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Judgment
Per: Subrata Kumar Dash, Member (Technical)
The present application has been filed by Mrs. Mandeep Gujral, Resolution Professional of M/s. Jaycon Infrastructure Limited under Section 30(6) read with regulation 39 of the Insolvency and Bankruptcy Code, 2016 (‘the Code’) for approval of the resolution plan in respect of the M/s. Jaycon Infrastructure Limited (“the corporate debtor”). The applicant-Resolution Professional filed the present application on 10.03.2023 for approval of the resolution plan, which was approved with a 92.3% voting share of the Committee of Creditors (COC), in its 33th meeting which was held on 09.02.2023. The present application was reserved for orders on 09.06.2023.
The Company Petition CP (IB) No. 218/Chd/Chd/2018 was filed by the Financial creditor Gangotri Steel Syndicate against the corporate debtor, which was admitted into the Corporate Insolvency Resolution Process (‘CIRP’) vide order dated 07.10.2019
Mrs Mandeep Gujral was appointed as Interim Resolution Professional (‘IRP’) vide Order dated 07.10.2019, and the public announcement as per Regulation 6 of the CIRP Regulations in Form A, as prescribed under the schedule, was made on 11.10.2019 in two newspapers, in Amar Ujala (Hindi) and Financial Express (English), inviting claims from the creditors of the corporate debtor as envisaged under the Code.
The Interim Resolution Professional constituted the Committee of Creditors in accordance with Section 21(2) of the Code, which comprised of four financial creditors, i.e. State Bank of India (Secured) (90.12%), OXYZO Financial Services Private Limited (Unsecured) (7.71%), Decent Securities (P) Limited (Unsecured) (1.98%) and Sahyog Mega Chits Private Limited (Unsecured) (0.20%).
The Applicant had convened 33rd CoC meeting on 09.02.2023 in which the Resolution Plan submitted by Mr. Risabh Jain with 92.3% voting share has been approved.
The Applicant Submits that a total of 33 CoC meetings have been held during the CIRP period, details as follows:
| S. No. | Date of CoC Meeting | Main Points of Discussion | Important decisions taken |
|---|---|---|---|
| 1st CoC Meeting | 05.11.2019 | Status of claims received by IRP Formation of CoC & its voting rights determined Actions taken by IRP: Visiting the premises of CD, Public announcement, taking control of all the bank accounts of CD, Approval sought regarding placement of security services at the sites of CD. Discussion on the current status of CD Discussion on the requirement of Transaction auditor Discussion on the facilities availed by CD from all the FCs. Discussion on control of expenses Closing the bank accounts of CD which are not in operation to avoid unauthorized transactions. Discussion on expired Insurance of CD. Discussion on appointment of a site manager. SBI sought pending documents required from CD. | To appoint the Security agency to be placed at the premises of Corporate Debtor |
| 2nd CoC Meeting | 22.11.2019 | Collation of claims received by IRP Apprised about the valuers (Plant & Machinery & SFA) appointed under Regulation 27 of IBBI Regulations, 2016 Apprised about the Security agency placed at the premises of Corporate Debtor. Discussion on the current status of CD Discussion on the CIRP cost. Undertaking sought to receive the Information Memorandum from the CoC members. Discussion of publication of Form-G in the newspapers. | CoC members approved the publication of EoI in the newspapers to invite resolution applicants. |
| Status of recoveries from debtors of CD, Status of documents to be received from CD. | |||
| 3rd CoC Meeting | 23.12.2019 | Updated the CoC members regarding the publication of Form-G on 04.12.2019 in two newspapers. Discussion on the eligibility criteria for PRAs. Discussion on the evaluation matrix & RFRP which was asked by the CoC members to modify as per the standard format sent by their competent authority. Apprised the decision of appointing valuers (Stock) as per Regulation 27 of IBBI Regulations, 2016 Discussion on the requirement of Transaction auditor. Updated the claim verification process, stage of valuation process, stock statements, receivables, recoveries from government authorities, LEI documentation, | RP placed the Eligibility criteria before the CoC members which was approved by requisite voting share Approved the decision of appointing valuers (Stock) as per Regulation 27 of IBBI Regulations, 2016. Approved the decision of appointing Transaction auditor. CoC members approved the expenses incurred till date CoC members approved the appointment of Mrs. Mandeep Gujral as the RP of CD. |
| 4th CoC Meeting | 03.02.2020 | Claims received by RP. Discussion on the re-publication of Form-G. Discussion on the current status of CD & renewal of bank guarantees of CD. Discussion on the stage of valuation process and the work done by the Transaction auditor. SBI sought information regarding any changes occurred in the KMPs of CD in the past two years, LEI process initiation, demand notice served to one of the debtors of CD. RP approached Income Tax Department for the release of IT refund, discussion on the status of CD as MSME | CoC members approved the decision of re-publication of Form-G in the newspapers to invite resolution applicants. CoC members approved the expenses incurred by the RP to run the company. |
| 5th CoC Meeting | 18.03.2020 | Discussion on the current status of CD. Discussion on the stage of valuation process and the work done by the Transaction auditor. Details of resigned KMPs of CD, LEI status, Demand notice sent to NBCC, status of income tax refund, BG renewal charges, invocation of BG sought by CPWD, SBI asked the RP to | CoC members approved the decision of re-publication of Form-G in the newspapers to invite resolution applicants. CoC members approved the evaluation matrix & RFRP placed before them in the CoC meeting. |
| sought legal opinion in respect of BG invocation, discussion on the status of BGs. | CoC members approved the matter of moving an application before the Hon'ble NCLT for seeking extension of 90 days beyond the period of 180 days of CIRP. CoC members approved the expenses incurred by the RP to run the company. | ||
| 6th CoC Meeting | 26.06.2020 | Discussion on the stage of valuation process and the work done by the Transaction auditor. Discussion on the current status of CD. Discussion on the actions taken by the RP during the lockdown period and afterwards. Discussion to sell the assets lying at one of the project sites of CD, which are currently of no use but continuously deteriorating due to their idle nature. OXYZO (Unsecured FC) sought the action plan of the Promoter to revive the CD, CoC members sought the structure of utilization of funds received as IT refund. | CoC members approved the decision of re-publication of Form-G in the newspapers to invite resolution applicants. (the re-publication was due from the month of march 2020 due to the declaration of lockdown from March 2020 to May 2020) CoC members approved the matter of moving an application before the Hon'ble NCLT for seeking extension of 90 days beyond the period of 180 days of CIRP in view of non-filing of the same earlier due to declaration of lockdown from March 2020 to May 2020 CoC members approved the expenses incurred by the RP to run the company. |
| 7th CoC Meeting | 30.07.2020 | Discussion on the current status of CD. RP updated the next date of hearing of the application filed before the Hon'ble NCLT for seeking further 90 days. | CoC members approved the decision of publication of Corrigendum pursuant to the Form-G published on 04.07.2020 in the newspapers to invite resolution applicants. CoC members approved the expenses incurred by the RP to run the company. |
| 8th CoC Meeting | 01.09.2020 | Discussion on the current status of CD. RP updated the current status of claims received & admitted & submission of revised Information Memorandum. RP updated the status of valuation of one of the sites of CD for which request to sell its assets has been raised in the previous meeting. Discussion regarding the status of work done by the Transaction auditor. RP updated the next date of hearing of the application filed before the Hon'ble NCLT for seeking further 90 days. | CoC members approved to extend the due date for submission of Resolution Plan to 20.09.2020 which was 30.08.2020. CoC members approved the matter of moving an application before the Hon'ble NCLT for seeking exclusion of 90 days beyond the period of 180 days of CIRP. CoC members approved the expenses incurred by the RP to run the company. |
| 9th CoC Meeting | 29.09.2020 | Discussion on the current status of CD. RP updated the current status of claims received & admitted. Discussion regarding the status of work done by the Transaction auditor. RP updated the next date of hearing of the application filed before the Hon'ble NCLT for seeking further 90 days. Discussion regarding the resolution plans received from the PRAs. Discussion regarding the application to be moved before the Hon'ble NCLT to sought further 90 days beyond 270 days of CIRP. | CoC members approved the decision of re-publication of Form-G in the newspapers to invite resolution applicants. CoC members approved the expenses incurred by the RP to run the company. |
| 10th CoC Meeting | 05.11.2020 | Discussions regarding the Resolution plans as received from the PRAs. | CoC members approved to extend the due date for submission of Resolution Plan by 2 days. Resolution passed : Application to be filed before the Hon'ble NCLT for seeking extension of 60 days beyond the period of 270 days of CIRP |
| 11th CoC Meeting | 01.12.2020 | RP updated the status of all the applications filed before the Hon'ble NCLT. Discussions and further negotiations regarding the resolution plans received from the PRAs. | CoC members approved the expenses incurred by the RP to run the company. |
| · Discussions regarding the opinion formed by RP in respect of Transaction report. · Discussion regarding the matter in which OXYZO issued a notice u/s 138 & BG renewal. | |||
| 12th CoC Meeting | 22.12.2020 | · RP updated the status of all the applications filed before the Hon'ble NCLT. · Discussions and further negotiations regarding the revised resolution plans received from the PRAs. · Discussion regarding the request received from the Promoter of CD to release his salary and rent pertaining to CIRP. · Discussion on uncrystallized BGs. | · CoC members approved the expenses incurred by the RP to run the company. |
| 13th CoC Meeting | 11.01.2021 | · Discussions and further negotiations regarding the revised resolution plans received from the PRAs. · Discussion regarding the request received from the Promoter of CD to release his salary and rent pertaining to CIRP. · Discussion on the current status of HLL & NBCC (two projects) of CD. | · CoC members approved the expenses incurred by the RP to run the company. |
