Approval of Resolution Plan - S P S Metal Cast & Alloys Limited

Application under section 30(6) and section 31(1) of the Insolvency & Bankruptcy Code, 2016 read with regulation 39(4) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 for approval of Resolution Plan.

In the matter of: Jai Balaji Industries Limited … Financial Creditor Versus SPS Metal Cast & Alloys Limited CIN: U2710WB1990PLC049475 ... Corporate Debtor And In the matter of: Avishek Gupta, Resolution Professional of SPS Metal Cast & Alloys Limited ... Applicant Date of hearing: 17.08.2021 Date of pronouncement: 25.11.2021 Coram: Mr. Rajasekhar V.K. : Member (Judicial) Mr. Harish Chander Suri : Member (Technical)

Appearances (via video conference): For the Applicant/RP : 1. Mr. Rishav Banerjee, Advocate 2. Mr. Aishwarya Kumar Awasthi, Advocate 3. Mr. Avishek Gupta, Resolution Professional

KOLKATA BENCH In re approval of Resolution Plan of S.P.S. Metal Cast & Alloys Pvt. Ltd. I.A. (IB) No. 297/KB/2021 in C.P. (IB) No. 1495/KB/2018

ORDER Per: Rajasekhar V.K., Member (Judicial)

1. This Court convened through video conferencing. 2. Preliminary 2.1. I.A. (IB) No. 297/KB/2020 is an application under section 30(6) of the Insolvency and Bankruptcy Code, 2016, after approval of the Resolution Plan by the Committee of Creditors (CoC). 2.2. This application was moved on 17.08.2021 by Mr. Avishek Gupta, Resolution Professional of SPS Metal Cast & Alloy Limited (CIN: U2710WB1990PLC049475), by invoking the provisions of section 30(6) read with section 31(1) of the Insolvency and Bankruptcy Code, 2016 (“the Code”) read with regulation 39(4) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations. 2016 (“CIRP Regulations”) or approval of a Resolution Plan in respect of SPS Metal Cast & Alloy Limited (“the Corporate Debtor”). 2.3. The underlying Company Petition in C.P. (IB) No. 1495/KB/2018 was filed by Jai Balaji industries Limited against SPS Metal Cast & Alloys Limited, the Corporate Debtor, under section 9 of the Insolvency and Bankruptcy Code 2016, which was admitted vide order dated 25.06.2019. 2.4. Initially, Mr. Rakesh Agarwal was appointed as the Interim Resolution Professional (“IRP”), but the Committee of Creditors (“CoC”) in its 1st CoC meeting held on 24.07.2019 passed a resolution to replace Mr. Rakesh Agarwal with Mr. Avishek Gupta (Regn.

No. IBBI/IPA-003/IP-N000135/2017- 2018/11499) at the Resolution Professional (“RP”) with 98.09% voting share. Mr. Avishek Agarwal, the Applicant herein was KOLKATA BENCH In re approval of Resolution Plan of S.P.S. Metal Cast & Alloys Pvt. Ltd. I.A. (IB) No. 297/KB/2021 in C.P. (IB) No. 1495/KB/2018 appointed as the Resolution Professional by an order dated 03.10.2019 passed by this Adjudicating Authority. 2.5. The CIRP timeline was extended from time to time with approval of this Adjudicating Authority vide order dated 18.12.2020 wherein the timeline was extended by excluding the period from 21.03.2020 to 18.12.2020 and extension of 60 days from 19.12.2020. 3. Constitution of CoC 3.1. The erstwhile IRP had made public announcement on 28.06.2019 in Aajkal (Bengali) and Financial Express (English) (Kolkata edition) regarding initiation of the CIRP and called for proof of claims from the financial and operational creditors, workers and employees of the Company in the specified forms till 09.07.2019. 3.2. The CoC was constituted on 16.07.2019 with two Financial Creditors i.e., Indian Overseas Bank and Gouri Iron & Steel Pvt. Ltd. The CoC was reconstituted with four Financial Creditors viz. Edelweiss Asset Reconstruction Co. Ltd., Indian Overseas Bank, Union Bank of India and Gouri Iron & Steels Pvt. Ltd. and the same was filed before the Adjudicating Authority on 13.01.2020 and 31.01.2020.

3.3. The Applicant stated that a total of eleven CoC meetings have been held during CIRP period, as follows: Particulars Date of CoC meeting 1st CoC meeting 24.07.2019 2nd CoC meeting 19.08.2019 3rd CoC meeting 11.09.2019 4th CoC meeting 25.10.2019 5th CoC meeting 07.11.2019 6th CoC meeting 02.01.2020

KOLKATA BENCH In re approval of Resolution Plan of S.P.S. Metal Cast & Alloys Pvt. Ltd. I.A. (IB) No. 297/KB/2021 in C.P. (IB) No. 1495/KB/2018 Particulars Date of CoC meeting 7th CoC meeting 24.02.2020 8th CoC meeting 07.03.2020 9th CoC meeting 04.01.2021 10th CoC meeting 25.01.2021 11th CoC meeting 11.02.2021 4. Collation of claims 4.1. The amounts claimed and admitted are summarised below:

Sl. Category of claim Amount Amount No. Submitted admitted (Rs.) (Rs.) 1. Financial Creditors 1,46,16,46,253.45 1,46,16,46,253.45 2. Operational Creditors 59,46,37,791/- 56,48,23,807/- 3. Operational Creditors 86,77,92,646/- 81,27,21,127/- (Govt Dues) Total 2,92,40,76,690.45 2,83,91,91,187.45

5. CIRP and compliances 5.1. The Applicant submits that in terms of the provisions of section 25(2)(h) of the Code read with regulation 36A(1) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, invitations in Revised Form ‘G’ for Expressions of Interest (EoI) from potential resolution applicants was issued on 10.11.2019 and was published in “Aajkal” (Bengali) (Kolkata edition) Newspaper on 11.11.2019 and Financial Express (English) (Kolkata edition) Newspaper on 10.11.2019. 5.2. The Applicant submits that in response to the invitation for EoI, the Applicant received three EoIs from Shakambari Tie-Up

