10th July, 2024 Approval of Resolution Plan - Bulland Buildtech Private Limited [I.A. – 1449-2022

I.A. – 1449/2022 in C.P.(I.B.)-1744/2019 Canara Bank Vs. M/s Bulland Buildtech Private Limited
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IN THE NATIONAL COMPANY LAW TRIBUNAL NEW DELHI BENCH (COURT – II) I.A. – 1449/2022 IN
C.P.(IB)-1744 OF 2019

IN THE MATTER OF:
Canara Bank

…Financial Creditor Versus M/s Bulland Buildtech Private Limited

…Corporate Debtor

AND IN THE MATTER OF: Mr. Debashis Nanda Resolution Professional M/s Bulland Buildtech Private Limited

…Applicant 

Order delivered on: 09.07.2024 UNDER SECTION: 30(6) of IBC, 2016

CORAM: SH. ASHOK KUMAR BHARDWAJ, HON’BLE MEMBER (J) SH. SUBRATA KUMAR DASH, HON’BLE MEMBER (T)

PRESENT:

For the RP : Adv. Sumant Batra, Adv. Nidhi Yadav, Adv. Sarthak Bhandari, PCS Aradhana Singh, Mr. Debashish Nanda in person, Adv. Nipun Gautam
For the SRA : Adv. Saransh Goel, Adv. Neeraj Gupta

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ORDER

IA-1449/2022 has been filed by the Resolution Professional in terms of the provisions of Section – 30(6) of IBC, 2016 seeking approval of the Resolution Plan and IA-1852/2024 was filed to place on record an addendum to the Resolution Plan and has been allowed vide order dated 06.05.2024. The captioned application seeks the following reliefs: “A. Allow the present Application and approve the Resolution Plan submitted by the Saviour Builders Private Limited as approved by the Committee of Creditors of the Corporate Debtor with 94.37 % voting share in 9th CoC meeting; B. Declare that upon approval of the Resolution Plan by this Hon'ble Adjudicating Authority, provisions of the Resolution Plan shall be binding on the Corporate Debtor, its creditors, guarantors, members, employees and other stakeholders and the Successful Resolution Applicant in accordance with Section 31 of the Code, and shall be given effect to and implemented pursuant to the order of this Hon'ble Adjudicating Authority; C. Pass any such other and further orders as this Hon'ble Adjudicating Authority deem fit and proper in the interest of justice.”

To put the facts in brief, the underlying main Petition C.P.(IB) – 1744/(ND)/2019 was filed by Canara Bank against the Corporate Debtor namely, M/s Bulland Buildtech Private Limited under Section 7 of the Insolvency and Bankruptcy Code, 2016, which was admitted vide Order dated 22.03.2021 of this Adjudicating Authority and the Corporate Insolvency Resolution Process (CIRP) in respect of the Corporate Debtor was initiated. The Corporate Debtor is currently represented through its RP, Mr. Debashis Nanda, the Applicant herein.

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It is stated by the Applicant that in terms of Regulation 6(1) of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, the Applicant made a Public Announcement in Form – A on 26.03.2021 to invite claims, a copy of which was uploaded on the website of the Insolvency and Bankruptcy Board of India (IBBI). It is further stated by the Applicant that it had received the following claims:

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The Fair Value and Liquidation Value as per the Valuation Report is as under:

The details of the meetings of the CoC conducted by the RP along with the resolutions approved therein reads thus:

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The Applicant has further submitted that the ‘Form – G’ was published on 24.12.2021 and the last date for submission of an Expression of Interest was 04.01.2022. It is further added that pursuant to the invitation of EOI, a total of 6 Prospective Resolution Applicants (PRAs) had submitted their EOI out of which only 3 Resolution Plans were received from the following PRAs.

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Subsequently, after being given an opportunity to submit revised/improved plans, these Resolution Plans were put to vote for e-voting on 16.03.2022 and the same concluded on 21.03.2022 in which the resolution plan submitted by Saviour Builders Private Limited was approved by 94.37% votes. 7. It is submitted that as per the decision of the COC, an exclusion of 42 days was sought and granted by the Adjudicating Authority vide its order dated 03.09.2021, and further extension of 90 days was granted vide order dated 08.11.2021. Additionally, another extension of 60 days was granted vide order dated 07.02.2022. The extended period of CIRP was due to expire on 29.03.2022. The plan was approved by the CoC on 21.03.2022 i.e., before the expiry of the extended period allowed by this Adjudicating Authority. 8. As stated in our Order Sheet dated 25.04.2024, the RP submitted that after the order dated 09.04.2024 & 10.04.2024 passed by this Adjudicating Authority, another CoC meeting was held on 15.04.2024 and in terms of the resolution passed by the CoC in the said meeting, the land owning agency i.e. GNIDA would be paid Rs. 16.45 crores i.e. an amount more than what is provided for secured creditor viz. Canara Bank. It is also his plea that the amount offered to GNIDA is almost at par with the liquidation value of the CD. He also submitted that the GNIDA has been treated as secured creditor and it is in due deference to the observations made by this Tribunal in its order dated 09.04.2024 & 10.04.2024 that the aforementioned provision has been made in favour of the GNIDA.

