14th November, 2023 Approval of Resolution Plan - Rajnigandha Suppliers Private Limited [IA-4305-2023 in CP (IB) No.855-MB-C-IV-2022] (964.7 KB)
IN THE NATIONAL COMPANY LAW TRIBUNAL
MUMBAI BENCH-IV
IA-4305/2023
Under Section 30(6) of Insolvency &
Bankruptcy Code, 2016
Mr. Arun Kishanlal Bagaria
Resolution Professional/
…Applicant
In the matter of
CP (IB) No.855/MB/C-IV/2022
Rohit Motilal Agarwal
…Financial Creditor
Vs.
Rajnigandha Suppliers Private Limited
…Corporate Debtor
Order Pronounced on: 09.11.2023
Coram:
Ms. Anu Jagmohan Singh
Mr. Kishore Vemulapalli
Hon’ble Member (Technical)
Hon’ble Member (Judicial)
Appearances (via videoconferencing): For the Applicant/RP :
Mr. Umang Mehta a/w Ms.
Aalisha Sharma, Ld. counsel
i/b Dhruve Liladhar &
Company;
ORDER
This Application has been filed on 13.09.2023 by the Resolution Professional under Section 30(6) of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as the ‘the Code’) on behalf of the Committee of Creditors seeking approval of the Resolution Plan submitted by the Successful Resolution Applicant and approved by 100% of the voting
NATIONAL COMPANY LAW TRIBUNAL MUMBAI BENCH-IV IA-4305/2023
IN CP (IB)/855/MB-IV/2022
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share of the members of the Committee of Creditors
(hereinafter referred to as ‘CoC’) of the Corporate Debtor viz.
Rajnigandha
Suppliers
Private
Limited
[CIN:
U51909MH2009PTC311830]
(hereinafter
referred
to
as
‘Corporate Debtor’).
2.
The brief facts of the Application are as follows:
2.1
Corporate Insolvency Resolution Process (CIRP) of the
Corporate Debtor was initiated vide an order dated
29.03.2023 of this Court in C.P.(IB)-855(MB)/2022 on an
application filed by Rohit Motilal Agarwal (Financial
Creditor) under Section 7 of the Insolvency and
Bankruptcy Code 2016. Mr. Arun Kishanlal Bagaria
(Reg.
No.:
IBBI/IPA-002/IP-N00278/2017-18/10836
was appointed as Interim Resolution Professional (IRP),
who was confirmed as Resolution Professional (RP) in the
First CoC meeting held on 29.04.2023. The Applicant
made a public announcement in the newspapers (in
Nagpur) in Form-A on 01.04.2023 inviting claims from
the creditors, workers/employees of the Corporate
Debtor and from government bodies. IRP constituted the
Committee of Creditors (CoC) based on the claims
received by him and the first meeting of the CoC held on
29.04.2023.
2.2
Form G was published on 22.05.2023 for inviting
Expression of Interest and the last date for submission
of the resolution plan was 21.07.2023. Only one
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Prospective Resolution Applicant i.e., M/s Rishab Enterprises, which submitted the Resolution plan with Earnest Money Deposit on 21.07.2023. 2.3 The Resolution Plan submitted by the Resolution Applicant viz. M/s Rishab Enterprises was approved by the CoC in the 4th meeting held on 09.08.2023 through e-voting by 100% of the CoC member voting in favor of the Resolution Plan. The resolution is reproduced below
“Resolved that, the members of the Committee of
Creditors are and hereby approves the Resolution
Plan submitted by the Successful Resolution
Applicant as per Section 30 of IBC Code and
Regulations 39 of IBBI Regulations 2016. The
Members of Committee of Creditors accepted the
Resolution Plan in its entirely without any
amendment/objections
after
pursuing
the
summary of Resolution Plan provided and
discussed by the chairman.”
