Sandeep D. Maheswari vs Setubandhan Infrastructure Limited

Per: Reeta Kohli, Member (Judicial)

The above captioned Application was filed under Section 30(6) and Section 31, of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as the “Code”) by the Resolution Professional (hereinafter referred as the “Applicant”), seeking approval of the Resolution Plan, submitted by the Resolution Applicant –Univastu India Limited, which was approved by 98.57% voting shares of the members of the Committee of Creditors (hereinafter referred to as ‘COC’).

The facts leading to the Application are as under:

a. A Financial Creditor (i.e. State Bank of India), filed a Company Petition (IB) No. 106 of 2022 under Section 7 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as "the Code"). The Corporate Insolvency Resolution Process (CIRP) of the Corporate Debtor was initiated by an order dated 28.11.2022, and Mr Sandeep Maheshwari was appointed as the Interim Resolution Professional and later confirmed as Resolution Professional by the COC in its 1st meeting held on 28.12.2022. A public announcement as per Section 15 of the Code, inviting claims from the creditors of the Corporate Debtor.

b. The Applicant published a Public Announcement in Form A in accordance with Section 15 of the Code read with Regulation 6 of the CIRP Regulations, on 30.11.2022, inviting submission of proof of claims from the creditors of the Corporate Debtor, on or before 12.12.2022.

c. The claims received and accepted by the Interim Resolution Professional are as under:

After receiving the claims, the Committee of Creditors was constituted.

The constitution of COC is as under:

The Resolution Professional accordingly appointed two Registered Valuer namely (i.e. M/s Vijay Jain and Associate, Chartered Accountants as transaction auditor to assist him in determination of PUFE transactions) for conducting valuation across three (3) asset classes of the Corporate Debtor to determine its fair value and Liquidation value, as required under the Regulation 27 of the IBBI (IRP for Corporate Person) Regulations,2016.

These Registered Valuers submitted their reports. The Liquidation and fair value is stated as under:

Fair Value: -

Liquidation Value :-

The Applicant asserts that Form G, inviting Expression of Interest (EOI) from Prospective Resolution Applicants (PRAs), was first published on 28.01.2023, with a deadline of 12.02.2023. The Resolution Professional received Earnest Money Deposits (EMDs) from four (4) PRAs by the deadline. Subsequently, the Committee of Creditors (CoC) halted and cancelled owing to intimation received from State Bank of India seeking re-issuance of Form-G. During the 11th CoC meeting, it was resolved to re-issue Form-G with the intent to value maximization of Corporate Debtor. The CoC resolved to republish Form G, which resulted in receiving five EMDs from PRAs. Namely:

a. Galcatica Corporate Services Limited, Nashik

b. Ca Vishnu Kumar Patel, Gujarat

c. Univastu India Limited, Pune

d. Manoj Kumar Choukhany, Ahmedabad

The Applicant further submitted that in 12th meeting of the COC the COC approved the minimum eligibility criteria, Request for Resolution Plan (RFRP) along with evaluation matrix and the Information Memorandum to the PRAs on 17.11.2023.

Furthermore, the Resolution Professional received claim after the RFRP have been tabulated herein below:

On 16.12.2023, 4 (FOUR) Resolution Plans were received for the Corporate Debtor from the following PRAs (“Resolution Applicants”/“RAs”):

The COC, in its 17th meeting held on 08.03.2024, resolved to put vote on the existing plan basis as resolved in the 15th COC meeting. On 16/01/2024 Resolution Plan submitted by Univastu India Limited approved with a voting share of 98.57%. Thereafter, the Applicant has issued compliance certificate in Form “H”.

The Salient Features of the Resolution Plan are as under:

The company is engaged in the field of engineering, procurement and construction with an expertise in government infrastructure development, turnkey construction projects. Univastu is recognised & certified with ISO 9001, ISO 14001, ISO 45001 & prestigious certifications from various government departments such as PWD class IA (unlimited), CIDCO Civil & Infra work IA (Unlimited), Maharashtra State firefighting, electrical licenses The Resolution Applicant is eligible to act as a Resolution Applicant of the Corporate Debtor and is not ineligible under section 29A of Insolvency and Bankruptcy Code and also satisfies the eligibility criteria as mentioned in clause (h) of sub-section (2) of section 25 of the Code.

