Harihar Prakash Chaturvedi, Member - (1.) The present application (CA No. 223of 2017 in CP. No.24/ALD/2017) is filed by Shri Mukesh Mohan, Resolution Professional of the M/s. JEKPL Private Limited under Section 30(6) of I&B Code,2016 read with Regulation 39(4) of /the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Person) Regulation 2016 seeking approval from this Tribunal about the Resolution plan for the Company, which is duly approved by Committee of Creditors.
(2.) Brief fact of the present case, as narrated in the present application are stated /as under: I. The Corporate Debtor JEKPL Private Limited earlier filed an application CP. No.24/ALD/2017 under Section 10 of the Insolvency and Bankruptcy Code, 2016 read with Rule 7 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 before this Bench for initiation of corporate insolvency resolution process as a corporate debtor against itself. The same was admitted by this Bench vide order dated March 17, 2017 by appointing Mr. Dinkar T. Venkatasubramanian as an IRP. II. That on the recommendation of the COC, this Tribunal vide its order dated June 1, 2017 had appointed Mr. Mukesh Mohon as Resolution Professional, replacing Mr. Dinkar T. Venkatasubramanian. III. ThereaRer, as per decision of the COC, the R.P got published the Expression of Interest for Resolution Plans for JEKPL Private Limited in the Financial Express, Business Standard, Economic Times and Hindustan Times on July 14, 2017 and July 17, 2017 respectively. As per publication the last date for submission of Expression of Interest was fixed as July 31, 2017. Committee of Creditors in their meeting dated July 12, 2017 had decided that one of the major criteria to be fulfilled for sharing the Information Memorandum with the prospective Resolution Applicants is that the prospective Resolution Applicant should have minimum Net Worth of Rs.100 crores as on 31.03.2017. IV. That 13 Expression of Interest were received from the following persons: i. Oil India Limited ii. Hindustan Oil Exploration Company Limited iii. Atyant Capital India Fund-I iv. Asset Reconstruction Company (India) Limited [ARCIL] v. UV Asset Reconstruction Company Limited vi. PFH Oil and Gas Private Limited viL Quippo Oil and Gas Infrastructure Limited (A SREI Initiative) viii. Edelweiss Asset Reconstruction Company Limited ix. Infina Finance Private Limited x. Nauticawt Energy Solutions xi. Geopetrol International Inc. xii. Mitcon Consultancy and Engineering Service Limited xiii. IPR Energy. V. That the Information Memorandum was to be shared with the prospective Resolution Applicants who fulfilled the below conditions: i.Minimum Net Worth of Rs.100 Crores as on March 31, 2017, as stipulated by Committee of Creditors, and ii.Rcceived undertaking as per Section 29(2) of the Code, before the last date fixed up by the Committee of Creditors i.e. September 30, 2017. VI. That base on the above, the Information Memorandum was shared with the following five prospective Resolution Applicants: i.Oil India Limited ii. Hindustan Oil Exploration Company Limited iii. Atyant Capital India Fund iv. Asset Resolution Company (India) Limited [ARCILj v. UV Asset Resolution Company Limited. VII. However only two Resolution Applicants Namely M/s. Atyant Capital India Fund-I and M/s. Hindustan Oil Exploration Company Limited came forward to submit their Resolution Plans. VIII. That Resolution Professional in compliance of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Third Amendment) Regulations, 2017 sought an affidavit from both the Resolution Applicants that they comply with the requirements of the Code. Both the Resolution Applicants i.e. M/s. Hindustan Oil Exploration Company Limited and M/s. Atyant Capital India Fund-I submitted their affidavits in compliance of Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Third Amendment) Regulations, 2017. IX. Further the Resolution Professional in the meeting of Committee of Creditors held on November 13, 2017, placing reliance on the CA Certified given by M/s. AKG & Associates, Chartered Accountants, which has conducted the special investigative audit of M/s. JEKPL Private Limited on behalf of State Bank of India and also conducted forensic audit/special audit as directed by the Commitlee of Creditors, has confirmed which meet the requirement of the Code specifically covered under Section 43, 45, 50 and 66 of the Code. This was in compliance of Regulation 39(2) of Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations 2016. X. That Resolution Professional presented the Resolution Plans before the Committee of Creditors in its meeting held on November 13, 2017 after examination of the Resolution Plans received from M/s. Atyant Capital India Fund-I and M/s. Hindustan Oil Exploration Company Limited as per Section 30(2) of Insolvency and Bankruptcy Code, 2016 read with Regulation 