Fairmacs Shipping & Transport Services Private Limited vs Trimurti Corns Agro Foods Private Limited

c. Management of Corporate Debtor

d. Implementation and Supervision of the Resolution Plan:

h. The approved Resolution plan envisages a total payment of Rs. 17,30,30,000/-. The outlay of the amount envisaged therein is as under:

Sr. No.	Payment Particulars	Amount (in Rupees)
1.	CIRP Costs	Rs. 15,00,000/-
2.	Secured Financial Creditors	Rs. 16,91,00,000/-
3.	PF, ESIC and Gratuity Dues	Rs. 11,10,000/-
4.	Employees Dues	NIL
5.	Existing Shareholders	NIL
6.	Trade Payables	Rs. 13,20,000/-
	Total (A)	Rs. 17,30,30,000/-
7.	Working Capital Infusion	NIL
	Total (B)	NIL
	Grand Total (A) + (B)	17,30,30,000/-

i.

The Resolution Plan proposes a total consideration of Rs. 17,30,30,000/- (Rupees Seventeen Crores Thirty Lakhs Thirty Thousand only).

4.

Interest of All the Stakeholders the details of the proposed payments are as follows:

A) Corporate Insolvency Resolution Process Costs

i.

The proposed Resolution Plan has made a provision of Rs. 15 lacs, (Rupees Fifteen Lakhs only) in total, towards the CIRP Cost. In case of the CIRP Cost exceeds the above threshold of Rs. 15 lacs, such additional payout shall be adjusted from the proposed Upfront Payment for the Financial Creditors in the year under the approval of the Resolution Plan.

ii.

The full amount of the CIRP Cost shall be payable at actuals by the Resolution Applicants immediately (within 90 days) upon approval of the Adjudicating Authority. Such payment shall be, made in priority to the payment of other liabilities of the Corporate Debtor, as proposed under the Resolution Plan.

B) Financial Creditors

i.

The Financial Creditors outstanding balance as on 20.11.2018, as mentioned by the Resolution Professional in the information memorandum dated 27.05.2019 are as given below:

Name of the Lender	Claimed Amount (Rs. In Lacs)	Claim Admitted (Rs. In Lacs)	Proposed Payment (Rs. In Lacs)
Bank of Maharashtra Axis Bank	2,118.6 357.5	2,094.9 357.5	1425 266.0
Total	2476.1	2452.4	1691.0

ii.

The above table is the full list of claims from the Financial Creditors to the extent that any Financial Creditor has not submitted any claim with the RP, it is clarified that upon the approval of the Resolution Plan by the Adjudicating Authority, no claim of such financial creditors shall lie with the corporate debtor.

iii.

The Financial Creditors are proposed to be paid an amount of Rs 1691.00 Lacs (Rupees One Thousand Six Hundred Ninety One Lacs only) as a full and final settlement of all the claims of the Financial Creditors. Of the proposed amount Rs 308.50 Lacs shall be as an Upfront Payment, immediately after the Approval Date. The balance Rs. 1382.50 Lacs (Rupees One Thousand Three Hundred Eighty Two Lacs and Five Thousand only) ("Deferred Payment") shall be paid in three equal instalments from the Approval Date and before 31.03.2020, as per the table below:

Particulars (Rs. in Lacs)	Upfront Payment after Approval (Rs. in Lacs)	1st Instalment By Date 28/15/2019 (Rs. in Lacs)	2nd Instalment By Date 15/02/2020 (Rs. in Lacs)	3rd Instalment By Date 27/03/2020 (Rs. in Lacs)	Total (Rs. in Lacs)
Bank of Maharashtra Trimurti Principal	142.50	427.5	427.5	427.5	1425
Axis Bank Trimurti and DSNA Agro Foods Principal	166.00	50	50	50	266
Total	308.50	477.5	477.5	427.5	1691

iv.

If the proposed amount for the CIRP Cost exceeds Rs. 15 Lacs (Rupees Fifteen Lakhs) the amount paid Proposed for Upfront Payment to the Financial Creditors shall be adjusted. The Amount already paid upfront will be reduced and balance amount will be paid accordingly.

v.

