Babita Jain vs KRP Infrastructures & Builders Private Limited

The present Interlocutory Application bearing IA No. (Plan) 03/2024 has been filed by Mrs. Babita Jain, Resolution Professional (“RP”) of KRP Infrastructures & Builders Private Limited under the provisions of Section 30(6) r.w.s. 31 of the Insolvency & Bankruptcy Code, 2016 along with Section 60(5) of the Insolvency & Bankruptcy Code, 2016 (hereinafter referred to as (“the Code” or “IBC”) read with Regulation 39(4) of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (“CIRP Regulations”) for approval of the Resolution Plan in respect of M/s KRP Infrastructures & Builders Private Limited (“Corporate Debtor”).

The underlying Company Petition CP (IB) No.151/ALD/2019 filed by the Operational Creditor i.e. M/s Pruthvi Steels under Section 9 of the Code for initiation of Corporate Insolvency Resolution Process (“CIRP”) against the Corporate Debtor, namely M/s KRP Infrastructures & Builders Private Limited which was admitted by this Adjudicating Authority vide its order dated 22.08.2023 (“Admission Order”). On that date, i.e., 22.08.2023 (“Insolvency Commencement Date”), Mrs. Babita Jain (IBBI/IPA-002/IP-N00321/2017-18/10926) was appointed as IRP and was subsequently appointed as Resolution Professional in the first meeting of the Committee of Creditors (hereinafter referred as ‘COC’) held on 21.09.2023.

It is stated in the Resolution Plan that the public announcement was made on 25.08.2023 in Financial Express (English) and Jansatta (Hindi), the COC was constituted on 05.09.2023, and the RP filed the list of creditors and report of constitution of COC before this tribunal on 15.09.2023.

Pursuant to the collation and verification of claims received, the COC was constituted with three Operational Creditors in accordance with Regulation 16 of Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, owing to the absence of claims from any Financial Creditors. The list of Operational Creditors and their voting share are as under:

The details of claims submitted are as follows:

The RP submits that a total of 12 CoC meetings have been held during the whole CIRP period.

It is stated in the Resolution plan that the 2^nd CoC was held on 31.10.2023 whereby the CoC interalia approved the publication of Form G for invitation of expression of interest, Evaluation Matrix, and eligibility criteria. Accordingly, invitations for Expression of Interest (EoIs) in Form-G were published wherein the last date of receipt of the EoIs was fixed as 26.11.2023.

In pursuance thereto, the Resolution Professional received one EoI for submission of the Resolution plan. The PRA who submitted the EoI is given as under:-

Mr. Yogesh Mittal

The sole Resolution Applicant, Mr. Yogesh Mittal, submitted his Resolution Plan on 25.01.2024, which was presented for consideration before the members in the 4th and 5th CoC meetings held on 02.02.2024 and 10.02.2024, respectively. During the 6th CoC meeting on 04.03.2024, it was brought to the CoC's attention that a settlement proposal had been offered by the suspended director, Mr. Rahul Pathak, which included a one-time settlement offer along with a commitment to pay the CIRP costs in full. Further, in the 7th CoC meeting held on 07.03.2024, the CoC unanimously rejected the Resolution Plan submitted by Mr. Yogesh Mittal, taking into consideration the settlement proposal offered by the suspended director.

In regards to the settlement proposal, the suspended director made a part payment of ₹4,00,000/- towards the CIRP cost and, through an email dated 02.04.2024, assured the remaining payment by 10.04.2024. A settlement agreement was subsequently entered into between the suspended director and the members of the CoC, stipulating that the dues would be settled by 15.04.2024. However, during the 10th CoC meeting held on 19.04.2024, the CoC unanimously concluded that despite being given ample opportunities, the suspended director had failed to settle the dues related to Big Block Constructions Limited. As a result, the CoC rejected the suspended director's request for further extension of the settlement timeline and further unanimously decided to re-engage with Mr. Yogesh Mittal for further deliberations/negotiations rather than issuing a fresh Form-G or opting for liquidation.

