Sachin Dinkar Bhattbhatt

The application being IA/25(AHM)2024 filed on 10.06.2024 vide diary no. E1469 by the Applicant/Resolution Professional (Shri Sachin Dinkar Bhattbhatt) of Opel Securities Private Limited under Sections 30 and 31 of the Insolvency and Bankruptcy Code, 2016 (for short “Code”), seeks the following prayers: -

M/s. Zep Infratech Ltd. had filed a company petition on 15.10.2023 bearing CP(IB) No. 257 of 2023 through its Resolution Professional (as Zep Infratech admitted to the CIRP), seeking the initiation of the Corporate Insolvency Resolution Process (“CIRP”) against the Corporate Debtor – M/s. Opel Securities Pvt. Ltd. This Adjudicating Authority vide its order dated 27.10.2023 admitted the Corporate Debtor in CIRP and appointed Mr. Sachin Dinkar Bhattbhatt, as Interim Resolution Process (“IRP”), as proposed by the Applicant. Thereafter, on 01.12.2023, the IRP was confirmed as the Resolution Professional (RP). The RP filed an application, being IA(Plan)/16(AHM)2024, seeking approval of the resolution plan. However, during the hearing on 01.05.2024, learned counsel for the Applicant sought withdrawal of the said application with a liberty to file a revised application. Accordingly, this Adjudicating Authority vide order dated 01.05.2024 disposed of the application.

Thereafter, an application being IA/836(AHM)2024 was filed under Section 12(2) read with Section 60(5) of the IBC Code also read with Rule 11 of the NCLT Rules, 2016 seeking extension of CIRP period for further 90 days stating that the CoC in its 6^th meeting held on 06.05.2024 approved the resolution plan and further approved for extension of CIRP period for another 90 days as revised resolution plan has been received, which is now being filed before this Tribunal. Considering the same, this Adjudicating Authority vide its order dated 04.06.2024 extended the CIRP period by 30 days from 04.06.2024.

Accordingly, the instant application being IA(Plan)25(AHM)2024 has been filed on seeking approval of the resolution plan.

Some relevant facts as available in the Plan Application are summarised below:

The Application under section 7 of the IBC, 2016 was filed on 15.10.2023. An affidavit dated 25.10.2023 was filed by Shri Amit Ashokbhai Sompura, the Director of Opel Securities Private Limited, affirming, “the respondent admits to having defaulted in repaying the financial debt". This Adjudicating Authority vide its order dated 27.10.2023 admitted the Corporate Debtor into CIRP and appointed the Applicant as IRP. The IRP invited claims from creditors in the prescribed Form A, dated 04.11.2023. After receiving the claims, the Applicant constituted the Committee of Creditors ("CoC") comprising the following members: -

It has been stated that no other claims were received as of the day of the first CoC meeting.

This Adjudicating Authority vide its order dated 01.07.2024 directed the Applicant to hold another CoC meeting to rectify the defects as noticed by this Adjudicating Authority. Accordingly, in compliance of the same, an affidavit bearing diary No. D6310 dated 09.08.2024 is filed. In the said affidavit, the applicant has submitted that:-

Further, in compliance of the order dated 04.10.2024, the applicant filed an additional affidavit on 06.11.2024 vide diary no. D8190. In the said affidavit, it is stated that:

Thereafter, in compliance with the order dated 06.11.2024, the applicant filed an additional affidavit on 18.11.2024 vide diary no. 8377 giving the details of the business loss stating that:-

In compliance with this Tribunal order dated 28.04.2025, an additional affidavit is filed on 06.05.2025 vide diary no. D3017 dealing with the queries raised by this Adjudicating Authority and the response thereto herein:

Sintex Industries Limited was taken over by M/s. Reliance Industries Limited and M/s. Sintex-BAPL Limited was taken over by the Welspun Group of Companies by way of a Resolution Plan. Whereas, M/s. Sintex Plastic Technology Limited went into Liquidation, and during the Liquidation Process, M/s. Sintex Plastic Technology Limited was taken over by the Durgesh Infrastructure group.

Action taken by the RP regarding collection of debt due to the corporate debtorIt is submitted that the CD had an outstanding receivable from one, M/s. BVM Finance Private Limited. However, M/s. BVM Finance Private Limited was admitted under CIRP by this Hon'ble Adjudicating Authority vide an order dated 08.02.2024. Thus, the Applicant herein had duly submitted a Claim Form for such outstanding receivable during the CIRP of M/s. BVM Finance Private Limited and the same was admitted as a related party claim. 5.The number of workers and employees of the CD for each year (two years prior to the CIRP and till date afterward)The number of workers and employees of the CD for each year are as under: YearNo workers/employees As on 31.03.2022 NIL As on 31.03.2023 NIL As on 31.07.2024 NIL As on 31.03.2025 NIL 6.Reasons for default in payment committed by the CD and how the same is dealt in the plan submitted by the RAIt is submitted that sub-clause (n) of Clause 3.1.7.10 of the Resolution Plan duly provides as under: "n) The Resolution Plan is feasible and viable including addressed to cause of default and Resolution Applicant and their partners having sufficient net worth to implement the Resolution Plan. Net worth certificate of partners are submitted with RP separately demonstrating Resolution Applicant in position to implement the Resolution Plan." Further, in the Affidavit submitted by the SRA which is annexed hereto and marked as ANNEXURE R2, it has been stated thus:

