CFM Asset Reconstruction Pvt. Ltd. vs Machine Works (International) Ltd.

PER: LABH SINGH, JUDICIAL MEMBER

The present interlocutory application bearing IA (IBC) (Plan) No. 30/KB/2025 was filed on 24.9.2025 by CA Shantanu Brahma Resolution Professional ( for short ‘RP’) of Machine Works (International) Limited, the Corporate Debtor (CD) under the provisions of Sections 30(6) and section 31 of the Insolvency & Bankruptcy Code, 2016 for short 'IBC Code) read with Regulation 39(4) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (for short 'CIRP Regulations') for approval of the Resolution Plan submitted by Jaik Leasing and Commercial Investment Ltd, the Successful Resolution Applicant (SRA), as approved by the Committee of Creditors (CoC) with 100% vote.

The underlying Company Petition in CP (IB) No. 200/KB/2022 was filed by CFM Asset Reconstruction Pvt Limited against Machine Works (International) Pvt Ltd., the Corporate Debtor, under Section 7 of the Insolvency and Bankruptcy Code 2016 and the Corporate Debtor was admitted in Corporate Insolvency Resolution Process (for short 'CIRP process') by this Tribunal vide order dated 08.01.2025.

Initially, Mr. Arun Kumar Gupta was appointed as the Interim Resolution Professional. This Tribunal, lateron, appointed the applicant, CA Shantanu Brahma, as Resolution Professional of the Corporate Debtor vide order dated 21.02.2025 replacing erstwhile Interim Resolution Professional Mr. Arun Kumar Gupta.

The erstwhile IRP made public announcement on 10.01.2025 in “Business Standard (English) and “Ekdin” (Bengali) newspapers both Kolkata Edition regarding initiation of CIRP process and called proof of claims from the financial and operational creditors, workers and employees of the Company in the specified forms till 22nd January 2025.

The CoC was constituted on 06.02.2025 with sole Member, CFM Asset Reconstruction Pvt Ltd being the Secured Financial Creditor with 100% voting right in the CoC.

The applicant states that a total of __twelve (12) meetings have been held during CIRP period, as follows:

Registered Valuers, namely Mr. Pritam Nag was appointed as valuer for valuation of land and building and Mr. Bhavin R. Patel & Associate was appointed as valuer for both land and building and SFA and Mr. Pijus Karmkar was appointed valuer for SFA, as resolved on 06.08.2025. It has been submitted that the COC has considered the Resolution Plan, keeping in view the Valuation Reports submitted by the Registered Valuers, named above. The summary of the Fair Value and Liquidation Value of the Corporate Debtor are as under:

Copy of the Valuation Reports has been annexed with the Application for approval of the Resolution Plan as Annexure “A-21”, “A-22”, “A-23”, and “A-24”.

Valuation of the Corporate Debtor, as further provided in Form H, is as follows:

The Applicant submits that in terms of the provisions of section 25(2)(h) of the Code read with regulation 36A (1) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, invitations in Form ‘G’ for Expressions of Interest (“EoI”) from potential resolution applicants were issued. Form ‘G’ was published on 07.04.2025 for submission of resolution plans for the Corporate Debtor. The last date for receipt of EoIs was 22.04.2025. This was published in “Business Standard” (English) and “Ekdin” (Bengali) newspapers both Kolkata Edition. The notice was also published on the website of the Insolvency and Bankruptcy Board of India (hereinafter referred to as ‘IBBI’).

The Applicant submits that in response to the invitation for “EoI”, upto the last date, i.e 22.04.2025, two “EoIs” were received from Jaik Leasing and Commercial Investment Limited and Agravanshi Private Limited.

The final List of Prospective Resolution Applicants was issued on 17.05.2025 consisting of a total of two PRAs. Information memorandum, evaluation matrix and request for Resolution Plan was issued to the two prospective resolution applicants on 22.05.2025 and the last date for submission of Resolution Plan was 21.06.2025. Till the last date of submissions of resolution plan i.e till 21.06.2025, Jaik Leasing and Commercial Investment Limited and Agravanshi Private Limited submitted their Resolution Plans (hereinafter referred as “Resolution Applicant”).

The Applicant opened the Resolution Plans in the 6^th CoC meeting in presence of the CoC members and the prospective resolution applicants and the Resolution Professional evaluated the Resolution Plans.

