06th May, 2025 Approval of Resolution Plan - Shraman Estate Pvt. Ltd. [IA- 24/2024 in IB-1358/ND/2019] (8.21 MB)

IA. No. 24/2024 in CP (IB)- 1358/(ND)/2019
M/s Shrem Residency Pvt Ltd vs. Shraman Estate Pvt Ltd Page 1 of 46 IN THE NATIONAL COMPANY LAW TRIBUNAL NEW DELHI BENCH (COURT – II) Item No. 204 IB-1358/ND/2019 IA- 24/2024 IN THE MATTER OF: M/s Shrem Residency Pvt. Ltd.

… Applicant/Petitioner Versus

Shraman Estate Pvt. Ltd. … Respondent AND IN THE MATTER OF IA-24/2024 Mr. Shailesh Bhalchandra Desai, Resolution Professional of Shraman Estates Pvt Ltd, 708, 7th Floor, Raheja Centre, Nariman Point, Mumbai – 400021 … Applicant/ RP

Under Section: 30(6) of IBC Code, 2016
Order delivered on 28.03.2025 CORAM: SH. ASHOK KUMAR BHARDWAJ, HON’BLE MEMBER (J) MS. REENA SINHA PURI, HON’BLE MEMBER (T)

PRESENT:

For the Applicant : For the Respondent : For the Suspended
Director
: Adv. Vishesh Issar For the SRA : Adv. Kaanchi Ahuja & Adv. Mukesh Jain in IA- 24/2024 For the RP : Adv. Ayush in IA-24/2024

Hearing Through: VC and Physical (Hybrid) Mode

ORAL ORDER IA- 24/2024: The prayer made in the captioned application reads thus: - a) Consider and allow the instant IA No. of 2024 seeking approval of Resolution Plan under Section 30(6) read with Section 31;

Page 2 of 46 b) Consider and approve the Resolution Plan submitted on 24 April 2024 by Mr. Jaspal Singh Chandock which has been approved by the Committee of Creditors (CoC) u/s 31(1) of the Code; c) Consider closure of the corporate insolvency and resolution process of the Corporate Debtor on approval of the Resolution Plan under the Code;
d) Consider declaring u/s 31(3)(a) of the Code that the moratorium u/s (e) 14(1) of the Code shall cease to have effect from the date the Hon'ble NCLT passes an order approving the Resolution Plan;
e) Pass such other order(s) and/or direction(s) in the interest of justice which this Hon'ble Tribunal deems fit.” 2. The factual position has been enumerated in Para Nos. 1 to 35 of the application, which reads thus: -

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Our Attention is drawn to the provisions that have been made in Clause 7.2 of the Plan, which states that the CIRP cost shall paid in priority before any payment is made to the creditors. The clause reads thus: -

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The plan also provides for payment to the Operational Creditors in priority over the Financial Creditors. Clause 7.4 of the Plan wherein such provision has been made reads thus: -

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The source of fund as well as the total consideration under the plan has been provided under clause 11 of the plan, which reads thus: -

Page 27 of 46 6. The provisions regarding the implementation schedule of the plan are given in Part-H of the Plan, which reads thus: -

Page 28 of 46 7. The clause 16 under Part F of the plan provides for the formation of a Monitoring Committee for supervising the implementation of the plan. Relevant excerpt of clause 16 reads thus: -

The SRA has filed affidavit in terms of Section 29A of the IBC, 2016. The affidavit, enclosed at page 153 of the application, reads thus: -

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Page 30 of 46 9. Our attention is drawn to the Performance Security Amount of Rs. 5,60,00,000/- deposited by SRA in the CIRP account of the Corporate Debtor maintained with State Bank of India. Copy of the relevant bank statements and email confirming the depositing of aforementioned amount has been enclosed as Annexure- 17 to the application.
10. The cause of default and the mechanism to address the same are given in clause 12 of the Plan, which reads thus: -

The fair value and liquidation value of the assets of the Corporate Debtor, as mentioned in certificate given by RP in Form H, is Rs. 25,86,87,625/- and Rs. 18,71,66,594/- respectively.

