Hemant Gupta vs M/S Jasper Engineers Private Limited

Sl.

No",Name of Creditors,"Voting Share

(%)",Voting for Resolution Plan (Voted for/Dissented/Abstained),,

1,Bank of India,93.32%,Voted for Resolution Plan,,

2,Amit Industries Private Limited,5.46%,Voted for Resolution Plan,,

3,Bhavna Goel,1.18%,Abstained from the meeting. Later voted for Resolution plan through e-voting,,

Sl.

No","Category of

Shareholder",Amount claimed,"Amount

admitted","Amount

provided

under the

plan#","Amount

Provided to

the Amount

Claimed

(%)

1,"Secured

Financial

Creditor*",622.47,622.47,435.73,70%

2,"Unsecured

Financial

Creditors -

Unrelated",44.27,44.27,30.99,70%

3,"Unsecured

Financial

Creditors-

Related

parties",89.80,54.50,-,-

3,"Operational

Creditors",283.72,190.23,"67.98

6.66

19.06","35.73%

100%

100%

,Government,-,-,,

,Workmen,7.22,6.66,,

,"Employees-

Unrelated",20.33,19.06,,

,"Employees-

Promoters",61.45,47.12,-,-

4,"Other Debts

and Dues-

Related

parties",122.10,51.30,-,-

,TOTAL,1251.36,1035.61,560.42,

,IRP Cost,19.81,19.81,19.81,

Total amount

provided in the

Resolution Plan",,1271.17,1055.42,580.23,

“commercial decision†of the CoC muchless of the dissenting financial creditors for not supporting the proposed resolution plan.,,,,,

Whereas, from the legislative history there is contra indication that the commercial or business decisions of the financial creditors are not",,,,,

open to any judicial review by the adjudicating authority or the appellate authority.â€​,,,,,

It is thus clear that the judicial scrutiny of the approved resolution plan can only be done within the parameters of Section 30 (2) and Section 31 (1),,,,,

of the Code.,,,,,

Section 31(1) & (2) of the Code deals with the approval or rejection of the resolution plan by the Adjudicating Authority as approved by the CoC.,,,,,

Before approving the Resolution Plan, the Code mandates the Adjudicating Authority to ensure that:",,,,,

(A) the Resolution Plan meets the requirements of Section 30(2) of the Code and,,,,,

(B) the resolution plan has provisions for its effective implementation, as laid down in proviso to Section 31(1).",,,,,

In respect of compliance of point (A) above, sub-section 2 of Section 30 casts duty on the Resolution Professional to examine the resolution Plan",,,,,

received by him to confirm that such Resolution Plan provides for the payment of insolvency resolution process costs, provides for the payment of the",,,,,

debts of the operational creditors in such manner as may be specified, provides for the management of the affairs of the corporate debtor after",,,,,

approval of the Resolution Plan; the implementation and supervision of the Resolution Plan, that the Resolution Plan does not contravene any of the",,,,,

provisions of the law, and that the Resolution Plan conforms to such other requirements as may be specified by the Board.",,,,,

In compliance of the said provision, the Resolution Professional has filed compliance certificate in Form H and inter alia has confirmed that he has",,,,,

examined and verified the Resolution Plan approved by the CoC, in the light of the requirements of the Code and Regulations and that it is compliant to",,,,,

the relevant provisions of the Code and Regulations.,,,,,

Further in terms of Section 31(1) of the Code, Adjudicating Authority has also to examine whether the requirements of sub-section (2) of Section",,,,,

30 have been complied with or not. It has been submitted in the application that the final Resolution Plan approved by the CoC meets the requirements,,,,,

laid down in various clauses of Section 30 (2) of the Code.,,,,,

In respect of compliance of Section 30(2)(a) there is provision in the resolution plan as at Clause 5.4 (a), which provides for payment of CIRP",,,,,

costs in priority over payments to any other creditors. The clause inter alia provides that each holder of such priority claim shall be unimpaired under,,,,,

the Resolution Plan and would be paid CIRP Costs (estimated at INR 2.0 Crores) in full as per the prevailing Code and CIRP Regulations from the,,,,,

Effective Date prior to payments to all other Creditors. The Resolution Professional has confirmed in the compliance certificate given in Form H that,,,,,

the Resolution Plan provides for the payment of Insolvency Resolution Process costs.,,,,,

Therefore Section 30(2)(a) stands satisfied and it is made clear that Insolvency Resolution Process cost shall be paid in its entirety by the,,,,,

resolution applicant in priority to other debts of the corporate debtor. As per Section 30(2)(b) of the Code, the Resolution Plan must provide for the",,,,,

payment of the debts of operational creditors in such manner as may be specified by the Board which shall not be less than the amount to be paid to,,,,,

the operational creditors in the event of a liquidation of the corporate debtor under Section 53. In this connection Regulation 38(1) of CIRP,,,,,

