Eclear Leasing & Finance Pvt. Ltd. vs Swati Health And Education Services Pvt. Ltd.

O R D E R

IA. No. 6324/ND/2022:

(Rs in Lacs)

“45.

That in satisfaction of the mandatory requirements of the Code and the CIRP Regulations, the Applicant craves leave to place before this Hon’ble Adjudicating Authority, the following key features in respect of the Resolution Plan:

A. Financial Proposal

Successful Resolution Applicant has proposed Rs.2532.39 lacs towards settlement of CIRP cost and all other debts of the corporate debtor. Summary of the amount proposed under different categories with timelines for payments is as under: -

Sl. No	Particulars	Claim filed	Claim admitted	Amount Provided in the Resolution plan	% of amount provided to amount admitted	Timeline
1.	Insolvency Resolution Process Cost	N.A	Actual	100.00	On Actual basis	Within 90 days from the effective date
2.	Unsecured Financial Creditors (except related party)	1104.07	1104.07	1104.07	100.00	Within 90 days from the effective date
3.	Unsecured Financial related party)	1110.56	573.02	573.02	100.00	Within 90 days from the effective date
4.	Operational Creditors (Workmen & Employees)	0	0	0	0.00	N.A.
5.	Operational Creditors (statutory dues)	2141.95	1824.97	679.00	37.21	Within 90 days from the effective date
6.	Operational Creditors (Others)	1.74	1.26	0.63	50.00	Within 90 days from the effective date
7.	Other Creditors ( Related Party)	1.34	1.34	0.67	50.00	Within 90 days from the effective date
8.	Contingent Liability	N.A	N.A	75.00	N.A	Within 90 days from the effective date
	Total	4359.66	3504.66	2532.39

Remarks

CIRP cost will be paid on actual basis and in case actual CIRP cost is more than Rs 1.00 crore additional amount will be paid by RA and in case actual CIRP cost is less than Rs 1.00 crore than balance will remain in CD account.

B. The indicative timelines as per the resolution plan are as under: -

F. Mandatory Contents of Resolution Plan

a)

Management of Company after resolution by the new directors to be appointed by the resolution applicant and it is proposed that consortium member Mr Anoop Kumar Mittal and Sandeep Gupta or their nominees shall be the directors.

b)

Term of the resolution plan for settlement of CIRP cost and debts is within 90 days from the date of approval of resolution plan. Further it is proposed that the timeline to complete the CD project is 27 months with grace period of 12 months from effective date.

c)

Implementation and Supervision of the resolution plan will be by the monitoring committee comprising of 3 members, one to be appointed by Financial Creditors, one by Resolution Applicant and one Insolvency Professional. COC has decided to appoint Resolution Professional as Insolvency Professional in the monitoring committee.”

D. SOURCES OF FUNDING /PROPOSAL FOR FUNDING

“The Resolution Applicant proposes to use a mix of debt and equity for the purpose of funding the revival of the said Project. In addition, the Resolution Applicant shall have a right to mortgage all the Projects Lands/other Assets in favour of any Bank, Financial Institution/ NBFC for raising loans, and the loan amount raised out of such mortgaged shall be used for completion of the said project and Implementation of the Resolution Plan in this respect, the Resolution Professional shall issue a Public Notice in a widely circulated newspaper. The said certified copies of the Project Land /Other Assets, sale deed shall be handed over to such bank/ financial Institution/NBFC from where the Resolution Applicant proposes to raise loans against the Project land/Building and such bank/ financial Institution/ NBFC shall accept the said certified copies of the sale deed and shall be free to create equitable mortgage in respect of the Project land. In addition to the above arrangement, Consortium of Resolution Applicant have combined net worth of around Rs. 120.00 Crore which comprises liquid cash in the form of FDs/Mutual Funds/PPF etc., of around Rs.10.00 Crores.”

“7.

The amounts provided for the stakeholders under the Resolution Plan is as under:

SI. No	Category of Stakeholder*	Sub-Category of Stakeholder	Amount Claimed	Amount Admitted	Amount Provided under the Plan#	Amount Provided to the Amount Claimed %
1	2	3	4	5	6	7
1	Secured Financial Creditors	(a) Creditors not having a right to vote under sub-section (2) of section 21	0	0	0	0
		b) Other than (a) above: (i) who did not vote in favour of the resolution Plan	0 0	0 0	0 0	0 0
		(ii) who voted in favour of the resolution plan	0	0	0	0
		Total [(a)+(b)]	0	0	0	0
2	Unsecured Financial Creditors	(a) Creditors not having a right to vote under sub-section (2) of section 21	1110.56	573.02	573.02	51.60
		(b) Other than (a) above:
		(i) who did not vote in favour of the resolution Plan	0	0	0	0.00
		(ii) who voted in favour of the resolution plan	1104.07	1104.07	1104.07	100.00
		Total [(a)+(b)]	2214.63	1677.09	1677.09	75.73
		(a) Related Party of Corporate Debtor	0	0	0	0.00
		(b) Other than (a) above:
		(i) Government	2141.95	1824.97	679.00	31.70
		(ii) Workmen	0	0	0	0.00
		(iii) Employees	0	0	0	0.00
		(iv) Others	1.74	1.26	0.63	36.21
		Total [(a)+(b)]	2143.69	1826.23	679.63	31.70
4	Other debts and dues	(a) Related party claims	1.34	1.34	0.67	50.00
		(b) Contingent Liabilities	0.00	0.00	75.00	N.A
Grand Total		4359.66	3504.66	2432.39	54.07

*If there are sub-categories in a category, please add rows for each sub-category.

#Amount provided over time under the Resolution Plan and includes estimated value of non-cash components. It is not NPV.]

IA. No. 2551/ND/2023

“49.

Rainbow Papers (supra) did not notice the ‘waterfall mechanism’ under Section 53 – the provision had not been adverted to or extracted in the judgment. Furthermore, Rainbow Papers (supra) was in the context of a resolution process and not during liquidation. Section 53, as held earlier, enacts the waterfall mechanism providing for the hierarchy or priority of claims of various classes of creditors. The careful design of Section 53 locates amounts payable to secured creditors and workmen at the second place, after the costs and expenses of the liquidator payable during the liquidation proceedings. However, the dues payable to the government are placed much below those of secured creditors and even unsecured and operational creditors. This design was either not brought to the notice of the court in Rainbow Papers (supra) or was missed altogether. In any event, the judgment has not taken note of the provisions of the IBC which treat the dues payable to secured creditors at a higher footing than dues payable to Central or State Government.

50.

The Gujarat Value Added Tax Act, 2003 no doubt creates a charge in respect of amounts due and payable or arrears. It would be possible to hold [in the absence of a specific enumeration of government dues as in the present case, in Section 53(1)(e)] that the State is to be treated as a ‘secured creditor’. However, the separate and distinct treatment of amounts payable to secured creditor on the one hand, and dues payable to the government on the other clearly signifies Parliament’s intention to treat the latter differently - and in the present case, having lower priority. As noticed earlier, this intention is also evident from a reading of the preamble to the Act itself.

51.

According to the principles of statutory interpretation, when an enactment uses two different expressions, they cannot be construed as having the same meaning. It was held in Member, Board of Revenue v. Anthony Paul Benthall³⁶ that:

“When two words of different import are used in a statute, in two consecutive provisions, it would be difficult to maintain that they are used in the same sense…”

This idea is reflected in a subsequent judgment in Brihan Mumbai Mahanagarpalika & Anr. v. Willington Sports Club & Ors.³⁷

52.

The views expressed by the present judgment finds support in the decision reported as Sundaresh Bhatt, Liquidator of ABG Shipyard v. Central Board of Indirect Taxes and Customs38. In that case, Section 142A of the Customs Act 1962 was in issue – authorities had submitted that dues payable to it were to be treated as ‘first charge’ on the property of the assessee concerned. In the resolution process, it was argued that the Customs Act, 1962 acquired primacy and had to be given effect to. This court, after noticing the overriding effect of Section 238 of the IBC, held as follows:

“55.

