Phoenix Arc Pvt. Ltd. vs GPI Textiles Ltd.

This is an application filed under Section 18(1)(f) read with Section 20(2)(e), 25(2)(a), 60(5) of the Insolvency & Bankruptcy Code, 2016 and read with Rule 11 of the NCLT Rules, 2016. In the present application, Jalesh Kumar Grover, Resolution Professional of GPI Textiles Limited is the applicant, and The Hongkong and Shanghai Banking Corporation Ltd. (HSBC) and Reserve Bank of India are the respondents.

It is submitted by the applicant that the said issue was contended by the corporate debtor during the pendency of Section 7 application filed before this Tribunal. This contention was rejected as would be seen from the order of this authority dated 06.07.2018. The applicant has verified the claim submitted by Phoenix Arc. Pvt. Ltd. and vide email dated 02.08.2018 sought clarifications and supporting documents for considering the claim. The claimant provided a copy of the statement of account of the corporate debtor maintained with HSBC and sought further time to clarify the issue of the receipt of Rs. 81.67 crores by HSBC on behalf of the corporate debtor. The claimant has clarified vide email dated 07.08.2018 that Phoenix Arc. Pvt. Ltd. has not received any credit for the said amount of Rs. 81.25 Crores. Hence, there was no need for the treatment/accounting in the books of Phoenix Arc. Pvt. Ltd. Thereafter, the applicant-Resolution Professional has admitted the claim of Phoenix Arc. Pvt. Ltd. to the extent of Rs.286,48,31,235/-. The applicant-Resolution Professional vide email dated 17.08.2018 requested the respondent to provide clarification on the aforesaid amount of Rs.816,777,816.41. Respondent No.1 by e-mail dated 21.09.2018 stated that it did not receive any payment from the corporate debtor post assignment of debt to Phoenix Arc. Pvt. Ltd. and the entry of aforesaid amount was part of closing internal entry which the respondent bank had passed on 22.03.2012. After the reply from respondent No.1, the applicant vide e-mail dated 24.09.2018 sought clarifications with regard to the amount of debt assigned to Phoenix Arc. Pvt. Ltd. and the amount of SBLC held as security to HSBC. The respondent bank has replied that SBLC was partially called in two trenches i.e. on 16.11.2011 for USD 526,160 and 15.02.2012 for USD 772,009. The applicant has convened a meeting on 22.10.2018 with the respondent bank for clarification. The resolution professional has also sought the intervention of the Reserve Bank of India vide email dated 27.10.2018 to verify the claim submitted by the Phoenix Arc. Pvt. Ltd. as the respondent Bank neither provided the documents nor replied to the questionnaire raised by the applicant. The respondent Bank vide letter dated 29.10.2018 has stated that the SBLC was not assigned to Phoenix Arc. Pvt. Ltd. The applicant/Resolution Professional has averred that it is also an admitted fact that Rs.81.67/- Crores have been received by HSBC and the amount of Rs.81.67/- Crores is an asset of the corporate debtor and it is the duty of the applicant to take the custody and control of the said amount lying with the respondent Bank as once the debt was assigned on 21.03.2012 to Phoenix Arc. Pvt. Ltd. by respondent No. 1, any amount lying with HSBC was towards the credit of the corporate debtor.

It is further submitted that the amount of Rs.81.67 crores is shown as a liability in the Balance Sheet of the year 2016 (total liability being Rs.130 crores) of the Corporate Debtor. As per Section 20 of the code, RP is authorised to take control of and custody of ‘Property’, which is defined in Section 3(27) but the said amount has been shown as liability in the Balance Sheet of Corporate Debtor. Therefore, Section 20 is clearly not applicable. It is also added that since GPI has stated during the course of arguments while contesting petition for admission that they have filed a counterclaim with respect to Rs.81.67 crores and, therefore, the matter must be pending before some Authority.

It is averred by Respondent Bank that even if it is assumed to be a Debt, even then it becomes time-barred as the transaction is of year 2012, which admittedly was in the knowledge of GPI. No recovery action would be maintainable for a debt, which was allegedly due and payable in the year 2012. In view of the submissions, the present application is liable to be dismissed with exemplary cost.

The applicant has denied the submission of Respondent No.1 with regard to the question of limitation. It is stated that the Respondent bank has failed to transfer the sum of Rs. 81.67 Crores to the Phoenix ARC Pvt. Limited in terms of Assignment Agreement, therefore the Respondent bank is in possession of the corporate debtor’s assets and the applicant is duty-bound to take into the custody of all the assets of the corporate debtor under Section 18 and 25 of the IBC. Accordingly, as per the applicant, the question of limitation does not arise at all.

The statement of the Counsel of HSBC that GLAM paid Rs. 81.25 Cr. to HSBC to meet the loss of HSBC can only be seen in the light of the fact that the Term Deposit Rs. 131 Crore was available for utilisation and was in fact utilised to the extent of Rs. 81.25 Crore and that not utilising the remaining amount of Rs. 50 Crore was the choosing of HSBC. Therefore, Rs.81.25 Cr. received by HSBC in the Loan Account of the corporate debtor rightly belongs to the corporate debtor and is recoverable by the corporate debtor with the interest from 22.03.2012. It is also mentioned that the matter of the claim is pending before the Hon’ble Debt Recovery Tribunal (DRT).

This issue also came up for consideration at the time of consideration of the Section 7 application by this Adjudicating Authority. The observation on this issue in this Adjudicating Authority’s order dated 06.07.2018 is quoted below for the sake of clarity:

It is also relevant to refer to the observation of the Hon’ble NCLAT by its judgement dated 20.12.2018 while dismissing the appeal filed by the Suspended Director challenging the CIRP order as under:-

In the course of the present proceedings, the applicant-Resolution Professional has vehemently argued that this issue squarely falls within the jurisdiction of this Tribunal as the same is in relation to the insolvency resolution process, and thus falls under Section 60(5) of the Code.

Now, adverting to the facts as submitted by parties to this application, an amount of Rs.81.67/- Crores was transferred into the account of the corporate debtor by HSBC Bank as reflected in the Bank statement. The controversy arises from the claims and counter claims made regarding the nature of this entry of Rs.81.68 Crores by the two opposing parties. While the applicant-RP claims that the HSBC Bank has not settled this amount against the loan facility availed by the corporate debtor, the respondent Bank on the other hand has vehemently argued that this amount represents an intra-branch adjustments of the HSBC Bank.

