Virag Enterprise vs Ramachandra D. Chaudhary, RP of Rainbow Papers Ltd. & Anr.

[Per se: Ms. Manorama Kumari, Member (Judicial)]

The IA 224 of 2018 is filed under section 30(6) read with section 31 of the Insolvency and Bankruptcy Code, 2016 ("the Code" for short) and regulations framed thereunder, seeking approval of the Resolution Plan for insolvency resolution of the Corporate Debtor as a going concern, with prayers:

It is submitted by the Ld. Counsel on behalf of RP as well as CoC that the CP(IB)No. 88/2017 was filed by one Neeraj Papers Pvt. Ltd., the Operational Creditor under section 9 of the Code seeking initiation of Corporate Insolvency Resolution Process against Rainbow Papers Ltd (hereinafter referred to as "Corporate Debtor" having registered office at 801, Avdesh House, 8th Floor, Opp. Gurudwara Govinddham, S.G. Highway, Thaltej, Ahmedaba.

The said CP(IB) No. 88/2017 was admitted on 12.09.2017 by this Adjudicating Authority appointing IRP, on obtaining the recommendations from IBBI, Shri George Samuel on 22.09.2017.

On appointment of IRP, public announcement was made as per the provisions of section 15 of the Code calling upon the claims from the creditors. The public announcement was published in leading newspapers i.e. "Economic Times" and "Divya Bhaskar" on 26.09.2017, keeping the last date for submission of claims as 05.10.2017.

That on receipt of claims by 05.10.2017, Committee of Creditors was/is constituted on 10.10.2017 and the list of creditors is filed before this Bench as Annexure-D. Thereafter, IRP prepared Interim Information Memorandum dated 16.10.2017 on the basis of information collected in relation to the financial position. It is mentioned hereunder that on 29.09.2017 two registered valuers is/are also appointed by IRP to determine the liquidation value of the Corporate Debtor in due compliance of Regulation 27 read with Regulation 35 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016.

It is further submitted that in the first meeting of CoC, the resolution was passed to replace the Interim Resolution Professional with that of Mr. Ramchandra D. Chaudhary (hereinafter called RP). The change of IRP was also subsequently approved by this Bench vide order dated 06.11.2017.

In pursuance of the public announcement under the provisions of Section 15 of the Code inviting claims from all the creditors, IRP/RP received claims, hence CoC was constituted on 10.10.2017.

It is further submitted that in compliance of the resolution passed in the second meeting of the CoC, a public announcement was made in the newspapers inviting the expression of interest (hereinafter called "EoI") fixing the last date as 07.02.2018. On the said date, the applicant received the resolution plan from one Kushal Limited (hereinafter referred to as "Resolution Applicant"), but the said plan was rejected by the CoC in their fourth meeting dated 17.02.2018, as the plan was devoid of minimum eligibility criteria with respect to the Earnest Money Deposit (hereinafter referred to as "EMD"). Consequent upon which, CoC further resolved to invite fresh EoI and the Resolution Applicant was also directed to do the needful.

Meanwhile, CoC resolved to get 90 days extension of CIRP beyond 180 days and vide order dated 19.03.2018, CIRP was further extended by 90 days by this Bench.

It is stated that on issuance of fresh EoI vide advertisement dated 21.02.2018, the RP received a resolution plan on 19.03.2018 from the same Resolution Applicant, though EoI were received from three parties but none came up except Kushal Ltd, who deposited Rs. 30 crores as EMD. The said plan was placed in the fifth meeting of CoC dated 27.03.2018 where the CoC decided to put up the same for consideration in the next meeting.

It is submitted that the revised resolution plan was discussed in the 6th meeting of CoC dated 25.04.2018. On detailed discussions in the CoC, it was found that Resolution Applicant has not made sufficient improvement in the resolution plan dated 31.03.2018. Hence Resolution Applicant was also directed to proceed with the forensic audit of the Corporate Debtor.