Whether the CD has any plant and machinery, if yes, details machinery of majorNo, the CD does not have any plant and machinery in the books of account. 9.What is the business of the SRA and what are the plans of the SRA regarding the business of the CDThe said query has been addressed by the SRA in its Affidavit, which is annexed hereto and marked as ANNEXURE R2, as under: "14. With regards to the query of this Hon'ble Adjudicating Authority as to what is the business of the Successful Resolution Applicant and what are the plans of the Successful Resolution Applicant regarding the business of the Corporate Debtor, it is submitted that the Successful Resolution Applicant is a partnership firm and as per the partnership deed, the primary business activity of the firm is manufacturing of vehicle bodies, frames, panels, boxes, etc. 15. It is further reiterated that the Corporate Debtor being erstwhile promoter entity of Sintex Group, have extensive network and presence in the market. In view whereof. The Successful Resolution Applicant intends to revive the Corporate Debtor through its entrepreneurship skill and further intends to expand the business of manufacturing of vehicle bodies, frames, panels, boxes, etc. by using the extensive network and presence of the Corporate Debtor in the market." 10.What is the year-wise business loss/ brought forward depreciation ofThe details of the year-wise business loss/ brought forward depreciation of the CD as per the CD as per last filed income tax returnlast filed income tax return have been duly filed by the Applicant herein before this Hon'ble Adjudicating Authority by way of Further Additional Affidavit dated 12.11.2024. 11.Date of filing income tax returns of the CD for F.Y.: 2019-20 to 2023-24The date of filing of Income-tax Returns of the CD are as under: Financial YearDate of filling 2019-2015.02.2021 2020-2115.03.2022 2021-2220.10.2022 2022-2331.10.2023 2023-2415.11.2024 12.Sources of funds of the SRAIt is submitted that the SRA had informed the Applicant herein that they will be utilizing their own funds and not the borrowed funds for reviving the CD. In addition to the above, the said query has also been dealt with by the SRA in its Affidavit, which is annexed hereto and marked as ANNEXURE R2, as follows: "16. Apropos to the query qua the sources of funds of the Successful Resolution Applicant, it is submitted that Clause 3.1.6 of the Resolution Plan provides for source of funds and mechanics of payment of funds to various creditors. It is provided that the partners of the Successful Resolution Applicant have sufficient net worth to implement the Resolution Plan. 17. Thus, it is submitted that the three partners of the Successful Resolution Applicant sufficient net worth are to having infuse adequate funds in the Corporate Debtor for reviving the business of the Corporate Debtor. Moreover, the Successful Resolution Applicant undertakes that they will be utilizing their own funds and not borrowed funds for reviving the Corporate Debtor.

As directed by this Tribunal vide order dated 07.05.2025, the Applicant has filed Form H in the revised Format prescribed by the IBBI on 03.04.2025. Information, other than discussed above and other important information, as available in this Form, is summarised below:-

As per clause 3.1.1 of the Resolution Plan, the summary of proposal is as under:-

Costs, Standstill Period Costs Upfront OC Discharge Amount within the period of 45 days from the date of approval of Resolution Plan by Adjudicating Authority

In any case, the Resolution Applicant shall not be liable to pay any amount more than the Total Financial Proposal, i.e. INR 80,00,000 (Rupees Eighty Lakhs only).

In order to provide more clarity following payment proposed by Resolution Applicant to each class of creditors against their admitted amount of claim;

In addition to above as per Process Document, we undertake that Financial Creditors also entitle for all cash and bank balance including bank term deposit balance if any is available with Corporate Debtor and we as Resolution Applicant would not have right over them. Further, RP of Corporate Debtor had submitted claim under IBC proceedings of BVM Finance Private Limited. In this case recoveries under IBC proceedings from BVM Finance Private Limited shall be transferred to Financial Creditors and we as Resolution Applicant would not have right over them. However, maximum amount to be transferred to Financial Creditors shall be upto the amount of claims of Financial Creditors admitted by RP less amount recovered from this Resolution Plan as part of FC discharge amount and cash & bank balance i.e. maximum cap for amount to be transferred to Financial Creditors is upto haircut taken by Financial Creditors as pet this Resolution Plan. Any amount is received /recovered from the IBC proceedings of aforesaid Companies which is over and above of haircut amount undertaken by Financial Creditors, the same shall be retained by Corporate Debtor / Resolution Applicant.

As per clause 3.1.3. of the Resolution Plan, the Proposal for Outstanding Debt is as under:-

As per the Information Memorandum and List of Creditors provided by the RP, following are the details of the Outstanding Details of the Corporate Debtor as of the Insolvency Commencement Date:

The RP has not received any Claims from any Operational Creditors (including workmen and employees and Government Dues).

In accordance with Section 30(2)(b) of the Code, the Resolution Applicant is required to make payment to the Operational Creditors an amount equal to the higher of (i) the amount to be paid to Operational Creditors in the event of liquidation of the Corporate Debtor under Section 53 of the Code and (ii) the amount that would have been paid to Operational Creditors if the amount to be distributed under the Resolution Plan had been distributed in accordance with the order of priority in Section 53(1) of the Code.

The Resolution Applicant proposes to pay, through the Corporate Debtor, the Upfront OC Discharge Amount to settle and permanently discharge the aggregate of all Claims of the Operational Creditors. The Upfront OC Discharge Amount shall be paid in priority to the FC Discharge Amount.

With effect from the Effective Date, all Claims of Operational Creditors shall stand discharged, settled, extinguished in full and reduced to NIL.