It is also noted that though this issue has been taken up in different judicial forums, no decision in this regard has so far materialised. This Bench has carefully perused the communications between the applicant-RP and the respondent Bank on this issue. In the course of the present proceedings, the applicant-RP was given an opportunity to substantiate his claim by referring to the relevant entries on this transaction in the books of the corporate debtor. We also note that the treatment given to this transaction in the books of the corporate debtor and the respondent Bank differ diametrically. In its written submission filed by Diary No.00970/6 dated 16.02.2022, the Resolution Professional states that in its audited financial statements under the Long Term Borrowings, it has shown the amount of Rs.129 Crores (Principal) and has also added a note in the audited financial statements stating that for the said financial assistance a security was provided in the form of SBLC. Prima facie, the amount of Rs.81.67 Crores, representing the claim of the applicant RP, does not appear directly in the Books of the corporate debtor, though it is argued that this claim can be inferred from the related entries.

The respondent Bank in its submissions filed by Diary No.00976/4 dated 10/02/2022 has denied the allegation regarding HSBC India drawing down on the SBLC to make good the interest/processing fee payment and also denied that HSBC India had drawn down from the SBLC on 15.02.2012 and purportedly cleared then outstanding interest. It has also denied the allegation that information about the assessment of loan was withheld from GPI. It has further stated that the objection to the assessment by GPI and the underlined allegation are an afterthought because GPI had made a declaration that it had no objection to the substitution of Phoenix in place of HSBC India before the BIFR. In a hearing before BIFR in MA No.142/BC/2012, the Respondent Bank had further reiterated its earlier explanation that the entries relating to Rs.81.67 Crores are internal entries which HSBC India had passed through GPI’s current account after assessment. The Bank further asserted that there was no wrongful assessment of the loan as GPI was declared as NPA as per RBI guidelines and therefore could well have been sold to an ARC.

The only issue for the consideration of this Bench is whether the disputed amount of Rs.81.67 Crores is the asset owned by the corporate debtor and therefore should be brought under the custody of the RP. As is clear from the foregoing discussions, the dispute over the amount of Rs.81.67 Crores goes back to 2012, i.e. much before the initiation of the CIRP proceedings. This dispute has been taken before various judicial authorities as mentioned in the foregoing paragraphs, though no decision in the matter by any authority has been produced before this Bench. This issue is closely related to the assignment of SBLC by HSBC. As noted, the Hon’ble NCLAT has held in its judgment dated 20.12.2018 that this issue can be raised only in a civil suit and the appellant is ‘trying to convert the proceedings under the I&B Code as civil proceedings akin to a trial which is not the legislative intent’. It is also further noted that there is no clear evidence in the books of accounts of the corporate debtor regarding this entry of Rs.81.67 Crores even though it is claimed that this amount can be inferred from the Note 5 in the audited financial statements. In short, it is not recorded in the Balance Sheet of the Corporate Debtor - one of the requirements of Section 18(f) of the IBC.

In this context, the decision of the Hon’ble Supreme Court in the case of Gujarat Urja Vikas Nigam Ltd. Vs. Amit Gupta & Ors. Civil Appeal No. 9241 of 2019 has been brought to the notices of this Bench. The following paragraphs, relevant to the present discussion are extracted below:-

In the present case, the issue of assignment of SBLC, which took place much prior to the initiation of the CIRP proceedings, is not related to the insolvency of the corporate debtor. As narrated in the foregoing paragraphs, this issue has been agitated before different judicial authorities since 2013 onwards and is not in any way pivotal to the resolution process. To prove the claim additional evidence has to be brought on record during the current proceedings. The requirement for leading evidence suggests that the instant matter is out of the scope of summary proceedings under the Insolvency and Bankruptcy Code, 2016, and will be better dealt with in a civil Court. Also, by its very nature, it appears like a recovery suit. It is trite law that the Code is a beneficial legislation to put the corporate debtor on its feet, and not a mere recovery legislation for the parties.

We are also conscious of the observation of the Hon/ble Apex Court in the case of M/s Invent Asset Securitisation and Reconstruction Pvt. Ltd Vs. M/s Girnar Fibres Ltd (2022) ibclaw.in 26 SC

It is further submitted that when the financial facilities were sanctioned to the corporate debtor, the valuation of the property was roughly around Rs. 27.00 Crore as mentioned in the Sanction letter dated 17.05.2013 and as per valuation report dated 03.01.2015, the property was valued at Rs.30.64 Crores. The total amount payable by the corporate debtor to the applicant is Rs.23,05,02,680/- and this claim was duly admitted by RP. The Resolution Professional has also prepared a liquidation valuation chart , which is as follows:-

It is further submitted that the Resolution Professional invited Expression of Interest in which various interested applicants participated and finally the resolution plan of M/s Aggarsain Spinners was found to be highest. The resolution plan was put to vote in 12th Meeting of COC held on 27.03.2019.As per resolution plan of M/s Aggarsain Spinners, the total amount which was payable by the successful resolution applicant was Rs.82.57 Crore, out of which the amount payable to the Phoenix was Rs. 72.21 Crore and Rs.5.81 Crore was payable to the State Bank of India.

It is averred by the applicant/objector i.e. State Bank of India that it can recover the outstanding amount from the liquidation value of the assets held as a security by the State Bank of India. The Resolution Plan of M/s Aggarsain Spinners Limited was put to vote in the 12th meeting of CoC. Since, the liquidation value of the assets held by the objector/applicant i.e. State Bank of India was sufficient to recover the entire admitted claim of the Objector State Bank of India, the objector was the dissenting financial creditor. As M/s Phoenix ARC Pvt. Ltd. had 92.55% voting rights, in spite of dissent by the objector State Bank of India, the plan was approved.

It is also submitted that as the CoC has accepted the Resolution Plan offered by resolution applicant i.e. M/s Aggarsain Spinners Pvt. Ltd., the total amount available for appropriation by the secured creditors, employees and the statutory dues is Rs. 83.75 Crores. In this manner, the total amount which comes to the share of the applicant is Rs. 5.81 Crore as against the claim amounting to Rs. 23.05 Crores. The liquidation value of the assets held by the applicant are sufficient to recover the entire dues of Rs.23.05/- Crores.

