06th May, 2025 Approval of Resolution Plan - Shree Rudra Shakti Industries Private Limited [IA (IBC) Plan No.5 OF 2025 in CP(IB) NO. 430/9/HDB/2018] (333.25 KB)

Apoorva SL. No.4 NATIONAL COMPANY LAW TRIBUNAL HYDERABAD BENCH

COURT HALL NO: II
Hearing Through: VC and Physical (Hybrid) Mode
CORAM: SHRI. RAJEEV BHARDWAJ – HON’BLE MEMBER (J) CORAM: SHRI. SANJAY PURI - HON’BLE MEMBER (T)

    ATTENDANCE-CUM-ORDER SHEET OF THE HEARING OF NATIONAL COMPANY LAW TRIBUNAL,                                     
                     HYDERABAD BENCH, HELD ON 30.04.2025 at 10:30 AM 

TRANSFER PETITION NO.

COMPANY PETITION/APPLICATION NO. IA (IBC)(Plan)/05/2025 in CP (IB) No.430/9/HDB/2018 NAME OF THE COMPANY Shree Rudra Shakti Industries Pvt Ltd NAME OF THE PETITIONER(S) V.N. Commercial Corporation
NAME OF THE RESPONDENT(S) Shree Rudra Shakti Industries Pvt Ltd UNDER SECTION 9 OF IBC

ORDER IA (IBC)(Plan)/05/2025 Orders pronounced, recorded vide separate sheets. In the result, this Resolution Plan application is approved.

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MEMBER (T) MEMBER (J)

IN THE NATIONAL COMPANY LAW TRIBUNAL
HYDERABAD BENCH, COURT - II

IA (IBC) Plan No.5 OF 2025

in

CP(IB) NO. 430/9/HDB/2018

[U/s. 30(6) and Section 31(1) of the I&B Code, 2016 r/w Regulation 39(4) of the IBBI (IRPCP) Regulations, 2016]

In the matter of M/s.V.N.Commercial Corporation vs. M/s. Shree Rudra Shakti Industries Pvt. Ltd.

Mr.Dantu Indu Shekar Resolution Professional of M/s.Shree Rudra Shakti Industries Private Limited

.... Applicant

Order Pronounced on : 30.04.2025

Coram:

Shri Rajeev Bhardwaj, Hon’ble Member (Judicial) Shri Sanjay Puri, Hon’ble Member (Technical)

Parties / Counsels Present:

For the Applicant/RP : Ms. Mummaneni Vazra Laxmi,
Advocate

                                   Mr. Dantu Indu Shekar, RP

National Company Law Tribunal, Hyderabad Bench, Court-II

IA (IBC) (Plan) No. 5/2025 in C.P.(IB) No.430/9/HDB/2018

Date of Order: 30.04.2025

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[PER : BENCH]

ORDER

1. The instant Application bearing IA (IBC) (Plan) 5/2025 has been filed on behalf of the Resolution Professional (RP) of the Corporate Debtor, M/s. Shree Rudra Shakti Industries Pvt. Ltd. (CD), under Section 30(6) and 31(1) of IBC1, r/w regulation 39(4) of the applicable Regulations2, seeking, inter alia, approval of the Resolution Plan3, submitted by the Successful Resolution Applicant, Mr.Samala Raja Shekar (SRA) duly approved by the Committee of Creditors (COC) on 28.01.2025 in the e-voting concluded on 31.01.2025 with 100% voting share.

