Mr. Vekas Kumar Garg vs M/s ConnectM Technology Solutions Pvt. Ltd. & Ors.

a)

Take on record the instant application for approval of the resolution plan along with Compliance Certificate in FORM - H dated 28.09.2022 and convenience proforma dated 28.09.2022.

b)

Allow the present application as filed by the Applicant / Resolution Professional for approval of the resolution plan u/s 30 (6) of I&B Code, 2016 in accordance with the decision as taken by the committee of creditors.

"RESOLVED THAT the approval of the committee of creditors be and is hereby granted to allow RA for their delayed submission of the amended resolution plan dated 08.07.2022 and thereafter various left out compliance till 01.08.2022."

"RESOLVED. THAT the resolution plan as submitted by M/s ConnectM Technology Solutions Pvt. Ltd. Option 1 offering a total plan pay-out of Rs. 9,70,98,336/-(Rs. Nine crore seventy lacs ninety eight thousand three hundred & thirty six) be and is hereby approved in accordance with section 30 of the I&B Code, 2016. The CoC hereby further confirms that the resolution plan is in compliance with the conditions as stipulated under Regulation 30(2) of IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016."

"FURTHER RESOLVED THAT the resolution plan is approved in accordance with the conditions as stipulated in section 30(4) of I&B Code, 2016 which includes the feasibility and viability of the resolution plan and taking into account the manner of distribution of proceeds in accordance with the requirements of Section 53 of I&B Code, 2016 and other requirements as may be specified by the Board." ·

"RESOLVED FURTHER THAT the committee of creditors is of the opinion that the resolution plan complies with the other legal requirements including the eligibility of resolution applicant in accordance with the provisions of Section 29A of I&B Code, 2016"

"FURTHER RESOLVED THAT the resolution professional be and is hereby further directed to do necessary act or file documents/necessary application before the Adjudicating Authority in this regard."

9.

The compliance of the Resolution Plan is as under:

Section of the Code / Regulation No.	Requirement with respect to Resolution Plan	Clause of Resolution Plan	Compliance (Yes / No)
25(2)(h)	Whether the Resolution Applicant meets the criteria approved by the CoC having regard to the complexity and scale of operations of business of the CD?		Yes
Section 29A	Whether the Resolution Applicant is eligible to submit resolution plan as per final list of Resolution Professional or Order, if any, of the Adjudicating Authority?	Clause 13 of Part F	Yes
Section 30(1)	Whether the Resolution Applicant has submitted an affidavit stating that it is eligible?	Appendix 10 of the Resolution Plan	Yes
Section 30(2)	Whether the Resolution Plan- (a) provides for the payment of insolvency resolution process costs? (b) provides for the payment to the operational creditors? (c) provides for the payment to the financial creditors who did not vote in favour of the resolution plan? (d) provides for the management of the affairs of the corporate debtor? (e) provides for the implementation and supervision of the resolution plan? (f) contravenes any of the provisions of the law for the time being in force?	Clause 4.3 of Part -B Clause 4.7 of Part-B Not Applicable (there is only a single financial creditor of the corporate debtor) Clause 1.2 & 1.3 of Part -C Clause 1.2 & 1.3 of Part -C Clause 8.1.2 of Part A	Yes Yes NA Yes Yes Yes
Section 30(4)	Whether the Resolution Plan (a) is feasible and viable, according to the CoC? (b) has been approved by the CoC with 66% voting share?	Clause 8.1.3 (ii) of Part -A	Yes Yes
Section 31(1)	Whether the Resolution Plan has provisions for its effective implementation plan, according to the CoC?	Clause 1.2 of Part -C	Yes
Regulation 35A	Where the resolution professional made a determination if the corporate debtor has been subjected to any transaction of the nature covered under sections 43, 45, 50 or 66, before the one hundred and fifteenth day of the insolvency commencement date, under intimation to the Board?	There is no as such provision has been provided in the resolution plan, it is opined by the resolution professional that the amount may be distributed according to the waterfall mechanism as provided in section 53 of I&B Code, 2016
Regulation 38 (1)	Whether the amount due to the operational creditors under the resolution plan has been given priority in payment over financial creditors?		Yes
Regulation 38(1A)	Whether the resolution plan includes a statement as to how it has dealt with the interests of all stakeholders?	Clause 4.4 - 4.8 of Part - B	Yes
Regulation 38(1B)	(i) Whether the Resolution Applicant or any of its related parties has failed to implement or contributed to the failure of implementation of any resolution plan approved under the Code. (ii) If so, whether the Resolution Applicant has submitted the statement giving details of such non-implementation?	Not Applicable	Not Applicable
Regulation 38(2)	Whether the Resolution Plan provides: (a) the term of the plan and its implementation schedule? (b) for the management and control of the business of the corporate debtor during its term? (c) adequate means for supervising its implementation?	Clause 1.1 & 1.2 of Part -C Clause of 1.2 of Part -C Clause of 1.3 of Part -C	Yes Yes Yes
38(3)	Whether the resolution plan demonstrates that –