The respondent has stated in its reply that after the initiation of CIRP the respondent/resolution professional has made a public announcement for inviting the claims and after collating and verification of the claims CoC was constituted. The RP invited Expression of Interest and subsequently, resolution plans were put before CoC for approval. In the 12th Meeting of CoC, the resolution plan of M/s Aggarsain Spinners Pvt. Ltd. was approved by CoC members having voting shares of 92.55% and the applicant was a dissenting financial creditor objecting to the resolution plan. The CoC approved the resolution plan with 92.55% voting share as against the required threshold of only 66%.

India Resurgence ARC Pvt. Ltd. Vs. M/s Amit Metaliks Ltd. & Anr, Civil Appeal No.1700 of 2021 judgement dated 13.05.2021:

Furthermore, he has placed reliance on the following decisions of the Hon’ble Supreme Court in support of his contention that the commercial wisdom of the Committee of Creditors is paramount:

K.Shashidhar vs. India Overseas Bank & Ors., Civil Appeal No.10673 of 2018:-

Committee of Creditor of Essar Steel India Limited Vs. Satish Kumar Gupta & Ors., Civil Appeal No.8766-67/2019:-

The Hon’ble Supreme Court of India in the case of K.Shashidhar vs. India Overseas Bank & Ors.; 2019 SCC Online SC 257 (decided on 05.02.2019 in Civil Appeal No.10673 of 2018 with Nos.10719, 10971 of 2018 and SLP (C) No.29181 of 2018)

The Hon’ble Supreme Court of India in the case of India Resurgence ARC Pvt. Ltd. Vs. Amit Metaliks Ltd. & Anr.; 2021 SCC Online SC 409 (decided on 13.05.2021 in Civil Appeal No.1700 of 2021)

The Hon’ble Supreme Court of India in the case of Maharashtra Seamless Ltd. Vs. Padmanabhan Venkatesh; (2020) 11 SCC 467 (decided on 22.01.2020 in Civil Appeal No.4242 of 2019)

The Hon’ble Supreme Court of India in the case of Bank of Baroda Vs. MBL Infrastructure Ltd. & Ors. 2022 SCC Online SC 48 (decided on 18.01.2022 in Civil Appeal No.8411 of 2019)

This is an application filed under Section 60(5) of the Insolvency & Bankruptcy Code, 2016. In the present application, IDBI Bank Ltd. is the applicant, and Jalesh Kumar Grover, Resolution Professional of GPI Textiles Limited is the respondent.

In the present application, the applicant has prayed to consider the claim and IDBI Bank as one of the financial creditor of the corporate debtor and to set aside the order of the RP rejecting the claim of the applicant in this regard.

The brief facts, as mentioned in the application, are that the CIRP Process was initiated against the corporate debtor vide order dated 06.07.2018 and IRP had published Form A in the newspaper on 14.07.2018 and the last date for submitting the claims was fixed as 26.07.2018. The applicant is one of the financial creditors of the corporate debtor who is the holder of Cumulative Redeemable Preference Shares which is the investment made by the bank as One Time Settlement package in the corporate debtor. The applicant has filed a claim in Form C dated 14.11.2019 as prescribed under the CIRP Regulations to the respondent/RP. The RP vide e-mail dated 30.11.2019 rejected the claim of the applicant by stating that the claim was filed after the approval of the resolution plan.

It is further submitted that the RP has wrongly rejected the claim of the applicant as Regulation 12(2) of CIRP Regulations is merely directive in nature as there is no such limitation in the IBC which stipulates that after the period of 90 days the claim of the creditor become time-barred. It is further prayed that the claim of the applicant may be accepted as the CIRP Process has not been completed and the resolution plan is still pending for the approval/adjudication. The applicant has referred to the judgment of the Hon’ble NCLT, New Delhi Principal Bench in Edelweiss Asset Reconstruction Company Pvt. Ltd. vs. Adel Landmark Limited in (IB)-1083(PB)/2018 dated 06.06.2019.

The Hon’ble Apex Court in Ghanshyam Mishra and Sons Private Limited through the authorised signatory V. Edelweiss Asset Reconstruction Company Limited through the director & Ors. Civil Appeal No.8129 of 2019;

The Hon’ble Supreme Court of India in Committee of Creditors of Essar Steel India Limited through Authorised Signatory V. Satish Kumar Gupta & Ors. Civil Appeal No.8766-67 of 2019;

The Hon’ble NCLAT in Harish Polymer Product Vs. Mr. George Samuel & Anr. Company Appeal (AT) (Ins.) No.420 of 2021.

The Hon’ble NCLAT in ICICI Bank Ltd. Vs. Gopalsamy Ganesh Babu, Insolvency Professional of Subburaj Spinning Mills Pvt. LtdCompany Appeal (AT) (Insolvency) No.655 of 2019.

The Hon’ble NCLAT in Deputy Commissioner Division - VII, Central GST, Ahmedabad South Vs. Mr. Kiran Shah Company Appeal (AT) (Ins.) No.328 of 2021

In the present application, M/s Shreeji Cotfab Limited is the applicant, and GPI Textiles Limited through Jalesh Kumar Grover, Resolution Professional is the respondent.

It is contended that the applicant is associated with Corporate Debtor in various capacities such as supply of raw material on sale/purchase basis and job work basis. The applicant was getting the job work on contract from the corporate debtor and has an outstanding advance of Rs.301.46/- lakhs as on CIRP date.

It is submitted by the applicant that faced with severe liquidity crunch, Mr. L.K. Singh, Whole-time Director (Powers Suspended) approached the applicant for the supply of raw material as well as advance payment towards the job work charges so as to enable the corporate debtor as a going concern. The applicant entered into a job-work agreement on 20.02.2018 (Copy is attached as Annexure-4 of the application). Further, in continuation of the agreement dated 20.02.2018, the applicant and the corporate debtor entered into a registered agreement on 06.06.2018, which was in continuation of various earlier agreements relating to job work by the corporate debtor for the applicant (Copy is attached as Annexure-5 to the application).

It is pointed out that as per clause 18 of the said agreement dated 06.06.2018, it was agreed by the parties that the Merchant (Applicant herein) will pay the advanced job charges and shall have the right to adjust the advance money given to the Manufacturer (Corporate Debtor herein) and the manufacturer shall have no objection to the said adjustment. It is submitted that the applicant had the following transactions during the CIRP from 07.07.2018 till 31.03.2019.