For the sake of clarity following questions, may be answered as under:

(a)

Whether the provisions of the IBC would prevail over the Customs Act, and if so, to what extent?

The IBC would prevail over the Customs Act, to the extent that once moratorium is imposed in terms of Sections 14 or 33(5) of the IBC as the case may be, the respondent authority only has a limited jurisdiction to assess/ determine the quantum of customs duty and other levies. The respondent authority does not have the power to initiate recovery of dues by means of sale/confiscation, as provided under the Customs Act.

(b)

Whether the respondent could claim title over the goods and issue notice to sell the goods in terms of the Customs Act when the liquidation process has been initiated?

Answered in negative.

56.

On the basis of the above discussions, following are our conclusions:

(i)

Once moratorium is imposed in terms of Sections 14 or 33(5) of the IBC as the case may be, the respondent authority only has a limited jurisdiction to assess/ determine the quantum of customs duty and other levies. The respondent authority does not have the power to initiate recovery of dues by means of sale/confiscation, as provided under the Customs Act.

(ii)

After such assessment, the respondent authority has to submit its claims (concerning customs dues/operational debt) in terms of the procedure laid down, in strict compliance of the time periods prescribed under the IBC, before the adjudicating authority.

(iii)

In any case, the IRP/RP/liquidator can immediately secure goods from the respondent authority to be dealt with appropriately, in terms of the IBC.”

Similarly, in Duncans Industries Ltd. v. AJ Agrochem³⁹, Section 16G of the Tea Act, 1953 which required prior consent of the Central Government (for initiation of winding up proceedings) was held to be overridden by the IBC. In a similar manner, it is held that Section 238 of the IBC overrides the provisions of the Electricity Act, 2003 despite the latter containing two specific provisions which open with non-obstante clauses (i.e., Section 173 and 174). The position of law with respect to primacy of the IBC, is identical with the position discussed in Sundaresh Bhatt and Duncan Industries (supra) [refer also: Innoventive Industries (supra), CIT v. Monnet Ispat & Energy Ltd.⁴⁰, Ghanashyam Mishra & Sons (P) Ltd. v. Edelweiss Asset Reconstruction Co. Ltd.⁴¹, and Jagmohan Bajaj v. Shivam Fragrances Private Limited⁴²].

53.

In view of the above discussion, it is held that the reliance on Rainbow Papers (supra) is of no avail to the appellant. In this court’s view, that judgment has to be confined to the facts of that case alone.

54.

Lastly, the liquidator had urged that without registration of charge, the same was unenforceable under liquidation proceedings. Section 77 of the Companies Act, 2013 reads as follows:

“77.

Duty to register charges, etc.—(1) It shall be the duty of every company creating a charge within or outside India, on its property or assets or any of its undertakings, whether tangible or otherwise, and situated in or outside India, to register the particulars of the charge signed by the company and the charge-holder together with the instruments, if any, creating such charge in such form, on payment of such fees and in such manner as may be prescribed, with the Registrar within thirty days of its creation: Provided that the Registrar may, on an application by the company, allow such registration to be made within a period of three hundred days of such creation on payment of such additional fees as may be prescribed: Provided further that if registration is not made within a period of three hundred days of such creation, the company shall seek extension of time in accordance with section 87: Provided also that any subsequent registration of a charge shall not prejudice any right acquired in respect of any property before the charge is actually registered.

(2)

Where a charge is registered with the Registrar under sub-section (1), he shall issue a certificate of registration of such charge in such form and in such manner as may be prescribed to the company and, as the case may be, to the person in whose favour the charge is created.

(3)

Notwithstanding anything contained in any other law for the time being in force, no charge created by a company shall be taken into account by the liquidator or any other creditor unless it is duly registered under sub-section (1) and a certificate of registration of such charge is given by the Registrar under sub-section (2).

(4)

Nothing in sub-section (3) shall prejudice any contract or obligation for the repayment of the money secured by a charge.”

55.

Section 78 enacts, that when a company whose property is subject to charge, fails to register it, the charge holder (or the person entitled to the charge over the company’s assets) can seek its registration. Section 3 (31) of the IBC defines “security interest” in the widest terms. In this court’s opinion, the liquidator cannot urge this aspect at this stage, because of the concurrent findings of the NCLT and the NCLAT that PVVNL is a secured creditor.

56.

The record further shows that after the NCLT passed its order, the appellant preferred its claim on 10.04.2018. Based on that application, the liquidator had filed an application before the NCLT for modification of its order dated 21.08.2018, and contended that PVVNL also came under the definition of ‘secured operational creditor’ in realization of its dues in the liquidation proceedings as per law. The application sought amendment of the list of stakeholders. The application was allowed. In view of these factual developments, this Court does not consider it appropriate to rule on the submissions of the liquidator vis-a-vis the fact of non-registration of charges under Section 77 of the Companies Act, 2013.

57.

For the above reasons, it is held that the appeal deserves to fail. At the same time, the liquidator is directed to decide the claim exercised by PVVNL in the manner required by law. It shall complete the process within 10 weeks from the date of pronouncement of this decision, after providing such opportunity to the appellant, as is necessary under law.”

“77.6.1

The assessment about maximization of the value of assets, in the scheme of the Code, would always be subjective in nature and the question, as to whether a particular resolution plan and its propositions are leading to maximisation of value of assets or not, would be the matter of enquiry and assessment of the Committee of Creditors alone. When the Committee of Creditors takes the decision in its commercial wisdom and by the requisite majority; and there is no valid reason in law to question the decision so taken by the Committee of Creditors, the adjudicatory process, whether by the Adjudicating Authority or the Appellate Authority, cannot enter into any quantitative analysis to adjudge as to whether the prescription of the resolution plan results in maximisation of the value of the assets or not. The generalised submissions and objections made in relation to this aspect of value of maximisation do not, by themselves, make out a case of interference in the decision taken by the Committee of Creditors in its commercial wisdom.”

“46.

This is the reason why Regulation 38(1A) speaks of a resolution plan including a statement as to how it has dealt with the interests of all stakeholders, including operational creditors of the corporate debtor. Regulation 38(1) also states that the amount due to operational creditors under a resolution plan shall be given priority in payment over financial creditors. If nothing is to be paid to operational creditors, the minimum, being liquidation value - which in most cases would amount to nil after secured creditors have been paid - would certainly not balance the interest of all stakeholders or maximise the value of assets of a corporate debtor if it becomes impossible to continue running its business as a going concern. Thus, it is clear that when the Committee of Creditors exercises its commercial wisdom to arrive at a business decision to revive the corporate debtor, it must necessarily take into account these key features of the Code before it arrives at a commercial decision to pay off the dues of financial and operational creditors. There is no doubt whatsoever that the ultimate discretion of what to pay and how much to pay each class or subclass of creditors is with the Committee of Creditors, but, the decision of such Committee must reflect the fact that it has taken into account maximising the value of the assets of the corporate debtor and the fact that it has adequately balanced the interests of all stakeholders including operational creditors. This being the case, judicial review of the Adjudicating Authority that the resolution plan as approved by the Committee of Creditors has met the requirements referred to in Section 30(2) would include judicial review that is mentioned in Section 30(2)(e), as the provisions of the Code are also provisions of law for the time being in force. Thus, while the Adjudicating Authority cannot interfere on merits with the commercial decision taken by the Committee of Creditors, the limited judicial review available is to see that the Committee of Creditors has taken into account the fact that the corporate debtor needs to keep going as a going concern during the insolvency resolution process; that it needs to maximise the value of its assets; and that the interests of all stakeholders including operational creditors has been taken care of. If the Adjudicating Authority finds, on a given set of facts, that the aforesaid parameters have not been kept in view, it may send a resolution plan back to the Committee of Creditors to re-submit such plan after satisfying the aforesaid parameters. The reasons given by the Committee of Creditors while approving a resolution plan may thus be looked at by the Adjudicating Authority only from this point of view, and once it is satisfied that the Committee of Creditors has paid attention to these key features, it must then pass the resolution plan, other things being equal.”

