08th May, 2024 Approval of Resolution Plan - Reliance Broadcast Network Limited [I.A. No. 5391 of 2023 in C.P. No. 310 of 2022] (1.29 MB)

IN THE NATIONAL COMPANY LAW TRIBUNAL MUMBAI, BENCH-V

I.A. No. 5391 of 2023

IN C.P. No. 310 of 2022

In the matter of an Application under Section 30(6) and Section 31 of the Insolvency and Bankruptcy Code, 2016.

Mr. Rohit Ramesh Mehra (Resolution professional of Reliance Broadcast Network Limited) …Applicant/Resolution Professional

In the matter of IDBI Trusteeship Services Limited

… Financial Creditor V/s.
Reliance Broadcast Network Limited ... Corporate Debtor

Order Dated : 06.05.2024 Coram:
Hon’ble Ms. Madhu Sinha Hon’ble Ms. Reeta Kohli Member (Technical) Member (Judicial)

Appearance: For the Applicant/RP: Sr. Adv. Mustafa Doctor a/w Adv. Nishant Sogani a/w Adv. Saurabh Bachhawat a/w Adv. Shrishti Agnihotri i/b Chandliok & Mahajan (PH) For the Respondent: Sr. Adv. Gaurav Joshi a/w Adv. Kunal Kanungo, Adv. Nishant Chothani, Adv. Tanushree Sogani and Adv. Atishay Jain (R3) (PH)

MUMBAI BENCH-V I.A. No. 5391 of 2023 In C.P. No.310 of 2022

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ORDER

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 the “Applicant”), seeking approval of the Resolution Plan, submitted by the Resolution Applicant - Sapphire Media Limited, which was approved by 88.97% voting shares of the members of the Committee of Creditors (hereinafter referred to as ‘COC’).

The facts leading to the Application are as under: a. Corporate Insolvency Resolution Process (CIRP) of the Corporate Debtor was initiated, vide an order dated 24.02.2023, under Section 7 of the Insolvency and Bankruptcy Code 2016 (hereinafter referred to as ‘the Code’) and Mr. Rohit Ramesh Mehra, was appointed as Interim Resolution Professional. The IRP, constituted the Committee of Creditors. The COC in its 1st meeting held on 24.03.2023 appointed the present Applicant as the Resolution Professional. The IRP published a public announcement as per Section 15 of the Code, inviting claims from the creditors of the Corporate Debtor.

b. The Applicant published a Public Announcement in Form A in accordance with Section 15 of the Code read with Regulation 6 of the CIRP Regulations, on 27.02.2023, inviting submission of proof of claims from the creditors of the Corporate Debtor, on or before 10.03.2023.

c. The claims received and accepted by Interim Resolution Professional are as under:

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Creditors Claims Received

Claims Admitted

Secured Financial Creditors
6,14,15,16,609 5,78,34,57,563 Unsecured Financial Creditor
8,44,13,94,809 3,47,47,28,308 Operational Creditors (Employees and Workmen dues)
27,89,099 23,14,620
Operational Creditors (Government dues) 47,34,03,443

4,25,06,553

Operational Creditors (Other than Employees and Workmen dues and Government dues)
1,82,13,37,672

17,29,15,207

Other Creditors

Total 16,88,04,41,632

9,47,59,22,252

After receiving the claims, the Committee of Creditors was constituted. The constitution of COC is as under:

Sr. No. Name of the Financial Creditor
Claim admitted (In Crores) Voting Share (percentage %)

1. HSBC Asset Management (India) Private Limited on behalf of HSBC Credit Risk Fund 150.6 26.04
2. HSBC Asset Management (India) Private Limited on 73.8 12.77

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behalf of L&T FMP - Series XIV A
3. HSBC Asset Management (India) Private Limited on behalf of HSBC Low Duration Fund 14.4 2.49 4. IndusInd Bank Limited (“IndusInd”) 172.2 29.79 5. IDBI Trusteeship Services Limited acting as Debenture Trustee for Franklin Templeton Mutual Fund (“IDBI Trusteeship”) 103.5 17.89 6. Reliance Commercial Finance Limited (“RCFL”) 63.8 11.03 TOTAL 578.2 100%

