Mr. Rahul Jindal vs Committee Of Creditors Of Sinnar Thermal Power Limited

2. Brief Background of the Case:

3. Background of the Corporate Debtor

4. Collation of claims by RP

5. Valuation of the Corporate Debtor

6. Evaluation and Voting

7. Details of Resolution Applicant/Payment Schedule

The Resolution Applicants are proposing a total plan value for the Corporate Debtor which shall be an amount equivalent to Fund Infusion i.e. INR 3800.14 Crores = "Total Resolution Amount" which shall be deposited in the Designated Account on the Payment Date as per provisions of the Resolution Plan, the break-up of which amongst various stakeholders of the Corporate Debtor is provided below:

SCHEDULE 5 – MANDATORY PROVISIONS CHECK LIST

S. NO.	SECTION / REGULATION / UNDER THE CODE	DESCRIPTION / REQUIREMENT	CLAUSE REFERENCE
1.	Section 30(2)(a) of the Code	Payment of insolvency resolution process costs in priority to the payment of other debts of the Corporate Debtor.	Cl. 3.1 (Executive Summary) to Introduction; Cl. 2, Part II; Sch. 2 (Implementation Schedule)
2.	Section 30(2)(b) of the Code and Regulation 38(1)(a) of the CIRP Regulations	A. Payment of debts of Operational Creditors under the Resolution Plan which shall not be less than (a) the amount to be paid to such creditors in the event of a liquidation of the corporate debtor under section 53; or (b) the amount that would have been paid to such creditors, if the amount to be distributed in accordance with the order of priority in sub-section (1) of Section 53, whichever is higher, in priority over any Financial Creditor of the Corporate Debtor. B. the payment to the Operational Creditors shall be paid in priority over Financial Creditors.	Cl. 3.1 (Executive Summary); Cl. 3, Part II; Sch. 2 (Implementation Schedule)
3.	Section 30(2)(b) of the Code and Regulation 38(1)(b)	Section 30(2)(b) Payment of debts of financial creditors, who do not vote in favour of the resolution plan, which shall not be less than the amount to be paid to such	Cl. 3.2 (Executive Summary) to Introduction; Cl. 4, Part II; Sch. 2 (Implementation

		creditors in accordance with sub-section (1) of Section 53 in the event of a liquidation of the Corporate Debtor. Regulation 38(1)(b) Provides for priority of payment of amounts to 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 over Financial Creditors who voted in favour of the Plan.	Schedule)
4.	Section 30(2)(c) of the Code	Provides for the management of the affairs of the Corporate Debtor after approval of the Resolution Plan.	Cl. 6, Part II
5.	Section 30(2)(d) of the Code	The implementation and supervision of the Resolution Plan.	Cl. 6.1.2., Part II;
6.	Section 30(2)(e) of the Code	Statement as to the Resolution Plan does not contravene any of the provisions of the law for the time being in force.	Cl. 8, Part II ;
7.	Regulation 38(1A) of the CIRP Regulations	A statement as to how the Resolution Applicant has dealt with the interest of all stakeholders, including Financial Creditors and Operational Creditors of the Corporate Debtor.	Cl. 7, Part II
8.	Regulation 38 (IB)	Resolution plan shall include a statement giving details if the Resolution Applicant or 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.	Cl. 12, Part II ;
9.	Regulation 38(2)(a) of the CIRP Regulations	Term of the Resolution Plan and its implementation schedule.	Cl. 5, Part II; Schedule 2 (Implementation

