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Judgment
The Appellant is a 'Guarantor', 'Shareholder and former 'Chairman/ Managing Director' of 'Videocon Group of Companies'. It is stated that the 'Stakeholders' under the Resolution Plan has submitted a claim of Rs. 71,433.75 Crore, the amount admitted by the Resolution Professional (RP) is Rs. 64,938.63 Crore and the amount provided under the plan to the Stakeholders is Rs.2,962.02 Crore i.e. the amount provided to amount claimed percentage is 4.15%, this reflects that the stakeholders have a loss of 96% i.e. the hair cut is approx. 96% (page 76 of the Appeal paper book - (PB)).
The voting share percentage of the top 5 members of the CoC comprising of SBI, IDBI, Union Bank of India, Central Bank of India, Bank of Baroda is 58.54% (page 75 of PB).
The Learned Sr. Counsel appearing for the Appellant has submitted that the Resolution Plan is in violation of 'Section 30 (2) of the Insolvency and Bankruptcy Code'.
The plan suffers from material irregularity as all the valuable assets, particularly, Foreign Oil and Gas assets have not been included by RP in the 'Information Memorandum'. The RP and CoC committed grave error in not considering Foreign Oil and Gas assets of Videocon as assets of Videocon industry limited while the claim of the lenders on the same is approx. Rs. 23,000 Crore.
The RP and CoC have ignored order of Adjudicating Authority to track and include Foreign Oil and Gas assets of Videocon as assets of Videocon Industry. Value maximation - the thrust area of the CIRP has been compromised to give benefit to Respondent No.3.
It is heartening to reflects that the reasons of arriving at such a low liquidation value for the same assets for which the restructuring by the same lenders and experts were recommending much higher valuations and at one stage, the appellant was ready and willing to take back the company without any hair cut but with a staggered payment. They have alleged leaking of information of valuation to Respondent No.3.
They have also submitted that the Adjudicating Authority in its order dated 08.06.2021 has observed certain material irregularity and have pointed out vide para 5, 6 & 9 that by just paying only Rs. 262 Crore (while cash balance available with Corporate Debtor is Rs.200 Crore), the 'Successful Resolution Applicant'- Respondent No.3 will get the possession of all 13 Corporate Debtor to run these units against the property for which claim has been raised for over Rs. 71,000 Crore and large chunk of payments is through non-convertible debentures carrying 6.65% p.a. payable annual interest rate.
It was also submitted by the learned Sr. counsel that the Adjudicating Authority in its order dated 22.08.2019 (Page 213 of PB) have also stated in para 106, 107, 108 & 110 about the reason for considering consolidated 'Group Insolvency Resolution' with measure thrust on Foreign Oil and Gas assets not to be treated separately and all the creditors should get maximum value.
Dr. Abhishek Manu Singhvi, learned Sr. Counsel for the Respondent No.3- Resolution Applicant has stated the Appellant drove the company to zero and whose proposal under 12A of the Code was rejected by a very high majority of CoC. Their proposal was for repayment in 15-20 years. He has also refereed to this Appellate Tribunal order dated 19.02.2020 at page 253 and 254 of the PB and have also stated that the CoC has approved the Resolution Plan with 95% majority.
The counsel for CoC - Respondent No.2 has stated that the CoC has approved the Resolution Plan with 95% majority and few Financial Creditors and the Guarantors and Shareholders are approaching for nullifying the approved Resolution Plan.
We have considered the submissions of various parties. We admit the appeal and the Respondents are directed to file their reply by 15th September, 2021 and, thereafter, the rejoinder, if any, be filed by 17th September, 2021.
Let the matter be listed 'for hearing' on 20.09.2021.