06th January, 2026 Approval of Resolution Plan - Durha Vitark Private Limited [I.A. No. 43/2024, I.A. No. 3423/ND/2025 in IB) – 470/ND/2019] (9.56 MB)
IA. No. 43/2024 in CP (IB)-470/(ND)/2019 LIC Housing Finance Ltd. vs. Durha Vitrak Pvt. Ltd.
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IN THE NATIONAL COMPANY LAW TRIBUNAL NEW DELHI, SPECIAL BENCH (COURT-II)
Item No.219
(IB) – 470/ND/2019
I.A. No. 43/2024, I.A. No. 3423/ND/2025
IN THE MATTER OF: (Under Section- 7 of IBC, 2016) LIC Housing Finance Ltd. … Petitioner/ Financial Creditor
Versus
Durha Vitrak Pvt. Ltd. … Respondent/
Corporate Debtor
AND IN THE MATTER OF IA. NO. 43/2024:
Mr. Pankaj Narang
Resolution Professional,
Durha Vitrak Private Limited (Under CIRP),
304, Tower Appt. Swasthya Vihar,
New Delhi - 110092 … Applicant/RP
UNDER SECTION: 30(6) r/w 31 of IBC, 2016
AND IN THE MATTER OF IA. NO. 3423/2025:
G.T.B.S. Distributors,
Through its proprietor,
Mrs. Gurvinder Kaur Arora,
Having its address at
B-26, Basement Dewan House,
Ajay Enclave, Near Subash Nagar Metro Station,
New Delhi-110018 ... Applicant
Versus
Mr. Pankaj Narang, RP
Durha Vitark Private Limited
304, Tower Appt. Swasthya Vihar,
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New Delhi-110092 ...Respondent No. 1
Durha Vitark Private Limited Through its Resolution Professional, Mr. Pankaj Narang, 304, Tower Appt. Swasthya Vihar, New Delhi-110092 ...Respondent No. 2
Blue Heavens Healthcare Private Limited Sultanpur Chowk, Newar Dhulkit Barrier, Ambala Chandigarh Expressway, Ambala, Haryana-134003 ....Respondent No. 3
UNDER SECTION: 60(5) of IBC, 2016
Order delivered on: 13.10.2025
CORAM:
SH. ASHOK KUMAR BHARDWAJ, HON’BLE MEMBER (J)
SH. RAVINDRA CHATURVEDI, HON’BLE MEMBER (T)
PRESENT: For the Applicant : Sharad Tyagi, Ms. Archana Tyagi, Ms. K. Gayatri, Mr. Samarth Gogia For the SRA : Sr. Adv. P. Nagesh, Adv. Shankari Mishra, Adv. Niti Khanna For the RP : Adv. Abhishek Anand, Adv. Rakesh Bajaj AS PER. SHRI ASHOK KUMAR BHARDWAJ, MEMBER (J) ORAL ORDER I.A. No. 43/2024, IA. NO. 3423/2025: The I.A. No. 43/2024 has been preferred Mr. Pankaj Narang, Resolution Professional qua Durha Vitrak Private Limited (hereinafter, referred to as the ‘Applicant/RP’) under Section 30(6) of IBC, 2016, seeking the following reliefs:
a) Approve and accept the resolution plan of Resolution Applicant Blue Heavens Care Pvt. Ltd. as submitted in respect of the Corporate Debtor i.e. Durha Vitrak Private Limited, as approved by the Committee of Creditors by 100% voting share in its 13th
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COC meeting on 03rd and 4th July, 2024 via E voting dated 9th July to 12th July 2024; b) That the Hon’ble Tribunal may pass other such orders as may deem just and proper by the Tribunal. 2. Stating succinctly, the CP(IB) No. 470/ND/2019 was filed by LIC Housing Finance Ltd. (hereinafter, referred to as the “Financial Creditor”) seeking initiation of CIRP qua Durha Vitrak Pvt. Ltd. (hereinafter, referred to as the “Corporate Debtor”) in terms of the provision of Section 7 of IBC, 2016. The Corporate Debtor was admitted to CIRP in terms of order dated 08.11.2019 passed by this Tribunal and Ms. Aishwarya Mohan Gahrana (hereinafter, referred to as the “erstwhile RP”) was appointed as IRP. The Corporate Debtor is currently represented through its RP, Mr. Pankaj Narang i.e. the Applicant herein. 3. As per the provisions of Section 15 of the Code r/w Regulation 6(1) of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, the erstwhile RP issued a Public Announcement in Form-A on 13.11.2019 in two newspapers, viz. Financial Express (English) and Jansatta (Hindi), inviting claims with proof thereof from the creditors of the Corporate Debtor. A copy of the aforementioned Public Announcement is enclosed as Annexure No. A3 (Colly.) to the application. 4. Subsequently, on receipt of claims pursuant to aforementioned Public Announcement, the erstwhile RP constituted the Committee of Creditors (CoC) in terms of the provision of Section 21 of the Code on 25.11.2019. According to the Applicant, as on date of the application, the CoC qua Corporate Debtor consisted of the following financial creditors: -
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The Applicant/ RP has submitted that till the date of filing of the captioned application, 13 CoC meetings of the CD had been conducted i.e. 7 meetings by the erstwhile RP and 6 meetings by the Applicant/ RP, in terms of the provisions of Section 24 of the Code r/w Regulation 18 of CIRP Regulations, 2016. The details of aforementioned CoC meetings as given in the application read thus: -
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The Applicant/ RP has got the assets of the Corporate Debtor valued in terms of Regulation 27 of the CIRP Regulations, 2016 by the following Registered Valuers: -
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A copy of all valuation reports undertaken by the aforementioned registered valuers has been enclosed as Annexure No. A14 of the application. The Applicant/ RP has also submitted a summary of the aforesaid valuation reports, which read thus: -
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On 21.05.2025 this Tribunal passed the following order:-
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In response to the order, the RP has filed affidavit dated 28.05.2025. The relevant excerpt of the affidavit reads thus:-
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As has been espoused by the Ld. Counsel for the RP, in view of the
order of liquidation passed by this Tribunal and the subsequent order of the
Hon’ble NCLAT reversing the order of liquidation, the valuation of the assets
of the Corporate Debtor had to be carried out multiple times.
10.