Section of the Code / Regulation No.	Description of Activity	Latest Timeline under regulation 40A	Actual Date
Section 16(1)	Commencement of CIRP and Appointment of IRP	T 31.03.2021	26.03.2021 (Date of Receipt of order 31.03.2021)
Regulation 6(1)	Publication of Public Announcement	T+3 03.04.2021	02.04.2021
Section 15(1)(c) / Regulation 12 (1)	Submission of Claims	T+14 14.04.2021	14.04.2021
Regulation 13(1)	Verification of Claims	T+21 21.04.2021	21.04.2021
Section 26(6A) / Regulation 15A	Application for Appointment of Authorized Representative, if necessary	T+23 23.04.2021	NA
Regulation 17(1)	Filing of Report Certifying Constitution of CoC	T+23 23.04.2021	27.04.2021
Section 22(1) and Regulation 17(2)	First Meeting of the CoC	T+30 30.04.2021	12.05.2021
	Exclusion of Time of 42 days between 19.04.2021 to 31.05.2021
Regulation 27	Appointment of two Registered Valuers	T+47 28.06.2021	For P&M – 04.08.2021 For SFA – 27.07.2021 & 03.08.2021
Regulation 36 (1)	Submission of Information Memorandum to CoC	T+54 05.07.2021	24.09.2021
Regulation 36A	Invitation of EOI	T+75 26.07.2021	29.07.2021
	Publication of Form G	T+75 26.07.2021	29.07.2021
	Provisional List of Resolution Applicants	T+100 20.08.2021	23.08.2021
	Final List of Resolution Applicants	T+115 04.09.2021	24.09.2021
Regulation 35A	Determination of fraudulent and other transactions	T+115 04.09.2021	14.10.2021

10.

The CIRP has been conducted as per the timeline indicated as under:

Section of the Code / Regulation No.	Description of Activity	Latest Timeline under regulation 40A	Actual Date
Section 16(1)	Commencement of CIRP and Appointment of IRP	T 31.03.2021	26.03.2021 (Date of Receipt of order 31.03.2021)
Regulation 6(1)	Publication of Public Announcement	T+3 03.04.2021	02.04.2021
Section 15(1)(c) / Regulation 12 (1)	Submission of Claims	T+14 14.04.2021	14.04.2021
Regulation 13(1)	Verification of Claims	T+21 21.04.2021	21.04.2021
Section 26(6A) / Regulation 15A	Application for Appointment of Authorized Representative, if necessary	T+23 23.04.2021	NA
Regulation 17(1)	Filing of Report Certifying Constitution of CoC	T+23 23.04.2021	27.04.2021
Section 22(1) and Regulation 17(2)	First Meeting of the CoC	T+30 30.04.2021	12.05.2021
	Exclusion of Time of 42 days between 19.04.2021 to 31.05.2021
Regulation 27	Appointment of two Registered Valuers	T+47 28.06.2021	For P&M – 04.08.2021 For SFA – 27.07.2021 & 03.08.2021
Regulation 36 (1)	Submission of Information Memorandum to CoC	T+54 05.07.2021	24.09.2021
Regulation 36A	Invitation of EOI	T+75 26.07.2021	29.07.2021
	Publication of Form G	T+75 26.07.2021	29.07.2021
	Provisional List of Resolution Applicants	T+100 20.08.2021	23.08.2021
	Final List of Resolution Applicants	T+115 04.09.2021	24.09.2021
Regulation 35A	Determination of fraudulent and other transactions	T+115 04.09.2021	14.10.2021

