Sreeram E Techno School Pvt. Ltd vs Beans And More Hospitality Pvt Ltd, ...

Sreeram E. Techno School Pvt. Ltd. ...Appellant

Versus

Beans and More Hospitality Pvt. Ltd. Through R.P. Prabhjit Singh Soni ...Respondent

Present: For Appellant : Mr. Rakesh Kumar and Mr. Anjenya Mishra, Advocates

ORDER

11.09.2019 'Shree Siyaram Automations Private Limited' (now 'Shreeram

E Techno School Private Limited' - Appellant herein) moved an application under

Section 7 of the Insolvency and Bankruptcy Code, 2016 (for short, 'the I&B

Code'), pursuant to which 'Corporate Insolvency Resolution Process' was

initiated against 'Beans and More Hospitality Pvt. Limited (Corporate Debtor). In

the said case, the 'resolution plan' was submitted by one Mr. Abhay Jain,

'Promoter', was considered by the 'Committee of Creditors' in its meeting on 12th

November, 2018 by voting of 74.19% of voting share discussing all aspects of

approved 'resolution plan'. The Adjudicating Authority taken into consideration

all the facts and the plan being in consonance of Section 30(2) of the 'I&B Code'

approved the said plan by impugned order dated 19th July, 2019. Relevant

portion of which reads as :

"13. It is stated in the CA that the Resolution Plan

envisages that the Financial Creditors are 2

proposed to be paid against the full and final

settlement of their entire financial/ operational

debt against the Corporate Debtor including

contingent liabilities), as tabulated on page 16 of

the typed set of the CA.

S. Particulars Amount o/s Amount o/s in Proposed Remarks No. as per claims financial liability post admitted As statement but no INR on CIRP date claim INR received/admitted INR

1. CIRP Cost 33,45,000 To be paid on Priority

2. Workmen & NIL Provisions 5,00,000 Full amount Employee to be paid within 6 Months

3. Employee NIL If Any Full Amount Amount to be benefit (dues) carried forward and pay as and when become payable

4. Financial 198105341 198105341 198105341 Full amount Creditor within 12 (unrelated) months or earlier if possible

5. Financial 675457977 675457977 675457977 Full amount Creditor within 24 (related) months or earlier if possible

6. Government NIL If any Full Amount Despite no liabilities claims were submitted, RA proposes to make full 3

payment of Govt. dues

7. Government NIL Dues if Any Government Dues dues. No notice received if any amount pending it will be paid.

8. Operational NIL Amount Due Pending Although Creditors amount these claims were not submitted and verified by the RP thus under IBC Code no payment is due to them.

Will be paid 50% if raised pending bill

Total 877408318 877408318

14. It is also submitted that the Resolution Plan

envisages the continuation of the Corporate

Debtor as a "going concern" and previous

management will run the company to make it

viable so that society and other stakeholder will

gain and keeping company as going concern and

continuity of the company will contribute

significantly to the society and government by

putting the natural resources to best use and

contributing significant direct and indirect 4

employment and income generation opportunities

in the region and will wait for the decision of the

court and acquisition."

2. While considering the same, the Adjudicating Authority also noticed that

the 'Promoter' issued an affidavit to the effect that they are not ineligible under

Section 29A of the I&B Code.

3. The Appellant, one of the 'dissenting financial creditor' has challenged the

impugned order dated 19th July, 2019 alleging different infirmities and

irregularities.

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

'resolution applicant' was the erstwhile 'Promoter' and, therefore, is the relevant

eligible party under Section 29A of the I&B Code. However, such submission

cannot be accepted as it has no bar for the 'Promoter' to file 'resolution

application', even if otherwise not eligible in terms of Section 29A. There is

nothing on record to suggest that the 'Corporate Debtor' is an undischarged

insolvent or wilful defaulter in accordance with the guidelines of the Reserve

Bank of India issued under the Banking Regulations Act, 1949 or at the time of

submission of 'resolution plan' has an account, classified as 'Non-Performing

Asset' (NPA) in accordance with the guidelines of the Reserve Bank of India or

that the 'Promotor' or its Directors or has been convicted for any offence

punishable with imprisonment or is disqualified to act as a Director under the

Companies Act, 2013 or was prohibited by 'Securities and Exchange Board of

India' (SEBI) or made any preferential transaction , an undervalued transaction

or granted extortionate credit transaction or made fraudulent transaction etc. 5

5. Next, it was contended that the 'Corporate Debtor' is not a going concern.

However a 'resolution plan' cannot be rejected on such ground if the resolution

applicant can show the feasibility to run the company in future. The question

of viability, feasibility and other conditions as prescribed by the 'Insolvency and

Bankruptcy Board of India (for short, 'the Board) of a 'Corporate Debtor' can be

looked into by the 'Committee of Creditors' which has experte in the financial

field. Such issue of viability, feasibility and other conditions of the 'Corporate

Debtor' cannot be looked into by the Adjudicating Authority or by this Appellate

Tribunal. The 'Committee of Creditors' having gone through the financial

aspects, including the viability, feasibility and other conditions of the 'Resolution

Plan' and having approved the plan with 74.19% of voting share, this Appellate

Tribunal is not inclined to decide such issue.

6. It was next submitted that the Regulation 38 has not been complied with.

However, we have noticed that the 'Committee of Creditors' has noticed all the

aspects and merely because the Appellant is a dissenting financial creditor, no

interference is called for in absence of any illegality.

7. We have also noticed that the 'successful resolution applicant' proposed

to pay 100% dues of all the 'financial creditor' with interest including the

Appellant. In this background also, no interference is called for.

In absence of any merit, the appeal is dismissed. No costs.

[Justice S.J. Mukhopadhaya] Chairperson

[ Kanthi Narahari ] Member (Technical) /ns/gc