Summary of Payments under the revised Resolution Plan The amounts provided for the stakeholders under the Resolution Plan is as under:

(Amount in Lakhs)

1 *Amount provided by resolution Applicant towards its own dues have been excluded while calculating the total plan value. The incentive/upside provided to Financial Creditors have been excluded as the same are dependent on recovery and undeterminable at this point of time. 2 The Operational Creditor, being a related party (i.e. Univastu India Limited) to the Resolution Applicant, lodged a claim of INR 2026.67 lakhs, out of which the Resolution Professional admitted INR 1931.67 lakhs. The Resolution Applicant has provided for the payment of the admitted claim of INR 1931.67 lakhs through the issuance of optionally convertible debentures (OCDs). However, while this provision is reflected in the table, it has been excluded from the actual value under the Resolution Plan

3 Amount provided over time under the Resolution Plan and includes estimated value of non-cash components. It is not NPV. 4 Claim of Neeraj Porjects was admitted in full i.e. 5,18,26,196/- on 24.11.2023. i.e after circulation of updated list of creditors to the PRA's ON 07.11.2023. 5 Belated claim of GST amounting to Rs. 57,46,32,571/- was admitted in full on 28.02.2024 after seeking condonation of delay from the Hon'ble NCLT.

The interests of existing shareholders have been altered by the Resolution Plan as under:

Sources of Funds

The company has its internal accruals and funds are in liquid assets equivalent to resolution plan amount.

The initial capital is proposed to be infused through cash equity by us to the extent of Rs.4.97 Crores to pay CIRP Cost, Operational Creditors and Financial Creditors. it is further proposed to issue 26436 Equity Shares of Rs.100 face value each of the CD to the secured financial creditors on the date of transfer.

The RA proposes to pay Rs. 26.50 Crores to Financial Creditors of which Rs. 4 Crores will be paid upfront, Rs.7 Crores will be paid after 360 days from transfer date, Rs. 4 Crores will be paid by issuance of Secured Convertible debentures having 0% Coupon rate for a maximum tenure of 1-year convertible at the prevailing market rate at the end of the one year. Further Rs. 4 Crores will be paid by issuance of Secured Convertible debentures having 0% Coupon rate for a maximum tenure of 5-year convertible at the at the prevailing market rate at the end of the fifth year, with a put option at the end of the one year, it should not exceed 4 % of the total shareholding of the company by the end of the fifth year. In addition to that RA proposes to pay 50% of the amount to be received from the Arbitration claim of Rs. 32 Crores, if any. Further RA Proposes to pay to kotak 20% of the Fair value of the vehicle if recovered. Also the RA will pay Rs 7,50,000/- Equity share buyback at the end of 5 years.

The RA proposes to pay Rs. 0.20 Crores to Unsecured Financial Creditors. In addition to that RA proposes to pay 20% to ILFS of the amount to be received from the ITL recovery if any.

RA proposes to issue the optionally Convertible Debentures to the Operational Creditors of Rs. 19.32 Crores payable to Univastu India Ltd.

RA proposes to pay interest at the prevailing SBI base rate if there is any delay by RA in implementation of plan due to any reason and consequent on his part to that delay in payment as agreed in the resolution plan.

In nutshell, the sources of funds (as per original plan)are :

The Resolution Applicant and the Financial Creditors shall execute Definitive Agreements as is required for implementation of the Resolution Plan on or before the Transfer Date simultaneously payments to the Financial Creditors.

The estimated cash flow is as follows :

Note-1 : Value of the On going Projects and their related cost like Performance Guarantee etc required for execution of the Projects are not provided and hence currently assumed NIL in the above cashflow. RA proposes to finance for the requisite working capital and capex cost as and when required additionally over and above the proposal made to pay the creditors.