Regulation 36B	Issue of Request for Resolution Plan, which includes Evaluation Matrix and Information Memorandum to Resolution Applicants	T+105 25.08.2021	24.09.2021
Section 30(6) / Regulation 39(4)	Submission of CoC approved Resolution Plan	T+165 24.10.2021	30.09.2022
Section 31(1)	Approval of Resolution Plan	T=180 09.11.2021
	Exclusion of Time of 31 days between 01.01.2022 to 31.01.2022

11.

The time frame proposed for obtaining relevant approvals: The resolution plan at Part C – OTHER TERMS OF THE RESOLUTION PLAN deals with term, implementation and supervision of the resolution plan and also provides the timelines for implementation of the resolution plan. There is no mention by RA for obtaining of any other relevant approval from any statutory body or otherwise except from the adjudicating authority. However, various concessions / reliefs have been sought from the adjudicating authority in the matter. Various reliefs and concessions have been sought by RA from the adjudicating authority. The same is mentioned at Part D- Relief and Concessions. The same is enclosed herewith as an Annexure to the Compliance Certificate.

12.

The Resolution Plan is subject to following contingency.

1.

The Resolution Plan at Sr. No. 4.4.5 has mentioned that there are no source of funds available with the Resolution Applicant at the time of consideration of the resolution plan by COC, however, Resolution Applicant proposes to arrange the same in future and requests CoC to consider the same. The Resolution Applicant and its consortium partners shall comply with all the terms and conditions of the approved resolution plan. In the event, if Resolution Applicant is unable to comply with the terms and conditions including critical timelines pertaining to funds infusion and payment to the stakeholders as per the timelines stipulated due to any reasons then the resolution plan shall be treated as non-viable and failed the compliance of feasibility and liquidation before the adjudicating authority and all the terms and conditions pertaining to personal guarantee discharge extinguishment shall be considered as null and void

2.

The RA has mentioned at PART-E – KEY DISCLOSURES, QUALIFICATIONS AND ASSUMPTIONS of the resolution plan that the resolution plan has been prepared on the basis of the (i) information provided in the information memorandum, (ii) information provided by the resolution professional to the Resolution Applicant in the virtual data room, (iii) on the assumptions set out this Part E, (iv) acceptance and approval of the resolution plan in its entirety including but not limited to grant of approval for directions, relief and concessions by the adjudicating authority; (v) extinguishment of claims and liabilities in the manner detailed in the resolution plan.

13.

Following are the deviations / non-compliances of the provisions of the Insolvency and Bankruptcy Code, 2016, regulations made or circulars issued thereunder (If any deviation/ non-compliances were observed, please state the details and reasons for the same):

1.11.

Issue necessary directions, instructions to all Governmental Authorities including the Registrar of Companies that the Company, its directors and its key managerial personnel, officers and employees appointed after the NCLT Approval Date shall not be held liable in respect of all or any statutory / regulatory non-compliances having occurred prior to the NCLT approval Date, including with respect to various provisions of Applicable Laws including but not limited to the Companies Act, 1956 and / or Companies Act, 2013 and / or the Taxation Laws and also of non – preparation and / or non-approval of financial statements for any of the financial years prior to the Transfer Date and also to allow amendment in the Memorandum of Association and Articles of Association without approaching the Central Government and grant exemption to the Company for holding the Annual General Meeting of the members and other formalities.

1.12.

Waiver from the requirement of obtaining a no objection certificate under Section 281 of the Income-tax Act, 1961 and that the provisions of taking over predecessor's tax liability under Section 170 of the Income-tax Act, 1961 Act shall not be applicable.

1.13.