KOLKATA BENCH In re approval of Resolution Plan of S.P.S. Metal Cast & Alloys Pvt. Ltd. I.A. (IB) No. 297/KB/2021 in C.P. (IB) No. 1495/KB/2018 Private Limited, Bravo Sponge Iron Private Limited and Prudent ARC Limited. The RP then shared the Information Memorandum, Evaluation Matrix and Request for Resolution Plan (RFRP) with both the Prospective Resolution Applicants. 5.3. Only one Resolution Plan was received from Bravo Sponge Iron Private Limited (CIN:U27106WB1997PTC082921) on 14.01.2020. 6. Evaluation and voting 6.1. The Resolution Plan was placed for discussion before the CoC in the 6th CoC meeting held on 24.01.2020 but was not put up for voting as the CoC was in the process of negotiating the terms of the Resolution Plan with the Resolution Applicant. 6.2. The Resolution Plan was revised on 29.02.2020, 11.03.2020 and on 16.03.2020. The revised Resolution Plan dated 16.03.2020 was discussed in the CoC meeting and was put up for e-voting from 18.03.2020 to 19.03.2020. The Resolution Plan was not approved by the CoC by 42% voting share. 6.3. Thereafter, the Resolution Applicant filed a revised Resolution Plan dated 10.06.2020 for consideration. The Resolution Professional placed the revised Resolution Plan dated 10.06.2020 before the CoC in its 9th CoC meeting held on 04.01.2021. 6.4. The Resolution Plan was further revised and submitted on 14.01.2021 and was placed for discussion in the 10th CoC meeting held on 25.01.2021. The revised Resolution Plan dated 14.01.2021 was put up for e-voting on 28.01.2021 to 05.02.2021 and further extended to 07.02.2021. 6.5. The Resolution Applicant sent an email stating that all the statutory dues will be paid like other Operational Creditors as per the stake out of the total amount to be paid to the Operational Creditors which was accepted.

KOLKATA BENCH In re approval of Resolution Plan of S.P.S. Metal Cast & Alloys Pvt. Ltd. I.A. (IB) No. 297/KB/2021 in C.P. (IB) No. 1495/KB/2018 6.6. The revised Resolution Plan dated 14.01.2021 was approved by the CoC by 99.83% voting share1. 6.7. The Applicant issued a Letter of Intent on 15.02.2021 to the Successful Resolution Applicant and the successful Resolution Applicant sent an Unconditional Acceptance letter to the Applicant on 18.02.2021. 6.8. In accordance with regulation 36B(4A) of the CIRP Regulations, the Successful Resolution Applicant has submitted the Performance Bank Guarantee of Rs.2,35,40,000/- (Rupees Two Crore Thirty-Five Lakh Forty Thousand only). 7. Compliance of the approved Resolution Plan with various provisions 7.1. The Applicant has filed a Compliance Certificate in prescribed form, i.e., Form ‘H’2 in compliance with regulation 39(4) of the Insolvency & Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. 7.2. The Applicant submits that the successful resolution applicant has submitted an affidavit stating eligibility under section 29A of the Code, as required by regulation 39(1)(a) of the CIRP Regulations. 7.3. The Applicant has submitted details of various compliances as envisaged within the Code and the CIRP Regulations which a Resolution Plan should adhere to, which is reproduced hereunder:

1 Annexure E in page 47 of the I.A. 2 Annexure H in pages 104-113 of the I.A.

KOLKATA BENCH In re approval of Resolution Plan of S.P.S. Metal Cast & Alloys Pvt. Ltd. I.A. (IB) No. 297/KB/2021 in C.P. (IB) No. 1495/KB/2018 I. Submission of Resolution Plan in terms of sub-section (2) of section 30 of the Code (as amended vide Amendment dated 16 August 2019):

Clause Requirement How dealt with in the Plan of s.30(2)

1. Plan must provide for payment of Clause 1 (c) in Part B at CIRP cost in priority to repayment page 23 Clause 2 in Part B of other debts of CD in the manner at Pages 26-27 and of the specified by the Board. Resolution Plan.

2. (i) Plan must provide for Clause 2(ii) in Part B at repayment of debts of OCs in such Pages 27-28 of the manner as may be specified by the Resolution Plan. Board which shall not be less than the amount payable to them in the event of liquidation u/s 53;

(ii) Plan must provide for Clause 2(ii) in Part B at repayment of debts of OCs in such Pages 27-28 of the manner as may be specified by the Resolution Plan. Board which shall not be not less than amount that would have been paid to such creditors, if the amount to be distributed under the resolution plan had been distributed in accordance with the order of priority in sub-section (1) of section 53, whichever is higher;

KOLKATA BENCH In re approval of Resolution Plan of S.P.S. Metal Cast & Alloys Pvt. Ltd. I.A. (IB) No. 297/KB/2021 in C.P. (IB) No. 1495/KB/2018 Clause Requirement How dealt with in the Plan of s.30(2)

(iii) provides for payment of debts Clause 1(d) in Part B at Page of financial creditors who do not 25 of the Resolution Plan. vote in favour of the resolution plan, in such manner as may be specified by the Board.

(c) Management of the affairs of the Clause 2 in Part A at Page 8 Corporate Debtor after approval of of the Resolution Plan. the Resolution Plan.

(d) Implementation and Supervision Clause 4 in Part B at Pages 20-21 of the Resolution Plan.

(e) Plan does not contravene any of Clause 1(f) in Part B at Page the provisions of the law for the 25 of the Resolution Plan. time being in force.

(f) Conforms to such other ---requirements as may be specified by the Board.