The CoC decided to appoint valuers. The Resolution Professional accordingly appointed two Registered Valuers Jayesh Shah, Jayesh Mohan Kamat, Anil Pai Kakode (collectively, hereinafter referred to as “Valuer 1”) and GAA Advisory LLP (“Valuer 2”) for conducting valuation across three different asset classes, namely Land & Building, Plant & Machinery and Securities and Financial Assets to determine its fair value and liquidation value, as required under Regulation 27 of the IBBI (IRP for Corporate Persons) Regulations, 2016. The details of the Registered Valuers are as follows:

These Registered Valuers submitted their reports. The Liquidation and fair value is stated as under:

Fair Value:-
Asset Description Valuer 1 Valuer 2 Average Land & Building INR 0.01 crore INR 0.02 crore INR 0.01 crore Plant & Machinery INR 8.5 crore INR 6.8 crore INR 7.6 crore

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Securities & Financial Assets INR 224.7 crore INR 235.6 crore INR 230.2 crore Total INR 233.2 crore INR 242.4 crore INR 237.8 crore

Liquidation Value :-
Asset Description Valuer 1 Valuer 2 Average Land & Building INR 0.01 crore INR 0.01 crore INR 0.01 crore Plant & Machinery INR 7.2 crore INR 6.4 crore INR 6.8 crore Securities & Financial Assets INR 178.8 crore INR 186.3 crore INR 182.5 crore Total INR 185.9 crore INR 192.8 crore INR 189.4 crore

The Applicant submits that for inviting Expression of Interest (“EOI”) from Prospective Resolution Applicants as per section 25(2)(h) of the Code, Form G was published on 14.04.2023. The last date for submission of Expression of Interest (EOI) from Prospective Resolution Applicants was 14.05.2023 which was further extended to 31.05.2023.

The Applicant further Submits that the COC approved with minimum eligibility criteria, Request for Resolution Plan (RFRP) along with evaluation matrix and the Information Memorandum to the PRAs on 15.06.2023.

In 5th COC meeting on the extension requests received from PRAs and keeping in view the objective of value maximization of the Corporate Debtor through receipt of maximum resolution plans, the CoC approved extension of the last date for submission of resolution plans from 17.07.2023 to 17.08.2023. In the 6th CoC meeting dated 10.08.2023, on the further request of the PRAs the CoC extended the

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last date of submission of the resolution plans from 17.08.2023 to 01.09.2023.

On 8 September 2023, 6 (six) Resolution Plans were received for the Corporate Debtor from the following PRAs (“Resolution Applicants”/ “RAs”)):

(a) Cosmea Financial Holdings Private Limited (“Cosmea”); (b) Entertainment Network (India) Limited (“ENIL”); (c) Sapphire Media Limited/ Successful Resolution Applicant; (d) Abhijit Realtors and Infraventures Private Limited (“Abhijit Realtors”); (e) Creative Channel Advertising and Marketing Private Limited (“Creative”); and
(f) Authum Investment & Infrastructure Ltd (“Authum”).

10. The COC, in its 14th meeting held on 11.11.2023, approved Resolution Plan submitted by Sapphire Media Limited with a voting share of 88.97%. Thereafter, the Applicant has issued compliance certificate in Form “H”.

11. The Salient Features of the Resolution Plan are as under:

A. Brief Background of the Corporate debtor

i. Reliance broadcast Network Limited (hereinafter “RBNL” / “Corporate Debtor”), is a company incorporated under the Companies Act, 1965 on 27 December 2005, having its registered office at Unit No. 503, 5th Floor, ARC Plaza Industrial Estate, 48 Oshiwara Village, Jogeshwari (West), Mumbai, 400102, India.