The payments contemplated in this Resolution Plan shall be Resolution Applicant and the Corporate Debtor's full and final performance and satisfaction of all Claims, Debt, liabilities including contingent liabilities against it, in each case, whether or not such Claim, Debt, liabilities including contingent liabilities is reduced to judgment, fixed, equitable, matured, unmatured, disputed, undisputed, secured, unsecured, contingent, crystallised, admitted, rejected, under verification, recognized in the financial statements or not and including in relation to or pertaining to Tax whether or not contingent, recorded, assessed, unassessed, disputed, undisputed, whether or not in relation to or on account of assessment, reassessment, notice, proceedings, compounding, non-compliance, non-filling, non-preparation of documents, reports including but not limited to pursuant to any surveys or summons. No other payments or settlement (of any kind) will be made to any other person in respect of the Claims,

No payment is proposed to be made to the existing shareholders of Corporate Debtor and the existing paid up share capital of the Corporate Debtor, whether as equity or preference shares, along with any share application monies shall be reduced to NIL and extinguished and cancelled pursuant to the Capital Reduction contained herein.

Upon cancellation of the existing equity capital and any share application monies, the Implementing Entity shall infuse capital into the Corporate Debtor as described in Clause 3.3.1 (implementation Plan) of the Resolution Plan and become along with its group company, affiliate company, subsidiary company, parent company and/or its nominees (provided each such company and/or nominee is eligible under Section 29A of the Code to be a resolution applicant) as identified by it, the sole and 100% shareholder of the Corporate Debtor enjoying 100% of the voting rights and rights over distributable surplus, from time to time, of the Corporate Debtor. The capital instruments issued shall not be subject to any restrictions, encumbrances or agreement to create the same which were agreed by any person, other than the Resolution Applicant, prior to the Effective Date.

All rights of any person, whether such right is in any agreement, contracts, charter documents, confirmations, terms and conditions, letters, commitments, guarantees, indemnities, power(s) of attorneys, acceptances, promises, notes hypothecations, pledges, mortgages, charges, trusts and/or any other deed or document or attached to any security, to acquire or hold shares or any securities in the Corporate Debtor which may at any time and/or for any reason be converted or exchanged into shares or convertible securities, whether optionally or mandatorily or in part or in whole, or to participate in any decision making or governance of the Corporate Debtor, including by having voting rights, veto or affirmative rights or by nominating or appointing or causing the nomination and/or appointment of any director, executive, principal officer or any employee or observer in the Corporate Debtor, or to have any right to participate in the revenue or profits or any other earnings of the Corporate Debtor shall terminate and not be effective and binding any more, and all shareholder agreements, voting covenants etc. shall immediately terminate and the Corporate Debtor and the implementing Entity be released from all obligations thereto, whether express or implied.

The payments proposed in this Resolution Plan will be funded by the Implementing Entity or its affiliates, associates or group entities in accordance with the terms of this Resolution Plan.

The Implementing Entity proposes to infuse the Upfront Fund Infusion into the Corporate Debtor on the Effective Date in the manner and form as specified in Clause 3.3.1 (implementation Plan) for the payment of the amounts to the Creditors in the manner as specified in the Resolution Plan.

The partners of Resolution Applicant having sufficient net worth to implement the Resolution Plan.

As per Clause 3.3.2.2 of the Resolution Plan, the Upfront Fund Infusion in Corporate Debtor and Reduction of Share Capital are as under:-

Upon the receipt of the Plan Approval Order and on the Effective Date, the Implementing Entity will infuse and/or cause the infusion of funds of an amount equal to the Upfront Fund Infusion in the Corporate Debtor in the manner as specified in this Resolution Plan within the period of 45 days from the date of approval of Resolution Plan by Adjudicating Authority such that the Implementing Entity holds 100% of the entire shareholding of the Corporate Debtor on the Effective Date. Upon the receipt of the Plan Approval Order and with effect from the Effective Date, the entire share capital of the Corporate Debtor shall stand reduced to NIL and permanently discharged, extinguished and settled, such that the Implementing Entity remains the sole shareholder on the Effective Date.

As per Clause 3.3.4.1 of the Resolution Plan, the Monitoring Agent is as under:-

As per Clause 3.3.4.2 of the Resolution Plan, the Board of Directors is as under:-

As per Clause 3.3.4.3 of the Resolution Plan, the Monitoring Committee is as under:

As per Clause 3.3.4.4 of the Resolution Plan, the Supervision of Implementation of the Resolution Plan is as under:-

- The Form G titled, (Invitation for Expression of Interest for Opel Securities Private Limited not having any business activity at present) dated 28.12.2023 stated that the company does not have any fixed assets, and its other assets are located in Gujarat. The Company has no material business operations in the last financial year, and it has zero employees.

- Information relevant to the present proceedings, as available in the audited accounts of the CD for the financial year 2021-2022, is given below (The RP provided the information based on the directions issued by this Tribunal):

- The share capital of the company as on 31.03.2022 and 31.03.2021 was Rs 1.75 crores. It is not known who the shareholders are? But company belongs to Sintex Group. - Reserves and surplus of the company as on 31.03.2022 and 31.03.2023 were Rs (192.30 crores) and Rs (194.05 crores) respectively. The figures indicate that the company has accumulated a business loss of about Rs 200 crores. - Long-term borrowings as on 31.03.2022 and 31.03.2021 were Rs 255.32 crores. These remained the same during the financial year 2021-2022. None of these lenders have filed claims before the RP. - Trade payables were Rs 8.41 lakhs and 12.73 lakhs respectively as on 31.03.2022 and 31.03.2021. But, none of the creditors have filed a claim before the RP.

