Balakrishnan Venkatachalam

(a)

The Resolution Applicant is a wholly owned subsidiary of BCPL, that is generating steady cash flow / internal accruals from its operations.

(b)

Given the above, the Resolution Applicant intends to meet the commitment towards proposed Upfront Cash Recovery from the following sources;

(i)

Cash and Cash equivalents of BCPL available as on 10 December 2020 to the extent of INR 170.03 Crores which is only expected to increase in the coming days given that few of projects are nearing completion – a certificate from a Chartered Accountant on the cash and cash equivalents positions is enclosed as Annexure V. BCPL has also provided an undertaking that the funds to the extent of INR 150,00,00,000 (Rupees Hundred and Fifty Crore only) are exclusively earmarked for the purpose of meeting the commitment of the Resolution Applicant under this Resolution Plan. With the intent to give comfort to the financial creditors, the Resolution Applicant undertakes that the Resolution Applicant shall procure BCPL to provide a guarantee for the payment of the FC Settlement Liability (“Corporate Guarantee”) which shall be furnished along with this Resolution Plan. The agreed format of this Corporate Guarantee shall be stipulated by the FC and provided by BCPL along with this Resolution Plan.

(ii)

Available credit line from PHL Fininvest Private Limited (“Lender”) (part of Piramal group) to the extent of INR 175 Crore (subject to acceptance of this Resolution Plan) exclusively in connection with the proposed commercial project in the Guindy land parcel owned by the Corporate Debtor. The term sheet from the Lender is enclosed for your reference as Annexure V. The Resolution Application agrees and undertakes that no charge on the assets of the Corporate Debtor will be created in favour of the Lender prior to the Appointed Date.

(c)

A Certificate from a Chartered Accountant certifying the Resolution Applicant’s ability to meet the commitment towards the proposed Upfront Cash Recovery is also attached as Annexure V.

(d)

Further, it is pertaining to note that the Baashyam Group possesses sound goodwill and flawless credit history that allows the Resolution Applicant to secure debt funding / financial assistance as may be required to effectively implement this Resolution Plan.

37. Resolution plan.

A resolution plan shall provide for the measures, as may be necessary, for insolvency resolution of the corporate debtor for maximization of value of its assets, including but not limited to the following: -

(a)

transfer of all or part of the assets of the corporate debtor to one or more persons;

(b)

sale of all or part of the assets whether subject to any security interest or not;

(ba)

restructuring of the corporate debtor, by way of merger, amalgamation and demerger;

(c)

the substantial acquisition of shares of the corporate debtor, or the merger or consolidation of the corporate debtor with one or more persons;

(ca)

cancellation or delisting of any shares of the corporate debtor, if applicable;

(d)

satisfaction or modification of any security interest;

(e)

curing or waiving of any breach of the terms of any debt due from the corporate debtor;

(f)

reduction in the amount payable to the creditors;

(g)

extension of a maturity date or a change in interest rate or other terms of a debt due from the corporate debtor;

(h)

amendment of the constitutional documents of the corporate debtor;

(i)

issuance of securities of the corporate debtor, for cash, property, securities, or in exchange for claims or interests, or other appropriate purpose;

(j)

change in portfolio of goods or services produced or rendered by the corporate debtor;

(k)

change in technology used by the corporate debtor; and

(l)

obtaining necessary approvals from the Central and State Governments and other authorities.

“19...In the present case, however, our focus must be on the dispensation governing the process of approval or rejection of resolution plan by the CoC. The CoC is called upon to consider the resolution plan under Section 30(4) of the I&B Code after it is verified and vetted by the resolution professional as being compliant with all the statutory requirements specified in Section 30(2).

62.

...In the present case, however, we are concerned with the provisions of I&B Code dealing with the resolution process. The dispensation provided in the I&B Code is entirely different. In terms of Section 30 of the I&B Code, the decision is taken collectively after due negotiations between the financial creditors who are constituents of the CoC and they express their opinion on the proposed resolution plan in the form of votes, as per their voting share. In the meeting of the CoC, the proposed resolution plan is placed for discussion and after full interaction in the presence of all concerned and the Resolution Professional, the constituents of the CoC finally proceed to exercise their option (business/commercial decision) to approve or not to approve the proposed resolution plan. In such a case, non-recording of reasons would not per-se vitiate the collective decision of the financial creditors. The legislature has not envisaged challenge to the “commercial/business decision” of the financial creditors taken collectively or for that matter their individual opinion, as the case may be, on this count.”

“...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).

“55.

