IGOPL Offshore Private Limited Vs

It is an application filed under Section 30(6) read with Section 31(1) of the Insolvency & Bankruptcy Code, 2016 (“the Code”) read with Regulation 39(4) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process Corporate Persons) Regulations, 2016 for approval of the Resolution Plan by this Bench based on the approval already given by the Committee of Creditors (“CoC”) in its 8th Meeting with requisite majority of 100% u/s 30(4) of the Code.

Looking at the application moved by the Resolution Professional, it reveals that IGOPL Offshore Private Limited/Corporate Debtor has filed the petition u/s 10 of the Code for initiation of CIRP. This Bench admitted the aforesaid petition on 15.11.2021 by initiating Corporate Insolvency Resolution Process (“CIRP”) and appointing Mr. Bhavesh Rathod, as Interim Resolution Professional. IRP accordingly made Public announcement in Form A for inviting claims from the Creditors of the Corporate Debtor. Further, constituted CoC with 6 Financial Creditors out of which 2 were related parties. Subsequently, IRP was confirmed as the Resolution Professional in 1st CoC meeting held on 17.02.2021. Thereafter, the Resolution Professional/Applicant appointed registered valuers namely (1) Sanjay Dayal (2) Girish Pawar (3) Prasad Kulkarni and (4) Asha Ghoshal as per Regulation 27 of the CIRP Regulations to determine valuation of Plant and Machinery and Securities and Financial Assets of the Corporate Debtor in accordance with Regulation 35 of the CIRP Regulations, same was approved by the CoC in its 2nd meeting. After carrying out the Valuation by the Registered Valuer, the Fair Value was Rs. 33.16 Crore and Liquidation Value was Rs. 22.87 Crore.

The Applicant has issued invitation for Expression of Interest (“EoI”), as approved by the CoC, and has also made paper advertisement in Financial Express (English Ed.) and Mumbai Lakshadeep (Marathi Ed.) on 06.04.2021, by fixing the last date for EoI as 21.04.2021. Further, the Resolution Professional received five EoI’s. However, the Applicant has received the Resolution Plan from two Resolution Applicants viz. (1) Mr. Jai Kishan Thappa and (2) Jubliant Enpro Private Limited only along with declaration of Confidentiality and Non-Disclosure Agreement. The CoC discussed both the resolution plan submitted and requested the Successful RA’s to revise their Resolution Plan. Meanwhile, this Tribunal allowed the extension of 90 days, on the application made by the present applicant.

Further, Jai Kishan Thappa submitted its revised Resolution Plan on 31.08.2021 and Jubilant Enpro Private Limited submitted its revised Resolution Plan on 03.09.2021. The Applicant obtained Report from M/s. ASC Insolvency Services LLP on eligibility of Resolution Applicant under Section 29A of the IBC, 2016, Resolution Plan compliance certificate and evaluation matrix. In 8th CoC meeting held on 09.09.2021, the Applicant apprised the CoC that he has received 6 claims from Financial Creditors amounting to Rs. 50,42,37,123/-; 225 claims from Operational Creditors amounting to Rs. 37,52,59,525/-; 13 claims from Employees amounting to Rs. 1,47,45,873/- and claim from GST Department amounting to Rs. 73,61,946/-. Further on 09.09.2021, the CoC approved the plan of Jubilant Enpro Private Limited with 100% voting shares by CoC members in its 8th meeting. The Resolution Applicant had submitted the Resolution Plan of Rs. 24 Crores.

As regards the Resolution Plan, from Form – H filed by the Resolution Professional, it is evident that Fair Value is Rs. 33,15,72,056/- and the Liquidation Value is 22,86,97,925/-. It is also observed that admitted claim value against the debtor company is more than the liquidation value of the company.

