Beacon Trusteeship Ltd vs Imperial Consultants And Securities Ltd

Vide separate order pronounced in Open Court, the resolution plan is approved.

IA(IBC)(PLAN)/8(CHE)2025 is disposed of.

Under consideration is an application filed under Section 30(6) read with Section 60(5) of the Insolvency and Bankruptcy Code, 2016 (IBC, 2016) and Regulation 39(4) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (CIRP Regulations) by the Resolution Professional of the Corporate Debtor viz., IMPERIAL CONSULTANTS AND SERVICES LIMITED seeking approval of resolution plan submitted by Successful Resolution Applicant viz., CITOC VENTURES PRIVATE LIMITED seeking the following reliefs: -

The Corporate Debtor is a Company incorporated under the Companies Act, 1956 on 31.03.1993. The Corporate Debtor was engaged in the business of investment and consultancy.

The Company Petition CP(IB)/27(CHR)/2023 was filed by Bacon Trusteeship Limited (Financial Creditor), against the Corporate Debtor under Section 7 of the IBC, 2016 for initiation of Corporate Insolvency Resolution Process (CIRP) of the Corporate Debtor. The Petition was admitted by this Tribunal vide an order dated 13.04.2023 and the Applicant was appointed as the Interim Resolution Professional (IRP). He was subsequently confirmed as the Resolution Professional in the 1^st CoC meeting held on 12.05.2023.

The Applicant made public announcement in Form A on 16.04.2023 as per Regulation 6 of CIRP Regulations, in Financial Express (Chennai/Kochi Edition in English), Dhinasuryan (Chennai edition in Tamil) and Navakal (Thane Edition in Marathi) inviting claims from the creditors of the Corporate Debtor. Form A Public Announcement was also uploaded on the IBBI website.

The Applicant collated the claims submitted by the creditors of the Corporate Debtor and constituted the Committee of Creditors (CoC). The 1^st CoC meeting was held on 12.05.2023.

In terms of the resolution passed in the 1^st CoC meeting held on 12.05.2023, the Applicant published invitation for Expression of Interest (EoI) in Form-G as per Regulation 36A(1) of the CIRP Regulations on 17.05.2023 in Financial Express (Chennai/Kochi Edition in English), Dhinasuryan (Chennai edition in Tamil) and Navakal (Thane Edition in Marathi) as well the IBBI website. The last date for submission of EoI was fixed as 02.06.2023.

The Applicant received seven (7) EOIs from Prospective Resolution Applicants. After the verification of all the EOI documents, the Applicant qualified six (6) PRAs. The final list of PRAs was issued by the Applicant on 27.06.2023 and the same is extracted hereunder,

The Successful Resolution Applicant ("SRA") submitted its EoI dated 31.05.2023. Along with the EoI, the SRA submitted the Audited Financial Statements and Annual Returns for FYs 2019-2020, 2020-2021, 2021-2022, Declaration under Section 29A of IBC, 2016, Undertaking under Section 29 of IBC, 2016 read with Regulation 36(4) of the CIRP Regulations to the Applicant. The SRA also enclosed a cheque of Rs. 5,00,000/- towards payments of Earnest Money Deposit (EMD).

The Applicant issued RFRP dated 17.06.2023, which included an Evaluation Matrix, and Information Memorandum dated 16.06.2023 and an updated version on 07.11.2023 in the matter of the Corporate Debtor.

The CoC extended the late date for the PRAs to submit their Resolution Plan vide its decision in 5^th CoC meeting held on 21.11.2023.

In the 7^th CoC meeting held on 19.12.2023, the Applicant informed the CoC that four Resolution Applicants ("RAs") viz., Mr. Ashish Kane, Mr. Vardhman Ganpatlal Singhvi, CITOC Ventures Private Limited and the Consortium of Subhlaxmi Investment Advisory Pvt. Ltd have submitted their Resolution Plans. However, the Consortium has submitted a conditional plan. Hence, only the proposals of Mr. Ashish Kane, Mr. Vardhman Ganpatlal Singhvi and CITOC Ventures Private Limited meet the criteria set out in the RFRP.

Two Resolution Applicants viz. CITOC Ventures Private Limited (CITOC Ventures) and Mr. Ashish Kane presented their revised Plans in the 9^th meeting of the CoC held on 28.02.2024 and the same were considered by the CoC.

