Mr. Aravindan Devarajan & Ors. vs M/s. Lalith Gangadhar Constructions Pvt. Ltd.

IA (Plan) 09/2024 is allowed vide separate order. For submission of implementation report, list the case on 19.01.2026.

This Application is filed by Mr. Ratnakar Shetty (hereinafter referred to as ‘Applicant/Resolution Professional’) under Section 30(6) read with Section 31 of the Insolvency and Bankruptcy Code, 2016 and Regulation 39(4) of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 read with Rule 11 of the National Company Law Tribunal Rules, 2016 seeking approval of the Resolution Plan dated 01.08.2024 submitted by Kumar Properties Private Limited (hereinafter referred to as ‘Successful Resolution Applicant/SRA’), approved by the CoC in its 15th meeting, held on 30.07.2024 where voting lines closed on 07.08.2024, with 100% voting share.

The corporate insolvency resolution process (CIRP) for Lalith Gangadhar Constructions Private Limited was initiated on an application filed by the financial creditor for a default amount of INR 7,48,37,351/-. The application under Section 7 of the Insolvency and Bankruptcy Code(IBC), 2016, was admitted by the NCLT on 26.04.2022, marking the commencement date of CIRP. Mr. Ratnakar Shetty was appointed as the Interim Resolution Professional (IRP) upon admission of the petition and was subsequently confirmed as the Resolution Professional (RP) by the Committee of Creditors(CoC). This process also triggered the imposition of a moratorium under Section 14 of the Code and public announcement inviting claims from creditors as per regulatory compliance.

The Corporate Debtor Lalith Gangadhar Constructions Private Limited, was admitted into CIRP vide order dated 26.04.2022 in CP (IB) No. 87/BB/2021, wherein Mr. Ratnakar Shetty was appointed as the IRP.

The key dates and events during the CIRP period are tabulated as hereunder:

● Following Registered Valuers were approved by the CoC to be appointed for Land and Building on 13th July 2022 and 15th July 2022 -

● SVEE Valuation and Advisory LLP

● Anand Kumar C

● Following Registered Valuers were approved by the CoC to be appointed for Securities and Financial assets on 13th July 2022 -

● Rajesh Yanamandram

● SVEE Valuation and Advisory LLP

● Following Registered Valuers were appointed for Plant & Machinery on 13th July 2022 and 14th July 2022 -

● Rajkumar Sarda

● SVEE Valuation and Advisory LLP

● The Fair Value and Liquidation value of the Corporate Debtor is as follows:

The Kumar Properties Private Limited is a leading real estate development and renting company, incorporated over 55 years ago and having its registered office at Kumar Capital, 2413, East Street, Camp, Pune 411 001, Maharashtra, India. The Successful Resolution Applicant (SRA) is recognized for its substantial land bank of 1,000–1,250 acres in and around Pune, exceptional technical expertise in both real estate and biotechnology, and for constructing more than 18 million square feet across various prime locations. The SRA’s track record includes executing large construction contracts for institutional clients and pioneering technical collaborations with specialized firms, reflecting a significant learning curve in delivering quality infrastructure solutions through its substantial pool of engineering and management talent.

As of the date of the Resolution Plan, the principal shareholders of the SRA are Mr. Hitesh Kewal Kumar Jain, holding 74.80% equity, and Mr. Kewal Kumar Kesarimal Jain, holding 25.20% equity, together holding 100% of the company’s shares. The SRA’s leadership team includes directors and senior managers with postgraduate backgrounds in finance, civil engineering, and business administration, with prior experience in reputed business ventures both domestically and internationally.

The SRA’s considerable human resource strength includes 200 in real estate engineering, 50 in marketing, 60 in administration, as well as dedicated technical, marketing, and administration teams in its biotechnology vertical. Kumar Properties Private Limited is a widely trusted brand in Pune, renowned for resilience in fluctuating market conditions and for reliably delivering projects on schedule.

The Resolution Applicant meets the eligibility criteria provided by the Committee of Creditors and, on affidavit, confirms eligibility under Section 29A of the Insolvency and Bankruptcy Code, 2016. Further, all requisite declarations under Regulation 39(1)(c) and Regulation 38(1B) of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 have been provided, and the due diligence report under Regulation 36A(8) has been submitted, confirming the eligibility and capability of the SRA.

The RP has filed a memo on 20.05.2025 explaining the feasibility and viability of the Plan. The Committee of Creditors (CoC), acting in its commercial wisdom, thoroughly deliberated on the Resolution Plan submitted by Kumar Properties Private Limited in its 7th, 9th, 11th, 12th, and 15th meetings. Following extensive discussions and consideration of the financial, operational, and managerial aspects of the plan, the CoC, at its 15th meeting held on 30 July 2024 (with voting lines closing on 7 August 2024), unanimously approved the plan with a 100% voting share. The Resolution Plan demonstrates clear feasibility and viability. The Resolution Applicant, Kumar Properties Private Limited, has a robust financial standing, with over 15 years of experience in the real estate development sector, having constructed more than 18 million square feet and maintaining a substantial land bank. The plan provides for the infusion of INR 31,53,55,885 (Rupees Thirty-One Crores Fifty-Three Lakhs Fifty-Five Thousand Eight Hundred and Eighty-Five only) towards the revival of the Corporate Debtor, with supporting documentation for sources of funds, including a Letter of Comfort from Union Bank of India. The promoters have a proven track record, strong net worth, and have contemplated securing term loans if required for construction finance.