The Corporate Debtor shall have the option to pre-pay or whole of the Deferred Payment amount to the financial Creditors. Such Pre-payment shall be made at the NPV of the balance dues as per the payment structure, using a discounting rate of 12% p.a. The pre-payment can also be at any amount lower than that of the said NPV, as may be mutually acceptable to the Corporate Debtor and the respective Financial Creditor. Further, there shall not be any pre-payment penalty applicable. The Corporate Debtor shall have the option to pre-pay to any of the Financial Creditors as and when there is appropriate funding visibility.

vi.

The proposed payment amount to the Financial Creditors, as stated above, shall not carry any interest or any other changes.

vii.

To the extent that any financial Creditor has not submitted any claim with the RP or such claims not admitted by the RP till the Resolution Plan submission date, such Financial Creditor claims shall stand extinguished and no amount shall be payable by the RA against such claims.

viii.

Save and except the aforesaid sum of Rs 1691.00 Lacs (Rupees One Thousand Six Hundred Ninety One Lacs only) which is being paid in full and final settlement/payment of the entire claim of the Financial Creditors.

C) Proposal for Provident Fund, Employee State Insurance and Gratuity Dues

i.

The provident fund, employee state insurance and gratitude dues as per the assets and liabilities as on the insolvency date i.e., 20 November are as given below:

Particulars (Rs. in Lacs)	As on 20 November 2018 (Rs. in Lacs)	Amount Proposed to pay (Rs. in Lacs)
PF, ESIC & Gratuity	11.1	11.1
Total	11.1	11.1

ii.

The cash flows in the Resolution Plan are not sufficient to service all the Financial Creditors in full. Accordingly, the dues of provident fund, employee’s state insurance and gratuity dues may not be eligible to receive any payment towards their claims. The claims available as on 20 November, in the interest of the workmen and employees and towards abundant caution, the Resolution Applicant has considered the provident fund, employee state insurance dues as provided in Material Litigations as on the Insolvency Commencement Date i.e. 20.11.2018 as provided in IM version 27.05.2019.

iii.

These provident fund, employee's state insurance and gratuity dues are proposed to be settled in full at Rs. 11.1 lacs. The dues shall be paid upfront within 90 (ninety) days from the Approval Date.

iv.

The proposed dues for Provident Fund, Employees State Insurance and Gratitude, as stated above, shall not carry any interest, penal, belated charges and shall charges from the above proposed payment.

v.

In case there are any changes in the amounts of admitted claims from “under review or non-submission” or “non-claimed” or “additions” or charge in Provident Fund, Employees State Insurance and Gratuity Dues as on 20.11.2018, such incremental admitted claims would not attract additional payment under the Resolution Plan. Instead, the proposed pay-out of Rs 11.1 lacs towards provident fund, employee's state insurance and gratuity due shall be verified by the supervisor of the Resolution Plan.

vi.

The dues shall be paid after verification and admission of such dues. In case of the verification of dues during the period of CIRP Process, it shall be verified by the RP. In case of verification of dues after the completion of CIRP process, the same shall be verified by the Supervisor of the Resolution Plan.

vii.

This Resolution Plan assumes no additional liability has accrued dues towards provident fund, employees state insurance and gratuity between the Insolvency commencement Date and the Completion Date, and such liabilities (if any) stand settled by the Resolution Professional and claimed as Insolvency Cost. If any amount is payable on this account, then the payments made to the creditors shall be accordingly reduced.

D) Proposal for Operational Creditors other than Provident Fund, Employee State Insurance Gratuity, Employees and Statutory Dues.

i.

The claim on Operational Creditors as per the assets and liabilities as on the insolvency date i.e., 20.11.2018 are as given below:

Particulars (Rs in Lacs)	Amount Claimed	Amount Admitted	Amount Proposed to Pay
Trade Payable	26.4 (Rs in Lacs)	26.4 (Rs in Lacs)	13.2 (Rs in Lacs)

ii.

The proposed payment to the Operational Creditors, as stated above, shall not carry any interest, penal charges, warranty charges, break down charges, charges for breach of contract etc. herein under defined as “Net Claim Amount”. Thus, Net Claim amount is the claim admitted by the Resolution Professional less if any interest, penal charges, detention charges, breakdown charges, charges for breach of contract etc. charged by the Operational Creditors.

iii.

The Resolution plan proposed to pay a maximum amount of Rs 13.2 lacs (being 50% of the admitted claim amount) towards the operational Creditors. This amount shall be Payable on pro-rata basis against the total claims admitted. Hence the admitted claims of Operational Creditors shall be paid 50% of such admitted Net Claim Amount or pro rata payable of Rs 13.2 lacs whichever is lower.

iv.