| 14th CoC Meeting | 29.01.2021 | · Discussion on the current status of HLL & NBCC (two projects) of CD. · Discussion regarding the liquidation process. | · CoC members approved 50% payment to be released in respect of Promoter's Salary and rejected to release rent. · CoC members approved the decision of re-publication of Form-G in the newspapers to invite resolution applicants. · CoC members approved the matter of moving an application before the Hon'ble NCLT for seeking exclusion of 90 days beyond the period of 330 days of CIRP. · CoC members approved the expenses incurred by the RP to run the company. |
| 15th CoC Meeting | 24.02.2021 | Discussion on the current status of HLL & NBCC (two projects) of CD. Discussion regarding the request to raise interim finance. Discussion regarding the status of EoIs received pursuant to the publication of Form-G. RP updated the status of all the applications filed before the Hon'ble NCLT. Updated IM circulated among CoC members via mail, complaint filed by a labour for his dues prior to CIRP, mails received from the wife of promoter regarding the payment of rent. | |
| 16th CoC Meeting | 17.05.2021 | Discussion on the current status of all the projects of CD. Updated the actions taken by RP and her team. Discussion regarding the pending BG commission to be paid to SBI. | |
| 17th CoC Meeting | 17.06.2021 | Discussion on the current status of all the projects of CD. Updated the actions taken by RP and her team. RP updated the status of all the applications filed before the Hon'ble NCLT. Discussion regarding the pending BG commission to be paid to SBI. | |
| 18th CoC Meeting | 23.07.2021 | Discussion on the current status of all the projects of CD. Updated the actions taken by RP and her team. RP updated the status of all the applications filed before the Hon'ble NCLT. Discussion regarding the idle P&M lying at different construction sites of CD, interest received from PRAs, SBI asked RP to share the monthly cash flow against the receipts. | |
| 19th CoC Meeting | 25.08.2021 | Discussion on the current status of all the projects of CD. RP updated the current status of claims received & admitted. | CoC members approved the decision of re-publication of Form-G in the newspapers to invite resolution applicants. |
| RP updated the status of all the applications filed before the Hon'ble NCLT. Discussion to sell the idle P&M lying at different construction sites of CD, discussion regarding BG audit for which a professional has already been appointed by RP. | |||
| 20th CoC Meeting | 07.10.2021 | Discussion on the current status of all the projects of CD. RP updated the current status of claims received & admitted. RP updated the status of all the applications filed before the Hon'ble NCLT Discussion regarding the EoIs received pursuant to the publication of Form-G. Filing of an application before the Hon'ble NCLT seeking approval to sale encumbered assets lying at different construction sites of CD. Matter was adjourned till the next meeting. Discussion on reimbursement of BG commission charges, the matter regarding labour commissioner's order to release the dues of labour which are related to the period prior to CIRP. | CoC members approved the expenses incurred by the RP to run the company. |
| 21st CoC Meeting | 21.10.2021 | RP opened the Resolution plan before the CoC and presented the main terms of the same. | |
| 22nd CoC Meeting | 26.10.2021 | RP presented the compliant Resolution plan before the CoC and placed for further negotiations. (Adjourned). RP sought the undertaking of confidentiality to provide the liquidation value of CD to the CoC members. | |
| Day-2 of 22nd CoC Meeting | 12.11.2021 | RP presented the compliant Resolution plan before the CoC and placed for further negotiations. | |
| 23rd CoC Meeting | 20.11.2021 | Resolutions: 1.) Approve the resolution plan and file an application before the Hon'ble NCLT u/s 30 of IBC, 2016 to seek approval of the resolution plan. The matter was adjourned. | CoC member approved the matter of moving an application before the Hon'ble NCLT for seeking exclusion of 90 days beyond the period of 420 days of CIRP. |
| 2.) Approve filing of an application before the Hon'ble NCLT to seek approval of exclusion of 90 days beyond the period of 420 days of CIRP as there is neither a resolution nor liquidation which has been decided by the CoC members yet. 3.) Reimbursement of expenses incurred by the RP. | · CoC member approved the expenses incurred by the RP to run the company. · CoC member rejected the agenda to approve the liquidation of CD u/s 33 of IBC, 2016. | ||
| 24th CoC Meeting | 06.05.2022 | · RP updated the status of all the applications filed before the Hon'ble NCLT. · RP updated the current status of all the projects of CD. · Discussions held regarding the revised resolution plan received from the PRA. · Discussion regarding the outstanding BG commission | |
| 25th CoC Meeting | 30.07.2022 | · Discussion regarding the status of all application filed/to be filed with Hon'ble Adjudicating Authority. · Discussion on the actions taken by Resolution Professional. · Discussion to consider the Resolution Plan submitted by Mr. Rishabh Jain for final negotiation and further approval/rejection. | • Approval of expenses incurred by RP and her team (15.11.2021 – 15.07.2022). |
| 26th CoC Meeting | 31.08.2022 | • Discussion regarding the status of all application filed/to be filed with Hon'ble Adjudicating Authority. • Discussion on status of claims admitted by RP. • Discussion to consider the Resolution Plan submitted by Mr. Rishabh Jain for final negotiation and further approval/rejection. | • Approval of expenses incurred by RP and her team |
| 27th CoC Meeting | 04.10.2022 | • Discussion regarding the status of all application filed/to be filed with Hon'ble Adjudicating Authority. | • Approval to file an application before Adjudicating Authority to seek extension of 30 days from CIRP period to conclude CIRP process. |
| 28th CoC Meeting | 28.10.2022 | · Discussion regarding the status of all application filed/to be filed with Hon'ble Adjudicating Authority. · Discussion on the Resolution Plan submitted by Mr. Rishabh Jain. |
| 29th CoC Meeting | 02.12.2022 | Discussion regarding the operational issues Discussion on CoC observations on the Resolution Plan | |
| 30th CoC Meeting | 20.12.2022 | Discussion to approve the Resolution Plan submitted by Mr. Rishabh Jain. | Approval to file an application before Adjudicating Authority to seek extension of 30 days from CIRP period to conclude CIRP process. |
| 31st CoC Meeting | 16.01.2023 | Discussion regarding the status of all the applications filed with Hon'ble Adjudicating Authority. Discussion regarding the amended resolution plan submitted by Mr. Rishabh Jain. | |
| 32nd CoC Meeting | 24.01.2023 | Discussion regarding the status of EPFO claim Representative of SBI enquired about the expected time for release of Bank Guarantee of HLL Lifecare Limited. | |
| 33rd CoC Meeting | 09.02.2023 | RP placed the compliant Resolution Plan submitted by the eligible Prospective Resolution Applicant before the CoC in accordance with Section 30 of the IBC, 2016 for approval. | The Resolution plan submitted by Mr. Rishabh Jain was approved by 92.3% voting share. The RP discussed and placed CIRP costs in terms of Section 5(13) of the IBC, 2016, the same was approved by CoC. The RP discussed with the CoC the agenda to approve the appointment of Monitoring Agency for the supervision and implementation of the Resolution Plan. The same was approved by CoC vide email dated 27.02.2023. Approval to file an application before Adjudicating Authority to seek extension of 30 days from CIRP period to conclude CIRP process. The RP discussed with the CoC the agenda for liquidation of the Corporate Debtor u/s 33 of |
| IBC, 2016. The same was rejected by the CoC. · The RP discussed with the CoC the agenda for appointment of liquidator. The same was rejected by the CoC. · The RP discussed with the CoC the agenda to make/ approve the best estimate of the amount to meet liquidation cost. The same was rejected by the CoC. · The RP discussed with the CoC the agenda to make/ approve the best estimate of the value of liquid assets of Corporate Debtor to meet liquidation cost. · The RP discussed with the CoC the agenda to consider and to approve the plan providing for contribution for meeting the difference between the amounts required to meet liquidation cost and value of liquid assets of Corporate Debtor. The same was rejected by the CoC. · The RP discussed with the CoC the agenda to consider and to approve opening of designated escrow account in a scheduled bank for depositing the contribution made under regulation 2A(1) of IBBI (Liquidation Process) Regulations, 2016. The same was rejected by the CoC. · The RP discussed with the CoC the agenda to consider and to approve opening of designated escrow account for depositing the proceeds of |
| liquidation. The same was rejected by the CoC. - The RP discussed with the CoC the agenda to consider for recommendation of the sale of assets, etc. under clause (a) to (f) of Regulation 35 of IBBI (Liquidation Process) Regulations, 2016. The same was rejected by the CoC. - Agenda with respect to the fee and expenses of Liquidator was rejected by the CoC. |
It is stated by the Applicant that as per the valuation reports, the fair value of the corporate debtor was assessed in terms of Regulation 35 of the CIRP Regulations which is given below:-
| S. NO. | NAME OF VALUER | FAIR VALUE | LIQUIDATION VALUE | AVERAGE | |
|---|---|---|---|---|---|
| FAIR VALUE | LIQUIDATION VALUE | ||||
| A. | Plant & Machinery | ||||
| 1. | Alok Kaushik | 3,42,94,533 | 2,57,05,622 | 3,38,64,967 | 2,45,30,481 |
| 2. | Amarjit Kumar Sharma | 3,34,35,400 | 2,33,55,340 | ||
| B. | Stock | ||||
| 3. | Sachin Goel | 4,03,84,000 | 2,67,90,000 | 4,35,29,010 | 2,89,06,269 |
| 4. | Vipan Singal | 4,66,74,019 | 3,10,22,538 | ||
| C. | Securities and Financial Asset | ||||
| 5. | Sandeep Jain | 14,91,44,356 | 6,38,34,504 | 15,22,45,634 | 6,18,95,239 |
| 6. | Prateek Mittal | 15,53,46,913 | 5,99,55,973 | ||
| Total Value | 22,96,39,611 | 11,53,31,989 | |||
It is submitted that In the 3rd CoC meeting held on 23.12.2019, Interim Resolution Professional was confirmed as the Resolution Professional by the Committee of Creditors and the CoC members has also approved the eligibility criteria for the prospective resolution applicant. The Resolution Professional in terms of the Section 25(2)(h) of the Code, has published the Form-G on 04.12.2019 in two newspapers i.e. Financial Express and Amar Ujala.