- Tangible assets were of Rs 90,340 and Rs 93,990 respectively as on 31.03.2022 and 31.03.2021. Indicating that the CD has negligible tangible assets. - Non-current investments were of Rs 11.85 crores and 17.35 crores respectively as on 31.03.2022 and 31.03.2021. - Long-term loans and advances were of Rs 40.16 crores and Rs 26.78 crores, respectively, as on 31.03.2022 and 31.03.2021. - Current assets comprising current investments, cash and cash equivalents, short-term loans and advances, and other current assets were of Rs 11.08 crores and Rs 17.91 crores, respectively, as on 31.03.2022 and 31.03.2021. - During the year 2020-2021, the company had total revenue of Rs 3.99 crores, other expenses of Rs 1.18 crores and a profit before tax of Rs 2.75 crores.

- During the year 2022-2023, the company had other income of Rs 15.92 lakhs and other expenses of Rs 224.70 crores, leading to a loss of Rs 224.55 crores. - The company made a loss on the sale of investments of Rs 3.77 crores in the FY 2022-2023 and Rs 226.83 crores in FY 2020-2021. - Other expenses in the year 2022-2023 included loss on surrender/redeemed investments of Rs 82.06 crore and Rs 141.94 crores as loss on sale/transfer of investments. - During FY 2020-2021, the company made a profit on the sale of investments of Rs 3.72 crores. - The company had made intercorporate loans of Rs 255.32 crores as on 31.03.2021 and 31.03.2022.

Similarly, the information for the financial year 2022-2023 is given below:

- The share capital of the company as on 31.03.2022 and 31.03.2023 was Rs 1.75 crores. - Reserves and surplus of the company as on 31.03.2022 and 31.03.2023 were Rs 192.30 crores and Rs 60.92 crores, respectively. - Long-term borrowings as on 31.03.2022 were Rs 255.32 crores and NIL respectively. - Trade payables were Rs 8.41 lakhs and 1.32 lakhs respectively as on 31.03.2022 and 31.03.2023. - Tangible assets were of Rs 90,340 and Rs 43,030 respectively as on 31.03.2022 and 31.03.2023. - Non-current investments were of Rs 11.85 crores and 10.48 crores respectively as on 31.03.2022 and 31.03.2023 - Long-term loans and advances were of Rs 40.16 crores and Rs 43.47 crores, respectively, as on 31.03.2022 and 31.03.2023. - Current assets comprising of current investments, cash and cash equivalents, short term loans and advances, and other current assets were of Rs 11.08 crores and 8.72 crores respectively as on 31.03.2022 and 31.03.2023.

- During the year 2021-2022, the company had other income of Rs 3.98 crores and other expenses of Rs 2.33 crores and a profit before tax of Rs 1.63 crores. - During the year 2022-2023, the company had other income of Rs 15.92 lakhs and other expenses of Rs 224.70 crores, leading to a loss of Rs 224.55 crores. - The company made sales/reduction in investments of Rs 10.35 crores in the FY 2021-2022 and Rs 226.23 crores in FY 2022-2023. - No salary and wages expenses in the years 2021-2022 and 2022-2023. - Other expenses in the year 2022-2023 included loss on surrender/redeemed investments of Rs 82.06 crore and Rs 141.94 crores as loss on sale/transfer of investments.

Sintex Power Limited granted a loan to the Corporate Debtor in the year 2014. The name of Sintex Power Limited was changed to Sixvents Power and Engineering Limited and Sixvents Power was amalgamated with Zep Infratech Limited; therefore, the loan receivable from the Corporate Debtor stood transferred in favour of and in the name of Zep Infratech Limited (the Financial Creditor). Zep Infratech and CD entered into an MOU on 01.07.2018 that provided that the loan amount of Rs 6.50 crores, along with a premium of 20%, would be payable on or before 30.06.2022. It is noted that the MOU is not on a stamp paper.

As the loan was not repaid by the CD, the FC filed application under section 7 of the IBC and the Corporate Debtor replied twice that, “We would like to inform you that currently we are facing financial difficulties and we are not in a position to pay the debt to Zep Infratech Limited” and “the Respondent admits to having defaulted in repaying the financial debt in question”.

The Valuation Report of one valuer, namely Nilesh R Barad, had valued security or financial assets as given below:

- Investments of book value of Rs 9,41,26,461 were valued at Rs 20 211.39 - Long-term loans and advances of Rs 47,40,80,137 were valued at NIL. - Cash and bank balance of Rs 7,07,028 was valued at the same amount.

Maitri Valuation LLP provided another valuation report, which is similar to the one provided by Mr. Barad. The assets have been valued exactly at the same amount as was done by Mr. Barad. The Records reveal that the RP had received claims from two financial creditors of Rs 7,90,00,000, and the same amount was admitted as a claim. No claims were received from operational creditors, employees, and workmen.

As full information was not available in the Application seeking approval of the Plan therefore this Tribunal sought some clarifications vide order dated 19.06.2025. The information provided by the RP through the additional affidavit filed on 26.06.2025, to the extent helpful in taking a decision about the Plan, is given below:

- The Resolution Applicant is a partnership firm, namely M/s Deepvir Enterprises. It has been submitted that M/s Deepvir Enterprise, in consortium with M/s Kanha Ventures, had jointly submitted the Resolution Plan for an amount of Rs 7,75,00,000 in the case of M/s Zep Infratech Limited in CP (IB) 69 of 2023, which is the Applicant in the section 7 Application. - The RP has submitted that it had not issued any communication to the creditors as required by Regulation 6A of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. The RP has submitted that the trial balance drawn as on the date of CIRP, the CD did not have any material creditors except the unsecured FC, as well as the auditors of the company/CD. Both the unsecured creditors (M/s Zep Infratech Limited and M/s Rajendra M Thakkar (Ravasia) and Sons Private Limited had already submitted their claims. The RP has further submitted that there was regular verbal communication with the auditors of the CD, who had been duly made aware of the initiation of the CIRP against the CD, and even their services were also kept ongoing. The RP had also made communication with the GST and Income Tax authorities. The RP has additionally submitted that there were no material creditors as per the last books of account of the CD which needed to be communicated in terms of Regulation 6A.