KOLKATA BENCH In re approval of Resolution Plan of S.P.S. Metal Cast & Alloys Pvt. Ltd. I.A. (IB) No. 297/KB/2021 in C.P. (IB) No. 1495/KB/2018 II. Measures required for implementation of the Resolution Plan in terms of regulation 37 of CIRP Regulations:

Particulars Relevant Page of the Revised Resolution Plan dealing aforesaid compliance with Regulation

A resolution plan shall provide for the measures, as may be necessary, for insolvency resolution of the corporate debtor for maximisation of value of its assets, including but not limited to the following: - (a) transfer of all or part of the assets Not propsed in the Resolution Plan. of the corporate debtor to one or more persons;

(b) sale of all or part of the assets Not proposed in the Resolution whether subject to any security interest Plan. or not;

(c) restructuring of the corporate Page 39 of the Resolution Plan. debtor, by way of merger, amalgamation and demerger;

(d) the substantial acquisition of shares Page 39 of the Resolution Plan. of the corporate debtor, or the merger or consolidation of the corporate debtor with one or more persons;

KOLKATA BENCH In re approval of Resolution Plan of S.P.S. Metal Cast & Alloys Pvt. Ltd. I.A. (IB) No. 297/KB/2021 in C.P. (IB) No. 1495/KB/2018 Particulars Relevant Page of the Revised Resolution Plan dealing aforesaid compliance with Regulation (e) cancellation or delisting of any Clause 6 in Part B at Pages 33-34 shares of the corporate debtor, if and Clause 2 (g) in Part A at Page 11 applicable; of the Resolution Plan.

(f) satisfaction or modification of any Not proposed in the Resolution Plan. security interest;

(g) curing or waiving of any breach of Point vii at Page 36 of the Resolution the terms of any debt due from the Plan. (Reliefs and concessions) corporate debtor;

(h) reduction in the amount payable to Page 23 of the Resolution Plan. the creditors;

(i) extension of a maturity date or a Not proposed in the Resolution Plan. change in interest rate or other terms of a debt due from the corporate debtor;

(j) amendment of the constitutional Point iv at Page 36 of Resolution documents of the corporate debtor; Plan. (Reliefs and concessions)

(k) issuance of securities of the Not proposed in the Resolution Plan. corporate debtor, for cash, property, securities, or in exchange for claims or interests, or other appropriate purpose;

KOLKATA BENCH In re approval of Resolution Plan of S.P.S. Metal Cast & Alloys Pvt. Ltd. I.A. (IB) No. 297/KB/2021 in C.P. (IB) No. 1495/KB/2018 Particulars Relevant Page of the Revised Resolution Plan dealing aforesaid compliance with Regulation (l) change in portfolio of goods or Not proposed in the Resolution Plan services produced or rendered by the corporate debtor;

(m) change in technology used by the Not proposed in the Resolution Plan corporate debtor; and (n) obtaining necessary approvals Clause 5 of Part A at Pages 21-22 of from the Central and State the Resolution Plan Governments and other authorities.

III. Mandatory contents of Resolution Plan in terms of regulation 38 of CIRP Regulations:

Ref to Requirement How dealt with in the Plan relevant Reg.

38(1) The amount due to the Clause 2(ii) in Part B at Pages operational creditors under a 27-28 of the Resolution Plan. resolution plan shall be given priority in payment over financial creditors.

KOLKATA BENCH In re approval of Resolution Plan of S.P.S. Metal Cast & Alloys Pvt. Ltd. I.A. (IB) No. 297/KB/2021 in C.P. (IB) No. 1495/KB/2018 Ref to Requirement How dealt with in the Plan relevant Reg.

38(1A) A resolution plan shall include Clause 1 in Part B at Pages 22- a statement as to how it has 24 of the Resolution Plan. dealt with the interests of all stakeholders, including financial creditors and operational creditors of the corporate debtor.

38(1B) A resolution plan shall include a Clause 14 in Part B at Pages 34-statement giving details if the 35 of the Resolution Plan. resolution applicant or any of its related parties has failed to implement or contributed to the failure of implementation of any other resolution plan approved by the Adjudicating Authority at any time in the past.

38(2) A resolution plan shall provide:

(a) the term of the plan and its Page 24 of the Resolution Plan. implementation schedule;

KOLKATA BENCH In re approval of Resolution Plan of S.P.S. Metal Cast & Alloys Pvt. Ltd. I.A. (IB) No. 297/KB/2021 in C.P. (IB) No. 1495/KB/2018 Ref to Requirement How dealt with in the Plan relevant Reg.

(b) the management and control Clause 4 (b) and (c) in Part A at of the business of the Page 21 of the Resolution Plan. corporate debtor during its term; and (c) adequate means for Clause 4 in Part A at Page 20-21 supervising its and Clause 13 in Part B at Page implementation. 34 of the Resolution Plan.

38(3) A resolution plan shall demonstrate that – (a) it addresses the cause of Clause 3 in Part A at Pages 18-default; 19 of the Resolution Plan.

(b) it is feasible and viable; Clause 1 (f) in Part A at Page 25 of the Resolution Plan.

(c) it has provisions for its Clause 3(c) in Part A at Page 19 effective implementation; of the Resolution Plan.

(d) it has provisions for Clause 5 of Part A at Pages 21-approvals required and the 22 of the Resolution Plan. timeline for the same; and KOLKATA BENCH In re approval of Resolution Plan of S.P.S. Metal Cast & Alloys Pvt. Ltd. I.A. (IB) No. 297/KB/2021 in C.P. (IB) No. 1495/KB/2018 Ref to Requirement How dealt with in the Plan relevant Reg.

(e) the Resolution Applicant Part A at Pages 12-18 of has the capability to Resolution Plan. implement the resolution plan.

