26th December, 2024 Approval of Resolution Plan - Paras Commercial Centre Private Limited [IA. No. 15-2024 in CP(IB)No. 619-MB-C-II-2022] (433.49 KB)
IN THE NATIONAL COMPANY LAW TRIBUNAL, MUMBAI BENCH, COURT-II
IA. No. 15/2024 In CP(IB)No. 619/MB/C-II/2022
Application filed under section 30(6), r/w Section 31(1) of the Insolvency & Bankruptcy Code,2016 read with Regulation 39(4) of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016,
Filed by
Mr. Avinash Ambikaprasad Shukla,
Resolution Professional
…Applicant
In the matter of
M/s. The Karnataka Bank Limited
…Financial Creditor V/s Paras Commercial Centre Private Limited
…Corporate Debtor
Order Pronounced on: - 20.12.2024 Coram:
Anil Raj Chellan Kuldip Kumar Kareer Member (Technical) Member (Judicial)
MUMBAI BENCH, COURT II I.A. NO. 15/MB/C-II/2024 In
C.P. (IB) No. 619/MB/C-II/2022
Page 2 of 19
Appearances -
For the Resolution Professional : Adv. Yahya Batatawala
ORDER
Per: Kuldip Kumar Kareer, Member (Judiciall)
The present Interlocutory application is filed by Mr. Avinash A.
Shukla, the Applicant/Resolution Professional of M/s. Paras Commercial Centre
Private Limited (“the Corporate Debtor”) seeking approval of the resolution
plan under Section 30(6) of the Insolvency and Bankruptcy Code, 2016 (“the
Code”) read with Regulation 39 (4) of the Insolvency and Bankruptcy Board of
India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016
(“CIRP Regulations”) submitted by Mr. Nandlal M. Thakkar & Mrs. Pratima N.
Thakkar in consortium (“Successful Resolution Applicant”) which was duly
approved by 100% of the Committee of Creditors (“CoC”) of the Corporate
Debtor in its 10th CoC meeting held on 17.02.2024.
2.
The Applicant submits that the Corporate Debtor was initiated against the
Corporate Insolvency Resolution process (“CIRP”) vide Order dated 24.03.2023
passed in Company Petition No. 619/2022 filed by the Karnataka Bank Ltd.
under Section 7 of the IB Code, 2016 whereby Mr. Avinash A. Shukla was
appointed as Interim Resolution Professional (“IRP”).
3.
The IRP made a Public Announcement inviting claims in Form ‘A’ on 29.03.2023.
Based on the claims received, the CoC was constituted on 19.04.2024
comprising of one Member i.e, Karnataka Bank Ltd. The IRP convened the first
In
Page 3 of 19
meeting of the CoC on 26.04.2023 where by the CoC, inter alia, resolved to
confirm Mr. Avinash Ambikaprasad Shukla as the Resolution Professional (RP)
of the Corporate Debtor.
4.
Further, in pursuance of the discussions held in the 2nd and the 3rd CoC meetings
held on 22.05.2023 and 15.06.2023 respectively, the Applicant published Form
G in two newspapers on 17.06.2023. As many as six EoIs were received by the
Applicant and a provisional list of PRAs was prepared on 12.07.2023. The final
list of PRAs was published on 17.07.2023.
5.
In pursuance of the discussion held in the 4th CoC meeting held on 12.07.2023,
the Applicant prepared the Evaluation Matrix dated 18.07.2023 and also the
Information of Memorandum dated 27.06.2023. The Request for Resolution
Plan (RFRP) was also prepared and circulated to the PRAs. The last date for
submission of the Resolution Plans by the PRAs was 16.08.2023 which was
further extended to 05.09.2023. Pursuant to the request received from the
PRAs, the time for submission of the Resolution Plan was further extended up
to 20.10.2023.
6.
As the CIRP period of the Corporate Debtor was ending on 20.09.2023, the CoC
in its 6th meeting held on 31.08.2023, decided to file an application for an
extension of the CIRP period by 90 days i.e. from 21.09.2023 to 20.12.2023. This
Tribunal vide order dated 06.10.2023 allowed the said application.