In his submission, once liquidation had been ordered, the restoration
of CIRP at the strength of order of Hon’ble NCLAT, left no option but to carry
the valuation again. The relevant excerpt of the order passed by Hon’ble
NCLAT, reversing the order of liquidation passed by this Tribunal reads
thus:-
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As can be seen from the aforementioned order passed by Hon’ble NCLAT, the liquidation of the Corporate Debtor was not appreciated. 12. Now, at this stage, we have a Resolution Plan for approval before us which could be approved by CoC with 100% vote shares. once Hon’ble NCLAT has passed the aforementioned order reversing the order of liquidation passed by this Tribunal and an application has been preferred by RP for approval of the Resolution Plan approved by CoC with 100% vote share, we are left with no option except approving the Resolution Plan. 13. While the IBBI (CIRP) Regulations, 2016, provide that the valuation should be as on the date of commencement of CIRP, the mere fact that an order of liquidation passed by this Tribunal was subsequently quashed by the Hon’ble NCLAT, restoring the CIRP, would not alter the date of valuation prescribed under the Regulations. 14. However, Mr. Abhishek Anand, Ld. Counsel for the RP could produce before us copy of the Judgment passed by Hon’ble NCLAT in Company Appeal (AT) (Insolvency) No. 732, 680 and 681 of 2025 (Vashishth Builders and Engineers Limited v. Trishul Dream Homes Ltd. And Coc; CoC v. Trishul Dream Homes Ltd. And Vashishth Builders and Engineers Limited; Jalesh Kumar Grover, RP v. Vashishth Builders and Engineers Limited and CoC), to buttress that the CoC being fully satisfied and having endorsed the process of valuation and re-valuation, there could be no reason to interfere with the order of NCLT, on the ground of valuation. A reference has also been made to para 14 of the order/Judgment to espouse that it would not be open for the Adjudicating Authority to enter into the issue of valuation of assets of the Corporate Debtor and to make the same as ground for rejecting the Resolution Plan. Para 12 to 14 of the Judgment reads thus:-
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Ld. Counsel for the Applicant in IA-3423/ND/2025 could espouse that, when the claim of the Applicant was admitted for Rs. 32,00,000/- ,the Resolution Plan provide nil amount to it. Having raised such plea, he has challenged the Resolution Plan. He further submitted that, prior to the order dated 21.05.2025 passed by this Tribunal, the Applicant could have no grievance; however, since the aforementioned order raised the issue
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regarding the valuation of the assets of the Corporate Debtor, he is justified
in questioning the Resolution Plan on the ground of valuation.
16.
As has been noted hereinabove, it is not for this Tribunal to enter into
the issue of valuation, once the CoC has not raised any issue in this regard.
17.
With regard to the allocation and distribution of amounts to the
operational creditor, the Applicant has not pointed out any deviation from
Section 53 of the IBC, 2016. In terms of the provisions of the Code, the
Applicant, being an operational creditor, is entitled only to the liquidation
value, as provided under Section 30(2) (b) of the Code.
18.
Thus as a consequence of liquidation also, the Applicant could be
entitled only to nil amount. Thus we are of the considered view that in the
wake of the aforementioned orders passed by Hon’ble NCLAT, relied upon
by the Ld. Counsel for the Applicant, the plan deserves to be approved.
19.
It is pertinent to note that the erstwhile RP had filed an application
for liquidation pursuant to the sixth CoC meeting held on 28.01.2021
wherein the committee of creditors viewed the resolution plans received
from PRAs are not feasible and viable. The aforementioned application for
liquidation was allowed by this Tribunal in terms of order dated 31.05.2021.
The said order was subsequently challenged before the Hon’ble NCLAT in
CA(AT)(Ins) No. 612/2021 by an erstwhile director of the CD and the Hon’ble
Appellate Tribunal in terms of order dated 09.12.2022 allowed the appeal
and set aside the liquidation order passed by this Tribunal. Furthermore,
the Hon’ble NCLAT also ordered to replace the erstwhile RP.
20.
In terms of the aforementioned order of Hon’ble Appellate Tribunal,
the CoC in its 7th meeting on 04.05.2023 appointed the Applicant herein
viz. Mr. Pankaj Narang, as RP. Subsequently, this Tribunal having regard
to Section 22(3)(a) of IBC, 2016 passed the order dated 31.08.2023
confirming the appointment of the Applicant as RP.
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It is the case of the Applicant that in compliance of Section 29 of the
Code r/w Regulation 36 of the CIRP Regulations, 2016, he prepared an
Information Memorandum and submitted the same before the CoC at its 8th
meeting held on 25.10.2023. The Applicant/ RP has further submitted that
in said meeting, the CoC approved the advertisement for Invitation of
Expression of Interest (EoI) in terms of Regulation 36A of CIRP Regulations,
2016. Consequently, on 04.11.2023, the Applicant/ RP published Form- G
in two newspapers, namely Business Standard (English) and Business
Standard (Hindi) and the publication report was filed also with IBBI, vide
email dated 05.11.2023. The Applicant has enclosed a copy of Form- G as
Annexure No. A-16 of this application.
22.
In the application, the RP has submitted that in response to the
aforementioned publication in Form- G, EoIs were received from the
following three Prospective Resolution Applicants (PRAs): -
i.
Consortium of Skybase Infra Pvt. Ltd. & Mr. V. K. Gupta;
ii.
Dr. Mukesh Aggarwal;
iii.
Consortium of Blue Heaven Health Care Pvt. Ltd. & Mr. Chander
Prakash.
23.
In the 13th meeting of the CoC held on 03.07.2024, the members
were apprised of the resolution plans received, as well as the deliberations
and negotiations undertaken by the Applicant/RP with the Prospective
Resolution Applicants (PRAs). The members of the CoC, after evaluating the
Resolution Plans, opted for E-voting qua the same and approved Resolution
Plan submitted by “Blue Heavens Healthcare Private Limited”. The e-voting
could take place from 09.07.2024 to 12.07.2024 in terms of Regulation 25
r/w Regulation 26 of the CIRP Regulations, 2016 and as has been noted
hereinabove, as per the result of e-voting, the plan submitted by Blue
Heavens Healthcare Private Limited (hereinafter, referred to as the
“Successful Resolution Applicant”) was approved in terms of Section
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30(4) of the Code with a majority of 100%. The relevant excerpts of the 13th meeting of the CoC indicating the e- voting results read thus: -
It is averred in the present application that after approval of the plan submitted by the SRA, a letter of intent dated 22.07.2024 was issued to M/s Blue Heavens Health Pvt. Ltd. The SRA was requested to convey its unconditional acceptance and submit a Performance Bank Guarantee of Rs.