Subsequently, after detailed deliberations/negotiations and discussions with the members of the CoC during the 11th CoC meeting held on 03.05.2024 and 04.05.2024 respectively, Mr. Yogesh Mittal submitted a revised Resolution Plan. This Resolution Plan was then approved by 100% voting from all CoC members during the 12th CoC meeting. The Resolution Professional filed an application for approval of the Resolution Plan with this Tribunal on 20.05.2024. The relevant agenda item no. B7, passed unanimously by all three CoC members, collectively having 100% voting shares in the 12th CoC meeting held on 16.05.2024, is annexed as Annexure-3 (Colly) to the petition and is reproduced hereunder:: -

A compliance Certificate in terms of prescribed Form H under regulation 39(4) of the CIRP Regulations was filed with this petition and further a revised Form H was filed before this Tribunal through an additional affidavit dated 26.06.2024. As per FORM H, the fair value and the liquidation value of the corporate debtor, as determined by the Registered Valuers' Reports, is Nil.

This Adjudicating Authority has granted extensions/exclusions in the whole CIR Process, which are in tabular form as follows: -

The Successful Resolution Applicant i.e. Mr. Yogesh Mittal, is an individual residing at House No. A-11, Nirman Vihar, East Delhi, New Delhi-110092, with a net worth of ₹199.68 lakhs as of 31.03.2023. The Applicant submits the relevant information about the amount proposed to be paid by the Successful Resolution Applicant, i.e., Mr. Yogesh Mittal under the said Resolution Plan which is tabulated as under: -

The amount proposed in the Resolution Plan are tabulated below:

The Resolution Plan submitted by the Successful Resolution Applicant, as outlined in Clause 4.4.3, establishes that the duration of the plan shall be one year from the date of approval by this Tribunal.

The overall Resolution Plan is for a total amount of approximately Rs.18,00,000/- (inclusive of Rs.5,00,000 or actual CIRP cost, whichever is less) and the said amount shall be infused within 90 days from the effective date.

The Resolution Applicant shall bring funds from internal accruals, its own resources/reserves and from relatives. Further, the funds recovered from the IA-03/2024 (Application on behalf of Resolution Professional u/s 66 for seeking necessary directions against the suspended directors of the corporate debtor) shall be firstly utilized for payment of the expenses incurred in the said recovery and then be paid to the operational creditors to the extent of admitted claims i.e. Rs. 38,00,343 (Rs. 51,00,343 less Rs. 13,00,000) of the Corporate Debtor and the remaining amount, if any shall be utilized for the purpose of business operations of the Transferee Company. If any amount is not recovered from the said IA then there is no liability on the Resolution applicant to pay any amount to creditors of the Corporate Debtor.

The Applicant has submitted the details of various compliances as envisaged by the Code and the CIRP Regulations, which a Resolution Plan is required to adhere to, as follows:

The Applicant submits that the Successful resolution applicant has submitted an affidavit in regard to the eligibility under section 29A of the Code, as required by Regulation 39(1)(a) of the CIRP Regulations. An undertaking has also been submitted by the Successful Resolution Applicant, as mandated in terms of regulation 39(1)(c) of the CIRP Regulations. The affidavit under Section 29A is at page no. 489 in the application, which is reproduced there under: -

The Successful Resolution Applicant has provided the performance security of Rs.5,00,000/- (Rupees Five Lakhs Only) dated 17.05.2024 and the same is attached on page no. 542 of the present application and is in compliance with the Regulation 36B (4A) of CIRP Regulations, 2016.

The Resolution plan size is approximately of Rs.18,00,000/- (inclusive of the CIRP cost determined at Rs.5,00,000/- or actuals, whichever is less). The “Effective Date” will be the date on which the Adjudicating Authority approves the Resolution Plan.

The Resolution Plan also provides for details of management and control, implementation, and supervision and term of the Resolution Plan which is set out in Chapter V of the Resolution Plan and Clause 4.4 of the Resolution Plan.