Subsequently, in its 9th meeting held on 16.12.2023, the CoC again decided to
file an application for an extension of the CIRP period by another 60 days from
20.12.2023 to 19.02.2023. Accordingly, IA.No.5839/2023 was filed which was
allowed by this Authority vide order dated 02.01.2024.
7.
As on the last date for submission of Resolution Plans, the Applicant received
In
Page 4 of 19
only one Resolution Plan from the Promoters of the Corporate Debtor i.e., Mr.
Nandlal M. Thakkar & Mrs. Pratima N. Thakkar, in consortium. The PRA also
deposited an Earnest Money Deposit (EMD) of Rs. 50,00,000/- (Rupees Fifty
Lakhs only) with the Applicant.
8.
In the 8th CoC meeting on 08.11.2023, the Resolution Plan submitted by the PRA
was discussed. The CoC members raised certain observations and queries to the
PRA and also suggested to make certain changes in the Resolution Plan. The
Applicant requested the CoC to submit a detailed observation on the Resolution
Plan.
9.
A revised claim dated 14.02.2024 was submitted by the sole Financial Creditor
i.e. Karnataka Bank Limited by including the interest amount on the outstanding
debt as on 24.03.2023, amounting to Rs.1639.58 as the interest part was not
earlier taken into consideration while admitting the claim of the Financial
Creditor. The applicant after due verification admitted the revised claim on
16.02.2024.
10. On 14.02.2024, a due diligence report by A M Doshi & Associates LLP confirmed
that Resolution Applicants, Mr. Nandlal Thakkar and Mrs. Pratima N. Thakkar,
met the eligibility criteria under Section 29A of the IBC, Code 2016, and were
qualified to submit a Resolution Plan. The Corporate Debtor is an MSME.
11. On 16.02.2024, the revised claim received from the Financial Creditor was
updated the same on the IBBI portal. On the same day, the PRA, submitted a
revised Resolution Plan. The plan was discussed in the 10th CoC meeting on
17.02.2024, where it was approved with a 100% majority for an amount of Rs.
1,682.26 lakhs. Consequently, the consortium of Mr. Nandlal Thakkar and Mrs.
Pratima N. Thakkar was declared the Successful Resolution Applicant and a
In
Page 5 of 19
letter of intent was issued to them on 19.02.2024.
12. The Applicant submits that the ballot approving the Resolution plan was
received on 19.02.2024 i.e. the last day of the CIRP period as per order passed
by the Tribunal dated 02.01.2024. Thereafter, the application was prepared and
filed for approval before this Tribunal. Hence, the applicant prays for
condonation of the delay, if any, in filing the application for approval of the
Resolution Plan before this Tribunal.
13. Brief Background of the Corporate Debtor
The Corporate Debtor is an MSME (UDYAM-MH-19-0053772) mainly
engaged in storage and warehousing services and in renting of immovable
property services.
14.
Brief Background of the Successful Resolution Applicant
Mr. Nandlal M. Thakkar, commenced his career via the business of supply of
HDPE & Jute bags to ACC limited & Cement distributor of M/s. Bagalkot Cement Co.
Ltd. In 1980, he started the warehousing business providing both bonded and non-
bonded storage space along with the C & F Services to the Valued Customers.
Currently, he is into the business of Renting Immovable Property.
1.1.1. Mrs. Pratima Nandlal Thakkar has been involved in the same business
and Mr. Nandlal Thakkar and Mrs. Pratima both also own and operate M/s.
Global Logistics Pvt Ltd (GLPL), incorporated on 08.02.2005, which is
engaged in the business of real estate leasing & renting, providing logistics
solutions. GLPL is primarily doing the business of renting of Immovable
Property. The Company owns 12 acres of land at Vashivali village, Raigad
District, and have constructed a warehouse on it admeasuring 242,180
In
Page 6 of 19
sq.ft. carpet area especially for Castrol India Ltd.