It is submitted that in the 7the meeting of CoC dated 03.05.2018, the scope of the forensic audit was decided and the revised resolution plan was further discussed and accordingly, the Resolution Applicant was directed to submit the improved resolution plan removing some of the legal defects as observed in the plan.

The Resolution Applicant again filed the amended resolution plan on 26.05.2018. On scrutiny RP issued certificate on 28.05.2018 in compliance of the Regulation 39(2). Accordingly, RP/the applicant issued notice dated 29.05.2018 for convening the eighth and final meeting of the CoC on 04.06.2018. In the said meeting, CoC sought certain changes in the plan. In view of that, the Resolution Applicant was permitted to provide the addendum to the revised plan within a period of one (1) day which was accepted and duly acted upon by the Resolution applicant.

The said amended revised resolution plan along with the addendum dated 05.06.2018 was placed for e-voting before the members of the CoC which took place on two (2) days i.e. on 06.06.2018 and 07.06.2018. The CoC in their aforesaid e-voting resolved to approve the resolution plan along with the addendum with majority of 79.79% voting share in favour of the Resolution Applicant.

It is stated that all the compliances are made. CoC had taken the decision based upon the commercial wisdom looking to the meaningful and viable plan. The said decision of CoC takes care of the interests of all the stakeholders.

On filing of the application by the RP under section 30(6) read with section 31 of the Code, notices were issued to the CoC and suspended management. CoC approved and conceded to the fact of filing application by the RP under section 33(6) of the Code and have supported the argument advanced by the Ld. Counsel of the RP. No representation received from the suspended management.

That during the pendency and/or on filing of the application by RP under section 33(6) of the Code, number of intervention applications are filed. Some of the intervention applications are being withdrawn in due course, however, some of the applications are decided and disposed of on merit by hearing RP and the CoC. The order of those intervention applications are passed separately for the sake of convenience, as those are not maintainable.

Heard the arguments of the RP and CoC and also seen the Resolution Plan filed with the application.

That on perusal of the application as well as the Resolution Plan as also discussed above, which are not narrated here in again for the sake of brevity.

In the second meeting, CoC passed resolution and invited EoI which was published on 13.01.2018 with following criterion:

In view of the publication of announcement calling EoI, two EoI were received in relation to eligibility of resolution of the applicant, which were discussed in the CoC. The Resolution Plan of Kushal Limited jointly with Mr. Sandip Agrawal did not meet with the criteria of the initial deposit of 5% as on stipulated date. Hence the CoC rejected the Resolution Plan. The letter received from M/s. M.R. Agarwal Industries Ltd. was also discussed. To receive the better plan, CoC decided to revise EoI by relaxing certain conditions. The revised conditions are as under:

The CoC convened the (4^{\text{th}}) meeting on 17.02.2018 and decided to vote for resolution plans submitted by Kushal Limited jointly with Mr. Sandip Agrawal on 07.02.2018 and was placed before the CoC but the same was rejected due to want of minimum criteria. Hence, CoC decided to invite fresh EoI and got extended the CIRP term for further 90 days.

On perusal of the record and the advertisement, Eol was received from three parties viz. (i) Kushal Limited jointly with Mr. Sandip Agrawal (ii) Shree Rama Newsprint Ltd jointly with Ridhi sidhi Glucoboils Limited and (iii) Poddar International Limited jointly with three other applicants. But out of three parties, the resolution plan came from only Kushal Limited joining with Mr. Sandip Agrawal.

In the fifth meeting of CoC, proposal of the Kushal Limited jointly with Mr. Sandip Agrawal was discussed. The CoC suggested the Resolution applicant to improve the offer. Accordingly, Resolution Applicant submitted the revised resolution plan on 31.03.2018 and finally in the (8^{\text{th}}) meeting convened on 04.06.2018, the CoC planned for e-voting which commenced on 06.06.2018 and terminated on 07.06.2018 and the plan dated 26.05.2018 of Kushal Limited jointly with Mr. Sandip Agrawal was approved by (72.79%) voting along with the Scheme of Amalgamation forming part of the resolution and addendum.