2. The Company Petition CP(IB) No. 430/9/HDB/2018 filed by M/s.V.N.Commercial Corporation, the Operational Creditor (OC), was admitted by this Authority u/s 9 of IBC, vide Order dated 14.05.2019 (Admission Order) ordering commencement of CIRP4 against the CD, by appointing Mrs. Narala Vara Lakshmi as the Interim Resolution Professional (IRP), who was confirmed as RP by the CoC on 02.07.2019. After admission of claims of Mr. Balakrishna Bhora and M/s. Bajaj Finance Limited as Financial Creditors, COC was reconstituted and the reconstituted COC in the 6th COC Meeting held on 11.11.2019 proposed to replace Mrs. Narala Varalakshmi, RP with Mr.Chakravarthi Srinivasan and after the proposal was accepted, Mr. Chakiravarthi Srinivasan was appointed as RP. Subsequently, Mr. Ram

1 Insolvency & Bankruptcy Code, 2016 2 IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 3 Resolution Plan dated 06.01.2025 @ pg. no.194 to 261 of the application 4 Corporate Insolvency Resolution Process

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Narayana Boga was replaced as RP in place of Mr.Chakravarthi Srinivasan by this Authority vide order dated 22.12.2023 in IA 1048/2020. Due to pre-occupied position, Mr. Ram Narayana Boga had filed an IA No.76/2024 seeking to appoint another Insolvency Professional as RP in his place, which was allowed by this Authority by appointing Mr. Dantu Indu Sekhar as RP of the CD vide Order dated 06.02.2024. 3. After receipt of the Transaction Audit Report, Mrs. Narala Varalakshmi, erstwhile RP had filed IA Nos.742, 743, 744 and 745/2019 relating to avoidance transactions, which were withdrawn by Mr. Chakravarthi Srinivasan/RP by filing a Memo as all the IAs had wrongly filed by the earlier RP, and the same was approved by this Authority on 19.12.2019. 4. Aggrieved by the Order dated 19.12.2019, M/s.V.N.Commercial Corporation, one of the Operational Creditors had filed an IA No.1048/2020 under Section 47 and Section 60(5) of the IBC r/w Rule 11 of NCLT Rules, 2016 and Order 1 Rule 10(2) of Civil Procedure Code, which was disposed of by this Authority on 22.12.2023 with the following directions:
Para 32: As a sequel to our discussions, there is need to give directions in the context of non-compliance of the provisions of IBC which have come to our notice by way of the present application: i. Respondent No.1 is directed to be replaced with Mr. Ram Narayana Boga, Insolvency Professional, Mobile No.7358046767, email: ramnboga@gmail.com ii. Respondent No.5 shall not be part of the COC. iii. Two Valuers as per Regulation 35 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 be appointed and after considering their report as

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per the provisions of the IBC and rules thereunder, ascertain whether there is violation of Sections 43, 44, 45, 50 and 66 or any other law. iv. The IBBI be also intimated about the act and conduct of the Resolution Professional i.e. Respondent No.1. Accordingly, the application is disposed of with liberty to file fresh application after the report of the Valuers is received.

5. Public Announcement of the commencement of CIRP was made in Form-A on 04.06.2019 in the newspapers, inviting claims from the creditors of the CD. In response, claims were received from the Financial Creditors. After collating all the claims received and determining the financial position of the CD, the COC was initially constituted on 24.06.2019. After receipt of the claims from the Financial Creditors from time to time, COC was reconstituted on 17.09.2019 and lastly on 07.03.2024 with the sole Financial Creditor, M/s.Asset Reconstruction Company (India) Limited (ARCIL), which is the assignee of debt of M/s.Bajaj Finance Limited.
6. The list of Unsecured Financial Creditors of the CD and distribution of voting share among them is as under: S.No. Name of the Financial Creditor Amount Admitted Voting Share
7. Asset Reconstruction Company (India) Limited (ARCIL)

17,68,310/-

100% 2. Mr. Balkishan Bhora 28,01,512/- 0

7. Initially, the Valuers were appointed on 11.09.2019. Subsequently, pursuant to the Order in IA 1048/2020, dated 22.12.2023 the RP appointed Valuers on 13.03.2024 for conducting valuation of the assets of the CD and received the Valuation Reports.

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8. On 18.07.2024, after perusal of the Valuation Reports, the RP had filed applications under Preferential, Undervalued and Fraudulent Transactions, which are pending before this Authority,

9. The RP conducted a total of Twenty One (21) meetings of the COC during the CIRP.

10. The RP invited Expression of Interest (EOI) from Prospective Resolution Applicants (PRAs), by issuing Form-G on 10.08.2024. In response to the invitation for EOI, only one EOI has been received and the RP issued the Final List of PRAs on 19.09.2024.