Operationally, the Resolution Plan lays out a turnaround strategy focusing on the completion of the “One Street English Styled Townhouses” and “Happy Days” projects. This includes mechanisms for the timely completion of pending construction, planned contributions from homebuyers into a designated RERA account, and projected completion timelines within 21–24 months from NCLT approval. Strategic transfer of assets, such as the “Happy Days” project from the subsidiary LGCL Urban Homes (India) LLP back to the Corporate Debtor, is also contemplated.

For management and implementation, the plan establishes an Implementation and Monitoring Committee and provides for the reconstitution of the Board of Directors with nominees of the Resolution Applicant, ensuring experienced oversight and effective execution post-approval. The Plan complies fully with Section 30(2) of the Code and relevant CIRP regulations, and specific schedules in the plan confirm feasibility, viability, and the intent to balance claim serviceability with the practicalities of cash flow.

In conclusion, the CoC has given due consideration to the feasibility and viability of the Resolution Plan and, using its commercial judgement, has found the plan to be both sound and suitable for the revival of the Corporate Debtor. The Resolution Applicant commands the necessary resources, experience, and execution plan to revive the Corporate Debtor as a going concern and maximize stakeholder value. Approval of the Resolution Plan is in the best interest of all stakeholders and is critical to preventing the Corporate Debtor from entering liquidation.

The RP has filed a memo dated 03.01.2025 stating that Kumar Properties Private Limited has received a Letter of Comfort from Union Bank of India to fund the proposed project. The promoters possess substantial net worth, and the group has been engaged in the real estate business for over five decades. In addition to internal resources, term loans and construction finance have been arranged and availed from various banks, financial institutions, and reputed NBFCs, with supporting documentation evidencing these sources of funds.

The documents reflecting the fund position include:

Financial statements of Kumar Properties Private Limited as of March 2024

Net worth certificate of promoters as of March 2023

Letter of Comfort from Union Bank of India

Details of existing loans in the group

Outstanding term loan and finance facilities as on 30.11.2024 include:

a. Piramal Enterprises Ltd: Sanctioned amount ₹58 Cr, outstanding ₹17.64 Cr,

b. Kotak Mahindra Bank Ltd: Sanctioned amount ₹47.00 Cr, outstanding ₹25.26 Cr

c. Kotak Investment Advisors Limited: Sanctioned amount ₹145 Cr, outstanding ₹77 Cr

d. State Bank of India: Sanctioned amount ₹40 Cr, outstanding ₹29.45 Cr

e. SMFG India Home Finance Co. Ltd: Sanctioned amount ₹30.00 Cr, outstanding ₹7.49 Cr

The above documentation has been produced as Document Nos. 1 to 4 in Annexure-A of Diary number 127 filed on 07.01.2025 and establishes that Kumar Properties Private Limited has sufficient and credible sources of funds to implement the resolution plan. This financial arrangement provides comfort for creditors and stakeholders regarding the completion of the proposed revival scheme for the Corporate Debtor.

At Clause 29(i) of the Resolution Plan the resolution applicant declared that any amount recovered out of the application filed by the Resolution Professional under section 43,45,50 and 66 of the code, shall be retained by Corporate Debtor/ Resolution Applicant. It was further clarified that the Resolution applicant may at its own discretion decide to pursue the proceedings as may be necessary. Further, the Applicant has filed an affidavit listing the Pending Litigation marked as Annexure D, in Memo dated 07.01.2024. Regarding IBBI fee the applicant has stated in affidavit dated 07.01.2025 that Clause 16 mentions that the Resolution Applicant has made a provision of INR 2,00,00,000/-(Indian Rupees Two Crores Only) in total, towards CIRP Cost borne by the CoC members including the amount for interim finance cost (if required) and other regulatory fees as may be required to be paid (e.g., IBBI Fees etc.).

Heard Sh. A S Vishwajit, Advocate, learned counsel for the Resolution Professional and carefully perused the pleadings on record.

On 03.12.2024, following order had been passed:

On 27.01.2025, the Authority had given the following order:

In compliance, the Applicant has filed affidavits dated 07.01.2025 and 18.02.2025.

