Central Bank Of India vs M/s Worlds Window Exim Pvt. Ltd.

PER: ASHOK KUMAR BHARDWAJ, MEMBER (J)

The captioned petition has been preferred by the RP qua M/s Worlds Window Exim Pvt. Ltd., seeking approval of the Resolution Plan. It is Central Bank of India which initiated CIRP qua the CD alleging default in repayment of an amount of Rs. 175,96,47,674/- as on 22.03.2024. On admission of IB-108/PB/2025, the CIRP commenced and finally the RA viz. Dickey Special Situation Investment Trust through its investment Manager Dickey Asset Management Private Limited submitted its Resolution Plan and emerged successful (SRA). As is reflected in the plan, the CD viz. Worlds Window Exim Private Limited (WWEPL) was incorporated on 19.01.2006. As has been mentioned in the table given in the plan, the business of the CD was sales and purchase of goods. However, in the same table, it is also mentioned that the CD was incorporated as an asset holding company of its group companies and is not operative. The relevant excerpt of the table reads thus:-

It appears from the record that the CD was incorporated only to hold a land bank. Its 99.9999% equity shares were held by Worlds Window Infrastructure and Logistics Pvt. Ltd. and 0.0001% shares were held by one Mr. Sandesh (Nominee of Worlds Window Infrastructure & Logistics Pvt. Ltd.). The particulars of assets owned by the CD and its liabilities etc. are mentioned in clause 2.7 to 2.10 of the plan which reads thus:-

The CD had no workers and employees. As on 31.07.2025, the claim by the Financial Creditors was INR 9,97,44,98,649 (Indian Rupees Nine Hundred and Ninety Seven Crores Forty Four Lakhs Ninety Eight Thousand Six Hundred and Forty Nine only). Summary of claims of creditors as per the list of claims dated 31.07.2025 and Information Memorandum reads thus:-

When the amount claimed by Financial Creditors is Rs. 9,97,44,98,649, the Resolution Plan offered to pay only Rs. 7 Crores to be utilised for upfront payment. The relevant excerpt of the plan in this regard reads thus:-

It is seen from the certificate given by RP in the prescribed form viz. Form H, when Fair Value of CD is Rs. 21,30,53,919/- and its Liquidation Value is Rs. 9,42,25,758/-, the Plan Value is Rs. 7 Cr. only. The clauses 7A and 7B of the certificate reads thus:-

It is borne out of the record that one of the Financial Creditor viz. Punjab National Bank did not vote in favour of the plan, thus it emerges as dissenting creditor. It may be so that this Tribunal may not interfere with valuation of assets of CD nor can it nix the Resolution Plan on the ground that the plan value is less than liquidation value, but once the plan value is less than liquidation value, the share offered to dissenting secured Financial Creditor would be less than the amount to be paid to it in the event of liquidation of the CD under Section 53 of the Code. During the course of hearing, Mr. Abhishek, the Ld. Counsel for the RP tried to espouse that when Rs. 7 Cr. would be distributed amongst the secured Financial Creditors it may be so that the PNB will get the same amount which could be given to it in the event of liquidation of the CD under Section 53 of the Code. In such situation, the amount payable to other secured creditor would be in violation of explanation 1 to sub-section 2 of Section 30 of the Code. It is no longer res integra that the explanation had be read as part of the statute. The Section 30(2) of the Code reads thus:-

The Resolution Plan being violative of Section 30(2)(b) of IBC, 2016 cannot be approved and is liable to be rejected.

Additionally, when as per the provisions contained in Regulation 38(3) of IBBI (Resolution Process for Corporate Persons) Regulations, 2016, the Resolution Plan is expected to address the cause of default, we find from clause 2.14 of the plan that the Resolution Applicant is not even aware about the cause of default and it has intention to utilize the land securitized with lenders after settlement of their dues. The clause further indicate that a viable business proposition will be attended to generate positive returns. We are unable to appreciate that how and in what manner a viable business proposition will be attempted when CD in itself was created as an asset holding company. It may be legal to create an asset holding company, but availing the financial facility by an asset holding company and then assignment of debt by public bank to an ARC and then plan being offered for an amount which does not provide for share which could be received by secured Financial Creditor in case of liquidation lead to a situation, that has to be viewed with suspicion. The clause 2.14 of the plan reads thus:-

The learned counsel who represented Suspended Promoters conceded the plan instantly. The Resolution Plan stands rejected being violative of Section 30(2)(b) of the Code as also that of Regulation 39(3)(a) of IBBI (Resolution Process for Corporate Persons) Regulations, 2016. In due deference to the provisions of Section 33(1)(b), we require the CD to be liquidated and appoint Mr. Sandeep Chandna (IP), Registration No. IBBI/IPA-002/IP-N00447/2017-2018/11237, E-mail Id- [email protected] and Contact No. 9810768844, who has completed 20 assignments in total and is having one pending assignment as liquidator.

The liquidator shall issue a public announcement stating that the CD is in liquidation. He will also ensure that a copy of this order is sent to the authority with which the CD is registered. Subject to the provisions of Section 52 of the Code, there shall be a moratorium for the purposes referred to in clauses ‘a’ and ‘c’ of sub-section 1 read with sub-section 3 of Section 14 of the Code.

The liquidator would discharge function in terms of the provisions of Sections 35(1) (‘a’ to ‘o’), 36 (1) and (2), 37 (1) and (3) read with relevant provisions of IBBI (Liquidation Process) Regulations 2016. However, the Liquidator will not invite any fresh claim from any corner and would discharge function only in terms of the provisions of chapter VI and VII of the aforementioned regulations read with Section 54 of the Code. Nevertheless, the liquidator would follow the procedure prescribed in Regulation 21, 30A, 31 of the aforementioned Regulations. The liquidator would investigate the affairs of the CD and would take all legal steps including filing and pursuing applications under Sections 43, 45, 50 and 66 of the Code to disgorge the properties and assets of the CD for being utilized to discharge its debt. It is made clear that the ARC will not get the share from distributable amount in excess of the amount what it has paid to Central Bank of India and the excess amount if becomes payable to assignee of the debt of Central Bank of India would be paid to the assigner viz. Central Bank of India. In terms of the provisions of Section 21(11) of IBC, the CoC would continue to remain operative and functional during liquidation process.