Mr. Jayanti Lal Jain vs M/s. VXL Instruments Limited

The present Application has been filed by Mr. Jayanti Lal Jain, Resolution Professional (“Applicant”/“Resolution Professional”) of M/s. VXL Instruments Limited (“Corporate Debtor”/“CD”), under Section 30(6) read with Section 31(1) of the Insolvency and Bankruptcy Code, 2016 (“Code”), Regulation 39(4) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (“CIRP Regulations”), and Rule 11 of the National Company Law Tribunal Rules, 2016, seeking approval of the Resolution Plan dated 16^th May 2026 submitted by Consortium of NG Organics Private Limited and Mr. Nitinbhai Govindbhai Patel (hereinafter referred to as the “Successful Resolution Applicant”/“SRA”).

The Resolution Plan submitted by the SRA, along with the Addendum thereto, was approved by the Committee of Creditors (“CoC”) with 100% voting share in the 12^th CoC meeting conducted on 23 May 2026

The Corporate Debtor was incorporated on 28th February 1986 under the provisions of the Companies Act, 1956 bearing Corporate Identification Number (CIN) L85110MH1986PLC272426 and also listed on the Bombay Stock Exchange. Its registered office is situated at WeWork, Floor-2, Plot Nos. 264/265, Vaswani Chambers, Dr. Annie Besant Road, Worli Colony, Mumbai – 400030. The Corporate Debtor is registered with the Registrar of Companies, Mumbai, and has an authorised share capital of ₹15,00,00,000/- and a paid-up share capital of ₹13,32,48,000/-.

The Corporate Debtor is primarily engaged in the business of manufacturing electronic instruments. It is stated that the Corporate Debtor has its factory premises at 74/C, KEONICS Electronics City, Hosur Road, Bengaluru – 560100, Karnataka, which are held on a rental basis. It is also stated that the Corporate Debtor has not undertaken any significant business activity since 1^st April 2024 and does not own any fixed assets.

The Corporate Insolvency Resolution Process (“CIRP”) of the Corporate Debtor commenced pursuant to the order dated 26th November 2024 passed by this Tribunal in C.P. (IB) No. 570 (MB) of 2024 under Section 7 of the Insolvency and Bankruptcy Code, 2016 (“Code”), whereby Mr. Jayanti Lal Jain was appointed as the Interim Resolution Professional (“IRP”).

On 3rd December 2024, the IRP issued a public announcement regarding the commencement of the CIRP and invited claims from the creditors of the Corporate Debtor. The last date for submission of claims was 25th December 2024. Upon verification of the claims received, the Committee of Creditors (“CoC”) was constituted under Section 21(1) of the Code, comprising M/s. Kapishvar Silicates Pvt. Ltd. as the sole Financial Creditor, holding 100% voting share.

Form G was issued on 13th January 2025, inviting Expressions of Interest (“EoIs”) from prospective resolution applicants (“PRAs”). The last date for submission of EoIs was 24th January 2025, and the last date for submission of resolution plans was 30th January 2025. Thereafter, the final list of PRAs was published on 11th February 2025. On 15th February 2025, the Applicant issued the Information Memorandum, Request for Resolution Plans (“RFRP”) and Evaluation Matrix to the PRAs.

The Applicant submits that the initial last date for submission of Resolution Plan was 17th March 2025. Thereafter, the CoC granted extensions extending the deadline to 21st April 2025 and thereafter till 16th May 2025.

The Resolution Plans received under the Form G process were placed before the CoC in its 7th Meeting held on 22nd April 2025. Legal vetting, deliberations and negotiations with the PRAs were thereafter undertaken in the 8th and 9th CoC Meetings. In its 11th Meeting held on 20th May 2025, the CoC noted receipt of fourteen (14) final Resolution Plans. One plan was not considered as it was submitted after the prescribed deadline.

Upon considering the feasibility and viability of the compliant Resolution Plans under Section 30(4) of the Code, the CoC, in its 12th Meeting held on 23rd May 2025, approved the Resolution Plan submitted by the Consortium of NG Organics Private Limited and Mr. Nitinbhai Govindbhai Patel, with 100% voting share. The e-voting concluded on 29th May 2025. During the CIRP, the Applicant convened thirteen (13) CoC Meetings.

The Applicant submits that the Resolution Plan is examined by the Applicant and the CoC and has been found compliant with the requirements of Section 30(2) of the Code, Regulation 38 of the CIRP Regulations and other applicable provisions of law. The Resolution Plan provides, inter alia, for payment of the CIRP Costs in priority and at actuals, treatment of operational creditors in accordance with the provisions of the Code, the management and implementation of the Resolution Plan, supervision of its implementation through a Monitoring Committee, and a statement setting out the manner in which the interests of the stakeholders have been dealt with under the Resolution Plan.