Payments proposals of the various stakeholders under the Resolution Plan:

a. The Resolution Applicant clarifies the basis of the allocation of equity shares proposed to each of the secured financial creditors. The proposed equity will be allocated to each of the SFC in the same ratio of the amount payable under the plan. This is subject to approval of CoC which can be modified, if required. No additional payment is required to be made by SFC for equity allotment. The Resolution Applicant has proposed to all the secured financial creditors to transfer the said 26,436 Equity shares with all the bonus shares if any declared during the period of five year to the RA or its nominee at a value of Rs. 7.5 Crores in case the prevailing rate at the end of five year is less than 7.5 crores. This option can be exercised by secured financial creditors within 3 months from the end of the five years. The equity shares are without any lock in period and are freely transferable(Page No. 297 clause No.7 of the Resolution Plan).

b. CIRP cost assumed to be INR 0.75 Crores. If the actual amount is lesser than INR 0.75 Crores then the excess over the actual amount upto INR 0.75 Crores will be paid to Secured Financial Creditors. If the actual amount is more than INR 0.75 Crores then the excess over INR 0.75 Crores will be adjusted from payment committed to Secured Financial Creditors.

c. Rs. 4 Crores will be paid by issuance of Secured Convertible debentures having 0% Coupon rate for a maximum tenure of 1 year convertible at the prevailing market rate at the end of 1 year. Further Rs. 4 Crores will be paid by issuance of issuance of Secured Convertible debentures having 0% Coupon rate for a maximum tenure of 5 year convertible at the prevailing market rate at the end 5 year, further the said secured convertible debentures will have a put option at the end of 1st year. The total equity stake of secured financial creditors should not be exceed 4 % of the total shareholding of the company.

d. Maximum amount payable to Operational Creditors is mentioned above which will be allocated to the admitted claims including any new claims admitted by Resolution Professional

e. RA proposes to issue the Optionally Convertible Debentures to the Operational Creditors of Rs. 19.32 Crores payable to Univastu India Ltd (which is not added in the total amount of Plan).

f. The amount is kept reserved for any unexpected contingent liability (3 lakh).

g. RA proposes to pay interest at the prevailing SBI base rate if there is any delay by RA in implementation of plan due to any reason and consequent on his part to that delay in payment as agreed in the resolution plan.

h. As per the terms of RFRP, The EMD of INR 25,00,000/- (Indian Twenty Five Lakh Only) provided through RTGS CNRBR52023111667801119 from Canara Bank, shall be returned upon submission of Performance Guarantee within 3 business days from the date of intimation to the Successful Resolution Applicant by the Resolution Professional or such extended date as may be decided by the CoC and adjusted against the proposed contribution.

The Resolution Applicant has proposed the above payment as under:

a. Insolvency resolution process cost

The CIRP cost incurred up to 15/09/2023 is approx. Rs. 51.31 lakhs and the expected CIRP cost up to the end of the process (i.e., 360 days from insolvency commencement date) is approx. Rs. 75 lakhs as informed by the Resolution Professional. The CIRP Costs will be paid out in priority over payments to any other creditors on or before the Transfer Date.Once the CIRP Cost have been paid in full in terms of this Resolution Plan, it is clarified that no claims, liabilities, fines, costs, expenses or any other payment of such nature or otherwise, that are or are claimed to constitute CIRP Cost shall be payable by the Resolution Applicants and/or the Corporate Debtor.

b. Payment to Employees and Workmen

As per the information gathered by the RP, there were no employees on roll working for the corporate debtor as on the insolvency commencement date. Further, no claims have been received till date from any former employees or workmen of the company.

c. Payment to Operational Creditors

d. Proposed Payment Terms:

e. Amount Payable to Operational Creditors (Government Dues) as per Data Room

f. Proposed Payment Terms:

Amount Payable for Other Creditors dues as per Data Room -

g.Proposed Payment Terms:

All dues payable to Operational Creditors shall be written off in full and shall be, and be deemed to be, permanently extinguished as on the Transfer Date.

Claim as per Balance Sheet as on 30.06.2023:

- The paid up equity share capital as on 30.06.2023 was Rs. 1256.78 Lakhs.

Treatment:

- (a) The Company is listed in BSE/NSE Limited. It is currently trading and not delisted as per the prescribed norms of SEBI.

The Resolution Applicant proposes as follows:

- (b) The existing paid up share capital to the extent of promoters holding shall stand fully written down (“Capital Reduction”). - (c) The Resolution Applicant shall infuse Rs.4.97 Crores through issue of equity shares by Corporate Debtor within 45 days and hold the overall 94% of the total shareholding. - (d) Balance 5% of the shares, i.e. 26,436 shares to be issued to the existing non-promoter shareholders other than the Promoters Group and their related parties against their existing holdings. - (e) The post conversion of debentures issued to the Secured Financial Creditors should not exceed 4% of the total shareholding of the corporate debtor.

