M/s. Gabriel Ventures India Private Limited

The present application being IA(plan)/41(AHM)2024 has been filed by the Applicant/Resolution Professional on 05.09.2024 vide diary no. E2301 under Section 30 read with Section 31 of the Insolvency and Bankruptcy Code, 2016 (“IBC, 2016”) seeking the following reliefs: -

The brief facts of this case as submitted by the Applicant and as available in the Resolution Plan, are given in this paragraph (I to XLVI):-

I. The Financial Creditor-M/s. Zep Infratech Limited had filed a petition on 11.10.2023, being Company Petition (I.B.) No. 251 of 2023 under Section 7 of the IBC, 2016 for initiating the Corporate Insolvency Resolution Process (“CIRP”) against the Corporate Debtor-M/s. Gabriel Ventures India Private Limited. This Adjudicating Authority vide its order dated 23.11.2023 admitted the Company Petition (I.B.) No. 251 of 2023 and appointed the Applicant as Interim Resolution Professional (“IRP”).

II. Thereafter, the Applicant invited the claims by issuing the prescribed Form-A dated 25.11.2023. In pursuance to which, the Applicant received claims from the stakeholders and constituted the Committee of Creditors (“CoC”) comprising of the following members.

III. Thereafter, on 26.01.2024, the Applicant moved an application being I.A. No. 269 of 2024 for placing on record the report certifying the constitution of the CoC. This Adjudicating Authority vide its order dated 07.02.2024 allowed the said I.A. and took on record the report certifying the constitution of CoC.

IV. In addition to the above, the Applicant had suo moto admitted the outstanding claim of the Income Tax Department to the tune of Rs. 1,53,620/-, based on the information available with the Applicant through the Income-tax website and the same is duly recorded in the minutes of the 1^st CoC meeting held on 22.12.2023.

V. However, subsequently an income-tax refund came to be issued in favour of the Corporate Debtor and the said outstanding claim of Rs.1,53,620/- was also removed from the Income-tax website. Hence, the claim of the Income-tax Department was removed from the list of creditors by the Applicant, and the same is duly recorded in the minutes of the 5^th CoC meeting held on 22.04.2024.

VI. The Applicant had also suo moto admitted a claim from the following entity, based on an assessment order dated 27.01.2024 passed under Section 73 of the Goods and Services Tax Act, 2017:

VII. In the interregnum, the 1^st meeting of CoC was held on 22.12.2023 wherein the appointment of the Applicant herein was confirmed as Resolution Professional (“RP”) for Corporate Debtor.

VIII. On 29.12.2023, the Applicant had appointed two registered valuers, namely, (i) M/s. Maitri Valuation LLP; and (ii) Mr. Nilesh R. Barad for determining the value of securities and financial assets of the Corporate Debtor. The appointments of the said registered valuers were ratified by the CoC in the 2^nd meeting held on 18.01.2024.

IX. Further, in the said 2^nd meeting of the CoC held on 18.01.2024, a unanimous resolution with regards to approval of the eligibility criteria, evaluation matrix for Prospective Resolution Applicants (“PRAs”), Form G and Request for Resolution Plan (“RFRP”) was passed by the CoC. The Applicant had published Form G on 22.01.2024. The last date for submission of Expression of Interest (“EoI”) for the PRAs was 07.02.2024. Till 07.02.2024, the Applicant had received EoI from only one PRA i.e., Ms. Niyati K. Patel, who had also deposited the Earnest Money Deposit (“EMD”). As per the said Form G dated 22.01.2024, the last date for submission of the Resolution Plan was 25.03.2024.

X. The 3rd meeting of the CoC was held on 12.03.2024 wherein a unanimous resolution was passed by the CoC for holding meetings of the CoC on a need basis, subject to at least 1 (one) meeting being held in every quarter.

XI. Thereafter, the Applicant had received the valuation reports from the aforementioned registered valuers and shared the same with the members of the CoC. The summary of the valuation of the assets of the Corporate Debtor made by the aforementioned registered valuers is as follows: Securities and Financial Assets:

XII. Thereafter, the Applicant had duly received the Resolution Plan from Ms. Niyati K. Patel on 21.03.2024, i.e., prior to the last date for submission of the Resolution Plan. The Applicant evaluated the Resolution Plan received from Ms. Niyati K. Patel, ensuring the compliance thereof with the provisions of the IBC, 2016.

XIII. The 4^th meeting of the CoC was held on 10.04.2024, by which time, the Applicant had received Resolution Plan only from one PRA i.e., Resolution Plan of Ms. Niyati K. Patel and the sole resolution plan left for consideration of the CoC. Thus, in the said, the Resolution Plan of Ms. Niyati K. Patel was duly discussed, and the members of the CoC were of the opinion that negotiations with the PRA were required since the financial proposal under the Resolution Plan was below the expectations of the members of the CoC.

XIV. Thereafter, the members of the CoC instructed the Applicant to obtain a convenient date of the sole PRA and arrange for a CoC meeting inviting the sole PRA for further negotiation discussion on the matter. There were minor lacunas in the Resolution Plan, which the Applicant herein had agreed to co-ordinate with the sole PRA and get it rectified.

XV. The 5^th meeting of the CoC was held on 22.04.2024 wherein the members of the CoC deliberated about the Resolution Plan in great details with the PRA and intimated that the financial proposal was below the expectations of the CoC and that she should consider an increase in the financial terms. Therefore, the PRA sought time to reconsider and get back with revised financial terms to the Applicant herein latest by 25.04.2024.

XVI. Subsequent to which in the 6^th meeting of the CoC held on 06.05.2024, a detailed discussion and deliberation took place on the revised financial proposal under the Resolution Plan submitted by Ms. Niyati K. Patel. In the said meeting, the CoC decided to put the final Resolution Plan received from Ms. Niyati K. Patel for e-voting from 07.05.2024 at 10:00 A.M. to 08.05.2024 at 01:00 P.M. In the said voting, the Resolution Plan submitted by Ms. Niyati K. Patel was approved by 100% majority of the members of the CoC.

