Videocon Industries Limited

Total plan funding, as printed

Rs. 2,962.02 Crores approved (4.15% of total outstanding claim amount of Rs. 71,433.75 Crores; claims admitted for Rs 64,838.63 Crores per the bench's own observation at para 5, though the Form H Grand Total records admitted claims of Rs.64,938.63 Crores)

Upfront amount, as printed

Rs. 200 crores to Financial Creditors (of which INR 2 crores forms part of the litigation corpus); approx. Rs. 52 crores to Workmen and Employees; INR 10 Crores to Operational and Statutory Creditors

Deferred amount, as printed

Rs. 2,700 crores worth of NCDs (coupon 6.65% per annum, payable annually), redeemable in 5 instalments: Rs.200 crore due 25 months from the Closing Date; Rs.625 crores due 3 years from the Closing Date; INR 625 crores due 4 years from the Closing Date; INR 625 crore due 5 years from the Closing Date; INR 625 crore due 6 years from the Closing Date

Payout horizon as printed

NCDs redeemable over a period up to 6 years from the Closing Date in 5 instalments

CIRP cost, as printed

As determined on actuals

Cirp cost treatment

Paid in accordance with Section 5(13) of the Code and Regulation 31 of the CIRP Regulations, from available cash flows and in priority; in the event of a shortfall the Implementing Entity will infuse funds by way of equity, convertible securities, subordinate convertible loans or any other appropriate means to make such payments in full and in priority

Performance security

INR 296.2 crores (financial guarantee, being Guarantee No. 1637620F0000731 dated December 15, 2020 issued by the State Bank of India; also recorded in Form H as Guarantee 1637620FG0000731 dtd 15.12.2020, BG Amount INR 296,20,00,000.00)

Performance security instrument

BG

Units note

The Form H stakeholder table (para 7) and the 'salient features' table (para 4) are printed in Rs. Crores

The Form H stakeholder table (para 7) and the 'salient features' table (para 4) are printed in Rs. Crores

Body of order · 6 rows

Form H · 15 rows

1. Seq

   1

   Beneficiary

   CIRP Costs

   Amount as printed

   As determined at actuals

   Timing as printed

   In accordance with Section 5(13) of the Code and Regulation 31 of the CIRP Regulations, in priority; from available cash flows, with the Implementing Entity to infuse funds by equity, convertible securities, subordinate convertible loans or other appropriate means in the event of a shortfall

2. Seq

   2

   Beneficiary

   Financial Creditors

   Amount as printed

   Rs. 200 crores

   Timing as printed

   Upfront Payment (INR 2 crores of which shall form part of the litigation corpus)

3. Seq

   3

   Beneficiary

   Financial Creditors

   Amount as printed

   Rs. 2,700 crores worth of NCDs (coupon 6.65% p.a., payable annually)

   Timing as printed

   Redeemable in 5 instalments: Rs.200 crore due 25 months from the Closing Date; Rs.625 crores due 3 years from the Closing Date; INR 625 crores due 4 years from the Closing Date; INR 625 crore due 5 years from the Closing Date; INR 625 crore due 6 years from the Closing Date

4. Seq

   4

   Beneficiary

   Workmen and Employees (admitted workmen dues INR 13.5 crores; admitted employees/non-workmen dues INR 38.5 crores)

   Amount as printed

   Approx. Rs. 52 crores

   Timing as printed

   Upfront cash payment pursuant to funds infused by the Resolution Applicant

5. Seq

   5

   Beneficiary

   Operational Creditors and Statutory Creditors (claim Rs.1,178 crores Operational + Rs.1,587.1 crores Statutory)

   Amount as printed

   INR 10 Crores

   Timing as printed

   Upfront cash payment pursuant to funds infused by the Resolution Applicant, to be distributed proportionately among the operational and statutory dues

6. Seq

   6

   Beneficiary

   Related Parties

   Amount as printed

   NIL

   Timing as printed

   N.A.

7. Seq

   7

   Beneficiary

   Other Creditors

   Amount as printed

   NIL

   Timing as printed

   Not separately provided / N.A.

