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Judgment
ORDER
Oral Judgment : Justice Sharad Kumar Sharma, Member (Judicial):
These Appeals under Section 61 of the I & B Code, 2016, had been preferred by the Appellant(s). In Company Appeal (AT) (CH) (INS) No. 302 / 2025, the Appellants are the members of the Consortium of Successful Resolution Applicants, who had challenged the Impugned Order dated 27.03.2025, that was passed by the Ld. NCLT, Amaravati Bench, in IA (IBC) / 2 / 2025 in CP (IB) / 204 / 7 / AMR / 2019. By virtue of the Impugned Order, the prayer of the Appellants / SRA for grant of extension of time for payment of 2nd Tranche and 3rd Tranche of the Resolution Plan was rejected with the observation that grant of extension of time would amount to giving undue benefits to the Appellants.
In Company Appeal (AT) (CH) (INS) No. 303 / 2025, the Appellants challenge the order of Ld. NCLT, Amaravati Bench dated 09.04.2025, passed in IA (IBC) (Liq) / 1 / AMR / 2025 in CP (IB) / 204 / 7 / AMR / 2019, by virtue of which Ld. NCLT allowed the application of Respondent No. 1, the Monitoring Agent, seeking for liquidation of the Corporate Debtor, on the grounds of alleged non-compliance with terms of the Resolution Plan, ordered Liquidation of the Corporate Debtor i.e. M/s. KVR Industries Private Limited and appointed a Liquidator to carry out further process.
The brief facts of the case are that the Corporate Debtor was admitted into CIRP on 18.02.2022, Resolution Plan of the Appellants was approved on 04.04.2023 by CoC and on 06.09.2024 by Ld. Adjudicating Authority, the Appellants paid 10% of Plan amount on 13.04.2023, they were to make payment of the 2nd and the 3rd Tranches on 08.01.2025 and 09.03.2025, that they sought extension of time to make the above payments by filing application IA (IBC) / 2 / 2025 on 08.01.2025, that the Monitoring Agent / Respondent No. 1 herein filed IA (IBC) / 21 / AM / 2025 seeking directions whether to proceed with the Resolution Plan or, to file for Liquidation, that on 23.01.2025, Ld. Adjudicating Authority in IA (IBC) / 21 / 2025 ordered Respondent No. 1 to take appropriate steps as per law, that on 10.02.2025, Respondent No. 1 filed IA (IBC) / (Liq) / 1 / AM / 2025, seeking orders to liquidate the Corporate Debtor, that on 18.03.2025 Appellants wrote to Respondent No. 1 highlighting the problems faced by them on account of non-restoration of electricity supply which has led to their request for extension of time to make payments, that on 27.03.2025, Ld. Adjudicating Authority dismissed IA (IBC) / 2 / 2025 filed by the Appellants seeking extension of time and that on 09.04.2025, Ld. Adjudicating Authority passed orders on IA (IBC) / (Liq) / 1 / AM / 2025 ordering Liquidation of the Corporate Debtor.
It is seen that, the Ld. Adjudicating Authority dismissed the application of the Appellants praying for extension of time to make the payment of 2nd and 3rd Tranches on the grounds that the Appellants had failed to comply with the Payment Schedule given in the plan, that the conditions of the Plan remained unfulfilled due to non-payment of Tranches as per the time schedule given therein, that there is time value of money and all the Secured and the Unsecured Creditors are suffering because of non-payment of Tranches, Impugned Order as passed on 27.03.2025, and that it is not a fit case for exercising its inherent and discretionary powers to extend the time period for the payment of the balance amount as per the Schedule given by the Successful Resolution Applicant in the Resolution Plan as it would amount to giving an undue financial benefit to the SRA.
It is further seen that, the Ld. NCLT, Amaravati Bench has passed orders in IA (IBC) (Liq) / 1 / AM / 2025 in CP (IB) / 204 / 7 / AMR / 2019, on 09.04.2025 ordering for the Liquidation of the Corporate Debtor, after considering the implications and the consequences of non-remittance of the amount of the 2nd and the 3rd Tranche under the Plan and observing that though the 1st Tranche of the amount was already remitted within the time stipulated after the grant of approval of the Plan, the SRA did not remit the balance amount of the 2nd and the 3rd Tranche, within 120 days and 180 days respectively as per schedule, that the Monitoring Committee in its Meeting, held on 30.01.2025, had deliberated upon the implication of the non-implementation of the Resolution Plan by the Successful Resolution Applicant, and directed the Monitoring Agent, to file an Application for Liquidation of the Corporate Debtor and that as per provisions of Section 33 of the I & B Code, 2016, it is inclined to pass orders for Liquidation of the Corporate Debtor.
The Appellant has contended that he has paid the 1st Tranche in time, that his revival efforts got hampered due to non-restoration of electricity supply which is beyond his control, that in similar cases Hon’ble NCLAT has held that non-restoration of electricity supply is a valid ground for extension of time for implementation of Resolution Plan and therefore on that ground, the two Impugned Orders ought to be set aside.
When these two Appeals were taken up today, a consensus was arrived at between the parties to the proceedings to the effect that, the sole Financial Creditor i.e. Punjab National Bank / Respondent No. 2 who would be the ultimate sufferer due to the delayed payment of the 2nd and the 3rd Tranche, has today filed an affidavit through the Chief Manager, Punjab National Bank submitting thereof that, the Appellants to the two Company Appeals herein, has approached the Financial Creditor seeking an extension of time to make the balance payment as per the approved Resolution Plan and owing to the assurance, that was extended, the Financial Creditor has agreed in principle to extend the period till 30.09.2025 for making the balance payment as per the approved Resolution Plan, subject to certain terms and conditions as detailed in the said affidavit, that the Appellants are agreeable to the said terms and conditions and that, if these two Appeals are closed under the terms and conditions as given in the Memorandum Affidavit presented before the Tribunal, they would not have any grievances, as such and they would be seeking the disposals of the two Appeals based upon the terms of settlement, which has been offered by the Appellants and accepted by the Financial Creditor / Respondent No.2.
The terms as offered by the Financial Creditor and accepted by the Appellant are enumerated hereunder; and it will form to be part and reasons for disposal of these Appeals:
``a. That the Appellant / Resolution Applicant should pay the balance payment of the 2nd tranche payment of Rs.2,60,00,000/- and the 3rd tranche payment of Rs.20,50,00,000/- that are due and payable as per the approved Resolution Plan vide the Order of the Hon’ble NCLT dated 06.09.2024 on or before 30.09.2025.
b. That the balance amounts due and payable by the Appellant / Resolution Applicant, as per the Resolution Plan, as stipulated in clause (a) of this Affidavit must be paid together with interest on a reducing basis at the rate of MCLR + 1% at the date of approval of the Resolution Plan or on the date of the total balance payments as per Clause (a), whichever is higher.
c. That in addition to the balance amounts due and payable by the Appellant / Resolution Applicant, as stipulated in clause (a) and (b) of this Affidavit, the Appellant is also required to pay the entirety of the CIRP / Liquidation costs incurred / that may incurred till the date of payment of all amounts that are due and payable by the Appellant / Resolution Applicant.
d. That in the event of the breach / failure to comply with any of the above terms and conditions, appropriate steps will be taken to initiate / revive Liquidation proceedings as against the Corporate Debtor and the Appellant / Resolution Applicant waives its right to challenge the same. Furthermore, in the event of breach / failure to comply with any of the above terms and conditions, the amounts that have already been paid as per the Resolution Plan by the Appellant / Resolution Applicant and any amount paid thereafter, will stand forfeited and the Appellant / Resolution Applicant waives all rights as against claiming the same.’’
The portion as extracted above will constitute to be the part of today’s order and will have a binding precedent on the Appellant(s) who undertake that they would be strictly complying with the conditions given therein, failing which, the order of appointment of Liquidator, as impugned in the Company Appeal (AT) (CH) (INS) No. 303 / 2025, would revive back and will have its own legal effect.
Accordingly, the Company Appeal (AT) (CH) (INS) No. 302 / 2025 and Company Appeal (AT) (CH) (INS) No. 303 / 2025 are allowed. The respective orders which are under challenge therein i.e. the Impugned Order dated 27.03.2025 as rendered in IA (IBC) / 2 / 2025 in CP (IB) / 204 / 7 / AMR / 2019 and the order rendered on 09.04.2025 in IA (IBC) (Liq.) / 1 / AM / 2025 in CP (IB) / 204 / 7 / AMR / 2019 would hereby stand quashed, subject to the aforesaid conditions as referred to herein above. All pending Interlocutory Applications would stand closed.