The Operational Creditors, whose claims have been verified and admitted, shall be paid within 90 (ninety) days from the approval date or Adjudicating Authority.

v.

In case there any changes in the amount of admitted claims from “under review” or “non-submission” or “non-claimed” or “additions” or change in Operational Creditors (Trade payable & Advance from Customer) as on 20.11.2018, leading to increase in Operational Creditor claim beyond Rs 26.4 lacs, such incremental pay-out of Rs 13.2 lacs towards Operational Creditors shall get paid proportionately.

vi.

On the approval of the Resolution Plan, any cheques or demand promissory notes or post-dated cheques or letter of credit or legal proceedings or Corporate guarantees or under any law or other such instruments/securities furnished by the Corporate Debtor or any of its Promoters or Guarantor’s or Key Manage Management Personnel to any vendor or operational creditors to secure the payment obligations of the Corporate Debtor in relation to any transaction with an operational creditors shall be returned to the Corporate Debtor and in any event all obligations thereunder shall be denied to have been duly extinguished. The payment obligations of the Corporate Debtor to such operation creditors (s) shall be limited to the amount set out in this Resolution Plan.

vii.

Despite negligible recovery potential for such creditors under the liquidation scenario, however considering the importance of the Operational Creditors for the business and in an effort to balance the interest of all stakeholders, the Resolution Plan has attempted making partial payment of such liabilities, as specified above.

E) Proposal for Other Dues

i.

The other dues as per the financials as on 20 November 2018 are as given below:

Particulars (In Lacs)	As on 20 Nov 2018 (Rs. in Lacs)	Amount Proposed to Pay (Rs. in Lacs)
Other Liabilities Other Dues Short Term Provisions	--141.8	---

Note: PF of Rs 11.1 Lacs has been assumed separately and provided for total short term provision including PF of Rs 153.00 Lacs.

ii.

The cash flow in the Resolution Plan are not sufficient to services all the Financial Creditors. Operational Creditors and Statutory Liabilities in full. Accordingly, the other Liabilities might not be receiving any payment towards their claims.

iii.

In case there any changes in the amount of admitted claims from “under review” or “non- submission” or “non-claimed” or “additions” or change in Other Liabilities as on 20.11.2018, Leading to increase in other liabilities claim beyond Rs 142 lacs, such incremental admitted claims would not attract additional payment under the Resolution Plan.

iv.

The proposed payment amount to the other liabilities, as stated above, shall not carry any interest, penal charges, delay charges.

v.

On the approval of the Resolution Plan, any cheques or demand promissory notes or post-dated cheques or letter of credit or legal proceedings or Corporate guarantees or under any law or other such instruments/securities furnished by the Corporate Debtor or any of its Promoters or Guarantor’s or Key Manage Management Personnel to any vendor or operational creditors to secure the payment obligations of the Corporate Debtor in relation to any transaction with an operational creditors shall be returned to the Corporate Debtor, and, in any event all obligations thereunder shall be denied to have been duly extinguished. The payment obligations of the Corporate Debtor to such operation creditors (s) shall be limited to the amount set out in this Resolution Plan, as given above.

vi.

If does not include any claims with respect to damages, torts or alleged infringements/breaches, and does not include interest claims or claims to legal costs. All claims of such nature shall be treated as written off on the approval of the Resolution Plan.

F) Proposal for Equity Shareholders

As the Shareholders are the first one to take any write off, existing Equity Shares issued by the Company shall be written off to tune of 100% equity share held by erstwhile promoters shall be written off. New Equity Shares shall be issued to Resolution Applicant. The Revised Equity Shareholding post the Resolution Plan approval and fund infusion shall be as per the table below:

Name of Shareholders	No. of Shares	Amount (in Lacs)	Percentage of Share
Resolution Applicant Dr. Gopal Agarwal Mr. Santosh Shinde	47,85,150.87 12,72,002.13	478.50 127.20	79.00 % 21.00 %
Total	60,57,153	605.70	100%

G) Resolution of Disputed Legal Cases/ Litigations and Contingent Liabilities

i.

