Shilpi Cables Private Limited vs M/s Jhunsons Chemicals Private Limited

PER: RAVINDRA CHATURVEDI, MEMBER (TECHNICAL)

The present interlocutory application bearing IA (IBC) (Plan) No. 33/2025 was filed on 05.06.2025 by Mr. Ajay Gupta, Resolution Professional (RP) of M/s Jhunsons Chemicals Private Limited, the Corporate Debtor (CD) under the provisions of Sections 30(6) and section 31 of the Insolvency & Bankruptcy Code, 2016 (the Code or IBC) read with Regulation 39(4) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (CIRP Regulations) for approval of the Resolution Plan submitted by M/s Reliant Packaging Films Private Limited, the Successful Resolution Applicant (SRA), as approved by the Committee of Creditors (CoC). The prayers made in the Application are as follows:

The Corporate Debtor is a company incorporated on 07.09.1992, having a registered office at House No. G-115, Ashok Vihar PH-I, North West, Delhi, India, 110052, under the provisions of the Companies Act 1956.

The underlying Company Petition CP (IB)-380(PB)/2022 was filed by Shilpi Cables Private Limited (Financial Creditor / Shilpi Cables), against CD under Section 7 of the Code for initiation of Corporate Insolvency Resolution Process (CIRP) of the Corporate Debtor. The Application was admitted by this Adjudicating Authority vide order dated 02.05.2024(Admission Order), and Mr. Ajay Gupta was appointed as the Interim Resolution Professional (IRP). In the 1^stCOC meeting convened on 01.06.2024, the agenda on confirmation of IRP as RP did not receive the requisite vote, thus IRP, in accordance with section 16(5) continued to perform the duty of the RP. Subsequently, Mr. Ajay Gupta was confirmed as RP in 3^rd CoC meeting convened on 28.08.2024 and vide order dated 30.09.2024 by this AA in IA(I.B.C)/4756(PB)2024

The IRP made a public announcement in Form A on 04.05.2024 in Financial Express (English) – Delhi-NCR edition, Jansatta (Hindi) - Delhi-NCR edition, Indian Express (English) - Jaipur edition, and Mahanagar Times (Hindi)- Alwar edition, calling upon creditors of the Corporate Debtor to submit their claims along with the proof on or before 16.05.2024. 2.2. Pursuant to the public announcement, IRP received claims from a secured Financial Creditor being Union Bank of India, 12 (Twelve) unsecured Financial Creditors; 17 (Seventeen) Workmen and Employees, and 6 (Six) Operational Creditors and list of these creditors have been filed by the IRP under regulation 13(2)(d) of CIRP, Regulations 2016 vide IA(I.B.C)/2845(PB)2024. IRP further filed a report regarding the constitution of COC vide IA(I.B.C)/2846(PB)2024 under Regulation 17(1) of CIRP Regulations 2016. Both the List of Creditors and the CoC Constitution Report were taken on record by this AA vide order dated 03.06.2024. Subsequently, RP filed the constitution of CoC with the revised voting rights, vide IA(I.B.C)/2505(PB)2025, and the same was taken on record by this AA vide order dated 27.05.2025.

The composition of CoC with the revised voting rights is as follows:

The RP has submitted that total 13 (thirteen) meetings have been held during the CIRP period, which are as follows:

In terms of Regulation 27 of CIRP Regulations, 2016 Registered Valuers, namely GN Fair Valuation Private Limited & Neeru Gupta, and Mr. Anand Prusty, Ashish Sawe & Gyaneshwar Sahai, were appointed in the 2^nd CoC meeting convened on 19.07.2024, for carrying out the valuation of Land & Building, Plant & Machinery, and Securities & Financial Assets. The summary of the Fair Value and Liquidation Value of the Corporate Debtor is as under:

Copies of the Valuation Reports have been placed on record.

