Aircel Limited

Total plan funding, as printed

Rs 19,600 crore (combined, as stated by the bench at para 6.3.1(a): amount proposed to be paid by the Resolution Applicant against total outstanding Financial Creditor debt of approximately Rs 58,760 crore across all three corporate applicants; of this Rs 19,600 crore, approximately Rs 6,630 crore is by way of ZOCDs and the balance Rs 12,970 crore is given up)

Upfront amount, as printed

Rs 11 crore equity commitment from the Resolution Applicant collectively (Rs 5 crore each in Aircel Limited and Dishnet Wireless Limited, Rs 1 crore in Aircel Cellular Limited)

Deferred amount, as printed

Zero-Coupon Optionally Convertible Debentures (ZOCDs) amounting to Rs 3750 crore issued for Aircel Limited's verified financial debt (per Annexure C of the Plan), secured by the same security interest as existed before the Effective Date; combined ZOCD figure across all three corporate applicants stated by the bench as approximately Rs 6,630 crore

Payout horizon as printed

RA to use all efforts to make payments towards CIRP cost and creditors' payments within five years from the Effective Date; unredeemed ZOCDs at expiry of that period convert to equity

Plan term as printed

Five years from the Effective Date (ZOCD redemption/implementation period)

CIRP cost, as printed

Rs 298.48 crore approximately (total CIRP cost of all three corporate applicants combined, as mentioned in the Resolution Plan)

Cirp cost treatment

CIRP costs to be paid from Available Funds in priority to any other creditor (Clause 6.2); part already paid from the Rs 639 crore recovered through Supreme Court litigation during CIRP

Units note

Stakeholder-payment tables and most money figures are printed in crore rupees (Rs ); a few figures (e.g. the RP-stated verified/admitted financial debt at the time of filing) are printed in full absolute rupee amounts with words in parenthesis, e.g. Rs 19788,77,30,929/-.

Stakeholder-payment tables and most money figures are printed in crore rupees (Rs ); a few figures (e.g. the RP-stated verified/admitted financial debt at the time of filing) are printed in full absolute rupee amounts with words in parenthesis, e.g. Rs 19788,77,30,929/-.

Body of order · 18 rows

1. Seq

   1

   Beneficiary

   CIRP costs (all three corporate applicants combined)

   Amount as printed

   Rs 298.48 crore approximately

   Timing as printed

   Paid in priority to all other debts from Available Funds

2. Seq

   2

   Beneficiary

   Expense Reserve corpus

   Amount as printed

   Rs 72 crore

   Timing as printed

   Created for meeting various expenses of operating the scaled-down businesses

3. Seq

   3

   Beneficiary

   Workmen (all three corporate applicants combined)

   Amount as printed

   Rs 94.1 lakh, or the liquidation values, whichever is higher

4. Seq

   4

   Beneficiary

   Operational Creditors other than workmen (all three corporate applicants combined)

   Amount as printed

   Rs 45.25 crore, or the liquidation values, whichever is higher

5. Seq

   5

   Beneficiary

   Financial Creditors (ZOCD redemption, combined)

   Amount as printed

   Rs 6,630 crore approximately

   Timing as printed

   Redeemed in entirety over a period of five years from Available Funds and Generated Funds

Entity type

ARC

Sources of funds

Available Funds (funds lying with the corporate applicants as on the Effective Date, including refund of Rs 298.01 crore by DoT and return of bank guarantee of Rs 453.73 crore from Bharti Airtel to Aircel Limited and Dishnet Wireless Limited pursuant to Supreme Court order dated 29.11.2018, and Rs 639 crore already recovered from litigation); Generated Funds (proceeds from monetisation of assets not required for scaled-down operations, realisation of claims/litigations, and monetisation of carry-forward losses/unabsorbed depreciation); Infused Funds (Rs 11 crore upfront equity commitment from UVARC across the three corporate applicants, of which Rs 5 crore each for Aircel Limited and Dishnet Wireless Limited and Rs 1 crore for Aircel Cellular Limited).