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5,00,00,000/-. The relevant excerpt of the letter of intent issued to the SRA, enclosed as Annexure No. A23 of the application, reads thus: -
It is borne out of the pleading and record that the SRA gave an unconditional acceptance by way of submission of Performance Bank Guarantee by way of RTGS on 23.07.2024. The Applicant/ RP has enclosed the proof of submission of Performance Bank Guarantee by the SRA which reads thus: -
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The Resolution Plan submitted by the SRA, which stands approved by the CoC, has been enclosed as Annexure No. A25 of the application. 27. It is pertinent to note that when the matter was listed on 17.02.2025, the SRA could commit to file an affidavit regarding the enhancement of the amount payable towards employee dues and statutory liabilities. Fulfilling the commitment, the SRA submitted an affidavit dated 18.02.2025 whereby it could enhance the amount payable to Operational Creditor (Employee Dues) and statutory authorities from Rs. 1,00,000/- each to Rs. 2,00,000/. The relevant excerpt of the affidavit filed by the SRA reads thus: - “1. That pursuant to the order dated 17/02/2024 passed by the Hon’ble National Company Law Tribunal (NCLT), wherein it was directed to file affidavit cum undertaking to the Successful Resolution Applicant (SRA), Blue Heavens Health Care Private Limited, to place on record the undertakings concerning the enhancement of resolution amount payable towards outstanding employee dues and statutory liabilities, in
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furtherance of ensuring an effective and equitable resolution process. 2. That, therefore the Successful Resolution Applicant, Blue Heavens Health Care Private Limited, in compliance with the directions of this Hon’ble Bench, undertook to increase its resolution amount payable towards the outstanding dues of employees and statutory liabilities (government dues) to ensure an effective and equitable resolution process. 3. That in light of the aforesaid order, the Successful Resolution Applicant (SRA) hereby reaffirms its commitment to increase the amount allocated towards the settlement of employee dues and statutory liabilities from the previously allocated amount of Rs.1,00,000/- (Rupees One Lakh Only) to an enhanced amount of Rs. 2,00,000/- (Rupees Two Lakhs Only) each i.e. Rs. 2,00,000/- (Rupees Two Lakhs Only) towards operational creditor (employee dues) and Rs. 2,00,000/- (Rupees Two Lakhs Only) towards operational creditor (government and statutory dues). The said payment shall be made on a priority basis in accordance with the provisions of Section 30(2)(b) of the Insolvency and Bankruptcy Code, 2016. That the said increase offered by the Resolution Applicant should not be in any manner considered as admission of any liability towards such dues as in so far as the amounts which were already allocated under the resolution plan were in due compliance of Section 30(2)(b) read with Section 53 of the Code. 4. That the increase in the financial commitment is being made in adherence to the express directions of this Hon’ble Tribunal and in good faith to facilitate the seamless implementation of the resolution plan. The enhancement is undertaken with the objective of safeguarding the interests of all stakeholders, particularly the employees of the Corporate Debtor, and ensuring due compliance with statutory obligations. The SRA
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acknowledges that employees form an integral part of the Corporate Debtor's functioning and recognizes the necessity of honoring outstanding statutory liabilities to achieve a smooth and uninterrupted resolution process. 5. That the SRA further undertakes to comply with the requirements stipulated under Regulation 38 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, as and when the Adjudicating Authority grants approval to the resolution plan. Additionally, the deponent solemnly affirms its unwavering commitment to adhere to the provisions of the Insolvency and Bankruptcy Code, 2016, along with all rules, regulations, and guidelines prescribed thereunder.” 28. The Applicant/ RP also file a separate affidavit dated 18.02.2025 whereby he placed on record the duly updated Form- H to reflecting the revised commitment towards the employees’ claim and statutory liabilities. The relevant excerpt of the affidavit reads thus: - “1. That in pursuant to the order dated 17/02/2025, passed by the Hon'ble National Company Law Tribunal (NCLT), directing the filing of an Affidavit-cum-Undertaking by the Successful Resolution Applicant (SRA), M/ s Blue Heavens Health Care Private Limited, to place on record its commitment towards the increase of financial obligations concerning outstanding employee dues and statutory liabilities, in furtherance of ensuring an effective and equitable resolution process. 2. That in compliance with the aforesaid order, the Successful Resolution Applicant (SRA), M/s Blue Heavens · Health Care Private Limited, undertakes to enhance its financial commitment towards the settlement of outstanding employee dues and statutory liabilities, increasing the previously
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committed amount of Rs. 1,00,000/- (Rupees One Lakh Only) to an enhanced sum of Rs. 2,00,000/- (Rupees Two Lakhs Only) for each category. A true copy of the Affidavit-cum-Undertaking submitted by the Successful Resolution Applicant is annexed herewith and ANNEXURE-Al. 3. That as per the directions of the Hon’ble NCLT, and after the Successful Resolution Applicant (SRA) submitted the aforementioned Affidavit- cum- Undertaking, thereafter the deponent, as per the directions of the Hon’ble NCLT, have duly updated Form-H to reflect the revised commitment towards the settlement of employee dues and statutory liabilities, increasing the amount from Rs. 1,00,000/- (Rupees One Lakh Only) to Rs. 2,00,000/- (Rupees Two Lakhs Only) for each category. Additionally, the depodent have rectified the clerical error as pointed out by the Hon'ble NCLT, as of 17/02/2025. A true copy of the updated Form-H, as per the directions of the Hon'ble NCLT, is annexed herewith and marked as ANNEXURE-A2.” 29. It is further noted that the RP has filed an affidavit dated 07.04.2025, wherein he rectified a typographical error in the liquidation value stated in Form-H. The average liquidation value of the Corporate Debtor was earlier mentioned as ₹33,69,36,086/- in Form-H, whereas the correct figure is ₹33,99,36,087/-. Accordingly, the deponent filed the revised Form-H along with the said affidavit. 30. The Applicant/ RP has submitted in the revised Form- H that the Resolution Plan includes a statement under Regulation 38(1A) of CIRP Regulations, 2016 as to how it has dealt with the interests of all stakeholders in compliance of the Code and the Regulations made thereunder. The relevant excerpt of Form- H reads thus: - “6. The Resolution Plan includes a statement under regulation 38(1A) of the CIRP Regulations as to how it has dealt with the
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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:”