Post commencement of CIRP, CoC was constituted by the RP. The details of the creditors, the distribution of voting share among them and the position of voting for the Resolution Plan is as under (Para 5 of Form H):

The details of stakeholders and the amounts provided for them under the Resolution Plan is given in Para 7 of Form H, given below:

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

The interest of existing shareholders in the Corporate Debtor has been altered by Resolution Plan as under, as per Para 8 of Form H:

The compliance of the Resolution Plan as per Para 9 of Form H as submitted by the applicant is hereunder:

At this juncture it is necessary to refer to Section 30(2). The provisions of Section 30(2) of the I&B Code, 2016 are as follows:

The compliance of Section 30(2) of the Code is given in Para no. 09 of the Form-H (supra). The same is being further examined as under:

Operational Creditor (Other than Employees & Statutory Dues)-Employees and workmen, whose claims aggregate to INR 4,89,186, will receive an upfront payment of INR 4,892 as per Schedule VI.

Operational Creditor (Employees & Statutory Dues)- Statutory creditors, holding claims of INR 6,13,181, will receive a total upfront payment of INR 2,62,822, prioritised in accordance with the ruling in State Tax Officer v. Rainbow Papers and in compliance with Regulation 38(1).

Regulation 38(1A): Clause 25 and 28 detail each stakeholder’s payment, ensuring protection of all interests as per the Board’s priority regime, with a breakdown for CIRP, secured creditors, homebuyer-completing units, and operational creditors (employees, workmen, statutory dues, and others).

Regulation 38(1B): As mandated under Regulation 38(1B) of the CIRP Regulations, the Resolution Applicant confirms in Clause 3.3 read with Schedule-1 that as on date neither it nor any of its related parties has 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.

Regulation 38(3)(a): Clause 8 cites lack of funds, invalid registration for the project, and bad market conditions as the main causes of default. The turnaround plan involves infusing equity, bringing in new management and professional oversight, and completing the company’s stalled projects in a time-bound manner.

Regulation 38(3)(b): The Resolution Plan demonstrates feasibility and viability as required under Regulation 38(3)(b) of the CIRP Regulations. Clause 28 of the plan sets out a turnaround strategy involving equity infusion, project completion, reconstitution of management, and payment to creditors in a time-bound manner, supported by the sponsor’s financial net worth and expertise in the real estate sector.

Regulation 38(3)(c) : Clause 30 of the plan sets out the mechanism for management and control of the affairs of the Corporate Debtor during and after the implementation of the resolution plan. Upon the NCLT Approval Date and until the Transfer Date, an Implementation and Monitoring Committee shall be constituted, comprising the Resolution Professional, two representatives appointed by the Resolution Applicant, and one member appointed by the Committee of Creditors. This committee will supervise the implementation of the plan. All existing directors of the Corporate Debtor will be deemed to have resigned, with a new board reconstituted by the Resolution Applicant. After the Transfer Date, the newly constituted Board and Key Managerial Personnel designated by the Resolution Applicant will be responsible for the management of the Corporate Debtor, in accordance with governance standards and the objectives of the revival plan. Further

Regulation 38(3)(d): Clause 27 of the Plan lays down the Implementation Schedule produced below, for reference:

Clause 10.2.8. Following are the tentative timelines for completion of the Project:

Regulation 38(3)(e): The plan sets out the details of the Resolution Applicant, Kumar Properties Private Limited, providing its registered address, business activity, and confirmation that there is no restriction on forming consortia; The shareholding pattern is detailed, with ownership fully disclosed between two individuals; Declarations are included stating that the applicant and its connected persons are not disqualified under Section 29A, that all information is true and correct, and that neither the applicant nor any related party has failed to implement a prior resolution plan approved by an adjudicating authority; The credibility and financial capability of the Resolution Applicant are described, citing the applicant's over 55 years in real estate development and a land bank of 1000-1250 acres, with supporting technical collaborations and a history of large engineering projects; Key managerial personnel involved in implementing the plan are identified, with summaries of their professional qualifications and experience; The plan outlines key resources available to the applicant, including technical know-how, brand reputation, and a large team across engineering, marketing, administration, and biotechnology disciplines.

The Prayer has been examined and it is observed that for such reliefs and exemptions, the Resolution Applicant will have to approach the respective statutory authorities for being considered and decided as per the provisions of concerned existing laws and landmark judgements. Further, the approval of the Resolution Plan shall not in itself be construed as waiver of any statutory obligations/liabilities and any waiver sought in the Resolution Plan, shall be subject to approval by the Authorities concerned in light of the Judgment of Supreme Court in Ghanshyam Mishra and Sons Private Limited v/s. Edelweiss Asset Reconstruction Company Limited (Civil Appeal no. 8129 of 2019).

In the circumstances and for the aforesaid reasons, the incumbent application bearing I.A. No. 09 of 2024 in CP (IB) 87/2021 is allowed and accordingly:

a. The moratorium imposed in the main Company Petition ceases to operate from the date of this order.

b. The resolution professional shall forward all records relating to the conduct of the CIRP and the Resolution Plan to the Board to be recorded/uploaded on its database.