In the 4th meeting of CoC, held on 03.02.2020, the CoC resolved to republish the Form-G as no expression of interest has been received. The Form-G was republished on 06.02.2020. Even after the republication of the Form-G no expression of interest has been received till the last date of submissions of EOI. In the 5th meeting of CoC it is again resolved to republish the Form-G. The 7th meeting of CoC on 30.07.2020, it is discussed that one EOI has been received from Mr. Jatinder Mittal who is the director of the Corporate Debtor. One additional interest has been received on 19.07.2020 and the CoC has approved the publication of th corrigendum pursuant to the publicaiton of the Form-G on 04.07.2020. In the corrigendum, the last date to submit the EOI was extended upto 06.08.2020.
In the 8th meeting of CoC, the Applicant informed that till the last date of submission of EOI, two (2) EOI were received by the Applicant namely from Mr. Jatinder Mittal and from M/s One City Infrastructure Private Limited. In the 9th meeting of CoC, the applicant has informed that no resolution plan has been received and 180 days of CIRP was expiring on 03.04.2020.
In the 10th meeting of CoC held on 05.11.2020, the applicant has republished the Form-G on 03.10.2020 and the last date for submission of resolution plan was fixed as 02.11.2020 (after extention). The resolution plans were received from a) Mr. Jatinder Mittal (Promoter of Corporate Debtor, being MSME registered) b) Mr. Ravi Surender Singh Sandhu & Mr. Rohit Goyal.
In the 11th meeting of CoC held on 01.12.2020, the CoC has negotiate with the two prospected resolutions applicants. In the 13th meeting of CoC held on 11.01.2021. It is observed by the members of CoC that the resolution plans submitted by the Prospective Resolution Applicants are non-compliant and it was suggested that fresh Form G should be published in order for resolution of the Corporate Debtor. In the 14th meeting of CoC held on 29.01.2021, the resolution for re-publication of FORM-G for inviting prospective investors for submission of expression of interest and the same was published on 02.02.2021. In the 15th meeting of CoC held on 24.02.2021, the applicant has informed that potential PRAs has submitted their EOI. The negotiations could not take place due to COVID-19 situations and updation of claims received by the applicant. Therefore, The Form-G has again published on 26.08.2021 as resolved in 19th meeting of CoC held on 25.08.2021. In pursuance of the same, three EOIs has been received till 10.09.2021 which are as follows:-
| Name of the PRA | Directors | Type of Industry |
|---|---|---|
| Yashvi Constructions | Jitendra P. Shah | Construction |
| M/s Prabhatam Infrastructure Ltd. | Mayank Gupta, Nishant Gupta, Subhash Sahu | Infrastructure & real estate |
| Rishabh Jain | Director- Maya Enterprises Ltd. | Infrastructure & real estate |
In the 21st meeting of CoC held on 21.10.2021, the resolution plan of Mr. Risabh Jain was opened and detailed deliberations was made thereupon. In the 22nd meeting of CoC held on 26.10.2021, the fair and liquidation value was shared with the CoC upon submission of an undertaking in terms of CIRP regulations. In the 24th meeting of CoC held on 06.05.2022, the financial proposal of PRA-Risabh Jain with amended terms was shared with SBI for consideration. After detailed discussion about the plan and project status of the corporate debtor, the meeting was concluded and put for further discussion. In the 25th meeting of CoC held on 30.07.2022, the amended resolution plan of the PRA-Risabh Jain was submitted. The resolution plan was discussed in detail in the 25th, 26th and 27th meeting of CoC held on 30.07.2022, 31.08.2022 and 04.10.2022 respectively.
In the 28th meeting of CoC held on 28.10.2022, the lead CoC member i.e. State Bank of India asked for Latest Net worth of PRA which should be CA certified along with the working of valuation of shares, Updated Project status along with BG details and detailed information on the major reasons of losses mentioned in the plan to evaluate the feasibility & Viability of the Resolution Plan. In the 30th meeting of CoC held on 20.12.2022, the resolution plan of Mr. Risabh Jain was negotiate again and discussed in length.
In the 32nd meeting of CoC held on 24.01.2023, the applicant has discussed the status of EPFO claim with the CoC members and has informed that a claim for an amount of Rs. 29,62,02,900/- (Rupees Twenty Nine Crores Sixty Two Lacs Two Thousand and Nine Hundred Rupees Only) and the same had been admitted only to the extent of Rs. 6,71,982/- (Rupees Six Lacs Seventy One Thousand Nine Hundred and Eight Two Only). On the request of applicant, EPFO department reinitiated enquiry u/s 7A of the PF Act and all documents were submitted.
In the 33rd meeting of CoC held on 09.02.2023, the resolution plan submitted by Mr. Risabh Jain has been approved with 92.3% voting share. It is further submitted that due to inadvertable the applicant will not act as monitoring professional due to some personal reasons and therefore the name of Mr. Jalesh Kumar Grover, Insolvency Professional having IBBI Regn. No. IBBI/IPA-001/IP-P00200/2017-18/10390 to act as monitoring profession has been proposed and it has also being proved in the same meeting. The resolution plan along with addendum as Annexure A-51 of the application.
Pursuant to the approval of resolution plan passed by the CoC the applicant issued the letter of intent dated 13.02.2023 to the resolution applicant. In pursuance of the same and as per regulations 39(4A) of CIRP regulations the successful resolution applicant has submitted the performance guarantee to the tune of Rs. 16 Lacs and the copy of the same is attached with the application as Annexure A-52.
The Details of exclusion & extension sought by the Resolution Professional and granted by this Adjudicating Authority is given below :-
| Sr. No. | IAs/ CAs | Date of filing | Number of days granted | Date of order |
|---|---|---|---|---|
| 1. | 251/2020 | 03.07.2020 | 90 | 04.09.2020 |
| 2. | 805/2020 | 06.11.2020 | 60 | 11.12.2020 |
| 3. | 104/2021 | 06.02.2021 | 90 | 23.08.2021 |
| 4. | 653/2021 | 21.11.2021 | 90 | 15.07.2022 |
| 5. | 1370/2022 | 11.10.2022 | 20 | 01.12.2022 |
| 6. | 98/2023 | 20.12.2022 | 30 | 12.01.2023 |
The Resolution applicant has also submitted an undertaking stating that he is eligible under Section 29A of the Code. The said undertaking is attached with the application as Annexure A-55.