The plans were discussed in the 7^th and 8^th CoC meeting, held on 15.07.2025 and 29.07.2025 and the CoC asked the Resolution Applicants to submit better offers. In the 11^th CoC meeting held on 20.8.2025, the Resolution Applicants were invited to negotiate on the resolution plans by notice sent through email. The Agravanshi Private Limited desired to participate through physical mode, but the CoC decided to attend the resolution applicants through online mode due to their location at different parts of the Country. However, the representative of Agravanshi declined to participate in online negotiation and challenge mechanism and hence the CoC negotiated with Jaik Leasing and Commercial Investment Limited through and after negotiation and discussion, Jaik Leasing and Commercial Investment Limited proposed its best and improved plan of Rs. 31.25 crores plus working capital of Rs. 3 crores. Both the resolution plans were put up for voting in the 12^th CoC meeting. The CFM Asset Reconstruction Pvt. Ltd being the sole CoC Member, approved the Resolution Plan submitted by Jaik Leasing and Commercial Investment Limited (hereinafter referred as “Successful Resolution Applicant”) with 100 % voting.

The Applicant issued Letter of Intent on 19.09.2025 and the same was accepted and acknowledged by the successful resolution applicant on same day i.e on 19.09.2025 by reverting through email. A copy of the accepted Letter of Intent is annexed to the I.A. and marked as Annexure “A-27”.

The successful resolution applicant submitted the performance security in the shape of bank transfer amounting to Rs.3,12,50,000/- (Rs. Three Crores Twelve Lakh Fifty Thousand Only) by way of RTGS bearing UTR NO. HDFCR52025091962842890 dated 19.9.2025 in compliance of the RFRP on 19.9.2025 issued by HDFC Bank. A copy of the Bank Transfer is annexed to the I.A. and marked as Annexure “A-27”.

The CIRP process was initiated against M/s Machine Works (International) Ltd. the corporate debtor on 08.01.2025 and the resolution plan was approved by the CoC on 18.09.2025, the application for approval of resolution plan by this Adjudicating Authority was filed on 24.09.2025. The period of 180 days of CIRP ended on 06.07.2025 and further extension of 90 days period i.e., up to 28.09.2025 was granted by this Adjudication Authority vide order dated 02.07.2025. As per Section 12 of the Code, 2016, the Corporate Insolvency Resolution Process (CIRP) should be completed within 180 days or within the extended period of 90 days and mandatorily be completed within 330 days including any extension and the time taken in legal proceedings. Considering the given factual position and in the interest of justice, this Adjudicating Authority Suo-moto, hereby excludes the CIRP period from the last date of extension till the date of approval of the resolution plan by this Adjudicating Authority.

The Successful Resolution Applicant, Jaik Leasing and Commercial Investment Limited, is a private company incorporated on 08.8.2024 having CIN: U02720WB1884PLC037812. 5.2. The amounts claimed and admitted are summarized below: (In Rs. /Lacs.)

The Applicant has filed a Compliance Certificate in prescribed form, i.e., Form ‘H’ in compliance with regulation 39(4) of the IBBI (CIRP) Regulations, 2016, which has been annexed to the application as Annexure “A-28” at page no. 554.

The applicant submits that an application bearing IA No. 1375/KB/2025 under Section 43, 45, 49, and 66 of the IBC Code, 2016 was filed on 21.08.2025 against suspended board of Corporate Debtor for avoidance transection for amount involved Rs. 677.06 lacs before this Adjudicating Authority. There is another pending application being IA No. 747/KB/2025 filed under Section 19(2) of the IBC Code 2016 against suspended board for non-co-operation. A perusal of Form - H also confirms the same. The same is dealt with by the CoC post approval of resolution plan as per Clause 7.8 of the plan. The applicant further submits that the liquidation value and fair market value of the corporate debtor is INR 4136.21 lacs and INR 2787.62 lacs respectively.

The Applicant submits details of various compliances as envisaged within the Code and the CIRP Regulations which requires a Resolution Plan to adhere to, which is reproduced hereunder:

The Applicant submits that the successful Resolution Applicant has submitted a certificate of eligibility under Section 29A of the Code, which has been annexed as Annexure “A-26” at page 527.