Average valuation of the assets of the Corporate Debtor, as further provided in Form H, is as follows:

In the 2^nd CoC meeting itself, the IRP formed a prima facie view that there existed several questionable transactions for which an audit needs to be conducted to determine such transactions. Accordingly, the COC with 100% votes resolved to appoint Chaudhary Pradeep & Co., Chartered Accountants, to carry out the transaction audit for the determination of transactions falling under Sections 43, 45, 49, 50, and 66 of the IBC.

It has been submitted that the suspended management/ promoter of CD had filed an appeal before the Hon'ble National Company Law Appellate Tribunal (Hon'ble NCLAT) vide Company Appeal (AT) (Insolvency) No. 972 of 2024 against the admission order dated 02.05.2024 passed by this Adjudicating Authority. While hearing in appeal on 17.05.2024, it was stated on behalf of the Appellant that steps for settlement have been initiated and therefore the Hon'ble NCLAT imposed a stay on issuance of Form G, however, allowed RP to proceed with the constitution of CoC. The order dated 17.05.2024 of the Hon'ble NCLAT is extracted hereinbelow:

The Hon'ble NCLAT vide order dated 26.11.2024 vacated the stay and directed RP to proceed further with the issuance of Form G. Relevant portion of the order dated 26.11.2024 is extracted hereinbelow:

In view of the above, RP filed an application being IA-6211/2024 seeking exclusion of 193 days with effect from 17.05.2024 to 26.11.2024, from the calculation of the CIRP period, and the same was allowed by this AA vide order dated 07.01.2025.

The Applicant submits that in terms of Regulation 36A(1) of the CIRP Regulations, 2016 read with section 25(2)(h) of the Code, invitation in Form G for Expressions of Interest (EoI) from Prospective Resolution Applicants (PRAs) was published on 18.12.2024, with the last date for submission of EoI being 07.01.2025 and for submission of Resolution Plan being 08.03.2025, which later was extended up till 15.03.2025, on request received from PRAs. 3.2 Pursuant to the same 07 (Seven) EOIs were received, and they were declared as eligible Prospective Resolution Applicants. Eventually, only 5 of them submitted the Resolution Plan by 15.03.2025. Final list of PRAs was issued on 01.02.2025.

In terms of Regulation 36B of CIRP Regulations 2016, the RP had issued Request for Resolution Plan (RFRP), IM, and Evaluation Matrix to all eligible Applicants in the provisional list.

The resolution plans as submitted by the 5 PRAs were presented before the COC during the 9th COC meeting held on 02.04.2025 and 04.04.2025, wherein negotiations were held upon the financial proposal and timelines proposed by PRAs in their respective plan, and time was granted till 12.04.2025 to each PRA to submit the revised resolution plan after considering the observations and non-compliances informed by the applicant and CoC.

Accordingly, revised resolution plans from 4 out of 5 RAs were received on 12.04.2025, while one amongst 5 wished to continue with the original resolution plan only. These Resolution Plans were considered in the 10th COC meeting held on 16.04.2025.

CoC carried out detailed deliberation on the resolution plans submitted by RAs in the 11^th CoC meeting convened on 25.04.2025.

In the meanwhile, since CIRP period of 180 days was expiring on 10.05.2025, the CoC in its 11^th CoC meeting convened on 25.04.2025 passed resolution for seeking extension of 60 days. Accordingly, RP filed an application bearing IA-2301/2025 seeking extension of 60 days (beyond CIRP period of 180 days) with effect from 11.05.2025 and the same was allowed by this AA vide order dated 15.05.2025.

In the 12^th CoC meeting convened on 03.05.2025, detailed discussion on feasibility and viability was carried out on Resolution Plans submitted. After detailed discussion, it was decided that only compliant Resolution Plans submitted by the following persons will be put to vote:

a. Titan Media Limited

b. Reliant Packaging Films Private Limited

c. Hershit Kumar Gupta

Further, the Resolution Plans from these three entities, were evaluated in terms of Evaluation Matrix and put to vote in this 12th meeting. Upon conclusion of voting process, Resolution Plan of M/s Reliant Packaging Films Pvt Ltd stood approved by the COC with 96.63% votes.