Entity type

company

Sources of funds

Financial Outlay under the Resolution Plan: CIRP Costs paid as determined on actuals from available cash flows (Implementing Entity to infuse funds by equity, convertible securities, subordinate convertible loans or other appropriate means in case of shortfall); Financial Creditors to receive Rs. 200 crores upfront + Rs. 2,700 crores worth of NCDs (coupon 6.65% p.a.) + cash balances available on the Plan Effective Date + 8% equity shares of VIL.

Post plan management

Implementing Entity to act in active consultation with a Steering Committee constituted under the Resolution Plan; the Applicant (RP) and Lead Bank Financial Creditors to be members of the Steering Committee; Mr. R.K. Agarwal, former Whole Time Member of SEBI, appointed by the Adjudicating Authority as Observer cum Permanent Invitee to the Steering Committee.

Statutory dues

Operational and statutory dues combined: total claim of Rs.1,178 crores (Operational) plus Rs.1,587.1 crores (Statutory); INR 10 Crores proposed as upfront cash payment to be distributed proportionately among operational and statutory dues; the Adjudicating Authority directed the CoC to ensure payment of statutory dues of employees/ex-employees (Gratuity, Provident Fund etc.) in full and on priority, per the NCLT Mumbai Bench decision in Precision Fasteners Ltd

Operational creditors

Total Operational Creditors: claimed Rs.8,621.23 crores, admitted Rs.3,000.3/3,003.3 crores, provided Rs.62.02 crores (0.72% of claimed). The Adjudicating Authority observed this to be a 'very meagre amount' amounting to a 99.28% haircut for Operational Creditors, and requested the CoC and the Successful Resolution Applicant to increase the pay-out to Operational Creditors, especially MSMEs, given the large number of MSME operational creditors involved

Workmen employees

Admitted workmen dues of INR 13.5 crores and admitted employees/non-workmen dues of INR 38.5 crores; approx. Rs. 52 crores proposed as upfront cash payment pursuant to funds infused by the Resolution Applicant

Litigation carveout

Settlement of a trust of Rs. 1,000/- in favour of the financial creditors to hold in trust the investment of VIL and VTL in its Subsidiary Companies, Associate Companies and joint venture business (VTL not intended to be part of this trust structure); out of the Rs.200 crore upfront payment to Financial Creditors, INR 2 crores shall form part of the litigation corpus

Group entities

13 Videocon Group Companies were consolidated for CIRP by the NCLT's Consolidation Order dated 08.08.2019; 11 of the 13 corporate debtors (Applicomp, CE India, Century Appliances, Electroworld Digital Solutions, Evans Fraser & Co, Millennium Appliances, PE Electronics, SKY Appliances, Techno Electronics, Techno Kart, Value Industries) are to be merged into VIL, except Videocon Telecommunications Limited, which is instead to become a 100% subsidiary of the merged VIL

Assets description

Assets of the 13 companies situated throughout the country with varied business interests: oil and gas assets, Consumer Electronics and Home Appliances (Air Conditioners, Refrigerators, LED/LCD TVs, Washing Machines, Air Coolers), Telecom Services, digital solutions, Real Estate, an Electronic Retail Chain, and ownership of two premium brands

Going concern status

Fair Value of the assets was Rs. 4,069.95 crores and Liquidation Value was Rs. 2,568.13 crores, as ascertained through two registered valuers (RBSA Advisors and Rakesh Narula & Co) under Regulation 27; the assets are to be taken over and run by the Implementing Entity, with the merger of 11 of the 13 Corporate Debtors into VIL and the delisting of VIL and Value Industries Limited shares from BSE and NSE within 44 days of the Plan Effective Date

Interim resolution professional

Mahender Khandelwal

RP replaced the IRP

Yes

Rp replacement date

2019-09-25

Rp replacement reason

Pursuant to the Consolidation Order, at the first meeting of the consolidated CoC held on 16.09.2019, the CoC voted with the requisite majority to replace Mr. Mahender Khandelwal with Mr. Abhijit Guhathakurta as Resolution Professional; the Tribunal approved this appointment by order dated 25.09.2019 (published 27.09.2019)

Invitations for expressions of interest

1. Round no

   1

   Form g date

   2019-10-11

   Plans received

   11

   Outcome

   plan approved

Applicants considered

1. Name

   Twin Star Technologies Limited

   Stage reached

   approved

   Plan value as printed

   Total admitted claim Rs. 61,773 crores; proposed payment of Rs. 200 crores upfront + Rs. 2,700 crores of NCDs + cash balances available + 8% equity shares of VIL