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As can be seen from the above table, the secured financial creditors would be paid a sum of Rs. 48,30,09,630/- against the admitted claim of about Rs. 48,30,09,630/- i.e. 100% of the admitted amount. Furthermore, no claims have been received from any unsecured financial creditors, except a claim of Rs. 3,00,000/- from related party and in respect of the unsecured financial creditors, the SRA has proposed NIL payment. With respect to employees and workmen, against the admitted claim of Rs. 4,47,69,880/-, the SRA offered Rs. 2,00,000/-. With regard to statutory/ government dues, against the admitted claim of Rs. 1,37,85,563/-, the SRA propose to pay Rs. 2,00,000/- towards full and final settlement of the claims. Thus, against the admitted claim of Rs. 54,18,65,074/-, an amount of Rs. 48,34,09,630/- has been proposed to be paid under the plan as per the breakup given in the table reproduced above. 32. The plan also proposes a maximum limit of ₹2,00,00,000/- towards the CIRP cost. The relevant excerpt of the plan reads thus:
It is also noted from the affidavit-cum-undertaking dated 28.04.2025 filed by the authorised representative of the SRA that the SRA has undertaken to pay a sum of ₹10,00,000/- to the Income Tax Department, outside the Resolution Plan, within one week from the date of the order
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passed by this Tribunal in the present application preferred under Section 31(1) of the Insolvency and Bankruptcy Code, 2016. 34. The compliance of the Resolution Plan with the provisions of the Code as well as the Regulations made thereunder, as stated in Form H, reads thus: -
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As regards the capital restructuring of the CD, the clause 6.3 of the resolution plan provides that on approval of the plan by the Adjudicating Authority, the entire share capital held by the promoter/ other shareholders shall stand cancelled and extinguished to NIL. The plan further provides that the Corporate Debtor, after its approval will become a wholly owned subsidiary of the SRA. The clause 6.3 of the resolution plan reads thus: -
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As per Section 30(1) of the Code, a resolution applicant needs to submit, along with the resolution plan, an affidavit under Section 29A of the Code to the RP, stating therein that he is not ineligible to submit the plan. In this regard, the affidavit under Section 29A of the Code has been submitted by the SRA and is enclosed as Annexure No. A27 of the application. In the affidavit, the SRA has declared that it is not disqualified from submitting the resolution plan. The relevant excerpt of the aforementioned affidavit submitted by the SRA reads thus: -
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As per Regulation 37 of CIRP Regulations, 2016, a Resolution Plan shall provide for the measures, as may be necessary, for insolvency resolution of Corporate Debtor for maximisation of the value of CD’s assets. In this respect, it is relevant to refer to clause 9.11 to 9.25 of the Resolution Plan, which reads thus: -
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Regarding the source of funds, in clause 4.6 of the Resolution Plan the SRA has stated that after cancellation of the existing shares of the Corporate Debtor, the SRA or its nominees/ affiliates shall infuse capital in the form of equity for an amount of Rs. 10,00,000/- within 30 days from the Effective Date towards subscription of fresh equity shares of the CD. Furthermore, the SRA has also stated at clause 4.7 of the plan that in addition to the aforementioned amount, the SRA or its nominees/ affiliates shall infuse/ arrange funds as per the requirement of the plan within the stipulated time frame in a tax compliant structure in the form of unsecured subordinate loans/ equity/ preferred equity as per its sole discretion. The relevant excerpt of clause 4.6 and 4.7 of the plan reads thus: -
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“4.6 Restructured Capital As part of the Resolution Plan, the entire share capital of Corporate Debtor shall be restructured in a manner that the shareholding of Corporate Debtor shall entirely be held by the Resolution Applicant and/ or its nominee(s) and/ or Affiliate of the Resolution Applicant or a SPV. The aforesaid restructuring shall take place in the following manner: […] iii. Consequent to the aforesaid cancellation of shares, all the shares of the Corporate Debtor held by the existing shareholders shall be deemed to be extinguished without any deed and things or approvals/ requirements envisaged under Section 66 of the Companies Act, 2013 or such other provisions under any other applicable law. The approval of this Resolution Plan by the Hon’ble Adjudicating Authority shall be deemed to be an approval for the purpose of cancellation/ extinguishment of the paid-up equity share capital as envisaged under this plan as per the provisions of Section 66 of the Companies Act, 2013 or such other provisions under any other applicable law. Such cancellation/ extinguishment of the paid- up share capital of the Corporate Debtor shall be effective from the Effective Date. iv. The Resolution Applicant and/ or its nominee(s) and/ or Affiliate of the Resolution Applicant or a SPV shall infuse capital in the form of equity in the Corporate Debtor for an amount of Rs. 10,00,000/- (Rupees Ten Lakh Only) within Thirty (30) days of the Effective Date towards subscription of fresh equity share capital of the CD. Notwithstanding anything contained in Section 42 read with Section 62 or any other applicable provision(s) of the Companies Act, 2013 read with rules made thereunder and/ or such other provisions under any
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other applicable law, consequent to the aforesaid infusion of capital towards subscription of the 1,00,000 fresh equity shares of Rs. 10 each, to be issued at par, shall be issued to Resolution Applicant and/ or its nominee(s) and/ or Affiliate of the Resolution Applicant or a SPV. […] 4.7 Other Infusion/ Investments In addition to the amount stated in above, notwithstanding anything contained in the Companies Act, 2013 read with rules made thereunder and/ or such other provisions under any other applicable law, Resolution Applicant and/ or its nominee(s) and/ or Affiliate of the Resolution Applicant or a SPV shall infuse/ arrange the required funds as per the requirements of this plan within committed time frame in a tax compliant structure in the form of unsecured subordinate loans/ Equity/ Preferred Equity as per its sole discretion. […]” 39. Regulation 38(1B) of CIRP Regulations, 2016 provides that a Resolution Plan shall include a statement giving details as to whether the SRA or any of its related parties have failed to implement or contributed to the failure of implementation of any other resolution plan approved by the Adjudicating Authority at any time in the past. In this regard, a declaration has been given by the SRA in clause 9.10 of the plan, which reads thus: - “9.10 Statement of Failure of Implementation of any Resolution Plan The Resolution Applicant undertakes that neither the Resolution Applicant nor any of its related parties has failed to implement or contributed to the failure of the implementation of any
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resolution plan approved by the Adjudicating Authority at any
time in the past.”
40.