It is submitted by the applicant that the respondent did not allow adjustment of Rs.301.46/- Lakhs as advance job charges from the job charges accrued during the period. The advance of Rs.301.46/- Lakhs was not reflected in the Information Memorandum as CIRP cost nor has been even presented before the CoC for approval.

It is averred by the applicant that the respondent wrote an e-mail dated 04.05.2019 without any prior discussion advising the applicant to stop the further dispatch of material with immediate effect thereby causing huge financial loss to the applicant.

The applicant relied on Section 5(13) of the IBC, 2016 which defines insolvency resolution process cost and Regulation 2(3) read with Regulation 31 and 33 of IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 in support of its claim that the amounts involved should be included in the CIRP cost.

It is alleged that Resolution Professional that without deliberation upon the representation of the applicant which was handed over on 05.03.2019, vide e-mail dated 04.05.2019, rejected the claim and asked the applicant to pay the amount of Rs.35.47/- Lakhs instead.

It is submitted that the resolution plan submitted by M/s Aggarsain Spinners Limited was put for voting in 12th meeting of CoC held on 27.03.2019 and was approved by the Members of the CoC with 92.58% voting share pending approval of this Tribunal.

It is further submitted by the respondent that the applicant has filed his claim in the capacity of Operational Creditor of the corporate debtor in prescribed Form B with the respondent on 11.08.2018 for advance given to the corporate debtor to the tune of Rs.3,01,46,724/- prior to initiation of CIRP along with interest and other charges. The respondent in accordance with the provisions of the Code admitted the principal amount of Rs.3,01,46,721/- as claimed by the applicant, as an operational debt of the corporate debtor and rejected the other charges in terms of provisions of the Code since there was no agreement to that effect. The same forms a part of the Information Memorandum prepared by the respondent in terms of Section 29 of the Code read with Regulation 36 of the CIRP Regulations.

It is averred by the respondent that the said claim by the applicant was due prior to initiation of the CIRP against the corporate debtor and pertains to pre-CIRP period. The respondent in response to the order of this Tribunal dated 21.02.2019 in IA No.112 of 2019 asked the applicant to file written representation in accordance with the liberty granted by this Adjudicating Authority. Instead, the respondent states that the applicant made verbal representations. Copy of e-mail dated 04.05.2019 sent by the applicant and e-mail dated 07.05.2019 sent by the respondent on this subject are annexed with the reply as Annexure R-7.

It is submitted by the respondent that the applicant by its present application before this Adjudicating Authority seeks to treat its claim as a part of CIRP cost with the intention to jump the rank provided under Section 53 of the Code and gain priority over secured creditors under the Resolution Plan. It is further submitted by the respondent that the amount claimed by the applicant does not fall within the purview of Section 5(13) of the Code and the claim of the applicant being pre-CIRP dues cannot be treated as CIRP cost.

It is further noted that the dispute relating to payments was brought before this Tribunal earlier through IA No.112 of 2019, and by its order dated 21.02.2019, this Tribunal had given an opportunity to the applicant to file written representation before the respondent regarding its claim. The relevant part of the aforesaid order is extracted as under:-

In compliance with the above direction, a meeting was held between the parties, and we find references to this meeting in the emails dated 04.05.2019, and 07.05.2019, which is to the following effect:

At this stage, we must notice that there is no clarity in the aforementioned emails as to whether supporting documents like ledger account copy, bills, vouchers and relevant correspondence etc. were produced by the applicant in the course of the aforementioned meeting in support of its claim. We also observe that no such document has been produced before this Tribunal to facilitate a decision on this issue.

The appellant's claim that the alleged amounts outstanding should be considered as a part of the CIRP cost as these amounts are spent in pursuance to a contract made to enable the corporate debtor to survive as a going concern is not supported by any evidence on record. From the very nature of the contract and the subsequent action by the parties, it is clear that this was a commercial transaction for the mutual benefit of both the parties which was subsequently cancelled by the respondent unilaterally.

The correspondences between the parties also indicate that there is a dispute on the issue at hand and the respondent has made a counterclaim of Rs.35.47/- lacs in its email dated 04.05.2019 as against the claim of Rs.301.46 Crore by the applicant. Furthermore, whether an expense can be included in the CIRP cost is clearly defined in Section 5(13) of The Insolvency And Bankruptcy Code, 2016 read with Regulation 31 of the Insolvency And Bankruptcy Board of India (Insolvency Resolution Process For Corporate Persons) Regulations, 2016, which is to the following effect:

This is an application filed under Section 60(5) read with Section 31 of the Insolvency & Bankruptcy Code, 2016. In the present application, M/s Shreeji Cotfab Limited is the applicant, and GPI Textiles Limited through Jalesh Kumar Grover, Resolution Professional is the respondent.

In the present application, the applicant prays for raising objections against the Resolution Plan of M/s Aggarsain Spinners Limited and requests for its rejection.

The directions prayed to be issued to the respondent, in this case, relate to (1) admission of the pending claims of the applicant including the liabilities towards rent, interest, and statutory forms; (2) to reconstitute of the COC and setting aside the COC’s decision to approve the resolution plan submitted by M/s Aggarsain Spinners Limited and to consider/accept the resolution plan submitted by other applicants; (3) distribution of funds equally amongst the secured creditors and operational creditors (including the applicant); (4) to correctly calculate the liquidation value after taking into consideration the possible recovery from HSBC, and (5) to include the profit generated by the successful resolution applicant during CIRP for distribution to financial and operational creditors and to direct the successful resolution applicant to keep the Corporate Debtor as a going concern for at least five years;

The applicant has also sought interim relief in terms of disposal of the application filed by Mr. L.K. Singh, Suspended Director of the Board in priority over the resolution plan of M/s Aggarsain Spinners Limited; priority disposal of the application filed by the respondent against HSBC Bank for recovery of Rs.81 Crores before deciding the resolution plan; and making available Rs.81 crores recovered from HSBC along with interest to the CD and and not to allow the same to be taken by Secured Creditors.

As the issues relating to the possible recovery from HSBC have already been considered in this order in connection with IA No.89/2019 no separate finding is warranted here. The prayers subject to the approval of the Resolution Plan by this Adjudicating Authority, which is separately taken up in the order relating to the IA 348/2021 are also not required to be taken up here. This order, therefore, considers only the issues raised in the first three points of the para 2.1.

It is further submitted by the applicant that at the insistence of Resolution Professional, the applicant continued with the job work under an existing agreement even after initiation of CIRP on 06.07.2018.