The revised shareholding (pre conversion) is tabulated as follows:

h. Other Liabilities including Contingent Liabilities

The Resolution Applicant and CD shall have no liability, towards any Operational Creditor/s and/or any other creditor/s, with respect to any claims (as defined under the Code) relating to in any manner to the period prior to the Effective Date including claims not submitted, in excess and above of the contingency reserve/fund kept for this purpose.

All such liabilities shall immediately, irrevocably and unconditionally stand fully and finally discharged and settled with there being no further claims whatsoever, and all forms of security created or suffered to exist, or rights to create such a security, to secure any obligations towards Operational Creditor/s and other creditor/s shall immediately, irrevocably and unconditionally stand released and discharged, and the Operational Creditors and/or all other creditors shall waive all rights to invoke or enforce the same.

In accordance with the forgoing, all claims (whether final or contingent, whether disputed or undisputed, whether or not notified and whether assessed and demand raised or not and whether claimed or not claimed against CD) of all Governmental Authorities (including in relation to Taxes) and all other dues and/or statutory payments to any Governmental Authority) relating to the period prior to the Effective Date, shall stand fully discharged and settled.

Any and all legal proceedings (including any show cause notice, adjudication proceedings, petitions, complaints, assessment proceedings or regulatory orders etc.) initiated before any forum by or on behalf of any Operational Creditors and/or all other creditors or Governmental Authorities, to enforce any rights or claims, demands, dispute against CD shall stand immediately irrevocable and unconditionally withdrawn, abated, settled and/ or extinguished, and the Operational Creditors and other creditors and all other authorities, persons or service providers shall take all necessary steps to ensure the same.

While the existing contracts of CD, shall be continued, except as stated herein, all liabilities (statutory or otherwise) of CD after the effective date, arising from any contractual arrangements entered into by CD, any claims against CD, or liabilities of CD, arising or having crystallized prior to the Effective Date shall be deemed to be cancelled and written off on the Effective Date pursuant to NCLT Approval Order.

Further, any claim against CD, arising from any contractual arrangements, whether set out herein or not, whether admitted or not, due or contingent, asserted or not, present or future, whether or not set out in the Information Memorandum, the balance sheet or the books of accounts of CD, in relation to any period prior to the Effective Date, will be written off.

j. Transaction Audit:

Resolution Applicant proposes to relinquish their rights in favour of the secured financial Creditors pertaining to the funds that the Corporate Debtor would be eligible to receive from any third party. Resolution Applicant proposes that any receivables which may accrue to the Corporate Debtor as a result of any proceedings under the Code (including but limited to proceedings where any transaction is avoided/set aside by the Adjudicating Authority in terms of Section 43,45,47,49,50 or 66 of the Code) shall be considered to be settled for the benefit of the approving secured financial Creditors.

Any costs / expenses with respect to such recovery proceedings are to be borne by the secured financial Creditors. The Resolution Applicant will provide limited support by way of confirmation(s) on any matter related to the aforesaid recovery

Implementation Schedule:

Implementation of the Resolution Plan shall commence from the NCLT Approval Date. Subject to Exhibit 3.8. The Resolution Plan is effective for a term of 45 days. The Resolution Applicant will undertake the following steps to implement the Resolution Plan in the indicative timeline provided below:

The above timeline is based on the assumption that all the relevant and necessary approvals will be obtained in timely manner, however, any delay in obtaining the same, may affect the assumed timeline mentioned above.

It is clarified that notwithstanding anything contained in this Resolution Plan, the Resolution Applicant shall implement the Resolution Plan and make payments within the timelines specified in the Resolution Plan, unless such timelines are extended on account of any stay on implementation of the Resolution Plan by any appellate tribunal or court.

Earnest Money Deposit

The Resolution Applicant has submitted Earnest Money Deposit of INR Rs. 2,75,00,871/- (Two corer Seventy-Five lakh eight hundred seventy-one only) along with this Resolution Plan.