Regulation 38(2)(a) of CIRP Regulations, 2016 provides that the plan
should contain provisions for the term of the plan and its implementation
schedule. In this respect, clause 9.1 of the plan states that its
implementation shall commence immediately from the Effective Date and
shall be carried in accordance with the steps set out in the plan. Clause 9.1
of the plan reads thus: -
“9.1 Term of Resolution Plan
9.1.1 The implementation of the Resolution Plan shall
commence immediately from the Effective Date, and completion
of the implementation of the Resolution Plan shall be carried out
in accordance with the steps set out in this Resolution Plan, and
performance of all other actions as set out in this Resolution
Plan, subject to satisfaction, or waiver by the Resolution
Applicant, as the case may be, of the conditions stipulated
hereunder.
9.1.2 The steps for completion and effective implementation of
the transactions contemplated in this Resolution Plan are set
out in this Resolution Plan. The Resolution Applicant, Corporate
Debtor, Resolution Professional, Committee of Creditors, and all
other relevant stakeholders of the Corporate Debtor shall take
all relevant actions as may be required for achieving effective
implementation of this Resolution Plan.”
Furthermore, in clause 8.3.4 of the Resolution Plan, it has been mentioned
that the payment to be made by the SRA to various stakeholders shall be
made within 30 days from the Effective Date i.e. date of receipt of approval
of the plan by this Adjudicating Authority.
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With respect to the implementation of the plan and the credibility of
the source of funds, reference is made to clause 2.2 of the Resolution Plan,
which sets out the net worth of the SRA. The relevant excerpt reads as
under:
“2.2 Financial Information about the Resolution
Applicant
The Net Worth of the Resolution Applicant as on March 31,
2023 is Rs. 119.4874 Crores.”
42.
As per Regulation 38(2)(b) of CIRP Regulations, 2016, the Resolution
Plan should provide for the management and control of the business of the
Corporate Debtor during its term. Further, as per Regulation 38(2)(c) of said
Regulations, the plan should also provide for adequate means for
supervising its implementation. In this regard, it is apt to refer to Clause
9.2 and 9.3 of the Resolution Plan which deals with management and
control of the Corporate Debtor and supervision of the implementation of
the Resolution Plan. The said clauses read thus: -
“9.2 Management and Control of the Corporate Debtor
9.2.1 On and from the Effective Date, the Corporate Debtor will
continue to be managed and controlled in accordance with the
provisions of this Resolution Plan. It is further proposed that
upon the Effective Date, the existing Board of Directors of the
Corporate Debtor will be replaced by a new Board of Directors
constituted by the Resolution Applicant in compliance with
Applicable Law and in accordance with the provisions of this
Resolution Plan.
9.3 Supervision of the implementation of this Resolution
Plan
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9.3.1 The implementation process, its supervision and detailed
mechanism regarding the management and control of Corporate
Debtor has been discussed in detail in this Resolution Plan.
9.3.2 It is clarified that to effectively manage and control the
affairs of the Corporate Debtor and to ensure effective
implementation of this Resolution Plan, the Resolution Applicant
propose to constitute a Plan Monitoring Committee.”
43.
Further, chapter 4 of the plan deals in detail with the management
and control of the CD, which reads thus: -
“CHAPTER 4: (MANAGEMENT AND CONTROL)
From the date of Insolvency Commencement Date, the
Moratorium is declared by Adjudicating Authority under section
14 of Insolvency and Bankruptcy Code, 2016 and the powers
of Board of Directors gets suspended. The power of Board of
Directors gets vested with Resolution Professional. On approval
of the Resolution Plan by Adjudicating Authority under section
31(3) of Insolvency and Bankruptcy Code, 2016, the
Moratorium declared ceases to have effect and the powers of
the Board of Directors will get restored.
Within 30 days from the Effective Date, the Resolution Applicant
shall change the directors of the Corporate Debtor. The Board
of Directors of the Corporate Debtor will be reconstituted, with
resignation of existing directors (including independent
directors, if any), and appointment of new directors nominated
by the Resolution Applicant. These newly appointed directors
will be experienced professionals, independent from the
Corporate Debtor, and fully compliant with Section 29A of the
Insolvency and Bankruptcy Code, 2016.
Hence, the Resolution Applicant will take control and manage
the affairs of the Corporate Debtor, and the business will be
conducted by the new management appointed by the
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Resolution Applicant. Further the RA, will continue the operations of the CD. However, until the Cut-Off Date, the Resolution Applicant assumes that the Resolution Professional will continue to run the affairs of the Corporate Debtor without any involvement from existing directors, promoters, or shareholders. The Resolution Applicant will appoint the statutory, internal, cost & secretarial auditors, as may be applicable of its choice, subject to compliance with the Applicable Laws. The Resolution Applicant or any of its nominee will become the new promoter of the Corporate Debtor. Relevant applications will be made to the Ministry of Corporate Affairs (MCA) and other Departments and Authorities to declassify the existing promoters as promoters of the Corporate Debtor. 4.1 Control of Subsidiaries: The Subsidiaries of the CD, if any, shall be under the control of new management of the CD appointed by the RA. RA may, post evaluation of the business potential of the subsidiaries, may decide to liquidate/ wind up/ de-merge/ sell or transfer the shares of such Subsidiaries and may change existing management of the Subsidiaries (exercising its shareholder rights over Subsidiaries), subject to Applicable Law. 4.2 Release of Resolution Professional: The Resolution Professional was appointed by the Adjudicating Authority and the Committee of Creditors was formed by the Interim Resolution Professional pursuant to the Corporate Insolvency Resolution Process of the Corporate Debtor. The Resolution Professional shall be released of his duties and responsibilities and the Committee of Creditors shall be dissolved with effect from the Cut-Off Date. During the transitional period between the Effective Date and the Cut-off Date the operations of the Corporate Debtor will be
Page 49 of 67
with the Resolution Professional. During this period the
Resolution Professional will ensure for the proper hand over of
the Corporate Debtor to the Resolution Applicant and further
provide assistance to the Resolution Applicant or its
representative(s) or nominee for meeting compliances, if any,
related to the period, which was under the control of the
Resolution Professional.
4.3 Going Concern:
The RA shall cause the Corporate Debtor to continue as a going
concern and operate in its normal course of business upon
implementation of the Resolution Plan. With effect from Effective
Date, the management of affairs of the Corporate Debtor would
be vested with the restored Board appointed as new
management by the RA.