“65.

Ultimately, the Hon’ble Supreme Court allowed the Appeal and set aside the Order of the NCLT. The above Judgement also fully supports the view that Adjudicating Authority could not have approved the plan implicating the land which was owned by the Appellant in the CIRP Process of the Corporate Debtor.

66.

At this stage, we may also notice the provisions of Uttar Pradesh Industrial Area Development Act, 1976. This Act, 1976 was enacted to provide for the constitution of an authority for the development of certain areas in the State into industrial and urban township and for matters connected therewith. The Appellant is an authority constituted under Section 3 of the Act. Section 7 of the Act provides:

“the Authority may sell, lease or otherwise transfer whether by auction allotment or otherwise any land or building belonging to the Authority in the industrial development area on such terms and conditions as it may, subject to any rules that may be made under this Act, think fit to impose”.

67.

The transfer of land thus is statutorily governed and terms and conditions lays down by authority are statutorily protected. Resolution Plan which contains provisions for transfer of the project of the land contrary to the terms and conditions of the lease deed under which the project land was leased out to the land holding company is contrary to the terms and conditions of the lease deed as well as Section 7 of the UP Industrial Area Development Act, 1976. Resolution Plan thus was clearly in breach of the provisions of the 1976 Act which cannot be sustained.

68.

We have noticed the statutory provision, that Explanation to Section 18(1)(f) clearly contemplates that assets of subsidiary company are entirely different from assets of the holding company and principle of lifting of veil cannot be invoked contrary to statutory prescription as in the present case that is Section 18(1)(f).

69.

Now on the question as to whether the Resolution Plan could have contained the provision obligating the Appellant to transfer lease hold right in favour of SRA or any third entity. It is sufficient to notice the terms and conditions of the lease deed under which land was leased out to the land holding company. For transfer of plot, lease deed contains following terms and conditions in lease dated 01.09.2010:

“TRANSFER OF PLOT

1.

Without obtaining the completion certificate the Lessee shall have the right to sub-divide the allotted plot into suitable smaller plots as per planning norms and to transfer the same to the interested parties up to 31.03.2010 or as decided by the Lessor, with the prior approval of LESSOR on payment of transfer charges @ 2% of allotment rate. However, the area of each of such sub-divided plots should not be less than 20,000 sq. mts. However, individual flat/plot will be transferable with prior approval of the LESSOR as per the following conditions: -

(i)

The dues of LESSOR towards cost of land shall be paid in accordance with the payment schedule specified in the Lease Deed before executing of sub-lease deed of the flat.

(ii)

The lease deed has been executed.

(iii)

Transfer of flat will be allowed only after obtaining completion certificate for respective phase by the Lessee.

(iv)

The sub-Lessee undertakes to put to use the premises for the residential use only.

(v)

The Lessee has obtained building occupancy certificate from Building Cell/Planning Section, Greater NOIDA.

(vi)

First sale/transfer of a flat/plot to an allottee shall be through a Sub-lease/Lease Deed to be executed on the request of the Lessee to the Lessor in writing.

(vii)

No transfer charges will be payable in case of first sale, including the built-up premises on the subdivided plot(s) as described above. However, on subsequent sale, transfer charges shall be applicable on the prevailing rates as fixed by the LESSOR.

(viii)

Rs. 1000/- shall be paid as processing fee in each case of transfer of flat in addition to transfer charges.”

70.

The transfer of plot as per terms and conditions of the lease could not have been effected without approval of the Appellant. The Respondent themselves realized that without Appellant transferring the plot no right can be accrued in favour of allottees or SRA that is why the conditions was provided in the Resolution Plan asking the direction to the Appellant to transfer the project land in favour of the SRA or Special Purpose Entity. Thus, Resolution Plan could not have contained clause for transfer of land without there being any approval of the Appellant for such transfer. Further direction to the Appellant to transfer while waiving of its entitlement and charges is clearly contrary to the terms and conditions of the lease and not in a public interest.

71.

At this stage, we may also notice one more submission which was pressed by the Learned Counsel for the Successful Resolution Applicant Alpha Corp Development Private Limited. It is submitted by Learned Counsel for the Respondent No. 2-SRA relying on Section 3 and Section 5 of Uttar Pradesh Apartment (Promotion of Construction, Ownership and Maintenance) Act, 2010 that allottees of project Earth Saphire Court and Tech One have heritable interest in the area of land leased by the Appellant from the date of execution of the respective apartment buyer agreement. Submission is that allottees themselves have become owner from the date of apartment buyers agreement has been executed. We may notice few provisions of Uttar Pradesh Apartment (Promotion of Construction, Ownership and Maintenance) Act, 2010. Section 3, subclause (b) defines “apartment” in following manner:

“Section 3(b), defines “apartment” means a part of any property, intended for any type of independent use, including enclosed spaces located on one or more floors or any part or parts thereof, in a building to be used for residential or official purposes or for the purpose of practicing any profession, or for carrying on any occupation, trade or business (excluding shopping malls and multiplexes) or for such other use as may be prescribed, and with a direct exit to a public street, road or to a common area leading to such street, road and includes any garage or room (whether or not adjacent to the building in which such apartment is located) provided by the promoter for use by the owner of such apartment for parking or, as the case may be for the residence of any domestic aide employed in such apartment;”

“Section 3(d) defines “apartment owner” means the person or persons owning an apartment or the promoter or his nominee in case of unsold apartments and an undivided interest in the common areas and facilities appurtenant to such apartment in the percentage specified in the Deed of Apartment and includes the lessee of the land on which the building containing such apartment has been constructed, where the lease of such land is for a period of thirty years or more;”

“Section 3(g) defines “building” means a building constructed on any land, containing four or more apartments, or two or more buildings in any area designated as a block, each containing two or more apartments with a total of four or more apartments in all such buildings; Provided that an independent house constructed in a row with independent entry and exit, whether or not adjoining to other independent houses, shall not constitute a building.”

72.

Section 4(5) of 2010 Act lays down following:

“4. General Liabilities of Promoter-

…………

(5)

An apartment may be transferred by the promoter to any person only after obtaining the completion certificate from the prescribed sanctioning authority concerned as per building byelaws. The completion certificate shall be obtained by promoter from prescribed authority within the period of two years from the date of sale agreement. Provided that if the construction work is not completed within the stipulated period, with the permission of the prescribed authority: Provided further that if the completion certificate is not issued by the prescribed sanctioning authority within three months of submission of the application by the promoter complete with all certificates and other documents required, the same shall be deemed to have been issued after the expiry of three months.

Explanation. - For the purposes of this sub-section “completion” means the completion of the construction works of a building as a whole or the completion of an independent block of such building, as the case may be.”

73.

The builders buyer agreement which was entered into by allottees with the corporate debtor cannot be said to be apartment buyer agreement. Apartment Buyer Agreement is executed after completion and obtaining the completion certificate from the prescribed sanctioning authority. In the present case, in the Information Memorandum, it clearly gives the details of status of the project land which indicates that no project is complete. The apartment as contemplated in 2010 Act are not even in existence in the facts of the present case hence there is no question of applicability of Section 5. Section 5 of the Act deals with rights of apartment owners. Section 5(1) lays down following:

“5 (1) Every person to whom any apartment is sold or otherwise transferred by the promoter shall subject to the other provisions of this Act, be entitled to the exclusive ownership and possession of the apartment so sold or otherwise transferred to him.”

74.

The present is not a case where any apartment has been transferred in favour of the allottees. We are of the view that submission made on behalf of the SRA relating to 2010 Act are misconceived.”

