Mr. Amitabh Singh vs M/S Vaishali Real Estate Private Limited

The present interlocutory application bearing IA. No. 325/2022 was moved on behalf of Mr. Rajeev Ranjan Singh Resolution Professional (“RP”) of M/s Vaishali Real Estate Private Limited under the provisions of Sections 30(6) and 31(1) of the Insolvency& Bankruptcy Code, 2016 [hereinafter referred to as “the Code” or “IBC”] read with Regulation 39(4) of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (“CIRP Regulations”) for approval of the ResolutionPlan in respect of M/s Vaishali Real Estate Private Limited (“Corporate Debtor”).

The underlying Company Petition CP (IB) No.207/ALD/2019 filed by Mr. Amitabh Singh under Section 7 of the Code for initiation of Corporate Insolvency Resolution Process (“CIRP”) against the Corporate Debtor namely M/s Vaishali Real Estate Private Limited which was admitted by this Adjudicating Authority vide its order dated 30.03.2022(“Admission Order”). On that date, i.e., 30.03.2022(“Insolvency Commencement Date”), Mr. Rajeev Ranjan Sigh (IBBI/IPA-002/IP-N00707/2018-2019/12418) was appointed as IRP. Subsequently, IRPConducted 1^st CoC meeting on 28.04.2022 whereby IRP was confirmed to be appointed as RP.

It is stated in Resolution Plan that the public announcement was made on 02.04.2022 in Financial Express (English) and Jansatta (Hindi) and he called for proof of claims from the creditors of the Corporate Debtor and informed lenders to submit their claims as envisaged under the Code.

Pursuant to the collation and verification of claims received, the COC was constituted on 22.04.2022 with one Financial Creditor and 6 real estate allotees. However, in the 3rd COC dated 26.08.2022, the revised list of claims was received and COC was reconstituted in lieu of claim received from CVK Charitable Trust. The list of Financial Creditor and real estate allotees and the distribution of voting share among them is as under:

The details of claims submitted are as follows:

The RP submits that a total of 5 CoC meetings have been held during the whole CIRP period.

It is stated in the Resolution plan that the 2^nd CoC was held on 10.06.2022 whereby the CoC Inter alia approved the publication of Form G, Request for Resolution plan, Evaluation Matrix, and eligibility criteria. Accordingly, invitations for Expression of Interest (EoIs) in Form-G were published on 13.06.2022, wherein the last date of receipt of the EOI was fixed as 28.06.2022

In pursuance thereto, the resolution professional received 2 EoIs for submission of the Resolution plan. The PRAs who have submitted EoIs are given as under:-

Dwiti Construction Pvt. Ltd.

RKG Fund-I

One Resolution Applicant viz, Dwiti Construction Pvt. Ltd. submitted its Resolution Plan which was put for consideration before CoC in the 4^th CoC meeting dated 08.09.2022. Pursuant to the 4^th COC meeting, Applicant received revised Resolution Plan from the Prospective Resolution Applicant.The revised Resolution Plan received from the Successful resolution Applicant was put before 5^th COC meeting dated 13.09.2022.

The e- voting on the compliant resolution plan commenced at 04:00 PM on 13.09.2022 and concluded at 05:40 PM on the same day itself.

The Resolution Plan submitted by the Successful Resolution Applicant i.e. Dwiti Construction Pvt. Ltd. was approved by a majority of 94.85% voting share by the CoC in the 5^th COC meeting dated 13.09.2022. The application for approval of the resolution planby this Adjudicating Authority was filed by the RP on 23.09.2022. The voting results of the 5^th COC meeting dated 13.09.2022 is reproduced hereunder:-

A compliance Certificate in terms of prescribed Form H under regulation 39 (4) of the CIRP Regulations was also filed before this Tribunal. As per FORM H, the fair value of the corporate debtor is Rs. 630.75 Lakhs and the liquidation value is Rs. 393.30 Lakhs as per the registered valuers report.

The successful Resolution Applicant i.e. Dwiti Construction Pvt. Ltd is a non-government company carrying on the business of promoters, builders, colonisers, etc. in India or any part of the world.