Details of Resolution Plan/Payment Schedule 8. The relevant information with regard to the amount claimed, amount admitted and the amount proposed to be paid by the Resolution Applicant i.e., Bravo Sponge Iron Private Limited, under the said resolution plan is tabulated as under: (Rs. in Crore)

Sl Creditor Amount Amount % to Amount No Claimed Admitted be proposed in (in Rs.) (in Rs.) paid Resolution Plan (in Rs.) 1. ----- ----- N/A Actual CIRP payment Cost Secured 2. Financial ---- 9.9875 Creditors 146.16 146.16 3. ___ 1.7625 Unsecured Financial Creditors 4 143.24 137.75 _ 0.0200 Operational Creditors

KOLKATA BENCH In re approval of Resolution Plan of S.P.S. Metal Cast & Alloys Pvt. Ltd. I.A. (IB) No. 297/KB/2021 in C.P. (IB) No. 1495/KB/2018 TOTAL 292.40 283.91 11.7700 + Actual CIRP costs

9. The total plan size is approximately ₹21.770 Crore + CIRP costs, inclusive of the Working Capital of ₹10.00 Crore for development of the assets and operation of the Corporate Debtor, as tabulated hereunder:

Sl No Type of debts Amount proposed (Rs. Crore)

1. Estimated CIRP Cost Actual

2. Secured Financial Creditors 9.9875

3. Unsecured Financial Creditors 1.7625

4. Operational Creditors 0.0200

Total payment to creditors 11.770

5. 10.00 Capital expenditure and working capital for development of the assets and operations of the corporate debtor3.

Total Plan Outlay 21.770

3 Page 77 of the I.A.

KOLKATA BENCH In re approval of Resolution Plan of S.P.S. Metal Cast & Alloys Pvt. Ltd. I.A. (IB) No. 297/KB/2021 in C.P. (IB) No. 1495/KB/2018 10. Summary of the financial proposal/ payments under the Resolution Plan dated 14.01.2021 of Bravo Sponge Iron Private Limited, is tabulated hereunder:

Particulars Amount The Resolution Applicant proposes to Admissible Debt to be paid make upfront payment of the actual CIRP upfront to the CIRP costs cost. Admissible Debt to be paid upfront to the Operational The Resolution Applicant proposes to make upfront payment of ₹0.0200 Crore Creditors to the operational creditors.

Payment to Secured Financial The Resolution Applicant proposes to Creditor make an upfront payment of ₹5.000Crore, ₹2.4950Crore in the second tranche and ₹2.4925Crore in the third tranche. Payment to the Unsecured The Resolution Applicant proposes to Financial Creditor make an upfront payment of ₹0.875Crore, ₹0.4425Crore in the second tranche and ₹0.4450Crore in the third tranche. Working Capital The Resolution Applicant proposes to infuse ₹10.00Crore within 24-48 months from the approval of Resolution Plan.

Details on Management / Implementation and Relief as per the Resolution Plan- Salient Features

11. The Resolution Plan also provides for- 11.1. Management of Company after resolution in Clause 2 of Part A at Pages 8-10 of the Plan; 11.2. Term of the Resolution Plan as per Clause 2 of Part B at Pages 27-28 of the Plan;

KOLKATA BENCH In re approval of Resolution Plan of S.P.S. Metal Cast & Alloys Pvt. Ltd. I.A. (IB) No. 297/KB/2021 in C.P. (IB) No. 1495/KB/2018 11.3. Implementation and Supervision of the resolution plan in Clause 4 of Part A at Pages 20-21 of the Plan; 11.4. Indicative timelines of events for implementation in Clause 2 of Part B at Pages 27-28 of the Plan.

Waivers, Reliefs and Exemptions 12. The reliefs and concessions sought by the Resolution Applicant from the Adjudicating Authority are set out below for the successful implementation of the Resolution Plan. The orders thereon are indicated against each.

SI Ref. to Reliefs/Concessions/Grants Order Thereon No. Clause sought

1. 20 (i) Replacement and As far as meetings of reconstitution of the existing shareholders are board of directors with the concerned, approval to the new board of directors Resolution Plan accorded without any requirement of by this Adjudicating any board/shareholders Authority shall be deemed resolution or any other to be requisite approval corporate approval. for all such meetings or dispensation from conducting meetings of shareholders. However, all regulatory compliances such as filing with the RoC, payment of filing fees on documents etc. will have to be complied with. RoC cannot be expected to grant automatic approval

KOLKATA BENCH In re approval of Resolution Plan of S.P.S. Metal Cast & Alloys Pvt. Ltd. I.A. (IB) No. 297/KB/2021 in C.P. (IB) No. 1495/KB/2018 SI Ref. to Reliefs/Concessions/Grants Order Thereon No. Clause sought for such activities without the forms being filed on behalf of the corporate debtor.

2. 20 (ii) Consolidation of the issued As far as meetings of and paid-up equity share shareholders for issue of capital of the Company and such new equity shares issuance of the shares as and for cancellation of contemplated in the existing equity shares of resolution plan without any the corporate debtor are requirement of any concerned, approval to the board/shareholders resolution Resolution Plan accorded or any other corporate by this Adjudicating approval. Authority shall be deemed to be requisite approval for all such meetings or dispensation from conducting meetings of shareholders. However, all regulatory compliances such as filing with the RoC, payment of filing fees on documents etc. will have to be complied with. RoC cannot be expected to grant automatic approval for such activities without

KOLKATA BENCH In re approval of Resolution Plan of S.P.S. Metal Cast & Alloys Pvt. Ltd. I.A. (IB) No. 297/KB/2021 in C.P. (IB) No. 1495/KB/2018 SI Ref. to Reliefs/Concessions/Grants Order Thereon No. Clause sought the forms being filed on behalf of the corporate debtor. This fact has also been recognised to be so by the Ministry of Corporate Affairs vide General Circular No.IBC/01/2017 dated 25.10.2017 issued under File No.30/14/2017- Insolvency.