“15.

That Applicant has also made an allegation that the Resolution Plan seeks to alter the terms and conditions of the lease deed executed with the Applicant and the Corporate Debtor. It is not correct because Resolution Plan will be approved as per applicable provisions of IBC.

16.

It is submitted that no term of the resolution plan contemplates an alteration in any material term of the lease deed entered into between the Applicant and the Corporate Debtor. 20. That applicant has also alleged that Resolution Plan does not have any stipulation about land use. It is submitted that as per the lease deed the plot/land can be used only for Hospital, Research & Training Institute and SRA can only use the said plot in the permitted category use, so there is no requirement to mention it.

32.

It is submitted that to the best of the knowledge of the RP, the SRA does not seek to mortgage the land in a manner prohibited under the terms of the lease agreement entered into between the Applicant and the Corporate Debtor.”

“141.

After considering the judgment of this Court in the case of Arcelormittal India Private Limited vs. Satish Kumar Gupta and others⁴⁶ and the relevant provisions of the I&B Code, this court further observed in K. Sashidhar (supra) thus:

“52.

As aforesaid, upon receipt of a “rejected” resolution plan the adjudicating authority (NCLT) is not expected to do anything more; but is obligated to initiate liquidation process under Section 33(1) of the I&B Code. The legislature has not endowed the adjudicating authority (NCLT) with the jurisdiction or authority to analyse or evaluate the commercial decision of CoC much less to enquire into the justness of the rejection of the resolution plan by the dissenting financial creditors. From the legislative history and the background in which the I&B Code has been enacted, it is noticed that a completely new approach has been adopted for speeding up the recovery of the debt due from the de− faulting companies. In the new approach, there is a calm period followed by a swift resolution process to be completed within 270 days (outer limit) failing which, initiation of liquidation process has been made inevitable and mandatory. In the earlier regime, the corporate debtor could indefinitely continue to enjoy the protection given under Section 22 of the Sick Industrial Companies Act, 1985 or under other such enactments which has now been forsaken. Besides, the commercial wisdom of CoC has been given paramount status without any judicial intervention, for ensuring completion of the stated processes within the timelines prescribed by the I&B Code. There is an intrinsic assumption that financial creditors are fully informed about the viability of the corporate debtor and feasibility of the proposed resolution plan. They act on the basis of thorough examination of the proposed resolution plan and assessment made by their team of experts. The opinion on the subject−matter expressed by them after due deliberations in CoC meetings through voting, as per voting shares, is a collective business decision. The legislature, consciously, has not provided any ground to challenge the “commercial wisdom” of the individual financial creditors or their collective decision before the adjudicating authority. That is made non−justiciable.” (emphasis supplied)

142.

This Court has held, that it is not open to the Adjudicating Authority or Appellate Authority to reckon any other factor other than specified in Sections 30(2) or 61(3) of the I&B Code. It has further been held, that the commercial wisdom of CoC has been given paramount status without any judicial intervention for ensuring completion of the stated processes within the timelines prescribed by the I&B Code. This Court thus, in unequivocal terms, held, that there is an intrinsic assumption, that financial creditors are fully informed about the viability of the corporate debtor and feasibility of the proposed resolution plan. They act on the basis of thorough examination of the proposed resolution plan and assessment made by their team of experts. It has been held, that the opinion expressed by CoC after due deliberations in the meetings through voting, as per voting shares, is a collective business decision. It has been held, that the legislature has consciously not provided any ground to challenge the “commercial wisdom” of the individual financial creditors or their collective decision before the Adjudicating Authority and that the decision of CoC’s ‘commercial wisdom’ is made non−justiciable.

143.

This Court in Committee of Creditors of Essar Steel India Limited through Authorised Signatory (supra) after referring to the judgment of this Court in the case of K. Sashidhar (supra) observed thus:

“64.

Thus, what is left to the majority decision of the Committee of Creditors is the “feasibility and viability” of a resolution plan, which obviously takes into account all aspects of the plan, including the manner of distribution of funds among the various classes of creditors. As an example, take the case of a resolution plan which does not pro− vide for payment of electricity dues. It is certainly open to the Committee of Creditors to suggest a modification to the prospective resolution applicant to the effect that such dues ought to be paid in full, so that the carrying on of the business of the corporate debtor does not become impossible for want of a most basic and essential element for the carrying on of such business, namely, electricity. This may, in turn, be accepted by the resolution applicant with a consequent modification as to distribution of funds, payment being provided to a certain type of operational creditor, namely, the electricity distribution company, out of upfront payment offered by the proposed resolution applicant which may also result in a consequent reduction of amounts payable to other financial and operational creditors. What is important is that it is the commercial wisdom of this majority of creditors which is to determine, through negotiation with the prospective resolution applicant, as to how and in what manner the corporate resolution process is to take place.” (emphasis supplied)

144.

This Court held, that what is left to the majority decision of CoC is the “feasibility and viability” of a resolution plan, which is required to take into account all aspects of the plan, including the manner of distribution of funds among the various classes of creditors. It has further been held, that CoC is entitled to suggest a modification to the prospective resolution applicant, so that carrying on the business of the Corporate Debtor does not become impossible, which suggestion may, in turn, be accepted by the resolution applicant with a consequent modification as to distribution of funds, etc. It has been held, that what is important is, the commercial wisdom of the majority of creditors, which is to determine, through negotiation with the prospective resolution applicant, as to how and in what manner the corporate resolution process is to take place.

145.

The view taken in the case of K. Sashidhar (supra) and Committee of Creditors of Essar Steel India Limited through Authorised Signatory (supra) has been reiterated by another three Judges Bench of this Court in the case of Maharashtra Seamless Limited (supra).

146.

In all the aforesaid three judgments of this Court, the scope of jurisdiction of the Adjudicating Authority (NCLT) and the Appellate Authority (NCLAT) has also been elaborately considered. It will be relevant to refer to paragraph 55 of the judgment in the case of K. Sashidhar (supra), which reads thus:

“55.

Whereas, the discretion of the adjudicating authority (NCLT) is circumscribed by Section 31 limited to scrutiny of the resolution plan “as approved” by the requisite per cent of voting share of financial creditors. Even in that enquiry, the grounds on which the adjudicating authority can reject the resolution plan is in reference to matters specified in Section 30(2), when the resolution plan does not conform to the stated requirements. Reverting to Section 30(2), the enquiry to be done is in respect of whether the resolution plan provides: (i) the payment of insolvency resolution process costs in a specified manner in priority to the repayment of other debts of the corporate debtor, (ii) the repayment of the debts of operational creditors in prescribed manner, (iii) the management of the affairs of the corporate debtor, (iv) the implementation and supervision of the resolution plan, (v) does not contravene any of the provisions of the law for the time being in force, (vi) conforms to such other requirements as may be specified by the Board. The Board referred to is established under Section 188 of the I&B Code. The powers and functions of the Board have been delineated in Section 196 of the I&B Code. None of the specified functions of the Board, directly or indirectly, pertain to regulating the manner in which the financial creditors ought to or ought not to exercise their commercial wisdom during the voting on the resolution plan under Section 30(4) of the I&B Code. The subjective satisfaction of the financial creditors at the time of voting is bound to be a mixed baggage of variety of factors. To wit, the feasibility and viability of the proposed resolution plan and including their perceptions about the general capability of the resolution applicant to translate the projected plan into a reality. The resolution applicant may have given projections backed by normative data but still in the opinion of the dissenting financial creditors, it would not be free from being speculative. These aspects are completely within the domain of the financial creditors who are called upon to vote on the resolution plan under Section 30(4) of the I&B Code.”

147.