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ii. The Corporate Insolvency Resolution Process (“CIRP”) of Reliance broadcast Network Limited has been 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 24.02.2023 (“CIRP Order”). Pursuant to such order, Mr. Rohit Mehra, (having IP Registration no. IBBI/IPA-002/IP-P00799/2017-18/11374), Name Reliance Broadcast Network Limited ROC Code ROC- Mumbai CIN U64200MH2005PLC158355 Date of Incorporation 27 December 2005 Class of Company Public Whether listed or not Unlisted Industry Entertainment Authorized Capital INR 15,00,00,00,000 Paid-up Capital INR 6,39,72,55,850 Activities Unit No. 503, 5th Floor, ARC Plaza Industrial Estate, 48 Oshiwara Village, Jogeshwari (West), Mumbai, 400102, India.

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Insolvency Professional, was appointed as the Interim Resolution Professional (IRP).

B. Background of the Resolution Applicant

i. SAPPHIRE MEDIA LIMITED, the Resolution Applicant, was incorporated on October 21st, 2022, having its registered office at Mangla Estates 4th Km Stone Opposite Vrindavan gardens Kurukshetra Road, Kaithal Haryana-136027 incorporated under the provisions of the Companies Act, 1956. The corporate identification number of the Resolution Applicant is U74999HR2022PLC107331.

Name Sapphire Media Limited ROC Code ROC- Delhi CIN U74999HR2022PLC107331 Date of Incorporation 21 December 2022 Class of Company Public Whether listed or not Unlisted Industry Advertisement, Media, News Paper and News Channel Authorized Capital INR 25,00,00,000

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Paid-up Capital INR 21,00,99,900 Address and Activities Mangla Estate, 4th KM Stone, Opposite Vrindavan Gardens, Kurukshetra Road, Kaithal, Haryana-136027

ii. The 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.

12. Summary of Payments under the Resolution Plan

Category Admitted Amount Amount Proposed Percentage Secured Financial Creditors 578.35 255 44.09 Unsecured Financial Creditors 347.47 Nil 0 Operational Creditors 21.77 6 27.5 a) Towards upfront payment of Workmen & Employees
0.23 0.23 100

b) Towards upfront payment of Operational Creditors – MIB and AIR Resources Prashar Bharati
4.25 4.25 100

c) Towards upfront payment of 17.29 1.52

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remaining Operational Creditors Total payout to creditors 947.59 261 27.54

13. Sources of Funds

S.NO SOURCE OF FUNDS Amount (Rs.) 1.
As Equity Contribution
(200000000 shares @ Rs. 5 each ) in the first year 100.00 2.
As unsecured loan @10%annual interest in the first year from Resolution Applicant 151.00 3.
Existing Bank Balances used for capex
15.00

The RA represents that the funds are backed by ICD (Inter Corporate Deposits) of Rs. 80.00 Crores by private limited companies. The RA further represents that the funds are backed by a comfort letter/ term sheet of Rs 200 crores issued by various bankers and NBFC, which is attached hereto as Annexure 4 (Colly).
The Resolution Applicant hereby represents and warrants that the funds required for the implementation of the Resolution Plan have been arranged and are backed by a separate comfort letters of Rs. 130.00 Crores issued by Director and Shareholders of Resolution Applicant Mr. Sahil Mangla, Mr. Madan Lal Mangla and Ms. Usha Mangla along with their CA certified Net Worth Certificates , which are attached hereto as Annexure 4 (Colly), and that such funds shall be disbursed in terms of the Payment Schedule to ensure the successful implementation of the Resolution Plan.

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14. Payments proposals of the various stakeholders under the Resolution Plan:

A. CIRP Costs i. The Corporate Debtor is having operating revenue from business and CIRP cost shall be paid out of internal cash accruals and bank balances of Corporate Debtor. In case the internal cash accruals and bank balances are insufficient, the Resolution Applicant agrees to fund the outstanding CIRP costs, if any as on the Approval Date, which shall be infused by the Resolution Applicant in the Designated Bank Account on or before the Transfer Date on an actual basis over and above the Upfront Cash Payment. ii. It is clarified that the CIRP Costs shall be paid in full and in priority to the payment of other debts of the Corporate Debtor as per the provisions of Section 30(2)(a).