XVII. Since the statutory period of 180 days was expiring on 21.05.2024 and the Resolution Plan provided for 15 days' time to the SRA to deposit the Performance Security from the date of approval of Resolution Plan by the CoC and also the drafting and filing of the instant application was under process, a 7^th meeting of the CoC was called on 13.05.2024 by the Applicant, wherein it was unanimously resolved and approved by the CoC to seek an extension of 90 days from 21.05.2024 for completion of CIRP of the Corporate Debtor from this Adjudicating Authority.

XVIII. Accordingly, on 17.05.2024, the Applicant filed an Interlocutory Application being No. 833 of 2024 seeking extension of 90 days for completion of CIRP. However, this Adjudicating Authority vide its order dated 04.06.2024 granted only an extension of 30 days from the date of the order i.e., from 04.06.2024.

XIX. Thereafter, on 02.07.2024, the Applicant preferred an application being I.A. (Plan) No. 30 of 2024 seeking approval of the Resolution Plan submitted by Ms. Niyati K. Patel.

XX. On 13.08.2024, this Adjudicating Authority dismissed the said application with liberty to hold one more CoC meeting. The said order records as under:-

XXI. Thereafter, the Applicant convened the 8^th meeting of the CoC on 20.08.2024 in order to discuss and deliberate upon the aforementioned order dated 13.08.2024 passed by this Adjudicating Authority. In the said meeting, the members of the CoC informed the Applicant that they have already considered the feasibility and viability of the Resolution Plan in their commercial wisdom at the time of its approval and after that only the same was approved by the CoC on 06.05.2024 by 100% majority. Further, the members of the CoC also explained that in their commercial wisdom, the Resolution Plan of Ms. Niyati K. Patel is feasible and viable considering the fact that the plan value is above the liquidation value and further considering that the PRA has adequate net worth to implement the Resolution Plan. Also, the available cash and bank balance, if any, available in the account of the Corporate Debtor would be transferred to the Financial Creditors, after deduction of CIRP cost. Further, in the said meeting, the following resolution came to be passed by the members of the CoC by 100% majority:

XXII. Ms. Niyati K. Patel has duly submitted a declaration by way of an affidavit dated 05.02.2024 for eligibility criteria under Section 29A of the IBC, 2016 to the Applicant.

XXIII. In addition to the above, one Mrs. Anita K. Patel, part of the Implementing Entity and a nominee shareholder of 0.01% has also submitted a declaration by way of an affidavit dated 05.02.2024 under Section 29A of the IBC, 2016 to the Applicant. Be that as it may, it has been duly provided under the Resolution Plan that the shares in the name of Mrs. Anita K. Patel will otherwise be beneficially held by Ms. Niyati K. Patel, i.e., the SRA.

XXIV. The aforementioned persons, namely, (i) Ms. Niyati K. Patel; and (ii) Mrs. Anita K. Patel would be appointed in the Board of Directors subsequent to the approval of Resolution Plan by this Adjudicating Authority and the same is duly recorded in the minutes of the 8^th CoC meeting held on 20.08.2024.

XXV. At Paragraph No. 6 of the Resolution Plan, the SRA had sought the following reliefs and concessions from this Adjudicating Authority:

XXVI. The members of the CoC duly deliberated upon the aforementioned reliefs and concessions in the 8^th CoC meeting held on 20.08.2024. Further, the Applicant duly taken a confirmation letter from the SRA when the Resolution Plan was submitted, that all the aforementioned reliefs and concessions are not conditional in nature and that the same does not affect the implementation of the Resolution Plan.

XXVII. Accordingly, the members of the CoC were of the opinion that the relief and concessions asked for by the SRA were routine in nature and are not conditions which affect the implementation of Resolution Plan. Hence, this Adjudicating Authority may grant reliefs and concessions as requested by the SRA, as per its own discretion.

XXVIII. Further, in terms of Regulation 36B(4A) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, the Resolution Plan provides that 25% of the Resolution Plan amount after deduction of the EMD amount deposited by the SRA to the tune of Rs. 3,00,000/- shall be provided in the form of Demand Draft towards Performance Security.

XXIX. Accordingly, the SRA had submitted a cheque dated 07.02.2024 bearing no. 000152 drawn on Bank of Baroda for an amount of Rs. 1,00,000, a cheque dated 21.03.2024 bearing no. 000154 drawn on Bank of Baroda for an amount of Rs. 2,00,000/- and a cheque dated 11.05.2024 bearing no. 000192 drawn on Bank of Baroda for an amount of Rs. 7,00,000/- to the Applicant. Thus, a total amount of Rs. 10,00,000/- is duly provided by the SRA towards Performance Security.

XXX. Thus, the approved Resolution Plan meets with the requirements of Regulation 38 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 as well as Section 30 of the Insolvency and Bankruptcy Code, 2016. The Resolution Plan provides for payment to Financial Creditors as well as payment to Operational Creditor.

XXXI. The Resolution Applicant shall pay, an aggregate amount of Rs. 40,00,000/-. The tabular summary of the payments to the creditors contemplated to be made under the approved Resolution Plan is as follows:

Note 1: As on date of Approval of the Resolution Plan, the unpaid CIRP Cost is NIL. Further, the Corporate Debtor has a bank balance of approximately Rs. 9,00,000/- (Rupees Nine Lacs Only) i.e., after deducting the amount of performance security deposited by the Successful Resolution Applicant. It is pertinent to submit that the entire CIRP cost till filing of the present application has already been paid and the future CIRP costs till the approval of the Resolution Plan are expected to be below Rs. 9,00,000/- (Rupees Nine Lacs Only). Hence, the CIRP costs shall be paid from the existing bank balance. Further, the Resolution Plan provides that the Successful Resolution Applicant shall have no right over the existing cash and bank balance including bank term deposit balance, if any available with the Corporate Debtor and the Financial Creditors are entitled to have a right over the same. In view whereof, the Applicant herein had informed the Resolution Applicant that the unpaid CIRP costs are estimated to be NIL.

Be that as it may, Clauses 3.1.1 and 3.1.2 under the Resolution Plan duly provides that "Any unpaid Insolvency Resolution Process Costs and Standstill Period Costs shall be paid by way of Upfront Fund Infusion made by the Resolution Applicant and shall be adjusted from the Upfront Cash Recovery." and that "The Insolvency Resolution Process Costs will be paid in priority to any payment to any Creditors."

XXXII. Till the filing of the present application, a total amount of Rs. 9,58,380 was incurred towards the CIRP cost and the same had been duly approved or ratified by the members of the CoC and has also been paid off.