39(2) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Person) Regulations, 2016. XI. That the next meeting of COC to discuss the revised Resolution Plan submitted by the Atyant Capital India Fund-I and M/s. Hindustan Oil Exploration Company Limited was held on November 20,2017. The COC have requested the Resolution Applicant to further enhance the consideration and also decided to call for earnest money deposit of Rupees Five Crores from the Resolution Applicants. XII. That pursuant to the instructions of the Committee of Creditors, the Resolution Professional sought revised Resolution Plans with the following clarifications/ modifications: i.Rate of Interest should be at least 12% on deferred payments. ii.Equity and Royalty payments should be monetised and consolidated consideration should be offered. iii.Substantial increase in the consideration amount offered. XIII. That Committee of Creditors met on December 04, 2017 to finalize the Resolution Plan. Both the Resolution Applicants were also invited to the meeting to present their final Resolution Plans. Before inviting the Resolution Professional proposed for inter-se bidding/auction to realise better consideration and value discovery, to which the Committee of Creditors agreed. XIV. That as decided by the Committee of Creditors in its meeting held on November 20, 2017 at Mumbai, the Liquidation Value was revised by the Committed of Creditors to Rs.222.06 Crores at its meeting held on December 04, 2017, based on the clarification submitted by the Duffs and Phelps ad M/s. RBSA Advisors (Valuers appointed by the Interim Resolution Professional to provide the Liquidation Value of JEKPL Private Limited as per the Code) as well as report provided by Gaffney Cline & Associate (being the consultant appointed for Reserves and Resources Assessment of the Kharsang Field Onshore India appointed by GeoEnpro Petroleum Limited (Operator of Kharsang Field with the approval of the Operating Committee of Kharsang Field) , who have estimated the value of participating interest in Kharsang Field only) and the Legal Opinion provided by M/s. Luthra and Luthra. XV. That the inter-se bidding/auction was conducted in the meeting of the Committee of Creditors held on December 04, 2017 and that after three biddings by both the Resolution Applicants, M/s. Hindustan Oil Exploration Company Limited refused to proceed further in the bidding process. Despite request by all the members of Committee of Creditors the representatives of M/s. Hindustan Oil Exploration Company Limited quit the meeting room without even signing the Bid documents. Thereafter, it was decided by the Committed of Creditors that they will seek approval of their competent authorities for the Resolution Plan submitted by M/s. Atyant Capital India Fund-I. It was further decided that the next meeting of Committee of Creditors will be held on December 07, 2017 for the voting on the Resolution Plan by the Financial Creditors. XVI. That the revised claim submitted by the EXIM Bank in Form F on December 06, 2017, was not reviewed by the Resolution Professional as the matter of claim by the EXIM bank is sub-judice, since the advance copy of appeal by EXIM Bank has also been received by the Resolution Professional. XVII. That the Committee of Creditors at their meeting held on December 07, 2017 at New Delhi, has discussed on the communication received from M/s. Hindustan Oil Exploration Company Limited on December 06, 2017 and decided against considering the Resol ution Plan submitted on December 06,2017 as the same is conditional, which condition "This proposal is inclusive ofJEKPL loan given toJOGPL Private Limited which holds Tripura asset. Therefore, it is requested that the existing bankers who are creditors to JEKPL will not claim or retain any interest on JOGPL and the existing promoter group companies to JEKPL shall have no rights to the assets to JOGPL whatsoever. This should be ensured and facilitated. " Cannot be enforced or tenable as the lenders can only assign those rights/securities which they hold. F7urther, despite the request by the Committee of Creditors, M/s. Hindustan Oil Exploration Company Limited chose not to participate in the process adopted by the Committee of Creditors during its meeting held on December 04, 2017 and the Committee of Creditors had decided to proceed with the Resolution Plan submitted by Atyant Capital India Fund-I. XVIII. That the Committee of Creditors at their meeting held on December 07, 2017 at New Delhi approved the Resolution Plan of Atyant Capital India Fund I through voting as per Section 30(4) of the I&B Code, 2016 read with Regulation 39 (3) of the 1BBI (Insolvency Resolution Process for the Corporate Person) Regulation, 2016. The result of voting is as under:
(3.) Thus the Atyant Capital India Fund I proposed to takeover JEKPL Private Limited (JEKPL) as a going concern on the basis of the terms and conditions of the resolution plan The Prominent measures as proposed under the Resolution Plan submitted by Atyant Capital India Fund may be described as under: I.100% of equity and preference shares in JEKPL Private Limited lo - be transferred on an unencumbered or free of lien basis to Atyant Capital or its SPV (Invenire Energy Private Limited) after rescinding or cancelling the existing equity and preference shares. II JFKPL has several financial creditors including but not limited to the entities listed through Serial No.3 through 8. III. A11 Security including any guarantees, sureties and undertakings proved by JEKPL Private Limited for the term loans granted by State Bank of India and Central Bank of India are to be rescinded. IV.A11 Security including any guarantees, sureties and undertakings provided by the Shareholders of JEKPL Private Limited, its Promoters, JE Energy Ventures Private Limited, JODPL Private Limited, JOGPL Private Limited, JE (NELP-V) Private Limited and any other guarantors of JEKPL Private Limited for the terms loans granted by Slate Bank of India and Central Bank of India are to be assigned to Atyant Capital or it's SPV (Invenire Energy Private Limited) . V.All Security including any guarantees, sureties and undertakings provided by JEKPL Private Limited in favour of Export Import Bank of India (EXIM) or lo any other person for the term loans extended by EXIM to JE Energy B.V. (formerly Jubilant Energy B.V.) and Jubilant Energy (Holding) B.V. are to be rescinded. VI. All liabilities of JEKPL Private Limited, i.e. current and non-current liabilities appearing on the balance sheet of JEKPL Private Limited on the Effective Date excluding the net income tax asset/liability are to be extinguished or annulled. V1I.AI1 contingent liabilities of JEKPL Private Limited, whether claimed or unclaimed, excluding ihe bank guarantee provided by Axis Bank is to be extinguished or annulled. For the sake of clarity this waiver of liabilities includes the liabilities to the Government of India under the production sharing contracts for the blocks AA-ONN-2009/1 and AA-ONN-2009/2. In case the waiver of liabilities by the Government of India is not enforceable by the order of the Adjudicating Authority and if the bank guarantee provided by Axis Bank is invoked. Axis Bank shall only be entitled to receive the prorata amount of the consideration provided under this Resolution Plan in proportion to their claim to the total claim accepted at any point of time which shall be kepi in an escrow account (modalities to be discussed with lenders) . No additional amount shall be paid to Axis Bank and any guarantee or counter guarantee provided by JEKPL Private Limited shall be extinguished. VUI.There shall be no liability under the Income Tax Act, 1961, including any liability under the Minimum Alternate Tax on account of the transactions envisaged under this resolution plan and the Adjudicating Authority shall pass an order to that effect. IX.In summary, all the liabilities of JEKPL Private Limited including term borrowings, current, non-current and contingent liabilities and various guarantees issued by the banks shall be written off7cancclled/annulled with no further liability to Atyant Capital or its SPV (Invenirc Energy Private Limited) or JEKPL Private Limited in lieu of the Consideration as ascribed from the Effective Date will be to the benefit of the SPV. X.A1I cash, Bank Balance and cash equivalents of JEKPL Private Limited excluding lien marked deposits on the Effective Date will be handed over to the Financial Creditors and Atyant Capital or its SPV (Invenire Energy Private Limited) will have no claim on it. Cash surplus accruing from the Effective Date will be to the benefit of the SPV. XI.A1I other current assets including all receivables and sundry debtors of JEKPL Private Limited will transfer to the Resolution Applicant on a going concern basis. XII.The Resolution Applicant through its SPV has paid an Earnest Money Deposit of 1NR 5 Crores to the committee of creditors. This EMD will be considered an advance against the consideration proposed below if this Resolution Plan is implemented in its entirety. If this Resolution Plan or any part of it is not implemented in its entirety, the EMD alongwith any cash consideration already paid will be refunded to the Resolution Applicant without any prejudice. XIII.Any approvals required from the Government of India or the other participating interest holders in the Kharsang Production Sharing Contrast (PSC) as per the provisions of the PSC and JOA of Kharsang Field will be granted by both Government of India and the other participating interest holders. XlV.Save and except to the extent set out herein the Resolution Applicant shall not be required to provide any credit support, corporate support or any other credit enhancement to the Financial Creditors.;