The Resolution Applicants viz. CITOC Ventures submitted Addendum to Resolution Plan vide letter dated 09.02.2024, wherein, it affirmed that any avoidance proceedings, if any under Chapter III or fraudulent or wrongful trading under Chapter VI of Part II of the Code, will be pursued after the approval of the Resolution Plan by the CoC or their representative and the proceeds, if any, from such proceedings shall be distributed as decided by the CoC.

In terms of the discussion undertaken in the 13^th CoC meeting held on 13.02.2024, CITOC Ventures submitted 2^nd Addendum to the Resolution Plan qua distribution of the amount amongst the creditors and appointment of RP as the Chairman of the monitoring committee vide letter dated 23.02.2024, for the consideration of the CoC.

The CIRP period was extended from time and again, on the following applications,

An Interlocutory Application i.e., IA(IBC)/1335(CHE)/2024 was filed by IDBI Bank seeking replacement of Resolution Professional. The Application was disposed of vide order of this Tribunal dated 13.12.2024 with directions to the IDBI Bank to represent before the CoC for taking a decision on the prayer made in the application.

IDBI Bank was present in the 16^th CoC meeting held on 20.01.2025 and 17^th CoC meeting held on 24.03.2025. However, the creditor did not make any representation for the replacement of the Resolution Professional and the Applicant herein continued to act as the RP of the Corporate Debtor.

Another IA(IBC)/1416(CHE)/2024 was filed by IDBI Bank seeking examination of related party of CoC members. The Resolution Professional examined the matter and submitted a report before the Tribunal vide S.R. No. 4293 dated 26.08.2024. The Application was disposed of vide order dated 13.12.2024 with liberty to the Bank to file appropriate application in case of any grievance against the report.

The Applicant appointed two valuers each for the valuation of the Land and Building and the Securities and Financial Assets of the Corporate Debtor. The details of valuation submitted by the Registered Valuers is extracted hereunder,

The Resolution Plan dated 08.11.2023 submitted by CITOC Ventures Private Limited ("SRA") along with addendum dated 09.02.2024 & 23.02.2024 was approved by the CoC by a voting of 76.73%. The voting results were declared on 29.05.2025.

Hence, the present Application seeking approval of the Resolution Plan submitted by the SRA viz. CITOC Ventures Private Limited has been filed before this Tribunal.

The Successful Resolution Applicant (SRA) is a flagship holding company of CITOC group founded in 1997, providing solutions to industries through IT Support services, Digital Multimedia Films for OTT Platforms, Logistics management Services, and consultancy services as well as enhancing its offerings and capabilities through strategic mergers and acquisitions.

The SRA has assessed the cause of default to be the low Debt Service Coverage.

The SRA has confirmed in its affidavit dated 09.11.2023 that it is eligible under Section 29A of the IBC, 2016 read with Regulation 38(3) of the CIRP Regulations to submit a Resolution Plan for the Corporate Debtor.

The Applicant has calculated the total amount due as Rs. 93,19,67,25,194/-, upon admitting the following claims, as per the provisions of the IBC and applicable regulations:

The SRA has proposed to infuse Rs. 17,00,00,000, out of which it has proposed to disburse Rs. 16,20,00,000 towards the settlement of total admitted dues of Rs. 93,19,67,16,344. A synopsis of the financial proposal of the SRA is provided herein,

As per the Plan, the SRA has proposed to pay the full Resolution Amount of Rs. 1700 lakhs upfront within 90 days of approval of the Plan.

As per Section 3 Part IV Clause B of the Plan, the CIRP cost, including corpus contribution by the CoC members, shall be paid in full towards final payment of the CIRP costs payable in terms of Section 30(2)(a) of IBC, 2016 read with Regulation 38(1)(a) of CIRP Regulations. The CIRP cost is estimated at Rs.80.0 Lakhs which shall be paid out of the funds infused by the Resolution Applicant in the Corporate Debtor as ‘Mandatory Payment Funds’.

Section 3 Part IV of Clause B of the Plan provides details about the amounts proposed to be paid to the various financial creditors as extracted hereunder,

However, as per Addendum vide letter dated 23.02.2024 of the Revised Financial Proposal, the following amounts are proposed to be paid to each of the Financial Creditors of the Corporate Debtor.