The Resolution passed for approval of the Resolution Plan of M/s Reliant Packaging Films Pvt Ltd is extracted herein below:

On approval of the resolution plan of M/s Reliant Packaging Films Pvt Ltd, the RP issued a letter of intent (LOI) dated 03.06.2025 to M/s Reliant Packaging Films Pvt Ltd/ SRA.

The SRA deposited Performance Security in terms of Regulation 36B(4A) of the CIRP Regulations, 2016, to the tune of Rs 97,50,000/- (Ninety Seven Lakhs Fifty Thousand Only) being 10% of the resolution plan value on 04.06.2025 via bank guarantee bearing no PEBNDH297361 dated 04.06.2025 issued by HSBC bank valid up to 03.06.2026.

Pursuant thereto, the present application has been filed by the RP seeking approval of the Resolution Plan in terms of the provisions of the code.

B.13 The SRA has submitted an undertaking with respect to eligibility in accordance with Section 29A, and the same is placed at page 99 of this Application for approval of the Resolution Plan and the same is further confirmed by Resolution Professional. The Certificate issued by RP is enclosed on page no. 192 of the application is extracted below:

Further, RP's compliance certificate in form H has been placed on record as Annexure A-3. In the certificate, inter alia RP has certified as follows:

The eligibility of SRA has been determined in the 5^th CoC meeting convened on 02.12.2024. That as per the net worth certificate dated 24.12.2024 duly certified by CA, submitted by the SRA reflects its total net worth to be as Rs 22,83,67,000/- (Rupees Twenty Crores Eighty Three Lakhs Sixty Seven Thousand Only) with paid up capital as Rs 10,09,58,000/- (Rupees Ten Crores Nine Lakhs Fifty Eight Thousand) Only, thus both criteria stands duly satisfied as provided under eligibility criteria, further there are no losses recorded in the last three years in the balance sheet of the SRA.

The SRA is proposing a total sum of Rs 9,75,00,000/- (Rupees Nine Crores Seventy Five Lakh Only) under the approved resolution plan towards payment to the creditors and CIRP cost within a period of 3 months from the Effective Date i.e. the date on which this hon'ble tribunal approves the Resolution Plan.

The SRA is a private company, incorporated on 15.01.1996 under the Companies Act 1956, having a registered office at S-31, F.I.E.E, Okhla Industrial Area, Phase-2, Delhi -110020, Okhla Industrial Area Phase-I, South Delhi, Delhi, India- 110020. The Company has set up plants to manufacture multilayer cast coextruded films at Village Bilaspur at 60th Km stone National Highway-48 (Delhi-Jaipur Highway), in District Gurugram, Haryana. The company manufactures Five layer Cast Coextruded Films for medical, tyre, and food applications. The Company is ISO 9001-2015 certified, and ISO 13485-2016 certified for medical packaging applications. SRA is a leading supplier of films and medical paper to the medical device industry in India, and most of its customers are already using the Gamma radiation facility

Total value of Financial Proposal stands to the tune of INR 9,75,00,000/- (Rupees Nine Crores and Seventy-Five Lacs only).

The SRA has undertaken to pay to the financial creditor within 3 months from the effective date i.e., date of approval of the Resolution Plan by this AA.

The above Resolution Plan value includes CIRP Cost, being an estimated amount of INR 70,00,000/- (Rupees Seventy Lakhs Only), and he same shall also be paid upfront in priority to other payments, within 3 months.

The claim of sole Secured Financial Creditor, namely Union Bank of India, amounting to Rs 5,27,83,213/- (Five Crores Twenty Seven Lakhs Eighty Three Thousand Two Hundred Thirteen Only) is being settled under the resolution plan by making full payment within 90 days from the date of approval. Further, the SRA has proposed to pay simple interest @ 8% p.a. on the proposed amount, starting from the effective date till the date of payment or 90 days, whichever is earlier.