However, during the transitional period between the Effective
Date and the Cut-Off date, the operations of the Corporate
Debtor will be with the Resolution Professional. During this
period the Resolution Professional will ensure for the proper
hand over of the Corporate Debtor to the Resolution Applicant,
after due settlement of the payments proposed to the Creditors.
4.4 Continued corporate existence
The Corporate Debtor shall continue its operations in the normal
course of business.
4.5 Corporate Actions
The Resolution Professional shall cause the Corporate Debtor to
take
appropriate
corporate
actions
necessary
for
implementation of all the provisions of the Resolution Plan,
which includes filing of appropriate documents or forms
amongst others, with the Registrar of Companies and Ministry
of Corporate Affairs (“MCA”); and other compliance as per the
governing law.”
[…]”
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As per Regulation 38(2)(d) of the CIRP Regulations, 2016, a resolution plan shall provide the manner in which the proceedings with respect to avoidance transactions and fraudulent/ wrongful trading is to be pursued and the manner in which the proceeds, if any, from such proceedings shall be distributed. In this regard, it is apposite to note that as per Form – H given by the Applicant/ RP, no application filed under Sections 43, 45, 50 and 66 of the Code is pending. The relevant excerpt of Form- H reads thus:
Furthermore, as per clause 8.4.7 of the plan, the SRA will pursue PUFE/
Avoidance transactions, if any, and the creditors of the CD will have no
additional stake in the outcome from recovery of such transactions. The
relevant excerpt of clause 8.4.7 of the plan reads thus: -
“8.4.7 The Financial Creditors or any other creditors of the CD
shall have no additional stake in the outcome from recovery
with respect to the PUFE/ Avoidance Transactions, if any. The
Resolution Applicant further propose to peruse the same. For
the above purpose the amount from PUFE Transactions, if any,
after deduction of legal expenses incurred thereon, shall mean
the additional net amount realized by the Corporate Debtor/
Page 51 of 67
relief available to the Corporate Debtor because of an order of
Adjudicating Authority. RA proposes to utilize the recovery of
the amount from the outcome of the PUFE/ Avoidance
Application in the Corporate Debtor.”
45.
As per the requirement of Regulation 38(3)(a) of CIRP Regulations,
2016, a plan shall demonstrate that it addresses the cause of default by the
Corporate Debtor. To address the concern, we may refer to chapter 7 of the
resolution plan wherein the SRA has stated the cause of default by the CD
and how the same is to be addressed. Chapter 7 of the plan reads thus: -
“CHAPTER 7: (CAUSE OF DEFAULT)
The core of our strategy to revive the Corporate Debtor within
our Resolution Plan is founded upon this diagnosis.
Financial
Mismanagement:
Poor
financial
mismanagement,
including
inadequate
budgeting,
overspending, or inefficient cycle management, can lead
to financial instability.
Declining Revenues: Reductions in patient volumes,
declining
reimbursements
from
payers
(such
as
insurance companies or government programs), or
changes
in healthcare regulations can result
in
decreased revenues.
High Operating Cost: Hospitals have high fixed costs,
including labor, supplies, and technology. If these costs
are not effectively managed or if they increase
disproportionately to revenues, it can strain the hospital’s
financial resources.
Debt Burden: Accumulation of excessive debt, whether
from loans, bonds or other financial obligations, can
create financial strain and lead to insolvency, especially
if the hospital is unable to meet its debt obligations.
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Market Competition: Competition from other healthcare
providers, including other hospitals, outpatient clinics,
and ambulatory surgery centers, can erode a hospital’s
market share and revenues.
Legal or
Regulatory Issues: Legal or
regulatory
challenges, such as compliance violations, lawsuits, or
fines, can have significant financial implications and
damage the hospital’s reputation.
Changes in Patient Demographics: Shift in population
demographics, such as aging population or changes in
the prevalence of certain diseases, can impact the
demand for healthcare services and affect a hospital’s
financial viability.
Strategic Missteps: Poor strategic decision- making, such
as entering into unprofitable service lines or expanding
too rapidly without adequate planning, can strain
financial resources and lead to insolvency.
External
Economic
Factors:
Economic
downturns,
changes in healthcare policy, or unforeseen events (such
as natural disasters or public health crises) can have a
negative impact on a hospital’s financial health.”
46.
Further, in compliance of Regulation 38(3)(b) of CIRP Regulations,
2016, the Resolution Plan under clause 9.5 also demonstrates as how the
plan will be feasible and viable. The said clause reads thus: -
“9.5 Feasibility and viability of the Resolution Plan
9.5.1 The Resolution Plan proposed by Resolution Applicant is
in compliance with Code and the regulations made thereunder.
Under this Resolution Plan, the Resolution Applicant has
proposed to undertake and re-organize the business of the
Corporate Debtor. Further the Resolution Plan also provides for
the settlement of dues towards all the Creditors/ Stakeholders
in a manner which has been elaborate in detail in Financial
Proposal (forming part of the Resolution Plan).
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9.5.2 The Resolution Plan provides successful re-organization of the business of the Corporate Debtor and deals with discharge of all dues and claims of Financial Creditors, Operational Creditors, and other creditors (including the Statutory Authorities). This Resolution Plan provides for best realisation for all stakeholders in a viable and feasible manner. 9.5.3 The Resolution Plan also states the process of its implementation and management to make it feasible and viable.” 47. As per Regulation 38(4) of the CIRP Regulations, 2016, the CoC may consider the requirement of a Monitoring Committee for the implementation of the plan. In this respect, clause 5.1 of the plan states that from the effective date i.e. the date of approval of plan by this Tribunal and till the Settlement Date, a Monitoring Committee shall be constituted for monitoring and supervising the implementation of the resolution plan. It is also stated in the plan that the Monitoring Committee shall consist of one representative of the SRA, one representative of the financial creditors and a Qualified Insolvency Professional/ Resolution Professional. It is further stated therein that the Qualified Insolvency Professional/ Resolution Professional will be the Chairperson of the Monitoring Committee. Moreover, the SRA has also stated in clause 5.1 that with effect from the Effective Date, the Board of Directors of the Corporate Debtor shall be reconstituted with SRA’s nominees. The relevant excerpt of the clause 5.1 reads thus: -
Page 54 of 67
Page 55 of 67
As can be seen from clause 9.9 of the Resolution Plan, the SRA has
stated that the plan is not in contravention of any law. Clause 9.9 of the
plan reads thus: -
“9.9 No Contravention of any provision of law
The Resolution Applicant hereby confirms that this Plan is not
in contravention of the provisions of any Applicable Law in India
prevailing as on date of this Resolution Plan.”