   Vote pct

   95.09%

   Outcome note

   Successful Resolution Applicant; plan found compliant and approved by the CoC at its 19th meeting held on 11.11.2020

2. Name

   V-Shape Investment Management Limited

   Stage reached

   plan_submitted

   Outcome note

   Found compliant with the mandatory provisions of the Code along with Twin Star Technologies Limited's plan at the 19th CoC meeting (11.11.2020), but the CoC approved Twin Star's plan

3. Name

   Mr. V.N. Dhoot (proposal for restructuring of domestic assets / Section 12A application)

   Stage reached

   rejected_by_coc

   Outcome note

   Proposal informed to the CoC at its 15th meeting (02.09.2020); the Section 12A application in respect of this proposal was discussed in the CoC and put for voting, and the CoC instead approved the Resolution Plan of Twin Star Technologies Limited

Bidding mechanism

negotiation

Evaluation matrix present

Yes

Clock events

1. Kind

   extension

   Days

   90

   Granted date

   2020-01-28

   Reason

   NCLT order dated 28.01.2020 granted an extension of 90 days for the consolidated CIRP, extending the last date from February 4, 2020 to May 4, 2020

2. Kind

   exclusion

   Granted date

   2020-03-30

   Reason

   NCLAT order dated 30.03.2020 in Company Appeal (AT) (Insolvency) No. 01 of 2020 directed exclusion of the COVID-19 lockdown period from the CIRP timeline computation; as a result the CIRP period of the Corporate Debtors was extended to expire on February 13, 2021

Advisors

1. Role

   Registered Valuer

   Name

   RBSA Advisors

   Note

   Appointed November 1, 2019 pursuant to CoC approval at the meeting held October 24, 2019

2. Role

   Registered Valuer

   Name

   Rakesh Narula & Co

   Note

   Appointed November 1, 2019 pursuant to CoC approval at the meeting held October 24, 2019

3. Role

   Process Advisor

   Name

   SBI Capital Markets Limited

4. Role

   Techno-Economic Viability Consultant

   Name

   Dunn & Bradstreet

   Note

   Presented on the techno-economic viability of the Resolution Plan at the CoC meeting dated November 11, 2020

5. Role

   Section 29A eligibility check / due diligence

   Name

   Kroll Associates (India) Pvt Ltd

   Note

   Report dated November 23, 2020 shared with and presented to the CoC; no adverse observations on the Resolution Applicant's eligibility under Section 29A

6. Role

   Transaction Review Auditor (Videocon Industries Limited; Videocon Telecommunications Limited)

   Name

   PricewaterhouseCoopers Private Limited

   Note

   Transaction audit reports dated January 20, 2020 (VIL, two reports referenced) and January 23, 2020 (VTL)

7. Role

   Transaction Review Auditor (Value Industries Limited; Century Appliance Limited)

   Name

   Batliboi & Purohit

   Note

   Transaction audit reports dated February 1, 2020

8. Role

   Transaction Review Auditor (Evans Fraser & Co. (India) Limited)

   Name

   N V Dand & Associates

   Note

   Transaction audit report dated July 23, 2020

9. Role

   Transaction Review Auditor (CE India Limited)

   Name

   Haribhakti & Co. LLP

   Note

   Transaction audit report dated January 22, 2020

10. Role

    Certification of Consolidated Financial Statements

    Name

    V. Nair and Associates

    Note

    Certification of Consolidated Financial Statements of the Corporate Debtors as on 31.03.2018

11. Role

    Applicant's Authorised Representative

    Name

    Deloitte Touche Tohmastsu India LLP

    Note

    Provided 22, 20 and 20 representatives respectively at the 10th, 11th and 12th CoC meetings (attended by 26, 26 and 28 CoC members respectively), in addition to the Applicant's Legal Counsel; the bench flagged the size of this representation for IBBI to examine