11. On 16.08.2024, the COC approved the Request for Resolution Plan (RFRP) and the Evaluation Matrix (EM). and shared the same to the sole PRA on 24.09.2024 by fixing the last date for submission of Resolution Plan as 24.10.2024.

12. In response to the RFRP, the PRA, Mr. Samala Raja Shekar submitted his Resolution Plan on 24.10.2024, which was placed before the 17th COC Meeting held on 29.10.2024 for its consideration.

13. In response to the request made to furnish the revised compliant Resolution Plan by 28.11.2024, the PRA did not submit any revised Resolution Plan till 18.12.2024. After detailed discussions and negotiations from time to time, lastly, the PRA submitted his revised Resolution Plan dated 06.01.2025 improving the Resolution Plan amounting to Rs.2.54 crs.

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14. In the 20th COC Meeting held on 22.01.2025, the COC discussed upon the compliance, feasibility and viability of the Final Resolution Plan dated 06.01.2025 amounting to Rs.2.54 crores (Rupees Two Crores Fifty Four Lakhs only) submitted by Mr.Samala Raja Shekar and placed the same for e-voting scheduled till 31.01.2025, which was approved by COC with 100% voting share on 28.01.2025.
15. The Applicant has further submitted, that as the approved Resolution Plan meets all the requirements envisaged under IBC and Rules/Regulations made thereunder, the RP on 29.01.2025, issued ‘Letter of Intent’ (LoI) to Mr.Samala Raja Shekar declaring him as Successful Resolution Applicant (SRA). They were requested to comply with the terms of the LOI and submit the Performance Security. In response, the SRA submitted the Performance Security by way of Demand Draft No.505263, dated 05.02.2025 for Rs.38,15,000/- with acceptance of LOI as submission of Performance Bank Guarantee is taking time due to pending formalities.
16. After availing the extensions allowed periodically, the last date for completing the CIRP was set at 03.03.2025.
17. The salient details of the revised Resolution Plan dated 06.01.2025 submitted by Mr. Samala Raja Shekar and as approved by the CoC, are as follows: i) Mr. Samala Raja Shekar is a seasoned entrepreneur and investor with a diverse portfolio in real estate acquisitions and corporate restructuring. With a keen interest in distressed assets and turnaround strategies, he has successfully navigated various legal

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and financial landscapes including participating in auctions under SARFAESI Act, Debt Recovery Tribunal (DRT), National Company Law Tribunal (NCLT) Proceedings. His strategic insights and proactive approach have enabled him to identify and capitalise on opportunities in acquiring companies as going concerns, particularly through the Corporate Insolvency Resolution Process (CIRP).

ii) The SRA also has a robust track record in acquiring properties through auctions conducted under SARFAESI Act and DRT Proceedings. His understanding of property valuation, market dynamics, and legal frameworks allows him to make informed investment decisions.

iii) The SRA has experience in formulating and executing Resolution Plans, leveraging his financial acumen and negotiation skills to achieve favorable outcomes.

iv) The SRA has a strategic focus on acquiring companies as going concerns, emphasizing operational continuity and value creation.
His approach includes thorough due diligience, risk assessment, and post-acquisition integration to optimize business synergies.

v) The SRA has led successful bids in multiple auctions under SARFAESI Act and DRT, acquiring prime properties at competitive prices; Played a pivotal role in the acquisition and restructuring of distressed companies through the CIRP process, preserving jobs and maximising stakeholder value.

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vi) The SRA established a reputation for ethical business practices and adherence to regulatory compliance in all transactions.