The Applicant submits the relevant information with regards to the amount claimed, amount admitted, and the amount proposed to be paid by the Resolution Applicant, i.e., Jaik Leasing and Commercial Investment Limited, under the said Resolution Plan is tabulated as under:

Summary of the financial proposal/payment under the Resolution Plan dated 21.6.2025 of M/s Machine Works (International) Ltd is tabulated hereunder:

The Resolution Plan defines “Effective Date” or “Completion Date” shall mean the date of receipt of order pronounced by the Adjudicating Authority whereby the instant resolution plan stands approved as per provision of the IBC Code.

Details on Management/Implementation and Reliefs as per the Resolution Plan - Salient Features

The Resolution Plan also provides for management and Control of the Corporate Debtor in accordance with Section 30(2)(d) as follows:

The term of the Resolution Plan will be upfront, within 30 days for completion of the project and will commence from the effective date i.e from the date of approval of the plan.

The provision about implementation and supervision of the resolution plan has been provided in term of Section 30(2)(d) of the IBC Code 2016 as follows:

NOTE: (the reliefs, waivers and concessions sought are different for each case, the following is for reference purposes only)

We have perused the reliefs, waivers and concessions as sought for in the application. It is evident that some of the reliefs, waivers and concessions sought by the Resolution Applicant come within the ambit of the IBC Code 2016 and the Companies Act 2013, while many others fall under the power and jurisdiction of different Government Authorities/Departments. This Adjudicating Authority has the power to grant reliefs, waivers and concessions only concerning the reliefs, waivers and concessions that are directly with the IBC Code 2016 and the Companies Act 2013(within the powers of the NCLT). The reliefs, waivers and concessions that pertain to other Governmental Authorities/Departments may be dealt with by the respective competent Authorities/Forums/Offices, Government or Semi-Government of the State or Central Government concerning the respective reliefs, waivers and concession, whenever sought for. The competent authorities including the Appellate Authorities may consider granting such reliefs, waivers and concessions keeping in view the spirit of the IBC Code, 2016 and the Companies Act, 2013.

It is settled proposition of law that the Resolution Plan must be consistent with the extant law. The Resolution Applicant shall make necessary applications to the concerned regulatory or statutory authorities for renewal of business permits and supply of essential services, if required, and all necessary forms along with filing fees etc. and such authority shall also consider the same keeping in mind the objectives of the Code, which is essentially the resolving of the insolvency of the Corporate Debtor. On this aspect, Hon’ble Apex Court in case of Embassy Property Developments Pvt. Ltd. vs. State of Karnataka (2020) 13 SCC 308, held that:

The reliefs sought for subsisting contracts/agreements can be granted, and no blanket orders can be granted in the absence of the parties to the contracts and agreements.

Insofar as waivers with regard to the extinguishment of claims which arose prior to the initiation of the CIRP Process and which have not been claimed are granted in terms of the law laid down by the Hon’ble Apex Court in case of Ghanashyam Mishra and Sons Private Limited vs. Edelweiss Asset Reconstruction Company Limited [2021] 13 SCR 737, wherein Hon’ble Apex Court held that

It has further been held by Hon’ble Apex Court Ghanshyam Mishra Case (Supra) that:

On the same aspect we would also rely on the judgement of Hon’ble High Court of Rajasthan in the matter of EMC v. State of Rajasthan (2023) ibclaw.in 42 HC wherein Hon’ble High Court held that-

Thus, on the date of approval of resolution plan by the Adjudicating Authority, all such claims, which are not a part of resolution plan, shall stand extinguished and no person will be entitled to initiate or continue any proceedings in respect to a claim, which is not part of the resolution plan as per the law laid down by the Hon’ble Supreme Court in Ghanashyam Mishra supra. The Hon’ble Supreme Court also held that all the dues including the statutory dues owed to the Central Govt, any State Govt or any local authority, if not part of the resolution plan, shall stand extinguished and no proceedings in respect of such dues for the period prior to the date on which the Adjudicating Authority grants its approval under section 31 could be continued.

The waivers sought with respect to guarantors, we place reliance on the judgment of Hon’ble Supreme Court in case of Lalit Kumar Jain v. Union of India (2021) 9 SCC 321, wherein Hon’ble Supreme Court in para no. 133 held that sanction of a resolution plan and finality imparted to it by section 31 does not per se operate as a discharge of the guarantor’s liability shall apply.

