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2023 Supreme(Online)(NCLT) 3226
NATIONAL COMPANY LAW TRIBUNAL
MR. MANNI SANKARIAH SHANMUGA SUNDARAM, HON’BLE MEMBER (JUDICIAL), DR. BINOD KUMAR SINHA, HON’BLE MEMBER (TECHNICAL)
Realiable Finance Corpn Pvt Ltd – Appellant
Versus
Nature India Communique Ltd – Respondent
IA/5236/ND/2021 IN IB/2410/ND/2019
For the Appellants/Petitioners:
Resolution Plans under IBC must comply with relevant corporate laws to ensure legal implementation and avoid contravention of statutory provisions.
Headnote:(A) Insolvency and Bankruptcy Code, 2016 - Sections 30(6), 31, and 232(3)(h)(A) - Corporate Insolvency Resolution Process - Resolution Plan submitted by Successful Resolution Applicant for merger with Corporate Debtor rejected for contravening provisions of the Companies Act regarding automatic transfer of listing status. (Paras 28, 29)
(B) Resolution Plans - Require adherence to all applicable laws and regulations to ensure legal implementability and compliance with corporate governance. (Paras 24, 28)
Facts of the case:
Application under IBC for approval of Resolution Plan for merger initiated; corporate debtor faced financial distress with no recoverable assets.
Findings of Court:
Proposed merger contravenes Section 232(3)(h)(A) of Companies Act; automatic transfer of listing not permissible.
Issues: Whether listing status of the Corporate Debtor can be transferred to the Successful Resolution Applicant post-merger.
Ratio Decidendi: Compliance with all applicable laws necessary for approval of resolution plans under IBC; provisions of Companies Act uphold existing corporate governance frameworks and cannot be bypassed.
Result: Resolution Plan rejected and application for I.A. 5236/ND/2021 dismissed.
| Table of Content |
|---|
| 1. corporate insolvency resolution process initiated against corporate debtor. (Para 2) |
| 2. resolution proposal evaluated by committee of creditors. (Para 3 , 5) |
| 3. legal compliance and supervision of resolution plan. (Para 4 , 12) |
| 4. need for compliance with laws in resolution plans. (Para 17 , 24) |
| 5. resolution plan rejected for violating statutory provisions. (Para 28 , 29) |
ORDER
PER: DR. BINOD KUMAR SINHA, MEMBER (TECHNICAL)
The present application has been filed under Section 30 (6) read with Section 31 of the Insolvency & Bankruptcy Code, 2016, (‗Code‘) read with Regulation 39(4) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (‗Regulations‘) on behalf of Mr. Mohd. Nazim Khan, Resolution Professional of the Corporate Debtor (‗applicant‘), seeking approval of the Resolution Plan submitted by M/s. Lovely Securities Private Limited (‗Successful Resolution Applicant‘).
CIRP: FACTS IN BRIEF
2. The facts as averred by the applicant in the application are stated in brief as follow:
a) The Corporate Insolvency Resolution Process (CIRP) was initiated against the Corporate Debtor, M/s. Nature India Communique Ltd., vide this Adjudicating Authority‘s order dated 03.05.2021, pursuant to an application filed by M/s. Reliable Finance Corpn Private Limited, sole financial creditor under Section 7 of the Code and Mr. Yash Jeet Basrar was appointed as Interim Resolution Professional who was replaced on an application filed by the sole Financial Creditor due to the age limit prescribed by the IBBI and appointed Mr. Attiuttam Prasad Singh as the IRP vide this Adjudicating Authority‘s order dated 06.07.2021
b) The Public Announcement of initiation of CIRP against the Corporate Debtor was made on 09.07.2021 in Form-A in Financial Express, English edition and Jansatta, Hindi edition. After collation of claims and determination of the financial position of the Corporate Debtor, the Committee of Creditors (CoC) was duly constituted by the IRP on 24.07.2021. The first meeting of the Committee of Creditors (‗CoC‘) was held on 31.07.2021, wherein Mr. Atiuttam Prasad Singh had shown his unwillingness and appointment of Mr. Mohd Nazim Khan was approved as the Resolution Professional of the Corporate Debtor by the CoC and the same was confirmed by this Adjudicating Authority vide order dated 15.09.2021.
c) The status of the claims as admitted by the resolution professional is as follow:-
d) The second meeting of CoC was held on 26.08.2021, wherein the eligibility criteria pursuant to Section 25 (2) of the IBC, 2016 along with the Request for Resolution Plan (RFRP) and Evaluation Matrix was discussed and the same has been passed by the COC unanimously with 100% Voting in favor. The Form-G for invitation of expression of interest was published in prescribed Form G on 28.08.2021 in Pioneer English edition and Pioneer Hindi edition newspapers wherein, the last date for receipt of Expression of Interest was 12th September, 2021.
e) Pursuant to the publication of Form-G, the applicant had received the Expression of Interest from the sole Prospective Resolution Applicant namely M/s. Lovely Securities Private Limited on 11.09.2021. The provisional list of Prospective Resolution Applicants was made on 22.09.2021 and the final list of Prospective Resolution Applicants on 07.10.2021 wherein M/s. Lovely Securities Private Limited was the sole Prospective Resolution Applicant.
f) The third meeting of the COC was held on 20.09.2021 wherein the Resolution for the extension of CIRP period was passed by the CoC with 100% voting in favour and this Adjudicating Authority vide order dated 23.09.2021 had extended the CIRP period for 90 days and further vide Order dated 28.09.2021 had allowed the exclusion of 49 days from the CIRP Period on account of COVID-19 lockdown.
g) The CoC in its fourth meeting held on 01.11.2021, had deliberated on the Resolution Plan submitted by M/s. Lovely Securities Priv
