First Resolution Plan under the Code accepted by the NCLT

The Hyderabad Bench of NCLT has accepted the resolution plan proposed under the first petition ‘filed’ under the Insolvency and Bankruptcy Code, 2016, albeit with modifications..The petition, which was filed by the corporate debtor Synergies-Dooray Automotive Ltd under Section 10 of the Code, was admitted by the NCLT on January 23, 2017. The day on which enabling sections of the Code came into force i.e. December 1, 2016, appeals involving Synergies were pending with the AAIFR and the DRT..With the notification of the SICA Repeal Act 2003, proceedings before the AAIFR stood abated. Thereafter, Synergies itself approached NCLT under the Code for initiation of the resolution process. While admitting the case, the NCLT exercised its powers under Section 13(1)(a) and 14 of the Code to stay all pending suits against Synergies..As it appears from the orders, the three financial creditors that have been involved in the proceedings include Edelweiss, Synergy Castings Limited (SCL) and Millennium Finance Limited (MFL)..Edelweiss (an ARC which had taken over the debt from EXIM bank), was much opposed to the triggering of insolvency since the very beginning, to a point where there arose a dispute between Edelweiss and the Interim Resolution Professional (IRP), Mamta Binani, with respect to production of documents..During the 180 day moratorium period, Edelweiss approached the NCLT under Section 60(5)(c) of the Code seeking directions against the IRP to produce all documents, files and paper. The IRP was ordered, by the NCLT, to produce the documents as demanded by Edelweiss..However, just yesterday, the NCLT orally admitted – ‘with modifications’- the plan proposed by SCL which, in addition to being a financial creditor, is also a related party to the corporate debtor, Synergies..The resolution plan has been proposed by SCL, which essentially involves an amalgamation between SCL and Synergies, with a promise to pay all debts over a period of three years..The modifications proposed by the NCLT are unknown at this point and will be revealed in the order when it comes out..Abhirup Dasgupta appeared for Synergies, the original petitioner; S.Chidambaram appeared for SCL. Senior Counsel Deepak Bhattacharya and Dishit Bhattacharya appeared for MFL. Senior Counsel Niranjan Reddy appeared for Edelweiss, briefed by Phoenix Legal. Krishnendu Datta and P. Nagesh appeared for Mamta Binani, the IRP.