AI Structured Summary
Not yet generated for this judgment
Judgment
ORDER
PER: SHRI ASHOK KUMAR BHARDWAJ, MEMBER (J)
IA-6/ND/2026: The captioned IA has been preferred by RP under Section 30(6) of Insolvency and Bankruptcy Code, 2016, seeking approval of the Resolution Plan, passed by the CoC qua M/s Mona Portfolio Limited (Corporate Debtor), a public company incorporated under the companies Act, 1956, having its registered office at 501 PP Towers, Netaji Subhash Place, Pitampura Delhi-110034. As has been mentioned in the petition preferred under Section 7 of IBC, 2016, the CD has been in the business of finance. The authorised share capital of the CD is Rs. 3,00,00,000/- and its paid-up share capital is Rs. 2,74,20,330/-. Sans, irrelevant details, we note that the CoC has resolved and passed the Resolution Plan of M/s Yucca Merchants Pvt. Ltd. (SRA) with 85.89% vote share. Relevant excerpt of the Resolution passed by CoC approving the Resolution Plan with voting result reads thus:-
As a sequel of the approval of the Resolution Plan by the COC, the Applicant issued the Letter of Intent to SRA, as per provisions of RFRP, on 19.12.2025. Subsequent thereto, in consonance with Clause 1.9.3 of the RFRP, the SRA submitted Performance Guarantee by way of transfer on 24.12.2025. Paras 40 and 41 of the application filed by RP reads thus:-
“40.That subsequent to the approval of the Resolution Plan by the CoC, the Applicant issued the Letter of Intent on 19.12.2025 to the SRA as per provisions of the RFRP which was accepted by the SRA.
41.That, thereafter, in compliance with the Clause 1.9.3 of the RFRP, the SRA had submitted Performance Bank Guarantee of Rs. 15 lacs by way of Bank Transfer dated 24.12.2025 (after adjusting Rs. 5 lacs EMD deposited with EOI and Rs. 10 lacs with Resolution Plan). Copy of the Letter of Intent issued by the Applicant to M/s. Yucca Merchants Pvt. Ltd is hereto marked and annexed as ANNEXURE - 17. Copy of the Bank Statements of CIRP Bank account of Corporate Debtor reflecting the Performance Bank Guarantee furnished by M/s. Yucca Merchants Pvt. Ltd. is hereto marked and annexed as ANNEXURE – 18 (COLLY.).”
It is the case of the RP that the contents of the Resolution Plan are in consonance with the requirements envisaged under Section 30 of the Code r/w the applicable Regulations of the CIRP Regulations 2016. Further, in para 44 of the application the RP has given the key feature of the Resolution Plan. The para reads thus:-
It is seen from the certificate given in prescribed form i.e. Form H by the RP, the liquidation and Fair value of CD is 38,797.00, while the Plan Value is Rs. 3,00,00,000/. The RP has also certified that the SRA has paid Performance Security amount of Rs. 30, 00, 000/- Regarding source of fund, the RP has certified that the same would be made available through fresh equity. The RP has also certified the details regarding implementation and supervision of Resolution Plan. The relevant excerpt of the certificate in this regard reads thus:-
The clause 7A and 7B of the certificate provides for realisable amount and details thereof. The clauses reads thus:-
The certificate also indicates the time frame proposed for obtaining relevant approvals. The clause 8 of the plan reads thus:-
The clause 12 of the certificate refers to the provisions regarding PUFE applications. The plan also indicates the financial creditor wise contribution in the event of liquidation. The RP has also certified that the Plan is in consonance with the provisions of Sections 25(2)(h), 29A, 30(1), 30(2), 30(4), 31(1) of the Code as also Regulations 38(1), 38(1A), 38(1B), 38(2), 38(3), 39(2) and 39(4) of IBBI (CIRP) Regulations 2016. The relevant excerpt of the certificate reads thus:-
As can be seen from the above, the RP has certified that the plan is not in contravention of any of the provisions of law. The Resolution Plan has also addressed the cause of default of CD. The relevant excerpt of Plan reads thus:-
The Plan also contains the provisions regarding supervision and implementation thereof. The relevant excerpt of the Plan reads thus:-
Terms of the Plan and implementation period for the same as provided in the Plan reads thus:-
The Resolution Plan provides for payment of CIRP cost on priority. The relevant excerpt of the Plan reads thus:-
As has been noted hereinabove, the RP has certified that the Resolution Plan is complaint of the provisions of Section 30(2)(c) of IBC, 2016. A perusal of the Plan reveals that the Dissenting Financial Creditors shall be paid an amount not less than the amount to be paid to the creditors in his category under Section 53(1) of the Code in the event of a liquidation of the CD and the amount shall be paid in priority. The relevant excerpt of the Plan reads thus:-
The RP has placed on record the Statement of Account qua the CD [Annexure-18 (Colly) to the application] to show that the Performance Security Amount could be deposited in Account No. 120502000000897 at D 28 - 29 Connaught Place, Central/New Delhi-110001 branch of Indian Overseas Bank.