It is averred by the applicant that it had submitted a claim of Rs.641.89 Lacs which included the principal advance amount of Rs.301.46 Lacs, interest of Rs.19.17 lacs, and liability for pending statutory forms Rs.321.26 Lacs (for C form and E1 forms) before the respondent. The liability linked to the non-issue of the statutory forms arose on account of the failure of the corporate debtor to deposit sales tax dues with the sales tax department as a consequence of which, the corporate debtor did not issue requisite forms to the applicant.

It is submitted by the applicant that the respondent approved the claim ignoring the interest component, and the same was not approved by the respondent. Moreover, the claim of pending statutory forms was not approved and the required statutory forms have not been issued by the respondent till date.

It is alleged by the applicant that the respondent has not rightly constituted the Committee of Creditors. The respondent has constituted the CoC comprising Phoenix Arc Private Limited and State Bank of India having vote shares of 92.55% and 7.45% respectively. It is submitted that notices of CoC meeting should have been issued to other creditors including the unsecured creditors.

It is further submitted by the applicant that CoC has made certain changes in the resolution plan wherein payouts to financial creditors have been improved from 14.30% to 25.21%. Despite the increase in total payout from Rs.56 crores to Rs.83.75 Crores, payment to the operational creditors is reduced significantly from 5% to 1.16% which translates to a reduction from Rs.2.20 Crores and to Rs.0.51 Crores. Thus, by forcing a lesser percentage of claims to operational creditors, the resolution plan so approved by CoC and recommended by the respondent for approval of this Tribunal is discriminatory and against the interests of the operational creditors. Reliance has been placed on the decision of the Hon’ble NCLAT in the Binani Cement Case in support of this claim on the ground that CoC has failed to safeguard the interest of all stakeholders.

The corporate debtor is entitled to conversion charges for the conversion of raw materials supplied by the applicant into finished goods as per the Job Work Contract dated 20.02.2018. It is further pointed out that the applicant as an Operational Creditor of the Corporate Debtor on 11.08.2018 has mentioned in the prescribed Form B an amount of Rs.3,01,46,724/- as advance given prior to the initiation of CIRP along with interest and other charges. This amount is mentioned as principal. The applicant has further claimed the interest of Rs.19,16,709/- and liability arising out of C Form amounting to Rs.3,21,26,086/-. The principal amount of Rs.3,01,46,721/- as claimed by the applicant has been accepted as an operational debt.

It is submitted by the respondent that on one hand the applicant itself has claimed an amount of Rs.3,04,46,721/- as outstanding prior to the insolvency commencement date and on the other hand by virtue of the present application, the applicant is seeking to treat the same as CIRP cost with the sole intention to gain priority over the other stakeholders of the Corporate Debtor. It is submitted that such claim has been filed by the applicant as part of CIRP cost with the sole intention to jump the rank as provided under Section 53 of the Code and given priority over secured creditors under resolution plan. Reliance has been placed on the provisions of Section 5(13) of the Code and Regulation 31 of the CIRP Regulations. In view of the above, it is further stated that the prayer of the applicant to treat the claim in the class of the operational debt of the Corporate Debtor pertaining to the pre-CIRP period as CIRP cost is beyond the provisions of the Code.

As regards the prayer to set aside the approval of the resolution plan approved by the CoC on the ground that the CoC was not constituted as per provisions in the Code, the Respondent has submitted that the applicant has no locus standi to challenge the constitution of the CoC as in terms of Section 21 of the Code, the Committee of Creditors shall comprise all financial creditors of the Corporate Debtor with voting share determined on the basis of the financial debts owed by him. It is further stated that in terms of the provisions of the Code, it is the financial creditors who are given the right to vote in the CoC whereas, the Operational Creditors have no right of audience. In support of this contention, reliance has been placed on the decision of the Hon’ble Rajasthan High Court in the matter of Ultra Tech Nathdwara Cement Limited Vs. Union of India & Ors in Civil Writ Petition No.9480/2019. The respondent has also placed reliance on the decision of the Hon’ble NCLAT in the matter of IMR Metallurgical Resources AG Vs. Ferro Alloys Corporation Limited & Ors, Company Appeal (AT) (Insolvency) No.272 of 2020 dated 08.06.2020, which holds that an un-successful Resolution Applicant has no vested right in the Corporate Insolvency Resolution Process of the Corporate Debtor and to insist that his resolution plan must be considered. It is also pointed out that the decision in IMR Metallurgical Resources AG. (supra) has subsequently been upheld by the Hon’ble Supreme Court by their order dated 20.07.2020 in Civil Appeal No.2720 of 2020. In support of their contention that the commercial wisdom of the CoC is paramount and the scope of judicial review is limited, the respondents have placed reliance on the decisions of the Hon’ble Supreme Court in the matter of Kalpraj Dharamshi & Anr. Vs. Kotak Investment Advisors Ltd. & Anr. Civil Appeal No.2943-2944 of 2020 dated 10.03.2021 and in the matter of Committee of Creditors of Essar Steel India Limited through Authorised Signatory Vs. Satish Kumar Gupta and Ors. 2019 SCC Online SC 1478.

Regarding the claim of the applicant that the funds are to be equally distributed amounts secured financial and operational creditors, the respondent have submitted that in terms of the provisions of Section 30(2)(b) of the Code, the Operational Creditors are required to be provided with at least the liquidation value they would recover in the event of the Corporate Debtor goes under liquidation. According to the respondent, in the present case, the liquidation value owed to the Operational Creditor is NIL and that the amount offered to the Operational Creditor under the resolution plan is much higher than what they would fetch in the event the Corporate Debtor is pushed to liquidation in compliance with the provisions of the Code. In this context, the respondents placed reliance on the decision of the Hon’ble Supreme Court in the matter of India Resurgence ARC Private Limited Vs. M/s Amit Metaliks Limited & Anr. in Civil Appeal No.1700 of 2021 dated 13.01.2021. The relevant part of the decision is extracted below:-

Furthermore, reliance has been placed on the decision of the Hon’ble Supreme Court in the matter of Committee of Creditors of Essar Steel India Limited through Authorised Signatory Vs. Satish Kumar Gupta and Others, 2019 SCC Online SC 1478. The relevant part of the decision is extracted below:-

It is further submitted that even FORM H itself categories the classes of Operational Creditors in three classes in terms of the CIRP Regulations, 2016.