- Both the unsecured financial creditors, who have filed their claims, and the CD are not related party as per the provisions of section 5 (24) of the IBC, 2016.

- As directed by this Tribunal, the RP has also provided a copy of the Information Memorandum, which was not the part of the Plan Application filed by the RP for the approval of the Resolution Plan and not available on the DMS Portal. The IM states that the last audited accounts of the CD have been prepared for FY 2022-2023. Up to date books of accounts are being maintained on a regular basis. The IM notes that the provisional trial balance of the current year as on the CIRP commencement date is given in Annexure. A list of creditors is given in Annexure. As per trial balance as on 23.11.2023, the CD has no dues payable or receivable from the related party. The CD has no permanent employees. Major assets of the company as on 27.10.2023 consist of loan receivable from BVM Finance Private Limited of Rs 47.41 crores and investment in equity shares of BVM Finance Private Limited of Rs 9.41 crores. Apart from this the CD has a bank balance of Rs 7 lakhs in two current accounts.

- The Company was incorporated on 08.11.1995 under the name of Opel Securities Private Limited, and the primary activity of the company consisted of investment in shares of Sintex Industries Limited and Sintex Plastics Technology Limited, since both these companies are under CIRP, the investment in these shares has been written off in the books of OSPL. - The Information Memorandum refers to trial balance as on CIRP commencement date but the copy of IM provided to this Tribunal does not have any trial balance. - A copy of claim forms received from M/s Zep Infratech Limited, and M/s Rajendra M. Thakkar and Sons Private Limited, having the address of 101, House of Grace, Padwal H, Bagle Estate Thane, 400604, are provided. The documents provided show that M/s Rajendra M. Thakkar & Sons provided an inter-corporate loan of Rs 10,00,000 only on 30.09.2023, whereas the application under section 7 was filed on 15.10.2023.

- This non-compliance with Regulation 6A of the CIRP Regulations, which requires the RP to issue a public notice to creditors within 14 days of appointment, potentially deprived other creditors of the opportunity to file claims, thereby compromising the transparency and inclusivity of the CIRP process. This lapse further supports the Tribunal's concerns regarding the integrity of the resolution process.

Before adverting to the Application filed by the RP and the submitted Resolution Plan, we consider it appropriate to highlight essential facts about the case as available in the records.

- The Corporate Debtor and the Financial Creditor belong to the Sintex Group of cases. Sintex Group companies have undergone CIRP. - The Financial Creditor, namely Zep Infratech Limited, a Group company, had filed the application under section 7 of the IBC, 2016, against the CD.

- The CD has also filed an application under section 7 against BVM Finance Limited, a Group company, and BVM Finance Private Limited is also undergoing CIRP. Though the CD initiated proceedings against BVM Finance Private Limited, it may not get anything from the CIRP proceedings, being a related party. - M/s Zep Infratech Limited has filed applications under section 7 in at least three other cases (Gabriel Ventures India Pvt. Ltd, Kolon Investments Pvt. Ltd, and Star Line Leasing Limited), and the resolution plans are filed in those cases and the same are being adjudicated by this Authority. - The above facts show that Sintex Group entities are undergoing/undergone CIRP. - The information on various assets and liabilities as noted in the balance sheet of the CD as on 31.03.2021, 31.03.2022, and 31.03.2023 is noted in this order. There are huge liabilities, and surprisingly, none have made any claims against the CD. The CD also did not make any claims except BVM Finance Private Limited or recover any amount. - The CD has no business for the two years prior to the admission to the CIRP, and also not during the period of the CIRP. - The CD has no tangible assets (no factory, no office, or other premises), and it has only financial assets, and those are valued at about Rs 7 lakhs. Coincidentally, two independent valuers valued the financial assets at the same value.

- The CD had no employees for two years prior to the admission of the CD in the CIRP, and also during the CIRP and at present, the CD has no employees.

- The CD has a huge business loss, long-term capital loss, and the Resolution Plan seeks confirmation from the Principal Commissioner of Income Tax and direction from this AA that the business loss will be allowed as set off against income under section 79 of the Income Tax Act. We also see the availability of business loss or long-term capital loss, which can potentially be considered an asset and could be utilised in tax planning by entities to reduce their tax liability. However, this asset is not valued.

- The RA is seeking various relief and concessions, most of which do not apply to the facts of the case. For example, it is seeking a waiver of transfer fees on land leased from the Industrial Development Authority. Indicating that the RA does not have information that the CD has no land. The CoC also did not look into the relief and concessions sought in the Plan and relevance such reliefs and concessions to the actual facts of the CD.

- The RA filed a response regarding various queries raised in the form of an Affidavit, and such information was not available in the submitted Plan. For example, regarding the business proposed by the RA, the Affidavit states that the RA intends to revive the Corporate Debtor through its entrepreneurship skills and further intends to expand the business of manufacturing of vehicle bodies, frames, boxes etc. by using the extensive network and presence of the Corporate Debtor in the market. This business plan has no link with the CD. When CD has no assets and no employees, then how could it be considered to have an extensive network and presence in the market? The claims of the Resolution Applicant are not supported by reality on the ground and lack substance. The CoC did not examine these aspects and continued to approve the resolutions with a 100% majority.