B. Payment to Financial Creditors i. As per the Information Memorandum, the claims of the Financial Creditors against the Corporate Debtor verified / admitted by the Resolution Professional as on the Insolvency Commencement Date (“Financial Creditor Claims”) are set out below:- Figures in INR cr. Sr. No. Category of Financial Creditors Amount Claimed Amount Admitted Amount not Admitted 1 Financial Creditors- Secured 614.15 578.35 35.80

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2 Financial Creditors- Unsecured 844.14 347.47 496.67 3 Total Financial Creditors 1458.29 925.82 532.47

Financial Creditors (Secured)

Sr. No Name of Creditor Amount Claimed Amt of Claim Admitted % Voting Share in CoC 1 HSBC Asset Management (India) Private Limited on behalf of HSBC Credit Risk Fund 1 ,50,59,27,288 1 ,50,59,27,288 26.04% 2 HSBC Asset Management (India) Private Limited on behalf of L&T FMP - Series XIV A 7 3,83,04,723 7 3,83,04,723 12.77% 3 HSBC Asset Management (India) Private Limited on behalf of HSBC Low Duration Fund 1 4,41,30,219 1 4,41,30,219 2.49% 4 IndusInd Bank Limited 1 ,72,27,39,356 1 ,72,27,39,356 29.79%

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5 IDBI Trusteeship Services Limited acting as Debenture Trustee for Franklin
Templeton Mutual Fund 1 ,03,45,28,414 1 ,03,45,28,414 17.89% 6 Reliance Commercial Finance Limited 8 0,12,91,568 6 3,78,27,563 11.03% 7 Yes Bank Limited 1 9,45,95,041

0.00%

6 ,14,15,16,609 5 ,78,34,57,563 100.00%

Financial Creditors (Unsecured)

Sr. No Name of Creditor Amount Claimed Amt of Claim Admitted % Voting Share in CoC 1 Reliance Capital Limited 7,79,78,30,156 3,47,47,28,308

2 Azalia Distribution Private Limited 27,63,13,980

3 Adhar Project Management & Consultancy Private Limited 7,88,27,371

4 Gamesa Investment Management Private Limited 2,91,31,685

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5 Arion Movie Production Private Limited

12,20,10,862

6 Wallace Movies & Entertainment Private Limited 13,72,80,755

8,44,13,94,809 3,47,47,28,308

C. Payment to Operational Creditors

i. As per the list of claims as uploaded in the VDR of the Operational Creditors against the Corporate Debtor verified/ admitted/ under-verification by the Resolution Professional as on the Insolvency Commencement Date (“Operational Creditor Claims”) are set out below:-:- Figures in INR cr. Sr. No. Category of Operational
Creditors Amt. Claimed Amt. Admitted Amt not Admitted 1 Operational Creditors- other than workmen and employees and Government Dues 182.13 17.29 8.49 2 Operational Creditors-
workmen and employees
0.28 0.23 0.05

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3 Operational Creditors – Government Dues (MIB & AIR Resources Prasar Bharati) 47.34 4.25 30.66

Total Operational Creditors 229.75 21.77 39.20

Detail of Operational Creditors other than Workmen

Sr. No Name of Creditor Amount Claimed Amt of Claim Admitted % Voting Share in CoC 1 DNP Tech Services 1 1,89,590 7 ,18,450

2 Kfin Technologies Limited 1 ,49,090 1 ,49,090

3 Technomedia Solution Private Limited 1 7,16,274 1 5,97,912

4 Innovent Space Private Limited 1 ,35,22,311 1 ,12,07,000

5 The Indian Performing Right Society Limited 1 ,41,55,64,727 1

6 LeazeOn Private Limited 2 ,60,780 2 ,55,780

7 Holidayz 2 2,79,031 1 4,18,998

8 powernest solutions 9 5,360 5 4,560

9 TAM MEDIA RESEARCH PRIVATE LIMITED 1 8,53,677 1 8,30,288

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10 Yashraj Films pvt Ltd 1 ,88,450 1 ,85,982