On perusal of the resolution plan, it is/was found that applicant made all the compliances in conformity with the provisions of the Code and the regulations framed thereunder and have taken care of creditors, shareholders, stakeholders and the employees. For the sake of convenience, the description of compliances made, are given hereunder in the tabular form:

It is found that RP/the applicant is duly authorized to submit the approved resolution plan before this Bench for approval in accordance with the provisions of the Code. Though resolution plan was approved by CoC by 72.79% of voting, however, in view of the amendment in Section 30 of the Code, 2018 which came into force on 06.06.2018, revised resolution plan ought to have been approved by the minimum of 66% of voting share of Financial Creditors, but in the instant case, resolution plan was duly approved by majority of 72.79% of the members of CoC.

The Hon'ble Supreme Court in its recent judgment in Civil Appeal No. 10673 of 2018 in K. Sashidhar Vs. Indian Overseas Bank & Ors. Comprising of Hon'ble Justice A.M. Khanwilkar and Hon'ble Justice Ajay Rastogi observed that:

Being aggrieved by the Resolution Plan, the Interlocutory Applications No. 271 of 2018, 272 of 2018, 273 of 2018, 337 of 2018 and P-01 of 2019 have been filed by the above named applicants in C.P.(I.B.) No. 88 of 2017 in the matter of Neeraj Papers Pvt. Ltd versus Rainbow Papers Limited apart from other IAs which are already disposed of on merits except above said IAs.

Facts of each IA are as under:

IA 271 of 2018 – Shree Ganpatlal Onkar Agrawal & Co.

It is stated that the applicant submitted the proof of the claim for Rs. 20,52,203/- to the IRP along with the affidavit dated 30.11.2017 with all the relevant documents. The total amount of the claim included interest as on the insolvency commencement date. However, the Resolution Professional reduced the claim to Rs. 15,14,698/- without giving any explanation.

It is stated by the applicant that as per the resolution plan, applicant, the operational creditor will get cash payment of the 10% of the total outstanding amount in five equal installments from the 3rd to 7th year after the effective date. It is also stated by the applicant that apart from 10% of the outstanding amount, the Resolution Plan provides for issue of share warrant with an option to purchase the shares by paying 75% of the offer price within the next 18 months at their sole discretion. The initial subscription towards share warrant, which is 25%, is a credit given by the Resolution Applicant to the applicant, the operational creditor. However, this provision is not compulsive and the applicants, the operational creditors are not compelled to take the shares. It is submitted by the applicant, the operational creditor, that by this arrangement, the operational creditor will lose 65% of the amount, if the applicant subscribes the shares.

IA 272 of 2018 – Swastik Coal Corporation Private Limited

It is stated that the applicant submitted the proof of the claim for Rs. 4,94,71,355/- to the IRP along with the affidavit dated 30.09.2017 with all the relevant documents. The total amount of the claim included interest as on the insolvency commencement date. However, the Resolution Professional reduced the claim to Rs. 3,22,51,656/- without giving any explanation.

It is stated by the applicant that as per the resolution plan, applicant, the operational creditor will get cash payment of the 10% of the total outstanding amount in five equal installments from the 3rd to 7th year after the effective date. It is also stated by the applicant that apart from 10% of the outstanding amount, the Resolution Plan provides for issue of share warrant with an option to purchase the shares by paying 75% of the offer price within the next 18 months at their sole discretion. The initial subscription towards share warrant, which is 25%, is a credit given by the Resolution Applicant to the applicant, the operational creditor. However, this provision is not compulsive and the applicants, the operational creditors are not compelled to take the shares. It is submitted by the applicant, the operational creditor, that by this arrangement, the operational creditor will lose 65% of the amount, if the applicant subscribes the shares.

