M/s Oriental Bank Of Commerce vs M/s Bindal Sponnge Industries Limited

“RESOLVED THAT the modified version (received by the RP on 02.11.2019) of the earlier Resolution Plan (dated 17.06.2019) of the Resolution Applicant M/s. Kalinga Allied Industries India Private Limited, which had been approved by the Committee of Creditors in the meeting held on 25.06.2019 (wherein the aggregate consideration was Rs.45.00 crores) and which has now been increased in the modified version to Rs. 45.11 crores plus actual CIRP cost till approval by the Hon’ble AA and wherein some other changes in the proposed shareholding pattern and in respect of details of managerial personnel have been incorporated and wherein all other terms & conditions have remained unchanged, be and is hereby approved by the Committee of Creditors.”

“RESOLVED FURTHER THAT the amounts proposed under the modified version of the Resolution Plan be amended and are hereby approved as under: (Figures in Rs.)

Particulars	Amount provided as per Resolution Plan dated 17.06.2019 which was approved by CoC on 25.06.2019	Amount provided by the RA as per modified version of Resolution Plan submitted on 02.11.2019	Amount proposed to be provided in the modified version of Resolution Plan submitted on 02.11.2019
Indian Overseas Bank	24,30,22,078.00	24,36,77,618.00	24,36,42,792.00
Punjab National Bank	6,48,58,076.00	6,50,33,028.00	6,49,98,664.00
Oriental Bank of Commerce	9,99,12,168.00	10,01,81,676.00	10,01,55,175.00

Workmen	2,11,00,000.00	2,11,00,000.00	2,11,95,691.00
All others	2,11,07,678.00	2,11,07,678.00	2,11,07,678.00
Total	45,00,00,000.00	45,11,00,000.00	45,11,00,000.00

“RESOLVED FURTHER THAT the Resolution Professional is authorized to make appropriate submissions on the aforesaid basis to the Hon’ble Adjudicating Authority, the Principal Bench, National Company Law Tribunal, New Delhi, further to the Resolution Plan dated 17.06.2019 submitted to the AA on 02.07.2019 and take all necessary steps for the approval of the modified version of the Resolution Plan as above.” Indian Overseas Bank and Punjab National Bank assented to the above resolution whereas the Oriental Bank of Commerce dissented. The above resolution was passed by 75.50% vote. A copy of the minutes of 13^th CoC meeting dated 11.11.2019 is placed on record as Annexure- A/5.

1B. (i) Whether Application for approval of Resolution Plan filed within 180 days of CIRP initiation - NO

(ii)

Number of days beyond 180 days taken for filing application for resolution plan : 58

(iii)

Reasons for delay: No delay, resolution plan filed for approval before the AA within the extended period.

2.

I hereby certify that -

(i)

the said Resolution Plan complies with all the provisions of the Insolvency and Bankruptcy Code, 2016 (IBC/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

(ii)

the Resolution Applicant M/s Kalinga Allied Industries India Pvt Ltd has submitted an affidavit pursuant to section 30(1) of the Code confirming its eligibility under section 29A of the Code to submit resolution plan. The contents of the said affidavit are in order.

(iii)

the said Resolution Plan has been approved by the CoC in accordance with the provisions of the Code and the CIRP Regulations made thereunder. The Resolution Plan has been approved by 75.50% of voting share of financial creditors after considering its feasibility and viability and other requirements specified by the CIRP Regulations

(iv)

The voting was held in the meeting of the CoC on 27.12.2018 & 28.12.2018 (where all the members of the CoC were present. The members Indian Overseas Bank (IOB-voting share 59.60%) and Punjab National Bank (PNB-voting share 15.90%) voted in favour of the resolution plan during the meeting. The other member Oriental Bank of Commerce (OBC-voting share 24.50%) sought a voting facility during which OBC voted against the resolution plan.

or

I sought vote of members of the CoC by electronic voting system which was kept open at least for 24 hours as per regulation 26.

[strike off the part that is not relevant]

3.

The details and documents related to the successful resolution applicant are as under:

Sl. No.	Particulars	Description
1.	Name of Successful Resolution Applicant (SRA)	Kalinga Allied Industries India Pvt Ltd

2.	Nature of Business of SRA	Manufacturer of steel
3.	Relationship status of SRA with CD, if any	NO relationship
4.	Whether SRA is eligible to submit plan u/s 240A of IBC in case of MSME CD	NO
5.	Due Diligence Certificate of the RP u/s 29A of IBC for the SRA (pls attach copy of certificate)	Copy of due diligence certificate dated 16.11.2018 attached.