Monitoring Committee

The Monitoring Committee shall comprise of 5 (Five) members comprising of the following:

*This Tribunal directs that the Monitoring Committee be constituted latest within fifteen (15) days of the effective date and pending constitution of the Monitoring Committee, the Resolution Professional shall be authorised to exercise all his powers and shall observe all its duties in accordance with the Code.

Avoidance Transactions

As per the requirements of Regulation 38(2) (d) of the CIRP Regulations, avoidance transactions application filed by the Resolution Professional, if any, under Chapter III or fraudulent or wrongful trading under Chapter VI of Part II of the Code, will be pursued after the approval of the resolution plan to its logical end by the Chairman of monitoring Committee and the proceeds shall be distributed to the Secured Financial Creditors in the manner approved by the COC while approving this Resolution plan.

The Resolution Applicant states in Affidavit and Resolution Plan that the Resolution Plan specifying disbursement of amounts recoverable from PUFE transaction to Creditors:

As per the Clause 15 of the Form –H states that there are 4 ongoing litigations against the Corporate Debtor among which 1 is Application is filed before the Adjudicating Authority for PUFFE transaction, One Application of for Undervalued transactions, the other one is for Extortionate credit transactions and Fraudulent transactions.

As per the clause 3.10.10 of the Resolution Plan the Resolution Applicant states that “ It is clarified that the existing promoters, shareholders, managers, directors, officers, or such other person in charge of the affairs and management of the Corporate Debtor (including any person who was an ‘officer in default’ or ‘occupier’) prior to the Insolvency Commencement Date shall continue to be responsible and liable for all the liabilities, claims, demand, obligations, penalties etc. arising out of any (i) proceedings, inquiries, investigations, orders, show causes, notices, suits, litigation etc. (including those arising out of any orders passed by the Adjudicating Authority pursuant to Sections 43, 45, 49, 50, 66, 68, 70, 71, 72, 73, 74 of the Code) or any acts or omissions in breach of Applicable Law which occurred prior to the Insolvency Commencement Date. Further, for the avoidance of doubt and without prejudice to the generality of the foregoing, it is expressly clarified that any criminal proceedings initiated against the officers of the Corporate Debtor prior to the Insolvency Commencement Date shall continue against such officers without any liability accruing to the Resolution Applicant in its capacity as promoters and management of Corporate Debtor in relation to such criminal proceedings. Further on and with effect from the NCLT Approval Date, all the negotiable instruments issued by the Corporate Debtor shall stand terminated and the Corporate Debtor’s liability under such instruments shall stand extinguished.”

Therefore, this bench directs the Financial Creditors to ensure effective pursuance of the Interlocutory Applications mentioned at clause 50 of the Convenience Performa for Resolution Plan submitted by the Resolution Professional.

The compliance of the Resolution Plan is as under (Referred by From-H submitted by the RP):

Observation and Findings-

It is imperative to take notice of the fact that that Stake Bank of India, Union Bank of India, and IL & FS Financial Services Limited, with their respective voting shares, approved the said Resolution Plan with votes aggregating to 98.57%. However, Kotak Mahindra Prime Limited, with voting share of 1.43% abstained from voting.

(Amount in INR Crores)

However, on perusal of the copy of the Resolution Plan of Univastu India Limited, annexed as Exhibit- “W” (Page no. 296) in the present Application, it has come to light that the total plan value is stated as Rs. 20 Crores, with the following break-up of payment summary-

On comparison of the two aforementioned tables, it deserves to be taken note of that there exists an inconsistency in the Total Plan Value as given in the Application and in the Resolution Plan proposed by Univastu India Limited. The Plan value as given in the Application is Rs. 27,50,00,000/-, however, the Total Plan Value as envisaged in the Resolution Plan (annexed as Exhibit – “W”) is Rs. 20,00,00,000/-. Thus, it stands evident that there exists a difference of Rs. 7,50,00,000/-, specifically in terms of the payment allocated towards Secured Financial Creditor as in the present Application, Rs. 26.50 Crores have been allocated towards the payment of Secured Financial Creditors, however, the perusal of the Resolution Plan submitted by Univastu India Limited reveals that Rs. 19 Crores have been designated for the payment of the same class of Creditors, that is, Secured Financial Creditors and the same is evident from the perusal of the above-stated tables.