It has been held, that in an enquiry under Section 31, the limited enquiry that the Adjudicating Authority is permitted is, as to whether the resolution plan provides:

(i)

the payment of insolvency resolution process costs in a specified manner in priority to the repayment of other debts of the corporate debtor,

(ii)

the repayment of the debts of operational creditors in prescribed manner,

(iii)

the management of the affairs of the corporate debtor,

(iv)

the implementation and supervision of the resolution plan,

(v)

the plan does not contravene any of the provisions of the law for the time being in force,

(vi)

conforms to such other requirements as may be specified by the Board.”

“57.

It could thus be seen, that the legislature has given paramount importance to the commercial wisdom of CoC and the scope of judicial review by Adjudicating Authority is limited to the extent provided under Section 31 of I&B Code and of the Appellate Authority is limited to the extent provided under sub-Section (3) of Section 61 of the I&B Code, is no more res integra.”

“CHAPTER 8

SPECIFIC RELIEFS AND WAIVERS

Regulation 37(1) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulation 2016 provides that a resolution plan may provide for the measures required for implementing it, including but not limited to obtaining necessary approvals from the Governmental Authorities and other Authorities. Accordingly, the Resolution Applicant request all Governmental Authorities to grant any relief / concessions or dispensation as may be required for a fair and proper implementation of the Transactions contemplated under this Resolution Plan in accordance with its terms and conditions.

The Resolution Applicant aims to implement this Resolution Plan for the revival of the C.D. by requesting grant of the assistance, reliefs, and concessions as set out under this Resolution Plan. If such reliefs are not granted even then the Plan will not be withdrawn but will remain valid. Notwithstanding anything to the contrary mentioned in the Resolution Plan, the obligations of the Resolution Applicant in respect of, the quantum of payment to be made or terms of settlement proposed in respect of creditor of the C.D. is not conditional upon any conditions, assumptions, relief/concessions and/or qualifications.

In particular, and without limiting the foregoing, the Resolution Applicant seeks the following reliefs and concessions including from Adjudicating Authority and fi^-om other Governmental Authorities, which the Resolution Applicant believe are required for implementing this Resolution Plan:

This Resolution Plan is based on the following reliefs and waivers sought against the full and final settlement of all the liabilities and claims of all the creditors towards this Resolution Plan.

1. FROM THE APPROVING AUTHORITIES:

i.

To the extent permissible under the IBC or any other License cancellation should be revoked and should be renewed for the implementation period without any fee, interest and penalty or other charges payment

ii.

License Compliance conditions should be suspended from the date of grant of License till the Effective Date without any penalty/composition fee, interest or any other charges.

iii.

To the extent permissible under the IBC or any other Applicable Law for the time being in force, applicable conditions under the provisions of The U.P. (Regulation of Buildings Operations) Act, 1958 or under any statute regarding restriction to obtain license should be waived off and the Licenses in the name of earlier Corporate Debtor, should be renewed in the name of current Corporate Debtor and /or Project SPV, as the case may be.

iv.

Resolution Applicant should not be made responsible for any non-compliances before the Effective Date.

v.

The Resolution Applicant proposed that R.A shall have the right to accept or not to accept any material amendment to the Resolution Plan approved by the COC Members and the Adjudicating Authority. They shall not create any additional financial pay out including but not limited to increased payment to any of the creditors as provided in the Resolution plan or liability for the Resolution Applicant, or reduction in time period-for payment of any liability or imposition /non extinguishment of significant non-financial Liability.

vi.

Any work of construction that has been executed by the previous management in the project till date for implementation of the Project, the Resolution Applicant shall not be liable for the same.

vii.

Recovery from related parties and Group Companies of Corporate Debtor will be made. The relief is sought by the Resolution Applicant from the Hon'ble NCLT to direct the related parties and Group Companies of Corporate Debtor to remit back the money to Resolution Applicant which has been paid to such related parties and Group Companies in violation of the provisions of IBC and Companies Act to defraud the Home Buyers/Creditors.

viii.

Waiver/Exemption from Shareholder's Approval vide MCA Circular dated October 25, 2017 bearing No IBC/01/2017 with regard to any action required in a Resolution Plan for a Company under Insolvency Process.

ix.

Liabilities Claimed by Secured Financial Creditors — Specific Order to the Financial Creditors that all the debts of the lenders be it due and pending on any account, gets fully and finally satisfied and extinguished, in terms of this Resolution Plan (on final payment of the offer as accepted in the approved Resolution Plan) and there remains nothing to be recovered out of such dues, from the Resolution Applicant against such loans/dues and the Charge/Lien created over the Fixed and Current Assets of the Company is completely released/discharged and free from any encumbrances on completion of the Approved Resolution Plan.

x.

Specific Order to the Financial Creditors to “UPGRADE” the Account of Corporate Debtor with Banks/FI under the CIBIL Mechanism to “Standard Category” from. NPA on the completion of the Resolution Pia enable the New Promoters (Resolution Applicants) to revive the business of Corporate Debtor afresh and such action would enable the Resolution Applicant to quickly turn around the Corporate Debtor.

xi.

Specific Order by NCLT that existing charge of the Un-Secured/Secured Financial Lenders/COC will not extend to current assets created from funds arranged/infused by Resolution Applicant.

xii.

Specific Order and Approval by NCLT to withdraw all the Recovery Proceedings against the Corporate Debtor under DRT, SARFAESI and any other law shall be withdrawn by the Secured Financial Creditors/COC on completion of Approved Resolution Plan for all loans of all Secured/unsecured/ collateral/allottees Financial Creditors.

xiii.

It is clarified that no right of subrogation shall be available to existing shareholders/promoters/other party in case of invocation of/payment by existing shareholders/promoters under their existing guarantees/contractual comforts and all such rights shall stand waived/extinguished against the Corporate Debtor as on the Date of Approval by NCLT of the Resolution Plan.

xiv.

Litigations before various Courts - Waiver Approval by NCLT for any case pending before Industrial Court, Labour Court, Civil Court, Criminal Court, RERA Court, Consumer Court or any Indian Court/tribunal for recovery or others related to acts before commencement of corporate Insolvency Process which may arise after the approval of Resolution Plan.

xv.

Liabilities claimed by the Promoters — Waiver Approval by NCLT for all Liabilities claimed by Promoters and Related Parties for Unsecured Loans and Operational/Other Creditors as on insolvency commencement date to be treated as Fully and Finally Settled with “NIL Value” (as Value of Assets of Corporate Debtor is less than the Dues to Secured Creditors as per Information Memorandum presented by the IP) and No Due remains to be paid over ever after the waiver.

xvi.

Liabilities accrued/due under Statutory Dues — Waiver Approval by NCLT for all Statutory Dues accrued or may get accrued due to past liabilities as on insolvency commencement date to the Statutory Authorities i.e., Department concerned with Income Tax, Sales Tax/VAT/GST, Excise etc. by way of Taxes, Fees, Penalties, Penal Interest, TDS, VAT, GST etc.

xvii.

Liabilities claimed under Operational Creditors — Waiver Approval by NCLT for all Other Liabilities claimed by Operational/Other Creditors as on the Date of Approval of the Resolution Plan by NCLT to be treated as Fully and Finally Settled with the value as mentioned in Resolution Plan.

xviii.

Liabilities that may accrue under Companies Act, Rules and Regulations Waiver Approval by NCLT for any past liabilities, penalties and any form of payment by way of Late Fees, Damages etc. which occurred or become due because of any non-compliance related to Companies Act and Rules till completion of Approved Resolution Plan.

xix.

Liabilities accrued/may accrue under Various Acts & Laws — Waiver from past Liabilities related to all Government Authorities with regard to non-compliances of various Statutes to be adhered related to Consent, Payments of Fees and all Dues, Certification etc. by the Corporate Debtor. The Waiver also includes any dues relating to Interest, Penal Interest, Penalty, Interest on Penalty, any kind of Late Fee as well as Damages.

xx.