The undertaking given by the Applicant to the effect that it is neither ineligible to submit nor it suffer from any disqualification under Section 29A of the IBC, 2016 is available on record at Annexure-21 (colly) to the application. The undertaking reads thus:-
Besides, we note that in terms of the judgment of Hon’ble Supreme Court in the case of Committee of Creditors of Essar Steel India Limited Through Authorised Signatory vs. Satish Kumar Gupta & Ors. [Civil Appeal No. 8766-67 of 2019], it is the subject matter of commercial wisdom of CoC to take decision regarding the amount of bid offered by SRA and the scope for this Tribunal to interfere on such issues is negligible. The above view was also reiterated by Hon’ble Supreme Court in Ebix Singapore Private Limited vs. Committee of Creditors of Educomp Solutions Limited & Anr. (Civil Appeal No. 3224 of 2020) wherein the Hon’ble Court ruled that the scope of examination of the application for approval of Resolution Plan by this Tribunal is confined to the provisions of Section 30(2) of IBC, 2016. Para 153 of the Judgment reads thus: -
“153.Regulation 38(3) mandates that a Resolution Plan be feasible, viable and implementable with specific timelines. A Resolution Plan whose implementation can be withdrawn at the behest of the successful Resolution Applicant, is inherently unviable, since open-ended clauses on modifications/withdrawal would mean that the Plan could fail at an undefined stage, be uncertain, including after approval by the Adjudicating Authority. It is inconsistent to postulate, on the one hand, that no withdrawal or modification is permitted after the approval by the Adjudicating Authority under Section 31, irrespective of the terms of the Resolution Plan; and on the other hand, to argue that the terms of the Resolution Plan relating to withdrawal or modification must be respected, in spite of the CoC’s approval, but prior to the approval by the Adjudicating Authority. The former position follows from the intent, object and purpose of the IBC and from Section 31, and the latter is disavowed by the IBC’s structure and objective. The IBC does not envisage a dichotomy in the binding character of the Resolution Plan in relation to a Resolution Applicant between the stage of approval by the CoC and the approval of the Adjudicating Authority. The binding nature of a Resolution Plan on a Resolution Applicant, who is the proponent of the Plan which has been accepted by the CoC cannot remain indeterminate at the discretion of the Resolution Applicant. The negotiations between the Resolution Applicant and the CoC are brought to an end after the CoC’s approval. The only conditionality that remains is the approval of the Adjudicating Authority, which has a limited jurisdiction to confirm or deny the legal validity of the Resolution Plan in terms of Section 30 (2) of the IBC. If the requirements of Section 30(2) are satisfied, the Adjudicating Authority shall confirm the Plan approved by the CoC under Section 31(1) of the IBC.”