Financial Aspects of Univastu modified plan

From the bare perusal of the aforementioned table, it becomes evident that the total amount / total plan amount is mentioned as Rs. 67,21,75,615/-. Further, it also should be taken note of that under the “Components” column, “OC (others) – Operational Creditors (Self) – Univastu”, the SRA (Univastu India Limited) has allocated a sum of Rs. 19,31,66,909/- to itself. However, the said amount allocated to self has not been disclosed in the payment summary of the Resolution Plan (annexed as EXHIBIT- “W”) or even in the facts submitted by the Applicant / RP in the present Application, the same stands evident from the tables given in preceding paragraph 3. The total plan value, as pleaded by the Applicant / RP in the present Application is Rs. 27.50 Crores and the said total plan value as given in the Resolution Plan (in EXHIBIT- “W”) is Rs. 20.00 Crores. However, the actual plan value of the Resolution Plan submitted by the SRA before the CoC is explicitly stated to be Rs. 67,21,75,615/- as substantiated from the table given in the 15^th Meeting of the CoC. Thus, in light of the aforementioned facts, it stands established that there exists a glaring inconsistency in the total plan value in the Resolution Plan proposed by the SRA, submitted in the Resolution Plan and stated in the IA for the approval of the said Plan. Therefore, it was the duty of the RP to be more vigilant with respect to the plan value at the time of placing the same before the CoC and also at the time of filing the necessary Application before the Hon’ble Tribunal for the approval of the Resolution Plan. Strangely, the plan put up by the RP before the CoC contains the plan value as Rs. 67.21 Crores and the plan value stated in the Application filed before this Hon’ble Tribunal was stated to be Rs. 27.50 Crores and the plan enclosed along with the Application stated the total plan value as Rs. 20 Crores. Therefore, the inconsistencies are so glaring that the same cannot be ignored.

Pinnacle Mall - The Written Down Value of the asset in the books as on 28/11/2022 is Rs. 20.74 crores. As per the legal opinion obtained, the said property does not belong to the corporate debtor. Accordingly, the PRAs are advised to exclude the same while submitting the Resolution Plan.

Raipur Shops - The Written Down Value in the books as on 28/11/2022 is Rs. 5.88 crores. It has come to the knowledge of the RP that the title to the said property (shops) is disputed, and they are in possession of a third party.

RP has failed to take notice that the Purchase Agreement with respect to the said property in favour of the Corporate Debtor is there and the shops have been secured with SBI. Even though the RP has stated that this fact was brought to the notice of the RAs but strangely RP seems to have failed in his duty to protect the assets of the Corporate Debtor for the maximization of the assets of the Corporate Debtor. Therefore, it is evident that the RP has failed to bring out maximization of the value of the assets of the Corporate Debtor which is against the objective and basic spirit of the IBC.

In the same regard, the following has been recorded with respect to 'Pinnacle Mall'-

In this regard, it is pertinent to note that the Corporate Debtor paid an amount of Rs. 22 Crores, as consideration, to its Related Party (Atal Buildcon Private Limited) for the purchase of 'Pinnacle Mall'. As stated above, the Corporate Debtor does not have the title or possession of the said Property and in view of the same, the said property was not valued by the registered valuers (page 118) and was not made part of the Resolution Plan. However, it is imperative to note that the RP/IRP, as per the mandate of law, is required to preserve and protect the assets of the Corporate Debtor. When the consideration of Rs. 22 Crores was paid by the Corporate Debtor for purchase of the property, it was incumbent upon the IRP/RP to protect this asset of the Corporate Debtor and for maximization of the value of Resolution Plan to include this entire property in the assets of the Corporate Debtor or atleast the amount paid by the Corporate Debtor to the extent of Rs. 22 Crores should have been included. Thus, it is evident that the RP has miserably failed to protect the assets of the Corporate Debtor and has apparently taken no steps at all towards maximization of the value of the Corporate Debtor. Similarly, the following has been recorded with respect to 'Bhakti Sankul Hotel, Nashik'-

As mentioned above, the RP has failed to include this property also in the assets of the Corporate debtor, only on the ground that the said property is not in possession of the Corporate Debtor. Though, he has taken note that Corporate debtor was being paid an amount of Rs. 1.6 Lakhs as rent but the RP has not received any such amount during the CIRP Process. Once again it is evident that RP has not taken any steps to ensure that during the CIRP Process the rent continues to flow towards the assets of the Corporate Debtor for maximization of values so as to safeguard the interest of the Corporate Debtor and get the Resolution Plan commensurating the value of the Corporate Debtor.