2.4
The RP issued Letter of Intent on 16.08.2021 in favor of the
Resolution Applicant and also sought for Performance
Guarantee of Rs.5 lakhs. Further, the RP vide its email dated
16.08.2023, inter alia has informed the Successful Resolution
Applicant that the amount of Earnest Money Deposit for an
amount of Rs. 5 lakhs to be continued to be held as Performance
Bank Guarantee. Therefore, RP states that the Resolution Plan
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approved by the CoC is in compliance with the requirements of Section 30(2) of the Code. In compliance of Section 30(2) of IBC, 2016, the Resolution Professional has examined the Resolution plan of the Successful Resolution Applicant and confirms that this Resolution Plan: a. Provides for payment of Insolvency Resolution Process cost in a manner specified by the Board in the priority to the payment of other debts of the corporate debtor; b. Provides for management of the affairs of the Corporate Debtor after approval of Resolution Plan; c. The implementation and supervision of Resolution Plan; d. Does not prima facie contravene any of the provisions of the law for time being in force, e. Conforms to such other requirements as may be specified by the Board. f. As per the Affidavit received and the further documents submitted, the Resolution applicants are not covered under 29A. In compliance of Regulation 38 of CIRP Regulations, the Resolution Professional confirms that the Resolution plan provides that:
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i. The amount due to the Operational Creditors under resolution plan shall be given priority in payment over Financial Creditors. ii. It has dealt with the interest of all Stakeholders including Financial Creditors and Operational Creditors of the CD. iii. A statement that neither the Resolution Applicants nor any related parties have failed to implement nor have contributed to the failure of implementation of any other Resolution Plan approved by the AA in the past. iv. The terms of the plan and its implementation schedule. v. The management and control of the business of the CD during its term. vi. Adequate means of Supervising its implementation. vii. The Resolution Plan Demonstrates that it addresses a. The cause of the Default b. It is feasible and viable c. Provision for effective implementation d. Provisions for approvals required and the time lines for the same. e. Capability to Implement the Resolution Plan 2.5 The Resolution Applicant viz. M/s Rishab Enterprises is a company engaged in the business of wholesale & retail trading business of electronic items in the name of ‘’Rishab
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Enterprises’’ being proprietary concern of Mr. Rishab Halwai, having office at Unit-20, Saraf Udyog Bhavan, Chicholi Pathak Gate, Chincholi, Malad (West), Mumbai-400064, Maharashtra, India. The Resolution Applicant confirmed that it is eligible to submit Resolution Plan as per Section 29A of Insolvency and Bankruptcy Code. 2.6 The Resolution Applicant has confirmed that - i. its connected persons are not convicted for any offence during the preceding five years and no criminal proceedings are pending against any person. ii. not disqualified under Companies Act, 2013 to act as a Director. iii. not identified as a willful defaulter by any bank of financial institution or consortium thereof in accordance with the guidelines of the Reserve Bank of India. iv. not debarred from accessing to, or trading in securities markets under any order or directions of the Securities and Exchange Board of India. 2.7 As per the RP the Fair Value and Liquidation Value determined by the registered Valuer are as follows: Fair Value
Rs. 01,28,43,000/-
Liquidation Value
Rs. 01,28,43,000/-
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Resolution Plan for the Corporate Debtor (the key features of the Resolution Plan submitted by M/s. Rishab Enterprises is summarized below): 3.1 The value of the said Resolution Plan is Rs. 1.40 crores which includes the cash payments towards the CIRP cost, payment to IBBI and payment to the Financial Creditors and the summary of payment is enumerated below: Sr. No. Particulars Amount Timeline
Insolvency Resolution Process Cost Rs. 6.50 lakhs In priority to all other payments
Payment to IBBI (as per Regulation 31A(1) of the Code) Rs. 0.34 lakhs T + 90 days
Operational Creditors – Trade Creditors, Liabilities and Provisions (other than Statutory/Government Dues, Workmen and Employees) N.A.
Workmen and Employees Dues N.A.
Non-Promoter Shareholders N.A.
Financial Creditors Rs. 133.16 lakhs T + 90 days
Total Rs. 1.40 crores
Ld. Counsel for the Resolution Professional has annexed a certificate of the Form-H to the Application under Regulation 39(4) In Form-H of the CIRP Regulations, 2016 to certify that the
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Resolution Plan has approved by the CoC meets all the requirements of the IBC and its Regulations. FORM H COMPLIANCE CERTIFICATE
(Under Regulation 39(4) of the Insolvency and Bankruptcy
Board of India (Insolvency Resolution Process for
Corporate Persons) Regulations, 2016
1.
I, Arun Kishanlal Bagaria, an insolvency professional
enrolled with Institute of Insolvency professionals and
registered with the Board with registration number
IBBI/IP-N00278/2017-18/10836,
am
the
resolution
professional for the corporate insolvency resolution
process (CIRP) of M/s Rajnigandha Suppliers private
Limited “Corporate Debtor”.