Page 31 of 46 12. The details of distribution of the consideration for the plan offered by the SRA to the stakeholders has been provided in clause (7) of Form H given by RP. The same reads thus: -

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The RP has also certified that the plan is in compliance with the provisions of IBC, 2016 r/w CIRP Regulations, 2016. The relevant excerpts of the certificate read thus: -

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In clause (4) of the certificate, the RP has specifically certified that the Plan does not contravene any of the provisions of law for the time being in force. The clause (4) of the certificate reads thus: -

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As far as the issue of reliefs and concessions which fall in the jurisdiction of different Government Authorities, and/ or are subjected to the provisions of different laws for the time being in force are concerned, it is made clear that the amount payable by the SRA in terms of the plan to different creditors, stakeholders, and to keep the Corporate Debtor as a going concern cannot be subject to any condition, assumptions, relief/ concessions and/ or qualification. It also needs to be underlined that the provisions of Section 31(4) of IBC, 2016 mandates the Resolution Applicant to obtain the necessary approval 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 by the Adjudicating Authority under Section 31 of the IBC, 2016. In terms of the provisions of Section 14 of the Code even during the period of CIRP, no default in payment of current dues is a precondition for continuation of the License, Permit, Registration and similar rights. Thus, even during the moratorium period, some of the facilities forming part of the reliefs and concessions sought are made available to the CD only when there is no default in

Page 37 of 46 payment of the current dues. On approval of the Resolution Plan, the SRA/CD cannot be put on a better footing by exempting it from paying its legitimate dues under the law. For the sake of convenience, the explanation below Section 14 of the code is extracted below: “14. Moratorium. – (1) Subject to provisions of sub-sections (2) and (3), on the insolvency commencement date, the Adjudicating Authority shall by order declare moratorium for prohibiting all of the following, namely: - (a) ….. (b) ….. (c) ….. (d) the recovery of any property by an owner or lessor where such property is occupied by or in the possession of the corporate debtor.

Explanation.- For the purposes of this sub-section, it is hereby clarified that notwithstanding anything contained in any other law for the time being in force, a licence, permit, registration, quota, concession, clearance or a similar grant or right given by the Central Government, State Government, local authority, sectoral regulator or any other authority constituted under any other law for the time being in force, shall not be suspended or terminated on the grounds of insolvency, subject to the condition that there is no default in payment of current dues arising for the use or continuation of the license, permit, registration, quota, concession, clearances or a similar grant or right during the moratorium period;” (Emphasis Supplied) 16. In any case, in terms of the provisions of Sections 13 and 15 of the IBC 2016 read with Regulations 6, 6A, 7, 8, 8A, 9 and 9A of IBBI (Insolvency Resolution Process for Corporate Persons) Regulations 2016, all the claimants such as Operational Creditors, Financial Creditors, Creditors in Class, Workmen and Employees and other Creditors can raise their claims before the IRP/RP. The

Page 38 of 46 claims are dealt with by IRP in terms of the provisions of Section 18(1)(b) of the IBC, 2016 and by RP in terms of the provisions of Section 25(1)(b) thereof read with Regulations 12A, 13 and 14 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. Thereafter, the RP prepares an Information Memorandum in terms of the provisions of Regulation 36(2) of IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. The Memorandum contains inter alia a list of creditors containing the range of creditors, the amounts claimed by them, the amount of their claim admitted and the security interest if any in respect of such claims. As has been provided in Regulation 36(1) of the Regulations (ibid), the Information Memorandum is required to be submitted in electronic form to each member of CoC, on or before 95th day from the Insolvency commencement date. As has been provided in Regulation 36A of the Regulations the RP publish brief particulars of the invitation for Expression of Interest in Form G of Schedule I to the Regulations at the earliest i.e. not later than 60th day from the Insolvency commencement date, from interested and eligible Prospective Resolution Applicants to submit Resolution Plans. As can be seen from Regulation 36B of the Regulations, the RP shall issue Information Memorandum Evaluation Matrix (IMEM) and request for Resolution Plans, within 5 days of the date of issue of provisional list of eligible Prospective Resolution Applicants (required to be issued under Regulation 36A(10) of the Regulations). It is with reference to such Information Memorandum Evaluation Matrix that the RP issues request for Resolution Plan. The request for Resolution Plan details each step in the process and the manner and purposes of interaction between the Resolution Professional