As per Addendum No. 2 of the letter dated 23.02.2024, any increase in the CIRP cost above Rs. 80,00,000 will be reduced from the amount payable to the Financial Creditors, so that the total amount payable shall not exceed Rs.17,00,00,000/-.

There are no dissenting financial creditors as per the Affidavit filed by the Applicant vide S.R. No. 2811 dated 10.07.2025.

As per Section 2 Part IV Clause B Point 4 of the Plan, workmen and employees’ dues with the Corporate Debtor are NIL. However, even though no claims have been received or admitted from the workmen, the SRA has proposed to pay any workmen dues and employees dues post verification, to continue the business of the Corporate Debtor as a going concern and to take care of the interest of the workmen out of the Mandatory Payment Funds left after the payment of CIRP Costs and Priority Workmen Dues. The dues shall be paid after verification and admission of such dues. During the CIRP process, the dues shall be verified by the RP. After the completion of CIRP process, the same shall be verified by the Supervisor of the Resolution Applicant.

As per Section 2 Part IV Clause B Point 4 of the Plan, claims of the Operational Creditors to the tune of Rs. 8,850/- have been admitted by the RP. As per Section 53 of IBC, 2016, the amount payable to the Operational Creditors is NIL. Hence, no payment has been provided by the SRA towards settlement of the claims of the Operational Creditors.

All the payments to the Financial Creditors shall commence from the Approval Date i.e. Upfront Payment which is within 90 days from the date of approval.

Section 2 Part IV Clause B Point 8 of the Plan provides for Indicative Timelines for the implementation of the Resolution Plan as per which on and from the date of the approval of the Resolution Plan by the Tribunal, the Resolution Applicant, subject to structure finalized between the Resolution Applicant, the Resolution Professional and the Committee of Creditors, undertakes to obtain the following approvals:

a. Notice on the Company's Website.

b. Intimation to the MCA, COC, IBBI, Tax Authorities and various other Statutory Authorities (as applicable).

c. Other Approval/Filings required under the Plan.

d. Filing of various documents with MCA & Other Authorities.

e. Execution of Definitive Agreements, if any, with COC/RP on approval of Plan by the Tribunal to implement the Approved Plan.

f. Extinguishment of Old Shares of the Existing Shareholders.

g. Infusion of Funds by Equity through Issue of New Shares or subordinate debt to the RA.

h. Settlement of Upfront Payment as per the Approved Resolution Plan.

Under Section 7 of the Plan, the SRA has proposed to complete the steps as per the Implementation Schedule extracted hereunder,

As per Section 7.2, the detailed steps of the proposed structure are extracted below,

As per the Affidavit filed by the SRA vide S.R. No. 2811 dated 10.07.2025, the SRA has proposed to introduce the entire Plan amount of Rs. 1700 Lakhs in the form of equity share capital and no subordinate debt. It has undertaken that any stamp duty and other charges payable to increase the Authorized Capital to Rs.1700 Lakhs shall be paid by it to the Registrar of Companies or the respective Authority, post approval of the Resolution Plan by the Tribunal.

The source of funds has been mentioned in the IA, wherein the SRA has submitted a Demat Statement showing balance of Rs.35 Crore, which is annexed at Pg. No.761 of the IA.

As per the Affidavit filed by the SRA vide S.R. No. 2811 dated 10.07.2025, the funds for the payment of the sale consideration will be sourced from the sale of the current investments (i.e., listed shares), cash and cash equivalents belonging to the SRA.

The SRA has stated that there are sufficient current investments exceeding ₹1700 Lakhs in both FY 2022-23 and FY 2023-24, hence, the SRA has sufficient financial capacity to infuse the Resolution Plan amount of ₹17.00 Crores within the stipulated timelines.

The details of the current investments as per the Audited Balance Sheet as on 31.03.2024 and 31.03.2023 are extracted hereunder,

As per Section 3 Part II Point 5.1 of the Resolution Plan, from the Approval Date and until the Transfer Date in the manner set out in the Implementation Schedule of the Plan, the Corporate Debtor will be managed and controlled by the Monitoring Committee to carry out the day-to-day functions of the Corporate Debtor under the supervision of the Committee of Creditors of the Corporate Debtor.

Any decisions which would otherwise have been taken by the Board consisting of the earlier directors shall be taken by the Monitoring Committee and that the Board shall have no authority whatsoever to conduct the business of the Corporate Debtor. Any decisions taken by the Board shall be null and void and not binding on the Monitoring Committee and/or the Corporate Debtor.