11 Sai Johan enterprises 8 8,500 8 1,821

12 Nidhishree technology services 5 ,00,933 3 ,35,154

13 SAMAIRCON 2 ,09,214 1 ,62,376

14 Videocon Industries Limited 1 8,47,484 1 7,25,970

15 Silicon Rental Solutions Limited 1 ,45,00,000 1,35,40,000

16 ABHAY SAHARE 6 0,000 6 0,000

17 Hirezone Systems Private Limited 3 0,386 2 9,983

18 Phonographic Performance Limited 1 ,50,23,445 1,46,05,159

19 BOOKNOW DIGITAL PRIVATE LIMITED 7 2,414 3 9,766

20 Greysell Marketing Promotions Pvt Ltd 6 ,78,500 6,21,000

21 Equilibrio Advisory LLP 2 ,12,400 1 ,88,614

22 Broadcast Engineering Consultants India Limited 1 3,09,99,855 10,76,21,058

23 Sony Music Entertainment India Private Limited 2 6,86,173 24,83,011

24 CHIRAG SARVAIYA & CO 4 ,24,800 3 ,59,871

25 TMT Law Practice 1 7,500 1 5,750

26 Soundkraft 7 ,79,461 5,73,845

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27 MRN Digital Services Private Limited 32,69,585 15,03,304

28 Elite Enterprises & Events 8 2,600 8 1,200

29 Uptrendic events 2 ,77,338 2 ,72,637

30 Event Managers 6 ,37,700 6 ,37,700

31 Client Linx Software Private Limited 3 9,34,955 33,19,200

32 Outcry Entertainment 1 ,17,000 1 ,17,000

33 Associated Warehousing 75,41,830

34 Associated Assemblies &
Repackers 82,69,109 2,94,551

35 Market Info INC. 7,200 7,200

36 Tips Industries Limited 4,42,50,000 81,910

37 Mad Over Marketing 2,95,000 2,90,000

38 Accutech Power Solutions Private Limited 3,26,176 3,26,176

39 Deb Enterprises 59,000 58,000

40 Amulya Chandra 10,266 6,055

41 Cool Air System 28,320 25,354

42 SS Net Com Pvt Ltd
12,390 12,390

43 MP Engineers 14,702 14,577

44 Deccan Sales and Services Private Limited 18,450 18,137

45 URSS Techservices Private Limited 13,939 2,062

46 Sheen telecom
7,080 4,226

47 Guru Nanak Engineers 1,418 1,418

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48 Scube airconditioning Pvt Ltd 4,039 4,039

49 Plumsoft 2,950 2,700

50 Celest technologies LLP 25,960 20,963

51 Keya Sales 7,504 7,504

52 Reliance Entertainment studios Pvt Ltd
15,15,138 9,43,425

53 Trinity Mahalasa Durga Sales & Services
24,777

54 Stereo Adventures 1,05,138 1,03,356

55 Sunrise Sales and Servisces 13,450 13,450

56 Servoll Solution
7,63,638 7,33,556

57 Nexgen ISP 7,965

58 Shubh Enterprises 5,310 3,224

59 AS Syetem 5,46,991 5,20,365

60 Guru Nanak Electro Controls 1,10,920 1,09,040

61 RSC Generators 10,298 10,298

62 BSIX Engineering Pvt Ltd 31,860 19,016

63 Weartech Engineers Pvt Ltd
76,800 76,800

64 Digitcom India Technologies
1,61,774 1,59,050

65 AS Global Aircon Solution
95,580 81,656

66 S M Gensets Spares and Solutions 45,809

67 Indeft Technologies Solution Pvt Ltd 1,27,178 1,27,178

68 Satellite Cable TV Services
11,328 11,328

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69 JS Genset Power Solution
28,550

70 Eaton Power Quality Pvt Ltd
3,39,753 2,40,996

71 Inure Interiors 22,000 11,000

72 Quest Offices Private Limited 4,98,337 4,27,784

73 Prototact Digital Network 10,620 10,620

74 Raghav Outdoor & Events 59,000 58,000

75 Delhi Metro Rail Corporation Ltd 13,99,68,828 1

76 Zee Media Corporation Limited
3,54,602 3,35,000

77 Balaji Generator 4,084 4,084

78 Torrent Power
Limited 32,570 32,570

79 Leonard Corporate Solution Private Limited 2,86,740

80 Konasth Travels Private Limited 6,37,633 6,37,633

81 FTC Talent Media & Entertainment Private Limited
12,76,136 12,76,136

1,82,13,37,672 17,29,15,207

Operational Creditors -Employees Sr. No Name of Authorized representative Amount Claimed Amt of Claim Admitted % Voting Share in CoC 1 Nilpesh Mahendra Shah 27,89,099 23,14,620