2.
The details of the CIRP are as under:
Sl.
No.
Particulars
Description
1
Name of the CD
M/s.
Rajnigandha
Suppliers
private
Limited.
2
Date of Initiation of CIRP 29th March,2023
3
Date of Appointment of IRP
29th March,2023
4
Date of Publication of Public
Announcement
1st April, 2023
5
Date of Constitution of CoC
22nd April, 2023
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6
Date of First Meeting of CoC
29th April, 2023
7
Date of Appointment of RP
29th April, 2023
8
Date of Appointment of
Registered Valuers
2nd May, 2023
9
Date of Issue of Invitation for EoI 22nd May,2023
10
Date of Final List of Eligible
Prospective Resolution
Applicants
1st July, 2023
11
Date of Invitation of Resolution
Plan
22nd May,2023
12
Last Date of Submission of
Resolution Plan
21st July,2023
13
Date of Approval of Resolution
Plan by CoC
10th August, 2023
14
Date of Filing of Resolution Plan
with Adjudicating Authority
(estimated date)
20th August,2023
15
Date of Expiry of 180 days of
CIRP
26th September,2023
16
Date of Order extending the
period of CIRP
NA
17
Date of Expiry of Extended
Period of CIRP
NA
18
Fair Value
128.43 lakhs
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19
Liquidation value
128.43 lakhs
20
Number of Meetings of CoC held
4
3.
I have examined the Resolution Plan received from
Resolution
Applicant M/s
Rishab Enterprises and
approved by Committee of Creditors (CoC) of M/s
Rajnigandha Suppliers Private Limited.
4.
I hereby certify that:-
i. The said Resolution Plan complies with all the
provisions of the Insolvency and Bankruptcy Code
2016 (Code), the Insolvency and Bankruptcy Board of
India (Insolvency Resolution Process for Corporate
Persons) Regulations, 2016 (CIRP Regulations) and
does not contravene any of the provisions of the law for
the time being in force.
ii. the Resolution Applicant M/s Rishab Enterprises has
submitted an affidavit pursuant to section30(1) of the
Code confirming its eligibility under section 29A of the
Code to submit resolution plan. The contents of the
said affidavit are in order.
iii. the said Resolution Plan has been approved by the CoC
in accordance with the provisions of the Code and the
CIRP Regulations made thereunder. The Resolution
Plan has been approved by CoC which Resolution Plan
was approved by 100 % voting share of financial
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creditors after considering its feasibility and viability
and other requirements specified by the CIRP
Regulations.
iv. The voting was held in the meeting of the CoC on 09th
August,2023 where all the members of the CoC were
present.
5.
The list of financial creditors of the CD M/s Rajnigandha
Suppliers Private Limited being members of the CoC and
distribution of voting share among them is as under:
Sl.
No.
Name of Creditor
Voting
Share (%)
Voting
for
Resolution
Plan
(Voted
for
/
Dissented
/
Abstained)
1.
Rohit Motilal Agrawal
100%
100%
6.
The Resolution Plan includes a statement under regulation
38(1A) of the CIRP Regulations as to how it has dealt with
the interests of all stakeholders in compliance with the
Code and regulations made thereunder.
7.
The amounts provided for the stakeholders under the
Resolution Plan is as under:
Amount in Rs.
Sl. No. Category of Stakeholder* Sub-Category of Stakeholder Amount Claimed Amount Admitted Amount Provided under the Plan Amount Provided to the Amount Claimed (%) (1) (2) (3) (4) (5) (6) (7) 1 Secured Financial Creditors
(a) Creditors not having a right to vote under sub- section (2) of section 21 NA NA NA NA
(b) Other than (a) above:
(i) who did not vote in favour of the resolution Plan (ii) who voted in favour of the resolution plan
NA NA NA NA
Total[(a) + (b)] NA NA NA NA 2 Unsecured Financial Creditors
(a) Creditors not having a right to vote under sub- section (2) of section 21 NA NA NA NA
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(b) Other than (a) above: (i) who did not vote in favour of the resolution Plan (ii) who voted in favour of the resolution plan
NA
1,48,23,726 NA
1,48,23,726 NA
1,33,16,000 NA
89.83%
Total[(a) + (b)] 1,48,23,726 1,48,23,726 1,33,16,000 89.83% 3 Operational Creditors
(a) Related Party of
Corporate Debtor
NA
NA
NA
NA
(b) Other than (a)
above:
(i)Government
(ii)Workmen
(iii)Employees
(iv) ………
NA NA NA NA
Total[(a) + (b)] NA NA NA NA 4 Other debts and dues
NA NA NA NA Grand Total
1,48,23,726 1,48,23,726 1,33,16,000 89.83%
If there are sub-categories in a category, please add rows for
each sub-category.