XXXIII. Accordingly, the proposed distribution to the various stakeholders of the Corporate Debtor under the Resolution Plan is as follows:

XXXIV. Further, the Approved Resolution Plan of Ms. Niyati K. Patel provides for Implementation Steps and Schedule. The implementation plan proposed by the Resolution Applicant is as under:

It is submitted that the Resolution Plan shall be deemed to be implemented on payment of the FC Discharge Amount to the Unsecured Financial Creditors (who are last in line to receive from the resolution amount).

XXXV. The Clause 3.4 of the said Resolution Plan provides that implementation of the Resolution Plan shall commence immediately from the receipt of an order of this Adjudicating Authority approving the Resolution Plan and the SRA intends to implement the entire Resolution Plan not later than period of 90 days of receipt of a Plan Approval Order.

XXXVI. Further, Clause 4 of the Resolution Plan provides thus:

XXXVII. The Resolution Plan also provides for Performance Security as per sub-regulation (4A) of Regulation 36B of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016.

XXXVIII. The SRA has undertaken in the Resolution Plan that the Financial Creditors shall be entitled for all cash and bank balance including bank term deposit balance, if any available with the Corporate Debtor and the SRA shall not have any right over them.

XXXIX. Further, Clause 3.1.6 of the Resolution Plan provides for Source of Funds and mechanics of payment of funds to various creditors. The Implementing Entity/ SRA individually and also with Mrs. Anita K. Patel have sufficient net worth to implement the Resolution Plan. The following is the list indicating the net worth of the Successful Resolution Applicant and Mrs. Anita K. Patel:

XL. The Applicant had sent the relevant documents to the advocate for preparing a draft of the instant application on 25.08.2024 and the concerned advocate had shared a draft of the instant application on 28.08.2024 to the Applicant. That after vetting the draft of the instant application and subsequent to making minor corrections therein, the Applicant herein has now been able to affirm the instant application for filing the same before this Adjudicating Authority.

XLI. Thus, the present application is filed seeking approval of the Resolution Plan submitted by Ms. Niyati K. Patel for revival of the Corporate Debtor.

XLII. In accordance with Section 31(1) of the IBC, 2016, the approved Resolution Plan shall be binding on the Corporate Debtor and its employees, members, creditors, including the Central Government, any State Government or any local authority to whom a debt in respect of the payment of dues arising under any law for the time being in force, such as authorities to whom statutory dues are owed, guarantors and other stakeholders involved in the Resolution Plan. It is clarified that neither the Corporate Debtor nor the Resolution Applicant shall be required to make any payments over and above the amount provided for under the said Resolution Plan on and from the date of approval of the Resolution Plan.

XLIII. Since the Resolution Plan results in the change in the management or control of the Corporate Debtor, according to Section 32A of the IBC, 2016, notwithstanding anything to the contrary contained in this Code or any other law for the time being in force, the liability of a Corporate Debtor for an offence committed prior to the commencement of CIRP shall cease, and the Corporate Debtor shall not be prosecuted for such an offence from the date the Resolution Plan has been approved by the Adjudicating Authority under Section 31 of the IBC, 2016 and any instrument executed by the Corporate Debtor under the Negotiable Instrument Act, 1881 including but not limited to post-dated cheques, demand promissory notes, etc. prior to the approval order passed by the Adjudicating Authority shall in no manner be the liability of the Resolution Applicant and all such instruments to be treated as null and void ab-initio.

XLIV. Furthermore, with the subscription of the Equity Shares by the Resolution Applicant and its Affiliates/ Nominees, the entire Equity Shares held by the Existing Shareholders shall stand fully extinguished as a part of this Resolution Plan.

XLV. Nothing contained in this Resolution Plan shall affect the rights of the Corporate Debtor to recover any amounts due to the Corporate Debtor from any third party including any Related Parties of the Corporate Debtor, under proceedings initiated by the Corporate Debtor and there shall be no set-off of any such amounts recoverable by the Corporate Debtor against any amount paid/ payable by the Corporate Debtor or any liability discharged, satisfied or extinguished pursuant to this Resolution Plan.

XLVI. The Applicant has not filed any other application concerning the subject matter of this application before any other Court including the Hon'ble Supreme Court of India.

In compliance of the order dated 25.09.2024, wherein the learned counsel for the Applicant has sought indulgence to place on record the original copy of 29A compliance as well as affidavit with verification from both the proposed Board of Directors along with DIN Number, an additional affidavit was filed by the Applicant on 06.11.2024 vide diary no. D8201. As per the said affidavit, the DIN number of Ms. Niyati K. Patel is 10803062 and that of Mrs. Anita K. Patel is 03324837.

Further, in compliance of the order dated 06.11.2024, wherein the learned counsel for the Applicant had sought time to file an additional affidavit detailing the position of various brought forward losses and unabsorbed depreciation, an additional affidavit was filed on 18.11.2024 vide diary no. D8379. As per the said affidavit, the Business Loss, Unabsorbed Depreciation and Long-Term Capital Loss as per the books of accounts and income-tax returns of the Corporate Debtor are as under:-

During the course of hearing on 28.04.2025, this Adjudicating Authority had raised the following queries/clarifications:-

- • Information on the business carried out by the CD for the previous two years prior to the admission in the CIRP and during the CIRP and what business is proposed by the Resolution Applicant; - • Audited financial accounts for two years prior to the admission of the CD in the CIRP and after that till 31.03.2025; - • List of assets on which the IRP/RP had taken control and custody thereof; - • Action taken by the RP regarding collection of debt due to the corporate debtor; - • The number of workers and employees of the CD for each year (two years prior to the CIRP and till date afterward); - • Reasons for default in payment committed by the CD and how the same is dealt in the plan submitted by the RA; - • Whether the Resolution Plan provide for any restructuring of CD by way of merger, amalgamation and demerger; - • Whether the CD has any plant and machinery, if yes, details of major machinery. - • What is the business of the SRA and what are the plans of the SRA regarding the business of the CD; - • What is the year-wise business loss/brought forward depreciation of the CD as per last filed income tax return. - • Date of filing income tax returns of the CD for FYs 2019-2020 to 2023-2024. - • Sources of funds of the SRA.

