State Bank Of India vs M/s Nexgen Laminators Private Limited

FACTS OF THE CASE

“The present is not a case that Resolution Plan submitted by Respondent No.1 by email before 15.04.2021 was considered on merits. Rather, the CoC took a decision to issue fresh Form-G to give opportunity to all with the object of maximizing the value of Corporate Debtor. The Adjudicating Authority had not committed any error in granting extension of 90 days period after expiry of 300 days to complete the process. Exclusion of time granted by Adjudicating Authority in the facts of the present case cannot be held to be erroneous and uncalled for. In view of the foregoing discussions, we do not find any error in the impugned order, warranting interference by this Appellate Tribunal in exercise of its appellate jurisdiction. The Appeal is dismissed. No order as to costs.” It was also informed that In pursuant to above Order, the Applicant has also filed a Caveat before Hon’ble Supreme Court in this regard.

a. Allow the present IA;

b. Approve the Modified Resolution Plan dated 04.09.2023 along with addendum dated 09.11.2023 submitted by Mr, Rajesh Singla as approved by 100% voting share of the CoC in the 31st CoC meeting convened on 17.11.2023 and vide e-voting dated 23,11,2023.

c. Declare upon approval of the Resolution Plan by this Adjudicating Authority, the provisions of the Resolution Plan shall be binding on the Company, its creditors, guarantors, members, employees, Statutory Authorities and other stakeholders in accordance with section 31 of the Code and shall be given effect to and implemented pursuant to the order of this Adjudicating Authority; and

d. Approve and grant reliefs and directions sought under the Resolution Plan by the Resolution Applicant;

e. Pass any further necessary order, as it may deem fit and proper in the interest of justice.

(i)

In view of the Supreme Court judgement in the matter of Rainbow Papers, VAT dues are secured & rank pari passu with secured Financial Creditors and thus, have been proposed to be paid in same proportion, as of secured Financial Creditor. There is no liability of any other Statutory authority falling under the category of secured dues in the books of the Corporate Debtor. Further, since the liquidation value of Corporate Debtor as assessed by Resolution Applicant is not sufficient to settle the dues of secured Financial Creditors, hence Resolution Applicant is not proposing any amount against the above-mentioned claims admitted of Statutory Authorities (Other than VAT).

(ii)

No claim has been received against the gratuity of the ex- employees and the current employees of the Corporate Debtor. However, in view of the judgment passed in the matter of Jet Airways, the SRA has proposed payment of full amount of the book liability against the dues of the gratuity, i.e., Rs.5262105.36/-.

(iii)

In the Resolution Plan submitted by the SRA, the amount allocated to the Financial Creditors has been distributed on the basis of voting share. However, it has been mutually decided by the CoC members that SIDBI shall receive a minimum value of Rs. 14 crores, as per their security interest.

- (iv) Pursuant to the issuance of the LoI dated 23.11.2023, the SRA submitted the Performance Bank Guarantee dated 01.12.2023 within the specified time period of 7 days. The same has been placed on record vide IA No. 2959 of 2023. - (v) The SRA has sought relief under the Income Tax Act to carry forward the losses incurred by the Corporate Debtor. In this regard, the RP has sent an email and following reminders to the SRA to share the quantification of the amount. In response to the same, the SRA vide email dated 08.02.2024 has stated that relief has been sought amounting to. Rs. 4,90,48,676/- and has also declared that the relief sought to be quantified has no repercussion or bearing on the Resolution Plan. A copy of the email communication between the RP & the SRA has been annexed as Annexure-1 of the short-written submissions. - (vi) In compliance with order dated 23.01.2024, the RP has filed a separate compliance affidavit in IA 2959 of 2023 with respect to confirmation sought from the non-issuing branch regarding the authenticity and validity of the Performance Bank Guarantee submitted by the SRA. - (vii) There is no PUFE application is pending against the Directors (Power suspended) or any other party before this Adjudicating Authority.

(i)

The balance sheet prepared at the time of the CIRP is not audited and is considered provisional.