The amount proposed in the Resolution Plan are tabulated below:

Estimated Total Amount Proposed to be brought in the Corporate Debtor for the turnaround of the Corporate Debtor:

The overall Resolution Plan is for a total amount of approximately Rs. 03.10 Crores which shall be infused by the Resolution Applicant from their own sources/raising funds from friends & relatives/ Associates/ Banks/ NBFC/ARC.

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:

Section 30(2) of Insolvency Compliance under Relevant Page and Bankruptcy Code, 2016 Resolution Plan Number of Application

Measures provided in Resolution Plan in terms of Regulation 37 of CIRP Regulations.

As regards to the compliance of Regulation 37(a) of the above table, we have noticed that while declaring that the present provision concerning transfer of all or part of the assets of the Corporate Debtor to one or more persons is not applicable to this Resolution Plan. However, there seems to be a conflict of this declaration given in the table above as against clause (VII) (1) of the Resolution Plan in as much as the said clause stipulates that the resolution applicant shall be at liberty to transfer such assets to any person including the Corporate Debtor. We are therefore, not inclined to accept the stipulations made in Clause VII (1) of the Resolution Plan in view of the explicit declaration having been made in the aforesaid table concerning compliance of Regulation 37(a) whereby the resolution applicant has declared that the said provision is not applicable.

The Applicant submits that the successful resolution applicant has submitted an affidavit in regard to the eligibility under section 29A of the Code, as required by Regulation 39(1)(a) of the CIRP Regulations. An undertaking has also been submitted by the successful Resolution Applicant, as mandated in terms of regulation 39(1)(c) of the CIRP Regulations. The affidavit under section 29 A is at page no. 101 in the application which is reproduced there under:-

The Applicant has filed a Compliance Certificate in prescribed Form, i.e. Form ‘H’ in compliance with Regulation 39(4) of the CIRP Regulations. The RP has issued the Letter of Intent to the Successful Resolution Applicant and the Successful Resolution Applicant provided the Performance Bank Guarantee of Rs.31,07,228/-(Rupees Thirty-One Lakhs Seven Thousand Two Hundred Twenty Eight Only) through Bank Transfer into CD’s CIRP account dated 23.09.2022 is annexed as Annexure-17 at pg. no. 169 which is required under Regulation 36B (4A) of CIRP Regulations, 2016.

The Applicant submits the relevant information about the amount claimed, the amount admitted, and the amount proposed to be paid by the Successful Resolution Applicant, i.e., Dwiti Construction Pvt. Ltd. under the said Resolution Plan which is tabulated as under:

Sl. Types of debts Resolution Amount Payment Term No. (In Crores)

With respect to serial no. 1 of the above table concerning the CIRP cost, we have noticed that the plan includes CIRP cost in addition to an amount of Rs. 2.91 crore for Financial Creditors. However, the amount of the CIRP cost has not been mentioned in the plan, though there is a mention of Rs. 19 lacs towards CIRP cost in the minutes of the 5^th CoC meeting, copy of which has been attached with the IA. Therefore the plan value would be Rs. 2.91 Crore for Financial Creditors and CIRP cost of Rs. 19 lacs till the 5^th CoC meeting dated 13^th September, 2022. Further it would also include the CIRP cost to be paid as per actual till the approval of the Resolution Plan.

The Resolution plan size is approximately of Rs.3.10 Cr. (Rupees Three Crores Ten lakhs). The “Effective Date” will be the date on which the Adjudicating Authority approves the Resolution Plan.

The Resolution Plan also provides for details of management and control, implementation and supervision of the Resolution Plan and term of plan and the same is already set out in Para 16 supra.

Not provided in Resolution plan or application. However, the convenience proforma provides the following:

The SRA has sought/prayed for the reliefs, waivers and concessions as enumerated under the Resolution Plan approved by the CoC , namely, that from the plan approval date all inquiries, investigation and proceedings, whether civil or criminal, suits, claims, disputes, interests and damages in connection with the Corporate Debtor or the affairs of the Corporate Debtor, pending or threatened, present or future in relation to any period prior to the plan approval date, or arising on account of implementation of this Resolution Plan, shall stand withdrawn, satisfied and discharged. From the date of approval of the ‘Resolution Plan’, the Resolution Applicant shall be legally authorized to seek appropriate orders from respective authorities/courts/tribunals for renewal of licenses/withdrawal/dismissal or abetment of the proceedings as the case may be.

There are certain litigation pending involving corporate debtor as mentioned in the additional document filed on 13.12.2022. It may be mentioned that the said litigations would be governed by Section 32A of the Code.

On hearing the submissions made by the Ld. Counsel for the Resolution Professional and perusing the record, we find that the Resolution Plan has been approved by the CoC with 94.85% of the members voting in favour of the ResolutionPlan. As per the CoC, the Plan meets the requirement of being a viable and feasible revival of the Corporate Debtor. By and large, there are provisions 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 IBC and also complies with regulations 37, 38 and 39 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations,2016.

The reliefs, concessions and waivers sought by the Successful Resolution Applicant will be dealt with strictly in accordance with the applicable laws.

It may be clarified that litigations wherever pending against the corporate debtor would be governed by Section 32A of the Code.

As far as the question of granting time to comply with the statutory obligations/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.

In case of non-compliance with this order or withdrawal of the Resolution Plan within the stipulated time, in addition to other consequences which follow under law, the CoC shall forfeit the EMD amount of Rs. 20 Lakh already paid by the Resolution Applicant as well as the Performance Bank Guarantee of Rs. 31,07,228/-

As already elaborated at para no. 16 with regard to the compliance of provisions Regulation 37(a) consisting transfer of all part of the assets of the Corporate Debtor to one or more persons, the declaration of the Resolution applicant that the present provision is not applicable is accepted. 33. Subject to the observations made in this Order, the Resolution Plan of Rs.2.91 Cr. (Rupees two crores and ninety one lac) plus CIRP cost of Rs. 19 lacs payable till the date of 5^th CoC meeting dated 13.09.2022 and additionally CIRP cost as per actual from 13.09.2022 till the date of approval of Resolution Plan, containing the mandatory contents of Resolution Plan in terms of Regulation 38(1), is hereby approved as perSection 31(1), after satisfying ourselves that the resolution plan as approved by the COC under sub- section (4) of Section 30 on 13.09.2022 meets the requirements as referred to in subsection (2) of Section 30. The Resolution Plan shall form part of this Order. As already mentioned above, the CIRP cost of Rs. 19 Lakhs as on the decision of the CoC taken in its 5th meeting held on 13.09.2022 shall be payable and thereafter the CIRP cost till the approval of the Resolution Plan as per actuals shall also be paid by the Successful Resolution Applicant.

The reliefs, concessions and waivers sought/prayed by the Successful Resolution Applicant will be dealt with strictly in accordance with the applicable laws including Companies Act, 2013 and Income Tax Act, 1961, etc.

The Moratorium imposed under section 14 of the Code shall cease to have effect from the date of this order.

The Resolution Professional shall submit the records collected during the commencement of the proceedings to the Insolvency & Bankruptcy Board of India for their record.

The Monitory Committee as proposed in the resolution plan is appointed as under:

The above Monitory Committee shall ensure timely & successful implementation of resolution plan approved by this order.

Section 43 and Section 66 Application have been filed separately vide IA no. 282/2022 and IA 283/2022 respectively and are pending. In view of the above, we order that Resolution Applicant would pursue the PUFE application. It is also made clear that whatever would be the proceeds out of the above applications, the differential amount between the claim and admitted amount of the creditors would be met first and remaining, if any, would be going to the Resolution Applicant.

IA No. 325/2022 shall stand disposed of accordingly.

Liberty is hereby granted for moving appropriate application if required in connection with implementation of this Resolution Plan.

A copy of this Order shall be filed by the Resolution Professional with the Registrar of Companies

The Resolution Professional shall stand discharged from his duties with effect from the date of this Order, save and except those duties that are enjoined upon him for implementation of the approved Resolution Plan.

The Resolution Professional is further directed to hand over all records, premises/ factories/documents available with it to the Resolution Applicant to finalise the further line of action required for starting of the operation. The Resolution Applicant shall have access to all the records and premises through the ResolutionProfessional to finalise the further course of action required for starting of operations of the Corporate Debtor.

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

The registry is further directed to send the copy of the order to the IBBI also for their record.

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

File be consigned to the record.

The pending applications are already listed on 26^th May, 2023.