All fees payable to and costs and expenses incurred by the Monitoring Committee shall be met out of internal accruals of the Corporate Debtor and in case the internal accruals are not sufficient to meet the aforesaid costs and expenses, the same shall be paid by the Resolution Applicant, as consideration for fulfilling their obligation during the intervening period.

The plan provides that the members of the Monitoring Committee will be appointed by the Resolution Applicant at such terms as may be agreed by and between each of the members and the Resolution Applicant. Further Addendum of the Resolution Plan vide letter dated 23.02.2024 provides that the Resolution Professional will be appointed as the member and Chairman of the Monitoring Committee.

The Monitoring Committee will be constituted in terms of Regulation 38(4) of the CIRP Regulations, 2016. The Resolution Professional will also be compensated as per of Regulation Proviso to 38(4)(b) of the CIRP Regulations, 2016.

Section 3 Part II Point 5.1 provides that the Monitoring Committee shall oversee the settlement of Claims as envisaged in the Implementation Schedule, if any.

As per Section 3 Part II Point 5.2, the supervision of the implementation of the Plan shall be of the Monitoring Committee from the Approval Date and until the full & final payment is made to the secured financial creditors.

The Applicant has submitted the details of various compliances as envisaged within the provisions of IBC, 2016 and CIRP Regulations, which require a Resolution Plan to adhere to, which are reproduced hereunder:

Heard the counsel for the Applicant and perused the documents on record

The Applicant has filed Compliance Certificate in Form H dated 31.05.2025. The same is appended as Exhibit ZS of the Application.

It is seen from Form H that the Fair value of the Corporate Debtor has been estimated to be Rs.9,38,99,358/- (Rupees Nine Crores Thirty-Eight Lakhs Ninety-Nine Thousand Three Hundred Fifty-Eight Only), and the Liquidation value has been estimated to be Rs.8,98,30,509/- (Rupees Eight Crores Ninety-Eight Lakhs Thirty Thousand Five Hundred Nine Only). The Resolution Plan value is Rs. 17,00,00,000 /- (Rupees Seventeen Crores Only).

It was seen from Form – H that the Applicant has yet to file PUFE Application under Section 43, 45 and 66 of IBC, 2016. During the hearing on 11.07.2025, it was submitted by the Ld. Counsel for the Applicant that two PUFE applications have been filed before this Tribunal and the beneficiary of the PUFE Applications will be the CoC and the CoC will pursue the Applications as contemplated in the Plan.

As per Section 2 of the Plan, "Approval Date" means the date of approval of the Plan by the Hon'ble NCLT and "Transfer Date" shall mean the date on which the Resolution Applicant acquires majority shareholding and control of the Corporate Debtor by payment of total consideration or within 90 days from the approval date.

The SRA has submitted an Affidavit under Section 29A of IBC, 2016 to the Resolution Professional confirming that, as on the date of this Plan and on the basis of the records of the Resolution Applicant, the Resolution Applicant is eligible under Section 29A of the Code to submit the Plan. The Affidavit is appended as Exhibit ZT to this Application.

FY 2022-23 and FY 2023-24 balance sheets show the available liquidity of the SRA above ₹1700 Lakhs, thereby satisfying the requirement of demonstrating financial capacity.

Section 2 Part IV Clause B Point 1 provides that, upon payment of the resolved dues by the Successful Resolution Applicant, the financial creditors shall release all personal guarantees, corporate guarantees, cross border guarantees, third party guarantees extended by the guarantors of the Corporate Debtor for the Corporate Debtor or any of its subsidiary / step down subsidiary of related entity, if any. The Tribunal notes the submission of the Resolution Applicant that, although the Plan contains a clause regarding extinguishment of such guarantees, but there are in fact no guarantors in existence in the present case. Since the said clause is redundant, it was requested that the clause may be struck down as redundant without affecting the viability of the Plan.