INR 3,34,00,619/- (Rupees Three Crores Thirty Four Lakhs Six Hundred and Nineteen Only) (i.e., 92% of the admitted claim amount of INR 3,63,05,021/- (Rupees Three Crores Sixty Three Lakhs Five Thousand and Twenty One Only) is being proposed to be paid against their total dues of unsecured Financial Creditors who are non-related parties of the corporate debtor.

Nothing is being proposed under the Plan against the admitted claim of Rs. 5,33,39,127 (Five Crores Thirty Three Lakhs Thirty Nine Thousand One Hundred Twenty Seven Only) toward unsecured financial creditors, being related parties.

The SRA is proposing to pay the entire amount of Rs 26,71,638/- (Rupees Twenty Six Lakhs Seventy One Thousand Six Hundred Thirty Eight Only) as admitted claims of Employee/workmen under the plan.

The SRA is proposing full payment of the admitted claim amount of INR 4,121/- (Rupees Four Thousand One Hundred Twenty-One Only) to EPFO.

For Operational Creditors (other than workmen/employee and statutory dues), the SRA has proposed payment of Rs 6,01,985/- (Rupees Six Lakhs One Thousand Nine Hundred Eighty-Five Only) (10% of admitted amount).

Further, qua capital expenditure, the SRA proposes to infuse an amount of INR 5 crores, as per requirement, towards the capital expense or working capital requirement for the factory operation.

The SRA has further proposed a sum of INR 10,38,423/- to be a contingency fund.

Summary of Consolidated payments proposed in the Resolution Plan is as follows:

Source of fund: It has been stated that the total value proposed under the resolution plan for Rs 9,75,00,000/- (towards payment to creditors & CIRP cost) and Rs 5,00,00,000/- (towards the capex & working capital requirement) shall be paid by the SRA from its own sources, having a net worth of Rs 22,83,67,000 as per the CA certificate. It has been further stated that the SRA has depicted availability of funds in its current account and sufficient available credit facility to execute the above financial commitment under the Resolution Plan, which has been duly noted by the CoC in the 12th COC meeting.

Revival and Rationale: The SRA has a great customer support for the industry in which the CD operated, since all customers of the resolution applicant are also the customers of the CD. The SRA carries customer trust. The SRA has adequate resources available to revive the operations of the CD. The professional expertise of the SRA shall also contribute to eliminate the operational inefficiencies of the CD. The Action Plan proposed in the Resolution Plan is as follows:

- A. Restarting the operations and re-establishment of customer network. - B. Infusion of Funds to meet working capital gap, if required. - C. The corporate debtor shall be managed through professionals which shall ensure effective management. - D. Tapping the existing customer base of RA for providing services from corporate debtor.

The Applicant has filed a Compliance Certificate in the prescribed form i.e., Form H, along with the Resolution Plan, in compliance with regulation 39(4) of the CIRP Regulations, 2016 and the same has been annexed to the Plan application as ANNEXURE A-3.

Details of various compliances as envisaged in the Resolution Plan under section 30 of the Code and Regulation 37 and 38 of the CIRP Regulations 2016, which are reproduced hereunder:

There are 18 (eighteen) such creditors, whose aggregate admitted claim value is INR 26.72 lacs.

This claim amount is inclusive of: a. gratuity of INR 12.39 lacs;

b. sum of Rs 7.08 Lacs towards operational debt of workmen for a period of 24 months;

c. INR 1.82 lacs towards amounts due to employees other than workmen for 12 months and INR 5.43 lacs beyond 12 months.

The SRA has proposed to pay the Full amount as in each category as mentioned above.

Provided the above amount shall be first appropriated towards the mandatory payment of these creditors, being gratuity dues or EPF dues if any, and the balance amount shall be distributed to them in the ratio of their balance admitted claims.

Total outlay towards the claims of operational creditors (workmen or employees) shall be INR 26.72 lacs only, irrespective of any other claim being admitted subsequently.