18. The amounts provided for the stakeholders under the Resolution Plan are as under: (Rs. in lakhs) 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 Nil 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
Nil

Nil NA

NA NA

NA NA

NA Total [(a) + (b)] Nil NA NA NA 2 Unsecured Financial Creditors

(a) Creditors not having a right to vote under sub- section (2) of Section 21 Nil NA NA NA

(b) Other than (a) above: (i) who did not vote in favour of the Resolution Plan

Nil

NA

NA

NA

(ii) Who voted in favour of the Resolution Plan

17.68

17.68

17.68

100%

(iii) Who are not part of COC consequent to NCLT Order dated 22.12.2023

28.02

28.02

2.80

10%

Total [(a)+(b)] 45.70 45.70 20.48 44.81% 3. Operational Creditors (a) Related Party of Corporate Debtor Nil NA NA NA

(b) Other than (a) above

(i) Government Nil NA NA NA

(ii) Workmen Nil NA NA NA

(iii) Employees* Nil NA NA NA

(iv) Other Operational Creditors

197.09

183.84

183.84

100%

Total [(a)+(b)] 197.09 183.84 183.84 100% 4. Other debts and dues

NIL NA NA NA Grand Total 242.79 229.54 204.32

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19. As per the approved Resolution Plan, the Payout to various Stakeholders is as follows: S.No. Category of Stakeholder Amount Claimed Amount Admitted Amount provided under the Plan % of claim admitted Maximum period

CIRP Cost

--

50.00 lakhs (or) actuals whichever is higher

Within 90 days from approval of Resolution Plan by NCLT 2.
Financial Creditors (Secured) NIL NIL NA NA NA 3.
Financial Creditors (Unsecured)

(i) Asset Reconstruction Company (India) Limited 17,68,310.00 17,68,310.00 17,68,310.00

100% Within 90 days from approval of Resolution Plan by NCLT (ii) Balkishan Bohra 28,01,512.00 28,01,512.00 2,80,150.00 10% 4.
Operational Creditors (Other than Workmen & Employees)

1,97,09,098.59

1,83,83,871

1,83,83,871

100% Within 90 days from approval of Resolution Plan by NCLT 5.
Operational Creditors
(Statutory / Tax Dues) NIL NIL NA NA NA 6.
Operational Creditors
(PF Dues) NIL NIL NA NA NA 7.
Any remaining debts and dues – Related Parties NIL NIL NA NA NA Total 2,42,78,920.59 2,29,53,693 2,54,32,331

--

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20. The Financial Outlook: The Total proposed Value of the Plan: The Resolution Applicant proposes the following Plan value as a part of his proposal: S.No. Purpose Amount (in Rs.)

CIRP Cost 50,00,000/-* 2.
Payment to Financial Creditors 20,48,460/- 3.
Payment to Operation Creditors 1,83,83,871/- 4.
Infusion of funds into the Corporate Debtor by way of Equity/Debt/Structured Debt

4,00,00,000/- 5.
Infusion of further need based working capital into the Corporate Debtor by way of Equity/Debt/Structured Debt 4,00,00,000/- Total Plan Value 10,54,32,331/-

• As estimated by the Resolution Professional. The same is subject to COC’s approval and may vary on actuals. **Against the disbursal of Rs.20,48,460/-, the Resolution Applicant will be allocated equity worth Rs.20,48,460/- amounting to Rs.2,04,846 shares issued at Rs.10/- each.

21. Management of the Corporate Debtor5:
    During the period from the NCLT Approval Date and upto the Transfer Date, the CD shall be managed by the Monitoring Committee (MC).
    The MC shall comprise of (i) Resolution Professional as Chairperson; (ii) Resolution Applicant; and (iii) Financial Creditor to oversee the implementation and monitoring of the Resolution Plan. The MC shall cease to exist after the implementation of the Resolution Plan.

5 Pg. no.235 of the Application

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22. Compliance of mandatory contents of Resolution Plan under IBC and CIRP Regulations: The Applicant is stated to have conducted a thorough compliance check of the Resolution Plan in terms of Section 30(2)(a), (b) & (c) of IBC as well as Regulations 38 & 39 of the CIRP Regulations and has submitted Form-H under Regulation 39(4). A copy of the Form-H has also been filed.6 It is submitted that the Resolution Applicant has filed an Affidavit pursuant to Section 30(1) of IBC confirming that they are eligible to submit the Plan under Section 29A of IBC and that the contents of the said Certificate are in order. Both Fair Value and Liquidation Value as submitted in Form-H are stated to be Rs. Nil.

