Case Law Details
Ravindra Kumar Goyal Vs Jatin Prakash Gupta (NCLT Ahmedabad)
Conclusion: The Resolution Plan of the Successful Resolution Applicant could not be approved as it had breached the waterfall mechanism of payments as given under Section 53 of IBC and selectively favoured certain creditors without according any reason for the same and the Plan ineffectively dealt with the interests of all stakeholders of the Corporate Debtor and was non-compliant of Section 30(2)(e) and Section 30(2)(f) of IBC.
Held: In the instant case, it was seen from the materials on record that there were four Operational Creditors of the Corporate Debtor. The Resolution Applicant proposed to pay dues of only two of them. There was no reason assigned in the resolution plan as to why other two Operational Creditors were not paid anything. Such resolution plan could not be approved. It was in breach of two provisions of law i.e sequence of priority in payment of the dues to the stakeholders as stated under Section 53 of IBC and also it did not comply mandatory requirement under Regulation 38 and more particularly Regulation 38(1)A of IBBI (Insolvency Resolution Process for Corporate Persons) Regulation,2016, which stated that “ A resolution plan shall include a statement as to how it has dealt with the interests of all stakeholders, including financial creditors and operational creditors, of the corporate debtor.” As it did not effectively deal with the interests of all stakeholders of the company, this resolution plan did not comply with Sections 30(2)(e) and Section 30(2)(f) of IBC, hence, such plan cold not be approved. The Resolution plan of M/s. Akashganga Processor Pvt. Ltd. for the Corporate Debtor-M/s. Polycoat India Pvt. Ltd. submitted for our approval was rejected for the reason that it did not comply with the provision of Section 30(2)(e) & Section 30(2)(f) of the IBC.
FULL TEXT OF THE NCLT AHMEDABAD ORDER
1. IA 680 of 2021 is filed by the Resolution Professional of the Corporate Debtor-M/s. Polycoat India Pvt. Ltd. under Section 30(6) of IBC for approval of the resolution plan submitted by M/s. Akashganga Processor Private Limited.
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