The Resolution Plan provides that the liquidation value payable to the equity shareholders is NIL; however, the listing of the Corporate Debtor on the BSE shall continue, subject to applicable laws.

The Resolution further Plan provides for extinguishment of all pre-CIRP statutory dues, claims and civil or criminal litigations, while preserving the liability of the erstwhile promoters in respect of avoidance transactions and pending litigations. It further provides that the Corporate Debtor and the Resolution Applicant shall retain the right to recover dues, claims and receivables from third parties, including governmental and statutory authorities, without any set-off or competing claim by any stakeholder.

It is submitted that, upon approval, the Resolution Professional shall prepare the final statement of accounts as on the Effective Date, and any resultant difference or balancing figure shall be adjusted against the capital reserve in accordance with applicable accounting standards, without any liability of the Corporate Debtor for tax consequences arising solely from such accounting adjustment.

The Applicant further submits that, in terms of Clause 1.9 of the RFRP, the Bid Security Bank Guarantee (“BSBG”) furnished by the Resolution Applicant is liable to be converted into or adjusted towards Performance Security upon declaration of the Successful Resolution Applicant. In the present case, the Performance Security is ₹70,00,000/- (Rupees Seventy Lakhs only), being 10% of the amount offered under the Resolution Plan. Rs 50,00,000/- has been deposited by the Successful Resolution Applicant as EMD and accordingly stands converted into Performance Security.

The Applicant further draws our attention to affidavit dated 19th November 2025, whereby it was placed on record that the Resolution Applicant has deposited an aggregate amount of ₹1,41,00,000/- (Rupees One Crore Forty-One Lakhs only), exceeding the stipulated requirement of ₹1,05,00,000/-, being 15% of the Plan Value of ₹7 Crores. The bank statement of the Corporate Debtor was placed on record in support thereof.

The Resolution Plan provides for revival of the Corporate Debtor by transitioning from its thin-client manufacturing business to agriculture-related activities, including contract farming, food processing and trading of agricultural products, with provision for exploring other sectors and infusion of working capital as required.

The Resolution Plan further provides for the merger of the Corporate Debtor, M/s. VXL Instruments Limited, with the Resolution Applicant, NG Organics Private Limited ( a company incorporated in state of Gujarat), as part of the resolution process, with a view to consolidating and streamlining the operations.

The Resolution Plan provides for a structured implementation and monitoring mechanism through constitution of a Monitoring Committee in terms of Regulation 38(4)(a) of the CIRP Regulations, which shall oversee implementation of the Resolution Plan until its completion.

The Applicant further submits that the Resolution Plan has been duly considered and approved by the CoC after evaluating, inter alia, its feasibility, viability, implementation mechanism and the recoveries proposed for the stakeholders. The Resolution Plan having received the requisite approval of the CoC, the same is being placed before this Tribunal for consideration and approval under Section 31 of the Code.

In view of the approval accorded by the CoC in its 12^th meeting with 100% vote, the Applicant has preferred the present Interlocutory Application seeking approval of the Resolution Plan dated 16.05.2026 submitted by Consortium of M/ s. NG Organics Pvt. Ltd. and Mr. Nitinbhai Govindbhai Patel, under Section 31 of the Insolvency and Bankruptcy Code, 2016.

It is stated that the 180-day period of the CIRP expired on 25th May 2025, the Applicant filed Interlocutory Application No. 2788 of 2025 seeking extension of the CIRP period. The said application was allowed by this Tribunal, thereby extending the CIRP period from 25th May 2025 to 30th June 2025. Accordingly, the present Application, having been filed on 05.06.2025 is within the prescribed period of limitation.

a. Financial Proposal:

The total admitted claims of 76 creditors amount to ₹6.28 Crores. The Resolution Plan proposes a total amount of ₹7.00 Crores towards full and final settlement of the admitted claims, comprising: (a) CIRP costs of ₹50 lakhs; (b) Financial Creditors, including interest, ₹3.13 Crores; (c) Operational Creditors ₹0.98 Crores; and (d) Workmen and Employees ₹2.44 Crores. It is pertinent to note that the CIRP costs shall be paid in full on an actual basis, even if they exceed the estimated amount of ₹50 lakhs.

b. Sources of Funds: The Resolution Plan proposes to fund the total bid value of ₹7 Crores through the Resolution Applicant’s internal resources, including equity infusion, unsecured loans, convertible instruments, or contributions from its directors and family members. The Resolution Applicant has confirmed that it has sufficient funds and access to permissible alternative sources, including bank finance or strategic investors, if required. All sources of funding shall be in compliance with Section 29A of the Code.