Accordingly, in compliance of the order dated 28.04.2025, the Applicant filed an additional affidavit on 08.05.2025 vide Inward No. D-3033, dealing with the queries raised by this Adjudicating Authority and the response thereto herein:

went into Liquidation and during the Liquidation Process, M/s. Sintex Plastic Technology Limited was taken over by the Durgesh Infrastructure group.

Shri Suresh V. Vyas, the authorised signatory of Ms Niyati K Patel, the RA, file an affidavit dated 06.05.2025. Vide letter dated 15.04.2025, she has authorised Shri Vyas as she is travelling outside India from 24.04.2025 to 31.05.2025.

Further, in compliance with the order dated 07.05.2025, a revised Form-H has been filed by way of additional Affidavit through Inward No. D-3125 on 13.05.2025, in the revised Format prescribed by the IBBI. Information, other than discussed above and other important information, as available in this Form, is summarized below:-

I. The SRA, namely, Ms. Niyati K Patel and its group is engaged in the business of textile (cotton trading).

II. The Members of CoC are Zep Infratech Limited (97.65% voting rights), and Rajendra M. Thakkar (Ravasia) and Sons Private Limited (2.35% voting rights).

III. The total admitted claims are of Rs.2,50,94,671/- for other than corporate guarantee claims. The Plan value results in the realisation of 15.94% of the Principal Amount and 15.94% of the total admitted claims.

IV. The Resolution Plan value is Rs.40,00,000/-, against a fair value of Rs.29,53,650/- and a liquidation value of Rs. 29,53,650/-.

V. The Plan amount of Rs.40,00,000 /- will be distributed between unsecured financial creditors ( Rs 39,85,000/- and operational creditors – Government (Rs. 15,000/-) .

VI. The Plan results into realization of 17.02% of the unsecured financial creditors (members of CoC) claims of Rs.2,34,06,857/- and 0.89% of the Operational Creditor-(Government) claim of Rs.16,87,814/-.

VII. The government claims are of Rs.16,87,814/-, and the Plan provides for recovery of only Rs.15,000, which is 0.89%. After payment of these, the Plan does not leave anything for the business of Corporate Debtor.

VIII. The RP has not identified any Preferential, Undervalued, Fraudulent and Extortionate transactions.

IX. The CD has a business loss of Rs.0.02 crores and long term capital loss of Rs.1.23 crores for the assessment year 2023-2024 and the expiry year is 2031-2032.

The Applicant has also filed a synopsis with a convenience chart on 13.05.2025 vide diary no. D3126. We have gone through the same.

As per clause 3.1.1 of the Resolution Plan, the summary of proposal is as under:-

As per clause 3.1.3. of the Resolution Plan, the Proposal for Outstanding Debt is as under:-

As per Clause 3.3.2.2 of the Resolution Plan, the Upfront Fund Infusion in Corporate Debtor and Reduction of Current Share Capital are as under:

As per Clause 3.3.4.1 of the Resolution Plan, the Monitoring Agent is as under:

As per Clause 3.3.4.2 of the Resolution Plan, the Board of Directors is as under:

As per Clause 3.3.4.3 of the Resolution Plan, the Monitoring Committee is as under:

As per Clause 3.3.4.4 of the Resolution Plan, the Supervision of Implementation of the Resolution Plan is as under:-

Information relevant to the present proceedings as available in the audited accounts of the CD for the financial years 2021-2022 is given below (The RP provided the information based on the directions issued by this Tribunal):

- The share capital of the company as on 31.03.2022 and 31.03.2021 was Rs.1 Lakh. - Reserves and surplus of the company as on 31.03.2022 and 31.03.2021 were Rs (218.57 lakhs) and Rs (218.79 Lakhs) respectively. The figures indicate that the company has accumulated a business loss.

- Short-term borrowings as on 31.03.2022 and 31.03.2021 were Rs 715.78 Lakhs. These remained the same during the financial year 2021-2022. - Trades payable were Rs 1.03 lakhs and Rs. 30.54 lakhs respectively as on 31.03.2022 and 31.03.2021. - Tangible assets were of Rs.2.55 Lakhs on 31.03.2022 and NIL as on 31.03.2021. - Non-current investments were of Rs 4.47 Lakhs as on 31.03.2022 and 31.03.2021. - Long-term loans and advances were of Rs 158.23 Lakhs and Rs 149.18 Lakhs, respectively, as on 31.03.2022 and 31.03.2021. - Current assets comprising trade receivables, cash and cash equivalents, short-term loans and advances were of Rs 334.00 Lakhs and Rs 375.74 Lakhs, respectively, as on 31.03.2022 and 31.03.2021. - During the year 2020-2021, the company had total revenue of Rs 140.65 Lakhs (sub lease rent) and other expenses of Rs 141.49 Lakhs and a profit before tax of Rs 1.54 Lakhs. - During the year 2021-2022, the CD had revenues of Rs 155.92 lakhs (sublease rent) and expenses of Rs 115.67 lakhs, resulting in a profit of Rs 0.25 lakhs.

- As on 31.03.2022, the company had a liability of Rs 715.78 lakhs, which comprises loans from relatives of directors of Rs 266.40 lakhs, inter corporate deposit of Rs 329.38 lakhs and security deposit of Rs 120.0 lakhs.

Similarly, the information for the financial year 2022-2023 is given below:

- The share capital of the company as on 31.03.2022 and 31.03.2023 was Rs 1.00 Lakh. - Reserves and surplus of the company as on 31.03.2022 and 31.03.2023 were Rs (218.57) Lakhs and Rs 43.65 Lakhs, respectively. - Long-term borrowings as on 31.03.2023 were Rs 138.61 Lakhs as against Rs 595.78 Lakhs as on 31.03.2022. - Other current liabilities were of Rs 120 lakhs as on 31.03.2022 and 31.03.2023. - Trades payable were Rs 1.03 lakhs and Rs.0.90 lakhs respectively as on 31.03.2022 and 31.03.2023.