Amount provided over time under the Resolution Plan and
includes estimated value of non-cash components. It is not NPV.
8.
The interests of existing shareholders have been altered by
the Resolution plan as under :
Sl.
No
Category of
Share
Holder
No. of Shares
held
before
CIRP
No.
of
Shares
held
after
the CIRP
Voting
Share
(%)
held before
CIRP
Voting
Share
(%)
held
after
CIRP
1
Equity
28,55,750
Nil
100%
Nil
2
Preference
NA
NA
NA
NA
9.
The compliance of the Resolution Plan is as under:
Section of the
Code
/
Regulation No.
Requirement with respect to
Resolution Plan
Clause
of
Resolution Plan
Compliance
(Yes / No)
25(2)(h)
Whether
the
Resolution
Applicant meets the criteria
approved by the CoC having
regard to the complexity and
scale of operations of business
of the CD?
Section IV (v)(1)
Yes
Section 29A
Whether
the
Resolution
Applicant is eligible to submit
resolution plan as per final list
of Resolution Professional or
Order,
if
any,
of
the
Adjudicating Authority?
Annexure III
Yes
Section 30(1)
Whether
the
Resolution
Applicant has submitted an
affidavit stating that it is
eligible?
Annexure III
Yes
Section 30(2)
Whether the Resolution Plan-
Section V (vi)
Yes
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(a) provides for the payment of
insolvency resolution process
costs?
(b) provides for the payment to
the operational creditors?
(c) provides for the payment to
the financial creditors who did
not vote in favour of the
resolution plan?
(d)
provides
for
the
management of the affairs of
the corporate debtor?
(e)
provides
for
the
implementation
and
supervision of the resolution
plan?
(f) contravenes any of the
provisions of the law for the
time being in force?]
(h)
Section 30(4)
Whether the Resolution Plan
(a) is feasible and viable,
according to the CoC?
(b) has been approved by the
CoC with 66% voting share?
4th CoC
Meeting
Yes
Section 31(1)
Whether the Resolution Plan
has provisions for its effective
implementation
plan,
according to the CoC?
Section IX
(xviii)
Yes
Regulation
38(1)
Whether the amount due to
the
operational
creditors
under the resolution plan has
been given priority in payment
over financial creditors?]
Section VI (xi)
Yes
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Regulation
38(1A)
Whether the resolution plan
includes a statement as to
how it has dealt with the
interests of all stakeholders?
Section X (xxi)
(2)
Yes
Regulation
38(1B)
(i) Whether the Resolution
Applicant or any of its related
parties
has
failed
to
implement or contributed to
the failure of implementation
of
any
resolution
plan
approved under the Code.
(ii)
If
so,
whether
the
Resolution
Applicant
has
submitted
the
statement
giving details of such non-
implementation?]
Section X (xxi)
(3)
Yes
Regulation
38(2)
Whether the Resolution Plan
provides:
(a) the term of the plan and its
implementation schedule?
(b) for the management and
control of the business of the
corporate debtor during its
term?
(c)
adequate
means
for
supervising
its
implementation?
Section VIII
(xiv)
Section VIII (xv)
Section VIII
(xvi) & (xvii)
Yes
38(3)
Whether the resolution plan
demonstrates that –
Section X
(xxi) (3)
No
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(a) it addresses the cause of
default?
(b) it is feasible and viable?
(c) it has provisions for its
effective implementation?
(d)
it
has
provisions
for
approvals required and the
timeline for the same?
(e) the resolution applicant
has
the
capability
to
implement
the
resolution
plan?
39(2)
Whether the RP has filed
applications
in
respect
of
transactions observed, found
or determined by him?
NA
No
Regulation
39(4)
Provide details of performance
security received, as referred
to in sub-regulation (4A) of
regulation 36B.]
Ae mentioned
earlier in RFRP
Yes
10. The CIRP has been conducted as per the timeline indicated
as under:
Section of the
Code /
Regulation No.
