14th August, 2025 Approval of Resolution Plan - Highland Automobiles Private Limited [IA. No. 17/2024 in CP (IB) No. 119/Chd/J&K/2019] (4.73 MB)

IA No. 17/ 2024 in CP(IB) No. 119/Chd/J&K/2019
Punjab National Bank VS Highland Automobiles Pvt. Ltd.
Page 1 of 26 NATIONAL COMPANY LAW TRIBUNAL CHANDIGARH BENCH (COURT-I)

IA. NO. 17/2024
IN CP (IB) No. 119/Chd/J&K/2019

IN THE MATTER OF:

Punjab National Bank ...Petitioner

Versus

Highland Automobiles Pvt. Ltd. …Respondent AND IN THE MATTER OF IA No. 17/2024: Mr. Arvind Kumar Resolution Professional of Highland Automobiles Private Limited Address: #303, 3rd Floor, Plot No. D-90, Phase 8B, Sec. 74, Industrial Area, SAS Nagar Mohali, Punjab - 160071 …Resolution Professional/Applicant

Judgment Delivered on: 12.08.2025 

SECTION: 30(6) of IBC, 2016 read with Regulation 39(4) of CIRP Regulations, 2016 read with Rule 11 of NCLT Rules, 2016

CORAM: SH. HARNAM SINGH THAKUR, HON’BLE MEMBER (JUDICIAL) SH. SHISHIR AGARWAL, HON’BLE MEMBER (TECHNICAL)

PRESENT:

For the Applicant/RP : Mr. Sumer Singh Brar, Ms. Vaishali Singla, Advocates Mr. Arvind Kumar, RP in-person (through vc) For the SRA : Mr. Atul V. Sood, Advocate

Page 2 of 26 ORDER

PER: HON’BLE SH. HARNAM SINGH THAKUR, MEMBER (JUDICIAL)
HON’BLE SH. SHISHIR AGARWAL, MEMBER (TECHNICAL) The IA No. 17 of 2024 preferred by Mr. Arvind Kumar, Resolution Professional of Highland Automobiles Private Limited (“Applicant/ Resolution Professional”) under Section 30(6) of the Insolvency and Bankruptcy Code 2016, Regulation 39(4) of the IBBI (Insolvency Resolution Process of Corporate Debtor) Regulations 2016 and Rule 11 of NCLT Rules, 2016 for approval of the Resolution plan submitted by Abhishek Jain (“Successful Resolution Applicant” / “SRA”). The Applicant has made the following prayers: a) Allow the present Application on behalf of the Corporate Debtor through the Resolution Professional under Section 30(6) read with Section 31 of the IBC, 2016 and Regulation 39(4) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (“CIRP Regulations”) read with Rule 11 of the NCLT Rules, 2016, seeking approval of Resolution Plan as submitted by the Resolution Applicant, Abhishek Jain

b) And pass any further necessary order as deem fit in the interest of justice.

To put briefly, the facts of the present case are that the Financial Creditor Punjab National Bank filed an application under Section 7 of IBC, 2016 for initiating CIR Process against the Corporate Debtor (CD) Highland Automobiles Private Limited. The said Application was admitted by this Tribunal vide Order dated 15.02.2024 and Mr. Arvind Kumar was appointed as the Interim Resolution Professional (IRP) of the CD.
3. It is submitted by the Applicant that in terms of Regulation 6(1) of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, the said

Page 3 of 26 IRP made a Public Announcement in Form-A on 17.02.2024 to invite claims, publishing in the newspapers ‘Financial Express’ (English), ‘Jansatta’ (Hindi) and ‘Daily Udaan’ (Regional-Urdu). The said Public Announcement was uploaded on the website of Insolvency and Bankruptcy Board of India (IBBI) too. Further a corrigendum to the Form A was published in the same newspapers on 19-02- 2024 for updating the email id.