3. 20 (iii) Restructuring and increase in Granted, only for restructurings within the authorized share capital of the Plan period, and not the Company as aforesaid in perpetuity. without any requirement of Notwithstanding the any board/shareholders above, the company shall resolution or any other file all necessary forms corporate approval and along with applicable fee without payment of any fee with the jurisdictional and or duty for such increase RoC, and no exemption is granted in this regard.

4. 20 (iv) Amendment and the Granted within the Plan replacement of the MOA and period, and not in AOA of the Company/change perpetuity. of the name of the Company without any requirement of any board/shareholders

KOLKATA BENCH In re approval of Resolution Plan of S.P.S. Metal Cast & Alloys Pvt. Ltd. I.A. (IB) No. 297/KB/2021 in C.P. (IB) No. 1495/KB/2018 SI Ref. to Reliefs/Concessions/Grants Order Thereon No. Clause sought resolution or any other corporate approval.

5. 20 (v) All legal proceedings Granted in terms of the pertaining to any claims Ghanashyam Mishra which are ongoing before any and Sons Pvt Ltd v court, tribunal quasi-judicial Edelweiss Asset authority or any Government Reconstruction Company authority be quashed and such Ltd,4 wherein the Hon'ble claim shall stand extinguished Supreme Court has held against the Company that once a resolution plan is duly approved by the 6. 20 (vi) All on-going litigation against Adjudicating Authority the Company impacting the under sub-section (1) of implementation of the section 31, the claims as Resolution Plan shall not be provided in the resolution further proceeded with. plan shall stand frozen and will be binding on the Corporate Debtor and its employees, members, creditors, including the Central Govt, any State Govt or any local authority, guarantors and other stakeholders. On the date of approval of resolution plan by the Adjudicating Authority,

4 2021 SCC OnLine SC 313 decided on 13.04.2021.

KOLKATA BENCH In re approval of Resolution Plan of S.P.S. Metal Cast & Alloys Pvt. Ltd. I.A. (IB) No. 297/KB/2021 in C.P. (IB) No. 1495/KB/2018 SI Ref. to Reliefs/Concessions/Grants Order Thereon No. Clause sought all such claims, which are not a part of resolution plan, shall stand extinguished and no person will be entitled to initiate or continue any proceedings in respect to a claim, which is not part of the resolution plan. The Hon'ble Supreme Court also held that all the dues including the statutory dues owed to the Central Govt, any State Govt or any local authority, if not part of the resolution plan, shall stand extinguished and no proceedings in respect of such dues for the period prior to the date on which the Adjudicating Authority grants its approval under section 31 could be continued.

7. 20 (vii) Condonation/waiver of all Whatever protection is past irregularities and non-available to the corporate compliances by the Company debtor in terms of section

KOLKATA BENCH In re approval of Resolution Plan of S.P.S. Metal Cast & Alloys Pvt. Ltd. I.A. (IB) No. 297/KB/2021 in C.P. (IB) No. 1495/KB/2018 SI Ref. to Reliefs/Concessions/Grants Order Thereon No. Clause sought under the Companies Act, 32A of the Code will in 2013, Income Tax Act, EPF, any case continue to be ESI, DLI, VAT, Entry-tax, available. Therefore, no GST, Service Tax, Excise specific orders are Duty, Custom Duty, Allied necessary in this regard. levies of excise and custom duty, and other similar compliances.

8. 20 Extinguishment of all Granted in terms of the (viii) existing statutory dues and Ghanashyam Mishra waiver of and Sons Pvt Ltd v interest/damages/penalty etc. Edelweiss Asset against the statutory dues and Reconstruction Company condonation of delay in Ltd,5 wherein the Hon'ble submission of returns. Supreme Court has held that once a resolution plan is duly approved by the Adjudicating Authority under sub-section (1) of section 31, the claims as provided in the resolution plan shall stand frozen and will be binding on the Corporate Debtor and its employees, members, creditors, including the Central Govt, any State

5 2021 SCC OnLine SC 313 decided on 13.04.2021.

KOLKATA BENCH In re approval of Resolution Plan of S.P.S. Metal Cast & Alloys Pvt. Ltd. I.A. (IB) No. 297/KB/2021 in C.P. (IB) No. 1495/KB/2018 SI Ref. to Reliefs/Concessions/Grants Order Thereon No. Clause sought

Govt or any local authority, guarantors and other stakeholders. On the date of approval of resolution plan by the Adjudicating Authority, all such claims, which are not a part of resolution plan, shall stand extinguished and no person will be entitled to initiate or continue any proceedings in respect to a claim, which is not part of the resolution plan. The Hon'ble Supreme Court also held that all the dues including the statutory dues owed to the Central Govt, any State Govt or any local authority, if not part of the resolution plan, shall stand extinguished and no proceedings in respect of such dues for the period prior to the date on which the Adjudicating Authority grants its approval under

KOLKATA BENCH In re approval of Resolution Plan of S.P.S. Metal Cast & Alloys Pvt. Ltd. I.A. (IB) No. 297/KB/2021 in C.P. (IB) No. 1495/KB/2018 SI Ref. to Reliefs/Concessions/Grants Order Thereon No. Clause sought section 31 could be continued.

With respect to condonation of delay, if is for the respective authorities to consider, keeping the spirit of the IBC in view.

9. 20 (ix) Exemption from the payment Not granted. The of the stamp duty & other Resolution Plan cannot be costs and expenses required to in violation of any law for be incurred. the time being in force. Therefore, if there are any documents on which stamp duty is required to be paid, or in respect of which non-registration will have adverse consequences, they shall apply with full force and no waiver can be granted in this regard.