In compliance of Section 30(2) of IBC, 2016, the Resolution Professional has examined the Resolution plan of the Successful Resolution Applicant and confirms that this Resolution Plan:

In compliance of Regulation 38 of CIRP Regulations, the Resolution Professional confirms that the Resolution plan provides that

The Resolution Professional has submitted Revised Form-H under Regulation 39(4) of the CIRP Regulations vide Affidavit dated 20.10.2025 to certify that the Resolution Plan as approved by the CoC meets all the requirements of the IBC and its Regulations. The Resolution Applicant has submitted an affidavit pursuant to section 30(1) of the Code confirming its eligibility under section 29A of the Code to submit resolution plan. The contents of the said affidavit are in order. The relevant parts of the Form H are reproduced below:

The details of the Corporate Insolvency Resolution Process (“CIRP”) as per Form-H are set out hereunder:

The details pertaining to the implementation of the Resolution Plan as per Form-H are set out hereunder:

The details of the amounts proposed to be realised under the Resolution Plan are set out hereunder:

The details of the income-tax losses proposed to be carried forward under Section 79(2)(c) of the Income-tax Act, 1961, are set out hereunder:

The status of preferential, undervalued, fraudulent and extortionate transactions, and the manner in which they are dealt with under the Resolution Plan, are set out hereunder: The Resolution Plan contains the requisite disclosures in respect of preferential, undervalued, fraudulent and extortionate (“PUFE”) transactions. Clause 7.8, under the heading “Treatment of Amounts Claimed under Ongoing Avoidance Transactions under the Code,” records that no avoidance application has been filed as on date. It further provides that any recoveries arising from such transactions in future shall accrue to the benefit of the CoC, and the Resolution Applicant shall bear no liability in respect thereof.

Other compliances as per Form-H:

In its 13th meeting, the CoC deliberated upon the matters contemplated under the said Regulations and resolved to defer its decision thereon to the Stakeholders’ Consultation Committee (“SCC”) to be constituted in the event of liquidation, if so required. The CoC further noted that adequate time remained available during the CIRP to take an appropriate decision should the Resolution Plan not be approved.

The Resolution Professional has undertaken that the Resolution Plan is not subject to any condition or contingency. Further, the Resolution Professional, Mr. Jayanti Lal Jain, has certified that the Resolution Plan complies with all applicable provisions of the Insolvency and Bankruptcy Code, 2016, and the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016.

During the hearing, the Tribunal required the Applicant to place on record the Balance Sheet of the Corporate Debtor as on the Insolvency Commencement Date and the final list of Prospective Resolution Applicants (“PRAs”). In compliance thereof, the Applicant filed an affidavit dated 20th October 2025. Thereafter, an Additional Affidavit dated 6th November 2025 was filed placing further documents on record, including:

By order dated 04.12.2025, this Tribunal noted that the Balance Sheet of the Corporate Debtor reflected total assets of ₹12,78,32,801/- as on the Insolvency Commencement Date, which, inter alia, included Plant and Machinery, Motor Vehicles, Office Equipment, Computers, and Furniture and Fittings. However, the valuation report placed on record reflected valuation only in respect of the financial assets, comprising trade receivables, cash and cash equivalents, and bank balances. In explanation thereof, the Applicant submits that the Plant and Machinery, Motor Vehicles and Office Equipment were old and were accordingly sold as scrap by invoking the provisions of Regulation 29 of the applicable IBBI Regulations, for amounts of approximately ₹7.40 lakhs and ₹1.35 lakhs.

The erstwhile Bench, vide orders dated 04.12.2025, 23.02.2026 and 11.05.2026, had also made certain observations with regard to the report of M/s Chandhiok & Mahajan concerning the compliance of the Resolution Plan. In the said report, compliance with Regulation 39(1)(c) was specifically recorded as “not complied”, and the requirement pertaining to conditionality was also recorded as “not complied”. Thereafter, the Resolution Professional filed an affidavit dated 05.03.2026, placing on record an Addendum to the Code Compliance Report in respect of the Resolution Plan. It was, however, noticed that, insofar as Regulation 39(1)(c) and the conditionalities were concerned, the Addendum reflected a complete departure from the position recorded in the earlier report. M/s Chandhiok & Mahajan, which had earlier recorded the said requirements as “not complied”, subsequently recorded the same as “complied” and further stated, “we hereby confirm that the Plan is not conditional.”