It is further submitted that the CoC of the Corporate Debtor was constituted with 1 secured financial creditor. The details of the CoC member are stated herein below: - S.No. Name Amount %CoC 1. Punjab National Bank, Circle Sastra Srinagar 190001 J&K.
Rs. 60,48,13,446.66 100

The applicant / resolution professional prepared the list of creditors and submitted the Report certifying the constitution of Committee of Creditors with the Adjudicating Authority vide IA number 945/2024 dated 09-03-2024 accordance with Regulation 17(1) of IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. The same was duly taken on record by this Bench.

It is stated by the Applicant that the Committee of Creditors ("CoC") constituted under Regulation no.17(1) of Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Person) Regulations, 2016 in its 2nd meeting held on 12.04.2024 resolved to confirm the appointment of the applicant as the Resolution Professional (hereinafter referred as “RP”.

Page 4 of 26 7. It is stated by the Applicant that on receipt of further claims from financial creditors the Committee of Creditors was reconstituted on 13.09.2024 and the report certifying the reconstitution of the CoC was taken on record vide order dated 03.12.2024 in IA No. 2083/2024. The reconstituted CoC had approved the Plan on 22.10.2024. 8. In accordance with the Code, the initial period for completion of the corporate insolvency resolution process i.e. 180 days was scheduled to expire on 13th Day of August 2024. 9. The applicant filed an application seeking extension of 90 days in CIRP period from 13.08.2024 to 10.11.2024 vide I.A. No. 1842/2024 which was allowed by this bench vide order dated 03.12.2024.
10. It is stated by the Applicant that ‘Form-G’ was published on 15.04.2024. The last date of submission of EOI was 30.04.2024. The EOI was also uploaded on the website of IBBI at www.ibbi.gov.in. The Copy for FORM-G along with Information Document as prepared by RP for invitation of EOI is annexed as Annexure A-6(Colly) & Annexure A-7. 11. In terms of the Form G, the Applicant received 3 EOIs. On the basis of eligibility criterion as fixed by the CoC. The applicant shortlisted all of the 3 applicants in the final list and issued the following list of prospective resolution applicants- Final List of Prospective Resolution APPLICANTS S. No. Name of Prospective Resolution applicant 1 Mr. Abhishek Jain 2 Jagmohan Automotives Private Limited 3 Mr. Parmjit Gandhi

Page 5 of 26 12. It is submitted by the Applicant that pursuant to the EOI, 1 Resolution Plan was submitted by the Mr. Abhishek Jain.
13. It is further submitted by the Applicant that the resolution plan submitted by Mr. Abheshek was presented before the CoC in 10th meeting held on 18.09.2024. The bank sought enhancement of the offer by the Resolution Applicant and after making necessary modifications the Applicant Abhishek Jain submitted the final resolution plan on 11.10.2024 which was submitted to the CoC for its consideration. 14. It is submitted by the Applicant that at the 11th meeting of the CoC held on 22.10.2024 held discussions on feasibility and viability of the resolution plan and detailed deliberations were held. The records of these deliberations are contained in the minutes of 11th Meeting of the CoC. Annexure A-8. 15. It is submitted by the applicant that after deliberations the CoC in its 11th meeting approved the resolution plan with 91.80% voting share by passing the following resolution: Resolution: "I have gone through the contents of the resolution plan, submitted by Mr. Abhishek Jain independently; found that the plan confirms the mandatory requirements of section 30 of the Code and the regulation 37, 38 and 39 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulation 2016. I have satisfied myself as to the feasibility and viability of the resolution plan and affirms that the plan addresses the cause of the default, it has provision for the effective implementation, it has provisions for approvals required and the time line for the same and the resolution applicant has the capability to implement the resolution plan. I have verified that the resolution plan identifies the specific sources of the funds to pay the Insolvency Resolution Process cost, Payment to creditors as dealt with in the resolution plan. I have also considered the fact that Resolution Professional has not filed any application before the Adjudicating Authority in respect of avoidable transactions u/s 43, 66(I) and 66(2) of IBC, 2016. Based on the above said understanding, I hereby cast my vote on the resolution:

Page 6 of 26 "RESOLVED THAT after considering the feasibility and viability of the resolution plan, the implementation capacity of the Resolution Applicant, and ensuring compliance with all requirements of the Insolvency and Bankruptcy Code, 2016, and the regulations thereunder, as well as the payment terms associated with the settlement of claims for all stakeholders,, the tenure of the plan, and the concessions sought by the Resolution Applicant, the resolution plan submitted by Mr. Abhishek Jain, as provided to the Committee of Creditors by the Resolution Professional, is hereby approved." "RESOLVED FURTHER THAT the Monitoring Committee, as proposed by the Resolution Applicant in the resolution plan, shall consist of four members: the Resolution Professional (Chairman), one representative from the secured assenting Financial Creditor, and two representatives from the Resolution Applicant. The monthly fee for the Resolution Professional acting as Chairman of the Monitoring Committee shall be~ 25,000/- (exclusive of GST)."

16. The Applicant/RP has annexed the Section 29A Certificate of the Successful Resolution Applicant (SRA) along with the application as Annexure A-17, i.e. undertaking that the SRA is eligible under Section 29A of the Code to submit the Plan.
17. It is stated by the Applicant that in terms of the Regulation 36B(4A) of the IBBI (Insolvency Resolution Process of Corporate Persons) Regulations, 2016, it received from the SRA, the Performance Security deposit of Rs. 1,50,00,000/- (Rs. One Crore Fifty Lakh) in the bank account operated by the Applicant, which has been converted into a fixed deposit on 14.11.2024.
18. In compliance with Regulation 39(4) of the IBBI (Insolvency Resolution Process of Corporate Persons) Regulations 2016, the Applicant /RP has filed “Compliance Certificate” in Form H certifying that the present Resolution Plan duly approved by the CoC members complies with all the provisions of the IBC and IRPCP Regulations, 2016. The applicant subsequently filed the updated Form

Page 7 of 26 H on 28.04.2024 vide diary no. 3510/6 The relevant portion of the same is reproduced herein for reference:

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19. As per the Form ‘H’ (IBBI), the Fair Market Value (FMV) of the Corporate Debtor is Rs. 5,98,51,649.80/- and its Liquidation Value (LV) is Rs.

Page 14 of 26 2,06,00,424.30/- The details of the distribution of the Resolution Plan Amount amongst Stakeholders are given, as per which, the gross amount provided under the Resolution Plan is Rs. 2,20,00,000.00/-, which comes to approximately 106.79% of the Liquidation Value (LV) and around 36.75% of the Fair Market Value (FMV) of the Corporate Debtor. Out of this, realisable amount under the Plan is RS, 1,00,22,327/- (para 7B of Form ‘H’) and CIRP cost is RS. 1,19,77,673/- (Table 7 at page 28, Vol. 1 of Application). 20. In compliance of directions of this Tribunal vide order dated 03.12.2024 the Applicant has filed compliance of Regulation 6A and has also placed on record provisional financial statements as on insolvency commencement date i.e. 15.02.2024 and audited financial statements for the year ended 31.03.2022,31.03.2023, and 31.03.2024. 21. Vide order dated 05.03.2025, it was directed by this Bench to place on record copy of lease deed in respect of the corporate debtor, reconciliation statement in form of affidavit by RP that all the assets have been included for the purpose of valuation and all the claims/liabilities have been considered in the resolution plan along with balance sheet. In compliance of the same, the Applicant has filed an updated compliance affidavit vide Diary No. 03510/7 dated 07.07.2025 and refiled on 09.07.2025. The response to clarifications sought by this Tribunal is reproduced as under:

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22. In pursuance of order dated 05.03.2025, the SRA has filed an affidavit vide Dairy No. 03510/3 dated 10.03.2025 whereby the SRA offered to pay the amount towards the pending dues as payable towards Provident Fund and Gratuity in accordance with the provisions of law. The SRA Affidavit is reproduced herein below: -

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Page 19 of 26 23. The Applicant has also indicated the brief of the financial proposal and payment terms at Pg. 28 of the Application. The brief financial proposal and payment term in the resolution plan is reproduced herein below: -

Page 20 of 26 24. As regards to the term and implementation schedule, it has been proposed to implement the Resolution Plan as per the following events’ schedule:

The net worth of SRA is stated to be Rs. 1090.05 Lakhs, the same is reproduced as follows:

26. The sources of funds as mentioned in the Resolution Plan on page 453 of the Application are reproduced as under:

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27. Regarding supervision and monitoring over implementation of the Resolution Plan, it has been proposed to constitute a 4 Member Monitoring Committee comprising 1 Representative of assenting Financial Creditors, 2 Representative of Resolution Applicant and the Resolution Professional as Monitoring Agent. The relevant details given in the Resolution plan are reproduced thus:

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28. The Applicant during the CIRP process of the Corporate Debtor has not preferred any PUFE application.
29. We heard the Counsel for the Applicant/RP and perused the Application, and other documents placed on record. We observe that the CoC of the Corporate Debtor, in its commercial wisdom, has duly considered and approved the instant Resolution Plan submitted by the Successful Resolution Applicant by a voting share of 91.80% in its 11th Meeting held on 26.10.2024. We also note that the plan is backed by Performance Security deposit of Rs. 1,50,00,000/- (Rs. One Crore Fifty Lakhs) already deposited by SRA in the bank account operated by the Applicant as mentioned in paragraph 29 of the Application.
30. The role of the Adjudicating Authority has been examined by the Hon’ble Supreme Court in Civil Appeal No. 10673 of 2018 in the matter of “K. Sashidhar Vs. Indian Overseas Bank & Ors.”, the relevant extracts of which are reproduced below:

Page 23 of 26 “35. Whereas, 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. Reverting to Section 30(2), the enquiry to be done is in respect of whether the resolution plan provides: (i) the payment of insolvency resolution process costs in a specified manner in priority to the repayment of other debts of the corporate debtor, (ii) the repayment of the debts of operational creditors in prescribed manner, (iii) the management of the affairs of the corporate debtor, (iv) the implementation and supervision of the resolution plan, (v) does not contravene any of the provisions of the law for the time being in force, (vi) conforms to such other requirements as may be specified by the Board. The Board referred to is established under Section 188 of the I&B Code. The powers and functions of the Board have been delineated in Section 196 of the I&B Code. None of the specified functions of the Board, directly or indirectly, pertain to regulating the manner in which the financial creditors ought to or ought not to exercise their commercial wisdom during the voting on the resolution plan under Section 30(4) of the I&B Code. The subjective satisfaction of the financial creditors at the time of voting is bound to be a mixed baggage of variety of factors. To wit, the feasibility and viability of the proposed resolution plan and including their perceptions about the general capability of the resolution applicant to translate the projected plan into a reality. The resolution applicant may have given projections backed by normative data but still in the opinion of the dissenting financial creditors, it would not be free from being speculative. These aspects are completely within the domain of the financial creditors who are called upon to vote on the resolution plan under Section 30(4) of the I&B Code.” “38. indubitably, the inquiry in such an appeal would be limited to the power exercisable by the resolution professional under Section 30(2) of the I&B Code or, at best, by the adjudicating authority (NCLT) under Section 31(2) read with 31(1) of the I&B Code. No other inquiry would be permissible. Further, the jurisdiction bestowed upon the appellate authority (NCLAT) is also expressly circumscribed. It can examine the challenge only in relation to the grounds specified in Section 61(3) of the I&B Code, which is limited to matters “other than” enquiry into the autonomy or commercial wisdom of the dissenting

Page 24 of 26 financial creditors. Thus, the prescribed authorities (NCLT/NCLAT) have been endowed with limited jurisdiction as specified in the I&B Code and not to act as a court of equity or exercise plenary powers.”

