). v. The plan provides for a term of the plan, implementation schedule and supervision of the Resolution Plan under Section 30 (2) (d) & Regulation 38(2)(c). vi. The Resolution Plan does not contravene any of the provisions of the law for the time being in force - Resolution Plan provides for the implementation and supervision of the resolution plan as per Section 30(2) (e) vii. The Resolution Applicant has given a declaration that the Resolution Plan does not contravene any provisions of the law for the time being in force as per Section 30(2)(f). viii. As per IBBI Guidelines 38(1)(b) - the amount payable under a Resolution Plan -to the financial creditors, who have a right to vote under sub-section (2) of section 21 and did not vote in favour of the Resolution Plan, shall be paid in priority over financial creditors who voted in favour of the plan. ix. The resolution applicant or any of its related parties has not failed to implement or contributed to the failure of implementation of any other resolution plan approved by the Adjudicating Authority at any time in the past. x. The Resolution Plan is in compliance of the Regulation 38 of the Regulations in terms of Section 30(2)(f) as under: a. The amount due to the operational creditors under a resolution plan shall be given priority in payment over financial creditors. Regulation 38(1). b. The Resolution Plan has all the adequate means of supervising of the implementation of the Plan as required under Regulation 38(2) (c), of the IBBI, Insolvency resolution process for corporate persons, Regulation 2016.
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c. Provides for the payment of CIRP Costs in priority to the repayment of any other debts of the Company (Regulation 38(1)(a)). d. Provides for the manner of implementation and supervision of the Resolution Plan and adequate means for implementation and supervision of the Resolution Plan. e. The amount payable under a resolution plan to the Financial Creditors, who have right to vote under sub- section (2) of section 21 and did not vote in favor of the resolution plan, shall be paid in priority over financial creditors who voted in favour of the plan. f. The Resolution Applicant confirms that to the best of the knowledge of the Resolution Applicant, the Resolution Plan is not in contravention of the provisions of Applicable Law and is in compliance with the Code and the CIRP Regulations. g. The Resolution Applicant confirms that the Resolution Applicant and its connected persons are not disqualified from submitting a resolution plan under Section 29A of the Code and other provisions of the Code and any other Applicable Law. h. The plan provides for the management and control of the business of the Corporate Debtor during its term. i. All the above factors demonstrate that the plan address as the cause of default and the Resolution Applicant has the capacity to implement the Resolution Plan. j. That the Resolution Applicant or any of its related parties has never failed to implement or contributed to the failure of implementation of any other Resolution Plan approved by the Adjudicating Authority at any time in the past. This is in compliance of Regulation 38(1)(b) of the Regulations.
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k. The interests of all stakeholders (including Financial Creditors, Operational Creditors and other creditors, guarantors, members, employees and other stakeholders of the Company, keeping in view the objectives of the Code (Regulation 38(1A)).
-
The Resolution Plan has been approved in the 20th meeting held on 27th July 2022 with 76.63% voting in accordance with the provisions of the Code.
-
In K. Sashidhar v. Indian Overseas Bank & Others: 2019 SCC Online SC 257 (2019) 12 SCC 150) the Hon’ble Apex Court held that if the CoC had approved the Resolution Plan by requisite percent of voting share, then as per section 30(6) of the Code, it is imperative for the Resolution Professional to submit the same to the Adjudicating Authority (NCLT). On receipt of such a proposal, the Adjudicating Authority is required to satisfy itself that the Resolution Plan as approved by CoC meets the requirements specified in Section 30(2). The Hon’ble Court observed that the role of the NCLT is ‘no more and no less’. The Hon’ble Court 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.