The relevant information with regard to the amount claimed, amount admitted, and the amount proposed to be paid by the Resolution Applicant under the said resolution plan as mentioned in Form H filed at Annexure A-54 of the application which is reproduced as below:-
| Category of Stakeholder | Amount of Claim Filed | Amount of Claim Admitted | Amount provided under the Plan# | Amount provided to the Amount Claimed (%) | (Amount in Rs. lacs) | |
|---|---|---|---|---|---|---|
| Amount reflected in the last Balance Sheet before CIRP | Amount available in liquidation | |||||
| Secured Financial Creditor | 7024.48 | 7024.48 | 1161.09 | 16.53% | 835.19 | |
| Unsecured Financial Creditor | 1079.05 | 1079.05 | 0 | 0 | ||
| *Workmen Dues (24 months) | 141.36 | 121.61 | 21.95 | 18.05% | 382 | 16.80 |
| Employees dues | 207.38 | 176.30 | 0 | 0 | ||
| Operational Creditor (supplier of goods, service) | 8390.68 | 43.86 | Nil | Nil | 3216 | Nil |
| Statutory Liability (only PF) | 3300.8 | 32.45 | 13.96 | (100% of Book Balance, i.e., Rs. 672,982/- with provision of interest) | 6.72 | 13.96 (PF) |
| Other Creditors | Nil | Nil | ||||
| Total | 20144.07 | 8521.61 | *1197 | 3604.72 | 865.95 | |
The Applicant has submitted the details of various compliances as envisaged by the Code and the CIRP Regulations, which a Resolution Plan is required to adhere to, as follows:
Compliance with section 25(2)(h), 29A, 30(2) of the Code and mandatory contents of Resolution Plan in terms of Regulation 38 & 39(4) of CIRP Regulations
| Section of the Code / Regulation No. | Requirement with respect to Resolution Plan | Clause of Resolution Plan | Compliance (Yes / No) |
|---|---|---|---|
| 25(2)(h) | Whether the Resolution Applicant meets the criteria approved by the CoC having regard to the complexity and scale of operations of business of the CD? | Yes, as per the eligibility criteria at Page no. 700-701 of the Main Application (minutes of the 3rdCoC) | Yes |
| Section 29A | Whether the Resolution Applicant is eligible to submit resolution plan as per final list of Resolution Professional or Order, if any, of the Adjudicating Authority? | Yes, as per 29A affidavit on Page no. 625 of the main application submitted by the Successful Resolution Applicant. Further, the Successful Resolution Applicant fulfils the eligibility criteria; the same is mentioned at Page No. 697-699 attached as Annexure A-55 of the main application. | Yes |
| Section 30(1) | Whether the Resolution Applicant has submitted an affidavit stating that it is eligible? | Yes, as per affidavit on Page No. 697-699 of the Main application | Yes |
| Section 30(2) | Whether the Resolution Plan- (a) provides for the payment of insolvency resolution process costs? | a) Yes, at, at Page No 39 of the Resolution Plan which is attached as Annexure No. A-51 (Relevant page no. 633 of the main application.) Pursuant to the same, ResolutionApplicant proposes to pay unpaid CIRP cost on actual basis in priority to | Yes |
| other creditors under resolution plan. Since the CIRP cost amount is uncertain, hence RA is not proposing any specific amount for unpaid CIRP cost amount and the actual CIRP cost amount shall be adjusted from the amount proposed for the financial creditors. (iii) The amount of unpaid CIRP Cost (if any) shall be paid in priority to the payment of all other debts of the Corporate Debtor within 30 days from the effective date | |||
| (b) provides for the payment to the operational creditors? | b) Yes, at Page No 42-44 of the Resolution Plan which is attached as Annexure No. A-51 (Relevant page no. 636-638) of the main application. | Yes (v) | |
| (c) provides for the payment to the financial creditors who did not vote in favour of the resolution plan? | Yes, at Page No 40 of the Resolution Plan which is attached as Annexure No. A-51 (Relevant page no. 634) of the main application. Dissenting Financial Creditors: - The financial creditors, who have a right to vote under sub-section (2) of section 21 and did not vote in favour of the resolution plan, shall be paid in such manner as may be specified by the Board, which shall not be less than the amount to be paid to such creditors in accordance with sub-section (1) of section 53 in the event of a liquidation of the corporate debtor. (Section 30 (2) (b) of IBC, 2016). Dissenting financial creditors shall be paid in priority over financial creditors who voted in favour of the plan. | Yes (vii) | |
| (d) provides for the management of the affairs of the corporate debtor? | At Page No 49 of the Resolution Plan which is attached as Annexure No. A-51 (Relevant page no. 643) of the main application. | Yes (ix) | |
| (e) Provides for the implementation and supervision of the resolution plan? | Yes, at Page No 52 of the Resolution Plan which is attached as Annexure No. A-51 (Relevant page no. 643) of the main application. Monitoring Committee and Monitoring Professional A Monitoring Agency ('MA') or Monitoring Committee shall be appointed by the Resolution Applicant in consultation with CoC for supervision and implementation of the Resolution Plan in terms of | (xi) |
| Provisions of Section 30(2)(d) of IBC read with Regulation 38(2)(c) of the CIRP Regulations. The appointment shall be at the mutually agreed terms with CoC Members for the period with effect from the date of approval of the Resolution Plan by Hon'ble NCLT till the payments proposed under this Resolution Plan are cleared. The Composition of the Monitoring Committee shall be one representative each of the Resolution Applicant and CoC. | |||
| (xii) (f) Contravene any of the provisions of the law for the time being in force? | Yes, at Page No 32 of the Resolution Plan which is attached as Annexure No. A-51 (Relevant page no. 626) of the main application. DECLARATION U/S 30 (2)(E) Section 30 (2) (e) of IBC: The Resolution Applicant has taken utmost care, while preparing the Resolution Plan. The Resolution Applicant confirms that the Resolution Plan does not contravene any provision of applicable law for the time being in force | Yes (xiii) | |
| Section 30(4) | Whether the Resolution Plan | ||
| (xiv) (a) is feasible and viable, according to the CoC? | a) Yes at Page No 31 and 47 of the Resolution Plan which is attached as Annexure No. A-51 (Relevant page no. 625, 641) of the main application | Yes | |
| (xv) (b) has been approved by the CoC with 66% voting share? | Yes, approved by 92.3% Voting Share at Page No. 557 of the main application (Ballot Paper of the CoC member) | Yes | |
| Section 31(1) | Whether the Resolution Plan has provisions for its effective implementation plan, according to the CoC? | Yes, CoC has approved appointment of Monitoring Professional Mr. Jalesh Kumar Grover for the implementation of the Resolution Plan for the term of resolution plan after approval of the plan by the Adjudicating Authority via email dated 27.02.2023 which is attached as Annexure A-51 (Page No. 646) of the main application. | Yes |
| Regulation 38 (1) | Whether the amount due to the operational creditors under the resolution | Yes, at Page No 51 of the Resolution Plan which is attached as Annexure No. A-51 | Yes |
| plan has been given priority in payment over financial creditors? | |||
| Regulation 38(1A) | Whether the resolution plan includes a statement as to how it has dealt with the interests of all stakeholders? | Yes at Page No.52 -53 of the Resolution Plan which is attached as Annexure No. A-51 (Relevant page no. 646-647) of the main application. The proposed Resolution plan has been prepared taking in consideration of the Interest of all stakeholders and all the payments has been proposed as per section 53 of the IBC, 2016 | Yes |
| Regulation 38(1B) | (i) Whether the Resolution Applicant or any of its related parties has failed to implement or contributed to the failure of implementation of any resolution plan approved under the Code. | At Page 31, of the Resolution plan which is attached as Annexure No. A-51 (Relevant page no. 625) of the main application, the Resolution Applicant has declared that neither the resolution Applicant nor any of their related parties have failed to implement or contributed to the failure of implementation of any other resolution plan approved by the Adjudicating Authority at any time in the past. | No |
| (xix) (ii) If so, whether the Resolution Applicant has submitted the statement giving details of such non-implementation? | Not Applicable | (xx) | |
| Regulation 38(2) | (b) Whether the Resolution Plan provides: | ||
| (a) the term of the plan and its implementation schedule? | Yes, at Page No 48 and Page No. 53 – 54 of the Resolution Plan which is attached as Annexure No. A-51 (Relevant page no. 642, 647 & 648) of the main application. (i) The term of the Resolution Plan shall begin w.e.f. Effective Date till the final settlement of payouts suggested in the Resolution plan (i.e. within one year and 9 months) | Yes | |
| (ii) (b) for the management and control of the business of the corporate debtor during its term? | Yes at Page No 48 of the Resolution Plan which is attached as Annexure No. A-51 (Relevant page no. 642) of the main application (iii) Management & Control of the Business of the Corporate Debtor shall be with the Resolution Applicant. However, during the term of the resolution plan, the implementation of the Resolution shall be monitored by the Monitoring Agency. | Yes | |