Further, it is evident that the total consideration amount under the Resolution Plan will be INR 24 Crores, out of which the Secured Financial Creditors shall receive INR 19,39,08,568/- and Unsecured Financial Creditors shall receive INR 25,06,303/-; Unrelated Employees shall receive INR 34,66,814/- and Operational Creditors shall receive 6.18% of claim. Further, the amount of INR 50,24,721/- is proposed for the CIRP cost. Resolution Plan approved by CoC is of Rs. 24 Crores out of which Rs. 4,73,00,000/- by was of Equity and Rs. 19,27,00,000/- by way of unsecured loan. Payment outlay is as under:

CIRP Cost (Unpaid & Projected)

Rs. 50,24,721/-

100%

Secured Financial Creditors

Rs. 19,39,08,568/-

100%

Unsecured Financial Creditors

Rs. 25,06,303/-

100%

Related Parties Financial

Creditors

Rs. 30,78,22,252/-

0%

Employees (Unrelated)

Rs. 34,66,814/-

100%

Employees (Related)

Rs. 1,12,79,059/-

0%

GST Department

Rs. 73,61,946/-

100%

Operational Creditors

Rs. 37,52,59,525/-

6.18%

Other Statutory Dues (Claim not

received)

Rs. 76,82,254/-

100%

Jubilant Enpro Private Limited submitted a financial guarantee of INR 1,20,00,000/- equivalent to 5% of Resolution Plan Value being guarantee No. 00220100003194 dated 17.09.2021 issued by Axis Bank Limited, which shall remain in force until 12.03.2022 with an additional claim period of 30 days thereafter.

From Form – H filed by the Applicant, it is evident that the Applicant has not filed any applications under Section 43, 45, 50 and 66 of IBC, 2016. RP appointed Transaction Auditor to conduct Audit of transactions covered under Section 43, 44, 50 and 66 of the Code and as per the report received, there were no transactions which were observed and found.

As per the provision of the Code, this Tribunal is duty bound to examine the Resolution Plan as to whether it satisfies the conditions as laid down in Section 30(2) of the Code. A comparison of the mandatory compliance under the Code vis-à-vis the same made under the Resolution Plan is tabulated hereunder;

MANDATORY COMPLIANCE UNDER IBC CODE AND REGULATIONS

COMPLIANCE UNDER RESOLUTION PLAN

S.30(1)-          Resolution Applicant  to  submit  an affidavit stating that he is eligible  under  Sec.29A  of the Code, 2016

The  Resolution  Professional  in  Form-H  has certified  that  the  Resolution  Applicant  has submitted an affidavit.

S.30(2)(a)-   Payment    of insolvency        resolution process     cost     in     the manner  specified  by  the Board

It is anticipated that during the CIRP period, cash   flows   generated   by   the   Company, together with the amounts to be infused by

the Resolution Applicant as per Section 3 of

the  plan  will  be  sufficient  to  pay  the  CIRP Costs. CIRP Costs incurred until the date of NCLT Approval Date shall be paid at actuals (as  approved  by  the  CoC  or  as  otherwise payable under the IBC). It is hereby clarified that in the event the cash in the Company during the CIRP period is not sufficient to pay the CIRP Costs, and the Resolution Applicant is required to utilize its own funds for meeting such CIRP Costs, then such amount will be reduced from the Total Financial Outlay that is payable to the Operational Creditors.

S.  30(2)(b)  -Payment  of debts     of     Operational

Section  3,  Part  C  (Second)  of  Resolution

Plan: The Operational Creditors shall be paid

Creditors in such manner as may be specified by the Board, which shall not be less that the amount to be paid  to  the  Operational Creditors in the event of a liquidation        of        the Corporate  Debtor  under Sec. 53

the amounts as set out below in accordance with   Section   30   of   the   IBC   read   with Regulation 38 of the CIRP Regulations (“OC Settlement Value”) : 359.03 Lacs.

