North Eastern Development Finance Corporation Ltd. vs Ayursundra Hospital (Guwahati) Pvt. Ltd

Per: Balraj Joshi, Member (Technical)

This Interlocutory Application (IA) i.e., IA (IBC)(Plan)/3/GB/2024 has been filed by Sandeep Khaitan(“Resolution Professional/RP”), who is the appointed Resolution Professional of Ayursundra Hospital (Guwahati) Pvt. Ltd. (“Corporate Debtor/CD”), under Section 30(6) read with Section 60(5) of the Insolvency and Bankruptcy Code, 2016(“Code”). In CP (IB) No. 24/GB/2023, this Tribunal vide order dated 12.03.2024 admitted the above Petition and initiated Corporate Insolvency Resolution Process (“CIRP”) against the Corporate Applicant. The Resolution Plan dated 05.10.2024 (as amended on 28.10.2024) submitted by Peerless Hospitex Hospital and Research Center Limited (the Successful Resolution Applicant, “SRA”) has been approved by the Committee of Creditors (“CoC”) through e-voting held after the 6th CoC meeting, securing “100% voting share”. The Applicant through the present Application prays for the following reliefs to-

a. Allow the present Application and approve the CoC approved resolution plan dated 05.10.2024 (as amended on 28.10.2024) submitted by Peerless Hospitex Hospital and Research Center Limited;

b. Direct that the Resolution plan so approved be binding on the Corporate Debtor, its employees, members, shareholders, creditors, guarantors and other stake holders;

c. Issue appropriate direction for implementation of the Resolution Plan;

d. Pending hearing and final disposal of this Application and till the Resolution Plan is approved or rejected by this Hon'ble Adjudicating Authority and for such further time as this Hon'ble Adjudicating Authority may specify, this Hon'ble Adjudicating Authority be pleased to pass appropriate orders/directions such as but not limited to:

e. Pass any other or further order/order(s) as may be deemed fit and proper in the facts and circumstances of the present matter.

The relevant submissions of the Applicant made vide this Application is extracted hereunder:

Heard the Counsel for the Applicant and perused the material available on record along with the Resolution Plan approved by the CoC ("CoC Approved Resolution Plan").

It is seen that the Applicant has collated claims received by him and accordingly a list of creditors has been prepared, which was updated from time to time. It would be helpful to publish a summary of claims filed, and amounts admitted by the Applicant and the same is reproduced below:

** Rs. 4,660,181 of claims admitted as "Contingent Claims" are also proposed to be paid under the resolution plan.

The Application submits that in terms of the provisions of Section 25(2)(h) of the Code read with Regulation 36A(1) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons), Regulations, 2016, invitations in Form 'G' for Expression of Interest("EoI") from potential resolution applicant was issued on 05.07.2024, 25.07.2024 and 26.07.2024, wherein the last date of receiving EoI was 05.10.2024. The notices were published in the following newspapers:

The Applicant received interest from thirteen Prospective Resolution Applicants ("PRAs") and the approved Request for Resolution Plan & Evaluation Matrix along with the Information Memorandum was circulated to the PRAs on 31.08.2024. As per regulation 35(2) of the CIRP Regulations, after receipt of the Resolution Plan, the RP informed the fair value and liquidation value of the Corporate Debtor to the CoC.

The Resolution Plans so received were opened during the 5th CoC meeting held on 07.10.2024, following which the Applicant carried out the necessary code compliance check to ensure that the plans met the legal requirements and the PRAs were granted time until 15.10.2024 to resolve the deficiencies identified. It is relevant to point here that one of these six PRAs was disqualified due to failure to submit the Earnest Money Deposit ("EMD") in compliance with the terms of the RFRP. The remaining PRAs subsequently addressed the issues notified by the Applicant and submitted their respective plans.

After receiving the final revised plans from the PRAs, the Applicant reviewed them and issued the Eligibility & Compliance Certificates on 01.11.2024. A copy of the Eligibility & Compliance Certificate dated 01.11.2024 is annexed to the Application as Annexure A-9. The e-voting was carried out from 04.11.2024 till 08.11.2024 and the Resolution Plan dated 05.10.2024 (as amended as on 28.10.2024) submitted by Peerless Hospitex Hospital and Research Center Limited was approved by the CoC with (100%) voting share.

It is pertinent to note that vide order of this Tribunal dated 26.07.2024 in IA(IBC)/146/GB/2024, the CIRP expiry dated stood at 02.12.2024 and the present application for the approval of the resolution plan was filed before the expiry of the CIRP period.