Whereas, the discretion of the adjudicating authority (NCLT) is circumscribed by Section 31 limited to scrutiny of the resolution plan “as approved” by the requisite per cent 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. Reverting to Section 30(2), the enquiry to be done is in respect of whether the resolution plan provides: (i) the payment of insolvency resolution process costs in a specified manner in priority to the repayment of other debts of the corporate debtor, (ii) the repayment of the debts of operational creditors in prescribed manner, (iii) the management of the affairs of the corporate debtor, (iv) the implementation and supervision of the resolution plan, (v) does not contravene any of the provisions of the law for the time being in force, (vi) conforms to such other requirements as may be specified by the Board. The Board referred to is established under Section 188 of the I&B Code. The powers and functions of the Board have been delineated in Section 196 of the I&B Code. None of the specified functions of the Board, directly or indirectly, pertain to regulating the manner in which the financial creditors ought to or ought not to exercise their commercial wisdom during the voting on the resolution plan under Section 30(4) of the I&B Code. The subjective satisfaction of the financial creditors at the time of voting is bound to be a mixed baggage of variety of factors. To wit, the feasibility and viability of the proposed resolution plan and including their perceptions about the general capability of the resolution applicant to translate the projected plan into a reality. The resolution applicant may have given projections backed by normative data but still in the opinion of the dissenting financial creditors, it would not be free from being speculative. These aspects are completely within the domain of the financial creditors who are called upon to vote on the resolution plan under Section 30(4) of the I&B Code.

58.

Indubitably, the inquiry in such an appeal would be limited to the power exercisable by the resolution professional under Section 30(2) of the I&B Code or, at best, by the adjudicating authority (NCLT) under Section 31(2) read with Section 31(1) of the I&B Code. No other inquiry would be permissible. Further, the jurisdiction bestowed upon the appellate authority (NCLAT) is also expressly circumscribed. It can examine the challenge only in relation to the grounds specified in Section 61(3) of the I&B Code, which is limited to matters “other than” enquiry into the autonomy or commercial wisdom of the dissenting financial creditors. Thus, the prescribed authorities (NCLT/NCLAT) have been endowed with limited jurisdiction as specified in the I&B Code and not to act as a court of equity or exercise plenary powers.” (emphasis supplied)

“73.

There is no doubt whatsoever that the ultimate discretion of what to pay and how much to pay each class or sub-class of creditors is with the Committee of Creditors, but, the decision of such Committee must reflect the fact that it has taken into account maximising the value of the assets of the corporate debtor and the fact that it has adequately balanced the interests of all stakeholders including operational creditors. This being the case, judicial review of the Adjudicating Authority that the resolution plan as approved by the Committee of Creditors has met the requirements referred to in Section 30(2) would include judicial review that is mentioned in Section 30(2)(e), as the provisions of the Code are also provisions of law for the time being in force. Thus, while the Adjudicating Authority cannot interfere on merits with the commercial decision taken by the Committee of Creditors, the limited judicial review available is to see that the Committee of Creditors has taken into account the fact that the corporate debtor needs to keep going as a going concern during the insolvency resolution process; that it needs to maximise the value of its assets; and that the interests of all stakeholders including operational creditors has been taken care of. If the Adjudicating Authority finds, on a given set of facts, that the aforesaid parameters have not been kept in view, it may send a resolution plan back to the Committee of Creditors to re-submit such plan after satisfying the aforesaid parameters. The reasons given by the Committee of Creditors while approving a resolution plan may thus be looked at by the Adjudicating Authority only from this point of view, and once it is satisfied that the Committee of Creditors has paid attention to these key features, it must then pass the resolution plan, other things being equal." (emphasis supplied)

76.

The expositions aforesaid make it clear that the decision as to whether corporate debtor should continue as a going concern or should be liquidated is essentially a business decision; and in the scheme of IBC, this decision has been left to the Committee of Creditors, comprising of the financial creditors. Differently put, in regard to the insolvency resolution, the decision as to whether a particular resolution plan is to be accepted or not is ultimately in the hands of the Committee of Creditors; and even in such a decision making process, a resolution plan cannot be taken as approved if the same is not approved by votes of at least 66% of the voting share of financial creditors. Thus, broadly put, a resolution plan is approved only when the collective commercial wisdom of the financial creditors, having at least 2/3rd majority of voting share in the Committee of Creditors, stands in its favour.

77.

In the scheme of IBC, where approval of resolution plan is exclusively in the domain of the commercial wisdom of CoC, the scope of judicial review is correspondingly circumscribed by the provisions contained in Section 31 as regards approval of the Adjudicating Authority and in Section 32 read with Section 61 as regards the scope of appeal against the order of approval.

77.1.

Such limitations on judicial review have been duly underscored by this Court in the decisions above-referred, where it has been laid down in explicit terms that the powers of the Adjudicating Authority dealing with the resolution plan do not extend to examine the correctness or otherwise of the commercial wisdom exercised by the CoC. The limited judicial review available to Adjudicating Authority lies within the four corners of Section 30(2) of the Code, which would essentially be to examine that the resolution plan does not contravene any of the provisions of law for the time being in force, it conforms to such other requirements as may be specified by the Board, and it provides for: (a) payment of insolvency resolution process costs in priority; (b) payment of debts of operational creditors; (c) payment of debts of dissenting financial creditors; (d) for management of affairs of corporate debtor after approval of the resolution plan; and (e) implementation and supervision of the resolution plan.

77.2.

The limitations on the scope of judicial review are reinforced by the limited ground provided for an appeal against an order approving a resolution plan, namely, if the plan is in contravention of the provisions of any law for the time being in force; or there has been material irregularity in exercise of the powers by the resolution professional during the corporate insolvency resolution period; or the debts owed to the operational creditors have not been provided for; or the insolvency resolution process costs have not been provided for repayment in priority; or the resolution plan does not comply with any other criteria specified by the Board

77.6.1.

