IN RE Vs. ALCHEMIST ASSET RECONSTRUCTION CO LTD

JUDGEMENT

(1.) This Petition is submitted on 29.05.2017 under section 10 of Insolvency & Bankruptcy Code (hereinafter The Code) on Form No.6 under Rule 7 of the Insolvency & Bankruptcy (Application to Adjudicating Authority) Rules 2016. According to the Petitioner, total Debt in default was to the tune of Rs. 240 crores as stated in Part-Ill of Form No.6 under the column 3 titled as Total Debt raised and amount in Default'.

(2.) Before adjudicating the issue of admission of this Petition, it is worth to shortlist the legal points raised in the Miscellaneous Application as also argued before us as under :-

(3.) To get the answer, first a Miscellaneous Application (177 of 2017) is to be addressed wherein it is informed that the 'Modified Draft Rehabilitation Scheme' (MDRS) filed by the Petitioner on the basis of an order of AAIFR be considered before appointing an Insolvency Professional. The backgrounds of the events were that the Company was promoted by one Mr. S.N. Shetty in the year 1982 to manufacture snack foods and Soya Oil. In the year 1990 there was a diversification in the business for setting up an alcohol based Glycol Plant near Pune. The Project was originally estimated at Rs. 275 crores, however, completed at the cost of Rs. 388 crores in 1993. The said Project was part-financed by Term Loan of Rs. 218 crores. The completion of the Project had coincided with the de-control of Molasses and Alcohol prices. Due to the said reason the Project has become unviable, stated to be from inception. The manufacturing Plant worked intermittently and finally closed down in March 1996. The net worth got eroded. Due to erosion of the net worth of the Company an Application was moved before BIFR in the year 1997. In March 1998, the Company was declared as a 'sick Company' and the revival process had undertaken, A Draft Rehabilitation Scheme (DRS) was circulated by BIFR on 07.09.2007. A Scheme was sanctioned (SS-08) for revival by BIFR on 28.05.2008 calling the meeting of all the Creditors for taking consent of the majority of the Creditors. Certain promoters have infused substantial funds into the Company for payment towards Creditors and other stake holders. Pursuant to the said SS-08 Scheme the Company was granted several concessions for repayment of outstanding dues viz. Creditors, CBDT and other Agencies. Importantly it is highlighted that pursuant to the said SS-08 Scheme the Company had made payment to the tune of Rs. 150.71 crores out of the total liability of Rs. 152.84 crores. According to the Petitioner, about 98.61% payment was made against the total outstanding Debt. Progress report implementing the Scheme was submitted with IDBI (OA) and BIFR.