27,89,099 23,14,620

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Operational Creditors -Government Dues

Sr. No Name of Creditor Amount Claimed Amt of Claim Admitted % Voting Share in CoC 1 Ministry of Information and Broadcasting 20,68,92,270 1,52,97,352

2 AIR Resources, Prasar Bharati
13,01,04,077 2,72,09,200

3 Department of Tax & Trade/ Delhi GST 1,16,41,512

4 The Assistant Commissioner Division III, CGST 12,43,28,506

Shri K.N. Zala State Tax Officer, State Tax Department, Govt of Gujarat 4,37,078

47,34,03,443 4,25,06,553

15. Contingent Claims The Resolution Applicant acknowledges that as per the Information Memorandum and List of Creditors as on 15th June 2023, the certain claims are categorised as Contingent Liabilities against the Corporate Debtor, by the Resolution Professional. However, for the purpose of this Resolution Plan, the Applicant has considered the Contingent Liabilities, including those pertaining to Operational creditors, as reflected in the list of claims uploaded in the Virtual Data Room (VDR), and may not reflect the full liability towards Contingent Liabilities.

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Figures in INR cr. Sr. No. Name of Operational Creditor Amount Claimed Amount of Contingent Claims 1 The Indian Performing Right Society Limited 141.55 141.55 2 Associate Assemblies and Repackers 82.69 79.75 3 The Delhi Metro Rail Corporation Ltd 14.00 14.00 4 The Assistant Commissioner CGST Division III, GST 12.43 12.43

Total 250.67 247.73

16. Implementation Schedule:

S. No Activity Indicative Timeline Responsibility Part I- Approval Process of Resolution Plan

1 Approval of Plan by CoC and issuance of Letter of Intent A CoC / Resolution Professional 2 Unconditional acceptance of Letter of Intent A + 2 Working
Days Resolution Applicant 3 Submission of Performance Bank Guarantee
A + 3 Working days
Resolution Applicant 4 Application to NCLT for approval of Resolution Plan B Resolution Professional

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S. No Activity Indicative Timeline Responsibility 5 Approval by NCLT of Resolution Plan and receipt of order.
C Resolution Professional 6 Notice on the Corporate Debtor’s website Within C + 10 Working Days Corporate Debtor / Resolution Applicant 7 Intimation to all creditors (including the Governmental Authorities), existing shareholders, and other stakeholders about the approval of Resolution Plan by the Adjudicating Authority.
Corporate Debtor / Resolution Applicant/ Monitoring Professional Part II- Implementation of Plan

Receipt of consent letters by Resolution Professional or Monitoring Committee, as applicable, from the nominees of the Resolution Applicant and Financial Creditors to be appointed on Monitoring Committee and immediate constitution of Monitoring Agency. C Resolution Applicant/ Resolution Professional/ Financial Creditors 2.
Constitution of the Monitoring Committee until the Transfer Date C

Members of Monitoring Committee 3.
Appointment of Monitoring Professional
C

Members of Monitoring Committee 4.
Application to MIB for approval of change of shareholding and board of C+7 Resolution Applicant/

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S. No Activity Indicative Timeline Responsibility the Corporate Debtor as per the Resolution Plan
Monitoring Committee
5. Receipt of approval from MIB D

Infusion of Upfront Cash Payment and CIRP Cost unpaid as on the Approval Date (if any), in the Designated Bank Account by the Resolution Applicant as per the Annexure-1
D+30 (Transfer Date)
Resolution Applicant 7.
Distribution of CIRP Costs in priority to any other payment under the Plan
Transfer Date Monitoring Committee / Corporate Debtor 8.
Distribution of the Upfront Cash Payment amongst the creditors in accordance with the Resolution Plan (Schedule -2)
Transfer Date
Monitoring Committee / Corporate Debtor 9.
Issue and allotment of Equity Shares to the Resolution Applicant
Transfer Date
Monitoring Committee
10. Reconstitution of the Board of Directors of the Corporate Debtor with the new directors on the Board of Directors as given by Resolution Applicant in the Resolution Plan. Transfer Date
Monitoring Committee
11. Passing of necessary entries giving effect to the terms of Resolution Plan (including extinguishment of liability)
Transfer Date Corporate Debtor