Description of Activity
Latest Timeline
under
regulation 40A
Actual Date
Section 16(1)
Commencement of CIRP and
Appointment of IRP
T
29.03.2023
Regulation
6(1)
Publication of Public
Announcement
T+3
01.04.2023
Section
15(1)(c)
Submission of Claims
T+14
13.04.2023
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/Regulation 12 (1) Regulation 13(1) Verification of Claims T+21 19.04.2023 Section 26(6A) / Regulation 15A Application for Appointment of Authorised Representative, if necessary T+23 NA Regulation 17(1) Filing of Report Certifying Constitution of CoC T+23 22.04.2023 Section 22(1) and regulation 17(2) First Meeting of the CoC T+30 24.04.2023 Regulation 35A Determination of fraudulent and other transactions T+115 NA Regulation 27 Appointment of two Registered Valuers T+47 02.05.2023 Regulation 36 (1) Submission of Information Memorandum to CoC T+54] 15.05.2023 Regulation 36A Invitation of EoI T+75 22.05.2023 Publication of Form G T+75 22.05.2023 Provisional List of Resolution Applicants T+100 16.06.2023 Final List of Resolution Applicants T+115 01.07.2023 Regulation 36B Issue of Request for Resolution Plan, which includes Evaluation Matrix and Information Memorandum to Resolution Applicants T+105 21.07.2023
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Section 30(6)
/ Regulation
39(4)
Submission of CoC approved
Resolution Plan
T+165
20.08.2023
Section 31(1)
Approval of Resolution Plan
T=180 26.09.2023
11. The time frame proposed for obtaining relevant approvals
is as under:
Sl.
No.
Nature of Approval
Name
of
applicable Law
Name
of
Authority
who
will
grant
Approval
When
to
be
obtained
1
Approval
of
the
Resolution Plan
Insolvency and
Bankruptcy
Code, 2016
NCLT
After approval
of
the
Resolution
Plan by CoC
2
Capital Reduction as
per
section
66
of
Companies Act, 2013
Companies Act,
2013
(Procedure
for
Reduction
of
Share
Capital)
Rules, 2016
NCLT
NCLT
Along
with approval
of
Resolution
Plan
3
Dispensation
from
adding “and reduced” in
the
name
of
the
Corporate Debtor after
Capital Reduction
Companies Act,
2013
(Procedure
for
Reduction
of
Share
Capital)
Rules, 2016
NCLT
NCLT
Along
with approval
of
Resolution
Plan.
4
Dispensation
of
all
cases, claims etc filed by
any
person
or
competent
authority,
Various Acts &
Regulations
NCLT
Relevant
authorities
After approval
of
the
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pertaining
to
period
prior to NCLT Approval
Date.
Civil, criminal,
extant
exchange
control
laws,
securities laws,
any
anti-
corruption
laws,
SEBI
Regulations
depending
upon
the
pending
cases,
if
any.
Resolution
Plan by CoC
Intimation for approval and giving effect after approval by NCLT to various authorities 5 Relief from Stamp Duty & Fees on account of the transactions contemplated in the Plan Indian Stamp Act, 1899 NCLT & Stamp Authority NCLT - Along with approval of Resolution Plan. Stamp Authority
- Intimation for approval and giving effect after approval by NCLT 6 The approval of the shareholders to the transactions contemplated under the Plan shall be deemed to have been given on the approval of the Plan by the NCLT, including for the reduction of share capital Companies Act, 2013 NCLT NCLT - Along with approval of Resolution Plan. Shareholders, Financial Creditors
- Intimation and giving effect after
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approval by NCLT 7 Waiver of statutory non- compliance Applicable laws Relevant Government Authorities NCLT - Along with approval of Resolution Plan. Various Authority
- Intimation for approval and giving effect after approval by NCLT 8 Waiver of tax, interest and penalties from past litigations Income tax Act, 1961 NCLT, Income Tax Authorities NCLT - Along with approval of Resolution Plan. Various Authority
- Intimation for approval and giving effect after approval by NCLT 9 Waiver of non- compliance and penalties, cost interest on account of such waiver prior to Effective date including but
NCLT NCLT - Along with approval of Resolution Plan.
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without limitation and
restoration:
i.
Environment
Laws
ii.
Electricity
Department
iii.
Labor
department
iv.
Tax laws
v.
Companies Act,
1956 / 2013
vi.