Page 39 of 46 and the Prospective Resolution Applicant. The Resolution Plan submitted after consideration of the IMEM and RFRP is then examined by the Committee of Creditors. Nevertheless, it needs to satisfy the requirements of Regulation 37 and 38 of the extant Regulations. Once the plan is approved by the CoC, in terms of the provisions of Regulations 39 of the aforementioned Regulations, it virtually becomes a contract entered into between the CD represented through RP, SRA and the Creditors of the CD. On being approved by this Adjudicating Authority, by operation of Section 31(1) of the Code, the plan becomes binding on the Corporate Debtor and its employees, members, creditors (including the Central Government, any State Government or any local authority to whom a debt in respect of the payment of dues arising under any law for the time being enforced such as authorities to whom statutory dues are owed, guarantors and other stakeholders involved in the Resolution Plan. Thus, Section 31(1) of IBC, 2016, takes care of most of the relief/concession/waiver solicited by the Resolution Applicant.
17. Besides, in terms of the provisions of Section 32A, for an offence committed prior to the commencement of the Corporate Insolvency Resolution Process, the liability of the CD ceases and the CD is not liable to be prosecuted from the date of approval of Resolution Plan by this Adjudicating Authority, if the Resolution Plan results in change of management or control of the CD to a person who was not promotor or in the management or control of the CD or a related party of such a person or a person with regard to whom the concerned Investigating Agency has reason to believe that he had abated or conspired for the commission of the offence

Page 40 of 46 and has submitted or filed a report or a complaint to the relevant statutory authority or Court. In such cases, where the prosecution is instituted against the CD, during CIRP, the CD stands discharged qua the same from the date of approval of the Resolution Plan. Nevertheless, every person who was a designated partner as defined in clause (j) of Section 2 of the Limited Liability Partnership Act, 2008, “an officer who is in default” as defined in Clause (60) of Section 2 of Companies Act, 2013 or was in any manner in charge of, or responsible to the CD for the conduct of his business or associated with the CD in any manner and was directly or indirectly involved in the commission of an offence as per the report submitted or complaint filed by Investigating Agency shall continue to be liable to be prosecuted and punished for such an offence committed by the Corporate Debtor notwithstanding the Corporate Debtors’ liability ceases after approval of the plan. 18. In the wake of the provisions of Section 32A(2), no action is taken against the property of the Corporate Debtor in relation to an offence committed prior to the commencement of the Corporate Insolvency Resolution Process of the CD, where such property is covered under Resolution Plan approved by this Authority under Section 31, which result in the change in the control of the CD to a person who was not a promotor or in the management or control of the Corporate Debtor or related party of such person or a person with regard to whom the Investigating Agency has reason to believe that he had abated or conspired for commission of the offence and has submitted or filed a report or complaint to the relevant statutory authority or Court.