4.

The details of CIRP, and resolution plan are as under:

Sl. No.	Particulars				Description
1.	Whether Corporate Debtor is an MSME, if so, Date of obtaining MSME registration (pls attach copy of registration certificate)				NO
2.	Business of the CD)				Manufacture of steel
3.	Total admitted claims (Amount in Rs.)				253,26,80,260
	Sl. No.	Description	Principal	Interest and penalty, if any	Total
	1.	Corporate Guarantee claims	NIL	NIL	NIL
	2.	Other than Corporate Guarantee claims	204,11,31,104	65,66,72,089	269,78,03,193
4.	Resolution Plan Value (including insolvency resolution process cost, infusion of funds etc) (In the case of real estate CDs, provide the monetary value of flats etc. given to allottees) (pls attach copy of Resolution plan)				Rs 50,21,00,000.00. Insolvency resolution process cost is payable over and above the resolution plan value.

5.

Voting percentage (%) of CoC in favour of Resolution Plan (pls attach copy of minutes approving resolution plan)

75.50%

5.

Details of implementation of resolution plan:

Sl. No.	Particulars	Description
1.	Amount of Performance Guarantee furnished by SRA (in Rs.) and its validity (attach document)	Performance Guarantee amount of Rs. 2,50,00,000.00 was deposited in no lien current deposit account with IOB which was later converted into fixed deposit receipt.
2.	Source of funds (in brief)	From the SRA.
3.	Capital restructuring and management of CD post approval of resolution plan (in brief including shareholding proposed to be transferred in favour of SRA)	The entire existing equity share capital of the corporate debtor shall stand cancelled. Fresh 38,21,00,000 equity shares having face value of Re 1 each shall be issued to the Resolution Applicant. The monitoring of the implementation of the resolution plan and the management of the affairs of the CD from the approval of date till implementation date shall continue to be undertaken by the Monitoring Committee. Post implementation of the plan the management of affairs of the CD would be undertaken by the Board. The Board shall consist of nominees of the Resolution Applicant and Financial Sponsor.

4.	Term and implementation of plan (in brief)	The term of the plan shall commence from the Approval date by the AA and ends on 120 days after approval date. The payment of aggregate consideration of Rs 50,21,00,000.00 and CIRP cost, which is over and above consideration of Rs 50,21,00,000.00 will be made by the SRA within 120 days of the approval date.
5.	Details of monitoring committee (in brief)	The monitoring committee shall consist of one member each from both the financial creditors and two members of the SRA and one independent member, to be selected by the representatives of the SRA and FCs.
6.	Effective date of resolution plan implementation	The implementation date shall be the date 120 days after the approval date. Payment will be made at the end of the implementation period or 120th day from the approval date, whichever is earlier.

6.

The list of financial creditors of the CD being members of the CoC and distribution of voting share among them is as under:

Sl. No.	Name of Creditor	Voting Share (%)	Voting for Resolution Plan (Voted for / Dissented / Abstained)
1.	Indian Overseas Bank	59.60	Voted For
2.	Punjab National Bank	15.90	Voted For
3.	Oriental Bank of Commerce (since merged with PNB)	24.50	Dissented

Note: Above voting was for both original plan approved in 7^th CoC meeting held on 28.12.2018 and revised plan approved in 13^th CoC meeting held on 11.11.2019.

7A. Realisable amount:

Sl. No.	Particulars	Description
1.	Total Realisable amount under the plan (In case of real estate CDs, provide the monetary value of flats etc. given to allottees)	Realisable amount is Rs 50,21,00,000
2.	Fair Value	Rs 63,71,74,650
3.	Liquidation Value	Rs 42,89,15,150
4.	Percentage (%) of realisable amount to Fair Value	78.80%
5.	Percentage (%) of realisable amount to Liquidation Value	117.06%

6.	Percentage (%) of realisable amount to Principal amount	18.61%
7.	Percentage (%) of realisable amount to Total admitted Claims	19.82%
8.	Percentage (%) of realisable amount to Other than admitted Corporate Guarantee claims	19.82%

7B. Details of Realisable amount: (Amount In Rupees)