Approval by NCLT to allow the Carry Forward, set off and Adjustment of Losses of Corporate Debtor available as Section 79 of Income Tax Act, 1961 is not applicable for Companies under IBC 2016 as well as Allowability of Aggregate of Brought Forward Loss and Unabsorbed Depreciation as per amended Section 115JB of the Income Tax Act, 1961 related to Minimum Alternate Tax (MAT).

xxi.

Contingent Liabilities/Legal Proceedings pursuant to Resolution Approval — Approval by NCLT for Contingent Liabilities or any suits other than those explicitly covered in the Resolution Plan, no other person or whosoever shall be eligible to receive any amount whatsoever from the Corporate Debtor, either on account of unverified claims or otherwise or through legal proceedings, etc. All legal proceedings and other contingent liabilities shall irrevocably and unconditionally stand settled and extinguished as on the Effective Date.

xxii.

Contracts made prior to Effective Date — Approval by NCLT that any onerous contract made by the Corporate Debtor subsisting before the approval of Resolution Plan shall be duly extinguished and be ineffective on approval of Resolution Plan by NCLT.

xxiii.

Claims/Rights of Existing Promoter and Promoter Group — Approval by NCLT that all claims, rights of existing promoter / promoter group against the Corporate Debtor, unless covered in the Resolution Plan, shall stand irrevocably and unconditionally extinguished and ineffective on approval of Resolution Plan.

xxiv.

Claims by Government Authorities — Approval by NCLT that claims of government authorities, in relation of all taxes etc. for period pertaining prior to the insolvency commencement date shall stand extinguished and ineffective.

xxv.

TDS Recovery from Income Tax Department — Approval by NCLT that TDS will be recovered by the R.A. from the Income Tax Department as per the Books^--of Accounts of C.D. The same amount may be adjusted if any demand arose by Income Tax. Department with the R.A.

xxvi.

Security Deposit & Other Advances Refund — Approval by NCLT that any amount of Security Deposit as advances paid by the C.D. as per Books of Accounts of C.D. shall be recoverable from the concerned persons where it has been deposited or advances paid.

xxvii.

Termination of any Negotiable Instruments — Approval by NCLT that All outstanding negotiable instruments issued by Corporate Debtor or any other person on behalf of Corporate Debtor shall stand terminated and no liability shall arise on the same on the insolvency commencement date.

xxviii. Corporate Guarantee/Indemnities by Corporate Debtor -All liabilities which may arise due to issuance of Corporate Guarantees, Indemnities, etc. provided by the Corporate Debtor (whether known or unknown) shall stand extinguished and ineffective on the insolvency commencement date.

xxix.

Revocation of Power of Attorneys — Specific Order and Approval by NCLT to treat all the power of attorneys provided to any person by the Corporate Debtor stands revoked after the Effective Date.

xxx.

Extinguishment/Revocation of Workmen Contract — Specific Order and Approval by NCLT that Any contract subsisting with respect to Workmen contractual labour before the approval of Resolution Plan shall be duly extinguished and be ineffective, which we assume has already been done.

xxxi.

The statutory authorities including but not limited to Registrar of Companies, Income Tax Department, GST Department, Labour Department, Building and other Construction Workers' Department (hereinafter “BOCW”) and Employees' provident Fund Organization (“EPFO'') Department should not initiate any proceedings,, civil as well as criminals, in respect of any non-compliance on the part of the Corporate Debtor or the Land-Owning Companies and/or in connection with the project under Applicant Laws. To the extent permissible under the IBC or any other Applicant Laws for the time being in force, the Government Authorities to waive off interest and / or penalty charged/ levied for any non- compliances under the applicable laws including but not limited to compliances under RERA, GST and income Tax against the said project.

xxxii.

All Government Authorities should waive requirement for making any filing or undertaking other compliances for the period prior to the Effective date (Including making of Annual filings with the ROC) in respect of Swati Health and Education Services Private Limited in view of non-availability of historical data in this regard.

xxxiii. Upon completion of part or whole of the Said Project, when the Resolution Applicant makes an application for obtaining the occupation-certificate to GNIDA or such other competent authority in terms of the Applicable Laws, the concerned Governmental Authority for the purpose of granting such occupation certificate (including for the other reason as may be deemed reasonable by such concerned authority) if it intends to review / verify compliance of any of these license conditions, or if conditions to issue such occupation certificate, liability to fulfil all such conditions and to provide proof of compliance of the same should be of the Resolution Applicant only for the period after the Effective Date.

xxxiv.

Goods and Service Tax — The Resolution Applicant shall be allowed time to evaluate the best GST regime that will be beneficial to the Project and allow extended time, from the Effective Date for opting into/out of such suitable regime. To the extent permissible under the IBC or any other Applicable Law for the time being in force, any duty dues payable in respect of the development right transferred in the past by the Land-Owning Companies to the Corporate Debtor shall stand waived off.

xxxv.

The respective competent authorities shall renew/approve the fire clearance in respect of the said project and the same shall extent till the Completion Date.

xxxvi.

The R.A. reserves the right to revisit or extent the timelines of the Implementation Schedule in case any unexpected huge financial burden arises on the Successful Resolution Applicant.

xxxvii. All the leasing rights with respect to the said project shall vest with the Resolution Applicant exclusively.

xxxviii. Central Board of Direct Taxes:

•

Exemption from provisions of Section 56 of the Income Tax Act, with regard to forfeiture of advances not received by the Resolution Applicant and fresh allotment of shares or transfer of shares to the Resolution Applicant or its Associates /Group/ SPV.

•

Exemption from provision of sec 56 of the IT Act.

•

Exemption from provisions of section 50CA of the Income Tax Act if applicable

xxxix.

No Buy Back agreement or subvention agreement shall be entertained and same shall stand automatically terminated on and from Effective Date. The Resolution Applicant shall be under no obligation and or responsibility to satisfy the conditions under the said agreements.

xl. Liability under BOCW shall be applicable on the Resolution Applicant to the extent of the amount spent by it on the construction of the said project. The Resolution Applicant shall not be liable or responsible toward the liability under the BOCW Act or the cost of the Said Project, as the case maybe.

xli. Under no circumstances the Governmental Authorities shall refuse the Completion certificate and the occupation certificate of the said project if the Resolution Applicant questions the liability towards BOCW on the cost of construction incurred by the erstwhile developer.

xlii. Any changes in the drawings, lay-out plan specifications etc. of the said projects shall be the sole discretion of the Resolution Applicant. In case any such changes are proposed, the Resolution Applicant shall take all steps as may be required to execute such changes.

xliii. All available Floor space index (“FSI”) whether present or in future shall be available to the Resolution Applicant for construction, maintenance, future development work, sale, transfer or deal with it in any manner as it may deem fit, including^-transferring of part or whole of its right, interest and or entitlements, including development right, as may be permissible under the applicable laws.

xliv. All FSI or Floor Area Ratio (“FAR”) which is presently available but has not been used by the erstwhile developer shall also be available to the Resolution Applicant for the aforementioned purposes,

xlv. Under this Resolution Plan, the Resolution Applicant /relevant Project SPAT shall be free to revise the Building Plan of the said project for the better commercial exploitation of the same.

xlvi. The R.A. reserves the right to resubmit the Building Plan after approval of the Resolution Plan. The approving/concerned authorities shall permit the fresh building plan on retrospective basis.

xlvii. Cooperation of employees and workmen shall be expected and deemed necessary in respect of all the details within their knowledge which are relevant to this Resolution Plan of the Resolution Applicant.

a. The Resolution Applicant shall not be responsible for any amount collected by the Corporate Debtor from any of the Un-Secured/Operational/Other creditors and not deposited with the respective statutory authorities /Government authority /semi-Government authority or any other competent authority. It is hereby clarified that the Resolution Applicant reserves the right to recover such amount afresh from the Unsecured/ Operational/ Other creditors, in case the Resolution Applicant receives any demand for such dues from the respective statutory authorities! Government authority/ semi-government authority or any other competent authority, such dues, post collection, shall be deposited by the Resolution Applicant with such statutory authority/ Government authority/semi-Government authority or any other competent authority.