As far as the issue of reliefs and concessions which fall in the jurisdiction of different Government Authorities, and/ or are subjected to the provisions of different laws for the time being in force are concerned, it is made clear that the amount payable by the SRA in terms of the plan to different creditors, stakeholders, and to keep the Corporate Debtor as a going concern cannot be subject to any condition, assumptions, relief/ concessions and/ or qualification. It also needs to be underlined that the provisions of Section 31(4) of IBC, 2016 mandates the Resolution Applicant to obtain the necessary approval required under any law for the time being in force within a period of one year from the date of approval of the resolution plan by the Adjudicating Authority under Section 31 of the IBC, 2016. In terms of the provisions of Section 14 of the Code even during the period of CIRP, no default in payment of current dues is a precondition for continuation of the License, Permit, Registration and similar rights. Thus, even during the moratorium period, some of the facilities forming part of the reliefs and concessions sought are made available to the CD only when there is no default in payment of the current dues. On approval of the Resolution Plan, the SRA/CD cannot be put on a better footing by exempting it from paying its legitimate dues under the law. For the sake of convenience, the explanation below Section 14 of the code is extracted below:
“14. Moratorium. –
(1)Subject to provisions of sub-sections (2) and (3), on the insolvency commencement date, the Adjudicating Authority shall by order declare moratorium for prohibiting all of the following, namely: -
(a)…..
(b)…..
(c)…..
(d)the recovery of any property by an owner or lessor where such property is occupied by or in the possession of the corporate debtor.
Explanation.- For the purposes of this sub-section, it is hereby clarified that notwithstanding anything contained in any other law for the time being in force, a licence, permit, registration, quota, concession, clearance or a similar grant or right given by the Central Government, State Government, local authority, sectoral regulator or any other authority constituted under any other law for the time being in force, shall not be suspended or terminated on the grounds of insolvency, subject to the condition that there is no default in payment of current dues arising for the use or continuation of the license, permit, registration, quota, concession, clearances or a similar grant or right during the moratorium period;” (Emphasis Supplied)
In any case, in terms of the provisions of Sections 13 and 15 of the IBC 2016 read with Regulations 6, 6A, 7, 8, 8A, 9 and 9A of IBBI (Insolvency Resolution Process for Corporate Persons) Regulations 2016, all the claimants such as Operational Creditors, Financial Creditors, Creditors in Class, Workmen and Employees and other Creditors can raise their claims before the IRP/RP. The claims are dealt with by IRP in terms of the provisions of Section 18(1)(b) of the IBC, 2016 and by RP in terms of the provisions of Section 25(1)(b) thereof read with Regulations 12A, 13 and 14 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. Thereafter, the RP prepares an Information Memorandum in terms of the provisions of Regulation 36(2) of IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. The Memorandum contains inter alia a list of creditors containing the range of creditors, the amounts claimed by them, the amount of their claim admitted and the security interest if any in respect of such claims. As has been provided in Regulation 36(1) of the Regulations (ibid), the Information Memorandum is required to be submitted in electronic form to each member of CoC, on or before 95th day from the Insolvency commencement date. As has been provided in Regulation 36A of the Regulations the RP publish brief particulars of the invitation for Expression of Interest in Form G of Schedule I to the Regulations at the earliest i.e. not later than 60th day from the Insolvency commencement date, from interested and eligible Prospective Resolution Applicants to submit Resolution Plans. As can be seen from Regulation 36B of the Regulations, the RP shall issue Information Memorandum Evaluation Matrix (IMEM) and request for Resolution Plans, within 5 days of the date of issue of provisional list of eligible Prospective Resolution Applicants (required to be issued under Regulation 36A(10) of the Regulations). It is with reference to such Information Memorandum Evaluation Matrix that the RP issues request for Resolution Plan. The request for Resolution Plan details each step in the process and the manner and purposes of interaction between the Resolution Professional and the Prospective Resolution Applicant. The Resolution Plan submitted after consideration of the IMEM and RFRP is then examined by the Committee of Creditors. Nevertheless, it needs to satisfy the requirements of Regulation 37 and 38 of the extant Regulations. Once the plan is approved by the CoC, in terms of the provisions of Regulations 39 of the aforementioned Regulations, it virtually becomes a contract entered into between the CD represented through RP, SRA and the Creditors of the CD. On being approved by this Adjudicating Authority, by operation of Section 31(1) of the Code, the plan becomes binding on the Corporate Debtor and its employees, members, creditors (including the Central Government, any State Government or any local authority to whom a debt in respect of the payment of dues arising under any law for the time being enforced such as authorities to whom statutory dues are owed, guarantors and other stakeholders involved in the Resolution Plan. Thus, Section 31(1) of IBC, 2016, takes care of most of the relief/concession/waiver solicited by the Resolution Applicant.