23. Reliefs & Concessions: Besides seeking approval of the Resolution Plan submitted by Mr. Samala Raja Shekar, the Applicant has also prayed for grant of reliefs, waivers and concessions to the Resolution Applicant, as set out in SECTION-VIII7 of the Resolution Plan.

24. In the above backdrop, we have heard the Learned Counsel for the Applicant and perused the records.

25. We have carefully considered the present application seeking approval of the revised Resolution Plan submitted by Mr. Samala Raja Shekar on 06.01.2025.

26. In view of the Order passed in IA 1048/2020, lesser amount is proposed to Mr.Balakrishna Bhora, one of the Financial Creditors as compared to the other Financial Creditors.

6 Page nos. 264-275 of the Application 7 Reliefs and Concessions - @ pg. nos.249 - 257 of the application

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27. While reviewing the Resolution Plan as aforesaid, we have taken into account the judgment in the case of K. Sashidhar v. Indian Overseas Bank8 where the Hon’ble Supreme Court has held that: “if 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.
    On receipt of such proposal, the Adjudicating Authority (NCLT) is required to satisfy itself that the resolution plan as approved by CoC meets the requirements specified in Section 30(2). No more and no less”. And held further in para 35 of the judgement that –

“the discretion of the adjudicating authority (NCLT) is circumscribed by Section 31 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”.

28. The Hon’ble Supreme Court reiterated this view in the case of Essar Steel9 by holding that: “…it is clear that the limited judicial review, which can in no circumstances trespass upon a business decision of the majority of the CoC, has to be within the four corners of section 30(2) of the Code, insofar as the Adjudicating Authority is concerned….”.

8 In K. Sashidhar v. Indian Overseas Bank & Others (in Civil Appeal No. 10673/2018) decided on 05.02.2019: (2019) 12 SCC 150 9 Committee of Creditors of Essar Steel India Limited Vs. Satish Kumar Gupta & Ors. in Civil Appeal No.8766-67/2019, decided on 15.11.2019: (2020) 8 SCC 531

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29. Reinforcing the above, the Hon’ble Supreme Court more recently has held in Vallal RCK vs M/s Siva Industries10 that:

“21. This Court has consistently held that the commercial wisdom of the CoC has been given paramount status without any judicial intervention for ensuring completion of the stated processes within the timelines prescribed by the IBC. It has been held that there is an intrinsic assumption, that financial creditors are fully informed about the viability of the corporate debtor and feasibility of the proposed resolution plan. They act on the basis of thorough examination of the proposed resolution plan and assessment made by their team of experts.
Emphasizing yet again, that “27. This Court has, time and again, emphasized the need for minimal judicial interference by the NCLAT and NCLT in the framework of IBC.” and, by referring to an earlier judgment in the case of Arun Kumar Jagatramka11, added a note of caution that

“…However, we do take this opportunity to offer a note of caution for NCLT and NCLAT, functioning as the adjudicating authority and appellate authority under the IBC respectively, from judicially interfering in the framework envisaged under the IBC. As we have noted earlier in the judgment, the IBC was introduced in order to overhaul the insolvency and bankruptcy regime in India. As such, it is a carefully considered and well thought out piece of legislation which sought to shed away the

10 Vallal RCK vs M/s Siva Industries and Holdings Limited & Ors. in Civil Appeal No.1811-1812/2022, decided on 03.06.2022: (2022) 9 SCC 803 11 Arun Kumar Jagatramka v. Jindal Steel & Power Ltd. (2021) 7 SCC 474] : (SCC p. 533, para 95)