Page 41 of 46 19. The action against the property of the Corporate Debtor as referred to in Section 32A of the Code includes the attachment, seizure, retention or confiscation under such law as may be applicable to the Corporate Debtor. One may also be not oblivious of the fact that in the backdrop of provisions of Section 31(3)(a) of the IBC, 2016, the moratorium order passed by the Adjudicating Authority under Section 14 ceases to have effect. In sum and substance, the SRA/CD would be entitled to no other relief/concession/waiver except those, which are available to it as per the provisions of Section 31(1) and 32A of IBC, 2016. 20. In any case, the resolution plan also indicated that irrespective of any grant of any agreed concession by this tribunal as prayed by the SRA, the plan would be implemented. The relevant excerpt of the application reads thus: -

Further, the Applicant/ RP also furnished an affidavit dated 27.03.2025 wherein it was conceded that there were inadvertent errors in page 16 of the

Page 42 of 46 application as instead of mentioning the claims of the Operational Creditors in lakhs, the same were mentioned in crores. Furthermore, the Applicant also furnished a corrected tabular representation. Relevant excerpt of the affidavit reads thus: -

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During the course of today’s hearing, Advocate Mukesh Jain, Ld. Counsel for SRA, submitted that not an amount of Rs. 1 Lakh, but an amount of Rs. 75,74,670/- would be paid to Income Tax Department and such provision for

Page 44 of 46 payment would be outside the scheme of the plan. It was further submitted that such payment to Income Tax Department would be made within one week from 31.03.2025. The SRA also furnished his affidavit of undertaking to pay the aforementioned amount to the Income Tax Department by 31.03.2025, outside the scheme of the plan. The affidavit reads thus: -

In the backdrop of aforementioned factual position, discussion, analysis and findings, the IA- 24/2024 filed by the RP for approval of the Resolution Plan is allowed. The Plan submitted by the SRA, certified by the RP by issuing a certificate in prescribed form viz. Form “H”, is approved. 24. As a sequel, we issue the following directions: -

Page 45 of 46 i. The approved Resolution Plan shall become effective from the date of passing of this Order and shall be implemented strictly as per the term of the plan and implementation schedule given in the Plan;
ii. All claims which have not been dealt with in the Resolution Plan do not survive after the approval of the Resolution Plan;
iii. The SRA/CD would be entitled to no other reliefs/ concessions/waivers except those are available/permissible to it as per the provisions of Section 31(1) and 32A of IBC, 2016. The SRA is at liberty to approach the relevant authorities who would consider these claims as per the provisions of the relevant law in an expeditious manner; iv. Following steps would be taken in terms of the resolution plan: - SL. NO. STEP TO BE TAKEN TIMELINE FROM DATE OF RECEIPT OF ORDER 1. Effective Date T (45 days from the receipt of order) 2. Constitution of Monitoring Committee T+1 Day 3. Reconstitution of the Board of Directors T+1 Day 4. Cancellation/ Reduction in share capital of CD T+1 Day 5. Payment of CIRP Cost T+10 Days 6. Payment to Operational Creditors including workmen and employees and Dissenting Financial Creditors T+10 Days 7. Payment to Consenting Financial Creditors T+10 Days

Page 46 of 46 v. The order of the moratorium in respect to the corporate debtor passed by this Adjudicating Authority under Section 14 of the IBC, 2016 shall cease to have effect from the date of passing of this Order; vi. The SRA shall act in terms of the provisions of Section 31(4) of IBC 2016; vii. The Monitoring Committee shall file progress report regarding implementation of the Plan before this Tribunal, every month; viii. The RP shall forward all the records relating to the conduct of the CIRP and the Resolution Plan to the IBBI for its record and database; ix. The RP shall also forthwith send a copy of this order to the participants and the Resolution Applicant. He would also send a copy of this order to the ROC concerned within 15 days of this order; x. The RP shall intimate each claimant about the principle or formulae, as the case may be, for payment of debts under the Plan; 25. The Court Officer and Resolution Professional (RP) shall forthwith make available/send a copy of this Order to the CoC and the Successful Resolution Applicant (SRA) for immediate necessary compliance. 26. A copy of this order shall also be sent by the Court Officer and Applicant to the IBBI and RoC for their record.

Sd/-

Sd/-

(REENA SINHA PURI)

(ASHOK KUMAR BHARDWAJ)

MEMBER (T)

      MEMBER (J) 
                                                                          Jitendra/ Atul Raj