The assessment about maximisation of the value of assets, in the scheme of the Code, would always be subjective in nature and the question, as to whether a particular resolution plan and its propositions are leading to maximisation of value of assets or not, would be the matter of enquiry and assessment of the Committee of Creditors alone. When the Committee of Creditors takes the decision in its commercial wisdom and by the requisite majority; and there is no valid reason in law to question the decision so taken by the Committee of Creditors, the adjudicatory process, whether by the Adjudicating Authority or the Appellate Authority, cannot enter into any quantitative analysis to adjudge as to whether the prescription of the resolution plan results in maximisation of the value of assets or not. The generalised submissions and objections made in relation to this aspect of value maximisation do not, by themselves, make out a case of interference in the decision taken by the Committee of Creditors in its commercial wisdom

78.

To put in a nutshell, the Adjudicating Authority has limited jurisdiction in the matter of approval of a resolution plan, which is well defined and circumscribed by Sections 30(2) and 31 of the Code read with the parameters delineated by this Court in the decisions above referred. The jurisdiction of the Appellate Authority is also circumscribed by the limited grounds of appeal provided in Section 61 of the Code. In the adjudicatory process concerning a resolution plan under IBC, there is no scope for interference with the commercial aspects of the decision of the CoC; and there is no scope for substituting any commercial term of the resolution plan approved by the CoC. Within its limited jurisdiction, if the Adjudicating Authority or the Appellate Authority, as the case may be, would find any shortcoming in the resolution plan vis-à-vis the specified parameters, it would only send the resolution plan back to the Committee of Creditors, for re-submission after satisfying the parameters delineated by Code and exposited by this Court.

10.1.

That the Hon’ble NCLT be pleased to give or issue necessary directions, instructions to the Central Board of Direct Taxation, Central Board of Indirect Taxes, Customs, Value Added Tax authorities, State Governments Tax authorities to grant the reliefs / exemptions / waivers under / from applicability of Section 170 & 281 of the Income Tax Act for the purposes of implementation of this Resolution Plan;

10.2.

That the Hon’ble NCLT be pleased to give or issue necessary directions, instructions to the CBDT, Central Board of Indirect Taxes, Customs and Value added Tax authorities to exempt income / gain / profits, if any, arising as a result of giving effect to the Resolution Plan and from being subjected to Income Tax in the hands of the Transferee / Resolution Applicant under the provisions of the value added tax, customs, octroi, excise duty, service tax, goods & services tax, Income tax Act and waive all liabilities whether crystallized or not in respect of Taxes (including interest and penalty) arising in respect of periods up to the NCLT Approval Date;

10.3.

That the Hon’ble NCLT be pleased to give or issue necessary directions, instructions to all relevant Governmental Authorities to grant relief / concessions from payment of fees, charges, stamp duty, registration fees (including fees payable to the jurisdiction ROC) in connection with various actions contemplated under this Resolution Plan viz. increase of authorized share capital of the Transferee pursuant to combining the authorized share capital of the Transferor, transfer of assets and properties, assignment of debt in terms of clause 4.8 of the Resolution Plan and any other action taken to implement the Resolution Plan;

10.4.

That the Hon’ble NCLT be pleased to declare that the order of Hon’ble NCLT approving this Resolution Plan shall be deemed to be an order of Hon’ble NCLT sanctioning a Scheme of arrangement with creditors under the Companies Act including for the purpose of payment of stamp duty on such order and accordingly stamp duty payable shall be the amount payable for an order of NCLT sanctioning a Scheme under Section 230 to 232 of the Companies Act as may be determined in accordance with the provisions of the Indian Stamp Act, 1899 (as applicable in the State of Tamil Nadu) and G.O. Ms. No. 47 dated 19 February 2020 issued by the Commercial Taxes and Registration Department, Tamil Nadu;

10.5.

That the Corporate Debtor and / or BIPL shall not be required to make any separate applications before the Hon'ble NCLT under the provisions of the Code or under the Companies Act and that the approval of the Resolution Plan by the Hon'ble NCLT shall be treated as if the necessary approvals is required to have been obtained under the Companies Act, including consent of shareholders or creditors of the Corporate Debtor and applications to / consents or approvals from any other appropriate authority as required under the Companies Act, together with the process laid down under the Companies Act, have been made, obtained and duly complied with;

10.6.

That the compliance with the provisions of the Resolution Plan (also comprising of the scheme of arrangement) shall be deemed to be in accordance with an constitute compliance with any and all provisions of law that would have otherwise applied to a similar scheme of arrangement under the Companies Act, Income Tax Act and or under rules/circular / regulations issued thereunder; and

10.7.

Such other reliefs and concessions as permitted under the Code or any other Applicable Law and as the Hon'ble NCLT deems appropriate in connection with effective implementation of this Resolution Plan and to afford all benefits and protections to the Resolution Applicant as envisaged pursuant to this Resolution Plan.