Stakeholder Type	Amount(s)				Payment schedule
	Amount Claimed	Amount Admitted	Realisable amount under the plan	Amount realizable in plan to amount claimed (%)
Secured Financial Creditors
- Creditors not having a right to vote under sub-section (2) of section 21	N I L	N I L	N I L	N I L	N I L
- Dissenting	29,74,73,799	29,74,73,799	10,02,28,510	33.69%	The amount payable to dissenting secured FC shall be made in prior to assenting secured FC. Overall, payment to PF Deptt., CIRP Cost and operational creditors will be made in priority
- Assenting	91,66,67,923	91,66,67,923	30,88,54,965	33.69%

					to Secured FCs.
Unsecured Financial Creditors
-Creditors not having a right to vote under sub-section (2) of section 21	53,48,65,087	53,39,84,886	N I L	N I L	Related Party

- Dissenting
- Assenting
Operational Creditors
(i) Government	55,68,00,881	53,24,80,440	6,78,29,826	12.18%	Payment to Govt. Depts will be made in priority to payment to Secured FCs.
(ii) Workmen
- PF dues	N I L	N I L	N I L	N I L	Payment to workmen will be made in priority to payment to secured FCs.
- Other dues	12,50,02,498	10,56,11,258	2,12,10,563	16.97%
(iii) Employees
- PF dues	N I L	N I L	N I L	N I L	Payment to employees will be made in priority to payment to secured FCs.
- Other dues	8,05,62,445	5,73,81,042	15,57,776	1.93%
(iv) Other Operational creditors	17,78,80,560	8,90,80,912	24,18,360	1.36%	Payment to other OCs will be made in priority to payment to secured FCs.
Other Debts and Dues	85,50,000	0	0	0%	N I L
Shareholders	0	0	0	0%	N I L
Total	269,78,03,193	253,26,80,260	50,21,00,000

8.

The time frame proposed for obtaining relevant approvals is as under:

Sl. No.	Nature of Approval	Name of applicable law	Name of Authority who will grant Approval	When to be obtained
1	Factory License	Factories Act	Appropriate Authority	45 days from approval date
2	Load Sanction letter from Tata Power Central Odisha Distribution Ltd	Electricity	Local office of Tata Power Central Odisha Distribution Ltd	30 days from approval date
3	Renewal Registration Certificate and Labour License	Contract Labour Act	Labour Commissioner	60 days from approval date
4	Water drawal Approval		Irrigation Department	Before 120 days from approval date.
	Any other		From appropriate	60 days from

license/approvals

authority

approval date

9.

Steps to be taken by the concerned parties post approval of resolution plan by AA: The monitoring committee shall meet after the approval of the plan by the AA and shall decide future course of action.

Next Step(s)	Name of Party	Timeline
#See above

10.

Details of Income Tax losses carry forward under Section 79(2)(c) of Income Tax Act, 1961, if any. Reply: As at 31.03.2024, above figure works out to Rs 58,00,23,650.00.

11.

Amount of Regulatory fee payable (0.25%) to the Board under Regulation 31A [...] and affidavit to the said effect is submitted by the SRA to the Resolution Professional.

Reply: The realizable value is Rs 50,21,00,000.00 The regulatory fee @ 0.25% works out to Rs 12,55,250.00. An affidavit dated 09.08.2025 from the SRA to the effect submitted by the SRA to RP.

12.

Status of Preferential, Undervalued, Fraudulent and Extortionate transactions and how these are dealt in the resolution plan, if any

Sl. No.	Type of Transaction	Amount (Rs.)	Date of Filing with Adjudicating Authority	Date of Order of the Adjudicating Authority	Brief of the Order	How it is dealt in resolution plan
1	Preferential transactions u/s 43	45,21,25,000.00	IA 1839/2023 filed on 16.03.2023	Order of the AA is awaited.	N A	Post approval of the plan, this application shall be pursued by the FCs and amount realized, if any, shall be distributed among the stakeholders as per section 53 of IBC.
2	Undervalued transactions u/s 45	NIL
3	Extortionate credit transactions u/s 50	NIL
4	Fraudulent transactions u/s 66	116,79,00,000.00	IA 1837/2023 filed on 16.03.2023	Order of the AA is awaited	N A	Post approval of the plan, this application shall be pursued by the FCs and amount realized, if any, shall be distributed among the stakeholders as per section 53 of IBC

5.	Combination of PUFE transactions	NIL
	Total	162,00,25,000.00

13.