Post plan management

Existing suspended Board of Directors of each corporate applicant deemed to have resigned effective from the date of the order. Interim Monitoring Committee (Approval Date to Effective Date) of 3 members: 1 Financial Creditor representative, 1 representative of Deloitte Touche Tohmatsu India LLP, 1 RA representative. On the Effective Date a new Board of Directors is to be constituted with 3 directors nominated by the RA, 1 independent director nominated by mutual agreement between RA and FCs, and 1 FC-nominated director with affirmative voting rights; the Monitoring Committee is then reconstituted with 3 FC representatives (affirmative voting rights), 1 Deloitte representative and 3 RA representatives.

Operational creditors

Combined Rs 45.25 crore proposed (excluding workmen) against admitted claims across the three corporate applicants, or liquidation value whichever is higher; entity-wise figures per the stakeholder-payment tables.

Workmen employees

Corporate applicants have no workmen; for employees, Rs 94.1 lakh (or liquidation values, whichever higher) proposed against a total verified claim of about Rs 56.73 crore combined, of which about 97% pertains to performance-linked/other incentives (bonus) for the pre-CIRP period; salaries stated to have been paid in full.

Litigation carveout

All pending winding-up proceedings and other proceedings for the period prior to the Approval Date stand extinguished; new proceedings relating to the pre-Effective-Date period are barred (reliefs 9.1.16 and 9.1.25); relief limited to matters prior to Approval Date, with the corporate applicants (as controlled by the RA) responsible for post-approval conduct.

Group entities

The three corporate applicants (Aircel Limited, Dishnet Wireless Limited, Aircel Cellular Limited) were treated on an all-or-none, group basis owing to interweave of businesses, common 'Aircel' brand, obligor/co-obligor debt structure, common IT/technical infrastructure, common CIRP conduct, and an identical CoC constitution save that Standard Chartered Bank is an additional Financial Creditor only in Aircel Limited.

Assets description

Telecom business spread across twenty-three circles in India, with about 53,761 Base Transceiver Stations, 143 Mobile Switching Centres and 433 Base Station Controllers; approximately 14,500 km of optical fibre network; 2G/3G spectrum licences (Right to Use spectrum under 1800 MHz and 2100 MHz).

Going concern status

Corporate applicants to continue on a low-capex, scaled-down going-concern basis, retaining bulk SMS, data centre and tower-leasing businesses (expected to generate Rs 69 crore, Rs 96 crore and Rs 125 crore in years one to three respectively); other assets (fibre, real estate, towers, equipment, spectrum) to be monetised.

RP replaced the IRP

No

Invitations for expressions of interest

1. Round no

   1

   Eoi last date

   2018-12-07

   Expressions of interest received

   45

   Final list count

   20

   Plans received

   2

   Outcome

   plan approved

Applicants considered

1. Name

   UV Asset Reconstruction Company Limited

   Stage reached

   approved

   Outcome note

   Sole remaining Resolution Applicant after Eight Capital's withdrawal; plan approved by CoC at its 19th meeting on 13.05.2019 and approved by NCLT for all three corporate applicants.

2. Name

   Eight Capital Advisory Services Private Limited

   Stage reached

   withdrawn

   Outcome note

   Withdrew its Resolution Plan after the first round of discussions, in which various concerns were raised on compliance of its plan with IBC provisions and regulations (para 2.7.3).

Bidding mechanism

negotiation

Evaluation matrix present

Yes

Clock events

1. Kind

   exclusion

   Days

   30

   Granted date

   2018-08-09

   Reason

   Exclusion of 30 days from the CIRP period, granted in MA No.754/2018.

2. Kind

   extension

   Days

   90

   Granted date

   2018-10-16

   Reason

   Extension of the CIRP period by 90 days under section 12(3) of the IBC, granted in MA No.1137/2018.

3. Kind

   exclusion

   Granted date

   2018-10-16

   Reason

   Period during which the application (MA No.1137/2018) remained pending before the Adjudicating Authority, from 03.10.2018 to 15.10.2018, directed to be excluded from the CIRP period (day count not stated as a figure in the order).

Advisors

1. Role

   Registered valuer

   Name

   RBSA Valuation Advisors LLP

   Note

   Determined liquidation value and fair value of the corporate applicants under regulations 27 and 35 of the CIRP Regulations, 2016.

2. Role

   Registered valuer

   Name

   Duff & Phelps India Private Limited

   Note

   Determined liquidation value and fair value of the corporate applicants under regulations 27 and 35 of the CIRP Regulations, 2016.