b. Liabilities of Swati Health and Education Services Private Limited shall be restructured in accordance with the Resolution Plan either through an appropriate mechanism including through a scheme of arrangement or otherwise, as required and all stakeholders of Swati Health and Education Services Private Limited shall have deemed to have granted their consent in this regard, as may be required in terms of the Applicable Law.

c. The Resolution Applicant reserve the right to receive 100% of total amount and assets recovered from the Corporate Debtor and its related parties under sec 43 to 66 of IBC and under various other Applicable Laws for the time being in force.

d. The implementation of this Resolution Plan shall be dependent upon the requisite approvals from the competent Authority and shall be in accordance with the Uttar Pradesh Building Statute and Bye-laws.

e. The renewal of Occupancy Certificate, including Partial Occupancy Certificate, as the case may be, is to be issued by GNIDA or by any other Authority. Further, the GNIDA or any other Authority shall be duty bound to issue the renewal of Occupancy Certificate including the partial Occupancy Certificate, if any as the case may be and is required by the RA, subject to meeting the procedural requirements to that effect. The GNI DA shall not put any embargo or impediment, except in accordance with law, on issuance of such renew^-al of Occupancy Certificate and Partial Occupancy Certificate as and when applied by the R.A. Since the Project, subject to acceptance of the present Resolution Plan, shall be taken over by the RA herein on “as on where on basis”, the. RA under any circumstances, shall not be held liable for the wrong doings by the Corporate Debtor or the Contractors appointed by the Corporate Debtor. Further, the requirement vis-à-vis obtaining various NOCs from different governmental agencies shall stand dispersed with in favour of RA and the GNIDA or any other Authority in absence of such NOCs as mentioned foregoing shall not hinder or obstruct, in any manner whatsoever, the grant of renewal of Occupancy Certificate, subject to adherence and compliance by the RA to all the norms, upon which the sanction of the Project was granted to the Corporate Debtor. Further, in event of any unforeseen circumstances arising out of change in any government policy or judicial order, the renewal of Occupancy Certificate or the Partial Occupancy Certificate, as the case may be, could not be issued at the time of applying of the same by the RA, then in such an event, the RA shall be allowed and entitled to handover the possession based on fresh allotments. In such an event, the Project shall be deemed to be completed and no Authority or any other person shall claim any penalty whatsoever, for the want of Occupancy Certificate/renewal of Occupancy Certificate.

f. The relevant Governmental Authorities shall not initiate any investigations, actions or proceeding in relation to any non-compliances with Applicable Law by the CD during the period prior to the Effective Date. Neither shall the Resolution Applicant, nor the Company, nor their respective directors, officers and employee appointed on and as of the Closing Date be liable for any violations, liabilities, penalties or fines with respect to or pursuant to the Company not having in place requisite licenses and approvals required to undertake its business as per Applicable Law, or any non-compliances of Applicable Law by the Company. Further, the relevant Governmental Authorities. will provide a reasonable period of time after the Completion Date, for the Resolution Applicant to assess the status of any non-compliances under the Applicable Law (including with respect to applicable environmental laws, directions or orders by the Ministry of Environment and Forest, permits clearances and forest related clearances) and to procure that the Company regularizes such non-compliances under the Applicable Law existing prior to the Completion Date.

g. The Statutory Authorities/Concerned. Authorities are bound to new all the Licenses/approvals/ permissions as and when applied by the Successful Resolution Applicant. They are also bound to waive entire penalty, interest or any other charges on commercial project of C.D.

h. The Claims of all the former, Previous. Co promoter/ Suspended Directors/ Shareholders and their related Parties shall be dealt in accordance with the provisions of IBC 2016 and Rules and Regulations framed there under. Any inadvertent error in identifying such persons and their claims shall stand rectified accordingly, for treating such claims as non-Est and void-ab-into.

2. OTHER RELIEFS SOUGHT:

a. Any agreement (including any tripartite agreement) entered into between the Corporate Debtor, developer and/or any financial institution including public sector banks, private banks, non-banking finance companies, housing finance companies, shall not be applicable on, or the responsibility/obligation of, the Resolution Applicant.

b. To the extent permissible under the IBC or any other Applicable Law for the time being in force, any stamp duly/ liability payable under the any Statutory Stamp Act or any other applicable law shall be waived off.

c. On approval of Resolution Plan by COC, the Resolution Professional of this Project shall be bound to initiate the process for taking all necessary statutory approvals from the Appropriate/Concerned Authorities for the benefit of Resolution Process.

d. The State Environment Impact Assessment Authority, competent authority, shall renew the Environmental Clearance granted to all Institutional Projects of C.D and shall extend it till the Completion Date.

e. No obligation shall be imposed upon or penalties charged on Swati Health and Education Services Private Limited or the Resolution Applicant in relation to any act or omission by the Resolution Applicant on the basis of non-availability of Information.

f. To the extent permissible under the IBC or any other Applicable Law for the time being in force, GN1DA and other Government Authorities shall waive off all penalties, interest, license renewal cost/fee, and any other charges payable to GNIDA, Electricity Department and such other Government Authorities, with regard to the Resolution Applicant who is undertaking a revival of the Project in the interest of all stakeholders. As on the Effective Date, the Government Authorities shall renew all the licenses/approvals for a period of 2 to 3 years without any cost/fee to, and in favour of, the Successful Resolution Applicant in a time bound manner

g. Any Bank Accounts, Fixed Deposits, Escrow Accounts, Performance Guarantees, Bank Guarantees, residual funds in the accounts of Corporate Debtor or its promoters, and any other residuary assets related to the Institutional Projects, shall deemed to be transferred to the Resolution Applicant, without any further act or deed. It is hereby clarified that no pending liabilities shall be transferred to the Resolution Applicant.

h. The Resolution Applicant shall have a right to mortgage the Institutional Project Land & Building in favour of any Bank, Financial Institution/NBFC for raising loans, and the loan amount raised out of such mortgaged shall be used implementation of the Resolution Plan after making payment to all the creditors as per Resolution Plan. In this respect, the Resolution Professional shall issue a Public Notice in a widely circulated newspaper. The said certified copies of the Project Land sale deed/lease deed/occupancy certificate shall be handed over to such bank/ financial Institution/NBFC from where the Resolution Applicant proposes to raise loans against the Institutional Project land & building and such bank/ financial Institution/ NBFC shall accept the said certified copies of the sale deed/lease deed/occupancy certificate and shall be free to create equitable mortgage in respect of the Institutional Project land & building.

i.

All the Licenses in the name of C.D. stands automatically renewed in the name of Successful Resolution Applicant or its S.P.V. or its Nominees upon approval of the Resolution Plan. The Concerned Authorities to co-operate in this regard as and when requested by Successful Resolution Applicant.

j. The Resolution Applicant shall apply before the Governmental Authorities for renewal of all expired licenses to be granted in favour of all Institutional Project and which shall extend it till the Closing date.

k. As on Effective date, the Government Authorities shall Issue, transfer, revise, renew, and or reissue, as the case may be, all the licenses / approvals required for or in connection with the Project without any cost/ fees to, and in favour of the Resolution Applicant and or the SPV, as the case may be, in a time bound manner.

l. Road infrastructure which is part of the Master Plan of this Project, falling in the area or connecting to the Project shall not be the responsibility of the Resolution Applicant

m. The provisions for water and electricity shall be made. However, the supply thereof will not be the responsibility of the Resolution Applicant/Project SPV/ Maintenance Agency/Associates. The same shall be considered as the responsibility of the concerned agency of the Municipal Corporation/Concerned Department or any other competent authority.