10. 20 (x) Immunity from all inquiries, Whatever protection is investigations, notices, cause available to the corporate of action, suits, claims, debtor in terms of section disputes litigation, arbitration 32A of the Code will in or other judicial, regulatory or any case continue to be KOLKATA BENCH In re approval of Resolution Plan of S.P.S. Metal Cast & Alloys Pvt. Ltd. I.A. (IB) No. 297/KB/2021 in C.P. (IB) No. 1495/KB/2018 SI Ref. to Reliefs/Concessions/Grants Order Thereon No. Clause sought administrative proceedings available. Therefore, no against, the Company or the specific orders are affairs of the Company, necessary in this regard. pending or threatened, present or future, in relation to any period prior to the acquisition of control by the Resolution Applicant over the Company.

11. 20 (xi) All inquiries, investigation, Whatever protection is notices, cause of action, suits, available to the corporate claims, disputes, litigation, debtor in terms of section arbitration or other judicial, 32A of the Code will in regulatory or administrative any case continue to be proceedings against, the available. Therefore, no Company or the affairs of the specific orders are Company, pending or necessary in this regard. threatened, present or future, in relation to any period prior to the acquisition of control by the Resolution Applicant over the Company shall stand extinguished and accordingly all such proceedings, inquiries, investigations, etc. shall be disposed of and all liabilities or obligations in relation there to, whether or KOLKATA BENCH In re approval of Resolution Plan of S.P.S. Metal Cast & Alloys Pvt. Ltd. I.A. (IB) No. 297/KB/2021 in C.P. (IB) No. 1495/KB/2018 SI Ref. to Reliefs/Concessions/Grants Order Thereon No. Clause sought not set out in the balance sheet of the Company or the profit and loss account statements of the Company, will be deemed to have been written off in full and permanently extinguished by virtue of the NCLT approving the Resolution Plan and the Resolution Applicant or their nominee directors shall at no point of time be, directly or indirectly, held responsible or liable in relation thereto. By virtue of the order of the NCLT approving the Resolution Plan, all new inquiries, investigations, notices, suits, claims, disputed, litigation, arbitration or other judicial, regulatory or administrative proceedings will not be initiated or admitted if these relate to any period prior to the Closing Date, against the Company or any of its employees or directors who are appointed or who remain

KOLKATA BENCH In re approval of Resolution Plan of S.P.S. Metal Cast & Alloys Pvt. Ltd. I.A. (IB) No. 297/KB/2021 in C.P. (IB) No. 1495/KB/2018 SI Ref. to Reliefs/Concessions/Grants Order Thereon No. Clause sought in employment or directorship after the acquisition of control by Resolution Applicant over the Company or pursuant to the implementation of the Resolution Plan.

12. 20 (xii) Existing promoters, With respect to the existing promoters, shareholders, managers, shareholders, managers, directors, officers, directors, officers, employees, workmen or employees, workmen or other other personnel of the personnel of the Company Company, this cannot be called shall continue to be liable for waiver, relief or all liabilities, claim, demand, exemption. Why this direction is obligations, penalties etc. required is also not clear. arising out of any (i) proceedings, inquiries, investigations, order, show causes, notices, suits, litigation etc. (including those arising out of any orders passed by the NCLT pursuant to Sections 43,45,49,50,66,68,70,71,72,7 3,74 of the Code), whether Whatever protection is civil or criminal, pending available to the corporate before any authority, court, debtor in terms of section tribunal or any other forum 32A of the Code will in KOLKATA BENCH In re approval of Resolution Plan of S.P.S. Metal Cast & Alloys Pvt. Ltd. I.A. (IB) No. 297/KB/2021 in C.P. (IB) No. 1495/KB/2018 SI Ref. to Reliefs/Concessions/Grants Order Thereon No. Clause sought prior to the acquisition of any case continue to be control by the Resolution available. Applicant over the Company or (ii) that may arise out of any proceedings, inquiries, investigations, orders, show cause, notices, suits, litigations etc ((including those arising out of any orders passed by the NCLT pursuant to Sections 43,45,49,50,66,68,70,71,72,7 3,74 of the Code), whether civil or criminal, that may be initiated or instituted post the approval of the Resolution Plan by the NCLT on account of any transactions entered into, or decisions or action taken by, such existing, promoters, shareholders, managers, directors, officers, employees, workman or other personnel of the Company, and the Company or Resolution Applicant shall at no point of time be, directly or KOLKATA BENCH In re approval of Resolution Plan of S.P.S. Metal Cast & Alloys Pvt. Ltd. I.A. (IB) No. 297/KB/2021 in C.P. (IB) No. 1495/KB/2018 SI Ref. to Reliefs/Concessions/Grants Order Thereon No. Clause sought indirectly, held responsible or liable in relation thereto.

13. 20(xiii) All penalties and punishment Whatever protection is under the Companies Act, available to the corporate 2013, FEMA, PMLA, and all debtor in terms of section other applicable laws as may 32A of the Code will in be applicable due to the any case continue to be handling of the business and available. management of affairs prior to the Resolution Applicant becoming the shareholders of the Company, shall stand condoned/waived by the order of the NCLT. Further the Company shall not be required to pay any penalty or apply for compounding due to delay in the audit of the financial statements for any financial year(s) or filing of annual return, or any other return etc. Such delays shall stand condoned/waived and regularized by virtue of the order of the NCLT.

14. 20(xiv) All Corporate guarantee Granted. issued by the Company, whether invoked or not, shall

KOLKATA BENCH In re approval of Resolution Plan of S.P.S. Metal Cast & Alloys Pvt. Ltd. I.A. (IB) No. 297/KB/2021 in C.P. (IB) No. 1495/KB/2018 SI Ref. to Reliefs/Concessions/Grants Order Thereon No. Clause sought be deemed to have been discharged and released in full with effect from the closing date.