To exempt the Corporate Debtor from applicability of Section 281 of the Income Tax Act, 1961 due to any pending proceedings and dues (including interest and penalty) of the Company for periods prior to the NCLT approval Date (including such proceedings and dues for periods prior to the Effective Date that may crystallize subsequent to the NCLT approval Date).

1.14.

Extinguishment of pending assessments which are under process including the pending transfer pricing and TDS matters and also with regard to notices issued by the relevant Governmental Authority for relevant assessment years under various provisions of the Income Tax Act or indirect tax laws, the relevant Governmental Authorities make any further assessment with respect to reduction of losses or unabsorbed depreciation or raise any demand in respect of payment of Tax on and before the NCLT Approval Date and the same shall stand settled at NIL value.

1.15.

In respect of default on part of the Corporate Debtor in depositing the dues relating to tax deducted at source with the government, the Resolution Applicant/Corporate Debtor shall not be liable to deposit the same with the relevant Governmental Authority as the same has been settled at NIL value under this Resolution Plan.

1.16.

The Company and the Resolution Applicant shall be granted an exemption from all taxes, levies, fees, transfer charges, transfer premiums, and surcharges that arise from or relate to implementation of the Resolution Plan, since payment of these amounts may make the Resolution Plan unviable.

1.17.

To the extent not paid and settled under this Resolution Plan, waiver of any income-tax and Minimum Alternate Tax (MAT) liability or consequences (including interest, fine, penalty, etc) on the Company, Resolution Applicant and its shareholders on account of various steps as proposed in the Resolution Plan, including but not limited to liabilities if any under Section 56, Section 43, Section 28, Section 115JB and Section 79 of the Income-tax Act, 1961, including, without limitation (A) waiver of any Tax or MAT liability to the Resolution Applicant on account of purchase of Equity Shares of the Company from the Shareholders in accordance with Chapter V; (B) waiver of MAT and income tax implication arising due to hiving off of surplus/ obsolete assets, sold for raising money to make Balance Payment; (C) waiver of MAT and income tax implication arising due to write back/write off of liabilities in the books of accounts of the Company without any impact on brought forward tax and book loss / depreciation, pursuant to this Resolution Plan.

1.18.

Notwithstanding the extinguishment of any liability (including Statutory Dues) the Corporate Debtor shall continue to be entitled to exemptions/deductions/reliefs otherwise available to the Corporate Debtor but which could not be availed due to delays/non claim/lapses etc. including the matters which are presently sub-judice/ pending with any statutory/judicial authority.

1.19.

The Corporate Debtor shall not be denied any benefit under any Applicable Law including but not limited to Income Tax Act, 1961, Goods and Service Tax, Act, MEIS merely on account of unavailability of supporting documents (including but not limited to purchase invoices, shipping bill, bill of export, etc.).

1.20.

Any fair valuation / deeming provision of the Income Tax Act, 1961 (including but not limited to Sections 43CA, 45, 50C, 50CA etc.) shall be considered to have been complied with in respect of the transaction contemplated under this Plan and accordingly, the Corporate Debtor or Resolution Applicant shall not be subject to any additional Taxes.

1.21.

Any requirements to obtain waivers from any tax authorities including in terms of Section 79 of the IT Act is deemed to have granted upon approval of this Resolution Plan on the NCLT Approval Date.

1.22.

Any approvals that may be required from Governmental Authorities (including tax authorities) in connection with the implementation of the Resolution Plan including on account of change in ownership / control of the Company shall be deemed to have been granted on the NCLT Approval Date.

1.23.

Upon approval of the Resolution Plan/ CoC Approved Resolution Plan by the Adjudicating Authority, all non-compliances, breaches and defaults of the Company for the period prior to the NCLT approval Date (including but not limited to those relating to tax), shall be deemed to be waived by the concerned Governmental Authorities. Immunity shall be deemed to have been granted to the Company from all proceedings and penalties under all Applicable Laws for any non-compliance for the period prior to the NCLT Approval Date and no interest/penal implications shall arise due to such non-compliance /default /breach prior to the NCLT Approval Date.

“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.

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 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.”