(ii)

The copy of the provisional balance sheet as on CIRP date i.e. 25.11.2019, audited balance sheet prior to the CIRP date 31.03.2019, first audited balance sheet prepared by the RP for the financial year 2019-20, and the latest audited balance sheet prepared by the RP for the financial year as on 31.03.2023 have been attached as Annexure-2, Annexure-3, Annexure-4 and Annexure-5 respectively with the affidavit.

(iii)

As per the Audited Balance Sheet prior to CIRP dated 31.03.2019, the written down value (hereinafter referred to as the "WDV") of the tangible fixed assets is Rs.45,19,25,016. Additionally, that as per the provisional balance sheet as of the date of the CIRP i.e. 25.11.2019, the WDV of the tangible fixed assets is Rs.43,80,10,325. Subsequently, in the audited balance sheet prepared by RP for the financial year 2019-2020, the WDV of the tangible fixed assets is Rs.43,11,88,732. Thereafter, as per the latest balance sheet prepared on 31.03.2023, by the RP, the WDV of the tangible fixed assets has further decreased to Rs.37,07,98,400. This reduction in asset value is attributed to depreciation of the assets over time.

(iv)

The total tangible assets include Rs.8.46 crores classified as pre-operative expenses in different asset heads i.e. (plant & machinery and misc. fixed assets). These pre-operative expenses encompass costs, such as interest and salaries incurred prior to the commencement of commercial operations for the unit. As a result, these Rs.8.46 crores have been capitalized within the tangible assets. Consequently, the valuer has excluded pre-operative expenses from the valuation of tangible assets.

(v)

The gross value of the fixed assets (i.e. plant & machinery) as per the valuation report is Rs.31,76,09,400. In addition, the pre-operative expenses amounts to Rs.84,631,000.00. When both figures are combined, the total comes to Rs.40,22,40,400, which reflects the gross block amount of the plant and machinery, as mentioned in the reconciliation statement. It is pertinent to mention that the gross value of plant and machinery as per provisional balance sheet is Rs.40,22,98,843 and gross value of land and building is Rs.18,00,36,659. Further, the WDV of the land and building as per the balance sheet on the date of CIRP is Rs.14,62,84,227. The WDV amount of the land and building as per the valuation report is Rs.14,62,84,227, which reflects the same amount of the land and building as per the balance sheet on the date of CIRP. The gross value as per the valuation report can be verified from page no. 57 of the valuation report of the Rishi Kumar Aggarwal, which is annexed in the Convenience Proforma. The pre-operative expenses have been verified from the fixed assets register, which is annexed as Annexure-6 with the affidavit.

(vi)

The assets appearing in the balance sheet of the Corporate Debtor have been valued, and there are no missing assets except the FDR amount of Rs.3483047/-, which has been forfeited by the SIDBI prior to CIRP due to the adjustment against the term loans after the Corporate Debtor turned Non-Performing Assets as per terms of sanction and the same has been informed by SIDBI vide mail dated 20.03.2020, which is annexed as Annexure-7 with the affidavit.

(vii)

The reconciliation with the assets listed in the audited balance sheet at the time of CIRP with those considered in the valuation report (annexed as Annexure-7 with the affidavit) and the details of claims received, claims admitted and the treatment of these claims as outlined in the Resolution Plan were also enclosed.

(viii)

The RP has received a claim of Rs.3,27,68,881/- from the Customs Department, which has been fully admitted. Additionally, the RP have received a claim of Rs.3,50,470/- from the Income Tax Officer (TDS Patiala), and this entire amount has also been admitted. The entire amount belongs to late fees for delay in filling of TDS Return and interest on late payment, the SRA has proposed an amount of Rs.2,00,000/- in relation to these claims.

(ix)

Further, the total claims submitted by Operational Creditors (excluding those of workmen, employees, and government dues) amount to Rs.6,45,78,854/-, out of which, the claims of Rs.5,12,38,822/- have been admitted by the RP, while a claim of Rs.1,33,40,031/- has not been admitted. The SRA proposes to pay Rs.2,00,000/- as full and final settlement to the Operational Creditors, distributed in proportion to the admitted claims. Furthermore, it is proposed that the SRA will deposit this amount into an Escrow Account with the Corporate Debtor, from which payments to various creditors will be made. Should any contingent claims become final and accepted in the future, such amounts will be settled at Re.1/-.