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practices of the past. The legislature has also been working hard to ensure that the efficacy of this legislation remains robust by constantly amending it based on its experience. Consequently, the need for judicial intervention or innovation from NCLT and NCLAT should be kept at its bare minimum and should not disturb the foundational principles of the IBC…..” 30. The Ministry of Corporate Affairs, Government of India issued a Notification S.O.988 (E), dated 27.03.2017 whereby a combination would not require prior notification to and approval from the Competition Commission of India (CCI) if inter alia the target enterprises including its division units and subsidiaries has either assets not exceeding Rs.350 crores in India or turnover not exceeding Rs.1000 crores in India (Target Exemption). The value of assets and turnover of the target enterprises must relate to the Financial Year immediately preceding the Financial Year in which the proposed combination is being undertaken. As both the Assets and Turnover of the CD are less than the Target Exemption Threshold, the Target Exemption is applicable to the present case and CCI approval is not required in this case.

31. Therefore, when tested on the touch stone of the rulings, and considering the facts of the case, we are of the view that the Resolution Plan satisfies the requirements of Section 30 (2) of IBC and Regulations 37, 38 & 39 of CIRP Regulations. We also find that Mr. Samala Raja Shekar /SRA is eligible to submit the Resolution Plan under Section 29A of IBC.

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32. It is also to be clarified that approval of the Resolution Plan shall not be construed as waiver of any statutory obligations/ liabilities of the Corporate Debtor and shall be dealt with by the appropriate Authorities in accordance with law. Any waiver sought in the Resolution Plan, shall be subject to approval by the Authorities concerned. As regards to the reliefs sought, the Corporate Debtor has to approach the Authorities concerned for such reliefs and we trust the Authorities concerned will do the needful. “Approval of this plan by NCLT shall be deemed to be sufficient notice which may be required to be given to any person for such matter and no further notice shall be required to be given” as per the view taken by the Hon’ble Supreme Court in the case of Ghanashyam Mishra.12

33. With the above remarks, we hereby approve the revised Resolution Plan dated 06.01.2025 submitted by Mr.Samala Raja Shekar and Order as under:

i. The Revised Resolution Plan dated 06.01.2025 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.

12 Ghanashyam Mishra and Sons Private Limited Versus Edelweiss Asset Reconstruction Company Limited in Civil Appeal No.8129/2019 with Civil Appeal No.1554/2021 and 1550-1553/2021, decided on 13.04.2021.: (2021) 9 SCC 657

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ii. All crystallized liabilities and unclaimed liabilities of the Corporate Debtor as on the date of this order shall stand extinguished on the approval of this Resolution Plan.

iii. If the SRA fails to pay the amount as envisaged in the ‘Revised Resolution Plan’ to the stakeholders within the timeline fixed in the Plan, the entire amount paid by the SRA shall be forfeited.

iv. It is hereby ordered that the Demand Draft towards Performance Security furnished by the Resolution Applicant shall remain in force till the amount proposed to be paid to the creditors under this plan is fully paid off and the plan is fully implemented.

v. The Memorandum of Association (MoA) and Articles of Association (AoA) shall accordingly be amended and filed with the Registrar of Companies (RoC), Hyderabad for information and record. The Resolution Applicant, for effective 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.

vi. The pending IAs, if any, filed under PUFE transactions before this Authority will be pursued by the SRA. The other pending IAs, if any, will be pursued by the Financial Creditors.

vii. Henceforth, no creditors of the erstwhile Corporate Debtor can claim anything other than the liabilities referred to in the Resolution Plan.

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viii. The moratorium under Section 14 of IBC shall cease to have effect from the date of this order.

ix. 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.

x. The Applicant shall forthwith send a copy of this order to the CoC and the SRA.

xi. The Registry is directed to furnish free copy to the parties as per Rule 50 of the NCLT Rules, 2016.

xii. The Registry is directed to communicate this order to the Registrar of Companies, Hyderabad for updating the master data and also forward a copy to IBBI.

Accordingly, IA (IBC) (Plan) No.5/2025 in CP(IB) No.430/9/HDB/2018 is allowed and disposed of.

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SANJAY PURI RAJEEV BHARDWAJ MEMBER (TECHNICAL) MEMBER (JUDICIAL)

Syamala