Further, we would rely upon the judgment passed by the Hon’ble NCLAT in case of Roshan Lal Mittal v. Rishabh Jain reported in (2023) ibclaw.in 803 wherein Hon’ble NCLAT held that:

Insofar as reliefs and waivers sought for all inquiries, litigations, investigations and proceedings shall be granted strictly as per the section 32A of the Code and the provisions of the law as may be applicable. In this context, we would note that upon the approval of the Resolution Plan, the Corporate Debtor avails the limbs of new management to revive its business. Thus, all the past liabilities of the Corporate Debtor including criminal liability prior to the initiation of the CIR Process shall stand effaced and the new management will step into the shoes of the company with a fresh or clean slate. Hence, the old management shall be liable to face all the offences committed prior to the commencement of the CIR Process. At this juncture, we would rely upon the judgment rendered by the Hon'ble Apex Court in Ajay Kumar Radheyshyam Goenka vs. Tourism Finance Corporation of India Ltd. reported in MANU/SC/0244/2023: (2023) 10 SCC 545 that:

Further, Hon'ble High Court of Madras in case of Vasan Healthcare Pvt. Ltd. vs. The Deputy Director of Income Tax (Investigation), Unit 3(2) (2024) ibclaw.in 80 HC, held that:

Hon’ble Madras High Court in M/s. Vasan Healthcare Pvt Ltd v. M/s. India Infoline Finance Ltd, (2024) ibclaw.in 700 HC, has observed that:

Further, the Hon’ble Apex Court in Jaypee Kensington Boulevard Apartments Welfare Association and Ors. vs. NBCC (India) Ltd. and Ors. (2022) 1 SCC 401at Para 216, has laid down proposition of law that:

Further, in Committee of Creditors of Essar Steel India Limited vs. Satish Kumar Gupta reported at (2020) 8 SCC 531, the Hon'ble Apex Court has held that:

Therefore, in view of the above, we come to a final conclusion that if there are any personal guarantors of the corporate debtor, the personal guarantees shall be invoked and an appropriate action against them, in accordance with law, be taken.

As far as the question of granting time to comply with the statutory obligations/seeking sanctions from Government 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 of this order or withdrawal of Resolution Plan, the CoC shall have the right to forfeit the EMD amount already paid by the Resolution Applicant.

Therefore, in view of aforesaid observations of ours and law applicable thereon, we hereby approve the Resolution Plan of Rs. 31,25,00,000/- (Rupees Thirty One Crore Twenty Five Lakh Only) submitted by Jaik Leasing and Commercial Investment Limited (Successful Resolution Applicant).

The Resolution Plan shall form part of this Order and shall be read along with this order for implementation. The Resolution Plan thus approved shall be binding on the Corporate Debtor and all other stakeholders involved in terms of Section 31 of the IBC Code 2016, so that the revival of the Corporate Debtor shall come into force with immediate effect without any delay. The Resolution Plan is binding on the Corporate Debtor and other stakeholders involved so that revival of the Debtor Company shall come into force with immediate effect.

The Moratorium imposed under section 14 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 and also return to the Resolution Applicant or New Promoters.

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

Liberty is hereby granted to prefer any application if required in connection with implementation of this Resolution Plan.

A copy of this Order is to be submitted in the Office of the Registrar of Companies, West Bengal.

It is not on record that whether the Financial Creditors have invoked Personal Guarantees or not. It is essential for the purpose of maximization for wealth of the Corporate Debtor; personal guarantees need to be invoked. Therefore, we direct the Financial Creditors to invoke Personal Guarantees, if not already done.

The Resolution Professional may stand discharged from his duties with effect from the date of this Order; however, he is required to comply with our direction mentioned in Para 30 of the order subject to comply the direction, which the creditors should bear in mind.

The Resolution Professional shall stand discharged from his duties with effect from the date of this Order. The Resolution Professional is further directed to handover all records, premises/factories/documents to the Resolution Applicant to finalise the further line of action required for starting of the operation. The Resolution Applicant shall have access to all the records/premises/factories/documents through the Resolution Professional to finalise the further line of action required for starting of the operation.

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

The Interlocutory Application being IA(IBC)(Plan)/30/KB/2025 and the C.P(IB) No.200/KB/2022 stands disposed of accordingly.

Since the Resolution Plan has been approved and hence, the pending application being IA No. 746/KB/2025 filed under Section 19(2) of the IBC Code 2016 for non-cooperation by the Suspended Board of Directors stands disposed of.

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

File be consigned to the record.