Thus, it is evident from the aforementioned that the RP took upon himself to adjudicate on the claim of EPFO amounting to Rs. 28 Lakhs and the final outlay of the Resolution Plan submitted by Univastu India Limited does not contain the provision of the same, which goes against the mandate of law. The Corporate Debtor is only a trustee of EPFO dues and the claim amount cannot be said to be the asset of the Corporate Debtor and thus, has to be discharged to the party to whom it belongs to by the Corporate Debtor, at the first instance. As per the mandate of law specified under Section 53 of the Code regarding Distribution of assets, there has to be a specific provision for EPFO Claims. Moreover, the Hon'ble NCLAT, in the case of Tourism Finance Corporation of India Ltd. vs Rainbow Papers Ltd (2019, 463 NCLAT), has clearly held that the Provident fund dues must be paid in full by the successful resolution applicant and the same was upheld by the Hon'ble Supreme Court. Following the same, there have been numerous judgments by the Hon'ble NCLAT categorically stating that the dues pending under Section 7A, 7Q, and 14B under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 has to be discharged, in full, in first instance. Unfortunately, in the present Resolution Plan the EPFO Claim has not been dealt with in terms of law and there is no specific allocation in the Resolution Plan for the discharge of this statutory liability. Hence, the present Resolution Plan is not in compliance with IBC and its Regulations.

- The Plan lacks mandatory provisions required under Regulation 38(1)(b) of IBBI Regulations, 2016, specifically regarding separate payment provisions for non-voting creditors. Thus, the plan is in violation of Section 30(2)(f) of the Code that explicitly states that the Plan must conform to other regulations specified by the Board. - The Plan violates Regulation 38(3)(b) of IBBI Regulations, 2016, by failing to include specific provisions for "Feasibility & Viability". Thus, the plan is in violation of Section 30(2)(f) of the Code. - The Plan contains no specific provision for the Claim of EPFO, the same being a statutory due must be paid in priority. Thus, this clearly violates the provision laid down in Section 30(2)(e) and Section 53 of IBC. - the RP has miserably failed to protect, preserve, and collate all the assets of the Corporate Debtor and has not taken any steps towards maximization of the assets of the Corporate Debtor to the detriment of the Financial Creditors, thus violating Section 18(1)(f)(ii), Section 25(1), and Section 25(2)(a) of the IBC, 2016. - The incorporation of an 'implied extension' clause permitting payment delays contravenes Regulation 38 of IBBI Regulations, 2016 and the very objective of the IBC.

- There is improper bifurcation of creditors belonging to the same class, against the mandate of Section 53 of the IBC. - The Plan that the claim of Mohini Buildwell Private Limited and Commissioner of State Tax, Mazgaon, Mumbai were classified as “Amount on hold” when the plan was approved by the CoC.

xxviii. The conduct of the Resolution Professional in this matter requires separate consideration by the IBBI on the following issues-

- Keeping 3 of the immovable properties of the Corporate Debtor out of the collated assets for the valuation of the Corporate Debtor for maximization of the assets of the Corporate Debtor for the Resolution Plan without any legally justifiable grounds which has deprived the CoC from appreciating the true value and worth of the assets of the Corporate Debtor while evaluating and approving the Resolution Plan of the SRA on flimsy ground of some legal opinion. Reference deserves to be made to Paragraphs 6-8 of the present Order. - Further, the RP’s actions of not making a specific provision for pending EPFO Claims on the baseless premise of talking to / settling with EPFO Authorities.

- Not making any specific provision for dissenting / abstaining Financial Creditor in the total plan outlay against the statutory provisions. - convening the 18th CoC meeting on 03.01.2025 while the matter was Reserved for Orders, filing an Additional Affidavit dated 15.01.2025 as a belated attempt to address fundamental deficiencies. - RP kept claims of Mohini Buildwell Private Limited and Assistant Commissioner of State Tax, Mazgaon, Mumbai on hold and got the plan approved from the CoC. - Made no efforts to recover, protect, and preserve the assets of the Corporate Debtor.