If resolution plan submitted by suspended director/ promoter of CD, any PUFE applications against the suspended directors are pending, if so the details of the same. – Not applicable.

14.

Details of other IAs pending against the Corporate Debtor: NIL

Filing No.	Date of Applicant On	Applicant (s) name	Respondent (s) name	Amount Involved, if any	Issue involved (in brief)
NIL

15.

Other compliances

a. The committee has approved a plan providing for contribution under regulation 39B as under:

- (i) Estimated liquidation cost: Rs... - (ii) Estimated liquid assets available: Rs...(iii) - (iv) Financial creditor wise contribution is as under:

Contributions required to be made: Rs...

REPLY: when the plan was approved in December 2018, there was no such requirement.

Sl. No.	Name of financial creditor	Amount to be contributed (Rs.)
1
2
Total

b. The committee has recommended under regulation 39C as under:

- (i) Sale of corporate debtor as a going concern: Yes / No - (ii) Sale of business of corporate debtor as a going concern: Yes / No

c. The committee has fixed, in consultation with the resolution professional, the fee payable [Amount in Rs...] to the liquidator during the liquidation period under regulation 39D.

REPLY: when the plan was approved in December 2018, there was no such requirement.

16.

Whether Resolution Plan is subject to any contingency/condition - NO.

17.

The Resolution Plan has been filed 238 days after the commencement of CIRP (in terms of Section 12 of the Code).

Declaration

I Dinesh Sood hereby certify that that the contents of this certificate are true and correct to the best of my knowledge and belief, and nothing material has been concealed therefrom.

FINDINGS OF THIS ADJUDICATING AUTHORITY

“1.

Timelines for payment to the stakeholders: All payments proposed in the Resolution Plan shall be made within implementation period i.e. 120 days of approval of the plan by the Adjudicating Authority. The priority of payment shall be as follows:-

1.

CIRP Cost on actual basis within 90 days of the approval;

2.

Operational Creditors (including workmen & employees, govt dues) within 100 days of the approval.

3.

Dissenting Financial Creditor, if any -NA

4.

Secured Financial Creditors; within 120 days of the approval;

“39.

Another important aspect is that under Section 25 (2) (b) of IBC, 2016, the resolution professional is obliged to represent and act on behalf of the corporate debtor with third parties and exercise rights for the benefit of the corporate debtor in judicial, quasi-judicial and arbitration proceedings. Section 25(1) and 25(2)(b) reads as follows:

“25. Duties of resolution professional –

(1)

It shall be the duty of the resolution professional to preserve and protect the assets of the corporate debtor, including the continued business operations of the corporate debtor.

(2)

For the purposes of sub-section (1), the resolution professional shall undertake the following actions:-

(a)...

(b)

represent and act on behalf of the corporate debtor with third parties, exercise rights for the benefit of the corporate debtor in judicial, quasi-judicial and arbitration proceedings.”

This shows that wherever the corporate debtor has to exercise rights in judicial, quasi-judicial proceedings, the resolution professional cannot short-circuit the same and bring a claim before NCLT taking advantage of Section 60(5).

40.

Therefore in the light of the statutory scheme as culled out from various provisions of the IBC, 2016 it is clear that wherever the corporate debtor has to exercise a right that falls outside the purview of the IBC, 2016 especially in the realm of the public law, they cannot, through the resolution professional, take a bypass and go before NCLT for the enforcement of such a right.”

'35. 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 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. 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.”

“38.

This Regulation fleshes out Section 30(4) of the Code, making it clear that ultimately it is the commercial wisdom of the Committee of Creditors which operates to approve what is deemed by a majority of such creditors to be the best resolution plan, which is finally accepted after negotiation of its terms by such Committee with prospective resolution applicants.”

‘273.1. The adjudicating authority has limited jurisdiction in the matter of approval of a resolution plan, which is well-defined and circumscribed by Sections 38(2) and 31 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 Committee of Creditors. If, within its limited jurisdiction, the adjudicating authority finds any shortcoming in the resolution plan vis-a-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 the Code and exposited by this Court.’ (emphasis supplied)

“102.1

That 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 resolution plan, shall stand extinguished and no person will be entitled to initiate or continue any proceedings in respect of a claim, which is not part of the resolution plan.

102.3

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.”