NCLT Mumbai Approves ACME Cleantech's Resolution Plan For Reliance Big Private Limited
Tazeen Ahmed
26 Feb 2025 6:25 AM
The National Company Law Tribunal (NCLT), Mumbai bench comprising Justice V. G. Bisht (Judicial Member) and Shri Prabhat Kumar (Technical Member) has approved the Resolution Plan for Reliance Big Private Limited submitted by ACME Cleantech Solutions Private Limited. Brief Facts: Mr. Rohit Ramesh Mehra (“Applicant”), Resolution Professional of Reliance Big Private...
The National Company Law Tribunal (NCLT), Mumbai bench comprising Justice V. G. Bisht (Judicial Member) and Shri Prabhat Kumar (Technical Member) has approved the Resolution Plan for Reliance Big Private Limited submitted by ACME Cleantech Solutions Private Limited.
Brief Facts:
Mr. Rohit Ramesh Mehra (“Applicant”), Resolution Professional of Reliance Big Private Limited (“Corporate debtor”) moved the application under Section 30(6) r/w Section 31 (l) of the Insolvency and Bankruptcy Code, 2016 (“Code”) r/w Regulation 39 (4) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons), 2016 (“IBBI Regulations”) for seeking approval of the Resolution Plan along with the Addendum thereto submitted by Mr. Manoj Kumar Upadhyay (“Successful Resolution Applicant/SRA”) and as approved in 100% majority by Committee of Creditors.
The Corporate Debtor owns a wind energy generator in Tamil Nadu and two land parcels in Thiruvallur and Tirunelveli Districts and supplies electricity to the Tamil Nadu Electricity Board.
Upon failure to maintain the security cover as per the terms of the Transaction documents relating to subscription of debentures, the Corporate debtor was obligated to a Mandatory Prepayment Event whereby the Corporate debtor had to ensure that all the outstanding amounts are deposited in the designated accounts.
The NCLT admitted the Corporate Debtor into the Corporate Insolvency Resolution Process (CIRP) under section 7 of the Code. A public announcement inviting claims from creditors was made. Only one resolution plan, submitted by Mr. Manoj Kumar Upadhyay, was received. The Committee of Creditors (“CoC”) raised concerns regarding contingencies and compliance issues. The applicant submitted a revised resolution plan on 20.02.2024 and filed an addendum on 19.03.2024.
Salient Features of the Resolution Plan:
A) Amount under the Resolution Plan
The Resolution Plan is for an aggregate amount of Rs. 351 Lakhs. As per the Resolution Plan, prior to the effective date and within 25 days of the Approval date, Upfront Cash payment of Rs. 4 crores has to be infused into the Corporate Debtor.
B) Treatment of CIRP Costs
The unpaid CIRP costs shall be funded from the internal accruals and cash flows of the Corporate Debtor as of the Effective Date and paid in priority over other debts.
C) Treatment of Standstill Period Costs
The Standstill Period Costs shall be paid in full on the Effective Date.
D) Treatment of Operational Creditors
The SRA proposes a payment of Rs. 0.50 lakhs towards claims filed by the Operational Creditors, while, the RP has admitted an amount equal to Rs. 66.66 lakhs towards Operational creditors other than Workmen and employee or Government dues.
E) Treatment of Statutory Dues
The Resolution Applicant has allocated NIL amounts for statutory creditors and Governmental Authorities as full and final settlement of dues and liabilities for the period prior to the Plan Approval Date.
F) Treatment of Secured Financial Creditors
The Resolution Applicant proposes to pay Rs. 350 lakhs, in the form of non-convertible debentures, along with all associated securities and encumbrances, to the Resolution Applicant on the Effective Date, which is also the FC discharge amount.
G) Treatment of Unsecured Financial Creditors
The SRA proposes payment of 28 lakhs however, no payment is admitted towards the unsecured financial creditors, as they are all related party unsecured Financial creditors.
H) Treatment of Dissenting Financial Creditors
As per the requirement of Section 30(2)(b) of the IBC, all the Financial Creditors who do not vote in favour of the Resolution Plan shall be paid such amount which shall be equal to the amount to be paid to such Financial Creditors in accordance with subsection (1) of Section 53 of the Code in the event of a liquidation of the Corporate Debtor. This payment will be made with priority over the Financial Creditors who voted in favour of the Resolution Plan, as mandated by Regulation 38(1)(b) of the CIRP Regulations.
Observations:
The court referred to the judgment of the Supreme Court in K Sashidhar v. Indian Overseas Bank & Others, (2019) 12 SCC 150, where it was held that:
"…… the discretion of the adjudicating authority (NCLT) is circumscribed by Section 31 limited to scrutiny of the resolution plan 'as approved' by the requisite per cent of voting share of financial creditors."
The Tribunal noted that the CoC had approved the plan with a 100% majority after considering concerns regarding compliance and inter-se distribution.
The Tribunal held that the Resolution Plan complied with the relevant provisions of the Code and CIRP Regulations. It noted that the Resolution provided for:
- Payment of CIRP Cost as specified u/s 30(2)(a) of the Code.
- Repayment of Debts of Operational Creditors as specified u/s 30(2)(b) of the Code.
- management of the affairs of the Corporate Debtor, after the approval of Resolution Plan, as specified U/s 30(2)(c) of the Code.
- The implementation and supervision of Resolution Plan by the RP and the CoC as specified u/s 30(2)(d) of the Code.
The Tribunal allowed the resolution plan to be implemented through ACME Cleantech Solutions in place of MKU Holdings.
Decision:
Approving the Resolution Plan, the Tribunal held that the requirements of Section 30(2) of the Code and Regulations 37, 38, 38 (1A) and 39 (4) of the Regulations were met and the Resolution Plan did not contravene Section 29A of the Code.
The Tribunal allowed the interlocutory application.
Case Title: In the Application of Mr. Rohit Ramesh Mehra (Resolution Professional of Reliance Big Private Limited)
Case Number: IA No. 54 of 2024 IN CP(IB) No. 845 (MB) of 2022
For the Applicant (SRA) : Adv. Saurabh Bachhawat a/w Adv. Pooja Mahajan, Adv. Nishant Sogani and Adv. Shrishti Agnihotri i/b Chandriok & Mahajan
For the Respondent (RP) : Adv. Deep Roy, Adv. Rishi Badraj & Adv. Dhawal S.
Order Delivered on: 18.02.2024