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2023 Supreme(Online)(NCLT) 1795
NATIONAL COMPANY LAW TRIBUNAL
Shri H.V. Subba Rao, Ms. Madhu Sinha, JJ
Mr. Gajesh Labhchand – Appellant
Versus
Reliance Commercial Finance Limited – Respondent
I.A No. 675 of 2023 | CP (IB) No: 4001 of 2019
Important Points
Subject
Insolvency - Corporate Bankruptcy
Act Referred
Headnote
(B) Corporate Insolvency Resolution Process (CIRP) - Requirement to keep the best interest of stakeholders, with financial creditors prioritized in payments, and adherence to provisions for operational creditors established under Regulation 38 of the Code. (Paras 4, 10, 11, 12)
Facts of the case:
The Resolution Professional applied for approval of a Resolution Plan under IBC following the corporate insolvency declaration of Broadband Pacenet. The Corporate Debtor had undergone CIRP with a resolution plan submitted by Marwari Media Corporation and approved by CoC. (Paras 1, 2, 3)
Findings of Court:
The Resolution Plan was found compliant with the Insolvency Code and Regulations and was approved noting its feasibility, viability, and proper management post-approval. (Paras 20, 21, 4, 9)
Issues: Determination of compliance with statutory requirements and whether the interests of all creditors, especially operational creditors, were adequately addressed. (Paras 31, 20, 9)
Ratio Decidendi: Court emphasized the necessity for Resolution Plans to comply with regulatory requirements for approval, highlighting that the commercial wisdom of the CoC is paramount in the approval process, as concluded in relevant case law. (Paras 3, 4, 8)
Result: The resolution plan was allowed and became binding upon all stakeholders.
For the Appellants/Petitioners: Mr. Ayush J. Rajani, Khushboo Shah
For the Respondents: AKR Advisors
| Table of Content |
|---|
| 1. application filed for the approval of a resolution plan. (Para 1 , 2 , 3) |
| 2. details of creditor claims and meetings held. (Para 4 , 5 , 6 , 7 , 9) |
ORDER
1. This is an Application filed under Section 30 (6) and Section 31 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as the “Code”) filed by the Resolution Professional of Broadband Pacenet (India) Private Limited (hereinafter referred to as “Corporate Debtor” seeking approval of the Resolution Plan submitted by a M/s Marwari Media Corporation Private Limited (the Successful Resolution Applicant) (SRA). The Resolution Plan submitted by the Successful Resolution Applicant was approved by 78% of the members of the Committee of Creditors of the Corporate Debtor (hereinafter referred to as “CoC”) at the 11th CoC meeting held on 10th January 2023.
2. Factual Background of the Corporate Debtor
1. Before proceeding to the evaluation of the Plan, as to its compliance with Section 30 (2) of IBC, it is necessary to set out the factual matrix of the Corporate Debtor.
2. The Financial Creditor i.e., Reliance Commercial Finance Limited filed a Company Petition bearing no: 4001 of 2019 against the Corporate Debtor under Section 7 of the IBC before this Hon’ble Tribunal. By an Order dated 10th March 2022 (CIRP Order) the Section 7 was admitted by the Adjudicating Authority and Mr. Ashok Kriplani was appointed as the IRP. Thereafter, a public announcement of CIRP in the present matter was published on 20 March 2022, inviting claims from all creditors to be filed by 31 March 2022.
3. During the 2nd Second meeting of Committee of Creditors held on 22 April 2022, the Coc resolved with 100 % of voting to replace , Mr. Ashok Kriplani with Mr. Gajesh Labhchand Jain. Accordingly, an order dated01 June 2022 passed by this Hon’ble NCLT.
4. The Applicant submits that the status of claims received and admitted as exist on the date of filing the present application is as follows:
5. The Applicant submits that, in accordance with Regulation 27 & 35 of IBBI (CIRP), Regulations 2016, Registered Valuers have been appointed to determine the Fair Value and Liquidation Value of the CD. The Applicant submits that since there is no land and building as assets of the Corporate Debtor the Applicant has not appointed any valuer for land and building.
| List of Valuers | Class of Valuation |
| AAA Valuation Professionals LLP | SFA, P&M |
| Raj Kamal Saraogi | SFA |
| Paramjeet Singh | P&M |
6. The Applicant submits that the above-mentioned valuers have submitted their Valuation Reports containing Fair Market Value and Liquidation Value to the Applicant / Resolution Professional. Accordingly, the fair market value and Liquidation value are as under:
(Amount in Rupees)
| Particulars | FAIR VALUE | LIQUIDATION VALUE | ||||
| Valuer 1 | Valuer 2 | Average | Valuer 1 | Valuer 2 | Average | |
| Plant & Machinery | 2,54,600 | 2,90,000 | 2,72,300 | 2,03,680 | 2,37,000 | 2,20,340 |
| S & FA | 5,18,688 | 5,18,689 | 5,18,689 | 5,18,688 | 5,18,689 | 5,18,689 |
| TOTAL | 7,73,288 | 8,08,689 | 7,90,989 | 7,22,368 | 7,55,689 | 7,39,029 |
7. The Applicant submits that during 5th CoC held on 27 July 2022, the Applicant has informed the CoC members that he has admitted the claim received from Alchemist Asset Reconstruction Company Limited and reconstituted the CoC on 14 July 2022. The Applicant has also filed an updated list of creditors with NCLT and revised claims have been updated on IBBI website.
8. The Applicant submits that in terms of the provisions of Section25(2)(h) of the Code, Expression of Interest (“EoI”) was called from potential resolution applicants for the purpose of submission of resolution plans for the Corporate Debtor. The advertisement for inviting EoI was published on 11 July 2022 wherein last day for submission of EoI was 26 July 2022 and last day for submission of Resolution Plan was 09 September 2022.
9. The Applicant submits that thereafter few inquiries were received from the below mentioned interested parties.
i. Nakshatra Corporate Advisors Limited
ii. Om Regmi
iii. Jindal Steel & Power Ltd.
iv. Sukhan Group
v. Ot