As regards the claim of interest, it is stated that there has been no provision for such claim of interest and other charges in the agreement dated between the applicant and the respondent-Corporate Debtor. In this context, reliance is placed on the decision of the Hon’ble NCLAT in the matter of Krishna Enterprises Vs. Gammon India Limited in company Appeal (AT) (Insolvency) 144 of 2018 dated 27.07.2018, which is to the following effect: it is submitted that the 'debt' includes the interest, but such submission cannot be accepted in deciding all claims. If in terms of any agreement interest is payable to the Operational or Financial Creditor then debt will include interest, otherwise, the principal amount is to be treated as the debt which is the liability in respect of the claim which can be made from the Corporate Debtor.

Regarding the claim relating to pending statutory forms, it is stated by the respondent that the non-payment of statutory dues pertains to a period before the commencement of CIRP against the Corporate Debtor and the respondent is making due efforts and requested the department to unlock the TIN Number. The application bearing CA No.243/2019 filed in this regard before this Tribunal is being separately taken up.

Reliance has been placed by the applicant on the decisions of the Hon’ble NCLAT in the matter of Binani Industries Limited Vs. Bank of Baroda & Anr. Company Appeal (AT) (Insolvency) No.82 of 2018 dated 14.11.2018 and of the Hon’ble Supreme Court in the matter of Essar Steel Vs. Satish Kumar Gupta & Ors., 2020 (8) SCC 531, in support of its contention that the resolution plan is prejudicial to the rights of all Creditors and should be rejected.

It is further submitted that in the absence of a decision of CA No.89/2019 against HSBC, the liquidation value of the Corporate Debtor has not been correctly assessed.

Whether the claim regarding the interest and the liability for any statutory dues should have been considered by the RP;

Whether only financial creditors should form part of the CoC;

Whether the payouts recommended for the financial creditors by the CoC in the present case is as per the procedure laid down:

Whether any applicant other than the successful resolution applicant recommended by the CoC be considered by the adjudicating authority in the present case.

The issue of the claim at Rs.301.46 Lakhs has already been considered in IA No.865/2019 above and the same has been rejected on the grounds mentioned in the said order.

As regards the maintainability of the claim of Interest, this Bench holds that the same is allowable only when there is a specific mention to that effect in the job contract. We have closely perused the job contract dated 20.02.2018. This contract has made provisions for charges for the conversion of raw material supplied by the applicant into finished goods but has not made any specific provision for interest. No payment of any interest could be shown to have been made by the corporate debtor to the applicant in their earlier dealings. In the absence of a specific agreement qua interest, we hold that the claim with regard to interest in the present case is not maintainable.

As regards the liability arising out of the non-issuance of the statutory form C, this bench is conscious of the decision of the Hon’ble NCLAT in the matter of Transit Geo System Integrators Pvt. Ltd. Vs. Stahl Techniks Pvt. Ltd., Comp. App. (AT) (Ins.) No. 106 of 2022 dated 03.02.2022 which is to the following effect:

This Bench, therefore, holds that the RP has correctly rejected the claim regarding the liability arising out of non-issuance of Form-C.

Regarding the formation of the CoC, The applicant’s Submission that all unsecured creditors should have been included in the CoC is not in accordance with the provisions of Section 21 of IBC, which is to the following effect:

The applicant’s prayer in this regard is, therefore, rejected.

The applicant has vehemently argued that the distribution of funds approved by the CoC is unfairly negotiated in favour of the members holding dominant position and is prejudicial to the rights of all creditors of the corporate debtor.

The Hon’ble Supreme Court has in a catena of judgements held that the opinions expressed by the CoC after due deliberations in the meetings through voting, as per voting shares, is the collective business decision and that decision of the CoC’s commercial wisdom is non-justiciable, except on limited grounds as are available for challenge under Section 30(2) or Section 61(3) of the IBC. This position of law, laid down in the case of Pratap Technocrats (P) Ltd. & Ors. Vs. Monitoring Committee of Reliance Infratel Ltd. & Anr.,Civil Appeal No. 676 of 2021 dated 10.08.2021 of the Hon’ble Supreme Court has been consistently reiterated in a several judgements of the Hon’ble Supreme Court, Including; K. Sashidhar vs. Indian Overseas Bank & Ors., Civil Appeal No.10673 of 2018 decided on 05.02.2019; Committee of Creditors of Essar Steel India Limited through Authorised Signatory Vs. Satish Kumar Gupta and Ors. 2019 SCC Online SC 1478 decided on 15.11.2019; Maharashtra Seamless Limited vs. Padmanabhan Venkatesh and Ors., Civil Appeal No.4242 of 2019 decided on 22.01.2020; Kalpraj Dharamshi & Anr. Vs. Kotak Investment Advisors Ltd. & Anr. Civil Appeal No.2943-2944 of 2020 dated 10.03.2021. In the present case, the applicant has failed to bring any instance of material irregularity in the decision of the CoC. In view of the above discussions, it is held that the applicant’s claims that the CoC is wrongly constituted and that its decisions were prejudicial to the rights of all creditors are misconceived. It is further held that the CoC in its wisdom has approved the selection of the successful resolution applicant, and such commercial wisdom of the CoC is paramount.

This is an application filed under Section 60(5) read with Section 31 of the Insolvency & Bankruptcy Code, 2016. In the present application, M/s Longowalia Yarns Limited is the applicant, and GPI Textiles Limited through Jalesh Kumar Grover, Resolution Professional is the respondent.

In the present application, the applicant has prayed inter alia to admit the pending claims of the applicant and to quash and set aside the decision of CoC to approve the Plan. It is further prayed to distribute the funds equally between secured creditors and operational creditors and to correctly calculate the Liquidation Value of the corporate debtor along with consideration of resolution plans submitted by other RAs.

In this application, the applicant states that it has been associated in different capacities as a supplier of raw material, purchaser of yarn, job work etc. with the Corporate Debtor from 2009. The applicant made a claim of ₹159.68 lakhs, which included principal amount, interest and liability for pending statutory forms. The respondent has approved the claim of Rs.89.70 Lakhs as principal only and this liability is still unpaid by the corporate debtor. The Resolution Professional has invited expression of interest on 21.12.2018 and 02.01.2019. The resolution plan of M/s Aggarsain Spinners Limited was put for voting in the 12th meeting of CoC held on 27.03.2019 and was approved by the Members of the CoC with 92.58% voting share. It is alleged that the resolution plan was passed in which the payment to the operational creditors is made at 1.16%. The respondent has also filed an application for the recovery of Rs.81 crores plus interest from HSBC Bank.