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It is pertinent to note that in chapter 10 of the Resolution Plan, the
SRA has sought a number of reliefs and concessions from this Tribunal.
Chapter 10 of the plan reads thus: -
“CHAPTER: 10 (DIRECTIONS, RELIEFS AND CONCESSIONS
SOUGHT)
The resolution plan is unconditional. However, in pursuance to
the provisions of the section 32A of the IBC, 2016, the
Resolution Applicant hereby requests that the approval order
for this Resolution Plan by the Hon’ble NCLT seeking requisite
directions, reliefs and concessions set out below for the
successful implementation of the Resolution Plan:
10.1 Waive any and all penalties and claims and grant
immunity to the Resolution Applicant, Corporate Debtor or the
directors of Resolution Applicant or newly appointed directors
of Corporate against any action or inaction by the Corporate Debtor
and the erstwhile management, before the Effective Date.
10.2 Directions to the ROC that any past prosecution/ cases by
ROC shall have no effect on the Corporate Debtor or its new
directors/ management or Resolution Applicant from the
Effective Date.
10.3 It shall be assumed that the Corporate Debtor shall be
deemed to be permitted to continue to operate the CD and shall
use the licenses, permissions, and approvals of the CD from the
Effective Date.
10.4 Direction shall be given to DDA to transfer the assets of
the CD to the RA without levying any additional charges.
Pursuant to the NCLT's order approving the Resolution Plan,
such transfer shall be deemed as completed.
10.5 It is assumed that the approval of this Resolution Plan
shall be deemed to be the approval seeking renewal of licenses
and KA shall need no further approval for the same and e
extensions or renewals required for any such licenses,
permissions, and approvals shall deemed to have granted upon
approval of the Plan.
10.6 Waiver with respect to all actions, proceedings or penalties
under any applicable law for any dues or non-compliances
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under Incoma Tax Act, 199% and the, same be permanently
extinguished.
10.7 Waiver of all past electricity dues and water dues or any
other statutory dues. Incurred and accrued in the assets of the
Corporate Debtor, prior to the commencement of CIRP of the
Corporate Debtor
10.8 Wavier from all past liabilities incurred and accrued prior
to the commencement of CIRP of the Corporate Debtor.
10.9 Direction to Tax Authorities to grant an exemption from all
Government
taxes,
State
Government
taxes,
Central
government
taxes,
District
taxes
authorities/Revenue
authorities, levies, fees, transfer charges, transfer premiums,
and surcharges that arse from or relate to implementation of the
Resolution Plan, since payment of these amounts may make the
Resolution Plan unviable. This would include waiver of MAT
and income tax implication arising due to write back/write off
of liabilities in the hooks of accounts of Corporate Debtor,
without any impact on brought forward tax and book loss /
depreciation, pursuant to this Resolution Plan.
10.10 Direction to the relevant Governmental Authority to grant
exemption to the Res Applicant, Corporate Debtor and their
respective directors, officers and employees appointed as on or
after the Effective Date, for/ from any violations, labilities,
penalties, interests on statutory payments and/ or fines with
respect to or pursuant to any order of the Governmental
Authority or on account of non-compliance of Applicable Law by
Corporate Debtor or due to Corporate Debtor not having in place
requisite approvals and licenses to undertake its business as
per Applicable Law.
10.11 Exemption from all taxes, levies, fees, transfer charges,
transfer premiums, and surcharges to Corporate Debtor/
Resolution Applicant that arise from or relate to implementation
of the Resolution Plan.
10.12 Banks to grant any approval or dispensation as may be
required for actions contemplated under the Resolution Plan in
accordance with its terms and conditions.
10.13 Waiver of any income-tax and Minimum Alternate Tax
(MAT) liability or consequences (including interest, fine, penalty,
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etc) on Corporate Debtor, Resolution Applicant and its
shareholders on account of various steps as proposed in the
Resolution Plan as per the Income Tax Act, 1961. Further
waiver of any Income Tax liability w.r.t the booking already
made at a price below the circle rate/ stamp valuation rate
under section 43CA or 50 C or any other provisions of the
Income Tax Act/ Rules.
10.14 The Central Board of Direct Taxes to not take any other
actions with respect to the transactions contemplated under
this Resolution Plan under Section 281 of the Income Tax Act,
1961.
10.15 Waiver/extinguishment of any tax (including but not
limited to income-tax and MAT) and duty (including interest,
fine, penalty, etc.) and legal liability pertaining for the period
prior to the Effective Date such as any kind of existing and/or
future litigation / assessment / scrutiny / contingency.
10.16 From the Effective Date, all inquiries, investigations and
proceedings, whether civil or criminal, suits, claims, disputes,
proceedings in connection with Corporate Debtor or affairs of
Corporate Debtor (including those initiated by Governmental
Authorities), pending or threatened, present or future in relation
to any period prior to the Effective Date, or arising on account
of implementation of this Resolution Plan shall stand
withdrawn and dismissed and all liabilities and obligations
therefore, whether or not set out in the balance sheets of
Corporate Debtor or the profit and loss account statements of
Corporate Debtor will be deemed to have been written off fully,
and permanently extinguished and no adverse orders passed
in the said matters should apply to Corporate Debtor or the
Resolution Applicant. Upon approval of his Resolution Plan, all
now inquiries investigations, notices, suits, claims, disputes
litigations, arbitrations or other judicial, regulatory, or
administrative proceedings will be deemed to be barred and
will not be initiated or admitted against Corporate Debtor and/
or its new management in relation to any period prior to the
Effective Date.