| (iv) (c) adequate means for supervising its implementation? | Yes, at Page No 52 of the Resolution Plan which is attached as Annexure No. A-51 (Relevant page no. 646) of the main application. Monitoring Committee and Monitoring Professional A Monitoring Agency ('MA') or Monitoring Committee shall be appointed by the Resolution Applicant in consultation with CoC for supervision and implementation of the Resolution Plan in terms of Provisions of Section 30(2)(d) of IBC read with Regulation 38(2)(c) of the CIRP Regulations. The appointment shall be at the mutually agreed terms with CoC Members for the period with effect from the date of approval of the Resolution Plan by Hon'ble NCLT till the payments proposed under this Resolution Plan are cleared. The Composition of the Monitoring Committee shall be one representative each of the Resolution Applicant and CoC. | (v) | |
| 38(3) | Whether the resolution plan demonstrates that – | ||
| (a) it addresses the cause of default? | Yes, at Page No 29-30 of the Resolution Plan which is attached as Annexure no. A-51 (relevant page no. 632-634) of the main application. | Yes (vii) |
| (b) it is feasible and viable? | Yes, at Page No 31 and 47 of the Resolution Plan which is attached as Annexure no. A-51 (relevant page no. 625 and 641) of the main application. The Resolution Applicant proposes a Payment of Rs. 12 Crores over a period of one year and 9 months. The Resolution Applicant has net worth of Rs. 19.35 crores as on 30.09.2022. Further, the Resolution Applicant and his associates have vast experience of 15 years in the relevant Industry. | Yes | |
| (c) it has provisions for its effective implementation? | Yes, at Page No 34 and 48 of the Resolution Plan which is attached as Annexure No. A-51 (Relevant page no. 628 & 642 of the main application). The Resolution Applicant would retain the existing workmen/employees, if required, and would employ additional workers/employees/professionals as per the requirements. Management & Control of the Business of the Corporate Debtor shall be with the Resolution Applicant. However, during the term of the resolution plan, the implementation of the Resolution shall be monitored by the Monitoring Agency | (viii) | |
| (d) it has provisions for approvals required and the timeline for the same? | The Corporate Debtor has all the approvals to run the operations of the unit. | (ix) | |
| (e) the resolution applicant has the capability to implement the resolution plan? | Yes, at Page No 34 and 48 of the Resolution Plan which is attached as Annexure no. A-51 (Relevant Page No. 628 and 642 of the main application). The Resolution Applicant Proposes a Payment of Rs. 12 Crores over a period of one year and 9 months. The Resolution Applicant has net worth of Rs. 19.35 crores as on 30.09.2022. Further, the Resolution Applicant and its associates have vast experience of 15 years in the relevant Industry. | (x) |
| 39(2) | (c) Whether the RP has filed applications in respect of transactions observed, found or determined by him? | Yes. RP has filed one Application in respect of preferential transactions (IA 186/2021). The matter is pending before the Hon'ble Adjudicating Authority. | Yes |
| Regulation 39(4) | (d) Provide details of performance security received, as referred to in sub-regulation (4A) of regulation 36B. | The Successful Resolution applicant has submitted the Performance Guarantee of Rs. 60 lacs in the favour of financial Creditor, State Bank of India | Yes |
It is submitted that The Resolution Plan shall be implemented as per the following schedule:-
(INR in Crores)
| Sr. No. | Particulars | Amount | Upfront Cash | Deferred Cash at the end of 1st year | Rest of cash |
|---|---|---|---|---|---|
| 1. | CIRP COST | 0 | 0 | 0 | 0 |
| 2. | Financial Creditor (Secured and Unsecured) | 11.64 | 1.00 | 7.09 | 3.55 |
| 3. | Workmen dues | 1.22 | 0.22 | 0 | 0 |
| 4. | Employee dues | 0 | 0 | 0 | 0 |
| 5. | Operational Creditor (Supplier of foods, service) | 0 | 0 | 0 | 0 |
| 6. | Operational Creditor (Statutory Authorities) | 0.14 | 0.14 | 0 | 0 |
Summary Of The Financial Proposal/ Payment Under The Resolution Plan Is As Follows:-
| Particulars | Amount (in Crores) |
|---|---|
| Resolution Plan Value | 12.00 |
| CIRP Cost | Nil (Fully paid from cash flow) |
| Payment to Secured Financial Creditors | 11.64 |
| Workmen & Employees priority dues | 0.22 |
| Operational Creditors (including Statutory Authority) | 0.14 |
Summary of the Payment Schedule under the Resolution Plan is extracted as below:-
| Particulars | Amount in Crore | Details of payment |
|---|---|---|
| Earnest Money Deposit | 0.10 | Along with the Resolution Plan vide DD No. 339427 dated 27.10.2022 in favor of Jaycon Infrastructure Limited |
| Upfront Contribution, if any, as per the Resolution Plan submitted by the Applicant | 1.36 | Within 30 days of approval of Resolution Plan by NCLT |
| Performance Security under Regulation 39(4) Sub Regulation (4A) of Regulation 36B read with Regulation 39(4) | 0.6 | Within 15 business days of approval of Resolution Plan by CoC vide BG No. 21062IGL0000323 dated 28.02.2023 |
| Deferred Payment under the Resolution Plan | 10.64 | Within 21 months from approval of Resolution Plan by NCLT |
Measures required for the implementation of the Resolution Plan in terms of Regulation 37 of CIRP Regulations are extracted below:
| Regulation | Particulars | Relevant page number of the Resolution Plan dealing aforesaid compliance with regulation (Clause Wise) |
|---|---|---|
| 37(a) | Transfer of all or part of assets of the Corporate debtor to one or more persons | NA |
| 37(b) | Sale of all or part of the assets whether subject to any security interest or not | NA |
| 37(b)(a) | Restructuring of the Corporate Debtor, by way of merger, amalgamation and demerger | NA |
| 37(c) | The substantial acquisition of shares of the Corporate Debtor, or the merger or consolidation of the Corporate Debtor with one or more persons | 100% stake/ shares of the Corporate Debtor shall be extinguished and the RA will issue fresh shares. Refer: Point No. 9.5 (Pg. No 49-50 of the Resolution Plan) |
| 37(ca) | Cancellation or delisting of any shares of the Corporate Debtor, if applicable | The shares of existing shareholders of the Corporate Debtor will automatically stand cancelled by way of Reduction of Share Capital upon approval of this Resolution Plan by the Adjudicating Authority Refer: Point No. 9.5 (Pg. No 49-50 of the Resolution Plan) |
| 37(d) | Satisfaction or modification of any security interest | The security interest (mortgage/ hypothecation/ pledge/ lien/ encumbrance) of any creditor on the assets of the Corporate Debtor will be extinguished upon the approval of this Resolution Plan by the Adjudicating Authority. Reliefs and concessional from financial creditors Refer: Point No. B (Pg. No. 57 - 58 of the Resolution Plan) |
| 37(e) | Curing or waiving of any breach of the terms of any debt due from the Corporate Debtor | NA |
| 37(f) | Reduction in the amount payable to the creditors | All liabilities of the creditors shall stand reduced to the amount proposed for final settlements under the plan. Refer: Point No. 9.11(Pg. No 53 of the Resolution Plan) |
| 37(g) | Extension of a maturity date or a change in interest rate or other terms of a debt due from the Corporate Debtor | NA |
| 37(h) | Amendment of the constitutional document of the Corporate Debtor | The Resolution Plan at present doesn't envisage any amendments in the Constitutional Documents of the Corporate Debtor. However, the Constitutional Documents may be amended within a period of 12 months for which no separate approval of shareholder and/or any other statutory authority is required. Refer Point 9.6 (pg 50 of the Resolution Plan) |
| 37(i) | Issuance of securities of the corporate debtor, for cash, property, securities, or in exchange for claims for interests, or other appropriate purpose | 100% stake/ shares of the Corporate Debtor will be acquired by issuance of fresh shares. Refer: Point No. 9.5(Pg. No 49-50 of the Resolution Plan) |
| 37(j) | Change in portfolio of goods or services produced or rendered by the Corporate Debtor | NA |
| 37(k) | Change in technology used by Corporate Debtor | NA |
| 37(I) | Obtaining necessary approvals from Central and State Governments | Since the Resolution Applicant would acquire the Corporate Debtor as a “going concern” basis, all consents, licenses, approvals, rights, entitlements, benefits and privileges whether under law, contracts, lease, granted in favor of Corporate Debtor for which Corporate Debtor is entitled or accustomed to, shall continue without disruptions for the benefit of the Corporate Debtor and /or the Resolution Applicant. However, if required, the Resolution Applicant shall seek the same within a period of 12 months from the date of approval of the Resolution Plan. |
Relinquishment/Waiver of liabilities and Approvals prayed for :
| Sr.No. | Relief and/or Concessions and Approvals Sought | Competent Authority/ Courts/ Government/Semi-Government Authority for relief sought | The plan is approved subject to the observations as below made in the column next to the prayer for relief. |
|---|---|---|---|
| 1. | Existing Equity Share Capital shall be written off without any implication under the Income Tax Act, 1961 and Companies Act, 2013 | From Statutory Departments: | This is for Income Tax Authorities to Consider, keeping in view the objects of Insolvency and Bankruptcy Code, 2016. |
| 2. | Respective Authorities to consider and approve the following: a. Allowing carry forward losses and depreciation as per the provision of the Income Tax Act, 1961; | From Statutory Departments: | This is for Income Tax Authorities to Consider, keeping in view the objects of Insolvency and Bankruptcy Code, 2016. |