- The reasons for default by the CD as stated in the additional affidavit filed by the RA are based on the queries raised by this Tribunal to the RP. - The RA has submitted that it will use its own funds for meeting the Plan requirements and not the borrowed funds for reviving the CD. However, it has not made any provision for equity capital or working capital. The amount of Rs 80,00,000, proposed in the Plan, is earmarked for payment to two financial creditors. - The net worth of three partners (Shri Kunal Virang Shah, Smt Deepti Virang Shah, and Shri Virang Shah) of the RA (a partnership firm) is shown to have a net worth of Rs 8,97,31,626. This net worth also includes immovable properties, such as a residential bungalow, and movable properties, like cars. M/s Deepvir Enterprise had also submitted a Resolution Plan for Zep Infratech Limited.

The CD had assets and liabilities in hundreds of crores as on 31.03.2021, 31.03.2022, and 31.03.2023. The CoC apparently had no idea about the business of the CD and it never asked any questions or raised any doubts about the transactions undertaken by the CD. The CD was neither subjected to any forensic audit nor the transaction audit nor the transactions were referred to any auditor for identifying the preferential transactions under section 43, undervalued transactions under section 45, extortionate transactions under section 50, and fraudulent transactions under section 66 of the IBC, 2016.

And On being directed by this Adjudicating Authority, an Affidavit to reply to the queries raised has been filed, and relevant information has been discussed in this order and summarised again below:

- The RP submitted that the audited financial statements for FY 2023-2024 and 2024-2025 are under the process of finalisation with the statutory auditors of the CD. - The RP states that the Resolution Plan is feasible and viable, but it has not demonstrated the basis thereof nor has it been deliberated by the CoC. What is feasible and viable in the circumstances that the CD has no business operations, no plant and machinery, no offices or other tangible assets, and no employees? The business of CD was to invest in the Sintex Group companies (which are group companies). It has only financial assets of whose market and liquidation value is Rs 7 lakhs. There are no employees of the CD, and therefore, no knowledge of the business or customer information or any other intangibles, other than tax losses, are available with the CD. There is no link or nexus of the business of the CD with that of the business proposal of the RA to manufacture and sell products.

The RP has filed an affidavit and revised Form-H, based on the IBBI Notification No. IBBI/2025-26/GN/REG 124, dated 03.04.2025, in this Tribunal on 10.05.2025 (Inward Diary No. 3558). Additional information provided is extracted below:

- Date of initiation of CIRP- 27.10.2023 - Date of expiry of 180 days of CIRP: 24.04.2024 - The extended period of CIRP expired on 03.07.2024 - Fair value of CD is Rs 7,27,241 - Liquidation Value is Rs 7,27,241.

- Resolution Plan Value Rs 80,00,000. - A total of 8 CoC meetings were held. - Form H shows that CD was part of erstwhile promoter group entities of Sintex Industries Limited and Sintex plastic Technology Limited. - No PUFE applications are made or pending.

Section 31 of the IBC deals with the approval of the resolution plan. Section 31 reads as follows:

To our understanding, section 31 requires satisfaction of the Adjudicating authority on two issues:

Section 30 (2) of the IBC reads as below:

Furthermore, Regulation 39(4) of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, requires the CoC to evaluate the resolution plan based on its feasibility and viability, a responsibility that appears to have been inadequately discharged in this case, as evidenced by the lack of scrutiny over the plan's business projections and financial provisions.

As far as effective implementation is concerned, the Plan only provides for payment to the CoC members to be made within 30 days of the approval of the Plan by the NCLT. As discussed in detail in this order, the CD was part of promoters of Sintex Group (a group investment company). Most of the Group entities have undergone CIRP and some have been liquidated. The value of the assets of the CD is about Rs 7 lakhs. Even the CIRP cost has exceeded Rs 7 lakhs. All assets have gone bad as the value of investment in the Group entities is zero. No tangible asset and no employees and in fact the CD has become a hollow shell. There is nothing in the plan about running the Corporate Debtor by the Ras except referring to its business and utilizing the CD to carry on its business of manufacturing. No plans or planning for the business. No money is provided for working capital. Therefore, the plan does not deal with the effective implementation of the Plan. In fact, there is nothing in the plan that provides for insolvency resolution of the CD or revival of the CD. It is obvious because there is nothing in the CD except its name, business losses, and financial assets having liquidation value of about Rs 7 lakhs. The case has potential of misuse of the business losses and long-term capital loss for income tax purposes.

This Tribunal is fully conscious of the principle that judicial intervention by the Adjudicating Authority under the Insolvency and Bankruptcy Code, 2016, must be limited and restrained. As reiterated in a catena of decisions by the Hon'ble Supreme Court, including in K. Sashidhar v. Indian Overseas Bank [2019] 102 taxmann.com / 12 SCC 150, Committee of Creditors of Essar Steel Ltd. V. Satish Kumar Gupta 8 SCC 531, Ebix Singapore (P) Ltd v. Committee of Creditors of Educomp Solutions Ltd [2021] 130 taxmann.com 208, Vallal RCK v. Siva Industries &Holding Ltd ((2022) 9 SCC 803), the commercial wisdom of the CoC is not to be interfered with, save in exceptional circumstances. However, this Tribunal cannot remain a mute spectator where the very anchor of the insolvency resolution process, the bona fide, and the commercial judgment of the CoC - is corroded by patent arbitrariness and opacity.