IA 273 of 2018 – Tourism Finance Corporation of India Ltd

It is stated that the applicant is a company within the meaning of Companies Act, 2013 and a notified Public Financial Institution within the meaning of Section 2(72). The applicant, claims to be a Secured Creditor of Rainbow Papers Limited, the Corporate Debtor of CP(IB) No. 88 of 2017, states that Corporate Debtor approached it for obtaining financial assistance for its business purpose and accordingly, the applicant had sanctioned credit facility by way of corporate loan of Rs 30.00 crores for meeting its capital requirements for expansion of paper manufacturing capacity and the said corporate loan had been secured by way of pledge of equity shares of Rainbow Papers Limited and Corporate guarantee of Orient Newsprint Ltd. The applicant has further stated that subsequent to availing the loan, the principal borrower and the guarantor committed persistent defaults in making payment of overdue principal amount and interest and the applicant issued notices upon them on 04.04.2016 and 15.04.2016 calling upon them to make the payment of Rs. 21,20,71,823/- as on 01.04.2016 which rose to Rs. 22,48,28,156/- as on 30.09.2017.

It is further submitted by the applicant that in the Resolution Plan dated 26.05.2018 submitted by Kushal Limited, the claim of the applicant was categorized as "Secured Financial Creditor". It is stated by the applicant that during the course of meeting of CoC held on 04.06.2018, it was casually informed by the Resolution Professional that the claim of the applicant is proposed to be categorized as "Unsecured Financial Creditor". Despite several protests and objections raised by the applicant, the Addendum dated 05.06.2018 to the Resolution Plan, replaced the applicant from the category of Secured Financial Creditor to Unsecured Financial Creditor. It is stated by the applicant that respondent No. 1 had considered the claim of the applicant as Unsecured Financial Creditor on the basis of Form C and legal opinion that had been sought from an advocate.

IA 337 of 2018 – Virat Enterprises

It is stated that the applicant submitted the proof of the claim for Rs. 41,01,098/- to the IRP along with the affidavit dated 29.09.2017 with all the relevant documents. The total amount of the claim included interest as on the insolvency commencement date. However, the Resolution Professional reduced the claim to Rs. 29,38,689/- without giving any explanation.

It is stated by the applicant that as per the resolution plan, applicant, the operational creditor will get cash payment of the 10% of the total outstanding amount in five equal installments from the 3rd to 7th year after the effective date. It is also stated by the applicant that apart from 10% of the outstanding amount, the Resolution Plan provides for issue of share warrant with an option to purchase the shares by paying 75% of the offer price within the next 18 months at their sole discretion. The initial subscription towards share warrant, which is 25%, is a credit given by the Resolution Applicant to the applicant, the operational creditor. However, this provision is not compulsive and the applicants, the operational creditors are not compelled to take the shares. It is submitted by the applicant, the operational creditor, that by this arrangement, the operational creditor will lose 65% of the amount, if the applicant subscribes the shares.

This P-01 of 2019 has been filed by the Sales Tax Officer (1), Office of the Assistant Commissioner of State Tax, Unit-33, Kadi, Dist. Mehsana, State of Gujarat, for a demand of Rs. 47,35,72,314/- towards Value Added Tax/Central Sales Tax due from the Corporate Debtor, vide Demand Notice in Form 305 under Gujarat Value Added Tax, 203 and Demand Notice in Form 8(B) under Central Sales Tax Act, 1956 for the year 2012-13 to 2015-16 and as per return filed by the Dealer, the Corporate Debtor for the period 01.03.2016 to 30.06.2016.

It is pertinent to mention here that during the hearing before the Gujarat Value Added Tax Tribunal at Ahmedabad, Shri N.C. Andharia, Hon'ble Member has stated that as the Adjudicating Authority, (NCLT), Ahmedabad Bench, Ahmedabad in its order dated 12.09.2017 has declared moratorium under Section 13(1)(a) of the I&B Code, prohibiting the institution of suits or continuation of pending suits or proceedings against the appellant (the Corporate Debtor) including execution of any judgment, decree or order in any court of law, tribunal, arbitration panel or other authority as provided in Section 14(1)(a) of the I&B Code and since there is moratorium prohibiting the execution of any order before any authority under Section 13 and 14 of the I&B Code & since it has the overriding effect vide Section 238 of the I&B Code over other laws, I admit these appeals without order for pre-deposit and remanded the matters to the First Appellate Authority.

It is stated by the applicant vide letter Sr. No -JCCT/Div-4/Mehsana/NCLT Case/O.W. No-3090 dated 22.10.2018 approached the Resolution Professional of the Corporate Debtor Company, asking the RP to confirm the amount of claim accepted by the Resolution Professional and the current status of resolution proceedings.

It is submitted by the applicant that RP in reply to his letter dated 22.10.2018 has informed the applicant as under:

Being aggrieved with the reply received from the RP of the Corporate Debtor, the applicant has filed this P-01 of 2019 stating that Resolution Plan submitted to this Bench of NCLT is clearly in contravention of provisions of Section 30(2)(e) of the Code as it contravenes the provisions of the law being in force, being Gujarat Value Added Tax, 2003 and Central Sales Tax Act, 1956 by waiving off the dues of the Gujarat Value Added Tax and Central Sales Tax as payable to the Applicant as suo moto.

The applicant admittedly filed this application before this Bench on 19.12.2018 and on perusal of the records, it is observed that the applicant has approached the RP on 22.10.2018, whereas the Resolution Plan dated 26.05.2018 along with Addendum dated 05.06.2018 was approved by the CoC with voting majority of 72.79 per cent in favor of the said Resolution Plan. Thus, the claim was made by the applicant at a much belated stage not only before the RP but also before this Bench too. Since CIRP is a time bound process, this application cannot be entertained due to delay and latches. The applicant should have submitted his claim when the RP invited the claims through public announcement on initiating the Insolvency Resolution Process. However, on perusal of the Resolution Plan, it is found that Resolution Applicant has taken care of all the operational creditors as per provisions of Section 53 of the Code which deals with distribution of assets and approved by the CoC. The Hon'ble Supreme Court in its recent judgment in Civil Appeal No. 10673 of 2018 in K. Sashidhar Vs. Indian Overseas Bank & Ors has upheld the supremacy of the CoC and their commercial wisdom cannot be questioned.

The respondent/the Resolution Professional has filed with this Tribunal his written replies and in some of the IAs has simply argued during the course of proceedings about the maintainability of the IAs. The submissions made by the respondent/the Resolution Professional are common for IA No. 271, 272, 337 of 2018 and P-01 of 2019 and the same are deliberated below.

It is pertinent to mention herein that arguments so advanced by the Ld. Lawyer of the RP has also been supported by CoC.

The Resolution Professional has submitted that the above said IAs are against the true intent, purport and object of the Insolvency and Bankruptcy Code, 2016 and the rules framed there under in order to circumvent the resolution process.

It is submitted by the Resolution Professional that as far as IA No. 271 of 2018 is concerned, the claim of the applicant for Rs. 20,52,203/-(Rupees Twenty Lakhs Fifty-Two Thousand Two Hundred Three Only) was examined with all professional diligence and documents examined in support of the claim and the books of account of the corporate debtor. It was found that there was discrepancy in the amount claimed and the amount legally due and payable. The account was reconciled and the claim was admitted at Rs. 15,14,698/- (Fifteen Lakhs Fourteen Thousand Six Hundred Ninety-Eight Only) and the same was informed to the applicant vide email dated 24.11.2017 and filed this Interlocutory Application with this Tribunal on 24.07.2018 after a lapse of 9 months for the reasons best known to the applicant.

It is submitted by the Resolution Professional that as far as IA No. 272 of 2018 is concerned, the claim of the applicant for Rs. 4,94,71,355/- (Four Crores Ninety-Four Lakhs Seventy-One Thousand Three Hundred Fifty-Five Only) was examined with all professional diligence and documents examined in support of the claim and the books of account of the corporate debtor. It was found that there was discrepancy in the amount claimed and the amount legally due and payable. The account was reconciled and the claim was admitted at Rs. 3,22,51,656/- and the same was informed to the applicant vide email dated 24.11.2017 and filed this Interlocutory Application with this Tribunal on 24.07.2018 after a lapse of 9 months for the reasons best known to the applicant.

With respect to the averments made in paragraph 4(viii), the respondent, the Resolution Professional denies that during the course of meeting of CoC held on 04.06.2018, it was casually informed to the applicant by the Resolution Professional that the claim of the applicant is proposed to be categorized as "Unsecured Financial Creditor and further denies that despite several protests and objections raised by the applicant, an addendum dated 05.06.2018 to the Resolution Plan was obtained from the Resolution Applicant and the same was approved by CoC. It is stated by the Resolution Professional that on the contrary, the Resolution Professional addressed an email dated 30.05.2018 requesting the applicant to substantiate its claim whether the same falls under the category of secured creditors and if so, the security involved. However, the applicant failed to substantiate its claim as secured creditor as contemplated under the Insolvency and Bankruptcy Code, 2016 and the regulations for the time being in force. With respect to the averments made in paragraph 4(xii), the Resolution Professional also denies the allegation that Resolution Professional had considered the claim of the applicant as unsecured financial creditor on the basis of Form C and legal opinion that had been sought from an advocate.

It is submitted by the Resolution Professional that as far as IA No. 337 of 2018 is concerned, the claim of the applicant for Rs. 41,01,098/- (Forty-One Lakhs One Thousand Ninety-Eight Only) was examined with all professional diligence and documents examined in support of the claim and the books of account of the corporate debtor. It was found that there was discrepancy in the amount claimed and the amount legally due and payable. The account was reconciled and the claim was admitted at Rs. 29,38,689/- (Twenty-Nine Lakhs Thirty-Eight Thousand Six Hundred Eighty-Nine Only).

The respondent/the Resolution Professional submits that present applications deserve to be rejected out rightly since the applicants have approached this Tribunal without any locus standi. It is further submitted by the RP, as per the Scheme envisaged under the provisions of the IBC, particularly under section 30 and 31 of the Code, it is the Resolution Professional who submits the Resolution Plan after the approval of CoC and thereafter, the Tribunal adjudicates upon the Resolution Plan.

It is submitted that the liquidation value of the Corporate Debtor is Rs.424 crores (Rupees Four Hundred Twenty-Four Crores Only) whereas the Resolution Applicant has proposed to offer the value to the tune of Rs. 632.67 crores (Rupees Six Hundred Thirty-Two Crores and Sixty-Seven Lakhs Only) which is way beyond the liquidation value of the Corporate Debtor. It is pertinent to mention here that the total outstanding amount due to the financial creditors is around Rs 1468.25 crores, whereas the total amount due to the operational creditors is to the tune of Rs. 139.40 crores.

It is further submitted by the Resolution Professional, that liquidation value due to the applicant(s) shall be NIL as per Section 53 of the IBC, which provides for the distribution of the proceeds from the sale of the liquidation assets of the Corporate Debtor. The liquidation value of the Corporate Debtor is Rs. 424 crores, whereas the outstanding dues of the Financial Creditors, is around Rs. 1437.11 crores. Therefore, the applicants shall not be entitled for any stake from the proceeds of the liquidation of estate of the Corporate Debtor. The percentage wise stake of all the stakeholders is presented in a tabular form:

It is submitted that the application(s) are not maintainable and the objections against the Resolution Plan are nothing but to stall the resolution plan/process despite being offered 10% (along with 25% share warrant) though the debt which is owed to the applicants in aggregate is not forming more than 1% of the total debt of the Corporate Debtor.

Heard the Ld. Counsels of all the applicants and the respondent/Resolution Professional and perused the application and the documents annexed therewith. On perusal of the Resolution Plan, it is found that Resolution Applicant shall make cash payment of 10% i.e. amount of Rs. 1.84 Crores to the Unsecured Financial Creditors as per Table A given below. Further an amount of Rs. 4.60 Crores i.e. 25% of the total outstanding of Unsecured Financial Creditors shall be adjusted or appropriated towards initial payment of 25% of Share Warrants to be issued by resolution Applicant as per terms given below. Remaining amount of 65% i.e. Rs. 11.97 Crores shall be deemed to be waived and no claim shall be allowed for the same.

Thus, on perusal of the Resolution Plan, it is found that Resolution Applicant has taken care of employees, members, creditors, guarantors and other stake holders, as the case may be, involved in the Resolution Plan.

Before proceeding further, we find it expedient to discuss Section 53 of the Code i.e. distribution of assets.

Section 53 of IBC lists the priorities to be given to the beneficiaries of liquidation value of the assets of the Corporate Debtor. The provisions of Section 53 make it amply clear that Operational Creditors are at the end of the list of beneficiaries as the Secured Financial Creditors have edge over the others. Moreover, the claims of the applicants who filed the Intervention Applications are having the claim below 10 per cent of the total debt of the Corporate Debtor. Hence, in view of Section 24(3)(c) of the Code, the operational creditors, if the amount of their aggregate dues is less than 10 per cent of the debt, they are not entitled to attend and vote in the meetings of CoC. Section 24(3) of the Code is reproduced below:

It would also be pertinent to mention here that Operational Creditors have no locus standi as far as approval of the Resolution Plan by the CoC is concerned. They are not eligible to attend and vote at the meetings of CoC if they are holding less than 10% of the total debt - Section 24(3)(C) of IBC. To make the provisions clearer, Section 30 and 31 of the IBC is reproduced hereunder:

The above provisions dispel the misconceptions of the Operational Creditors/intervener that they have edge over the other beneficiaries.

The very object of the Code is resolution of failing corporate debtor companies and not liquidation of corporate debtor companies. Our Parliament has enacted the Code with the following object:

Keeping in view such object behind the enactment of the Code and intention of the Legislature, is that the priority is to be given to the resolution than liquidation in the larger interests of the public, workmen, stakeholders and the other employees of the corporate debtors in the interest of justice and in order to achieve the object of the Code and liquidation of a company can be only as a last resort, wherein, all efforts for bringing Resolution Plan were failed or it cannot be found workable in the larger public interest. Hence, now the approval of Resolution Plan by this Adjudicating Authority is rule as per the apex court's decision in the matter of K. Sashidhar Vs. Indian Overseas Bank & Ors as discussed above. Furthermore, the Resolution Plan not only meets the requirements of sub-section 2 of section 30 of the Code, but the offer made by the Resolution Applicant amounting to Rs. 632.67 crores as against the liquidation value of Rs. 424 crores which is much higher than the liquidation value.

Under the facts and circumstances as narrated hereinabove, we are of the considered opinion and also satisfied that Resolution Plan as approved by the Committee of Creditors "CoC" meets the requirements as referred to under section 30(2) of the Insolvency and Bankruptcy Code, 2016 and therefore, IA 224 of 2018 is liable to be allowed as prayed for. Accordingly, we hereby approve the Resolution Plan dated 26.05.2018 along with Addendum dated 05.06.2018 submitted by the RP with approval of the CoC with following observations:

IA 337 of 2018 in CP(I.B.) 88 of 2017 is dismissed as not maintainable.