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The Applicant has filed Revised Form – H on 27.01.2024 and subsequently on 20.04.2024, offering Rs. 4 crores and subsequently increasing it to Rs. 16.5 crores to GNIDA. The relevant extract from Form H is extracted below for the sake of clarity:
“GNIDA submitted its claim of Rs. 45,80,74,381/- in Form C of Voluntary Liquidation Process instead of CIR Process on 25-01-2022 with the office of RP. Thereafter, GNIDA filed its claim of Rs.52,32,38,617/- in Form-C of Voluntary Liquidation Process before the Hon’ble NCLT in IA no. 3940/2022 on 25-03-2022. Despite being repeatedly asked, GNIDA has not submitted its claim in Form B. The RP received claim amount of Rs. 42,82,31,590/- from GNIDA through its letter dated 12-03-2024, by sending his authorised representative CS Harilal Kushwaha. The RP has taken Rs. 42,82,31,590/- as claim amount of GNIDA.
** Although GNIDA never filed its claim in prescribed Form, RP verified the claim of GNIDA from the records of CD and found that there was a liability of Rs. 26.45.49,217.26payable to GNIDA. RP disclosed the claimed amount and verified amount to RP. However, for the purpose of paying liquidation value to GNIDA, CoC and RP have considered full claim of Rs. 42,82,31,590/-made by GNIDA, and not the verified amount. As the claim, of verified amount of Rs. 26.45.49,217.26. Further, while calculating the payment of liquidation value to GNIDA, CoC and RP for claim of Rs. 42,82,31,590/-, GNIDA has been treated as secured operational creditor/secured creditor, in terms of order dated 08.1.2024 passed by Hon’ble NCLT in Greater Noida Industrial Development Authority VS Bulland Buildtech Private Limited, by Hon’ble Supreme Court in GNIDA vs. Prabhjit Singh Soni & Anr., as is clear from the minutes of CoC meeting dated 15th April, 2024. As the claim of Rs. 42,82,31,590/- is more than 10% of aggregate debt of CD, GNIDA was invited to CoC meeting held on 15th April, 2024 where its

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representative made representation which was discussed and considered by CoC. The representative of GNIDA namely Mr. UN Singh attended the 11th CoC meeting held on 15th April, 2024.
*** Considering the import of Prabhjit Soni (supra), SRA has offered an amount of Rs. 16,50,00,000/- on its own volition irrespective of liquidation value payable to GNIDA being Nil. The SRA has revised the amount of GNIDA by submitting addendum to the resolution plan vide email dated 18-04-2024 and the same was put for e-voting before the members of CoC which got approved by 78.43%% votes in favour.” 10. The Revised Form – H filed on 20.04.2024 reflects the following amounts to stakeholders:

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The details of compliances under Section 30(1), Section 30(2), Regulation 37(1), Regulation 38(1), Regulation 38(2), Regulation 38(3) of IBC, 2016, and IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 are extracted below:

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The Applicant has filed an Affidavit under Section 29A filed by the SRA as extracted below:

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12.1 In compliance of the provisions of Section 30(2) of the Code, it is stated that the Liquidation Value payable to the Operational Creditors is NIL as the amount of admitted claims of the Secured Financial Creditors is more than the Liquidation Value of the Corporate Debtor and are paid in priority to financial creditors.

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Despite the above, the Resolution Plan provides for a total payment of Rs. 1,75,50,20, 091/- including a payment of Rs. 16,50,00,000/- to GNIDA as Secured Operational Creditor. 12.2 With respect to PF dues, it has been categorically mentioned that there is no outstanding provident fund dues. On this issue, we are of the view that this does not absolve the Corporate Debtor from paying any liability towards PF & Gratuity, pertaining to the period ending on the date of initiation of CIRP. The SRA is, therefore, directed to pay the same if any, in compliance of the order of the Hon’ble NCLAT in the Case of M/s Jet Airways India Ltd. upheld by the Hon’ble Supreme Court in Civil Appeal No -107 of 2023 with Civil Appeal Nos 465 - 469 of 2023. 12.3 The RP has filed an avoidance application under Section 66 of the IBC, 2016 for recovery of Rs. 23 crores approx. from Bulland Realtors Pvt. Ltd. The RP has undertaken to pursue the avoidance transaction application and the proceeds, if any realized from the same will be vested with SRA.
13. The details of Monitoring Committee are as under:

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The Implementation Schedule as per the Resolution Plan is as under:

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The other notable aspects of the Resolution Plan are as follows: 15.1 Summary of Payments:

15.2 The interests of existing shareholders have been altered by the Resolution Plan as under:

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The Applicant has sought various reliefs and concessions under the Resolution Plan, which reads thus:

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As can be seen from the above, the Resolution Applicant has expected all Government Authorities to grant relief/concession or dispensation needed for fair and proper implementation of the transactions contemplated in terms of the Resolution Plan. Nevertheless. It is also made clear in the plan that the amount of payment to be made in terms of the plan, to the Creditor of the CD is not subjected to any condition, assumptions, relief/concessions, and/or qualifications. However, a long list of relief, concession, dispensation and waiver solicited by the Resolution Applicant (ibid) is mentioned in the Plan. The relief/concession broadly solicited by the SRA pertains to the renewal of licenses qua the CD, without subjecting it to payment of any penalty/composition fees, interest, or any other charges. The further concession sought in the plan is that of waiving off the restriction to obtain license, applicable. As has been noted herein above, there are numerous other relief and concessions prayed for in the plan. As can be seen from Section 31(4) of

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IBC 2016, the Resolution Applicant shall pursuant to the Resolution Plan approved under sub-Section 1 of Section 31 of IBC 2016 obtain the necessary approval required under any law for the time being in force within a period of one year from the date of the order passed under Section 31(1) of IBC 2016. Besides, in terms of the provisions of Section 14 of the Code, even during the period of CIRP, the license, permit, registration, quota, concession, clearances, or 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 should not be suspended or terminated on the ground of insolvency only subject to the condition that there is no default in payment of current dues arising for the use or continuance of the license, permit, registration, quota, concession, clearance or similar grant or right during the moratorium period. Thus, when even during the moratorium period, the facilities mentioned above 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 better footings. For convenient reference, the Explanation is reproduced herein below:- “14. Moratorium. – (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) …..

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(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;” 18. In any case, in terms of the provisions of Section 13 and 15 of the IBC 2016 read with Regulation 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(b) of the IBC, 2016 and by RP in terms of the provisions of Section 25(b) thereof read with Regulations 12(A), 13 and 14 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. Thereafter, the RP prepared 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 of creditors, the amounts claimed by them, the amount of their claim admitted and the security interest if any in

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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 the 95th day from the Insolvency commencement date. As has been provided in Regulation 36A of the Regulations, the RP published 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 36(B) 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 a request for a 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

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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, 2016, takes care of most of the relief/concession/waiver solicited by the Resolution Applicant.
19. Besides, in terms of the provisions of Section 32A incorporated in the Code by Act No.1 of 2020, w.e.f. 28.12.2019, for an offence committed prior to the commencement of the Corporate Insolvency Resolution Process, the liability of 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

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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.
20. 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 promoter 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.
21. 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.

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From the aforementioned analysis and discussion, it is apparent that the CD/SRA cannot be exempted from the liability to pay the dues/fees towards the required license, permit, registration, quota, concession, clearance or similar grant or right. Further, it would be incumbent on the SRA/CD to obtain the necessary approval required under any law for the time being enforced within a period of one year from the date of this order or within such period as provided for in relevant provisions of law, whichever is later. The SRA would be liable to pay the required fees/charges if any, for such approval.
23. In sum and substance, the SRA/CD would be entitled to no other relief/concession/waiver except those available to it, however, 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. 24. In the sequel to the above, we are inclined to approve the Resolution Plan as approved/recommended by the CoC as placed by the Applicant before this Adjudicating Authority. We, therefore, allow the present Application and approve the COC-approved Resolution Plan as placed before us by the Applicant/RP with 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 Performance Guarantee shall be renewed in the name of and kept alive by the “Monitoring Committee of the Corporate Debtor” till the Resolution Plan is fully implemented.

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(iii) The RP will make payments towards the claims allowed by this Bench as recorded in its Orders dated 10.06.2024 and 11.06.2024 be paid out of the provision made for contingencies under the Resolution Plan as undertaken by him. (iii) 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. (iv) The Monitoring Committee as provided in the Resolution Plan shall be set up by the Applicant/RP within 07 days of passing of this Order, which in turn, shall take all necessary steps for time bound implementation of the Resolution Plan as per approval.
(v) 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
(vi) The Resolution Professional shall forward all the records relating to the conduct of the CIRP and the Resolution Plan to the IBBI for its record and database. 25. 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.
26. A copy of this order shall also be sent by the Court Officer and Applicant to the IBBI for their record. Sd/-

  Sd/- 

(SUBRATA KUMAR DASH) (ASHOK KUMAR BHARDWAJ) MEMBER (T)

     MEMBER (J)