1.1.2. Presently, 170,000 sq. ft. has been leased out to Reliance Group. They
started leasing the warehouse in 2020 and an area of 20,000 sq. ft. has
been leased to Abhay Export since 2023. The Company also owns 5 Galas
opposite Tilaknagar Station of which 3 Galas have been hired by Swiggy
Pvt. Ltd. since November 2022.
15. SALIENT FEATURES OF THE APPROVED RESOLUTION
A. The Successful Resolution Applicant has proposed a total discharge amount of
INR 1682.26 Lakhs for the resolution of the Corporate Debtor in the following
manner:
(Amount in Rs. Lakh)
Sr.
No.
Category of
Stakeholder*
Sub-Category of
Stakeholder
Amount
Claimed
Amount
Admitted
Amount
Provided
under the
Plan#
Amount
Provided to
the Amount
Admitted (%)
1
CIRP Cost
CIRP Cost
7,500,000
7,500,000
7,500,000
100%
2
Secured Financial
Creditors
a) Creditors not having
a right to vote under
sub-section (2) of
section 21
In
Page 7 of 19
(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
163,958,000
163,958,000
16,00,00,000
97.58%
Total [(a)+(b)] 163,958,000 163,958,000 16,00,00,000 97.58% 3 Operational Creditors (i) Government
(ii) Other Operational Creditors 28,395,000
78,80,000 28,39,5000
78,80,000 5,68,000
1,58,000 2%
2% Total
200,233,000 200,233,000 168,226,000 84.015% Grand Total 200,233,000 200,233,000 168,226,000 84.015% (B) Infusion of Funds (i) As on 31st March 2023, the Net-Worth of Gobal Logistics Pvt Ltd is estimated at INR 1183 Lakhs approx. Moreover, Resolution Applicant (RA) has various group companies having free cash-flows and owns certain properties which shall be monetized to raise funds for payment, as proposed under this plan.
In
Page 8 of 19
C. Source of Funds
The Resolution Applicant proposes to provide capital infusion from liquid
investments held within the group and obtain unsecured loans from friends/
associates/relatives/ obtain secured loans. The Resolution Applicant has certain
immovable assets in its own name and in the name of its group companies which
may be sold to mobilise funds required for payment, as proposed under this plan.
D. CIRP Cost
The total amount provided by the SRA towards CIRP cost is INR 75.00 lakhs. This
amount will be paid up to the date of approval of the Resolution Plan by the
Adjudicating Authority in priority to other payments. In case, the CIRP cost is
higher than the estimated CIRP cost, such excess CIRP cost shall also be paid by
the Resolution Applicant.
E. Treatment of Secured Financial Creditors
The Successful Resolution Applicant assures that the Secured Financial Creditors
shall be paid as mentioned below:
- The Resolution Applicant proposes to pay an amount of INR 1600.00 lakhs towards the full and final settlement of secured financial creditors.
- Furthermore, the Resolution Applicant proposes an upfront payment of INR 200.00 lakhs towards admitted claims received from the secured financial creditors. The Resolution Applicant submits that till date, INR 123.00 lakhs has been paid post commencement of CIRP from various sources (summary of payments made is as per annexure D attached with the application), and balance upfront payments shall be paid from Earnest Money Deposit (EMD) amount and infusion of funds by the RA within 90 days. Deferred payments shall be paid over
In
Page 9 of 19
a period of 9 months from the effective date as under.
3. The payments outstanding after the 6th month from the effective date shall be
paid along with a nominal interest rate of 12% p.a. based on a reducing balance
basis from 7th month on or before 9 months from the effective date.
F. Treatment of the Claims of other operational creditors
The Resolution Applicant further proposes to pay an amount of INR 5.68 lakhs
upfront payment towards a full and final settlement of the operational creditors
being statutory dues of the Corporate Debtor.
The Resolution Applicant proposes to pay an amount of INR 1.58 lakhs upfront
payment towards the full and final settlement of the other operational creditors.
G. Capital Structure & Infusion of Funds
Issuance of additional equity shares/ infusion of Fresh Unsecured loans by
Resolution Applicant
The Company shall continue to have authorised share capital of INR 10.00 lakhs.