			Provisions);
10.	Regulation 38(2)(b) of the CIRP Regulations	The management and control of the business of the Corporate Debtor during its term.	Cl. 6, Part II;
11.	Regulation 38(2)(c) of the CIRP Regulations	Adequate means for supervising its implementation.	Cl. 6.1.2., Part II;
12.	Regulation 38(2)(d) of the CIRP Regulations	The manner in which proceedings in respect of avoidance transactions, if any, under Chapter III or fraudulent or wrongful trading under Chapter VI of Part II of the Code, will be pursued after the approval of the resolution plan and the manner in which the proceeds, if any, from such proceedings shall be distributed.	Cl. 10, Part II;
13.	Regulation 38(3)(a) of the CIRP Regulations	Resolution Plan shall demonstrate that it addresses the cause of default.	Cl. 13.1., Part II;
14.	Regulation 38(3)(b) of the CIRP Regulations	Resolution Plan shall demonstrate that it is feasible and viable.	Cl. 5, Schedule 6;
15.	Regulation 38(3)(c) of the CIRP Regulations	Resolution Plan shall demonstrate that it has provisions for its effective implementation.	Schedule 2 (Implementation Provisions);
16.	Regulation 38(3)(d) of the CIRP Regulations	Resolution Plan shall demonstrate that it has provisions for approvals required and the timeline for the same.	Cl. 3.1.6., Part I; Cl. 14.4, Part II;
17.	Regulation 38(3)(e) of the CIRP Regulations	A Resolution Plan shall demonstrate that the Resolution Applicant has the capability to implement the Resolution Plan.	Appendix 4 (Details of the Resolution Applicants);
18.	Regulation 39 (1) of the CIRP Regulations	An undertaking by the Resolution Applicant that every information and records provided in connection with or in the Resolution Plan is true and correct and discovery of any false information and record at any time will render the applicant	Cl. 3.1.5., Part I; Cl. 14.2;

		ineligible, forfeit the bid bond guarantee and attract penal action under the Code.
19.	Regulation 38 (4) of the CIRP Regulations	The committee may consider the requirement of a monitoring committee for the implementation of the resolution plan.	Sub. Cl. 6.1.1., Part II;
20.	Regulation 38 (5) of the CIRP Regulations	Where a monitoring committee for the implementation of the resolution plan is required, it may, while approving the resolution plan, decide to constitute the same with the resolution professional or propose another insolvency professional, or any other person as its members provided that where the resolution professional is proposed to be part of the monitoring committee, the monthly fee payable to him shall not exceed the monthly fee received by him during the corporate insolvency resolution process.	Sub. cl. 6.1.3.;
21.	Section 29A of the Code and Regulation 39 (1)(a)	An affidavit stating that the Resolution Applicant is eligible under Section 29A of the Code to submit the resolution plan.	29A Affidavit has provided separately at the time of submission of Resolution Plan. Section 29A undertaking also provided at Cl. 3.1.1., Part I.

l)

It is submitted that the Successful Resolution Applicant has submitted an affidavit dated 19 September 2024, to the Resolution Professional an affidavit under Section 29A of the Code affirming their eligibility under Section 29A of the Code as per the requirement of Section 30(1) of the Code.

9. Details on Term, Management, Implementation and Supervision of the Resolution Plan:

9.1

The details of implementation as provided by SRA in the Resolution Plan is as follows

Details of implementation of resolution plan:

7A. Realisable amount:

7B. Details of Realisable amount

(Amount In Rupees)

Stakeholder Type	Amount(s)				Payment schedule
	Amount Claimed	Amount Admitted	Realisable amount under the plan (In Crores)	Amount realizable in plan to amount claimed (%)
Secured Financial Creditors - Creditors not having a right to vote under sub-section (2) of section 21 - Dissenting - Assenting	1590,93,97,84 83.31	1590,93,97,84 83.31	3720.14 (Refer Note 1)	23.38%	Reference is invited to clause 7 of Part II at page 41 read with Schedule 2 at page 84 of the Resolution Plan dated 31 January 2025 read with clause 5 (Step 2, Step 3 and Step 5 of Schedule II (Implementation Provisions)) at page 9 of the Addendum.]
Unsecured Financial Creditors -Creditors not having a right to vote under sub-section (2) of section 21 - Dissenting	97,53,04,347	85,47,23,037	-	NIL	-

Stakeholder Type	Amount(s)				Payment schedule
	Amount Claimed	Amount Admitted	Realisable amount under the plan (In Crores)	Amount realizable in plan to amount claimed (%)
- Assenting
Operational Creditors
(i) Government	6,393,419,955	6,393,421,235	Refer Note2		Reference is invited to clause 7 of Part II at page 41 read with Schedule 2 at page 84 of the Resolution Plan dated 31 January 2025 read with clause 5 (Step 2, Step 3 and Step 5 of Schedule II (Implementation Provisions)) at page 9 of the Addendum.]
(ii) Workmen - PF dues - Other dues	-	-	NIL	NIL	-
(iii) Employees - PF dues - Other dues	-	-	-	-	-
(iv) Other Operational creditors	29,06,96,92,678.45	105,64,62,810.26	NIL	NIL	Reference is invited to clause 7 of Part II at page 41 read with Schedule 2 at page 84 of the

