Encore Asset Reconstruction Company ... vs Calyx Chemicals & Pharmaceuticals Ltd. ...

[ arising out of Order dated 16th April, 2019 by NCLT, Mumbai Bench, in MA 1346 of 2018 in CP No. 1554/I&BC/MB/MAH/2017 ]

IN THE MATTER OF:

Encore Asset Reconstruction Company Private Limited Having Its Registered Office at: 15th Floor, Eros Corporate Towers, Nehru Place, New Delhi 110019 ...Appellant

Versus

1. Calyx Chemicals & Pharmaceuticals Limited Through The Resolution Professional Having Address At: 2602, Fairfield, A Wing, Lodha Luxuria, Majiwada, Thana West, Thane-400 061

2. Ms. Charu Desai Resolution Professional of Corporate Debtor 2602, Fairfield, A Wing, Lodha Luxuria, Majiwada, Thana West, Thane-400 061

3. Topnotch Chemicals Private Limited Having Its Registered Office At: Plot No. C-116, Pawana Village, T.T.C. Industrial Area, Thane, Belapur Road, Navi Mumbai- 400 072

4. Khilari Infrastructure Private Limited Having Its Registered Office At: 101, Prabhat Centre, Sector-1A, Belapur, Mumbai- 400 614

5. Dena Bank Having Its Office At: Dena Corporate Centre, C-10, G-Block Bandra Kurla Complex, Bandra-East, Mumbai - 400 051 ...Respondents 2

Present: For Appellant : Mr. Krishnendu Datta, Mr. Abhirup Das Gupta, Mr. Ishaan Duggal and Ms. Niharica Khanna, Advocates

JUDGMENT

SUDHANSU JYOTI MUKHOPADHAYA, J.

In the 'Corporate Insolvency Resolution Process' against 'Calyx

Chemicals & Pharmaceuticals Limited' (Corporate Debtor), the 'resolution

plan' submitted by 'M/s. Khilari Topnotch Consortium' having approved by

the Adjudicating Authority (National Company Law Tribunal), Mumbai Bench

on 16th April, 2019, the said order is under challenge in this appeal.

2. The brief facts of the case is that on 31st August, 2018, two 'resolution

plans' were received by the 'Resolution Professional', one by 'Consortium of

Khilari-Topnotch' and other by 'Shamrock Pharmachemi Pvt. Ltd.'. Both the

plans were considered by the 'Committee of Creditors' in the various meetings

conducted by the 'Resolution Professional' and pursuant to e-voting held on

26-30 October, 2018 on the revised resolution plan of Khilari-Topnotch

Consortium, along with its latest commercial offer, the 'Committee of

Creditors' approved the same by 77.08% voting share.

3. Learned counsel appearing on behalf of the Appellant submitted that

the impugned order approving the 'resolution plan' submitted by consortium

of the 3rd and 4th Respondent amounts to accepting 95.2% waiver/haircut of

the dues. The assignor of the Appellant i.e. Dena Bank, recorded its dissent

Company Appeal (AT) (Insolvency) No. 657 of 2019 3

against the haircut of more than 95% proposed by the 'resolution plan' and,

therefore, abstained from voting the 'resolution plan'. The Appellant -

'assignee of Dena Bank' thereafter issued numerous e-mails to 'Resolution

Professional' and on 2nd May, 2019 requested for a copy of the approved

resolution plan. However, it was not supplied.

4. It was submitted that the Adjudicating Authority has failed to consider

that a 'resolution plan' compels the 'Financial Creditors' to take a haircut of

more than 95% and thereby the asset of the 'Corporate Debtor' has been

handed over to the 'resolution applicant' for meagre amount of Rs. 41.65

Lakhs which is 5% of the amount the Appellant (assignee) would have received

in the event of liquidation. Therefore, according to the Appellant, the interest

of the lenders has not been balanced.

5. Learned counsel for the Appellant - 'assignee of Dena Bank' further

submitted that the Appellant is the only 'Financial Creditor' holding exclusive

mortgage and cannot be treated at par with other 'Financial Creditors'.

Reliance has been placed on the decision of this Appellate Tribunal in 'Binani

Industries Limited vs. Bank of Baroda & Anr.' - '2018 SCC OnLine NCLAT

565' to suggest that the Appellant is not similarly situated with the other

'Financial Creditors'.

6. From the impugned order, we find that the Adjudicating Authority

noticed the admitted claim against the 'Corporate Debtor' and the trade

payables forming part of the 'Operational Creditors' , the detailed chart of

'Financial Creditors' including 'State Bank of India', 'Punjab National Bank',

'Exim', 'Allahabad Bank', 'Jammu & Kashmir Bank', 'Bank of India', 'Canara

Company Appeal (AT) (Insolvency) No. 657 of 2019 4

Bank', 'Corporation Bank', 'IDBI', 'Oriental Bank of Commerce', 'Bank of

Maharashtra', 'Uco Bank' and 'SBI Global Factors' has been shown and the

details of 'debt' forming part of the 'Operational Creditors' has also been

noticed by the Adjudicating Authority. After taking into consideration of the

aforesaid aspects including the amount payable to the 'employees', 'related

parties' and the 'statutory dues' as also viability and feasibility of the

'resolution plan', the impugned order of approval has been passed by the

Adjudicating Authority.

7. We find no substance in the grievances being made by the Appellant.

In absence of any discrepancies or discrimination, this Appellate Tribunal is

not inclined to interfere with the impugned order. The appeal is dismissed.

No costs.

[Justice S.J. Mukhopadhaya] Chairperson

[ Justice A.I.S. Cheema ] Member (Judicial)

[ Kanthi Narahari ] Member (Technical) New Delhi

30th August, 2019

//ns//

Company Appeal (AT) (Insolvency) No. 657 of 2019