-
In India Resurgence Arc Private Limited vs. Amit Metaliks Limited and Ors. (2021) the Hon’ble Apex Court held that the process of consideration and approval of resolution plan is essentially within the commercial wisdom of Committee of Creditors (CoC). The scope of judicial review remains limited under Section 30(2) of the Insolvency
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and Bankruptcy Code (IBC), 2016 by which the court would examine that the resolution plan does not contravene any statutory provisions and it conforms to such other requirements as may be specified by the Board. The court held that the process of judicial review cannot be stretched if all the above-mentioned requirements have been duly complied with and that dissenting financial creditor, expressing dissent over the value of security interest held by it, cannot seek to challenge an approved Resolution Plan. Lastly, it was held that Section 30 of the IBC, 2016 only amplified the considerations for the CoC while exercising its commercial wisdom so as to take an informed decision in regard to the viability and feasibility of resolution plan, with fairness of distribution amongst similarly situated creditors; and that the business decision taken in exercise of the commercial wisdom of CoC does not call for interference unless creditors belonging to a class being similarly situated are denied fair and equitable treatment. 15. The Hon’ble Apex Court at para 42 in Committee of Creditors of Essar Steel India Limited Vs. Satish Kumar Gupta & Ors.: (2019) SCC Online, has clearly laid down that the Adjudicating Authority would not have power to modify the Resolution Plan which the CoC in their commercial wisdom have approved.
“Para 42- Thus, it is clear that the limited judicial review available, which can in no circumstance trespass upon a business decision of the majority of the Committee of Creditors, has to be within the four corners of section 30(2) of the Code, insofar as the Adjudicating Authority is concerned, and section 32 read with section 61(3) of the Code, insofar as the Appellate Tribunal is concerned, the parameters of such review having been clearly laid down in K. Sashidhar (supra).”
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In view of the above cited case law, the legislature has given paramount importance to the commercial wisdom of committee of creditors (CoC) and the scope of judicial review by the Adjudicating Authority (AA) is limited to the extent of scrutiny provided under section 31 of Code and the direction of the Appellate Authority is limited to the extent provided under sub-section (3) of section 61 ofthe Code.
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In view of the discussions, this Bench is of the considered view that the instant Resolution Plan meets the requirements of Section 30(2) of the Code and Regulations 37, 38, 38(1A) and 39(4) of the Regulations. The Resolution Plan is not in contravention of any of the provisions of Section 29A of the Code and is in accordance with law. The Resolution Plan is feasible and viable. The Resolution Plan balances the interest of all the stakeholders and thus it deserves to be approved.
ORDER
a) The Interlocutory Application No. 3246 of 2022 is allowed. The Resolution Plan submitted by M/s. Autade Sugars Private Limited, is hereby approved. It shall become effective from this date and shall form part of this order. 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 payment of dues arising under any law for the time being in force is due.
b) The Memorandum of Association (MoA) and Articles of Association (AoA) shall accordingly be amended and filed with the Registrar of Companies (RoC), concerned for information
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and record. The Resolution Applicant, for effective implementation of the Plan, shall obtain all necessary approvals, under any law for the time being in force, within such period as may be prescribed.
c) The moratorium under Section 14 of the Code shall cease to have effect from this date.
d) The Monitoring committee shall supervise the implementation of the Resolution Plan and shall file status of its implementation before this Authority from time to time, preferably every quarter.
e) The Applicant shall forward all records relating to the conduct of the CIRP and the Resolution Plan to the IBBI along with copy of this Order for information.
f) The Applicant shall forthwith send a copy of this Order to the CoC and the Resolution Applicant for necessary compliance.
g) The Resolution Professional shall submit the records collected during the commencement of the proceedings to the Insolvency & Bankruptcy Board of India for their record.
h) The Resolution Professional shall stand discharged from his duties with effect from the date of this Order, save and except those duties that are enjoined upon him for implementation of the approved Resolution Plan.
i) The Registry is directed to send copies of the order forthwith to all the parties and their Ld. Counsel for information and for taking necessary steps.
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j) The Interlocutory Application No. 3246 of 2022 is accordingly allowed.
SD/-
SD/-
Madhu Sinha
Reeta Kohli
Member (Technical)
Member (Judicial)
/Aakansha/
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