Alloysmin Industries & Ors vs Punkaj Jain, R.P, Fenace Auto Ltd & Anr
- CitationCompany Appeal (AT) (Insolvency) No. 769 of 2018
Ratio decidendi
The rule this decision rests on
Where a resolution plan approved by the Committee of Creditors and the Adjudicating Authority treats operational creditors less favourably than financial creditors, and the successful resolution applicant undertakes to revise the plan so that the operational creditors receive the same percentage of their claims as the financial creditors, the appellate tribunal may approve the revised plan as a disposal of the appeals, with the revised terms substituted in the approved plan and binding on the resolution professional, the successful resolution applicant, the Adjudicating Authority and other stakeholders. Where the appellants have not alleged fraud before the Adjudicating Authority, the appellate tribunal will not decide any issue of fraud in the appeal.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
Alloysmin Industries & Ors. ...Appellants
Vs.
Punkaj Jain, R.P, Fenace Auto Ltd & Anr. ...Respondents
Present: For Appellant: - Ms. Divya Aggarwal, Advocate.
For Respondents: - Mr. Hitesh Sachar and Mr. Anuj Jain, Advocates for R-1.
Ms. Chetan Sharma, Senior Advocate with Ms. Aakanksha Kaul, Advocate for R-2.
Company Appeal (AT) (Insolvency) No. 05 of 2019
IN THE MATTER OF:
Vesuvius India Ltd. & Ors. ...Appellants
Vs.
Fenace Auto Ltd. & Ors. ...Respondents
Present: For Appellants: - Mr. A.R. Chowdhury and Ms. Vatsala Singh, Advocates.
For Respondents: - Mr. Hitesh Sachar and Mr. Anuj Jain, Advocates for R-1.
Ms. Chetan Sharma, Senior Advocate with Ms. Aakanksha Kaul, Advocate for R-2.
O R D E R
28.03.2019─ In the 'Corporate Insolvency Resolution Process'
against 'Fenace Auto Ltd.', the 'Committee of Creditors' approved the 2
'Resolution Plan' submitted by the 'Resolution Applicant'- 'M/s. Badve
Engineering Ltd.'. The said 'Resolution Plan' was approved by the
Adjudicating Authority (National Company Law Tribunal), New Delhi, by
order dated 17th October, 2018. The Appellants, who are the 'Operational
Creditors', including the intervenors being aggrieved by the impugned
order dated 17th October, 2018 preferred these appeals on the ground
that they have been discriminated as there being huge difference between
the percentage of the claim amount allowed in favour of the 'Financial
Creditors' and the 'Operational Creditors'.
2. Earlier, on 5th March, 2019, when the matter was taken up,
following order was passed:
"05.03.2019: Learned counsel for the Successful
Resolution Applicant- 'M/s. Badve Engineering Ltd.'
on instruction submits that the Successful Resolution
Applicant is ready to equate Operational Creditors
ranging from Rs. 5 Lakhs to Rs.10 lakhs onwards by
paying similar percentage of the claim amount of
26.36% as allowed in favour of all the 'Financial
Creditors'. He prays for and allowed ten days' time to
file a supplementary affidavit substituting the Clause
(B) for Operational Creditors, as shown at page 38 of
the Resolution Plan and approved by the Adjudicating
Authority.
Company Appeal (AT) (Insol.) Nos. 769 of 2018 & 05 of 2019 3
We make it clear that the Appellants having not
alleged any fraud before the Adjudicating Authority,
we are not going to decide such issue in these
appeals.
Post these appeals 'for orders' on 28th March,
2019."
3. A supplementary Affidavit has been filed by 'M/s. Badve
Engineering Ltd.'- ('Successful Resolution Applicant') wherein the
following statement has been made:
"2. That the present supplementary affidavit is being filed
pursuant to Order dated 05.03.2019 passed by this
Hon'ble Commission. In the course of the hearing on
05.03.2019, the answering Respondent (through its
Counsel) stated that it was ready to equate Operational
Creditors ranging from Rs. 5 lakhs to Rs. 10 lakhs
onwards by paying similar percentage of claim amount of
26.36% as allowed in favour of all the 'Financial Creditors'.
Category Amount Percentag Payout e Dues ranging Rs.2,07,02,992 20% Rs.41,40,598.00 from Rs.5,00,000- Rs. 10,00,000 Dues over Rs. Rs.18,17,97,836 10% Rs.1,81,79,784.0 10,00,000 Total Rs.20,25,00,828 Rs.2,23,20,382
Company Appeal (AT) (Insol.) Nos. 769 of 2018 & 05 of 2019 4
3. That in terms of the approved Resolution Plan (Para
3.1.2), the payout for Operational Creditors with dues
ranging from Rs. 5,00,000 - 10,00,000 and with dues over
Rs. 10,00,000 was proposed to be as under:
4. That pursuant to Order dated 05.03.2019 the
Resolution plan is sought to be amended and the payout
to Operational Creditors with dues ranging from
Rs.5,00,000- 10,00,000 and with dues over Rs.10,00,000
is proposed to be as under:
Category Amount Percentage Payout
Dues Rs.2,07,02,992 26.36% Rs.54,57,309 ranging from Rs. 5,00,000- 10,00,000 Dues over Rs.18,17,97,836 26.36% Rs.4,79,21,910 Rs.10,00,0 00 Total Rs.20,25,00,828 Rs.5,33,79,218
5. That thus, the Respondent No.2/ the successful
Resolution Applicant has proposed an additional payout of
Rs. 13,16,711/- to Operational Creditors with dues
ranging from Rs. 5,00,000-10,00,000 and of
Rs.2,97,42,126 to Operational Creditors with dues over
Rs. 10,00,000. The total additional payout is thus,
proposed to be Rs. 3,10,58,836.
6. That the said additional payout will ensure that
Operational Creditors with dues ranging from
Company Appeal (AT) (Insol.) Nos. 769 of 2018 & 05 of 2019 5
Rs.5,00,000-10,00,000 and with dues over Rs.10,00,000
are equated with Financial Creditors who are entitled to
receive 26.36% of their claim amount in terms of the
approved Resolution Plan."
4. It is stated that in terms with the revised 'Resolution Plan', cheques
have been issued.
5. Learned counsel appearing on behalf of the Appellants-
('Operational Creditors') and the intervenors ('Operational Creditors')
while accepted the revised 'Resolution Plan', as proposed and quoted
above are in accordance with law and that the 'Operational Creditors' are
satisfied, submitted that they have not received the cheques as on date.
6. Learned counsel for the 'Successful Resolution Applicant' submits
that the 'Successful Resolution Applicant' will provide the cheques if not
yet received.
7. In the circumstances, we approve the revised part of the 'Resolution
Plan' submitted by 'M/s. Badve Engineering Ltd.'- ('Successful Resolution
Applicant') which in addition to other conditions already made therein.
The statement made by 'M/s. Badve Engineering Ltd.' as quoted above,
is substituted in the 'Resolution Plan' in question.
8. The 'Resolution Professional', 'M/s. Badve Engineering Ltd.'-
('Successful Resolution Applicant'), the Adjudicating Authority and other
Company Appeal (AT) (Insol.) Nos. 769 of 2018 & 05 of 2019 6
stakeholders are bound by and will act as per the substituted 'Resolution
Plan' as approved.
Both the appeals stand disposed of with aforesaid observations and
directions. No cost.
(Justice S.J. Mukhopadhaya) Chairperson
(Justice A.I.S. Cheema) Member(Judicial) Ar/g
Company Appeal (AT) (Insol.) Nos. 769 of 2018 & 05 of 2019
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