The other allegations include the failure on the part of the CoC to protect the interest of operational creditors, non-recovery of Rs.81 Crores from HSBC Bank due to wrongful assignment.

In his response filed by Diary No.55836 dated 14.10.2019, the learned counsel for the respondent has pointed out that the applicant is espousing the cause of the Suspended Board and it is only a part of a proxy litigation. Firstly, the application is bad for non-joinder of parties. The CoC and RA have not been made a party to this application.

As regards the claim of interest, the learned counsel has pointed out that there is no such provision in the agreement regarding the payment of interest to be made to the applicant and therefore the RP has rightly rejected such claims. He has placed reliance on the decision of the Hon’ble NCLAT in the case of Krishan Vs. Gammon India dated 27 July 2018. He has made a reference to Regulation 13(1), to emphasise that RP is to “verify every claim as on the insolvency commencement date” and “thereupon maintain a list of creditors containing names of creditors along with the amount claimed by them, and the amount of their claims admitted, security interest, if any, in respect of such claim”. It has been pointed out that nowhere is the RP required under the IBC to inform any applicant regarding the status of his claim. As such the information regarding the admittance of claims are given in the notes to the list of creditors.

Regarding the alleged debt arising out of the outstanding amount of Form C, the learned counsel for the respondent has referred to the proof of the existence of debt as prescribed in Regulation 7(2) of the CIRP Regulations, 2016. He has further referred to the definition of “claim” in Section 3(6) and also the definition of “debt” in Section 3(11) of the IBC.and stated that non submission of FORM C can’t be termed as a ‘claim’ or ‘debt’.

It is further stated that outstanding Form C cannot be part of a “debt” as no case has been made out for identifying the liability. No document has been placed by the applicant to demonstrate that there is any actual demand made by the Sales Tax Department on account of non-furnishing of Form C or any such term which has been a part of the agreement between the parties. It is thus a claim that the RP has rightly rejected the claim. The RP has, however, discharged his duties by filing a claim regarding the Form C before the concerned Government Department.

As regards the alleged discrimination between the financial creditors and operational creditors, it has been stated by the learned counsel for the respondent that as per the decision of the Hon’ble Supreme Court in the case of ESSAR steel (para 88/89) has held that equitable treatment is only for similarly situated creditors. He has also stated that the IBC itself provides under Section 30(2)(b)(1) that the payment of debts of operational creditors shall not be less than the amount to be paid to such creditors in the event of a liquidation of the corporate debtor under Section 53.

It is further stated that in the present case, the outstanding amount of debt of creditors is Rs.309.53 Crores as against a liquidation value of only ₹103.34 crores and that if a liquidation taken place in the present case, the operational creditors would not have got anything towards the outstanding debt. In such an event the present distribution made by the Resolution Professional is valid and meets the end of justice.

The learned counsel for the respondent has also submitted that the applicant has no locus standi to challenge the resolution plan as it is not even a member of the CoC. In this connection, reliance has been placed on the decision of the Hon’ble Supreme Court in the case of Maharashtra Seamless (para 26), limited judicial review in Essar steel and the Supreme Court decision in Duncan industries.

In her arguments, further to the submissions made in the application, the learned counsel for the applicant has pointed out that there is Clause 15 in the job work agreement, it is stated that the supplier is responsible for statutory claims. It has also been pointed out that the concerned department has blocked the TIN number because of the lack of compliance by the corporate debtor and the resulting damage out of this action can be claimed as the debt against the corporate debtor.

The applicant has relied upon the following judicial decisions:

Binani Industries Ltd. Versus Bank of Baroda and Another, Company Appeal(AT) (insolvency) No.82 of 2018 decided on November 2018, which was subsequently upheld by the Hon’ble Supreme Court in Rajputana Properties Private Limited Versus Ultratech Cement Ltd. and Others. Civil Appeal No. 10998 of 2008 decided on 19 November 2018.

We have carefully perused the records available and submissions made by the learned counsel for the applicant and respondent.

It is settled law that proceedings before NCLT are summary in nature and adersorial evidence cannot be led and appraised by this Tribunal.

In the present case three major issues have been raised; (a) non-consideration of interest and liability for pending statutory forms by the Resolution Professional, (b) non-recovery of Rs.81 Crores from HSBC Bank due to wrongl assignment, and (c) discrimination between financial creditors and operational creditors in the resolution plan. All these issues are almost identical especially in CA No.866/2019 and CA No.89/2019 which have been rejected for reasons mentioned therein. For the sake of clarity, it is repeated that the claim for interest has been rejected on the ground that no provision of such payment of interest in any agreement was produced before this Bench during the current proceedings by the applicant. The claim for non-furnishing of Form No.C cannot be a subject matter of any dispute in the CIRP proceedings, as this issue cannot be a part of claims under CIRP proceedings, and the applicant can approach the competent authority for any relief in this matter. The issue of non-recovery of Rs.81 Crores from HSBC Bank can also be taken up by the applicant before competent authority, as the same is an old matter preceding the CIRP and the applicant can approach competent judicial authority for relief, if any. The applicant’s claim regarding discrimination between financial creditors and operational creditors is misconceived because it runs counter to the provisions of Section 21 of the IBC, 2016. In view of the aforementioned discussion, this CA No.553/2019 is dismissed and is disposed of accordingly.

This is an application filed under Section 60(5) of the Insolvency & Bankruptcy Code, 2016 in the matter of M/s Aayat Processors. In the present matter, M/s Aayat Processors is the applicant, and GPI Textiles Limited through Jalesh Kumar Grover, Resolution Professional is the respondent.

This is an application filed under Section 60(5) of the Insolvency & Bankruptcy Code, 2016. In the present application, Lalan Kumar Singh is the applicant, and Jalesh Kumar Grover, Resolution Professional of GPI Textiles Limited is the respondent.

The respondent has averred that the information regarding partial admission of the claim of the applicant was given to the letter by e-mail dated 11.02.2019 and the applicant is filing the application as late as 30.07.2019 i.e. after the CoC has approved the resolution plan. It is further averred that in terms of Section 53 of the Code, the applicant being a preference shareholder is ranked at as low as 7th in the water fall provided.