[1.  Outstanding  Workmen  and  Employees Dues: 34.67 Lacs; 2. Operational Debt of the Company (including claims admitted post 90 days  of  commencement  of  CIRP)  excluding payments    to    Governmental    Authorities:

250.74  Lacs;  3.  Goods  and  Services  Taxes payable: 73.62 Lacs]

It also states that the value due to such Operational Creditors as aforesaid will be discharged out of the Financial creditors Settlement  Amount,  in  priority  to  any payments  being  made  to  the  Financial Creditors.

S.  30(2)(c)-  provides  for the  management  of  the affairs  of  the  Corporate Debtor  after  approval  of the resolution plan;

Yes, the Resolution Plan in Section 6 provides for management of the Corporate Debtor by the Resolution Applicant.

S.30(2)(d)-

Implementation         and Supervision       of       the Resolution Plan

Event

Estimated Timeline

Approval of the NCLT

NCLT Approval Date

Cancellation of the Previously Issued Shares

Within 21 Business Days from completion of Step 1 above.

Infusion of Total Financial Outlay

Within 2 Business Days from completion of Step 2 above.

Payment of the Financial Creditors settlement amount and other payments

in the manner set

Within 15 Business Days from completion of Step 3 above.

out in section 2.1 of Part C.

Transfer of the

Company’s equity shareholding in the Investee Company, to the Financial Creditors.

Within 15 Business Days from competition of Step 4 above.

S.   30(2)(e)-   Contravene any  of  the  provisions  of the law for the time being in force.

Does not contravene any of the provisions of the law for the time being in force.

S.  30(4)-  Committee  of Creditors    approve    the Resolution   Plan   by   not less  than  66%  of  voting share       of       Financial Creditors,                 after considering its feasibility, viability  and  such  other requirement  as  specified by the Board

The CoC, in its 8th meeting has approved the Resolution   Plan   in   the   following   voting pattern;

S.

No

Name of Creditor

Ascent (%)

Dissent (%)

1.

Induslnd Bank Limited

100

-

TOTAL

100

-

A perusal of Form-H as filed by the Resolution Professional also posits the fact that the Resolution Plan is in compliance with the mandatory compliances as stipulated under Section 30(2) of the Code and also the Resolution Applicant has filed an Affidavit to the effect that he is eligible to submit the Resolution Plan taking into consideration Section 29A of the Code. The Monitoring Committee shall supervise the implementation of the Resolution Plan and shall be in control of the management and affairs of the Corporate Debtor till Closing Date.

As to the Reliefs and Concessions stated in Clause 1.7 and 1.8 of the Resolution Plan, the exemption as sought for in relation to the payment of registration charges, stamp duty, taxes and fees arising out of the implementation of the Resolution Plan is not granted. As regards the other reliefs and concessions as sought for, which exempts the Corporate Debtor from holding them liable for any offences committed prior to the commencement of CIRP and as stipulated under Section 32A of IBC, 2016 is granted to the Resolution Applicant. With regard to other concessions and reliefs, most of them are subsumed in the reliefs granted above. The relief which is not expressly granted above, shall not be construed as granted. The exemptions if any sought in violation of any law in force, it is hereby clarified that such exemptions shall be construed as not granted. Further in terms of the Judgement of Hon’ble Supreme Court in the matter of Ghanshyam Mishra and Sons Private Limited Vs. Edelweiss Asset Reconstruction Company Limited, on the date of approval of the Resolution Plan by the Adjudicating Authority, all such claims which are not a part of Resolution Plan, shall stand extinguished and no person will be entitled to initiate or continue any proceedings in respect to a claim which is not a part of the Resolution Plan. In view of the same, this plan is hereby approved.

The Resolution Professional is further directed to handover all records, premises / documents to Resolution Applicant to finalise the further line of action required for starting of the operation as contemplated under the Resolution Plan. The Resolution Applicant shall have access to all the records premises / documents through Resolution Professional to finalise the further line of action required for starting of the operation.

Accordingly, the Resolution Plan in IA/2192/2021 is hereby allowed and approved.