| b. To waive all demands/ interest and penalty charged against the dues of the income tax authority for the period prior to Approval date (Whether claimed or not). c. To allow the company to carry forward its unabsorbed business losses/Capital Losses beyond Statutory time limit of 8 Assessment Years under Section 72 of the IT act 1961 and set off in subsequent years; in as much as in calculation of the period of limitation of 8 years under Section 72(3) of Income Tax Act for carry forward of Losses, the years during which the net worth remained negative, be excluded. d. To allow total loss brought forward (including unabsorbed depreciation) to be reduced from the book profit for the purposes of levy of MAT under Section 155JB of the Act; e. Exemption from section 41 of the Act with respect to any Income which may arise due to write back of liabilities against the existing Brought Forward Losses and Unabsorbed Depreciation pursuant to the Approval of the Resolution Plan. f. Without prejudice to the rights available to the Corporate Debtor to otherwise carry forward its accumulated Tax Losses, the Corporate Debtor shall be permitted recourse to the Third Proviso to Section 79 of the IT ACT. Towards this end, while filing the application for approval of the plan with the NCLT under Section 30(6) of the Code, the Resolution Professional Shall make a written request to the NCLT to issue a notice to the Principal Commissioner or Commissioner |
| having Jurisdiction over the Corporate Debtor and to provide such Principal Commissioner or Commissioner with an opportunity of Being Heard ('Section 79 Notice'). If no representation is received from the Principal Commissioner or Commissioner pursuant to issuance of the Section 79 Notice by the Date of the NCLT Order, it shall be deemed that the Principal Commissioner or Commissioner has no objections to the Corporate Debtor carrying forward its income Tax Losses | |||
| 3. | To waive all demands/ interest and penalty charged against the dues of the Statutory Authorities for the Period up to the approval Date including but not limited to dues with respect to pending income tax Customer, sales tax, Service Tax, PF, ESI, GST etc | From Statutory Departments: | This is for the appropriate authorities to consider keeping in view of the clean slate principle envisaged under IBC, 2016. |
| 4. | To waive of all the future/subsequent demands/ claims/suits etc. against the Corporate Debtor related to the events up to Approval Date | From Statutory Departments: | This is for the appropriate authorities to consider keeping in view of the clean slate principle envisaged under IBC, 2016. |
| 5. | On approval of Resolution Plan by the Hon'ble NCLT and from the approval date, all the litigations, proceedings of whatever nature, including those relating to direct or indirect taxation, or of any other nature, in respect of the issues, claims, etc. pertaining to the period up to approval date, shall stand closed immediately and the Corporate Debtor and Resolution Applicant, shall not | From Statutory Departments: | This is for the appropriate authorities to consider keeping in view of the clean slate principle envisaged under IBC, 2016. |
| be liable for any civil or criminal or any other consequence including penalty arising there from | |||
| 6. | To waive off the contingent liability as may arise up to approval date and also which are not captured related to period before approval of Resolution Plan | From Statutory Departments: | This is for the appropriate authorities to consider keeping in view of the clean slate principle envisaged under IBC, 2016. |
| 7. | Approval by NCLT for waiver of 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 approval date | From Statutory Departments: | This is for the appropriate authorities to consider keeping in view of the clean slate principle envisaged under IBC, 2016. |
| 8. | 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 | From Statutory Departments: | Granted as per the relevant provisions of Insolvency and Bankruptcy Code, 2016. |
| 9. | Time period of twenty-one months from the approval date to ensure compliance in relation to noncompliance of Applicable laws by the Corporate Debtor without any additional interest and penalty | From Statutory Departments: | This is for the appropriate authorities to consider keeping in view of the objects of the IBC, 2016. |
| 10. | Further the relevant Government/ Statutory authorities shall not initiate any investigation, action or proceeding against the Resolution Applicant or the new management (upon acquisition of Corporate Debtor) including | From Statutory Departments: | This is for the appropriate authorities to consider keeping in view of the objects of the IBC, 2016. |
| the Board of Directors and Corporate Debtor (CD), in relation to any non-compliance with Applicable laws by the Corporate Debtor pertaining to any period up to approval date | |||
| 11. | Since the Resolution Applicant has limited information in relation to the business permits and their current status, it is probable that certain of the business permits of the corporate debtor have lapsed, expired, suspended, cancelled, revoked or terminated or the corporate debtor has non-compliances in relation thereto. Accordingly, all Government authorities that have issued or granted such business permits to provide reasonable time period of at least twelve months after the approval date in order to the Resolution Applicant to assess the status of business permits and applicable laws without initiating any action, proceeding in relation to non-compliance, and to permit the Resolution Applicant to continue to operate the Business of the Corporate Debtor as carried out prior | This is for the appropriate authorities to consider keeping in view of the objects of the IBC, 2016. | |
| 12. | 100% extinguishment of unclaimed amount of all other Central and State Government or Local Authorities (Including Dues of Land Revenue Department (if any) up to approval date | From Statutory Departments: | This is for the appropriate authorities to consider keeping in view of the clean slate principle envisaged under IBC, 2016. |
| 13. | Respective authorities to consider the Exempting the Corporate Debtor from Section 79 of the Income Tax Act, 1961 | From Statutory Departments: | This is for Income Tax Authorities to Consider, |
| keeping in view the objects of Insolvency and Bankruptcy Code, 2016. | |||
| 14. | All Government/ Regulatory Authorities to grant relief, concession or dispensation as may be required for implementation of the transaction contemplated under the Resolution Plan | From Statutory Departments: | This is for the appropriate authorities to consider keeping in view of the clean slate principle envisaged under IBC, 2016. |
| 15. | Any Tax Liability / Claim which may arise pursuant to the assessment of Tax in respect of any event/ transaction taken place prior to the Approval Date shall stand extinguished in entirety under the Resolution Plan | From Statutory Departments: | This is for the appropriate authorities to consider keeping in view of the clean slate principle envisaged under IBC, 2016. |
| 16. | Local Electricity Discom, local municipal corporation, local water supply agency to waive off all demands, penalties, taxes, dues, charges, levies, and cess for any period prior to the Plan Effective Date. The Company or Applicant shall not be liable for the above under Applicable Laws for the period prior to the Plan Effective Date and the Adjudicating Authority shall pass an order to that effect | From Statutory Departments: | This is for the appropriate authorities to consider keeping in view of the clean slate principle envisaged under IBC, 2016. |
| 17. | Any interest or penalty or charge payable during the CIRP period should be waived off under any law for the time being in force. If any interest or charge is paid, then it shall be recovered or reversed | From Statutory Departments: | This is for the appropriate authorities to consider keeping in view of the clean slate principle envisaged under IBC, 2016. |
| 18. | Resolution Applicant shall be allowed to make any modification in name or branding, etc. at their sole discretion and all concerned parties/stakeholders shall provide NOC for the same if required | From Statutory Departments: | This is for the appropriate authorities to consider keeping in view of the clean slate principle envisaged under IBC, 2016. |
| 19. | After the receipt of full amount as ascribed in the plan, the banks shall release their charge over all the assets of the corporate debtor as forming part of Plan, which have been provided as security against the facilities availed from the financial creditors and no amount of any nature shall be payable either by the Resolution Applicant or by the corporate debtor having new management / directors, except as provided for in the resolution plan | Secured Financial Creditors | Granted in terms of the judgement of Hon'ble Supreme Court in case of Ghanshyam Mishra and Sons Private Limited through Authorised Signatory vs. Edelweiss Asset Reconstruction Company Limited through the Director & Ors. 2021 SCC Online SC 313. |
| 20. | The Resolution Applicant will have the option to pre pay the dues of the Financial Creditors, without any additional levies | Secured Financial Creditors | Granted as per the relevant provisions of Insolvency and Bankruptcy Code, 2016. |
| 21. | After the implementation of the Resolution Plan all fixed assets and current assets as specifically provided for in the plan including written off will solely remain under the ownership and right of corporate Debtor and no other person will have the right on these assets in Future | Secured Financial Creditors | Granted as per the relevant provisions of Insolvency and Bankruptcy Code, 2016. |
| 22. | Bank Guarantees to be renewed at the Request of the CD under new management per procedure/policies of lender | Secured Financial Creditors | Granted as per the relevant provisions of Insolvency and Bankruptcy Code, 2016. |