15. 20(xv) (a) The Company and the Not granted. The Resolution Applicant shall be Resolution Plan cannot be granted an exemption from all in violation of any law for taxes, levies, fees, transfer the time being in force. charges, transfer premiums, and and surcharges that arise from or relate to implementation of the Resolution Plan, including exemption from any transfer premium or any other charges by whatever name called leviable or to be levied by Assansol Durgapur Development Authority with reference to 12 acres (more or less)of leasehold land of Assansol Durgapur Development Authority. (b) Liability arising from transfer of land from the name of Corporate Debtor to Resolution Applicant or any of its group Company by KOLKATA BENCH In re approval of Resolution Plan of S.P.S. Metal Cast & Alloys Pvt. Ltd. I.A. (IB) No. 297/KB/2021 in C.P. (IB) No. 1495/KB/2018 SI Ref. to Reliefs/Concessions/Grants Order Thereon No. Clause sought

Assansol Durgapur Development Authority (ADDA) e.g. Transfer Premium, fee or any other levy by whatever name called shall be waived and shall not be required to be paid. ADDA shall grant permission within 15 days from the date of approval of the Resolution Plan for mortgaging 12 acres of land favoring financial institutions/banks for obtaining finance for modernization, upgradation and expansion of the Corporate Debtor’s plant without any charge/Transfer fee or any other charge for creation of such mortgage.

16. 20(xvi) Any income tax and This is for the relevant Minimum Alternate Tax tax (MAT) liability or authorities to consider, consequences (including and not in the nature of a interest, fine, penalty, etc.) on waiver, concession or the company, the Resolution relief to be granted by Applicant and its this shareholders in account of KOLKATA BENCH In re approval of Resolution Plan of S.P.S. Metal Cast & Alloys Pvt. Ltd. I.A. (IB) No. 297/KB/2021 in C.P. (IB) No. 1495/KB/2018 SI Ref. to Reliefs/Concessions/Grants Order Thereon No. Clause sought various steps as proposed for Adjudicating Authority. implementation of the Resolution Plan, including but not limited to liabilities if any under Section 56, Section 41, Section 43, Section 28, Section 115JB and Section 79 of the Income Tax Act, 19__ shall stand waived without requirement of any further approvals from any other authority whatsoever.

17. 20(xvii Grant of carryover of This is for the relevant ) entitlement/losses, tax unabsorbed depreciation and authorities to consider, other exemption under and not in the nature of a Income Tax Act to continue waiver, concession or remaining available to the relief to be granted by company. this Adjudicating Authority.

18. 20(xvii Any contracts entered into or A carte blanche of this i) obligations/encumbrances/lic nature cannot be granted enses entered into by the in favour of the corporate erstwhile members of the debtor. Board of Directors and/or Corporate Debtor for dilution of the Corporate Debtor’s

KOLKATA BENCH In re approval of Resolution Plan of S.P.S. Metal Cast & Alloys Pvt. Ltd. I.A. (IB) No. 297/KB/2021 in C.P. (IB) No. 1495/KB/2018 SI Ref. to Reliefs/Concessions/Grants Order Thereon No. Clause sought right and interests shall stand annulled forthwith.

19. All claims not admitted by Granted in terms of the 20(xix) resolution professional but Ghanashyam Mishra accounted in books shall not and Sons Pvt Ltd v be paid and shall stand Edelweiss Asset extinguished against the Reconstruction Company Company. Ltd,6 wherein the Hon'ble Supreme Court has held that once a resolution plan is duly approved by the Adjudicating Authority under sub-section (1) of section 31, the claims as provided in the resolution plan shall stand frozen and will be binding on the Corporate Debtor and its employees, members, creditors, including the Central Govt, any State Govt or any local authority, guarantors and other stakeholders. On the date of approval of resolution plan by the Adjudicating Authority,

6 2021 SCC OnLine SC 313 decided on 13.04.2021.

KOLKATA BENCH In re approval of Resolution Plan of S.P.S. Metal Cast & Alloys Pvt. Ltd. I.A. (IB) No. 297/KB/2021 in C.P. (IB) No. 1495/KB/2018 SI Ref. to Reliefs/Concessions/Grants Order Thereon No. Clause sought all such claims, which are not a part of resolution plan, shall stand extinguished and no person will be entitled to initiate or continue any proceedings in respect to a claim, which is not part of the resolution plan. The Hon'ble Supreme Court also held that all the dues including the statutory dues owed to the Central Govt, any State Govt or any local authority, if not part of the resolution plan, shall stand extinguished and no proceedings in respect of such dues for the period prior to the date on which the Adjudicating Authority grants its approval under section 31 could be continued.

20. 20(xx) (a) Approval of Ministry of This is for the relevant tax authorities to Environment and Forest consider, and not in the (MOEF) to be considered on nature of a waiver,

KOLKATA BENCH In re approval of Resolution Plan of S.P.S. Metal Cast & Alloys Pvt. Ltd. I.A. (IB) No. 297/KB/2021 in C.P. (IB) No. 1495/KB/2018 SI Ref. to Reliefs/Concessions/Grants Order Thereon No. Clause sought merit without any reference concession or relief to be granted by this to past details of approval not Adjudicating Authority. received from RP and requirement of reference of past approval is waived. Further MOEF and other sanctioning/approving authorities are to expedite the process of grant of pollution and other necessary approval for enhanced capacity of the plant to enable expeditious implementation of upgradation, by refurbishing of existing plant. All other approvals required whether statutory or otherwise shall be granted by concerned authorities expeditiously and in event within thirty days from the date of application for the same.

21. 20(xxi) All existing liabilities save to Granted. the extent paid from out of bid amount, including the KOLKATA BENCH In re approval of Resolution Plan of S.P.S. Metal Cast & Alloys Pvt. Ltd. I.A. (IB) No. 297/KB/2021 in C.P. (IB) No. 1495/KB/2018 SI Ref. to Reliefs/Concessions/Grants Order Thereon No. Clause sought following statutory liability, shall stand extinguished.