10.17 Except to the extent of payments to be made to the
operational creditor and other creditors under Resolution Plan
above if any, the Resolution Applicant and Corporate Debtor
shall have no liability towards any Operational Creditors and
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other creditors with respect to any claims (as defined under the Code) relating in any manner to the period prior to the Effective Date. Any such liability shall be deemed to be owed and due as of the Insolvency Commencement Date, the liquidation value of which is NIL and therefore no amount is payable in relation thereto. All such liabilities shall immediately, irrevocably and unconditionally stand fully and finally discharged and settled with there being no further claims whatsoever, and all forms of security created or suffered to exist, or rights to create such a security, to secure any obligations towards Operational Creditors and other creditors shall immediately, irrevocably and unconditionally stand released and discharged, and the Operational Creditors and other creditors shall waive all rights to invoke or enforce the same. 10.18 Neither the Resolution Applicant nor Corporate Debtor, nor their respective directors, officers and employees appointed as on or alter the Effective Date shall be liable for any violations. liabilities, penalties, interests on statutory payments and or lines, with respect to or pursuant. to any order of any Governmental Authority or on account of non-compliance of Applicable Laws by Corporate Debtor or due to Corporate Debtor not haying in place requisite approvals and licenses to undertake its business as per Applicable Law. 10.19 The Business Permits/ licenses/or any statutory order(s) which were possessed by the Corporate Debtor to conduct the business shall deem in continuation on the date of final approval of NCLT as it were prior to the Insolvency Commencement Date by all or any one of the applicable statutory/ Governmental Authority(s) for the time being in force for ensuring the economic viability and financial sustainability of the business of Corporate Debtor: 10.20 Resolution Applicant shall not be impacted against any of the negative impact / observation / findings of Forensic Audit/ Transaction Audit. Further neither the Corporate Debtor nor any member of the new promoter group shall be made party to any of the legal cases arising out of such audit.” 50. It is pertinent to note that in Revised Form- H, the Applicant/ RP has stated that the fair value and liquidation value of the CD is Rs. 49,88,47,334/- and Rs. 33,99,36,087/- respectively. Thus, we find that the
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value of the plan is more the fair value of the Corporate Debtor, assessed by the valuers appointed by the RP in terms of the provisions of Regulation 27 of CIRP Regulations, 2016 r/w Regulation 35 thereof. 51. Besides, we note that in terms of the judgment of Hon’ble Supreme Court in the case of Committee of Creditors of Essar Steel India Limited Through Authorised Signatory vs. Satish Kumar Gupta & Ors. [Civil Appeal No. 8766-67 of 2019], it is the subject matter of commercial wisdom of CoC to take decision regarding the amount of bid offered by SRA and the scope for this Tribunal to interfere on such issues is negligible. The above view was also reiterated by Hon’ble Supreme Court in Ebix Singapore Private Limited vs. Committee of Creditors of Educomp Solutions Limited & Anr. (Civil Appeal No. 3224 of 2020) wherein the Hon’ble Court ruled that the scope of examination of the application for approval of Resolution Plan by this Tribunal is confined to the provisions of Section 30(2) of IBC, 2016. Para 153 of the Judgment reads thus: - “153. Regulation 38(3) mandates that a Resolution Plan be feasible, viable and implementable with specific timelines. A Resolution Plan whose implementation can be withdrawn at the behest of the successful Resolution Applicant, is inherently unviable, since open-ended clauses on modifications/withdrawal would mean that the Plan could fail at an undefined stage, be uncertain, including after approval by the Adjudicating Authority. It is inconsistent to postulate, on the one hand, that no withdrawal or modification is permitted after the approval by the Adjudicating Authority under Section 31, irrespective of the terms of the Resolution Plan; and on the other hand, to argue that the terms of the Resolution Plan relating to withdrawal or modification must be respected, in spite of the CoC’s approval, but prior to the approval by the Adjudicating Authority. The former position follows from the intent, object and purpose of the IBC and from Section 31, and the latter is disavowed by the IBC’s structure and objective. The IBC does not envisage a dichotomy in the binding character of the Resolution Plan in relation to a Resolution Applicant between the stage of approval by the CoC and the approval of the Adjudicating Authority. The binding nature of a Resolution
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Plan on a Resolution Applicant, who is the proponent of the Plan which has been accepted by the CoC cannot remain indeterminate at the discretion of the Resolution Applicant. The negotiations between the Resolution Applicant and the CoC are brought to an end after the CoC’s approval. The only conditionality that remains is the approval of the Adjudicating Authority, which has a limited jurisdiction to confirm or deny the legal validity of the Resolution Plan in terms of Section 30 (2) of the IBC. If the requirements of Section 30(2) are satisfied, the Adjudicating Authority shall confirm the Plan approved by the CoC under Section 31(1) of the IBC.” 52. 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 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. –
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(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) 53. 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 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
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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 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,
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2016, takes care of most of the relief/concession/waiver solicited by the Resolution Applicant. 54. 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 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. 55. 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
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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.
56.
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.
57.
In any case, the SRA has also stated in the Resolution Plan that the
plan is unconditional. Relevant excerpt of the same reads thus: -
“CHAPTER: 10 (DIRECTIONS, RELIEFS AND CONCESSIONS
SOUGHT)
The resolution plan is unconditional. However, in pursuance to
the provisions of the section 32A of the IBC, 2016, the
Resolution Applicant hereby requests that the approval order
for this Resolution Plan by the Hon’ble NCLT seeking requisite
directions, reliefs and concessions set out below for the
successful implementation of the Resolution Plan:
[…]”
(Emphasis Supplied)
58.
It is further directed that the SRA shall implement the plan as per the
timelines indicated in the Resolution Plan.
59.
In the backdrop of aforementioned factual position, discussion,
analysis and findings, the IA-43/2024 filed by the Applicant/ RP for
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approval of the Resolution Plan is allowed and IA-3423/ND/2025
stands rejected. The Plan submitted by the SRA, certified by the RP by
issuing a certificate in prescribed form viz. Form “H”, is approved.
60.
As a sequel, we issue the following directions: -
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.
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;
iii.
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.
Constitution of Monitoring Committee
Within 5 days
2.
Payment of CIRP Cost
Within 30 days
3.
Payment to Financial Creditors
Within 30 days
4.
Payment to Operational Creditors
(Statutory/ Government Dues)
Within 30 days
5.
Payment to Operational Creditors
(Workmen & Employees)
Within 30 days
6.
Change in Management of CD
including appointment of new
directors
Within 30 days
iv.
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;
v.
The SRA shall act in terms of the provisions of Section 31(4) of IBC
2016;
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vi.
The Monitoring Committee shall file progress report regarding
implementation of the Plan before this Tribunal, every month;
vii.
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;
viii.
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;
ix.
The RP shall intimate each claimant about the principle or formulae,
as the case may be, for payment of debts under the Plan;
61.
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.
62.
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/-
(RAVINDRA CHATURVEDI) (ASHOK KUMAR BHARDWAJ)
MEMBER (T)
MEMBER (J)
Ashima/Hetash
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