- Tangible assets were of Rs 2.55 Lakhs and Rs 2.06 Lakhs respectively as on 31.03.2022 and 31.03.2023. - Non-current investments were of Rs 4.47 Lakhs as on 31.03.2022 and Nil as on 31.03.2023 - Long-term loans and advances were of Rs 129.83 Lakhs and Rs 126.00 Lakhs, respectively, as on 31.03.2022 and 31.03.2023. - Current assets comprising of trade receivables, cash equivalents, short term loans and advances were of Rs 204.17 Lakhs and Rs.40.55 Lakh respectively as on 31.03.2022 and 31.03.2023. - During the year 2022-2023, the company had revenue from operations of Rs 157.70 lakhs (rent income) other income of Rs 1.60 lakhs and other expenses of Rs 327.22 Lakhs (rent expenses of Rs 148.05 lakhs and sundry balances written off of Rs 167.10 lakhs), leading to a loss of Rs 178.74 Lakhs. - No salary and wages expenses in the years 2021-2022 and 2022-2023.

The Application filed by the Financial Creditor under Section 7 of the IBC, 2016, mentions that a loan of Rs 1,34,04,200 was granted to the CD on 17.11.2017 and another loan of Rs 70,00,000 on 28.05.2018. The loan was sanctioned and disbursed by Sintex Power Limited whose name was changed to Sixvents Power and Engineering Limited with effect from 31.03.2015 and this company was amalgamated with Zep Infratech Limited, and therefore, the loan receivable from the Corporate Debtor stood transferred in favour and in the name of Zep Infratech Limited (the Financial Creditor). Zep Infratech and CD entered into an MOU cum loan agreement 01.07.2018 that provided that the loan amount of Rs 1,90,47,380.47, along with a premium of 20%, would be payable on or before 30.06.2022.

As the loan was not repaid, the FC filed application under section 7 of the IBC and the CD (Mr Amit K Parikg) aid to be the director of CD replied twice that, “We would like to acknowledge outstanding dues and would like to inform you that currently we are facing financial difficulties and we are not in a position to pay the debt to Zep Infratech Limited” and “the Respondent admits to having defaulted in repaying the financial debt in question”.

The RP got financial assets of the CD valued by two valuers, namely Maitri Valuation LLP and Shri Nilesh R Barad. Valuation Report of one valuer, namely Nilesh R Barad, had valued security or financial assets as given below:

- The non-current asset of book value of Rs 30,00,000/- was valued at NIL. - Cash & Bank Balances of Rs.3,91,629.26 were valued at Rs.3,91,629.26 (both fair and liquidation value). - Other current asset of Rs.25,62,036/- were valued at Rs.25,62,036/-. - Total financial assets were valued at Rs 29,53,665.26 (both fair and liquidation value).

Maitri Valuation LLP provided another valuation report. This valued various assets as given below:

- Cash and bank balance: Fair value Rs 391598 and liquidation value of Rs 391598 - Refunds receivable from Income Tax due to TDS on rent and dividends: Fair value Rs 25,62,036 and liquidation value Rs 25,62,036. - Loans and advances Rs 30,00,000 as book value but fair and liquidation value at Rs ZERO. - The total fair value of financial assets of the company Rs 29,53, 634 and the liquidation value Rs 29,53,634.

The Records reveal that the RP had received claims from two financial creditors of Rs 2,34,06,857/-, and the same amount was admitted as a claim.

The income tax return filed for the assessment year 2024-2025 shows total of equity and liabilities of Rs 26,92,932 and total of assets of Rs 26,92,932. The tax return shows rent expenses of Rs 92,83,960, interest income of Rs 63,076 and profit on sale of investments. This means that the CD/RP has sold investments in the financial year 2023-2024. A loss of Rs 1,23,32,831 for assessment year 2023-2024 is claimed to be carried forward.

A certificate of net worth, dated 05.10.2023, issued by Jaimin Shah and Associates, certifies the net worth of Ms Niyati Ketanbhai Patel as of 31.03.2022, at Rs 3,24,90,092.

This Tribunal sought some clarifications vide daily order dated 19.06.2025, and the Applicant filed replies on the DMS Portal on 25.06.2025. The information provided, as relevant, is given below:

- It has been submitted that Ms Niyati K Patel, the Resolution Applicant in the present case, has not submitted any other Resolution Plan. However, M/s Kanha Ventures, a partnership firm (in which Ms. Niyati Patel is a partner holding 50% share) had jointly submitted a resolution plan in consortium with another partnership firm, namely Deepvir Enterprise, for an amount of Rs 7,75,00,000 in the matter of M/s Zep Infratech Limited and this Adjudicating Authority has rejected the submitted plan vide order dated 23.06.2025.

- The Information Memorandum states that the company was incorporated on 23.5.2008 in the name of Sleek Electrical Private Limited and just a few months before, the name of the company is changed to Gabriel Ventures India Private Limited. The primary activity of the Company consisted of investing in shares of Sintex Industries Limited and Sintex Plastic Technology Limited, as well as leasing and sub-leasing. Since both these companies are under CIRP, the investment in these shares has been written off in the books of Gabriel Ventures India Private Limited. The primary income of the Company consisted of lease rent, interest income and dividend income. Major assets of the company as on 23.11.2023 consist of a loan receivable of Rs. 30,00,000/- and income tax refunds receivable. Apart from this, the CD has a bank balance aggregating to Rs 3 lakhs in a few current accounts. - The trial balance for the period 1.4.2023 to 23.11.2023 shows that the assets are: Loan advanced to Mukesh R Sheth Rs 30 lakhs, cash and bank balance, Advance tax and TDS resulting into assets of Rs 98,48,085. A unsecured loan of Rs 5,50,000 is shown in the name of Rajendra Kumar M Thakkar (Ravasisa) & Sons Pvt. Ltd. Reserve and Surplus of Rs 4,40,96,117 is shown as on 23.11.2023.

- The trial balance also shows rent income of Rs 93,00,000 and CAM charges income of Rs 5,47,000. Lease rent expenses of over Rs 90 lakhs are claimed. - Rajendra M Thakkar (Ravasisa) and Sons Private Limited having address of 101, House of Grace, Padwal Nagar, Wagle Estate, Thane 400604 has filed a claim in Form C which shows that a loan of Rs 5,50,000 was advanced on 21.9.2023 to CD and the claim for the same is made.

Before adverting to the Application filed by the RP and the submitted Resolution Plan, we consider it appropriate to highlight essential facts about the case as available in the records.

- The Corporate Debtor and the Financial Creditor filing application under section 7 belong to the Sintex Group of cases. Sintex Group companies have undergone CIRP. - The Financial Creditor, namely Zep Infratech Limited, a Group company, had filed the application under section 7 of the IBC, 2016, against the CD.