Stakeholder Type	Amount(s)				Payment schedule
	Amount Claimed	Amount Admitted	Realisable amount under the plan (In Crores)	Amount realizable in plan to amount claimed (%)
					Resolution Plan dated 31 January 2025 read with clause 5 (Step 2, Step 3 and Step 5 of Schedule II (Implementation Provisions)) at page 9 of the Addendum.]
Other Debts and Dues	-	-	Refer note 3	-	Reference is invited to clause 7 of Part II at page 41 read with Schedule 2 at page 84 of the Resolution Plan dated 31 January 2025 read with clause 5 (Step 2, Step 3 and Step 5 of Schedule II (Implementation Provisions)) at page 9 of the Addendum.]
Shareholders	-	-	-	-	-
Total	19548,77,04,351.76	16735,38,94,453.57	3800.14#	19.43%

INR 75 Crore are allocated towards payment of CIRP Costs which are payable at actuals. In case the CIRP Costs incurred exceed INR 75 Crores, any such excess CIRP Costs shall be deducted from the amount payable to the Assenting Financial Creditors.

NOTE 1: As per Step 5 i.e. Payment to Assenting Financial Creditors in Schedule 2 Implementation Provisions and addendum dated 02.06.2025, Assenting FC shall be paid as follows:-

(a)

Rs 3720.14 crore (subject to clause 6.2 to 6.9 of step 5 of Schedule 2 (Implementation Provisions); plus

(b)

Avoidance Transaction Recoveries, as per Cl. 10, Part II of the Resolution Plan i.e. Treatment of Applications filed under Section 43 to 67 of IBC plus

(c)

Litigation Recoveries; plus

(d)

Surplus Cash; plus

differential IRP Cost if IRP Cost is lower than Rs. 75 crore, as per the terms of the Resolution Plan

(less)

(e)

payment of IRP Cost over and above INR 75 crore*

(f)

DFC Payout

It is clarified that incase the IRP Costs exceed the amount of INR 75 Crores, such excess amount over and above INR 75 Crores shall be deducted from the amount payable to the Assenting Financial Creditors.

In step no. 4 i.e. Payment to Dissenting Financial Creditors in Schedule 2 Implementation Provisions

In the event the Dissenting Financial Creditors are entitled to an amount in the nature of liquidation value in terms of Sections 30 and Section 53 of the Code read with Regulation 38 of the CIRP Regulations ("DFC Payout"), then the Dissenting Financial Creditors would be provided the DFC Payout from the Fund Infusion.

Notwithstanding anything to the contrary contained in this Resolution Plan, the Dissenting Financial Creditors shall neither be entitled to, nor shall they receive any amounts other than the amounts due to them in the nature of liquidation value as stipulated hereinabove i.e. the DFC Payout. The Resolution Applicants submits that such treatment of Dissenting Financial Creditors is fair and equitable, and in compliance with Section 30(2), 53 of the Code and Regulation 38(1) of the CIRP Regulations.

The distribution of DFC Payout amongst the Dissenting Financial Creditors shall be in a manner deemed fit by the CoC

NOTE 2: As per addendum dated 02.06.2025 distribution of amount amongst Operational Creditors (including govt and Authorities Statutory and excluding Workmen and Employees) as mentioned in addendum, wherein, it was mentioned that higher of the following ("OC Amounts") shall be paid:-

Towards just and equitable treatment of the Operational Creditors, the higher of the following amounts shall be paid from the Fund Infusion to the Operational Creditors (including Government and Statutory Authorities and excluding Workmen and Employees), upfront and on a pro-rata basis, as follows:

(a)

(i) INR 2,50,00,000/- plus

(ii)

In the event IRP Costs is lower than INR 75 crores, the remaining amount after payment of IRP costs out of INR 75 crores, shall be paid to such creditors, if the amount to be distributed under this Resolution Plan had been distributed in accordance with the order of priority in sub-section (1) of Section 53 of the IBC, in full and final settlement of their dues; Or

(b)

the amount to be paid to such creditors in the event of a liquidation of the Corporate Debtor under Section 53 of the IBC.