1. Creditor

   State Bank of India

   Voting pct

   18.05%

   Vote

   for

2. Creditor

   IDBI Bank

   Voting pct

   16.06%

   Vote

   for

3. Creditor

   Union Bank of India + Corporation Bank + Andhra Bank

   Voting pct

   9.07%

   Vote

   for

4. Creditor

   Central Bank of India

   Voting pct

   8.43%

   Vote

   for

5. Creditor

   Bank of Baroda + Vijaya Bank + Dena Bank

   Voting pct

   6.93%

   Vote

   for

6. Creditor

   ICICI Bank

   Voting pct

   5.47%

   Vote

   for

7. Creditor

   Punjab National Bank + Oriental Bank of Commerce + United Bank of India

   Voting pct

   5.02%

   Vote

   for

8. Creditor

   Indian Bank + Allahabad Bank

   Voting pct

   4.94%

   Vote

   for

9. Creditor

   EXIM Bank

   Voting pct

   3.83%

   Vote

   for

10. Creditor

    Bank of India

    Voting pct

    3.76%

    Vote

    for

11. Creditor

    Canara Bank

    Voting pct

    3.14%

    Vote

    for

12. Creditor

    Indian Overseas Bank

    Voting pct

    2.98%

    Vote

    for

13. Creditor

    Syndicate Bank

    Voting pct

    2.81%

    Vote

    for

14. Creditor

    LIC of India

    Voting pct

    2.35%

    Vote

    for

15. Creditor

    Bank of Maharashtra

    Voting pct

    1.97%

    Vote

    against

16. Creditor

    UCO Bank

    Voting pct

    1.78%

    Vote

    for

17. Creditor

    IFCI

    Voting pct

    1.03%

    Vote

    against

18. Creditor

    DB Trustees (Hongkong) Ltd

    Voting pct

    0.87%

    Vote

    abstained

19. Creditor

    Banco BPM Societa Per Azioni

    Voting pct

    0.50%

    Vote

    abstained

20. Creditor

    Yes Bank

    Voting pct

    0.23%

    Vote

    abstained

21. Creditor

    Federal Bank

    Voting pct

    0.17%

    Vote

    for

22. Creditor

    J & K Bank

    Voting pct

    0.15%

    Vote

    for

23. Creditor

    Morgan Securities & Credits Pvt Ltd

    Voting pct

    0.12%

    Vote

    abstained

24. Creditor

    Barclays Bank PLC

    Voting pct

    0.11%

    Vote

    for

25. Creditor

    Goldman Sachs International

    Voting pct

    0.064%

    Vote

    abstained

26. Creditor

    SIDBI

    Voting pct

    0.053%

    Vote

    against

27. Creditor

    Axis Bank

    Voting pct

    0.039%

    Vote

    for

28. Creditor

    ABG Shipyard Ltd

    Voting pct

    0.024%

    Vote

    against

29. Creditor

    Morgan Stanley & Co International PLC

    Voting pct

    0.013%

    Vote

    abstained

30. Creditor

    Nomura International PLC

    Voting pct

    0.010%

    Vote

    abstained

31. Creditor

    Followel Engineering Limited

    Voting pct

    0.0095%

    Vote

    abstained

32. Creditor

    Kothari Metals Limited

    Voting pct

    0.0052%

    Vote

    abstained

33. Creditor

    Hewlett Packard Financial Services (India) Pvt Ltd.

    Voting pct

    0.0021%

    Vote

    abstained

34. Creditor

    Latur Urban Co-operative Bank

    Voting pct

    0.00053%

    Vote

    abstained

35. Creditor

    Hind Filters Limited

    Voting pct

    0.00003%

    Vote

    abstained

Dissenting fcs

1. Bank of Maharashtra
2. IFCI
3. SIDBI
4. ABG Shipyard Ltd

Dissenting fc treatment

Dissenting FCs shall not be paid less than the amount payable to them under Section 53(1) of the Code in the event of liquidation. Per Regulation 38(1)(b) of the CIRP Regulations, Dissenting FCs shall be paid in cash their portion of the Upfront Payment before assenting FCs are paid their portion; NCDs issued to Dissenting FCs shall be redeemed one day prior to the NCDs of consenting Financial Creditors; the payment and manner of payment to Dissenting FCs shall be made strictly per Section 30(2)(b) of the Code read with Regulation 38(1)(b) of the CIRP Regulations. The Adjudicating Authority additionally directed the CoC to make payments as per liquidation value to all dissenting Financial Creditors in cash upfront before any payment is made to assenting Financial Creditors, per Jaypee Kensington Boulevard Apartments Welfare Association v. NBCC (India) Ltd.