31. In view of the decision of Hon’ble Supreme Court (Supra), and many others, it has become a settled principle of law that the scope of inquiry with the Adjudicating Authority is limited to satisfying itself whether the requirements as referred to in Section 30(2) of IBC have been met and not to sit on judgment on the commercial wisdom of the CoC. Adjudicating Authority is not required to interfere with the decision taken by the CoC in its commercial wisdom, save and except the circumstances referred to in Section 31(2) of the IBC, 2016. Considering the facts of the case along with documents and reports submitted by the RP, we are of the view that the Resolution Plan satisfies the requirements of Section 30(2) of the IBC and Regulations 37, 38 & 39 of CIRP Regulations. The RP has certified that the SRA is eligible to submit the Plan under Section 29A of the IBC.
32. In view of the to the discussion above, we hereby approve the Resolution Plan submitted by the Applicant to this Adjudicating Authority, as endorsed by the CoC. We, therefore, allow the present IA and approve the COC approved Resolution Plan, placed before us by the Applicant/RP, with the following directions in respect of the Corporate Debtor: a. The Resolution Plan shall become effective from the date of passing of this Order and shall be implemented by the Monitoring Committee strictly as per the term of the Resolution Plan and Implementation Schedule given therein, i.e., within 180 days from the date of constitution of Monitoring Committee (Part II, Page 44 of the Resolution Plan); b. The Monitoring Committee for the implementation of the resolution plan shall be constituted in accordance with clause 3.1.1 of the Resolution Plan. It shall consist of one (1) representative of Secured accenting Financial

Page 25 of 26 Creditor, two (2) representatives of SRA and the Resolution Professional. The Monitoring Committee will supervise and implement the Resolution Plan and perform its functions in accordance to the resolution plan as approved by Committee of Creditors (COC).

c. It is also to be clarified that approval of the Resolution Plan shall not be construed as a 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.

d. The Resolution Plan 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.

e. All crystallized liabilities and unclaimed liabilities of the Corporate Debtor as on the date of this order except to the extent provided for under the plan shall stand extinguished on the approval of this Resolution Plan. Since the sundry debtors have been valued at “zero” they will be written off in the books and not carried forward and there shall be no loss carried forward for set off in future, for tax purposes, as confirmed by the RP during the hearing dated 24.07.2025. f. If the SRA fails to pay the amount as envisaged in the Resolution Plan to the stakeholders within the timeline fixed in the Plan, the entire amount paid by the SRA shall be forfeited.

g. The Memorandum of Association (MoA) and the 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 Plan, shall obtain all necessary approvals,

Page 26 of 26 under any law for the time being in force, within such period as may be prescribed.

h. The Performance Bank Guarantee submitted by SRA shall remain deposited with the Monitoring Committee, and shall be released after successful of implementation of the Resolution Plan. i. 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; and j. The RP shall forward all the records relating to the conduct of CIRP and Resolution Plan to IBBI for its record and database. k. The Applicant shall forthwith send a copy of this Order to the CoC and the Resolution Applicant.
l. The Registry is directed to furnish a free copy to the parties as per Rule 50 of the NCLT Rules, 2016.
m. The Registry is directed to communicate this Order to the concerned Registrar of Companies, for updating the master data and also forward a copy to IBBI.

33. In this regard, it is clarified that the SRAs shall be eligible to get protection as available under Section 32A of IBC, 2016.

34. A copy of this order shall also be sent by the Applicant to the IBBI for their record.

35. The IA NO. 17/2024 is allowed and disposed of accordingly. -Sd- -Sd- (Shishir Agarwal)

              (Harnam Singh Thakur) 
    

Member (Technical)

                   Member (Judicial) 

August 12, 2025

      Japneet