In the event any Operational Creditor claims and Outstanding Contributions are admitted post submission of this Resolution Plan till the NCLT Approval Date and if any minimum amount is payable as per Section 30 of the Code and settled law towards such Claims, then the same shall be paid out of the aforesaid payment of OC Amounts proposed to the Operational Creditors, on a pro rata basis. It is clarified that if any amounts, i.e., Denotification Amounts are payable to the customs authorities over and above the OC Amounts, the customs authorities shall be paid as per Clause 6.2 to 6.9 of Step 5 of Schedule 2 (Implementation Provisions), i.e., from the AFC Retained Amounts on the AFC Retained Payout Release Event.

NOTE 3: As per Addendum dated 02.06.2025, An amount of Rs. 2,50,00,000 (Rupees two crore fifty lakh only) from the Fund Infusion shall be set aside by the Resolution Applicants for a period of 3 years from the NCLT Approval Date (i.e., the Other Amounts). In the event any claims are received with respect to termination of the EPC Contracts within a period of 3 years of the NCLT Approval Date, the same shall be met on pro rata basis out of the Other Amounts.

It is clarified that no further amounts shall be brought in over and above the Other Amounts at any time whatsoever on account of any reason as this sum is being offered as part of the resolution plan payouts

9. Steps to be taken by the concerned parties post approval of resolution plan by AA:

Note: As per 2.3 i.e. Phased Commissioning in Schedule 7 BUSINESS PLAN Commissioning of Units Revival plan for Corporate Debtor focuses on restoring Units 1 and 2 within 9 months and Units 3, 4, and 5 within 3 years. The plan encompasses essential activities, including the restoration of the raw water system, coal supply arrangement, ash handling plant, ash dyke, BTG (Boiler-Turbine-Generator), and other critical components of the plant.

Note: As per Clause 10 of Part II at page 41 of the Resolution Plan dated 31 January 2025 i.e. Treatment of Applications filed under Section 43 to 67 of IBC in PART II i.e. Mandatory Provisions Upon the approval of the resolution plan vide the NCLT Order, the right to pursue all applications filed by the Resolution Professional and/or CoC regarding the avoidance transactions (preferential, undervalued, extortionate credit, fraudulent and/or wrongful trading or fraudulent transactions) under Section 43 to 67 shall remain with the CoC and that any recoveries made by the Corporate Debtor on account of any such application filed by the IRP and/or the Resolution Professional and/or the CoC shall be passed to the Assenting Financial Creditors of the Corporate Debtor (excluding the creditors against whom such order has been passed) (“Avoidance Transaction Recoveries”). It is clarified that the cost for pursuing all the avoidance applications, shall be borne by the CoC. It is further clarified that the Resolution Applicant shall provide necessary support to CoC in case any documents/information for the avoidance application is to be provided from the record of the Corporate Debtor, to the extent available with the Resolution Applicants. Any land that is recovered, if any pursuant to such avoidance applications or otherwise shall be for the sole benefit of and retained by the Corporate Debtor. Further, upon approval of this Resolution Plan, no land of the Corporate Debtor shall be given to any of the counter parties of the Identified Agreements or pursuant to any contracts entered into with related parties.

As has been stated in Clause 8.55 of Part-III, the Identified Agreements are significantly undervalued as compared to the ongoing market rates for fly ash and also an unreasonable amount of penalty (i.e. Rs. 800 per ton) is stipulated therein in case of sale of ash to a third party. The identified agreements appear to be falling within the scope of the Section 43 to 67 of the Code. The Resolution professional has filed relevant applications under Section 43 to 67, with the NCLT with respect to the Identified Agreements. We have been intimated by the Resolution Professional that the Identified Agreements entered into with Antheia and Notus have been terminated vide Letter dated 10.01.2024, as uploaded on the VDR on December 30, 2024. For the Identified Agreements of the Corporate Debtor and agreements entered into with related parties of the Corporate Debtor, which are still in effect, apart from the aforesaid, the same shall stand automatically terminated on the NCLT Approval Date by virtue of approval of the Resolution Plan and the Corporate Debtor/Resolution Applicant shall have no liability/obligation with respect to the same.