The Resolution Applicant along with its Associates/ Affiliates shall introduce
capital into the company in combination of equity/quasi-equity/ unsecured
loans and secured loans or any other form deemed fit by the Resolution
Applicant.
I. Formation of Implementation and Monitoring Committee (IMC).
- An Implementation and Monitoring Committee shall be formed for monitoring the implementation of the Resolution Plan which will be comprising of (i) a representative from Secured Financial Creditors (as decided by CoC) (ii) the Resolution Applicant, as well as any Insolvency Professional (which may include
In
Page 10 of 19
existing Resolution Professional) (iii) one Consultant mutually agreed by representative of the Secured Financial Creditor and the Resolution Applicant to supervise the implementation of the Resolution Plan.
J. Timeline of Implementation
Activity Timeline (Days) Remarks if any Approval by NCLT (E = Effective Date) E
Intimation to the MCA, CoC, IBBI, Tax Authorities and various other Statutory Authorities (as applicable) E+2
Intimation to all Creditors, existing shareholders and other stakeholders of the company
Other Approvals/ filings required under the Plan filing of various documents with MCA – Other Authorities Effective Date + 12
Payment of CIRP Cost Effective Date+ 3 months
Settlement of Employees & Workmen Dues
N.A.
The proposed dues, if any,
shall be paid in priority to
payment to financial creditors
Repayment to Secured Financial Creditors
Effective Date + 9 months
The same is provide as
payment
to
secured
&
unsecured financial creditors
as per section VII. It includes
upfront payment as well as
deferred payment as stated in
the payment summary table.
Repayment to Statutory Dues
Effective Date + 3 months
The same is provided as
payment
for
statutory
liabilities in financial proposal
separately.
The
proposed
dues, if any, shall be paid in
In
Page 11 of 19
priority to payment to financial creditors Repayment to Other Creditors Effective Date + 3 months The same is provided as payment to Operational Creditors as per the financial proposal separately. The proposed dues, if any, shall be paid in priority to payment to financial creditors Implementation of the Proposed Plan Execution of Definitive Agreements with CoC/RP on approval Plan by NCLY to implement the Approved Plan Effective Date + 3
Settlement of Upfront Payment as per the
Approved Resolution Plan
Effective Date + 3
Valuation
It is pertinent to mention that the value offered by the Resolution Applicant is more
than the fair value of the Corporate Debtor and the summary of the liquidation and
fair value of the assets of the Corporate Debtor is being reproduced hereunder.
Valuation on Securities & Financial Assets
Valuer
Liquidation Value (INR)
Fair Value (INR)
Atharve Valuation (OPC
Private
Limited-
Registered Valuer 1
90,000/-
7,71,000/-
Jayesh Parasmal Shah-
Registered Valuer
90,000/-
90,000/-
In
Page 12 of 19
Valuation on Immovable Assets
Valuer
Liquidation Value (INR)
Fair Value (INR)
Jayesh Mohan Kamat-
Registered Valuer 1
9,86,00,000/-
13,14,00,000/-
Parag Sheth- Registered
Valuer 2
7,06,37,000/-
10,07,10,000/-
K. Performance Guarantee
The Resolution Applicant proposes to provide INR 130.00 lakhs as margin money
towards such performance guarantee. Amounts paid as margin money shall be
adjusted against final payments under the plan.
L. Extinguishment of Personal Guarantees
The Resolution Applicant clarifies that the personal guarantee offered by the
Promoters/Directors of the Corporate Debtor for the financial assistance provided to
the Corporate Debtor shall stand extinguished pursuant to the approval of the Plan
by the Tribunal on the closing date i.e. on the date of payment of all the dues as
proposed in this plan, without requirement of any further act or deed by the
Resolution Applicants and/ or Corporate Debtor.
M. Relief and Concessions
The Successful Resolution Applicant has sought various reliefs and concessions based
on the clean slate concept laid down by the Hon’ble Supreme Court in various
judgements, reliefs which are necessary to keep the Corporate Debtor as going
concern, release from any and all liabilities/proceedings, disputes and
In
Page 13 of 19
noncompliances prior to the NCLT Approval Date and extended period for renewal or revival of licenses for running the business of the Corporate Debtor.