Section 30(2)(b) minimum stated

Yes

Business & treatment of stakeholders

Capital reduction of the equity share capital of VIL and of VTL, and extinguishment/cancellation thereof to Nil for each of the 13 Corporate Debtors; Conversion of 'Converted Debt' of VIL held by financial creditors into Financial Creditors Equity Shares of VIL such that financial creditors hold 8% equity of VIL on a post-money fully diluted basis, with a 3-year lock-in from the Closing Date, after which the Implementing Entity has a first right of refusal to acquire the same; infusion of funds by VIL into VTL in consideration of issuance of New Equity Shares of VTL such that VIL holds 100% share capital of VTL.

Delisting

Yes

Capital reduction

Yes

Merger or amalgamation

Yes

Post plan shareholding

1. Holder

   Videocon Industries Limited - Equity

   Before

   33,44,58,875 shares, 100% voting share

   After

   NIL

2. Holder

   Value Industries Limited - Equity

   Before

   3,91,85,675 shares, 100% voting share

   After

   NIL

3. Holder

   Electroworld Digital Solutions Limited - Equity

   Before

   12,42,04,71,883 shares, 100% voting share

   After

   NIL

4. Holder

   Videocon Telecommunications Limited - Equity

   Before

   8,00,00,00,000 shares, 100% voting share

   After

   NIL

5. Holder

   Applicomp India Limited - Equity

   Before

   13,82,92,837 shares, 100% voting share

   After

   NIL

6. Holder

   Millennium Appliances India Limited - Equity

   Before

   4,12,66,000 shares, 100% voting share

   After

   NIL

7. Holder

   PE Electronics Limited - Equity

   Before

   1,24,95,000 shares, 100% voting share

   After

   NIL

8. Holder

   Techno Electronics Limited - Equity

   Before

   13,24,75,000 shares, 100% voting share

   After

   NIL

9. Holder

   Techno Kart India Limited - Equity

   Before

   16,12,40,000 shares, 100% voting share

   After

   NIL

10. Holder

    CE India Limited - Equity

    Before

    70,107 shares, 100% voting share

    After

    NIL

11. Holder

    Century Appliances Limited - Equity

    Before

    1,00,00,000 shares, 100% voting share

    After

    NIL

12. Holder

    Sky Appliances Limited - Equity

    Before

    3,15,67,000 shares, 100% voting share

    After

    NIL

13. Holder

    Evans Fraser & Co. (India) Ltd. - Equity Class A and Class B

    Before

    Class A: 4,97,500 shares; Class B: 12,500 shares; 100% voting share

    After

    NIL

Effective date definition

The Resolution Plan shall become effective from the date of this order and shall form part of this order

Monitoring committee

The Resolution Applicant shall act in active consultation with a Steering Committee constituted under the Resolution Plan; the Applicant (RP) and the Lead Bank Financial Creditors shall be members of the Steering Committee, which will supervise implementation of the Resolution Plan; the Adjudicating Authority additionally appointed an Observer cum Permanent Invitee to the Steering Committee to ensure smooth functioning and changeover to the Successful Resolution Applicant

Monitoring committee members

1. Name

   R.K. Agarwal

   Role

   Observer cum Permanent Invitee to the Steering Committee (Former Whole Time Member of SEBI; expert in Capital Markets and Finance); to be suitably paid fee for professional services and other fringe benefits

1. Seq

   1

   Relief

   Continued use of the brand name 'Kelvinator' (IA 527 of 2019)

   Category

   contracts

   Disposition

   conditional

   Reason

   The Agreement should continue for at least a year from the date of approval of the Plan as per the existing terms and conditions, as a transitional arrangement, and subsequently it is up to both parties to decide the same as per their mutual understanding

2. Seq

   2

   Relief

   (all reliefs, en bloc)

   Disposition

   deferred_to_authority

   Reason

   The approval of the Resolution Plan shall not be construed as waiver of any statutory obligations/liabilities of the Corporate Debtor and shall be dealt with by the appropriate Authorities in accordance with law, under the Doctrine of Clean Slate as propounded by the Hon'ble Supreme Court in Committee of Creditors of Essar Steel v. Satish Gupta and Ghanashyam Mishra and Sons Private Limited