| 23. | Secured Creditors not to take any penal coercive action, recovery proceedings in DRT and/or other forums against the Assets of the Corporate Debtor, pending approval of this Resolution Plan | Secured Financial Creditors | Granted as per the relevant provisions of Insolvency and Bankruptcy Code,2016. |
| 24. | The Corporate Debtor and the Resolution Applicant are to be responsible only for the liabilities specifically mentioned and undertaken by them in the Resolution Plan. To clarify, the Resolution Applicant shall not be responsible for the liabilities not mentioned/ undertaken in the Resolution Plan | Other Creditors | Granted as per the relevant provisions of Insolvency and Bankruptcy Code,2016. |
| 25. | All the contingent liabilities of what so ever nature as stated in the financial statements or otherwise and also which are stated / not stated in the Information Memorandum and which is related to period prior to the approval of Resolution Plan from the approval date, are to be extinguished. All the future/subsequent demands/claims/suits etc. against the corporate debtor, relating to the events prior to the approval of the Resolution Plan by the Adjudicating Authority, are to be extinguished | Contingent Liabilities | The extinguishment of the contingent Liabilities will be as per the applicable laws. |
| 26. | All Corporate Guarantees issued by the Corporate Debtor in favor of any party which are reflected in the books or not or may occur in future due to any transaction in the past shall stand extinguished after the approval of the Resolution Plan | Corporate Guarantees issued by Corporate Debtor | The extinguishment of the contingent Liabilities will be as per the applicable laws. |
| 27. | All the contracts, including any onerous contract, entered into by the Corporate Debtor subsisting as on effective date, to be continued at the sole | Contracts made prior to Approval Date | Granted as per the relevant provisions of Insolvency and Bankruptcy Code,2016. |
| discretion of Corporate Debtor under the new management after the effective date. However, the new management and/or Corporate Debtor shall not be burdened with the additional liability/ penalty/ damages/ any other charges on account of delay/ default by the Corporate Debtor and/or by the Resolution Professional | |||
| 28. | To extinguish all the legal proceedings as extracted from the information memorandum as mentioned at clause) and future/subsequent demands/claims/suits etc. against the Corporate Debtor and Promoters/ Guarantors relating to the events prior up to approval date. Ather the Financial settlements as presented in the Resolution Plan and approved by Hon'ble NCLT shall be binding on all the category of creditors, Employees/Workmen, other stakeholders and no person shall be bled to receive any amount apart from as mentioned in the Plan | Litigation/ Legal Proceedings | Subject to the provisions of the relevant Laws |
| 29. | Approval by Hon'ble NCLT that all outstanding negotiable instruments issued by Corporate Debtor or any other person on behalf of Corporate Debtor shall stand terminated from the approval Date and no liability shall arise due to the same qua the corporate debtor | Termination of any Negotiable Instruments | Granted as per the relevant provisions of Insolvency and Bankruptcy Code,2016. |
| 30. | All the power of attorneys provided to any person by the Corporate Debtor shall stand revoked/ ineffective/null and void, immediately on the Approval Date | Revocation of Power of Attorneys | Granted as per the relevant provisions of Insolvency and Bankruptcy Code,2016. |
| 31. | The dues incurred by the Resolution Professional (on behalf of Corporate Debtor) during the CIRP, towards the financial and operational creditors shall be paid in terms of agreements with them. The Resolution Plan has been made on the assumption that all dues incurred by the Resolution Professional (on behalf of Corporate Debtor) during the CIRP and prior to the Effective Date, have been or will be paid as CIRP Costs. Therefore, except for CIRP Costs, any liabilities and/ or claims that arise between the Insolvency Commencement Date and the Effective Date disclosed or undisclosed and/or in India or anywhere outside India shall stand waived, extinguished, abated, discharged in perpetuity as on the Effective Date, pursuant to the NCLT Approval Order and after making the payment proposed under this plan Further, except as provided herein, no interest shall be paid for the CIRP Period, on any claim against Corporate Debtor (as on the Insolvency Commencement Data), be it of the financial creditor Operational creditor or any other claim arising on account of any financial liability, operational liability or any other contingent liability or dues, demands in connection with or against Corporate Debtor | Dues of Creditors during CIRP | Granted as per the relevant provisions of Insolvency and Bankruptcy Code,2016. |
| 32. | On the approval of the Resolution Plan by Hon'ble NCLT, the Resolution Applicant shall be the sole beneficiary of any amount recovered by the Resolution Applicant post | Extinguishment of claims and entitlements | Granted as per the relevant provisions of Insolvency and Bankruptcy Code,2016. |
| acquisition, previously written off by the corporate Debtor. Further, the Resolution Applicant shall have full right to recover/ proceed against the party, whose account a recoverable in the books of Corporate Debtor as on Effective Date and it shall be the sole beneficiary of the amount so recovered | |||
| 33. | Other than persons receiving financial settlement under the Resolution Plan, no payments or settlements (of any kind) shall be made to any other Person in respect of claims filed under the CIRP and all claims (including, for avoidance of doubt, any un-verified portion of their claims, rejected) against the Corporate Debtor along with any related legal proceedings (including criminal proceedings), shall stand irrevocably and unconditionally abated, settled and extinguished in perpetuity on and with effect from effective date. Any invocation or appropriation or enforcement action already taken in respect of any security, guarantee, pledge, charge, encumbrance granted or created by the Corporate Debtor, or in respect of any asset of the Corporate Debtor in connection with any financial debt or any other debt or obligation of the Corporate Debtor, at any time prior to the effective date shall stand automatically revoked and cancelled and deemed null and void all liabilities and obligations in relation to such security, guarantee, pledge, charge, encumbrance granted or created by the Corporate Debtor, or in respect of any | Extinguishment of claims and entitlements | Granted in terms of the judgement of Hon'ble Supreme Court in case of Ghanshyam Mishra and Sons Private Limited through Authorised Signatory vs. Edelweiss Asset Reconstruction Company Limited through the Director & Ors. 2021 SCC Online SC 313. |
| asset of the Corporate Debtor shall be deemed to have been permanently extinguished w.e.f. effective date | |||
| 34. | On making payment as per Resolution Plan, encumbrances, security interest, liens, and/or attachments created over the assets of the corporate debtor or any subsidiary or over the securities of the corporate debtor, whether by contract or by applicable law, shall stand unconditionally and irrevocably released, and reversed, without the requirement of any further deed or action on part of the Resolution Applicant or the Corporate debtor | Others | Granted in terms of the judgement of Hon'ble Supreme Court in case of Ghanshyam Mishra and Sons Private Limited through Authorised Signatory vs. Edelweiss Asset Reconstruction Company Limited through the Director & Ors. 2021 SCC Online SC 313. |
| 35. | As per the Information extracted from the Information Memorandum, the Resolution Professional has received Claims of Rs. 70.24 Crs from financial creditors, out of which claims of Rs. 70.24 Crs lacs are admitted. The Resolution Applicant has offered an amount of Rs. 11.64.00 Crs payable in one year and s months without interest to the secured financial creditors. The balance amount, not provided for in the Resolution Plan shall stand extinguished after the approval of the Resolution Plan. Further any Unclaimed Amount shall also stand extinguished on the approval of Resolution Plan from the Effective Date | Financial Creditors | Granted in terms of the judgement of Hon'ble Supreme Court in case of Ghanshyam Mishra and Sons Private Limited through Authorised Signatory vs. Edelweiss Asset Reconstruction Company Limited through the Director & Ors. 2021 SCC Online SC 313. |
| 36. | As per the information Extracted from the Information Memorandum, the Resolution | From Workers & Employees | Granted in terms of the judgement of Hon'ble Supreme Court in case of Ghanshyam Mishra and |
| Professional has verified claims of Rs. 297 Crs from the workers/ employees. The Resolution Applicant have offered Rs. 0.20 Crs towards claim of workmen only that pertain to period of 24 months prior of CIRP date in proportion of claim verified. The balance claim amount of workmen/employees i e Rs 2.77 Crs shall stand extinguished on the approval of resolution plan. Workers/employees who have not lodged their claims or if any amount has not been provided for in the Resolution Plan, shall stand extinguished after the approval of the Resolution Plan. Further any unclaimed amount (including the retirement benefits, gratuity etc.), shall also stand extinguished on the approval of Resolution Plan from the effective date | Sons Private Limited through Authorised Signatory vs. Edelweiss Asset Reconstruction Company Limited through the Director & Ors. 2021 SCC Online SC 313. | ||