In so far as approval of the Resolution Plan is concerned, this Tribunal is convinced on the decision of the Committee of Creditors, following the judgment of the Hon’ble Supreme Court in the matter of K. Sashidhar –Vs– Indian Overseas Bank (2019) 12 SCC 150, wherein in para 19 and 62 it is held as under;

The Hon’ble Supreme Court of India in the matter of Committee of Creditors of Essar Steels –Vs– Satish Kumar Gupta & Ors. in Civil Appeal No. 8766 – 67 of 2019 at para 42 has held as under;

The Hon’ble Supreme Court in the matter of K. Sashidhar v. Indian Overseas Bank and Ors. (supra) has lucidly delineated the scope and interference of the Adjudicating Authority in the process of approval of the Resolution Plan and held as under;

The Hon’ble Supreme Court in the matter of Committee of Creditors of Essar Steel India Limited v. Satish Kumar Gupta and Ors. (2020) 8 SCC 531 after referring to the decision in K. Sashidhar (supra) has held as follows;

The Hon’ble Supreme Court in its decision in Jaypee Kensington Boulevard Apartments Welfare Association & Ors. v. NBCC (India) Ltd. & Ors. in Civil Appeal no. 3395 of 2020 dated 24.03.2021 has held as follows;

Thus, from the catena of judgments rendered by the Hon’ble Supreme Court on the scope of approval of the Resolution Plan, it is amply clear that only limited judicial review is available for the Adjudicating Authority under Section 30(2) and Section 31 of IBC, 2016 and this Adjudicating Authority cannot venture into the commercial aspects of the decisions taken by the Committee of Creditors.

In the instant case, the Resolution Plan has been approved by the CoC with 76.73% voting share. The voting results of the resolution approving the resolution plan has been annexed as Exhibit ZK of the Application.

Thereafter, IDBI Bank Limited and Libord Finance Limited also submitted their approvals to the Resolution Professional via e-mail. As per the ‘Checklist for the Resolution Plan’ submitted by the Applicant/ Resolution Applicant, 100% of the CoC has voted in favour of the Resolution Plan. (The e-mails of IDBI Bank Limited and Libord Finance Limited are placed at Pgs. 19 – 22 of the Checklist. The voting sheet of the creditors is annexed as "Annexure - 3" of the Affidavit of the Applicant.)

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. It also complies with regulations 38 and 39 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016.

In the light of what has been stated above, the Resolution Plan is Approved by this Adjudicating Authority, subject to the observations made in this order. The Resolution Plan shall form part of this Order. The Resolution Plan will be binding on the Corporate Debtor and other stakeholders.

The Resolution Applicant has sought for reliefs and concessions under the Resolution Plan and the same are dealt with hereunder;

The SRA has made payment of Performance Guarantee of Rs. 45,00,000 on 30.05.2025 by NEFT. (The text message proving the payment of Performance Guarantee is annexed and marked as "Exhibit ZX" of the Application)

A further sum of ₹5 Lakhs has been paid by cheque bearing No. 496800 dated 30.05.2023 drawn on HDFC Bank, which has also been credited into the Corporate Debtor’s account. (Photocopy of the cheque dated 30.05.2023 bearing No. 496800 drawn upon HDFC Bank & copy of the Bank Statement of the Corporate Debtor for the period 01.06.2023 to 39.06.202 is marked as ‘Annexure 2 Colly’ of the Affidavit filed by the Applicant).

A Monitoring Committee is constituted comprising of Application / Resolution Professional as the Chairman of the monitoring committee, two representatives of the committee of creditors and two members of the successful resolution applicant. The monitoring committee shall monitor and supervise the implementation of the resolution plan. The monthly fee payable to the Chairman / RP shall not exceed the monthly fee received by him during the Corporate Insolvency Resolution Process.

The Monitoring Committee shall submit monthly report to the adjudicating authority regarding the status of implementation of the resolution plan.

The Successful Resolution Applicant shall bear and pay the incidental expenses of the monitoring committee.

In case of non-compliance with this order or withdrawal of the Resolution Plan by the Successful Resolution Applicant, the Monitoring Committee shall forfeit the amount deposited by the successful resolution applicant in terms of the RFRP.

Certified copy of this Order be issued on demand to the concerned parties, upon due compliance.

Liberty is granted for moving any Application if required in connection with the implementation of this Resolution Plan.

A copy of this Order be sent to the concerned Office of the Registrar of Companies.

Accordingly, IA(IBC)(PLAN)/8/CHE/2025 stands disposed of.

The Registry is directed to send e-mail copies of the order forthwith to all the parties and their Counsels for information and for taking necessary steps