The Applicant further submits that the Resolution Plan submitted is in
compliance with Section 30 (2) of the Code and Regulation 38 (A) of the CIRP
Regulations. The RP has also provided a compliance certificate in “FORM H” as
mandated under the Code for seeking approval of the Resolution Plan from this
Tribunal.
Observations of the Adjudicating Authority.
17.
We have heard the Applicant and perused the Resolution Plan as well as the
related documents submitted along with the Application.
As referred to in the above summary of the Resolution Plan, we are satisfied that the proposed Resolution Plan fulfils all the requirements of Section 30 (2) of the Code and no provision of the law appears to have been contravened.
Section 30 (4) of the Code reads as follows:
“(4) The committee of creditors may approve a resolution plan by a vote of not less than sixty-six percent of voting share of the financial creditors, after considering its feasibility and viability, the manner of distribution proposed, which may take into account the order of priority amongst creditors as laid down in sub-section (1) of section 53, including the priority and value of the security interest of a secured creditor and such other requirements as may be specified by the Board.
In
Page 14 of 19
Section 30(6) of the Code enjoins the Resolution Professional to submit the
Resolution Plan, as approved by the CoC to the Adjudicating Authority. Section
31 of the Code deals with the approval of the Resolution Plan by the Authority
if it is satisfied that the Resolution Plan, as approved by the CoC under section
30(4), meets the requirements provided under section 30(2) of the Code.
Thus, it is the duty of the Adjudicating Authority to satisfy itself that the
Resolution Plan, as approved by the CoC meets, the above requirements.
On perusal of the Resolution Plan, it is observed that the Resolution Plan
provides for the following:
a) Payment of CIRP Cost as specified u/s 30(2)(a) of the Code.
b) Repayment of Debts of Operational Creditors as specified u/s 30(2)(b)
of the Code.
c) For management of the affairs of the Corporate Debtor, after the
approval of the Resolution Plan, as specified u/s 30(2)(c) of the Code.
d) The implementation and supervision of the Resolution Plan by the RP
and the CoC as specified u/s 30(2)(d) of the Code.
-
The Resolution Plan has been approved by the CoC in its 10th meeting with 100% votes in terms of Section 30(4) of the Code.
In K Sashidhar v. Indian Overseas Bank & Others (in Civil Appeal No.10673/2018 decided on 05.02.2019) the Hon’ble Apex Court held that if the CoC has 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
In
Page 15 of 19
Professional to submit the same to the Adjudicating Authority (NCLT). On
receipt of such a proposal, the Adjudicating Authority is required to satisfy
itself that the Resolution Plan, as approved by the CoC, meets the
requirements specified in Section 30(2). The Hon’ble Apex Court further
observed that the role of the NCLT is ‘no more and no less’. The Hon’ble Apex
Court further held that the discretion of the Adjudicating Authority is
circumscribed by Section 31 and is limited to scrutiny of the Resolution Plan
“as approved” by the requisite percent of voting share of financial creditors.
Even in that enquiry, the grounds on which the Adjudicating Authority can
reject the Resolution Plan is in reference to matters specified in Section 30(2)
when the Resolution Plan does not conform to the stated
requirements.
In CoC of Essar Steel (Civil Appeal No. 8766-67 of 2019 decided on 15.11.2019)
the Hon’ble Apex Court clearly laid down that the Adjudicating Authority
does not have the power to modify the Resolution Plan which the CoC in their
commercial wisdom has approved. In para 42 Hon’ble Court observed as
under:
“Thus, it is clear that the limited judicial review
available, which can in no circumstance trespass
upon a business decision of the majority of the
Committee of Creditors, has to be within the four
corners of section 30(2) of the Code, insofar as the
Adjudicating Authority is concerned, and section 32
read with section 61(3) of the Code, insofar as the
Appellate Tribunal is concerned, the parameters of
In
Page 16 of 19
such review having been clearly laid down in K. Sashidhar (supra).”