The Contingent Liabilities as per Financials as on 20.11.2018 are as given below:

Sr. No.	Proceedings in the Matter of	Related Law/ Regulations	Amount (Rs. in Lacs)	Period
1. 2. 3. 4. 5. 6.	Tax Deducted at Source Tax Deducted at Source (Rent) Tax Deducted at Source (Contractor) Value Added Tax Central Sales Tax Professional Tax Payable	Income Tax Act Income Tax Act Income Tax Act Income Tax Act Income Tax Act Income Tax Act	Rs. 8.9 Rs. 0.9 Rs. 3.5 Rs. 5.6 Rs. 9.1 Rs. 5.7	March – 2017 March – 2017 March 2017 – August 2017 March 2017 March 2017 May 2017 to October 2017
	Total		Rs. 33.7

ii.

The Disputed Legal cases and contingent liabilities against the Corporate Debtor as on 20.11.2018 are as given above.

iii.

For the purpose of the Resolution plan, the liability arising out of the said cases, if any, is being considered as deemed crystallized as on the approval date. Hence, the Resolution Applicant is not disputing the above liabilities any further and instead considering them as deemed crystallized and admitted. Simultaneously, the Resolution Applicants is proposing to pay NIL value against all the contingent liabilities and legal cases pending against the Corporate Debtor, including the ones listed above.

iv.

Further any Liability crystallizing out of the contingent liabilities or disputed legal cases or pending appeals of the Corporate Debtor or any other unknown or unclaimed liability pertaining to the transaction or incident dating to a period prior to the Insolvency Commencement Date or during the CIRP which does not find a place in the approval the Resolution Plan, shall be deemed to have lapsed on the approval of the plan and the Corporate Debtor shall be deemed to have been duly discharged from all legal liability arising from such antecedent claims.

v.

All litigation initiated and pending adjudication, before any judicial or quasi-judicial authority (both central and state) against the Corporate Debtor, its erstwhile or new promoters, erstwhile guarantors, directors and employees of the Corporate Debtor, related to the matters that are addressed as per this Resolution Plan shall be withdrawn by the creditors of the Corporate Debtor upon Approval of this Resolution Plan by the Adjudicating Authority. All such creditors shall be deemed to have executed appropriate documents and take appropriate steps to give effects to the above.

5. Review of Interest of all Stakeholder:

i.

The Resolution Applicant has made an attempt to review and as possible, provide for addressing the claims of all the stakeholders of the Corporate Debtor.

ii.

In the effort to address the claims of all the stakeholders, the Resolution Applicant has attempted to balance the serviceability of the claims and outstanding liability, as per assets and liabilities as on 20.11.2018 and claim list as per information memorandum dated 27.05.2019, with the viability of such servicing based on potential cash flow from the business.

iii.

Accordingly, the following amounts and rationale is provided as per the table below for each of the stakeholder.

Sr. Stakeholders Claim Payment Rationale No. Amount Proposed (Rs. in Lacs) (Rs. in Lacs)

1.	Outstanding CIRP Cost	-	Rs. 15.0 Lacs	The Resolution Applicant shall pay a sum of Rs. 15,00,000/- or at actuals towards the entire outstanding CIRP Cost. Since the entire CIRP Cost is being paid by the Financial Creditors during the CIRP period, the same proposal is for the repayment to all the contributions by the Financial Creditors in their proportion to their respective contribution towards the CIRP Costs incurred.
2.	Payment to the Other Operational Creditors towards discharge of their Operational Debt in full and final settlement thereof. This amount shall be distributed among other Operational Creditors in proportion to their admitted claims.	Rs. 26.4 Lacs	Rs. 13.2 Lacs	Higher of the following: a. Successful Resolution Applicant proposes a settlement of Rs. 13,20,000/- towards claims of Operational Creditors. b. The amount to be paid to such creditors in the event of a liquidation of the Corporate Debtor under Section 53 of the Code; or c. The amount that would have been paid to such creditors, if the amount to be distributed under this Resolution Plan had been distributed in accordance with the order of priority in sub-section (1) of Section 53 of the Code.
2.	Payment towards Financial Creditors	Rs. 2476.10 Lacs	Rs. 1536 Lacs	The Financial Creditors are proposed to be paid 66.50% of the admitted claims amounting to Rs 1536 Lakhs over the Resolution period based on cash flow visibility from business.
3.	Provident Fund, Employee State Insurance and Gratuity Dues	Rs. 11.1 Lacs	Rs. 11.1 Lacs	100% of the known claims have been proposed to be paid considering the nature and importance of the employees and workmen for the revival of the organization.
4.	Employee Dues	-	-	NIL amount has been proposed to be paid as there hasn't been any claims received. The assets and liabilities statement dated 20.11.2018 also do not reflect any outstanding employee dues.
5.	Operational Creditors (Trade Payables)	Rs. 26.4 Lacs	Rs. 13.2 Lacs	Operational Creditors being unsecured and unlikely to receive any recovery under liquidation scenario have also been proposed to be paid 50% of the admitted claims given their importance and contribution towards business: operations.
6.	Statutory Liabilities	-	-	NIL amount has been proposed to be paid as there hasn't been any claims received. The assets and liabilities statement dated 20.11.2018 also do not reflect any outstanding dues.
7.	Other Dues	Rs. 1.42 Lacs	NIL	Other Liabilities have been proposed to pay NIL, given the insufficient cash visibility for all stakeholders.
8.	Contingent and Disputed Liabilities	Rs. 0.34 Lacs	NIL	Contingent and disputed liabilities, undisputed legal cases, have been assumed as deemed admitted and proposed to be paid NIL value.
9.	Equity Shareholders	Rs. 6.06 Lacs	Capital Reduction	Equity shareholders being the highest class of risk takers and last one to recover money in business are proposed to bear capital reduction of 51 % of their existing.
10.	Payment towards Secured Financial Creditors (excluding the Dissenting Financial Creditors)			The balance of the Upfront Cash from total payment of Rs. 3,47,80,000/- (i.e., after payment of amounts as contemplated above shall be payable by the Resolution Applicant/ Nominees.
Total Upfront Cash				Rs. 3,47,80,000/-