The same has been dealt with under Payment of Operational Creditors (Workmen/ employees dues) of Chapter 5 (Financial Proposal and Sources of Fund) in the Resolution Plan.

Indicative Timeline of implementation of the schedule as provided in the Resolution Plan is given below:

In terms of the final Transaction Report placed in the 7th CoC meeting held on 23.01.2025 and discussion by CoC thereupon, the applicant herein filed an application bearing I.A no. 1583/25 under section 66 of the Code against the ex-directors of the corporate debtor for the purpose of fraudulently carrying out the business of the corporate debtor and seeking reversal of the said transactions.

Resolution plan provides that the application shall be pursued by SRA on behalf of the CoC and/ or RP after the effective date, and the receipts from recovery, if any, shall be first distributed to unsecured financial creditors (Non Related Party) to the extent of unpaid amount out of the total claim admitted and the remaining amount shall be credited to the SRA

RP has declared that he has examined the Resolution Plan received from the SRA. 7.2 RP has further provided the details of the total realizable value, which is as follows:

The RP has further provided the checklist of mandatory compliances, which is extracted below:

It has been submitted that RP has perused the Resolution Plan and found the same is in compliance with the provisions of the IBC and CIRP Regulations. RP has provided the necessary details with respect to compliance under these provisions in Form H (Annexure A-3). Further, satisfaction as to compliance with section 30 of the Code, regulation 37, 38 and 39 of the CIRP Regulations has been recorded above.

We note that the proposed Resolution Plan has been approved by the CoC, comprising the sole secured Financial Creditor with 96.63% votes in favour of the Resolution Plan.

We observe that the Resolution Plan is in accordance with Sections 30 and 31 of the IBC and also complies with regulations 37, 38, and 39 of the CIRP Regulations, 2016.

We note at this stage 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 Supreme 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: -

Further, we rely upon the Judgement passed by Hon’ble Supreme Court in the matter of “Vallal RCK versus M/s Siva Industries and Holdings Limited and Others, Civil Appeal Nos. 1811-1812 of 2022” whereby the Hon’ble Apex Court has answered the question as to whether ‘the adjudicating authority (NCLT) or the appellate authority (NCLAT) can sit in an appeal over the commercial wisdom of the Committee of Creditors (hereinafter referred to as the “CoC”) or not. We rely upon the following paragraphs:

Additionally, the Hon’ble Supreme Court, in their judgment dated 01.04.2024, passed in Piramal Capital and Housing Finance Limited (Formerly known as Dewan Housing Finance Corporation Limited) Vs 63 Moons Technologies Limited & Ors., Civil Appeal Nos. 1632-1634 Of 2022 has examined the issue of scope of Judicial Review in the matter of approval of Resolution Plan. After analysing all the aforementioned judgments and other judgments, Hon’ble Supreme Court has stated as under:

Thus, from the judgments cited and the statutory framework of the Insolvency and Bankruptcy Code 2016, it is evident that the scope of judicial review available to this Adjudicating Authority under section 30(2) read with section 31 is limited to assessing the compliance of the Resolution Plan with the prescribed legal requirements. The Authority is neither empowered nor obligated to delve into or evaluate the commercial wisdom of the CoC, which is paramount and binding, provided it aligns with the provisions of the Code. Upon satisfaction that the proposed resolution plan adheres to the statutory mandates, including equitable treatment of stakeholders and compliance with applicable laws, this Adjudicating Authority finds no impediment to grant its approval.

The Resolution Plan of M/s Reliant Packaging Films Private Limited for the Corporate Debtor has been approved by CoC with 96.63% majority, and this Adjudicating Authority cannot interfere in the same.