| 37. | As per the Information Extracted from the Information Memorandum, the Resolution Professional has admitted claims worth Rs. 44.38 Crs. The Resolution Applicant has not offered any amount towards their claims because the expected liquidation value available to them is 'NIL'. Further any Unclaimed Amount shall also stand extinguished on the approval of Resolution Plan from the effective date | From Operational Creditors (Trade Payables) | Granted in terms of the judgement of Hon'ble Supreme Court in case of Ghanshyam Mishra and Sons Private Limited through Authorised Signatory vs. Edelweiss Asset Reconstruction Company Limited through the Director & Ors. 2021 SCC Online SC 313. |
| 38. | As per the Information Extracted from the Information Memorandum, the Resolution Professional has received claims worth Rs. 29.94 Crs out of which Rs. 0.32 crs has been admitted. The Resolution Applicant has not offered any amount towards their claims except to PF department as there are various judgments of supreme court & other tribunal. The admitted claim amount of PF department is Rs.6.72 crs which is principal amount as per information received. RA is proposing double of claims amount i.e Rs.0.14 crs to accommodate interest component over principal amount. Hence Further any Unclaimed Amount shall also stand extinguished on the approval of Resolution Plan from the effective date. Although Resolution Plan is prepared with utmost care and due diligence in spite of that if in future any hidden financial liability towards discharge of any legal obligation, of any nature whether known or unknown, defined or non-defined, admitted or non-admitted; arise on Resolution Applicant, the Resolution Applicant must be protected from such liability and must be allowed to approach Hon'ble NCLT for reliefs, if needed | From Creditors Authorities | Operational (Statutory) | Granted in terms of the judgement of Hon'ble Supreme Court in case of Ghanshyam Mishra and Sons Private Limited through Authorised Signatory vs. Edelweiss Asset Reconstruction Company Limited through the Director & Ors. 2021 SCC Online SC 313. |
Details Of Monitoring Committee:
| Name(s) of the proposed member(s) of Implementation and Monitoring Committee | Brief description of the proposed member(s) of the I & M committee |
| Mr. Jalesh Kumar Grover | Page 9 of the Resolution Plan provides 'Monitoring Agency' or 'Monitoring Committee' means the |
| Committee comprising one representative each of the Resolution Applicant and CoC Point 9.2 @page 48 of the Resolution Plan provides “A Monitoring Agency (“MA”) or Monitoring Committee shall be appointed by the Resolution Applicant in consultation with CoC for supervision and implementation of the Resolution Plan in terms of provisions of Section 30(2)(d) of IBC read with Regulation 38(2)(c) of the CIRP Regulations. The appointment shall be at the mutually agreed terms with CoC Members for the period with effect from the date of approval of the Resolution Plan by Hon’ble NCLT till the payments proposed under this Resolution are cleared” In view of the above, agenda for appointment of Monitoring Professional placed for approval by CoC in 33rd meeting of the CoC held on 09.02.2023 which got approved by the CoC vide email dated 27.02.2023. Further, CoC proposed the name of Mr. Jalesh Kumar Grover as Monitoring Agent for the implementation and Monitoring Committee post the approval of the Resolution Plan. Thereafter, Resolution Professional intimated Resolution Applicant regarding the decision of CoC for appointment of Monitoring Agent and Resolution Applicant vide email dated 24.03.2023, confirmed the said appointment. |
The resolution professional has appointed a forensic auditor, and on the basis of the forensic report, applications under Section 43(2) have been filed in compliance with Regulation 35A of Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016.
In the Addendum to Resolution Plan, it is stated that
“... Any amount is received by the Resolution Professional of the company or Corporate Debtor after approval of resolution plan in furtherance thereof, such sums shall be for the benefit of all the creditors and shall be distributed as per section 53 of IBC, 2016. Further the expenses to pursue the application in this regard shall be borne by the secured financial creditor. Monitoring Professional shall pursue the said application after approval of resolution plan by Adjudicating Authority. Secured Financial Creditor shall pursue the said application after full implementation of resolution plan.
On a perusal of the reliefs etc., sought above, it is seen that the same are claimed under the general reliefs as per the provisions of IBC, under the ratios of various judicial pronouncements. Some of the reliefs sought comes within the jurisdiction of Government Authorities/Departments. As regards the aforementioned claims under the IBC, it is clarified that this Adjudicating Authority has powers to decide the reliefs claimed which are directly relatable to the Resolution Process and not over those pertaining to extraneous issues. Regarding the reliefs/waivers pertaining to the domain of various Departments/Governmental Authorities, it is further clarified that this Adjudicating Authority has no power to sanction these waivers, etc., and the Successful Resolution Applicants are at liberty to approach the competent authorities/courts/legal forums/office(s) Government or Semi-Government/State or Central Government for appropriate relief(s) sought in the plan. Approval of the Resolution Plan does not mean automatic waivers.
It is directed that any relief sought in the resolution plan, where the contract/agreement/understanding/proceedings/actions/notice etc., is not specifically identified or is for future and contingent liability, is at this moment not acceded to.
The Resolution Applicants shall obtain the necessary approval required under any law for the time being in force within one year from the date of this order or within such period as provided for in such law, whichever is later.
Findings
On hearing the submissions made by the learned counsel for the Resolution Professional and perusing the records, we find that the Resolution Plan has been approved at a total Resolution Value of Rs. 1197 Lacs. The resolution applicant proposes to make payment to secured financial creditors Rs. 1161.09 Lacs and Rs. 13.96 Lacs to the Operational Creditors(Government dues) and Rs. 21.95 Lacs to Workmen.
As per the CoC, the Resolution Plan meets the requirement of being viable and feasible for the revival of the Corporate Debtor. By and large, all the compliances have been done by the RP and the Resolution Applicant for making the plan effective after approval by this Bench.
On perusal of the documents on record, we are satisfied that the Resolution Plan is in accordance with Sections 30 and 31 of the Code and complies with Regulations 38 and 39 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016.
Orders
Therefore, subject to the observations made in this order, we hereby accord our approval to the Resolution Plan along with the addendum.
It is further directed that the Resolution Applicant, on taking control of the corporate debtor, shall ensure compliance under all applicable laws for the time being in force. As far as the question of granting time to comply with the statutory obligations or seeking sanctions from governmental authorities is concerned, the Resolution Applicant is directed to do the same within one year as prescribed under Section 31(4) of the Code.
The Resolution Plan as approved shall be binding on the corporate debtor and its employees, members, and creditors, including the Central Government, State Government, or Local Authority, to whom a debt in respect of the payment of dues arising under any law for the time being in force such as authorities to whom statutory dues are owned, guarantors and other stakeholders involved in the resolution plan.
The Moratorium imposed under Section 14 shall cease to have effect from the date of this order.
The Resolution Professional shall stand discharged from his duties with effect from the date of this order. However, he shall perform his duties in terms of the Resolution Plan as approved by this Adjudicating Authority.
The Resolution Professional is further directed to hand over all records and properties to the Resolution Applicant and shall finalize the further line of action required for starting the operation. The Resolution Applicant shall have access to all the records and premises of the corporate debtor through the Resolution Professional to finalize the further line of action required for starting the operation.
In case of non-compliance with this order or withdrawal of the Resolution Plan, the performance security amount already paid by the Resolution Applicant shall be liable to be forfeited, in addition to such further action as may be permitted under the law.
Liberty is hereby granted for moving any application if required in connection with the implementation of this Resolution Plan.
The Resolution Professional shall forward all records relating to the conduct of the CIRP and the resolution plan to the Board to be recorded on its database.
The Resolution Professional shall file a copy of this order with the Concerned Registrar of Companies, inter alia, for updating the status of the corporate debtor.
Additionally, the Registry shall send a copy of this order to the Registrar of Companies, Punjab and Chandigarh.
The application bearing IA No. 659 of 2023 is allowed and the main Company Petition, i.e., CP (IB) No. 218/Chd/Chd/2018, shall stand disposed of accordingly.
Certified copy of this order may be issued, if applied for, upon compliance with all requisite formalities.