In this regard, it was submitted that, subsequent to the order dated 23.02.2026, the Applicant had furnished certain additional documents to M/s Chandhiok & Mahajan, on the basis of which the Addendum dated 04.03.2026 came to be issued. The Applicant/Resolution Professional thereafter filed a further affidavit dated 17.07.2026, placing on record the Revised Compliance Certificate dated 05.07.2026 issued by M/s Chandhiok & Mahajan, along with proof of the relevant correspondence. The Revised Compliance Certificate records compliance with Regulation 39(1)(c) and the corresponding requirement relating to conditionality as “complied”.

This Tribunal, vide order dated 21.08.2026, directed the Applicant to obtain a categorical statement from the Resolution Applicant in relation to the specific observations made by M/s Chandhiok & Mahajan, including waiver of the conditionalities and consequential/suitable modifications to the Resolution Plan. In compliance with the said direction, the Applicant has filed an affidavit dated 29.08.2026. At paragraph 6 thereof, the Resolution Applicant has categorically stated as under:

We have considered the Resolution Plan, the submissions of the Resolution Professional, the Compliance Certificate in Form H and the Due Diligence Certificate placed on record.

The Resolution Plan provides for payment of the Corporate Insolvency Resolution Process Costs in priority to all other debts, deals with the claims of the Operational Creditors in accordance with Section 30(2)(b) of the Code and the CIRP Regulations, provides for the management of the affairs of the Corporate Debtor after approval of the Resolution Plan, its implementation and supervision, and does not contravene any provisions of law for the time being in force. We also note that the Resolution Professional has certified the eligibility of the Successful Resolution Applicant under Section 29A of the Code and the Due Diligence Certificate supports the said eligibility. Further, it is stated that the Resolution Plan complies with the requirements of Section 30(2) of the Insolvency and Bankruptcy Code, 2016 and the applicable provisions of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016.

The RP has complied with the requirement of the Code in terms of Section 30(2)(a) to 30(2)(f) and Regulations 38(1), 38(1)(a), 38(2)(a), 38(2)(b), 38(2)(c) & 38(3) of the CIRP Regulations.

The RP has filed Compliance Certificate in Form-H along with the Resolution Plan. On perusal, the same is found to be in order. The Resolution Plan has been approved by the CoC by majority of 100%.

In the Resolution Plan, the SRA has sought the waivers/ reliefs/concessions stated in Part E of the Resolution Plans. The stated effect of the Resolution Plan and reliefs & concessions as prayed for shall be available in accordance with the principle laid down by Hon’ble Supreme Court in case of Ghanshyam Mishra and Sons Private Limited v/s. Edelweiss Asset Reconstruction Company Limited {(2021) 13 S.C.R 737} & Municipal Corporation of Greater Mumbai vs. Abhilash Lal and Ors. (2019) ibclaaw.in 480 NCLAT. Further, it is clarified and ordered that -

In K Sashidhar v. Indian Overseas Bank & Others (in Civil Appeal No.10673/2018 decided on 05.02.2019) the Hon’ble Apex Court held that if the CoC had approved the Resolution Plan by requisite percent of voting share, then as per Section 30(6) of the Code, it is imperative for the Resolution Professional to submit the same to the Adjudicating Authority (NCLT). On receipt of such a proposal, the Adjudicating Authority is required to satisfy itself that the Resolution Plan as approved by CoC meets the requirements specified in Section 30(2) of the Code. The Hon’ble Apex Court further observed that the role of the NCLT is ‘no more and no less’. The Hon’ble Apex Court further held that the discretion of the Adjudicating Authority is circumscribed by Section 31 of the Code and is limited to scrutiny of the Resolution Plan “as approved” by the requisite percent of voting share of financial creditors. Even in that enquiry, the grounds on which the Adjudicating Authority can reject the Resolution Plan is in reference to matters specified in Section 30(2) of the Code when the Resolution Plan does not conform to the stated requirements.

In view of the discussions and the law thus settled, the instant Resolution Plan meets the requirements of Section 30(2) of the Code and Regulations 37, 38, 38 (1A) and 39 (4) of the CIRP Regulations. The Resolution Plan is not in contravention of any of the provisions of Section 29A of the Code and is in accordance with law. The same needs to be approved. Hence, ordered.

The Resolution Plan is hereby approved. It shall become effective from this date and shall form part of this order with the following directions: