Biotechnology Industry Research Assistance Council vs Avesthagen Ltd.

Heard Ld. Counsels for the parties.

Ld. Counsel for respondent contended that the matter is deep in for settlement as the exchange of E-mails shall reflect. It is only because the Petitioner cannot on its own, take a decision on the settlement amount and the matter has to go to the Ministry, that more time is required. Ld. Counsel for Petitioner on the other hand pointed out to the previous docket orders to stress that over time similar arguments are raised while there is nothing on the ground. Self serving e-mails of respondent cannot be made the ground to stall these proceedings.

Since the parties are diametrically opposite regarding the settlement of matter, which position did not change even on keeping the matter at the end of Board and we having already heard on admission, the respondent is admitted to CIRP vide separate order and moratorium is declared.

List on 06.04.2026 for reports of IRP.

The present Petition was filed on 05.02.2024 under section 7 of the Insolvency and Bankruptcy Code, 2016 (for brevity ‘IBC’/Code) read with Rule 4 of the Insolvency & Bankruptcy (Application to Adjudicating Authority) Rules 2016 by Biotechnology Industry Research Assistance Council (hereinafter referred as the ‘Petitioner/Financial Creditor’) seeking to initiate Corporate Insolvency Resolution Process in respect of Avesthagen Limited (hereinafter referred as ‘Corporate Debtor/Respondent’) on the ground that the Corporate Debtor has committed a default for a total outstanding amount of Rs. 4,77,04,159.35/- (Rupees Four Crores Seventy Seven Lakhs Four Thousand One Hundred Fifty Nine and Paisa Thirty Five Only) as on 31.03.2023 with further interest accruing. The date of default as per the project has been given below:

Relevant facts of the case are as follows:

a. Scheme entitled “Biotechnology Industrial Partnership Programme” (BIPP) having partnership with industries for public support on a cost sharing basis for path-breaking research and development of appropriate technologies in the field of biotechnology.

b. Scheme entitled “Small Business Innovation Research Initiative” (SBIRI) to support innovative pre-proof-of-concept research and late-stage development and commercialization of the innovation by small and medium business units.

a. Biotechnology Industrial Partnership Programme (BIPP Project -BT/BIPP/0021/01/2008), vide Sanction Order dated 03.08.2009, DBT accorded sanction for the implementation of Project by the Corporate Debtor entitled “Development of self-glycogenic pearl millet adapted for marginal lands”, at the estimated Project cost of Rs. 300 Lakhs. For the same, a loan of Rs. 120 Lakhs was sanctioned in favour of the Corporate Debtor vide Sanction Order dated 03.08.2009, marked as Exhibit F. That DBT had released a loan amount of Rs. 81.40 Lakhs against the total sanctioned loan amount of Rs. 120.00 Lakhs.

b. Small Business Innovation Research Initiative (SBIRI Project-BT/SBIRI/471/17-B9/2008) vide Sanction Order dated 21.12.2009, DBT accorded sanction for the implementation of Project by the Corporate Debtor entitled “Hepatocyte-like cells generated from human embryonic stem cells (hESC) for hepatotoxicity screening of Xenobiotics in the drug discovery process” at the estimated Project cost of Rs.199 Lakhs. For which a loan of Rs.40 Lakhs was sanctioned in favour of the Corporate Debtor vide Sanction Order dated 21.12.2009, marked as Exhibit M. Further, DBT had released a loan amount of Rs.14 Lakhs against the total sanction loan amount of Rs. 40.00 Lakhs, by virtue of Release Order dated 21.12.2009, as enclosed in Exhibit N.

c. Small Business Innovation Research Initiative (2^nd SBIRI Project -BT/SBIRI/554/6-B11/2009) Vide Sanction Order dated l0.09.2010, DBT accorded sanction for the implementation of Project by the Corporate Debtor entitled “Scale-up and evaluation of high-value biosimilar product (Etanercept) aimed at providing cost-effective healthcare solutions to the emerging markets” at the estimated Project cost of Rs. 900.00/- Lakhs. A loan of Rs.400 Lakhs was sanctioned for the same in favour of the Corporate Debtor by way of Sanction Order dated 10.09.2010, marked as Exhibit R. That DBT had released a loan amount of Rs.230 Lakhs against the total sanction loan amount of Rs.400 Lakhs.

On 03.03.2025, the following order was passed:

Further, on the next date, the following order was passed:

We have heard the Learned Counsels for parties and carefully perused the materials on record.

The present Petition was filed on 05.02.2024. The Petitioner has disclosed three distinct dates of default in Form No. 1 in respect of three different projects, namely 08.09.2015, 31.03.2016 and 02.08.2020. The issue that arises for consideration is whether the present Petition is within the prescribed period of limitation. Taking the earliest date of default, i.e. 08.09.2015, into account, it is observed that the Petitioner has placed on record the financial statements of the Corporate Debtor for the financial years 2015–16 to 2020–21, wherein the loan liability is consistently reflected in the balance sheets of the Corporate Debtor. Reliance is placed on the judgment of the Hon’ble Supreme Court in Dena Bank v. C. Shivakumar Reddy & Anr., (2021) 10 SCC 330, wherein it has been held that:

In the financial year 2017–18, the notes to the financial statements for the year ending 31.03.2018, placed at page no. 331, reflect long-term borrowings and unsecured term loans acknowledging a liability of INR 69,00,000. A similar acknowledgment is also appearing at page no. 343 in the notes to the balance sheet for FY 2018–19. The aforesaid disclosures constitute acknowledgments of debt by the Corporate Debtor within the meaning of Section 18 of the Limitation Act, thereby extending the period of limitation for a further period of three years, i.e. till 31.03.2022.

Further, it must be noted that the Hon’ble Supreme Court in MA 29 of 2022 in MA 665 of 2021 in Suo Motu Writ Petition (C) No.3 of 2020, has given directions regarding excluding limitation period, which are as under: -

Under Section 7 of the IBC, in order to initiate CIRP, it is essential that the Applicant proves that there is a financial debt as defined under Section 5(8) of the IB Code and that a default under Section 3(12) has been committed in respect of that financial debt. In the present case the material on record clearly goes to show that Corporate Debtor had availed loan facilities and has committed default in repayment of the outstanding loan amount.

Further, it is noted that the Petitioner has placed on record Form D, being the record of default issued by NeSL, corroborating the dates of default in respect of the concerned projects. The said record reflects the status of authentication of default as “deemed to be authenticated” and is duly marked and annexed as Exhibits BB, CC and DD at page nos. 222, 228 and 234 of the Petition. It is also noted that the Corporate Debtor has acknowledged its outstanding dues vide email dated 24.05.2021, placed at page no. 244 of the Petition, the relevant extract whereof is reproduced hereinafter:

In the given facts and circumstances, the present petition being complete and having established the default in payment of the financial debt and for the default amount being above Rs. 1,00,00,000/-, the petition is liable to be admitted in terms of Section 7 of the IBC, 2016.

Accordingly, Company Petition bearing CP (IB) No. 161/BB/2024 is hereby admitted against the Corporate Debtor, AVESTHAGEN LIMITED and consequently moratorium is declared in terms of Section 14 of the Code imposing following prohibitions to be complied with by all concerned:

a. The institution of suits or continuation of pending suits or proceedings against the Corporate Debtor including execution of any judgment, decree or order in any court of law, tribunal, arbitration panel or other authority;

b. Transferring, encumbering, alienating or disposing of by the Corporate Debtor any of its assets or any legal right or beneficial interest therein;

c. Any action to foreclose, recover or enforce any security interest created by the Corporate Debtor in respect of its property including any action under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002;

d. The recovery of any property by an owner or lessor, where such property is occupied by or in the possession of the Corporate Debtor;

It is further directed that the supply of essential goods or services to the Corporate Debtor as may be specified, shall not be terminated or suspended or interrupted during the moratorium period in accordance with sub-section (2) of Section 14 of the Code;

The provisions of Section 14(3) shall however, not apply to such transactions as may be notified by the Central Government in consultation with any financial sector regulator and to a surety in a contract of guarantee to a Corporate Debtor.

The order of moratorium shall have effect from the date of this order till completion of the Corporate Insolvency Resolution Process or until this Bench approves the Resolution Plan under sub-section (1) of Section 31 or passed an order for liquidation of Corporate Debtor under Section 33 of the IBC as the case may be;

In Part-III of Form No.1, Shri. Piyush Kisanlal Jani, having Registration No. IBBI/IPA-001/IP-P01439/2018-19/12164 has been proposed as Interim Resolution Professional (IRP). Form No.2 Written Communication by the IRP has been filed along with the Petition, as Exhibit E on page no. 56. In view of the above, we, therefore appoint Shri. Piyush Kisanlal Jani, contact no. 9922999355, email id: [email protected] having registered address at Om Ashrya, New Laxminagar, Behind Mazar, Ring Road, Gondia, Maharashtra- 441614 as the Interim Resolution Professional. The IRP is directed to take the steps as mandated under the IBC, especially under Sections 15, 17, 18, 20 and 21 of IBC, 2016 and strive to complete the process within prescribed timeline.

The Financial Creditor shall deposit a sum of Rs.2,00,000/- (Rupees Two Lakhs Only) with the IRP to meet the expenses arising out of issuing public notice and inviting claims. These expenses are subject to approval by the Committee of Creditors. In addition, the RP shall issue individual notices to Jurisdictional Income Tax Authority; Principal Commissioner of Income Tax (Judicial), Bengaluru; Regional Provident Fund Commissioner; GST Commissioner; Commercial Tax Authority; recognized Labour Unions.

The Interim Resolution Professional shall after collation of all the claims received against Corporate Debtor and the determination of the financial position of the Corporate Debtor constitute a Committee of Creditors and shall file a report, certifying constitution of the Committee to this Tribunal on or before the expiry of thirty days from the date of his appointment, and shall convene first meeting of the Committee within seven days for filing the report of Constitution of the Committee. The Interim Resolution Professional is further directed to send monthly progress reports to this Authority without annexing a copy hereof.

A copy of the order shall be communicated to both the parties. The learned Counsel for the Petitioner shall deliver a copy of this order to the Interim Resolution Professional forthwith. The Registry is also directed to send a copy of this order to the Interim Resolution Professional at his e-mail address, [email protected].

Heard the Learned Counsel for the parties.

This application is filed by the Applicant/IRP under Section 12A of the I & B Code, 2016 read with Regulations 30A of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 and Rule 11 of the NCLT Rules, 2016 seeking for withdrawal of the C.P (IB) No.173/BB/2023 in view of the settlement arrived between the Operational Creditor and Corporate Debtor and the default amount of Rs.2,38,15,350/- is being settled fully and default amount of USD 1,578,132 shall be settled via a subsequent settlement agreement. Pertinently, the Applicant has not yet constituted the Committee of Creditors (CoC). Accordingly, the Petitioner has executed Form-FA dated 14.05.2025 seeking for withdrawing the company petition. Therefore, in view of the amicable settlement between the parties, the Applicant has filed the present application seeking withdrawal of the present company petition. Since the conditions for withdrawal of CIRP U/s.12A of the Code have been satisfied, this Adjudicating Authority has no objection for withdrawal of this Petition. Therefore, the instant Application is hereby allowed.

On 26.05.2025, the Adjudicating Authority noticed that the concerned person authorised to sign the form has no authorisation to withdraw the petition, therefore, the Applicant was directed to file the same. In compliance to the same, the Applicant has filed the Compliance Memo vide Dy.No.2973 dated 05.06.2025 and the same is taken on record.

Consequently, the Corporate Debtor is hereby released from the rigours of CIRP and the IRP so appointed, is directed to handover the charge of the assets and affairs of the Corporate Debtor back to the Suspended Members of the Board of Directors of Corporate Debtor. Subsequently, IRP is discharged from his duties of the Corporate Debtor, and moratorium shall be ceased to have effect, from the date of this order.

Accordingly, I.A (IBC) No.441/2025 stands allowed, consequently, the Petition bearing C.P.(IB) No.173/BB/2023 is disposed of as withdrawn and pending I.As, if any, stands closed.