It is further argued that CRPS is in the nature of the debt of the corporate debtor and the actual dividend thereon is too in the nature of debt of the corporate debtor. Regarding the payment of interest, it has been stated that the same will be allowed Article 180 in the Articles of Association of the corporate debtor. It is also stated that as the matter of default of corporate debtor regarding bank payment took place in May 2018, the claim of the applicant for salary and wages for and upto May 2018 should have been considered by the RP.

Regarding claim of interest @18% on CRPS-1, it is stated that the same was rejected since there was no agreement for the same and no documents/record of the corporate debtor provided for the same. It is also stated that earlier the corporate debtor had never paid any interest to the applicant. Reliance has been placed on the decision of Krish Enterprises Vs. Gammon India Ltd. Comp App (AT) (Ins) No.144 of 2018, 27.07.2018 - (paragraph4).

Regarding the claim of CRPS-2, the same was stated to be rejected on the account that it was not due until 2026. It is also stated that it is evident from the letter dated 19.04.2017 issued by IFCI Limited to the applicant that preference shares have been purchased from IFCI Limited. It is further contended that the subsequent letter dated 09.04.2018 referred by the applicant intimating transfer of shares from IFCI to applicant seems to be an afterthought and an attempt to mislead the Tribunal. The alleged letter was never put before the Board of Directors or shareholders of the Company. It has also been pointed out that contents of the letter dated 09.04.2018 are unilateral in nature and cannot be considered as valid since there is no agreement with the corporate debtor for the same and such terms cannot be unilaterally imposed by the applicant.

Regarding the claim of salary from August 2017 to May 2018, it is stated that the same was rejected as no amount outstanding against the salary to the applicant is reflected in the books of the corporate debtor. It is also pointed out that in the Audited Balance Sheet as on 31.03.2019 duly signed by applicant in the capacity of director, auditor has given the following remarks with regards to applicant’s salary. Relevant extract from the balance sheet as on 31.03.2019 (page 28 of the additional affidavit) is being reproduced here under for ready reference:

The instant application is filed by Central Goods & Services Tax, Commissionerate, Shimla through its Commissioner under Section 60(5) of the Insolvency & Bankruptcy Code, 2016 for permitting the revenue to adjust an amount of Rs.8,51,304/- as accrued to the corporate debtor on account of interest on delayed refund out of total due amount of Rs.1,60,06,758/- which is recoverable from the corporate debtor on account of arrears of tax.

The applicant submitted that this Adjudicating Authority admitted CP (IB) No. 35/Chd/HP/2018 vide order dated 06.07.2018 and CIRP proceedings initiated against the Corporate Debtor. On coming to know about the above order, the applicant had filed its claim for Rs.1,57,47,605/- on 08.03.2019 with the Resolution Professional. Further, the applicant filed the revised claim amounting to Rs.1,60,06,758/- on 11.09.2019 with the Resolution Professional after coming to know that an amount of Rs.2,59,153/- is also recoverable for delayed payment of Service Tax. It is also a matter of record that an amount of Rs. 8,51,304/- on account of interest claim is also due to be paid to the corporate debtor.and the adjustment of the same would not cause any prejudice to the corporate debtor.

It is contended by the applicant that RP has denied the request of the Department only on the ground that claim was already lodged earlier.

The respondent-RP in its reply vide Diary No.01291/01 dated 15.04.2021 denied the averments made by the applicant and stated that applicant seeking set off of refund claim of the corporate debtor against the Government dues of the corporate debtor will result in giving priority to the debts of an operational creditor of the corporate debtor over and above the debts of the financial creditors which in turn defeats the provisions of Section 53 and objective of the Code. The adjustment of refund claim with Government dues of the corporate debtor is also in violation of the provisions of Section 14 of the Code.

After careful perusal of the records available and submissions made by the learned counsels for the applicant and the respondent, we are of the considered view that the above dues are Operational Debt, as such, the applicant falls under the category of Operational Creditor. For the sake of brevity, the definition of Operational Creditor and Operational Debt reproduce hereinbelow:

In view of the above, the claim of the applicant is Operational Debt, and the applicant has already put their claim before IRP/RP.

Further, Section 238 of the I &B Code have overriding effect over all other law which read as under:

The provisions of Section 53 of the Code clearly lays down the priority of payments to the creditors and the same is sacrosanct. We are, therefore, of the view that granting the set off of refund of Rs.8,51,304/- against the Government dues of Rs.1,60,06,75/- in the present case result in giving the Government Department, an operational creditor, a priority over the dues of other stakeholders including the financial creditors and the same is against the provisions of Section 53 of the Code.

Hence, under the facts and circumstances as narrated above, we are of the view that the Resolution Professional has rightly denied the claim of the Department to set off the refund against the Government dues. Accordingly, the present application bearing IA No.132/2021 is dismissed and stands disposed of.

This is an application filed by Consortium of Proma Industries Limited and Shivam Syncotex Private Limited seeking consideration of their joint resolution plan dated 29.01.2022 submitted before the Resolution Professional. The joint resolution applicants are Proma Industries Limited & Shivam Syncotex Private Limited. It is submitted that the applicants have due experience and expertise in the textile industries and their resolution plan dated 29.01.2022 duly includes the interest of all the creditors/stakeholders. It is also stated that a complete financial proposal has been submitted in the said resolution plan. The respondents by their response filed by Diary No.00141/06 dated 02.03.2022 have stated that in the present case, the Committee of Creditors (CoC) have already approved the resolution plan with 92.55% voting share and an application seeking approval of the resolution plan is pending before this Adjudicating Authority. It is further stated that the applicant is a stranger to the CIRP process and has no locus standi to seek directions for placing the resolution plan before the CoC and that the much belated application by the applicant needs to be rejected as the same is not in compliance with the objectives of the IBC.

We have carefully perused the records available and submissions made by the learned counsel for the applicant and respondent.

In the present case, the application is filed much after the CoC has approved the resolution plan on 08.04.2019. In this backdrop it becomes necessary for this Bench to revisit some of the provisions of IBC and to take note of the interpretations which have been placed upon them in successive decisions of the Courts.

The Hon’ble Supreme Court in a catena of judgements has laid down the principle that the commercial wisdom of the CoC is paramount in the resolution process. The Code also envisages strict compliance to its provisions to achieve the objectives of maximising the value of assets of the corporate debtor and thereby for all creditors. The resolution plan is not an auction and it is also not a recovery process. The entire process is strictly time bound failing which there is drastic reduction in the value of the assets of the Corporate Debtor.