3. EXTINGUISHMENT AND WAIVER OF CLAIMS AND LIABILITIES:

a. All liabilities (including without limitation for any penalty, interest, fines or fees) or obligation of the Corporate Debtor, in relation to:

i.

any investigation, inquiry or show cause, proceedings whether civil or criminal or whether pending for initiation or initiated;

ii.

any non-compliance of provisions of Laws, rules, regulations, directions, notifications, circulars, guidelines, policies, licenses, approvals, consents or permissions or any offence including offence falling under the Economic Offence Wing.

iii.

Change of control, Transfer charges, unearned increase, compensation or any other such liability whatsoever under any contract, agreement, lease license, approval, consent, privilege, or permission to which the Corporate Debtor or its subsidiaries, joint ventures or associates are entitled.

iv.

Any leasehold rights or freehold rights to moveable or immovable properties in the possession of the Corporate Debtor;

v.

Any contract agreements or commitments made by the Corporate Debtor, whether admitted or not due or contingent asserted or unasserted, crystallized or uncrystallized, known or unknown, secured or unsecured ,disputed or undisputed , present or future , whether or not set out in the Balance Sheet of the Corporate Debtor or the Profit and loss account statement of the Corporate Debtor, in relation to any period prior to the CIRP commencement date, shall be written off in full and shall be permanently extinguished or discharged appropriately , as the case may be, and the Corporate Debtor or the Resolution Applicant /SPSV or any of their or their respective affiliates/ associates/personnel shall at no point of time be, directly or indirectly, held responsible or liable in relation thereto.

b. On the settlement of dues of various Allottees as mentioned in this Resolution Plan, all obligations, claims and Liabilities^. (whether final or contingent, whether disputed or undisputed, and whether or not notified to or claimed against the Corporate Debtor) of the Corporate Debtor, all outstanding disputes or legal proceeding against the company, all right or claims of any person against the Corporate Debtor, in each case, relating to the period prior to the Closing Date, shall immediately, irrevocably and unconditionally stand extinguished, waived, withdrawn and abated on the from the “Closing Date” and no person shall have any further rights or claims in this regard.

c. Guarantees: All obligations, liabilities claim or proceeding on relation to any corporate guarantees, indemnities and all other forms of credit support provided by the Corporate Debtor and/or the Land-Owning companies prior to the Closing Date which is deemed to be Owed and due as of the insolvency commencement date, and shall immediately, irrevocably and unconditionally stand extinguished waived, withdrawn and abated on and from the closing Date. Including but not limited to any form of credit support for person that are currently affiliates, promoters or promoters' group (including the existing Promoter Group), persons acting in concert with promoters, holding companies, subsidiary companies, associate companies and/or Group companies of the Corporate Debtor.

d. Right of Subrogation: Any person (including the existing promoter group) that has provided any form of security for and on behalf of, and/or in order to secure any obligation of the Corporate Debtor (whether by way of hypothecation, pledge, mortgage, guarantee or otherwise) shall not be entitled to exercise any subrogation right in respect of such arrangement against the Resolution Applicant. All obligations, liabilities, claims or proceeding against the C.D. in this regard shall be deemed to be owed and due as of the Insolvency Commencement Date and shall immediately, irrevocably and unconditionally stand extinguished, waived, withdrawn and^-abated on and from the Completion Date.

4.

On the settlement of dues of various claimants as mentioned in this Resolution Plan, the entire outstanding obligation of the Resolution Applicant toward the dues of each of the creditors/stakeholders mentioned therein shall stand fully discharged and nothing further shall be deemed to be payable to any of the category of the creditors/ stakeholders as mentioned therein.

5.

This Resolution Plan shall be binding on the Corporate Debtor, their creditors, guarantors, members, workmen and employees and authorities and all other stakeholder (including the existing promoter group) in accordance with Section 31 of the IBC.

6.

The terms of this Resolution Plan shall be deemed to have been approved by Swati Health and Education Services Private Limited, its creditors, guarantors, members, workmen, employees and statutory authorities and other stakeholders (including existing promoter group) and shall not require any separate approval or actions of the aforesaid.

7.

It is hereby clarified that notwithstanding anything to the contrary contained elsewhere, no past, present or future liabilities shall accrue to the Resolution Applicant, save and except those assumed herein specifically by the Resolution Applicant in this Resolution Plan.

8.

Any liabilities (civil or criminal) arising out of any work executed in the past by the erstwhile promoter/ the Corporate Debtor or its related/ associate companies shall not in any manner be the liabilities/ responsibility of the Resolution Applicant and/or its subsidiary /associate companies.

9.

In addition, all legal proceeding initiated before any forum by or on behalf of any employees or workmen, to enforce any rights or claims against the company shall immediately, irrevocably and unconditionally stand abated, withdrawn, settled and/or extinguished and the employees/workmen shall take all necessary steps to ensure the same.

10.

As on the Effective Date, disputes initiated or pending against the Corporate Debtor in regard to the Project, including proceeding initiated by the Allottees, contractors, subcontractor, association of apartment Allottees, creditors etc. shall be deemed to have been settled and withdrawn by the concerned parties.

11.

No guarantor of any loan to the Corporate Debtor shall have any right of subrogation against the Resolution Applicant.

12.

The Resolution Plan is based on claims admitted by RP up to 12.08.2022. In case any claims admitted/revised by RP/AA after 12.08.2022, the payment provision to category of creditor will decrease proportionately as per the Proposed Plan of R.A.

13.

This Resolution Plan thus addresses the interests of all stakeholders of Swati Health and Education Services Private Limited as contemplated by IBC.

14.

On and from the Effective Date, the Resolution- Applicant, shall have the sole and exclusive development rights and any economic benefits arising out of this Resolution Plan, and shall have exclusive right, title and interest, in any and all unsold area in the said project proposed to be revived by this Resolution Plan.

15.

All agreed benefits and obligations under this Resolution Plan available to Allottees, would also be applicable to successor of the Allottees and persons who purchase units from them.

16.

Any asset which is related directly or indirectly to any of the said project, detected subsequent to submission of this Resolution Plan and purchased by the Corporate Debtor out of the funds of the said project of which this Resolution Plan is being filed by the Resolution Applicant, such asset (movable/immovable) shall be deemed to be the property of such project. If in the future it comes to the knowledge of the Resolution Applicant that some asset is derived out of joint-cash-flow of various project, then the Resolution Applicant shall have proportionated right in respect to the project percentage except any liabilities.

17.

In the eventuality, if the Resolution Plan submitted in respect of this project is not approved by the Adjudicating Authority, the Resolution Applicant hereby reserves the right to be provided with a preferential opportunity to present and submit a revised Resolution Plan in respect of the Project.

18.

The Resolution Applicant shall have no liabilities towards/in connection/on behalf of, directly or indirectly, the persons currently classified as promoter or promoter group (including the existing group), related parties and persons acting in concert with promoters, Holding companies, group companies Subsidiary Companies, Associate Companies, Co-Promoters, group companies and/or their respective affiliates/associate, in each case in connection with the Corporate Debtor, Land-Owning Companies and/or the project. It is further clarified that the liabilities towards such persons as mentioned herein shall not be taken over in any manner whatsoever in nature and irrespective of the fact that they might have been agreed upon to be satisfied whether in this Resolution Plan or otherwise.”

“14. Moratorium. –

(1)

Subject to provisions of sub-sections (2) and (3), on the insolvency commencement date, the Adjudicating Authority shall by order declare moratorium for prohibiting all of the following, namely: -

(a)

…..

(b)

…..

(c)

…..

(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.

Explanation.- For the purposes of this sub-section, it is hereby clarified that notwithstanding anything contained in any other law for the time being in force, a licence, permit, registration, quota, concession, clearance or a similar grant or right given by the Central Government, State Government, local authority, sectoral regulator or any other authority constituted under any other law for the time being in force, shall not be suspended or terminated on the grounds of insolvency, subject to the condition that there is no default in payment of current dues arising for the use or continuation of the license, permit, registration, quota, concession, clearances or a similar grant or right during the moratorium period;”