Income Tax Act,
1961
Various
Authority
- Intimation for approval and giving effect after approval by NCLT 10 Non-lapse of brought forward losses of the Corporate Debtor Income Tax Act, 1961 NCLT, Income Tax authorities NCLT - Along with approval of Resolution Plan. Various Authority
- Intimation for approval and giving effect after approval by NCLT
- The Resolution Plan is not subject to any contingency. – No
- Following are the deviations / non-compliances of the provisions of the Insolvency and Bankruptcy Code, 2016, regulations made or circulars issued thereunder (If any
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deviation/ non-compliances were observed, please state
the details and reasons for the same):
Sl.
No.
Deviation/Non-
compliance
observed
Section of the Code /
Regulation
No.
/
Circular No.
Reasons
Whether
rectified or not
1
NA
NA
NA
NA
14. The Resolution Plan is being filed within 180 days before
the expiry of the period of CIRP provided in section 12 of
the Code.
14A. Whether the resolution professional has, in accordance
with regulation 35A –
a. applied to the Adjudicating Authority on or before the
one hundred and thirty-fifth day of the insolvency
commencement date: No
b.
filed Form CIRP 8 with the Board on or before the one
hundred
and
fortieth
day
of
the
insolvency
commencement date: No
15. Provide details of section 66 or avoidance application filed/
pending
Sl.
No.
Type
of
Transaction
Date of Filing with
Adjudicating
Authority
Date
of
Order of the
Adjudicating
Authority
Brief of the
Order
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1 Preferential transactions under section 43 NO NA NA 2 Undervalued transactions under section 45 NO NA NA 3 Extortionate credit transactions under section 50 NO NA NA 4 Fraudulent transactions under section 66 NO NA NA 15A. The committee has approved a plan providing for contribution under regulation 39B as under: NA a. Estimated liquidation cost:
Rs………….
b. Estimated liquid assets available:
Rs………….
c. Contributions required to be made:
Rs………….
d. Financial creditor wise contribution is as under:
Sl.
No.
Name of financial
creditor
Amount to be
contributed (Rs.)
Sl. No.
Name of
financial
creditor
1
NA
NA
1
NA
Total NA
NA
Total
NA
15B. The committee has recommended under regulation
39C as under:
a.
Sale of corporate debtor as a going concern:
NA
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b. Sale of business of corporate debtor as a going concern: NA The details of recommendation are available with the resolution professional. 15C. The committee has fixed, in consultation with the resolution professional, the fee payable to the liquidator during the liquidation period under regulation 39D.]: NA 16. I, Arun Kishanlal Bagaria hereby certify that the contents of this certificate are true and correct to the best of my knowledge and belief, and nothing material has been concealed therefrom.
Name of the Resolution Professional: Arun Kishanlal
Bagaria
IP
Registration
No:
IBBI/IPA-002/IP-
N00278/2017-18/10836 Address as registered with the
Board:
701,
Stanford
Building,
above
Mahindra
Showroom, near Shopper Stop, Junction of C.D. Barfiwala
Marg and S.V. Road, Andheri (W), Mumbai – 400058.
Email
id
as
registered
with
the
Board:
arun@bagariaco.com
Date: 25.08.2023
Place: Mumbai
5.
In the circumstances mentioned
hereinabove, the
Applicant has filed Application seeking approval of this
Tribunal on the Resolution Plan, submitted by the
Resolution Applicant i.e. M/s Rishab Enterprises stating
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that the plan is in accordance with the Section 30(2) and other provisions laid down under the code. 6. On perusal of the Resolution Plan, it is observed that the Resolution Plan provides for the following: a. Payment of CIRP Cost as specified u/s 30(2)(a) of the Code. b. Repayment of Debts of Operational Creditors as specified u/s 30(2)(b) of the Code. c. For management of the affairs of the Corporate Debtor, after the approval of Resolution Plan, as specified U/s 30(2)(c) of the Code. d. The implementation and supervision of Resolution Plan by the RP and the CoC as specified u/s 30(2)(d) of the Code. 7. The RP has complied with the requirement of the Code in terms of Section 30(2)(a) to 30(2)(f) and Regulations 38(1), 38(1)(a), 38(2)(a), 38(2)(b), 38(2)(c) & 38(3) of the Regulations. 8. The RP has filed Compliance Certificate in Form-H along with the plan. On perusal the same is found to be in order. The Resolution Plan has been approved by the CoC in the 4th meeting held on 09.08.2023 with 100% (Hundred percent).