In view of the discussions and the law thus settled, we are of the considered
view that the instant Resolution Plan meets the requirements of Section
30(2) of the Code and Regulations 37, 38, 38(1A), and 39 (4) of the
Regulations. The Resolution Plan is not in contravention of any of the
provisions of Section 29A of the Code and is in accordance with law. We,
therefore, allow the Application in the following terms.
ORDER
The Application IA No. 15 of 2024 in CP (IB) No. 619/2022 is allowed. The Resolution Plan submitted by Mr. Nandlal Thakkar and Mrs. Pratima Thakkar in consortium and passed by the CoC with the requisite majority is hereby approved. It shall become effective from this date and shall form part of this order. It shall be binding on the Corporate Debtor, its employees, members, and 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.
- The Hon’ble Supreme Court in the matter of Ghanshyam Mishra and Sons Private Limited Vs. Edelweiss Asset Reconstruction Company Limited, (Civil Appeal No. 8129 of 2019 decided on 13.04.2021) held that as on the date of
In
Page 17 of 19
the approval of the Resolution Plan by the Adjudicating Authority, all such
claims which are not a part of the Resolution Plan, shall stand extinguished and
no person will be entitled to initiate or continue any proceedings in respect to
a claim which is not a part of the Resolution Plan. Accordingly, no person or
authority will be entitled to initiate or continue any proceedings with respect
to a claim prior to the approval of the Resolution Plan which is not a part of the
Resolution Plan.
28.
The approval of the Resolution Plan shall not be construed as a waiver of any
future 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 relating to the period after the date of this order,
more particularly licenses and approvals for keeping the Corporate Debtor as
a going concern, shall be subject to approval by the Authorities concerned and
this Tribunal will not deter such authorities from dealing with any of the issues
arising after effecting the Resolution Plan. This Tribunals, however,
recommends due consideration of the revival of the Corporate Debtor.
The Monitoring Committee, as proposed in section IX para 4 of the Resolution Plan, shall be constituted to supervise the effective implementation of the Resolution Plan.
No application relating to preferential/fraudulent transactions under sections 43, 45, 50 and 66 of the IBC, 2016 is stated to be pending before this Tribunal. However, in case any such application is pending and some money is realized
In
Page 18 of 19
as an outcome of such application(s), the same shall enure to the Financial Creditor.
As regards the other reliefs and concessions, as sought in the application, which exempts the Corporate Debtor from holding them liable for any offenses committed prior to the commencement of CIRP, as stipulated under Section 32A of the Code, the same is granted to the Resolution Applicants. However, as regards the exemptions, if any, sought in violation of any law in force, it is hereby clarified that such exemptions shall be construed not to have been granted.
-
The Memorandum of Association (MoA) and Articles of Association (AoA) shall
accordingly be amended and filed with the concerned Registrar of Companies (RoC), for information and record. The Resolution Applicant, for effective implementation of the Resolution Plan, shall obtain all necessary approvals, under any law for the time being in force within such period, as may be prescribed. However, if any approval of shareholders is required under the Companies Act, 2013 or any other law for the time being in force for the implementation of actions under the Resolution Plan, such approval shall be deemed to have been given and it shall not be a contravention of the said Act or any other law.
The concessions sought in relation to the stamp duty, taxes, registration charges, etc for implementation of the approved Resolution Plan are not
In
Page 19 of 19
granted. However, the Resolution Applicant is at liberty to approach the competent authorities for the exemptions, if permitted under the law.
-
The moratorium declared under Section 14 of the Code shall cease to have effect from this date.
-
The Applicant shall forward all records relating to the conduct of the CIRP and
the Resolution Plan to the IBBI along with a copy of this Order for information.
- The Applicant shall forthwith send a certified copy of this Order to the CoC and
the Successful Resolution Applicant, respectively for necessary compliance.
Sd/-
Sd/-
ANIL RAJ CHELLAN KULDIP KUMAR KAREER
MEMBER (TECHNICAL) MEMBER (JUDICIAL) Chandrika, LRA
Verbatim extracted text (OCR/PDF). Older scans and tables may show extraction artifacts — verify against the original for anything you act on.
No analysis has been generated for this document yet.