6.

In addition to the Upfront Cash, the Deferred Cash of Rs. 13,82,50,000/- shall be utilized towards the balance payments to the Financial Secured Creditors, payable in Four Instalments.:

Particulars Upfront 1^st 2^nd 3^rd Total (Rs. in Lacs) Payment Instalment Instalment Instalment

	after Approval (Rs. in Lacs)	By Date 28/15/2019 (Rs. in Lacs)	By Date 15/02/2020 (Rs. in Lacs)	By Date 27/03/2020 (Rs. in Lacs)	(Rs. in Lacs)
Bank of Maharashtra Trimurti Principal	142.50	427.5	427.5	427.5	1425
Axis Bank Trimurti and DSNA Agro Foods Principal	166.00	50	50	50	266
Total	308.50	477.5	477.5	427.5	1691

7.

The Resolution Applicant is eligible to submit resolution plan. The Successful Resolution Applicant has given an Affidavit satisfying the eligibility criteria as per the provisions under Section 29A of the Insolvency & Bankruptcy Code, 2016.

8. Implementation Provisions:

i.

The issue and allotment of the New Equity Shares by the Corporate Debtor is being effected as an integral part of and in accordance with the Plan and shall be deemed to have been carried out without any further deed or action required by the Corporate Debtor or any other person as if the procedures laid down under Section 42, Section 62 (1)(c) and other provisions of the 2013 Act and related rules and other Applicable Laws Including the SEBI (Listing Obligations and Disclosures) Regulations, 2015 are duly complied with.

ii.

In terms of the circular (ref IBC/01/2017) dated 25 October 2017 issued by the Ministry of Corporate Affairs, read with explanation to section 31(e) of the Code inserted by Act No.26 of 2018, sec.23 (ii) (B) (w.e.f. 6-6-2018), approval of the shareholders of the Corporate Debtor to the transactions contemplated under the Plan including the offer and Issuance of the New Equity Shares shall be deemed to have been given on the approval of the Plan by the NCLT.

“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).”

ORDER

“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 part of the resolution plan.”

“95.

(i) Once a resolution plan is duly approved by the adjudicating authority under sub-section (1) of Section 31, the claims as provided in the resolution plan shall stand frozen and will be binding on the corporate debtor and its employees, members, creditors, including the Central Government, any State Government or any local authority, guarantors and other stakeholders. On the date of approval of resolution plan by the adjudicating authority, all such claims, which are not a part of the 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 part of the resolution plan;

(ii)

2019 Amendment to Section 31 of the I&B Code is clarificatory and declaratory in nature and therefore will be effective from the date on which the Code has come into effect;

(iii)

consequently, all the dues including the statutory dues owed to the Central Government, any State Government or any local authority, if not part of the resolution plan, shall stand extinguished and no proceedings in respect of such dues for the period prior to the date on which the adjudicating authority grants its approval under Section 31 could be continued.”