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There is no such pending proceedings u/s 66(1) r/w 43(1)
and 44(1) of the Code.
10. In the case of “K Sashidhar v. Indian Overseas Bank &
Others” (in Civil Appeal No.10673/2018 decided on
05.02.2019) the Hon’ble Apex Court held that if the CoC
had approved the Resolution Plan by requisite percent of
voting share, then as per section 30(6) of the Code, it is
imperative for the Resolution Professional to submit the
same to the Adjudicating Authority (NCLT). On receipt of
such a proposal, the Adjudicating Authority is required to
satisfy itself that the Resolution Plan as approved by CoC
meets the requirements specified in Section 30(2). The
Hon’ble Court observed that the role of the NCLT is ‘no
more and no less’. The Hon’ble Court further held that the
discretion of the Adjudicating Authority is circumscribed
by Section 31 and is limited to scrutiny of the Resolution
Plan “as approved” by the requisite percent of voting share
of financial creditors. Even in that enquiry, the grounds
on which the Adjudicating Authority can reject the
Resolution Plan is in reference to matters specified in
Section 30(2) when the Resolution Plan does not conform
to the stated requirements.
11. In CoC of Essar Steel (Civil Appeal No. 8766-67 of
2019 decided on 15.11.2019) the Hon’ble Apex Court
clearly laid down that the Adjudicating Authority would
not have power to modify the Resolution Plan which the
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CoC in their commercial wisdom have approved. In para 42 Hon’ble Court observed as under:
“Thus, it is clear that the limited judicial review available, which can in no circumstance trespass upon a business decision of the majority of the Committee of Creditors, has to be within the four corners of section 30(2) of the Code, insofar as the Adjudicating Authority is concerned, and section 32 read with section 61(3) of the Code, insofar as the Appellate Tribunal is concerned, the parameters of such review having been clearly laid down in K. Sashidhar(supra).”
- In view of the discussions and the law thus settled, the instant Resolution Plan meets the requirements of Section 30(2) of the Code and Regulations 37, 38, 38 (1A) and 39 (4) of the Regulations. The Resolution Plan is not in contravention of any of the provisions of Section 29A of the Code and is in accordance with law. The same needs to be approved. Hence ordered. ORDER
- The Application IA-4305/2023 in CP(IB)/855/(MB- IV)/2022 is allowed. The Resolution Plan annexed to the Application is hereby approved. It shall become effective from this date and shall form part of this order.
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13.1. It shall be binding on the Corporate Debtor, 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 in force is due, guarantors and other stakeholders involved in the Resolution Plan. 13.2. The approval of the resolution plan shall not be construed as waiver of any statutory obligations of the Corporate Debtor and shall be dealt by the appropriate authorities in accordance with law. Further in terms of the judgment of Hon’ble Supreme Court in the matter of “Ghanshyam Mishra And Sons Private Limited V/S Edelweiss Asset Reconstruction Company Limited”, on the date of approval of the Resolution Plan by the adjudicating authority, all such claims which are not a part of Resolution Plan, shall stand extinguished and no person will be entitled to initiate or continue any proceedings in respect to a claim which is not a part of the Resolution Plan. 13.3. The Memorandum of Association (MoA) and Articles of Association (AoA) shall accordingly be amended and filed with the Registrar of Companies (RoC), Mumbai, Maharashtra for information and record. The Resolution Applicant, for effective
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implementation of the Plan, shall obtain all necessary approvals, under any law for the time being in force, within such period as may be prescribed. 13.4. The moratorium under Section 14 of the Code shall cease to have effect from this date. 13.5. The Applicant shall supervise the implementation of the Resolution Plan and file status of its implementation before this Authority from time to time, preferably every quarter. 13.6. The Applicant shall forward all records relating to the conduct of the CIRP and the Resolution Plan to the IBBI along with copy of this Order for information. 13.7. The Applicant shall forthwith send a certified copy of this Order to the CoC and the Resolution Applicant, respectively for necessary compliance. 14. The Interlocutory Application i.e. IA-4305/2023 in CP(IB)/855(MB)/2022 is allowed accordingly disposed of.
Sd/-
Sd/- Anu Jagmohan Singh
Kishore Vemulapalli Member (Technical)
Member (Judicial)
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