The identification or classification of any transaction by the Resolution Professional as preferential, undervalued, fraudulent or extortionate transaction and / or filing of any avoidance application or any other application with the Adjudicating Authority with respect to such transaction filed, shall not absolve any counter party from its payment / repayment obligations towards the Corporate Debtor and such counter party shall continue to be liable to pay / repay any such amounts which is payable by it to the Corporate Debtor as per the terms of respective transaction, notwithstanding that such application has been filed and / or been pursued and any recoveries thereto, unless otherwise provided for, shall be for the benefit of the financial creditors of the Corporate Debtor. Further, the Corporate Debtor shall have the right to initiate all legal actions against the said counter parties and any other obligator of the said transaction with respect to any default in payment/repayment obligations with respect to the said transaction including initiation of any insolvency process, irrespective of whether such transaction is identified or not.

It is clarified that the past promoters or promoter group, managers, directors, officers, or person in charge of the affairs and / or management of the Corporate Debtor (including any person who was an 'officer in default', 'principal employer', or 'occupier', other than the Resolution Professional) prior to the Payment Date shall continue to be responsible and liable for all the liabilities, claims, demand, obligations, penalties etc. arising out of any (i) proceedings, inquiries, investigations, orders, show causes, notices, suits, litigation etc. (including those arising out of any orders passed by the NCLT pursuant to Sections 43, 45, 49, 50, 66, 68, 70, 71, 72, 73, 74 of the Code) or any acts or omissions in breach of Applicable Law which occurred prior to the Payment Date; or (ii) that may arise out of any proceedings, inquiries, investigations, orders, show cause, notices, suits, litigation etc. (including any orders that may be passed by the NCLT pursuant to Sections 43, 45, 49, 50, 66, 68, 70, 71, 72, 73, 74 of the Code).

14. Waivers, Reliefs and Concessions

“39.

Another important aspect is that under Section 25 (2) (b) of IBC, 2016, the resolution professional is obliged to represent and act on behalf of the corporate debtor with third parties and exercise rights for the benefit of the corporate debtor in judicial, quasi-judicial and arbitration proceedings. Section 25(1) and 25(2)(b) reads as follows:

25.

Duties of resolution professional – (1) It shall be the duty of the resolution professional to preserve and protect the assets of the corporate debtor, including the continued business operations of the corporate debtor.

(2)

For the purposes of sub-section (1), the resolution professional shall undertake the following actions: -

(a)

...

(b)

Represent and act on behalf of the corporate debtor with third parties, exercise rights for the benefit of the corporate debtor in judicial, quasi-judicial and arbitration proceedings.

This shows that wherever the corporate debtor has to exercise rights in judicial, quasi-judicial proceedings, the resolution professional cannot short-circuit the same and bring a claim before NCLT taking advantage of section 60(5).

40.

Therefore, in the light of the statutory scheme as culled out from various provisions of the IBC, 2016 it is clear that wherever the corporate debtor has to exercise a right that falls outside the purview of the IBC, 2016 especially in the realm of the public law, they cannot, through the resolution professional, take a bypass and go before NCLT for the enforcement of such a right.”

15. ANALYSIS AND FINDINGS

"35.

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

“38.

This Regulation fleshes out Section 30(4) of the Code, making it clear that ultimately it is the commercial wisdom of the Committee of Creditors which operates to approve what is deemed by a majority of such creditors to be the best resolution plan, which is finally accepted after negotiation of its terms by such Committee with prospective resolution applicants.”

273.1.

The adjudicating authority has limited jurisdiction in the matter of approval of a resolution plan, which is well-defined and circumscribed by Sections 38(2) and 31 of the Code. In the adjudicatory process concerning a resolution plan under IBC, there is no scope for interference with the commercial aspects of the decision of the CoC; and there is no scope for substituting any commercial term of the resolution plan approved by the Committee of Creditors. If, within its limited jurisdiction, the adjudicating authority finds any shortcoming in the resolution plan vis-à-vis the specified parameters, it would only send the resolution plan back to the Committee of Creditors, for resubmission after satisfying the parameters delineated by the Code and exposited by this Court.’ (emphasis supplied).

16. ORDERS