3. Role

   Process Advisor

   Name

   Alvarez & Marsal India Private Limited

   Note

   CIN U74140MH2007PTC234641; appointed by CoC at its meeting on 06.06.2018 to evaluate resolution plans; prepared viability and feasibility report tabled before CoC on 25.03.2019.

4. Role

   Monitoring Committee representative

   Name

   Deloitte Touche Tohmatsu India LLP

   Note

   LLP Identification No. AAE-8458; provides one representative on both the interim and reconstituted Monitoring Committee.

1. Creditor

   AB Svensk Exportkredit

   Creditor class

   financial_creditor

   Voting pct

   2.70

   Vote

   not stated

2. Creditor

   Bank of Baroda

   Creditor class

   financial_creditor

   Voting pct

   10.50

   Vote

   not stated

3. Creditor

   Canara Bank

   Creditor class

   financial_creditor

   Voting pct

   9.70

   Vote

   not stated

4. Creditor

   China Development Bank Corporation

   Creditor class

   financial_creditor

   Voting pct

   13.70

   Vote

   not stated

5. Creditor

   Exim Bank

   Creditor class

   financial_creditor

   Voting pct

   2.20

   Vote

   not stated

6. Creditor

   Jammu & Kashmir Bank

   Creditor class

   financial_creditor

   Voting pct

   1.70

   Vote

   not stated

7. Creditor

   L&T Infrastructure Finance Limited

   Creditor class

   financial_creditor

   Voting pct

   1.10

   Vote

   not stated

8. Creditor

   Nordic Investment Bank

   Creditor class

   financial_creditor

   Voting pct

   2.80

   Vote

   not stated

9. Creditor

   Punjab National Bank

   Creditor class

   financial_creditor

   Voting pct

   15.10

   Vote

   not stated

10. Creditor

    Standard Chartered Bank

    Creditor class

    financial_creditor

    Voting pct

    1.70

    Vote

    not stated

11. Creditor

    State Bank of India

    Creditor class

    financial_creditor

    Voting pct

    36.60

    Vote

    not stated

12. Creditor

    Syndicate Bank

    Creditor class

    financial_creditor

    Voting pct

    2.10

    Vote

    not stated

Business & treatment of stakeholders

Existing equity and preference share capital of each corporate applicant to stand extinguished for NIL consideration (capital reduction). Fresh equity issued to the RA at face value without premium (76%). A portion of verified financial debt (reduced by the Debenture Verified Financial Debt) converted into equity issued to Financial Creditors at a premium, reflected in the share premium account (24%); premium amount not stated. If ZOCDs remain unredeemed after five years they convert into equity such that Financial Creditors collectively hold 74% and the RA 26%.

Capital reduction

Yes

Merger or amalgamation

Yes

Post plan shareholding

1. Holder

   Resolution Applicant (UVARC)

   After

   76% (or 26% if unredeemed ZOCDs are fully converted to equity after five years)

2. Holder

   Financial Creditors

   After

   24% (or 74% if unredeemed ZOCDs are fully converted to equity after five years)

Monitoring committee

Interim Monitoring Committee (Approval Date to Effective Date): 3 members — 1 Financial Creditor representative, 1 representative of Deloitte Touche Tohmatsu India LLP, 1 Resolution Applicant representative; stands dissolved on the Effective Date. Reconstituted Monitoring Committee (from Effective Date): 3 Financial Creditor representatives (with affirmative voting rights), 1 Deloitte representative, 3 Resolution Applicant representatives, for advising and making recommendations to the reconstituted board of directors on implementation.

Monitoring committee members

1. Role

   Financial Creditor representative (interim Monitoring Committee)

2. Name

   Deloitte Touche Tohmatsu India LLP

   Role

   Representative on interim and reconstituted Monitoring Committee (LLP Identification No. AAE-8458)

3. Role

   Resolution Applicant representative (interim Monitoring Committee)

1. Seq

   1

   Relief

   Neither the Resolution Applicant nor its Affiliates shall be disqualified/ineligible under the Code for proposing/implementing a plan for any other person merely on account of implementing this Resolution Plan.

   Category

   other

   Disposition

   granted

2. Seq

   2

   Relief

   Dispensation from obtaining NOC under section 281 of the Income-tax Act, 1961 and predecessor-liability under section 170; deemed waiver of requirements under sections 79 and 115B of the Income Tax Act.

   Category

   tax

   Disposition

   granted

3. Seq

   3

   Relief

   Corporate Debtor to be treated as a widely held company under section 79 read with section 2(18) of the Income Tax Act; change in shareholding pursuant to the Plan not to cause lapse of carried-forward losses.

   Category

   tax

   Disposition

   granted

4. Seq

   4

   Relief

   CBEC directed not to void transactions under the Plan under section 81 of the CGST Act, 2017 and not to impose successor liability on the RA.

   Category

   tax

   Disposition

   granted

5. Seq

   5

   Relief

   Corporate Debtor and RA not required to deal with Dissenting Financial Creditors otherwise than as provided in the Code.

   Category

   other

   Disposition

   granted

6. Seq

   6

   Relief

   Dispensation from requirement to add 'and reduced' to the Corporate Debtor's name on account of share-capital reduction.

   Category

   other

   Disposition

   infructuous

   Reason

   This requirement no longer exists under the Companies Act, 2013; it existed only under section 102(2)(a) & 102(3) of the Companies Act, 1956.

7. Seq

   7

   Relief

   Deemed waiver of procedural requirements under sections 66, 42 and 62(1)(c) of the Companies Act and the NCLT (Procedure for Reduction of Share Capital) Rules, 2016 for reduction of share capital and issuance of equity to the RA.

   Category

   licences_approvals

   Disposition

   granted

   Reason

   Explanation below section 30(2)(f), inserted by the IBC (Second Amendment) Act, 2018 w.e.f. 06.06.2018, deems any shareholder approval required under the Companies Act or other law to have been given.

8. Seq

   8

   Relief

   NCLT approval to constitute adequate and final approval for cancellation of existing share capital and issuance of new equity/preference/convertible securities, i.e. single-window clearance.

   Category

   licences_approvals

   Disposition

   granted

   Reason

   Same statutory explanation below section 30(2)(f) as at seq 7.

9. Seq

   9

   Relief

   All Relevant Authorities (including RBI) to waive all non-compliances of the Corporate Debtor prior to the Effective Date, with permanent extinguishment of related penalties/liabilities/claims, plus a prospective 12-month waiver from the day after the Effective Date.

   Category

   statutory_dues

   Disposition

   declined

   Reason

   This in effect amounts to (1) extension of the period of moratorium and (2) encouragement to violate the law, both of which cannot be accepted. From the Appointed Date, the RA shall be responsible for all compliances with law.

10. Seq

    10

    Relief

    All actions under the Plan deemed exempt from all taxes, levies, fees, transfer charges, transfer premiums and surcharges arising from or relating to implementation of the Plan.

    Category

    tax

    Disposition

    declined

    Reason

    No such blanket approval can be given; the RA is free to bring specific matters to the notice of the Adjudicating Authority for a decision thereon.

11. Seq

    11

    Relief

    RA (and Affiliates) and future buyers of Assets including Right to Use Spectrum and AL Fibre/IE Business not to be liable for criminal proceedings against the Corporate Debtor or its former promoters/shareholders/directors/employees/officers, before or after the Approval Date.

    Category

    32A

    Disposition

    granted

    Reason

    Granted in terms of section 32A of the IBC, inserted by the IBC (Amendment) Act, 2020, notified 13.03.2020 with retrospective effect from 28.12.2019.

12. Seq

    12

    Relief

    Registration/Stamps authorities of Andhra Pradesh, Delhi, Karnataka, Maharashtra, Gujarat, Tamil Nadu, Rajasthan and other States, and the Ministry of Corporate Affairs, to exempt the RA and Corporate Debtor from stamp duty and fees applicable to implementation of the Plan including issuance/conversion of ZOCDs and Equity Shares.

    Category

    stamp_duty

    Disposition

    declined

    Reason

    No such blanket approval can be given; it is the duty of the RA and the corporate debtor to comply with the provisions of the Stamp Act of the respective States.

13. Seq

    13

    Relief

    Moratorium against actions/penalties for non-compliance to continue from Approval Date to Effective Date and beyond; deemed waiver from all actions/proceedings/penalties post Effective Date.

    Category

    32A

    Disposition

    granted

    Reason

    Granted in terms of section 32A of the IBC, inserted by the IBC (Amendment) Act, 2020, notified 13.03.2020 with retrospective effect from 28.12.2019.

14. Seq

    14

    Relief

    Renewal, by respective Relevant Authorities including DoT, of all lapsed/expired Business Permits with effect from the Approval Date, and continuation of operations pending such renewal.

    Category

    licences_approvals

    Disposition

    deferred_to_authority

    Reason

    The RA shall make necessary applications to the concerned regulatory/statutory authorities for renewal; such authorities shall consider the same keeping in mind the objectives of the IBC and that the RA is acquiring the corporate debtors on a going-concern basis.

15. Seq

    15

    Relief

    Waiver of authority action for suspended/cancelled/revoked/threatened Business Permits or breach of Applicable Law prior to the Plan; bar on post-Approval-Date investigations/actions for such prior non-compliance.

    Category

    licences_approvals

    Disposition

    deferred_to_authority

    Reason

    Same reasoning as seq 14 — RA to make necessary applications; authorities to consider in light of IBC objectives and going-concern basis.

16. Seq

    16

    Relief

    Withdrawal/dismissal, from the Approval Date, of all pending inquiries/investigations/proceedings/suits/claims/disputes concerning the Corporate Debtor for any period prior to the Approval Date, with related liabilities extinguished; bar on new proceedings for the pre-Effective-Date period.

    Category

    litigation_immunity

    Disposition

    granted

    Reason

    Granted subject to the condition that this pertains only to matters relating to the period prior to the Approval Date; from the Approval Date, the corporate applicants (now controlled by the RA) shall be responsible for their own conduct for the period after approval.

17. Seq

    17

    Relief

    No Governmental Authority (including regulatory, judicial or quasi-judicial) to issue orders/directions/decrees/judgments contravening the provisions of the Plan.

    Category

    licences_approvals

    Disposition

    deferred_to_authority

    Reason

    Same reasoning as seq 14 — RA to make necessary applications; authorities to consider in light of IBC objectives and going-concern basis.

18. Seq

    18

    Relief

    Approvals required from Governmental Authorities (including Tax authorities) in connection with implementation of the Plan, including on account of change in ownership/control, deemed granted on the Approval Date.

    Category

    other

    Disposition

    granted

19. Seq

    19

    Relief

    Unrestricted access to Assets: lessors/owners of premises where the Company conducts business to provide unrestricted access to the RA, the Company and their representatives without holding assets for ransom.

    Category

    other

    Disposition

    granted

20. Seq

    20

    Relief

    All actions under the Plan deemed approved; implementation not to be a ground for termination of Business Permits granted or applied for.

    Category

    licences_approvals

    Disposition

    deferred_to_authority

    Reason

    Same reasoning as seq 14 — RA to make necessary applications; authorities to consider in light of IBC objectives and going-concern basis.

21. Seq

    21

    Relief

    Continuity, without disruption, of all consents/licences/approvals/rights/entitlements/benefits/privileges of the Company (notwithstanding lapse/expiry due to non-compliance or efflux of time), for the benefit of the Company and RA, given the going-concern acquisition.

    Category

    licences_approvals

    Disposition

    granted

22. Seq

    22

    Relief

    Deemed termination of all contracts (save specified DoT licences/permissions for spectrum, AL Fibre and IE Business, and telecom tower contracts) with permanent extinguishment of related liabilities/claims/damages.

    Category

    contracts

    Disposition

    granted

    Reason

    The RA shall make formal applications to the concerned regulatory/statutory authorities for renewal of business permits, and such authority shall grant approval keeping in mind the IBC objectives and going-concern basis.

23. Seq

    23

    Relief

    Corporate Debtor allowed to enjoy/avail future tax benefits, deductions and exemptions it was entitled to before commencement of CIRP, for the balance period under Applicable Law.

    Category

    tax

    Disposition

    granted

24. Seq

    24

    Relief

    Direction that non-compliances under the Companies Act (including sections 185 and 186) be regularised and related penalties waived.

    Category

    other

    Disposition

    granted

25. Seq

    25

    Relief

    On Approval Date, all pending winding-up proceedings against the Corporate Debtor to stand extinguished irrevocably and unconditionally; deemed waiver by all creditors/authorities/employees/workmen of termination rights and rights to payment beyond the Plan.

    Category

    litigation_immunity

    Disposition

    granted

26. Seq

    26

    Relief

    RA and Company not liable towards claims/obligations relating to subsidiaries/associate companies (including guarantees issued for them); such guarantees/supports/credit comforts/put options/indemnities to stand irrevocably withdrawn for no consideration.

    Category

    guarantees

    Disposition

    granted

27. Seq

    27

    Relief

    Extinguishment of any security/guarantee/indemnity/pledge/charge/encumbrance or other collateral created in connection with any Financial or Operational Debt (or other debt/obligation) of the Company prior to the Approval Date, including subrogation rights, subject to simultaneous creation of Debenture Security Interest under Clause 5 of the Plan.

    Category

    guarantees

    Disposition

    granted

28. Seq

    28

    Relief

    Extinguishment of any call option, put option or right of pre-emption (including right of first refusal/first offer) against the Company.

    Category

    contracts

    Disposition

    granted

29. Seq

    29

    Relief

    Exemption of Corporate Debtor from providing notice period or payment in lieu of notice to employees terminated/laid off as part of the scaled-down operations, notwithstanding contractual notice-period terms.

    Category

    other

    Disposition

    conditional

    Reason

    While layoffs as part of scaling down are permitted, it shall be the duty of the RA and corporate debtors to ensure that the terms of such laid-off employees are respected and honoured in terms of payments and notices.

30. Seq

    30

    Relief

    All approvals/actions required under Applicable Law for implementation of the Plan, including AL Fibre and IE Transaction or Spectrum Transaction or sale of any other Asset, deemed waived/taken upon NCLT approval.

    Category

    licences_approvals

    Disposition

    granted

    Reason

    Granted, considering that DoT was represented in all CoC meetings from the 3rd meeting onwards, and the Resolution Plan was considered in DoT's presence with no objection raised.

31. Seq

    31

    Relief

    Transfer of Right to Use Spectrum to any Proposed Spectrum Buyer free of any Encumbrance, including any Encumbrance from DoT.

    Category

    licences_approvals

    Disposition

    granted

    Reason

    Granted, considering that DoT was represented in all CoC meetings from the 3rd meeting onwards, and the Resolution Plan was considered in DoT's presence with no objection raised.

32. Seq

    32

    Relief

    Waiver of tax on account of writing back/reduction of any debt pursuant to the Plan.

    Category

    tax

    Disposition

    granted

33. Seq

    33

    Relief

    DoT to approve implementation of the Plan, including the Spectrum Transaction and AL Fibre and Business Transaction, if such approval is required.

    Category

    licences_approvals

    Disposition

    granted

    Reason

    Granted, considering that DoT was represented in all CoC meetings from the 3rd meeting onwards, and the Resolution Plan was considered in DoT's presence with no objection raised.

34. Seq

    34

    Relief

    No consent from contracting parties or Governmental Authority required for implementing the Plan including the AL Fibre and IE Business Transaction, deemed in place post NCLT approval.

    Category

    contracts

    Disposition

    granted

    Reason

    The RA shall make formal applications to the concerned regulatory/statutory authorities for renewal of business permits, and such authority shall grant approval keeping in mind IBC objectives and going-concern basis.

35. Seq

    35

    Relief

    Exemption of the Corporate Debtor, RA and Financial Creditors from compliance with Companies Act or RBI regulations applicable to ZOCDs, given that ZOCDs are being issued as part of the Plan.

    Category

    other

    Disposition

    granted

    Reason

    The RA shall make formal applications to the concerned regulatory/statutory authorities for renewal of business permits, and such authority shall grant approval keeping in mind IBC objectives and going-concern basis.

36. Seq

    36

    Relief

    All concessions and reliefs including extinguishment of liabilities sought by the RA in Clause 6 (Treatment of Various Stakeholders) and Clause 5 (Implementation Schedule, Supervision of Implementation and Term).

    Category

    other

    Disposition

    granted

37. Seq

    37

    Relief

    Clause 9 to be read in harmony with, and without prejudice to, Clauses 5 and 6 of the Plan.

    Category

    other

    Disposition

    granted

1. Objector

   Bench (suo motu critical analysis)

   Objector class

   bench_itself

   Ground

   Extensive critical analysis at paras 6.3.1–6.3.10, including: FCs to recover only ~Rs 19,600 crore against ~Rs 58,760 crore outstanding with ~Rs 12,970 crore given up; only Rs 11 crore brought upfront by the RA; unclear premium on 24% FC equity; questionable revival of extinguished security for ZOCDs; income-tax carry-forward benefit doubtful given scaled-down operations; and a set of internal contradictions in the Plan (see flags/flag_evidence).

   Disposition

   not_adjudicated

   Effect on approval

   None — despite the criticism, the Plan was approved, the bench holding (per K. Sashidhar and Essar Steel) that it cannot reverse the CoC's commercial wisdom once satisfied that section 30(2) parameters and going-concern/value-maximisation/stakeholder-interest considerations were addressed.

1. Date

   2019-03-30

   What

   RA (UVARC) submitted a revised Resolution Plan following discussions at the CoC meeting of 25.03.2019, found compliant with the IBC.

2. Date

   2019-05-14

   What

   RA submitted a further letter (the 'Addendum Letter') responding to specific concerns raised by CoC participants at the meeting of 30.03.2019.

Conditions imposed

1. Condition

   RA to make formal applications to the concerned regulatory/statutory authorities for renewal of Business Permits/DoT approvals, rather than relying on any blanket deeming provision.

   Addressed to

   Resolution Applicant

2. Condition

   RA and corporate debtors to respect and honour payment/notice terms for laid-off employees notwithstanding exemption from formal notice-period compliance.

   Addressed to

   Resolution Applicant

3. Condition

   RA to be responsible for all compliances with law from the Appointed Date onward; no blanket prospective waiver of non-compliance granted.

   Addressed to

   Resolution Applicant

Precedents cited

1. Case

   K. Sashidhar v Indian Overseas Bank & Others, (2019) 12 SCC 150 (decided 05.02.2019)

   Proposition

   NCLT/NCLAT is not endowed with jurisdiction to analyse or evaluate the commercial decision of the CoC; the commercial wisdom of financial creditors, individually or collectively, is non-justiciable.

2. Case

   Committee of Creditors of Essar Steel India Limited v Satish Kumar Gupta & Others, (2019) SCC OnLine SC 1478 (decided 15.11.2019)

   Proposition

   The Adjudicating Authority cannot interfere on merits with the CoC's commercial decision, but limited judicial review lies to see that the CoC considered going-concern status, value maximisation of assets, and the interests of all stakeholders including operational creditors; if not, the plan may be sent back to the CoC.

Judicial observations

1. This is intriguing, to say the least. (p.40)
2. We are afraid that the Resolution Applicant may generate very negligible amount from actual business operations for three years as stated above. Therefore, this logic also appears to be flawed. (p.42)
3. A bare reading of this entire proposal is very optimistic at best and comes with lot of uncertainties. Therefore, the plan does not appear to a Resolution plan but appears to be a winding up, liquidation plan while just retaining a small portion of the business operations of the corporate applicants. (p.43)

Directives to third parties

DoT and other Relevant Authorities directed to consider renewal of business permits/approvals for the Spectrum and AL Fibre/IE Business transactions keeping in mind IBC objectives and the going-concern basis of acquisition; Departments of Registration and Stamps and the Ministry of Corporate Affairs across multiple States declined a blanket stamp-duty exemption and instead directed compliance with the respective State Stamp Acts.

1. Case number

   IA No.1863/2019 in CP (IB) No.302/2018 (Dishnet Wireless Limited)

   Outcome line

   Resolution Plan of Dishnet Wireless Limited approved together with Aircel Limited and Aircel Cellular Limited by this common order.

2. Case number

   IA No.1865/2019 in CP (IB) No.300/2018 (Aircel Cellular Limited)

   Outcome line

   Resolution Plan of Aircel Cellular Limited approved together with Aircel Limited and Dishnet Wireless Limited by this common order.

Companies named in the order

1. Aircel Limited
2. Dishnet Wireless Limited
3. Aircel Cellular Limited

Order date

2020-06-09