Pursuant to the approval of the Resolution Plan, the Applicant has issued the Letter of Intent to the SRA on 08.11.2024 which was accepted by the SRA on 13.11.2024. Further, as per the RFRP, the SRA was also required to submit a performance guarantee of an amount equal to (25%) of the total resolution plan value, which has been duly complied by the SRA. The SRA has on 13.11.2024 transferred the entire amount of performance guarantee to the CD.

The compliance of the Resolution Plan is set out in the Compliance Certificate/Form H which has been filed by the Applicant as Mandatory Requirement and Compliance with Section 30(2) of the Code and Regulation 38 of the CIRP Regulations. The Applicant, for sake of convenience, has submitted details of various compliances as envisaged within the Code and the CIRP Regulations which a Resolution Plan should adhere to, which is reproduced hereunder:

Further, it is also clarified that the source of funds is set out in Section 14 of the Resolution Plan. To this effect, it is seen that that the Resolution Plan provides for the payment of Rs. 142 Crores as the resolution value. Funding will be provided by the SRA, with support from friends and family. Additionally, the liquidation value of the CD is Rs. 64.41 Crores.

We find that the Resolution Plan filed by Peerless Hospitex Hospital and Research Center Limited has been approved by the CoC with (100%) voting share. As per the CoC, the plan meets the requirement of being viable and feasible for revival of the Corporate Debtor. By and large, all the compliances have been done by the Resolution Professional and the Resolution Applicant for making the plan effective after approval by this Bench.

On perusal of the documents on record and the replies to the clarifications sought by us, we are satisfied that the Resolution Plan is in accordance with sections 30 and 31 of the Code and also complies with regulations 38 and 39 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016.

As far as the question of granting time to comply with the statutory obligations or seeking approvals from authorities is concerned, the Resolution Applicant is directed to do so within one year from the date of this order, as prescribed under section 31(4) of the Code.

We have perused the reliefs, as given in Section 18 at pages 98-103 [Vol II] of the Resolution Plan. We have also gone through the waivers and concessions as sought and as provided in the Resolution Plan. It is evident that some of the reliefs, waivers and concessions sought by the Resolution Applicant come within the ambit of the Code and the Companies Act 2013, while many others fall under the power and jurisdiction of different government authorities/departments. This Adjudicating Authority has the power to grant reliefs, waivers and concessions only concerning the reliefs, waivers and concessions that are directly with the Code and the Companies Act (within the powers of the NCLT). The reliefs, waivers and concessions that pertain to other governmental authorities/departments may be dealt with by the respective competent authorities/forums/offices, Government or Semi-Government of the State or Central Government concerning the respective reliefs, waivers and concession, whenever sought for. The competent authorities including the Appellate authorities may consider granting such reliefs, waivers and concessions keeping in view the spirit of the Code and the Companies Act, 2013.

It is trite law and fairly well-settled that the Resolution Plan must be consistent with the extant law. The Resolution Applicant shall make necessary applications to the concerned regulatory or statutory authorities for the renewal of business permits and supply of essential services, if required, and all necessary forms along with filing fees etc. and such authority shall also consider the same keeping in mind the objectives of the Code, which is essentially the resolution of the insolvency of the Corporate Debtor.

It is pertinent to refer to Section 31 of the Code and the law laid down by the Hon'ble Supreme Court in Ghanshyam Mishra and Sons Pvt Ltd v Edelweiss Asset Reconstruction Company Ltd.(2021 SCC OnLine SC 313) wherein the Hon'ble Supreme Court has held 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 Govt, any State Govt or any local authority, guarantors and other stakeholders.

Reliance can also be placed on the recent judgement of the Hon'ble High Court of Rajasthan in the matter of EMC v State of Rajasthan, wherein it has been, inter-alia held that:

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 to a claim, which is not part of the resolution plan. The Hon'ble Supreme Court also held that all the dues including the statutory dues owed to the Central Govt, any State Govt 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.

As far as the specific concessions, reliefs and waivers are concerned, the SRA is granted liberty to file an application for the same and it would be dealt accordingly by this Tribunal in light of existing precedent and judicial discretion.

With the above-mentioned observations, findings and judicial precedents, IA (IBC)(Plan)/3/GB/2024 is APPROVED and disposed of.

The Registry is directed to send e-mail copies of the order forthwith to all the parties and their Ld. Counsel for information and for taking necessary steps.

Certified Copy of this order may be issued, if applied for, upon compliance of all requisite formalities.

File be consigned to records.