1. Objector

   Unnamed party under IA 527 of 2019

   Objector class

   other

   Ground

   Prayer for continued use of the brand name 'Kelvinator'

   Ia number

   IA 527 of 2019

   Disposition

   clarification_ordered

   Effect on approval

   None; use of the brand name directed to continue for at least one year from the date of approval as a transitional arrangement per existing terms, with the parties to decide thereafter by mutual understanding

Applications

1. Sections

   Section 43 and Section 66

   Respondents

   Suspended/erstwhile directors/personnel of Videocon Industries Limited

   Status

   pending

2. Sections

   Section 43

   Respondents

   Suspended/erstwhile directors/personnel of Value Industries Limited

   Status

   pending

3. Sections

   Section 43 and Section 45

   Respondents

   Suspended/erstwhile directors/personnel of Century Appliance Limited

   Status

   pending

4. Sections

   Section 66

   Respondents

   Suspended/erstwhile directors/personnel of CE India Limited

   Status

   pending

5. Sections

   Section 66

   Respondents

   Suspended/erstwhile directors/personnel of Evans Fraser & Co. (India) Ltd

   Status

   pending

6. Sections

   Section 66

   Respondents

   Suspended/erstwhile directors/personnel of Videocon Telecommunications Limited

   Status

   pending

Transaction audit findings

Transaction audit reports were submitted by PricewaterhouseCoopers Private Limited (Videocon Industries Limited - January 20, 2020, listed twice/duplicatively in Annexure D; Videocon Telecommunications Limited - January 23, 2020), Batliboi & Purohit (Value Industries Limited and Century Appliance Limited - February 1, 2020), Haribhakti & Co. LLP (CE India Limited - January 22, 2020), and N V Dand & Associates (Evans Fraser & Co. (India) Ltd - July 23, 2020). The Resolution Professional independently corroborated these reports and formed the view that suspended/erstwhile directors/personnel of the respective Corporate Debtors indulged in preferential, undervalued and/or fraudulent transactions under Sections 43, 45 and 66 of the Code, detrimental to the respective Corporate Debtors and their creditors.

Conditions imposed

1. Condition

   CoC to make payments as per liquidation value to all dissenting Financial Creditors in cash upfront before any payment is made to assenting Financial Creditors, per Jaypee Kensington Boulevard Apartments Welfare Association v. NBCC (India) Ltd

   Addressed to

   CoC

2. Condition

   CoC to ensure payment of statutory dues of employees/ex-employees (Gratuity, Provident Fund etc.) in full and on priority, per the NCLT Mumbai Bench decision in Precision Fasteners Ltd

   Addressed to

   CoC

3. Condition

   Resolution Applicant, for effective implementation of the Plan, to obtain all necessary approvals under any law for the time being in force, within such period as may be prescribed

   Addressed to

   Twin Star Technologies Limited / Implementing Entity

4. Condition

   Suggestion/request to both CoC and the Successful Resolution Applicant to increase the pay-out amount to Operational Creditors, especially MSMEs

   Addressed to

   CoC and Twin Star Technologies Limited

5. Condition

   IBBI requested to examine whether the confidentiality clause around Liquidation Value and Fair Market Value disclosure is followed in real time, and to frame appropriate regulations/safeguards if warranted

   Addressed to

   IBBI

6. Condition

   IBBI requested to examine the practice of a large number of Authorised Representatives attending CoC meetings on behalf of the Applicant, and to issue appropriate guidelines

   Addressed to

   IBBI

7. Condition

   Agreement for use of the brand name 'Kelvinator' (IA 527 of 2019) to continue for at least one year from the date of approval of the Plan, as a transitional arrangement per existing terms and conditions

   Addressed to

   Resolution Applicant / brand licensor

8. Condition

   NCLT appoints Mr. R.K. Agarwal as Observer cum Permanent Invitee in the Steering Committee to ensure smooth functioning and changeover to the Successful Resolution Applicant; he shall be suitably paid fee for his professional services and other fringe benefits

   Addressed to

   Steering Committee / Successful Resolution Applicant

Precedents cited

1. Case

   K. Sashidhar v. Indian Overseas Bank & Others, Civil Appeal No.10673/2018, decided 05.02.2019

   Proposition

   The AA's role is 'no more and no less' -- limited to scrutinizing that the Resolution Plan approved by requisite voting share meets the requirements of Section 30(2)