The applicant has prayed for number of waivers, reliefs, and concessions in the Resolution Plan. As to the relief and concessions sought in the resolution plan, by taking into consideration the decision of the Hon’ble Supreme Court in the matter of Embassy Property Development Private Limited v. State of Karnataka & Ors. in Civil Appeal No. 9170 of 2019, we direct the Successful Resolution Applicant to file necessary application before the necessary forum/authority in order to avail the necessary relief and concessions, in accordance with respective laws. The relevant part of the judgement is reproduced herein below:

Given the above, 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. The SRA/CD will be entitled to no other reliefs/ concessions/waivers except those that are available/permissible to it under section 32A of the IBC and as per other applicable provisions of the IBC, 2016. The SRA is at liberty to approach the relevant authorities, who would consider these claims as per the provisions of the relevant law in an expeditious manner.

Thus, it is ordered that the reliefs, concessions and waivers sought by the Successful Resolution Applicant will be dealt with strictly as per the law and shall not be deemed to be granted only by virtue of this plan approval order.

As far as the question of granting time to comply with the statutory obligations / seeking sanctions from governmental authorities is concerned, the Resolution Applicant is directed to do the same within one year as prescribed under section 31(4) of the Code.

In case of non-compliance of this order or withdrawal of the Resolution Plan within the stipulated time, in addition to other consequences which follow under law, the CoC shall forfeit the performance security paid by the SRA.

Therefore, in our considered view, there is no impediment to giving approval to the instant Resolution Plan. Accordingly, we hereby approve the Resolution Plan, which shall be binding on the Corporate Debtor, Financial Creditor, and all other stakeholders involved.

Subject to the observations made in this Order, the Resolution Plan submitted by M/s Reliant Packaging Films Private Limited for a value of INR 9,75,00,000/- (Rupees Nine Crores and Seventy-Five Lacs only), is hereby approved.

IA (IBC) (Plan) No. 33/2025 filed for approval of the Resolution Plan stands allowed.

The approved Resolution Plan shall become effective from the date of this Order and shall be implemented strictly as per the terms of the plan and implementation schedule given in the Plan;

The following steps shall be taken in terms of the Resolution Plan:

The Resolution Plan is binding on the Corporate Debtor and other stakeholders involved so that the revival of the Corporate Debtor shall come into force with immediate effect. 9.6 The Moratorium imposed under section 14 of the Code shall cease to have effect from the date of this order. 9.7 No Relief or waiver as sought in the Resolution Plan shall be deemed to be granted, unless the same is specifically granted herein under this order or the SRA is otherwise entitled to in accordance with the applicable provisions of the IBC 2016. 9.8 The Resolution Professional shall submit the records collected during the commencement of the proceedings to the Insolvency & Bankruptcy Board of India for their record and also return to the Resolution Applicant or New Promoters. 9.9 A Certified copy of this Order shall be filed by the Resolution Professional with the Registrar of Companies, NCT of Delhi & Haryana. 9.10 The Resolution Professional shall stand discharged from his duties with effect from the date of this Order, save and except those duties that are enjoined upon him for implementation of the approved Resolution Plan. 9.11 The Resolution Professional is further directed to hand over all the records, premises/factories/documents available with it to the Successful Resolution Applicant to finalise the further line of action required for starting of the operation. The Successful Resolution Applicant shall have access to all the records, premises/factories/documents through the Resolution Professional to finalise the further course of action required for starting of operations of the Corporate Debtor.

The Monitoring Committee shall file a periodical/quarterly progress report regarding the implementation of the Plan before this Tribunal until completion in terms of IBC, 2016 and CIRP Regulations, 2016. 9.13 The Registry is hereby directed to send e-mail copies of the order forthwith to all the parties; CoC, RP and SRA and their Ld. Counsels for information and for taking necessary steps. The Applicant – RP is directed to send a copy of this order to the IBBI and RoC concerned for their record. 9.14 Certified copy of this order may be issued, if applied for, upon compliance of all requisite formalities.

To summarise:

a. Accordingly, prayers made in IA(Plan)-33/2025 filed for seeking approval of the resolution plan are allowed.

b. File be consigned to record storage (current).