Besides, in terms of the provisions of Section 32A, for an offence committed prior to the commencement of the Corporate Insolvency Resolution Process, the liability of the CD ceases and the CD is not liable to be prosecuted from the date of approval of Resolution Plan by this Adjudicating Authority, if the Resolution Plan results in change of management or control of the CD to a person who was not promotor or in the management or control of the CD or a related party of such a person or a person with regard to whom the concerned Investigating Agency has reason to believe that he had abated or conspired for the commission of the offence and has submitted or filed a report or a complaint to the relevant statutory authority or Court. In such cases, where the prosecution is instituted against the CD, during CIRP, the CD stands discharged qua the same from the date of approval of the Resolution Plan. Nevertheless, every person who was a designated partner as defined in clause (j) of Section 2 of the Limited Liability Partnership Act, 2008, “an officer who is in default” as defined in Clause (60) of Section 2 of Companies Act, 2013 or was in any manner in charge of, or responsible to the CD for the conduct of his business or associated with the CD in any manner and was directly or indirectly involved in the commission of an offence as per the report submitted or complaint filed by Investigating Agency shall continue to be liable to be prosecuted and punished for such an offence committed by the Corporate Debtor notwithstanding the Corporate Debtors’ liability ceases after approval of the plan.
In the wake of the provisions of Section 32A(2), no action is taken against the property of the Corporate Debtor in relation to an offence committed prior to the commencement of the Corporate Insolvency Resolution Process of the CD, where such property is covered under Resolution Plan approved by this Authority under Section 31, which result in the change in the control of the CD to a person who was not a promotor or in the management or control of the Corporate Debtor or related party of such person or a person with regard to whom the Investigating Agency has reason to believe that he had abated or conspired for commission of the offence and has submitted or filed a report or complaint to the relevant statutory authority or Court.
The action against the property of the Corporate Debtor as referred to in Section 32A of the Code includes the attachment, seizure, retention or confiscation under such law as may be applicable to the Corporate Debtor. One may also be not oblivious of the fact that in the backdrop of provisions of Section 31(3)(a) of the IBC, 2016, the moratorium order passed by the Adjudicating Authority under Section 14 ceases to have effect. In sum and substance, the SRA/CD would be entitled to no other relief/concession/waiver except those, which are available to it as per the provisions of Section 31(1) and 32A of IBC, 2016.
In the totality of the facts, we approve the Resolution Plan subject to the following directions:-
I. As proposed by the SRA, the Resolution Plan will be implemented in terms of the following schedule in letter and spirit-
II. The Resolution Professional shall send a copy of this order to the participants and Resolution Applicant forthwith.
III. Within 15 days from today, the RP shall intimate each claimant, the principal or formulae as the case may be regarding payment of debt under the Resolution Plan.
IV. Copy of this order be also sent to the IBBI and Registrar of Companies by the RP.
The RP shall preserve the record of CIRP in terms of the provisions of Regulation 39A (1 to 4) of the Code.
The Applications stands disposed of.