Hon'ble Madras High Court in the matter of S.V. Ramani v. Union of India (Writ Petition No. 29845 of 2022) has observed in para 52.3 as under:

The relevant facts as discussed in this order are again summarised below:

- The Corporate Debtor had hundreds of crores of assets and liabilities as on 31.03.2021, 31.03.2022, and 31.03.2023 in the balance sheet, but all are on paper because none filed a claim before the RO, and the assets and liabilities are worthless as liquidation and market value of financial assets is about Rs 7 lakhs. - The filing of a petition under section 7 by M/s Zep Infratech Limited is apparently not for the resolution of corporate insolvency but to help legally assist the CD get immunities as provided in section 32A of the IBC, 2016.

- Neither the RP nor CoC recommended a forensic audit of the CD or an audit for identifying the PUFE transactions in the circumstances that the CD had transactions in hundreds of crores, including with related parties. - RP did not follow the requirements of Regulation 6A of the IBBI Regulations for CIRP as discussed above and did not identify the real creditors. - The RP has not demonstrated that it had taken steps to provide correct information along with full details of assets. The facts indicate that it was a very closed group that knew about the CIRP proceedings. There are no IAs by the third parties. - The CD has carried forward business loss and long-term capital loss in hundreds of crores. Though the SRA has asked for a prayer from this Adjudicating Authority to approve affording a reasonable opportunity of being heard by the jurisdictional principal commissioner of income tax in accordance with section 79 (2) of the Income Tax Act, 1961, to allow carry forward of losses of the previous year. However, these intangible assets have not been considered while valuing the CD or while submitting the Resolution Plan. It is made clear that this Adjudicating Authority has no power to decide the issue of carry forward of losses/depreciation, as the same is governed by the provisions of the Income Tax Act, 1961, and the Resolution Applicant's request for such a direction is irrelevant to the resolution process under the IBC, further highlighting the plan's misalignment with statutory objectives.

- The CD had advanced loans to various parties and it had huge trade receivables but the same were not taken into account by the CoC while approving the Resolution Plan amount quoted by the SRAs. - The Resolution Plan only provide for payments to the two unsecured financial creditors. However, the CD had advanced long-term loans and advances of Rs. 43.47 crores and had trade payables of Rs. 1.32 lakhs as on 31.03.2023 (as per Paragraph 18), but these were not taken into account by the CoC while approving the Resolution Plan amount of Rs. 80,00,000 quoted by the SRA, indicating a lack of due diligence in maximizing creditor value. - Whole money provided in the Plan will go the creditors and there is no provision for the working capital, equity capital, and for running the expenses of the CD. - There is no provision for CIRP cost as it will be met by the cash available with the CD.

- The financial capacity of the RAs is not convincing. As discussed in this order, the net worth certificates of three individuals (partners of the firm) also include immovable property and other illiquid assets, which will not be available for the CD. The RA has also submitted a plan in the case of M/s Zep Infratech Limited.

The above facts raise serious doubts about the whole CIRP process initiated based on the application of Zep Infratech Limited. The whole exercise suggests an accommodation or collusive arrangement with the sole purpose of helping the CD get benefits of reliefs and concessions under Section 32A of the IBC, 2016 and raises concerns about its alignment with the IBC's objective of genuine insolvency resolution. These circumstances warrant an investigation under Section 65 of the IBC to determine whether the CIRP was initiated with fraudulent or malicious intent. The Liquidator is directed to examine this aspect as part of the financial investigation under Section 35(1)(l) of the IBC.

There is no material in the Plan underpinning the feasibility and viability of the Resolution Plan.

The Corporate Debtor has no assets and no employees. Currently, CD is not conducting any business and is not a going concern or in operation. None will benefit, other than the two unsecured financial creditors, who constitute the CoC, from the approval of the Plan.

The RP has not filed any IA before this Tribunal regarding non-co-operation from the CD. The RP has neither proposed nor has an initiative been taken by the CoC for identifying the avoidance transaction. There are no accounts of the CD after 01.04.2023 and this indicates that the RP did not have the full information to be provided in the Information Memorandum and therefore in absence of the same, the Resolution Plan submitted by the RA cannot be considered to have taken into account the full picture of the CD as on the date of submission of the Plan.

The fulcrum on which the Resolution Process under the Code proceeds is the full and correct knowledge of the affairs of the CD; however, in the present case, full information about the CD was not available. Therefore, the CoC could not be said to have exercised its commercial wisdom while approving the resolution.

Commercial wisdom of the CoC: The role of CoC is questionable. The decision of the CoC to approve everything put up to it with a 100% majority and without raising any pertinent questions/clarifications on anything during the whole CIRP indicates a behaviour not of prudent decision makers and at arm's length. The CoC's approval of the resolution plan with a 100% majority, without questioning significant transactions undertaken, financial discrepancies, or the absence of audited accounts for FY 2023-24 and FY 2024-25, reflects arbitrary and irrational conduct. Such failure to exercise due diligence violates the CoC's duty to maximise value under Section 30(4) and undermines the IBC's objectives. The facts indicate that their decisions were motivated with the sole intention of getting the approval of this Tribunal and getting all types of benefits, reliefs and concessions available due to the approval of the plan to all involved in the transactions. There appears to be no intention to resolve the insolvency, as the CD has no ongoing business and no party is interested other than two CoC members.