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17. Performance Security In accordance with Regulation 36B (4A) of the CIRP Regulations, the Resolution Applicant, in case its Resolution Plan is approved under sub-section (4) of section 30 of the Code, shall provide performance security . The amount of performance security as envisaged under the RFRP will be Rs. 25.00 Crores, in favour of the IndusInd Bank Limited, which is acting on behalf of all the members of Committee of Creditors. The Performance Security shall be valid till the term of the Resolution Plan however the said amount of Performance Security will be paid by the Resolution Applicant after the approval of the plan by the Committee of Creditors.

18. Earnest Money Deposit

The Resolution Applicant has submitted Bid Bond of Rs. 3.00 Crores in the shape of Bank Guarantee Number 169BG01232370001 of Yes Bank Limited in favour of IndusInd Bank of Corporate Debtor along with Resolution Plan as a pre-requisite condition for submission of Resolution Plan

19. Structuring the Shareholding The Promoter Shareholders as on the Transfer Date shall cease to be the owner, shareholder, promoter of the Corporate Debtor and their entire shareholding shall be extinguished, and simultaneously fresh equity shares shall be issued to the Resolution Applicant.
    It is further stated that the Resolution Applicant will be at liberty to use any implementation structure including but not limited to conversion of debt of financial creditors to equity and then reduction of equity to Nil as per applicable law. Provided that the same shall not impact the timelines and amounts to be paid to the stakeholders as per this Resolution Plan.

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20. Monitoring Committee During the period commencing from the date of approval of the Resolution Plan by the Adjudicating Authority up to the Transfer Date, the day-to-day operation and management of the business and operations of the Corporate Debtor shall be carried out by the Monitoring Committee who shall be vested with the powers of the Board of Directors. The Monitoring Committee shall be constituted comprising of the 2 members of Resolution Applicant and 2 representatives of Financial Creditor and Mr. Rohit Mehra, current Resolution Professional (collectively referred to as “Monitoring Committee”).

21. Avoidance Transactions In case the there are any non-monetary benefits from the Avoidance Transactions Applications then the same shall accrue to the Corporate Debtor and in that case the Corporate Debtor/Resolution Applicant shall pursue the Avoidance Transaction Litigation and bear all the costs as may be incurred in relation thereto.

In the event the benefits from the Avoidance Transaction Applications are only in the nature of monetary benefits, then the costs and expenses for pursuing such Avoidance Transaction Applications will be borne by the Secured Financial Creditor without any liability on the Corporate Debtor or the Resolution Applicant.

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22. The compliance of the Resolution Plan is as under:

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23. 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 not less than the value they would have been paid in the event of liquidation of the Corporate Debtor. 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 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) vi. 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). vii. 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. viii. The Resolution Plan is in compliance of the Regulation 38 of the Regulations in terms of Section 30(2)(f) as under:

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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. 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 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. f. 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. g. The plan provides for the management and control of the business of the Corporate Debtor during its term. h. 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. i. 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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j. 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)).

24. The Resolution Plan has been approved in the 14th COC meeting held on 11.11.2023 with 88.97% voting in accordance with the provisions of the Code.

25. 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.

26. 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 and Bankruptcy Code (IBC), 2016 by which the court would examine

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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.

27. 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).”

28. In view of the above cited case law, the legislature has given paramount importance to the commercial wisdom of committee of creditors (CoC)

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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.

29. 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. 5391 of 2023 is allowed. The Resolution Plan submitted by Sapphire Media 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 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.

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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.

j) The Interlocutory Application No. 5391 of 2023 is accordingly allowed.

          SD/-                                           SD/- 
 Madhu Sinha                                Reeta Kohli                                

Member (Technical) Member (Judicial) /Abhay/