The SRA has sought/ prayed for the reliefs, waivers and concessions as enumerated under the Resolution Plan approved by the CoC , as detailed below:

On hearing the submissions made by the Ld. Counsel for the Resolution Professional and perusing the record, we find that the Resolution Plan has been approved by the CoC with 100% of the members voting in favour of the Resolution Plan. As per the CoC, the Plan meets the requirement of being a viable and feasible revival of the Corporate Debtor. By and large, there are provisions for making the Plan effective after approval by this Bench.

On perusal of the documents on record, we are satisfied that the Resolution Plan is in accordance with Sections 30 and 31 of the IBC and also complies with regulations 37, 38 and 39 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016.

In compliance with the order dated 07.06.2024, the Resolution Professional filed a supplementary affidavit on 26.06.2024 vide Diary No. 1233, requesting a modification of Clause 4.11.32 (Page 460, Volume III) under "Specific Relief" in the Resolution Plan submitted to this Tribunal. The prayer sought was deleting and substituting Clause 4.11.32 with the following:

Further, through an order dated 09.10.2024, the supplementary affidavit was taken on record and the amendment sought in Clause 4.11.32 (Page No. 460 of Volume III) of the Resolution plan under the heading "Specific Relief" was allowed.

The reliefs, concessions and waivers sought by the Successful Resolution Applicant will be dealt strictly in accordance with the applicable laws.

It may be clarified that litigations wherever pending against the corporate debtor would be governed by Section 32A of the Code.

It may be clarified that, based on the submissions made by the Authorized Representative of the Resolution Professional during the hearing on 09.10.2024, a PUFE Application (IA No. 03/2024) is currently pending and shall be pursued by the Monitoring Committee, consisting of the Resolution Professional and one member of the CoC with the highest claim value, along with the SRA. He also further submitted that the proceeds arising out of the above PUFE application filed vide IA No.03/2024 shall be first utilized for payment of the expenses towards the said recovery and then to be paid to the creditors to the extent of the admitted claims as per Section 53 of the Code.

As far as the question of granting time to comply with the statutory obligations/seeking sanctions from governmental authorities is concerned, the Resolution Applicant is directed to do the same within one year as prescribed under section 31(4) of the Code.

In case of non-compliance with this order or withdrawal of the Resolution Plan within the stipulated time, in addition to other consequences which follow under law, the CoC shall forfeit the EMD amount of Rs. 2.5 Lakh already paid by the Resolution Applicant as well as the Performance Security, as referred to in sub-regulation (4A) of regulation 36B, of Rs.5,00,000/-.

The Resolution Plan envisages payment of the CIRP cost as follows:

The reliefs, concessions and waivers sought/prayed by the Successful Resolution Applicant will be dealt with strictly in accordance with the applicable laws including Companies Act, 2013 and Income Tax Act, 1961, etc.

The Moratorium imposed under section 14 of the Code shall cease to have effect from the date of this order.

The Resolution Professional shall submit the records collected during the commencement of the proceedings to the Insolvency & Bankruptcy Board of India for their record.

The Monitory Committee as proposed in the resolution plan is appointed as under:

The above Monitory Committee shall ensure timely & successful implementation of resolution plan approved by this order and also effectively pursue the PUFE Application (I.A. No. 03/2024) pending with this Tribunal at present, till the final order is passed and do the needful as per the order.

I.A. No. (Plan) 03/2024 is hereby approved and shall stand disposed of accordingly.

A copy of this Order shall be filed by the Resolution Professional with the Registrar of Companies.

The Resolution Professional shall stand discharged from his duties with effect from the date of this Order, save and except those duties that are enjoined upon him for implementation of the approved Resolution Plan.

The Resolution Professional is further directed to hand over all records, premises/ factories/documents available with it to the Resolution Applicant to finalize the further line of action required for starting of the operation. The Resolution Applicant shall have access to all the records and premises through the Resolution Professional to finalize the further course of action required for starting of operations of the Corporate Debtor.

The Registry is directed to send copies of the order forthwith to all the parties and their Ld. Counsel for information and for taking necessary steps.

The registry is further directed to send the copy of the order to the IBBI also for their record.

Certified copy of this order may be issued, if applied for, upon compliance of all requisite formalities.

File be consigned to the record.