(a)Any payment due under power supply arrangement without affecting future re-connectivity. (b)EPF, ESI, DLI, VAT, Entry-tax, GST, Service Tax, Excise Duty, Custom Duty, Allied levies of excise and custom duty, and similar other liabilities.

22. 20(xxii Permission to be hereby given Not granted at this stage. ) to enter into arrangement/merger with Bravo Sponge Iron Private Limited or any other companies in the Group under Section 230, 232 and all other applicable provisions of Companies Act, 2013 and other related statutory provisions as may be decided by the other related areas for better and cost-effective operation.

KOLKATA BENCH In re approval of Resolution Plan of S.P.S. Metal Cast & Alloys Pvt. Ltd. I.A. (IB) No. 297/KB/2021 in C.P. (IB) No. 1495/KB/2018 SI Ref. to Reliefs/Concessions/Grants Order Thereon No. Clause sought

23. 20((xxi The Registrar of Companies, The duties of the Registrar ii) West Bengal shall give effect of Companies do not to appointment of the include taking on record directors (Reconstituted and implementing the Board) of the Resolution Plan. In so far as Applicant through back end compliances are process or any other concerned, all necessary applicable mode for giving forms along with filing effect to the Resolution Plan. fees shall be filed with the Registrar of Companies to enable him to take the same on record.

24. 20(xxi The authorities under GST This is for the relevant tax v) Laws shall give effect to authorities to consider, and addition in authorised not in the nature of a signatories/authorised waiver, concession or persons in GST portal of relief to be granted by this Corporate Debtor to give Adjudicating Authority. effect to the Resolution Plan.

25. (a) Operation level shall need The implication of this approval of Ministry of waiver is not clear. Environment and Forest (MOEF). Presentation of prior detail not received from Resolution Professional shall be waived.

KOLKATA BENCH In re approval of Resolution Plan of S.P.S. Metal Cast & Alloys Pvt. Ltd. I.A. (IB) No. 297/KB/2021 in C.P. (IB) No. 1495/KB/2018 13. Findings

13.1. On hearing the submissions made by the learned Counsel for the Resolution Professional, and perusing the records, we find that the Resolution Plan has been approved with 99.83% voting share. As per the CoC, the Plan meets the requirement of being viable and feasible for revival of the Corporate Debtor. By and large, all the compliances have been done by the RP and the Resolution Applicant for making the Plan effective after approval by this Bench.

13.2. On perusal of the Resolution Plan, it is found that the Resolution Applicant has considered the dates for making payments on assumption that the Resolution Plan would be approved by the Adjudicating Authority on 08.02.2021. Firstly, we discourage this practise of making assumptions. Secondly, the entire timeline of payment has been planned on the assumption that the Resolution Plan would be approved on 08.02.2021. The Resolution Applicant has proposed to make payments on 31.03.2021, 30.06.2021 and 30.09.2021 subject to approval of the Resolution Plan on 08.02.2021 by the Adjudicating Authority.

13.3. We direct the Resolution Professional and the Resolution Applicant to decide on an appropriate timeline for payment of resolution amount on approval of the Resolution Plan.

13.4. On perusal of the documents on record, we are satisfied that the Resolution Plan is in accordance with sections 30 and 31 of the Code and also complies with regulations 37, 38 and 39 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. No circumstances exist that militate against grant of approval for the Resolution Plan

KOLKATA BENCH In re approval of Resolution Plan of S.P.S. Metal Cast & Alloys Pvt. Ltd. I.A. (IB) No. 297/KB/2021 in C.P. (IB) No. 1495/KB/2018 Orders

14. Therefore, subject to the observations made in this Order, we hereby accord our approval to the Resolution Plan. The Resolution Plan shall form part of this Order. 15. As far as the question of granting time to comply with the statutory obligations or seeking sanctions from governmental authorities is concerned, the Resolution Applicant is directed to do the same within one year as prescribed under section 31(4) of the Code. 16. Any relief sought in the Resolution Plan, where any contract, agreement, understanding, proceeding, action, notice etc. not specifically identified, or is for a future contingency, is, at this point of time, rejected. 17. The Resolution Plan as approved is binding on the Corporate Debtor and other stakeholders involved so that the revival of the Corporate Debtor can come into force with immediate effect. 18. The Moratorium imposed under section 14 shall cease to have effect from the date of this order. 19. The Resolution Professional shall stand discharged from his duties with effect from the date of this Order. However, he shall perform his duties in terms of the Resolution Plan as approved by this Adjudicating Authority. 20. The Resolution Professional is further directed to handover all records, documents and properties of the Corporate Debtor to the Resolution Applicant to enable the Resolution Applicant to finalize the further line of action required for starting of the operations. 21. In case of non-compliance of this order or withdrawal of Resolution Plan, the performance security amount already paid by the Resolution Applicant shall be liable to be forfeited. 22. Liberty is hereby granted for moving any Application if required in connection with implementation of this Resolution Plan.

KOLKATA BENCH In re approval of Resolution Plan of S.P.S. Metal Cast & Alloys Pvt. Ltd. I.A. (IB) No. 297/KB/2021 in C.P. (IB) No. 1495/KB/2018 23. The Resolution Professional shall file a copy of this Order with the Registrar of Companies, West Bengal, inter alia for updating the status of the Corporate Debtor. Additionally, the Registry shall send a copy of this order to the Registrar of Companies, West Bengal. 24. The application bearing IA (IB) No. 297/KB/2021 and the main Company Petition bearing CP (IB) No. 1495/KB/2018 shall both stand disposed of accordingly. 25. Certified copy of this Order be issued on demand to the concerned parties, upon due compliance of requisite formalities.

Harish Chander Suri Rajasekhar V.K. Member (Technical) Member (Judicial) 25.11.2021

GGRB (LRA)