2. Case

   Committee of Creditors of Essar Steel, Civil Appeal No. 8766-67 of 2019, decided 15.11.2019

   Proposition

   The Adjudicating Authority has no jurisdiction as a Statutory Appellate Authority, only a supervisory role; it cannot substitute its views on the CoC's commercial wisdom but can remand the matter back to the CoC if not law compliant

3. Case

   Jaypee Kensington Boulevard Apartments Welfare Association & Ors. v. NBCC (India) Ltd. & Ors., Civil Appeal No. 3395 of 2020, decided 24.03.2021

   Proposition

   The Adjudicating Authority cannot modify the Resolution Plan but can send it back for reconsideration to the CoC; there is no scope for interference with the commercial aspects of the CoC's decision

4. Case

   Ghanashyam Mishra and Sons Private Limited, Civil Appeal No. 8129 of 2019, decided 13.04.2021

   Proposition

   Doctrine of 'Clean Slate' -- once a resolution plan is approved, all claims not forming part of the plan stand extinguished and no proceedings in respect of such claims can be initiated or continued

5. Case

   NCLT Mumbai Bench decision in Precision Fasteners Ltd

   Proposition

   CoC to ensure that payment of statutory dues of employees/ex-employees (Gratuity, Provident Fund etc.) is made in full and on priority

6. Case

   Edelweiss Asset Reconstruction Company Ltd v. Synergies Dooray Automative Ltd. and Ors., Company Appeals (Insolvency) 169-173 of 2017, NCLAT order dated December 14, 2018

   Proposition

   The IBC is an exhaustive code on the subject matter of insolvency in relation to corporate entities and is complete in itself, supporting a merger being effected as part of a resolution plan without recourse to the Companies Act, 2013

Judicial observations

1. "Out of total claim amount of Rupees 71,433.75 Crores, claims admitted are for Rs 64,838.63 Cores and the plan is approved for an amount of only Rs 2962.02 Crores which is only 4.15% of the total outstanding claim amount and the total hair cut to all the creditors is 95.85%. Therefore, the Successful Resolution Applicant is paying almost nothing and 99.28% hair cut is provided for Operational Creditors (Hair cut or Tonsure, Total Shave)." (p.32-33)
2. "Surprisingly the Resolution Applicant also valued all the assets and liabilities of all the 13 companies and arrived at almost the same value of the registered valuers... a doubt arises upon the confidentiality clause being in real time use therefore, we request IBBI to examine this issue in depth so as to ensure the confidentiality clause is followed unscruplessley, without any compromise in letter and spirit by all the concerned parties." (p.35)
3. "Such a large number of Authorised Representative for the Applicant indicates either he is not fully prepared or monitory benefit (fees) to these Representatives. Therefore, we request IBBI to examine this issue as well and appropriate guidelines may be issued." (p.35-36)

Directives to third parties

IBBI requested to examine whether the confidentiality clause around Liquidation Value/Fair Market Value disclosure is being followed in real-time practice and to frame appropriate regulations/safeguards if warranted; IBBI also requested to examine the practice of large numbers of Authorised Representatives attending CoC meetings on an Applicant's behalf and to issue appropriate guidelines

1. Case number

   IA 527 of 2019

   Outcome line

   Brand name 'Kelvinator' usage agreement directed to continue for at least one year from the date of approval, as a transitional arrangement per existing terms and conditions

2. Case number

   All pending IAs in CP (IB) No. 02/MB/C-II/2018 and the connected consolidated petitions

   Outcome line

   Disposed of in light of the directions given to the Applicant and CoC to consider the claims of Dissenting Financial Creditors, employees and ex-employees, and other Operational Creditors and stakeholders

Companies named in the order

1. Videocon Industries Ltd.
2. Videocon Telecommunications Ltd.
3. Evans Fraser & Co. (India) Ltd.
4. Millennium Appliances (India) Ltd.
5. Applicomp (India) Ltd.
6. Electroworld Digital Solutions Ltd.
7. Techno Kart India Ltd.
8. Century Appliances Ltd.
9. Techno Electronics Ltd.
10. Value Industries Ltd.
11. PE Electronics Ltd.
12. CE India Ltd.
13. Sky Appliances Ltd.

Order date

2021-06-08