Regulations provides for payment to the operational creditor in priority to the financial creditors.,,,,,

In regard to the aggregate amount owed to Operational Creditors (including statutory authorities and regulatory authorities and dues towards,,,,,

employees and workmen) as admitted by the Resolution Professional, the Resolution plan provides an amount of Rs. 67,98,000/- (Rupees Sixty-Seven",,,,,

Lakhs and Ninety- Eight Thousand only) shall be paid in priority to any payment made to Financial Creditors however but not later than 30 days of,,,,,

Closing date. Further Rs. 25,72,000/- (Rupees Twenty- Five Lakhs and Seventy- Two Thousand onlyâ€) is stipulated to be paid to workmen and",,,,,

employees within 30 days of approval of plan by Hon’ble Adjudicating Authority in priority over Financial creditors. The distribution of amount,,,,,

provided amongst Operational Creditors will be in a pro-rata basis to the number of claims admitted by the Resolution Professional as disclosed in,,,,,

Resolution Professional’s documents. Any other additional claims that may be admitted by the competent judicial authority, shall be paid on similar",,,,,

basis as above. The Resolution Professional has confirmed in the compliance certificate given in Form H that the payment to Operational Creditors,,,,,

have been given priority over payment to Financial Creditors. Therefore Section 30(2)(b) read with Regulation 38(1)(b) of the Insolvency and,,,,,

Bankruptcy Board of India (Insolvency Resolution Process of Corporate Persons) Regulations, 2016 stands satisfied.",,,,,

In terms of Section 30(2)(c), the Resolution Plan provides for management of affairs of the corporate debtor after approval of the Resolution Plan.",,,,,

The term of Plan and its implementation schedule as per Regulation 38(2)(a) has been provided for at Clause 6 of the Resolution plan which provides,,,,,

that the Company shall continue as a going concern and operate in its normal course of business upon implementation of the Resolution Plan. The,,,,,

Resolution Professional has confirmed in the compliance certificate given in Form H that section 5 and 6 of the Resolution Plan provides for the,,,,,

management and control of the business of the corporate debtor.,,,,,

The last but not the least, Section 30 of the Code provides to ensure that the Resolution Plan does not contravene any of the provisions of the law",,,,,

and conforms to such other requirements as may be specified by the Board. Clause 9 of the Resolution Plan covers compliance with various,,,,,

provisions of laws currently in force. The Resolution Applicant agrees to comply with all applicable laws under the proposed Resolution Plan, whether",,,,,

or not specifically provided herein.,,,,,

It is pertinent to state here that Section 29A of the Code prescribes certain eligibility criteria and disqualifications for persons who submit a,,,,,

resolution plan. Resolution applicants have given adequate declaration and undertaking on their eligibility to submit the Resolution Plan. Resolution,,,,,

Professional has also certified that he has verified that the Resolution Applicant and the persons in management and control of the company and the,,,,,

other 'Connected Persons' are eligible to submit resolution plan and does not fall under any of the category as mentioned in Section 29A as inserted by,,,,,

the Insolvency and Bankruptcy Code (Amendment) Act, 2017.",,,,,

The Resolution Professional has stated to have examined the Resolution Plan and has confirmed that the Resolution Plan has been approved by,,,,,

100 % of voting share of financial creditors after considering its feasibility and viability and other requirements specified by the Code and CIRP,,,,,

Regulations. Resolution Professional has further certified that the said Resolution Plan complies with all the provisions of the Insolvency and,,,,,

Bankruptcy Code 2016 (Code), the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations,",,,,,

2016 (CIRP Regulations) and does not contravene any of the provisions of the law for the time being in force.,,,,,

Regulation 36B(4A) of the CIRP Regulations requires that the Resolution Applicant shall provide a performance security. In view of Regulation,,,,,

36B(4A) of the CIRP Regulations, the Committee of creditors have approved an amount of Rs. 58,02,299/- (Rupees Fifty- Eight Lakhs Two",,,,,

Thousand Two Hundred and Ninety-nine only) as a performance security to be deposited by M/s BCH Electric Limited.,,,,,

Accordingly, in compliance of Regulation 36B(4A) of the CIRP Regulations, the successful Resolution applicant has submitted a bank guarantee",,,,,

of Rs. 58,02,299/- as performance security as per the following details: -",,,,,

Date of issuance of Bank Guarantee- 16.05.2019,,,,,

Name of Issuing Bank- Punjab National Bank,,,,,

Amount of Bank Guarantee- Rs.58,02,299/-",,,,,

Period of Bank Guarantee- Valid upto 15.11.2019,,,,,

As a sequel to aforesaid discussions we are satisfied that all the requirements of Section 30 (2) are fulfilled and no provisions of the law at present,,,,,

in force has been contravened.,,,,,

It is relevant to note here that ‘Explanation’ in sub-section(2) of Section 30 provides deemed approval of shareholders for implementations,,,,,

of actions under the Resolution Plan, making it clear that it shall not be a contravention of law.",,,,,

