NCLT Approves GAIL’s Resolution Plan for JBF Petrochemicals
NCLT Approves GAIL’s Resolution Plan for JBF Petrochemicals
The National Company Law Tribunal (NCLT), Ahmedabad by its division member bench of Justice Dr. Madan B Gosavi (Judicial Member) and Ajai Das Mehrotra (Technical Member) has approved the Rs 2,079 crore Resolution Plan submitted by GAIL (India) Ltd for JBF Petrochemical Limited which owed Rs 7,918 crore to a consortium led by IDBI Bank.
An application was filed by the Resolution Professional of the Corporate Debtor JBF Petrochemical Ltd. under Section 31(1) of the Insolvency and Bankruptcy Code, 2016 (‘Code’) for approval of the Resolution Plan submitted by GAIL (India) Ltd. and approved by Committee of Creditors (‘CoC’).
The facts in brief are that the Corporate Debtor was admitted into Corporate Insolvency Resolution Process (‘CIRP’) by this Adjudicating Authority vide order dated 28 January, 2022, in an application filed by the financial creditor IDBI Bank Ltd. under Section 7 of the Code triggering the moratorium and Mr. Sundaresh Bhat was appointed as Interim Resolution Professional (‘IRP’). The IRP made a public announcement in Form-A on 4 February, 2022 and collated claims and constituted a Committee of Creditors (‘CoC’).
The COC consisted of the following financial creditors- IDBI Bank, Union Bank of India, Bank of Baroda, RAK Branch, Export-Import Bank of India and Indian Overseas Bank.
Thereafter on 18 April, 2022 the Applicant issued Form G inviting Expression of Interest ("EoI") for submission of a resolution plan for the Corporate Debtor. Pursuant thereto 11 EoIs from various bidders were received.
The CoC further decided that the distribution to the creditors shall be carried out as per the Code and as specified under the approved resolution plan. The CoC had approved the resolution plan submitted by GAIL (India) Limited with 100% voting share.
Further, the average Fair Value and Liquidation Value of the Corporate Debtor are Rs. 2719,00,58,329/- and Rs. 1616,63,24,416/-, respectively. The present Resolution Plan offered total amount of Rs. 2101,00,00,000 including CIRP cost of Rs. 21,75,04,971.
The other secured lenders of the company are Union Bank of India, Bank of Baroda, Exim Bank and Indian Overseas Bank, among others. These lenders made a claim of Rs 4,584 crore, but NCLT admitted a total claim of Rs 4,662 crore. GAIL offered to pay the bankers Rs 2,015 crore, which is a 43.23 per cent recovery for them.
In addition to this, the unsecured creditors had claimed Rs 1,329 crore, of which the NCLT admitted Rs 252.83 crore and the operational creditors had claimed Rs 1,905 crore and Rs 49.33 crore was approved.
The Applicant had filed an affidavit on 3 December, 2022 contending that none of the Government Authorities have claimed any security or charge over any assets of the Corporate Debtor nor have they filed their claims as a secured creditor, thus none of the Government Authorities, can be deemed to be / treated as a secured creditor.
As far as reliefs and concessions claimed by the resolution applicant, the bench referred the decision passed by the Supreme Court, Ghanashyam Mishra and Sons Private Limited Vs. Edelweiss Asset Reconstruction Company Limited and others (2021), the NCLT observed, that all past claims would stand extinguished. However, as far as various statutory rights vested with the corporate debtor in form of various licenses, leases, and other alike matter, we make it clear that the successful resolution applicant has to approach the concerned statutory authority for those concessions and those authorities will consider the same as per their established procedure.
Lastly, the NCLT ruled, “we being satisfied approve the resolution plan submitted by GAIL (India) Limited......the resolution applicant shall obtain necessary approvals required under any law for the time being in force within a period of one year from the date of approval of the resolution plan.”