In the case of Vallal RCK v. Shiva Industries (supra) the Hon'ble Supreme Court has also held that:

In view of the facts discussed above, the CoC not only acted in a "capricious, arbitrary, irrational" manner but also approved the plans that contravene the provisions of IBC and the Regulations. In that regard, the CoC has failed to exercise its commercial wisdom in deciding on the Resolution Plan, which, in a real sense, does not take into account the ground realities of the CD and is not commercially feasible and viable. It does not lead to value maximisation from the assets of the CD. 37. Therefore, we are of the view that the resolution plan has no provisions for its effective implementation as required by Section 31 (1) of the IBC, as there is nothing in the plan except payment to CoC members and others out of plan value of Rs 80 lakhs. The whole money goes to the stakeholders, and nothing remains for the CD, not even for equity capital contribution.

The Tribunal would also like to mention that the underlying purpose of a resolution plan is not merely the settlement of claims but the revival of the Corporate Debtor as a going concern in a manner that is commercially viable and legally compliant. In this regard, Regulation 38(3) of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, outlines key parameters that every resolution plan must comply with. The said regulation reads as under:

In the present case, upon a detailed consideration of the material on record, it is evident that the resolution plan fails to satisfy the criteria laid down in the above regulation. Further, section 30 (2) of the IBC, 2016 requires that the plan provides for the implementation and resolution of the Plan. The RA has no plans to provide a resolution to the corporate insolvency. As discussed in detail with cogent reasons, the Plan fail to meet the requirements of clauses ( c), (d), (e ), and (f) of section 30 (2) of the IBC, 2016.

The plan lacks financial depth and strategic clarity to justify its feasibility and viability, as it provides no working capital, equity infusion, or business projections to revive the Corporate Debtor, which has no ongoing operations, employees, or plant and machinery. The resolution applicants' net worth, including illiquid assets, does not demonstrate sufficient liquid funds to implement the plan. Moreover, there is no demonstrable vision to restart the business of the CD and no capability is shown on the part of the Resolution Applicant to implement the plan. In fact does not provide any information on the business projections of the CD and how will it be achieved.

Thus, in substance and spirit, the resolution plan does not comply with the provisions of Sections 30(2)(c), (d), (e), and (f) and Section 31 of the IBC, 2016, and Regulation 38(3) of the CIRP Regulations, as it fails to provide for the management of the CD's affairs, effective implementation, compliance with applicable laws, and demonstrates the RA's capability to implement the plan.

The Hon'ble Supreme Court in the case of Pratap Technocrats (P) Ltd. v. Monitoring Committee of Reliance Infratel Ltd. 10 SCC 623, under the Heading: Balancing the goals and key objectives of insolvency law in paragraph 46 of the order noted that, " since an insolvency regime cannot fully protect the interests of all parties, some of the key policy choices to be made while designing the insolvency law relate to the broad goals of the law (rescuing businesses in financial difficulty, protecting employment, protecting the interest of creditors. Encouraging the development of an entrepreneurial class) and achieving the desired balance between the specific objectives identified above. The Hon'ble Court in paragraph 47 further notes that, "Hence, once the requirements of IBC have been fulfilled, the adjudicating authority and the appellate authority are duty-bound to abide by the discipline of the statutory provisions. It needs to be emphasised that neither the adjudicating authority nor the appellate authority have an unchartered jurisdiction in equity. The jurisdiction arises within and as a product of a statutory framework.

As discussed in this order, currently there is no business in the CD, CD has no employees, the creditors other than the unsecured security creditors have not even filed any claim, all pointing to the conclusion that the plan submitted by the RA does not meet the goals of the IBC law.

Accordingly, and in view of the discussion above, the relying on the provisions of Sections 30 and 31 (2) of IBC, 2016 and Regulation 38 as referred above, the Resolution Plan in question is hereby rejected by this Adjudicating Authority for non-compliance with Regulation 38(3)(a), (b), (c), and (c) of the CIRP Regulations, 2016, as it fails to address the cause of default, demonstrate feasibility and viability, provide for effective implementation, and establish the resolution applicant's capability to implement the plan.

The provisions under Section 33(1)(b) of the Code are reproduced below: -

The Hon'ble Supreme Court in the case of Ramkrishna Forging Ltd (supra), in paragraph 29 referred to the decisions in the cases of Innoventive Industries Ltd. v. ICICI Bank Ltd. [2017] 84 taxmann.com 320/ 1 SCC 407 and Swiss Ribbons (P) Ltd. v. Union of India [2019] 101 taxmann.com 389/4 SCC 17 in which it was explained that the Code was specifically introduced by the Parliament for ensuring quick and time bound resolution of insolvency of corporate entities in financial trouble, by first attempting to revive the Corporate Debtor, failure whereof would entail liquidation of the corporate debtor's assets. 47. As a consequence, following the rejection of the resolution plan under Section 31(2) for non-compliance with statutory requirements, and given the mandatory requirement under Section 33(1)(b) to initiate liquidation upon failure to approve a resolution plan within the CIRP period (expired on 03.07.2024), the Tribunal orders the liquidation of the Corporate Debtor to maximize creditor value and conclude the insolvency process. 48. IBBI vide its circular number Liq-12011/214/2023-IBBI/840 dated 18.07.2023 in the exercise of its powers conferred under section 34(4)(b) of the Code, had recommended that an IP other than the RP/IRP may be appointed as liquidator in all the cases where liquidator (read liquidation) order is passed henceforth.

In view of the above, it is hereby ordered as follows: -

Accordingly, IA (Plan) No. 25 of 2024 in CP(IB) No. 257 of 2023 stands dismissed and disposed of.

The Registry is also directed to send e-mail copies of the order forthwith to all the parties and their Learned Counsel for information and for taking necessary steps. Files be consigned to the record.