In respect of reliefs and concession sought for in the Plan which are beyond the jurisdiction of this Tribunal, Monitoring agency along with the",,,,,

Resolution Applicant can make such claim before the authorities which shall be considered in accordance with law. Besides under sub-section (4) of,,,,,

Section 31 the resolution applicant shall, pursuant to the resolution plan approved under sub-section(1), obtain the necessary approval required under",,,,,

any law for the time being in force within a period of one year from the date of approval of the resolution plan by the Adjudicating Authority under,,,,,

sub-section(1) or within such period as provided for in such law, whichever is later.",,,,,

In the facts, it is seen that the Resolution Plan meets the requirements of Section 30 (2) of the Code and that the resolution plan has provisions for",,,,,

its effective implementation.,,,,,

In the facts we are satisfied that the requirements as per the Code and regulations have been complied with. Moreover, the Resolution Plan has",,,,,

been approved by the requisite majority of the members of CoC and has been submitted in compliance of Section 30 of the Code for approval.,,,,,

Resolution Professional has confirmed that the Resolution Plan is compliant to sub-section (a) to (f) of Section 30(2) of the Code and also comply,,,,,

Regulation 38 of Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. He has further",,,,,

certified that it has dealt with the interests of all stake holders.,,,,,

In absence of any discrimination or perverse decision, it is beyond purview of the Adjudicating Authority to modify the Plan. As per the provisions",,,,,

of the Code, the CoC with the requisite super majority is the competent authority to decide on the rights of various stake holders by approving a",,,,,

resolution Plan. Adjudicating Authority is not expected to substitute its view, with the unanimous commercial wisdom of the CoC nor should deal with",,,,,

technicality and merits of Resolution Plan unless it is found contrary to the express Provisions of law and goes against the public interest. Admittedly,,,,,

the revival of the corporate debtor company would certainly enhance the interest of all the stake holders in view of the plan offering higher value than,,,,,

liquidation, the maximization of assets is endeavored to be achieved which falls in the line to achieve the object of the Code.",,,,,

In view of the finding that the resolution plan, as approved by the requisite majority of members of CoC, is in accordance with the sub-section 2 of",,,,,

Section 30 read with Section 31 of the Code and as the Resolution Applicant is not disqualified under Section 29A of the Code and as no infirmity,,,,,

seems to have brought out upon screening of the Resolution Plan; we hereby approve the Resolution Plan under sub-section (1) of Section 31 of the,,,,,

Code.,,,,,

The resolution applicant shall appoint a ‘Monitoring Agency’ with modification that Resolution Professional shall be appointed as,,,,,

‘Monitoring Agency’ to monitor and supervise the implementation of the Resolution Plan. We also grant Liberty to the monitoring Agency to,,,,,

apply to the Tribunal for any further direction in order to ensure effective implementation of the plan, if such a necessity arises.",,,,,

It is hereby declared that the Resolution Plan is binding on the corporate debtor, members, employees and workmen of the corporate debtor,",,,,,

creditors of the corporate debtor and other stakeholders involved in the Resolution Plan.,,,,,

The resolution applicant shall obtain the necessary approval required under any law for the time being in force within a period of one year from the,,,,,

date of this order or within such period as provided for in such law, whichever is later.",,,,,

The Resolution applicant has to adhere to all the applicable law for the time being in force.,,,,,

Approval of Resolution Plan shall confer change in management and ownership of the corporate debtor and the entire control of the Corporate,,,,,

Debtor shall vest with the new management. The RP is directed to hand over all records, assets, paper & proceedings and all other belongings of",,,,,

Corporate Debtor to the Resolution applicant within 7 days without any demur.,,,,,

We hereby exclude the period spent under adjudication and it is declared that the moratorium order passed by this Bench under Section 14 of the,,,,,

Code shall cease to have effect from the date of this order.,,,,,

The Resolution Professional shall forward all records relating to the CIR Process and the Resolution Plan to IBBI to be recorded at its data base.,,,,,

The approved ‘Resolution Plan’ shall become effective from the date of passing of this order.,,,,,

C.A. 175 (ND) 2019 and CP No. (IB) 821 (ND)/ 2018 along with all pending applications moved by various Operational Creditors are disposed of,,,,,

accordingly.,,,,,

Let the copy of the order be served to the parties.,,,,,