- M/s Zep Infratech Limited has filed applications under section 7 in at least three other cases, and all the cases are being adjudicated by this Authority. - The above facts show that Sintex Group entities are undergoing/undergone CIRP. - The information on various assets and liabilities as noted in the balance sheet of the CD as on 31.03.2021, 31.03.2022, and 31.03.2023 is noted in this order. There are huge liabilities, and surprisingly, none have made any claims against the CD. The CD also did not make any claims against anyone, including for a loan of Rs 30 lakhs advanced. - The CD has been an investment company of Sintex Group, and it was also engaged in the leasing business. - The CD has shown lease rentals received and payments, but the IM or any of the minutes of the meeting of CoC or the Resolution Plan submitted by the RA do not refer to the asset handled by the CD. - As per the IM and valuation reports, only assets of the CD are cash and bank balance, TDS refunds receivable from the income tax department, and a loan of Rs 30 lakhs receivable. - The CD never had any manufacturing activity and no business other than investment and subleasing. - The CD has no tangible assets (no factory, no office, or other premises), and it has only financial assets and TDS refunds receivable. All assets are valued at Rs 29,53,634. The CD has another loan advanced of Rs 30 lakhs, but the RP has made no efforts to collect the same. Coincidentally, two independent valuers valued the financial assets at the same value.

- The CD had no employees for two years prior to the admission of the CD in the CIRP, and also during the CIRP and at present, the CD has no employees. - The CD has a business loss, and the Resolution Plan seeks confirmation from the Principal Commissioner of Income Tax and direction from this AA that the business loss will be allowed as set off against income under section 79 of the Income Tax Act. We also see the availability of business loss or long-term capital loss, which can potentially be considered an asset and could be utilised in tax planning by entities to reduce their tax liability. However, this asset is not valued. - The RA is seeking various relief and concessions, most of which do not apply to the facts of the case. For example, it is seeking a waiver of transfer fees on land leased from the Industrial Development Authority. Indicating that the RA does not have information that the CD has no land. The CoC also did not look into the relief and concessions sought in the Plan and the relevance of such reliefs and concessions to the actual facts of the CD. - The RA filed a response regarding various queries raised in the form of an Affidavit, and such information was not available in the submitted Plan. For example, regarding the business proposed by the RA, the Affidavit states that the RA intends to revive the textile business by using the extensive network and presence of the Corporate Debtor in the market. But CD was never in textile business and it also has no employees who were looking after its business. This business plan has no link with the CD. When CD has no assets and no employees, then how could it be considered to have an extensive network and presence in the market? The CoC did not examine these aspects and continued to approve the resolutions with a 100% majority.

- The reasons for default by the CD as stated in the additional affidavit filed by the RA are based on the queries raised by this Tribunal to the RP. - The RA has submitted that it will use its own funds for meeting the Plan requirements and not the borrowed funds for reviving the CD. However, it has not made any provision for equity capital or working capital. The amount of Rs 30,00,000, proposed in the Plan, is earmarked for payment to two financial creditors.

The CD had assets and liabilities in lakhs as on 31.03.2021, 31.03.2022, and 31.03.2023, as reflected in the balance sheets provided in Paragraph 17. The CoC apparently had no idea about the business of the CD and it never asked any questions or raised any doubts about the transactions undertaken by the CD. The CD was neither subjected to any forensic audit nor the transaction audit nor the transactions were referred to any auditor for identifying the preferential transactions under section 43, undervalued transactions under section 45, extortionate transactions under section 50, and fraudulent transactions under section 66 of the IBC, 2016.

And on being directed by this Adjudicating Authority, an Affidavit to reply to the queries raised has been filed, and relevant information has been discussed in this order and summarised again below:

- The RP submitted that the audited financial statements for FY 2023-2024 and 2024-2025 are under the process of finalisation with the statutory auditors of the CD. - The RP states that the Resolution Plan is feasible and viable, but it has not demonstrated the basis thereof nor has it been deliberated by the CoC. What is feasible and viable in the circumstances that the CD has no business operations, no plant and machinery, no offices or other tangible assets, and no employees? The business of CD was to invest in the Sintex Group companies (which are group companies). It has only financial assets of whose market and liquidation value is about Rs 30 lakhs. There are no employees of the CD, and therefore, no knowledge of the business or customer information or any other intangibles, other than tax losses, are available with the CD. There is no link or nexus of the business of the CD with that of the business proposal of the RA to manufacture and sell products.

The RP has filed an affidavit and revised Form-H, based on the IBBI Notification No. IBBI/2025-26/GN/REG 124, dated 03.04.2025, in this Tribunal on 10.05.2025 (Inward Diary No. 3556). Additional information provided is extracted below:

- Date of initiation of CIRP- 23.11.2023 - Date of expiry of 180 days of CIRP: 21.05.2024 - The extended period of CIRP expired on 03.07.2024 - Fair value of CD is Rs 29,53,650. - Liquidation Value is Rs 29,53,650. - Total admitted claims Rs 2,50,94,671. - Resolution Plan Value Rs 40,00,000. - A total of 8 CoC meetings were held. - Form H shows that CD was part of the erstwhile promoter group entities of Sintex Industries Limited and Sintex Plastic Technology Limited. - No PUFE applications are made or pending. - SRA has given resolution plan to take over the corporate debtor as going concern.

Section 31 of the IBC deals with the approval of the resolution plan. Section 31 reads as follows:

To our understanding, section 31 requires satisfaction of the Adjudicating authority on two issues:

Section 30 (2) of the IBC reads as below:

Furthermore, Regulation 39(4) of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, requires the CoC to evaluate the resolution plan based on its feasibility and viability, a responsibility that appears to have been inadequately discharged in this case, as evidenced by the lack of scrutiny over the plan's business projections and financial provisions.

As far as effective implementation is concerned, the Plan only provides for payment to the CoC members to be made within 45 days of the approval of the Plan by the NCLT. As discussed in detail in this order, the CD was part of promoters of Sintex Group (a group investment company). Most of the Group entities have undergone CIRP and some have been liquidated. The value of the assets of the CD is about Rs 30 lakhs as per valuation report and another advance/loan of Rs 30 lakhs is receivable. Even the CIRP cost has exceeded Rs 9 lakhs. All assets have gone bad as the value of investment in the Group entities is zero. No tangible asset and no employees and in fact the CD has become a hollow shell. There is nothing in the plan about running the Corporate Debtor by the RA except referring to its business and utilizing the CD to carry on its business of textile, whereas CD was never in business of textiles. CD was having business of sub-leasing and this fact is not covered in any of the documents of the RP, or CoC, or the RA. No plans or planning for the business. No money is provided for working capital. Therefore, the plan does not deal with the effective implementation of the Plan. In fact, there is nothing in the plan that provides for insolvency resolution of the CD or revival of the CD. It is obvious because there is nothing in the CD except its name, business losses, and financial assets having liquidation value of about Rs 29 lakhs and another receivable of loan of Rs 30 lakhs. The case has potential of misuse of the business losses and long-term capital loss for income tax purposes.

This Tribunal is fully conscious of the principle that judicial intervention by the Adjudicating Authority under the Insolvency and Bankruptcy Code, 2016, must be limited and restrained. As reiterated in a catena of decisions by the Hon'ble Supreme Court, including in K. Sashidhar v. Indian Overseas Bank [2019] 102 taxmann.com / 12 SCC 150, Committee of Creditors of Essar Steel Ltd. V. Satish Kumar Gupta 8 SCC 531, Ebix Singapore (P) Ltd v. Committee of Creditors of Educomp Solutions Ltd [2021] 130 taxmann.com 208, Vallal RCK v. Siva Industries &Holding Ltd ((2022) 9 SCC 803), the commercial wisdom of the CoC is not to be interfered with, save in exceptional circumstances. However, this Tribunal cannot remain a mute spectator where the very anchor of the insolvency resolution process, the bona fide, and the commercial judgment of the CoC - is corroded by patent arbitrariness and opacity.

Hon'ble Madras High Court in the matter of Writ Petition No. 29845 of 2022 has observed in para 52.3 as under:

The relevant facts as discussed in this order are again summarised below:

- The Corporate Debtor had crores of assets and liabilities as on 31.03.2021, 31.03.2022, and 31.03.2023 in the balance sheet, but all are on paper because none filed a claim before the RO, and the assets and liabilities are worthless as liquidation and market value of financial assets is about Rs 30 lakhs.

- The filing of a petition under section 7 by M/s Zep Infratech Limited, coupled with the absence of claims from other significant creditors and lack of forensic audits to identify potential avoidance transactions, raises concerns about the transparency and purpose of the CIRP process, particularly in light of the immunities available under section 32A of the IBC, 2016. - Neither the RP nor CoC recommended a forensic audit of the CD or an audit for identifying the PUFE transactions in the circumstances that the CD had transactions in of crores, including with related parties. - RP did not follow the requirements of Regulation 6A of the IBBI Regulations for CIRP as discussed above and did not identify the real creditors. - The RP has not demonstrated that it had taken steps to provide correct information along with full details of assets, business or the loan of Rs 30 lakhs advanced. The facts indicate that it was a very closed group that was aware of the CIRP proceedings. There are no IAs from third parties.

- The CD has carried forward business loss and long-term capital loss in crores. Though the RA has asked for a prayer from this Adjudicating Authority to approve affording a reasonable opportunity of being heard by the jurisdictional principal commissioner of income tax in accordance with section 79 (2) of the Income Tax Act, 1961, to allow carry forward of losses of the previous year. However, these intangible assets have not been considered while valuing the CD or while submitting the Resolution Plan. It is made clear that this Adjudicating Authority has no power to decide the issue of carry forward of losses/depreciation, and the same will be subjected to the provisions of the Income Tax Act, 1961. - The CD had advanced loans to various parties, and it had huge trade receivables, but the same were not taken into account by the CoC while approving the Resolution Plan amount quoted by the SRAs. - The Resolution Plan only provide for payments to the two unsecured financial creditors. - Whole money provided in the Plan will go to the creditors, and there is no provision for the working capital, equity capital, and for running the expenses of the CD. - There is no provision for CIRP cost as it will be met by the cash available with the CD.

- The financial capacity of the RAs is not convincing. Ms Niyati Patel, the RA is a partner in a firm that has submitted a Resolution Plan in case of Zep Infratech Limited. - There is no material in the Plan underpinning the feasibility and viability of the Resolution Plan. The plan does not address the cause of default, demonstrate feasibility and viability, provide for effective implementation, or establish the RA's capability to implement it.

The above facts raise serious doubts about the whole CIRP process initiated based on the application of Zep Infratech Limited. The entire exercise suggests an accommodation or collusive arrangement with the sole purpose of helping the CD obtain benefits, reliefs, and concessions under Section 32A of the IBC, 2016, and raises concerns about its alignment with the IBC's objective of genuine insolvency resolution.

There is no material in the Plan underpinning the feasibility and viability of the Resolution Plan.

The Corporate Debtor has no assets and no employees. Currently, CD is not conducting any business and is not a going concern or in operation. None will benefit, other than the two unsecured financial creditors, who constitute the CoC, from the approval of the Plan.

The RP has not filed any IA before this Tribunal regarding non-co-operation from the CD. The records indicate that the CD's management provided the necessary documents and information to the RP, and no specific instances of non-cooperation were reported during the CIRP. The RP has neither proposed nor has an initiative been taken by the CoC for identifying the avoidance transaction. There are no audited accounts of the CD after 01.04.2023 and this indicates that the RP did not have the full information to be provided in the Information Memorandum. Therefore in absence of the same, the Resolution Plan submitted by the RA cannot be considered to have taken into account the full picture of the CD as on the date of submission of the Plan.

The fulcrum on which the Resolution Process under the Code proceeds is the full and correct knowledge of the affairs of the CD; however, in the present case, full information about the CD was not available. Therefore, the CoC could not be said to have exercised its commercial wisdom while approving the resolution.

Commercial wisdom of the CoC: The CoC’s role is questionable, as its 100% approval of the Resolution Plan without questioning significant unclaimed liabilities, the absence of audited accounts for FY 2023-24 and 2024-25, or the plan’s lack of revival strategy violates Section 30(4) of the IBC, which mandates a diligent evaluation of the plan’s feasibility and viability. This arbitrary conduct, lacking prudent decision-making at arm’s length, undermines the IBC’s objective of maximizing value for stakeholders. The facts indicate that their decisions were motivated with the sole intention of getting the approval of this Tribunal and getting all types of benefits, reliefs and concessions available due to the approval of the plan to all involved in the transactions. There appears to be no intention to resolve the insolvency, as the CD has no ongoing business and no party is interested other than the two CoC members.

In the case of Vallal RCK v. Shiva Industries (supra) the Hon'ble Supreme Court has also held that:

In view of the facts discussed above, the CoC not only acted in a "capricious, arbitrary, irrational" manner but also approved the plans that contravene the provisions of IBC and the Regulations. In that regard, the CoC has failed to exercise its commercial wisdom in deciding on the Resolution Plan, which, in a real sense, does not take into account the ground realities of the CD and is not commercially feasible and viable. It does not lead to value maximisation from the assets of the CD.

Therefore, we are of the view that the resolution plan has no provisions for its effective implementation as required by Section 31 (1) of the IBC, as there is nothing in the plan except payment to CoC members and others out of the plan value of Rs 40 lakhs. The whole money goes to the stakeholders, and nothing remains for the CD, not even for equity capital contribution.

The Tribunal would also like to mention that the underlying purpose of a resolution plan is not merely the settlement of claims but the revival of the Corporate Debtor as a going concern in a manner that is commercially viable and legally compliant. In this regard, Regulation 38(3) of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, outlines key parameters that every resolution plan must comply with. The said regulation reads as under:

In the present case, upon a detailed consideration of the material on record, it is evident that the resolution plan fails to satisfy the criteria laid down in the above regulation. Further, section 30 (2) of the IBC, 2016 requires that the plan provides for the implementation and resolution of the Plan. The RA has no plans to provide a resolution to the corporate insolvency. As discussed in detail with cogent reasons, the Plan fail to meet the requirements of clauses ( c), (d), (e ), and (f) of section 30 (2) of the IBC, 2016.

The plan lacks financial depth and strategic clarity to justify its feasibility and viability, as it provides no working capital, equity infusion, or business projections to revive the Corporate Debtor, which has no ongoing operations, employees, or plant and machinery. The resolution applicants' net worth, including illiquid assets, does not demonstrate sufficient liquid funds to implement the plan. Moreover, there is no demonstrable vision to restart the business of the CD and no capability is shown on the part of the Resolution Applicant to implement the plan. In fact, it does not provide any information on the business projections of the CD and how it will be achieved.

Thus, in form and substance, the resolution plan does not comply with the provisions of Sections 30 and 31 of the IBC, 2016, and Regulation 38(3), and the CoC's approval without ensuring compliance with these essential elements raises serious questions about the integrity of the resolution process as a whole.

The Hon'ble Supreme Court in the case of Pratap Technocrats (P) Ltd. v. Monitoring Committee of Reliance Infratel Ltd. 10 SCC 623, under the Heading: Balancing the goals and key objectives of insolvency law in paragraph 46 of the order noted that, “since an insolvency regime cannot fully protect the interests of all parties, some of the key policy choices to be made while designing the insolvency law relate to the broad goals of the law (rescuing businesses in financial difficulty, protecting employment, protecting the interest of creditors. Encouraging the development of an entrepreneurial class) and achieving the desired balance between the specific objectives identified above.

The Hon'ble Court in paragraph 47 further notes that, “Hence, once the requirements of IBC have been fulfilled, the adjudicating authority and the appellate authority are duty-bound to abide by the discipline of the statutory provisions. It needs to be emphasised that neither the adjudicating authority nor the appellate authority have an unchartered jurisdiction in equity. The jurisdiction arises within and as a product of a statutory framework.

As discussed in this order, currently there is no business in the CD, CD has no employees, the creditors other than the unsecured security creditors have not even filed any claim, all pointing to the conclusion that the plan submitted by the RA does not meet the goals of the IBC law.

Accordingly, and in view of the discussion above, the relying on the provisions of Sections 30 and 31 (2) of IBC, 2016 and Regulation 38 as referred above, the Resolution Plan in question is hereby rejected by this Adjudicating Authority for non-compliance with Regulation 38(3)(a), (b), (c), and (e) of the CIRP Regulations, 2016, as it fails to address the cause of default, demonstrate feasibility and viability, provide for effective implementation, and establish the resolution applicant's capability to implement the plan.

The provisions under Section 33(1)(b) of the Code are reproduced below: -

The Hon'ble Supreme Court in the case of Ramkrishna Forging Ltd (supra), in paragraph 29 referred to the decisions in the cases of Innovative Industries Ltd. v. ICICI Bank Ltd. [2017] 84 taxmann.com 320/ 1 SCC 407 and Swiss Ribbons (P) Ltd. v. Union of India [2019] 101 taxmann.com 389/4 SCC 17 in which it was explained that the Code was specifically introduced by the Parliament for ensuring quick and time bound resolution of insolvency of corporate entities in financial trouble, by first attempting to revive the Corporate Debtor, failure whereof would entail liquidation of the corporate debtor's assets.

As a consequence, following the rejection of the resolution plan under Section 31(2) for non-compliance with statutory requirements, and given the expiry of the extended CIRP period on 03.07.2024, the Tribunal, pursuant to Section 33(1)(b), orders the liquidation of the Corporate Debtor to maximize creditor value and conclude the insolvency process. The Corporate Debtor's lack of business operations, absence of employees, and minimal tangible assets, coupled with the resolution plan's failure to propose a viable revival strategy, render liquidation the only feasible course to maximize creditor value and achieve the IBC's objective of efficient insolvency resolution.

IBBI vide its circular number Liq-12011/214/2023-IBBI/840 dated 18.07.2023 in the exercise of its powers conferred under section 34(4)(b) of the Code, had recommended that an IP other than the RP/IRP may be appointed as liquidator in all the cases where liquidator (read liquidation) order is passed henceforth.

In view of the above, it is hereby ordered as follows: -

Accordingly, IA (Plan) No. 41 of 2024 in CP(IB) No. 251 of 2023 stands dismissed and disposed of.

The Registry is also directed to send e-mail copies of the order forthwith to all the parties and their Learned Counsel for information and for taking necessary steps. Files be consigned to the record.