(x)

The Provident Fund (hereinafter referred to as the “PF”) dues as of 25.11.2019 were Rs.9,08,807/- and these dues increased to Rs.11,45,794/- as of 31.03.2020, and further to Rs.15,83,431/- as of 31.03.2023. The PF dues as of 31.03.2020 include Rs.2,36,987/- for March 2020, which has since been paid. The PF dues as of 31.03.2023 include Rs.6,74,624/- related to the CIRP period, which has also been settled. Only the belated claims amounting to Rs.14,02,699/- have not been admitted due to their belated nature. There are no outstanding liabilities with the Employees' Provident Fund Organization (hereinafter referred to as the “EPFO”) except as mentioned above. An amount of Rs.8,02,577/- outstanding of the period prior to CIRP has not been proposed by the SRA, as the claim pertains to the same was not received by RP prior to approval of plan by CoC. Should any contingent claims become final and accepted in the future, such amounts will be settled at Rs.1/-.

ANALYSIS OF THE CASE

(a)

The resolution plan provides for the payment of insolvency resolution process costs in a manner specified by the Board in priority to the payment of other debts of the corporate debtor.

CIRP CostThe Resolution Applicant agrees that the amounts to be paid towards CIRP costs shall be determined by the Resolution Professional as soon as practicable after the Hon'ble NCLT approval date and in any event no later than 30 (thirty) days from the date thereof. The Resolution Applicant will make payment of the unpaid CIRP Cost incurred, and the estimated CIRP Cost to be incurred till the end of CIRP Period, as is discussed earlier in our resolution plan and is proposed to be Rs. 96,50,000 /- (Rupees Ninety-Six Lakhs Fifty Thousand Only) wherein Rs. 6,509,202.02 (Rupees Sixty-Five Lakhs Nine Thousand Two Hundred and Two Rupees and Two Paise ) towards unpaid CIRP Cost as specified in sub-section 30(2)(a) (Payment of CIRP Costs) of Section VI (Treatment of Stakeholders) of this Resolution Plan, towards payment of CIRP Costs. In case of actual CIRP cost as ratified by the CoC, and pending as on the Effective Date is less than proposed amount of Rs. 96,50,000 /- (Rupees Ninety-Six Lakhs Fifty Thousand Only), the difference between actual CIRP Cost and proposed CIRP Cost will be paid proportionately to Secured Financial Creditors. The amount will not be retained by the Resolution Applicant. In case the actual CIRP Cost exceeds the amount proposed in this Resolution Plan, aforesaid additional amount shall be reduced proportionately from the proposed payment of the Secured Financial Creditors to be paid by the Resolution Applicant.

(In Crore)

Sr. No.	Particulars	Amount Proposed	Within 15 days	Within 180 Days
1.	CIRP Cost	0.24	0.24	-
2.	Financial Creditor (Secured and Unsecured)	22.465	4.465	18.00
3.	Workmen dues	0.00	--	--
4.	Employee dues	0.00	--	--
5.	Operational Creditor (Statutory Authorities)	0.02	0.02	--
6.	Payment for Gratuity Liability of Ex-employees	0.24	0.24	--
7.	Fund for Gratuity Liability of current Employees (Gratuity Fund)	0.29	0.29	--
8.	Operational Creditors (other than Workmen & Employees and Govt.)	0.02	0.02	--
9.	Any other Creditors	--	--	--
	Total	24.00	6.00	18.00

The said amount is the total of the amount to be distributed and the CIRP cost after deducting the regulatory fee and the performance-linked incentive fee for timely resolution and the performance-linked incentive fee to RP for value maximization.

(b)

The resolution plan provides for the payment of debts of operational creditors in such manner as may be specified by the Board, which shall not be less than:

(i)

the amount to be paid to such creditors in the event of a liquidation of the corporate debtor under section 53; or

(ii)

the amount that would have been paid to such creditors, if the amount to be distributed under the resolution plan had been distributed in accordance with the order of priority in sub-section (1) of section 53, whichever is higher and provides for the payment of debts of financial creditors, who do not vote in favour of the resolution plan, in such manner as may be specified by the Board, which shall not be less than the amount to be paid to such creditors in accordance with sub-section (1) of section 53 in the event of a liquidation of the corporate debtor.

Explanation 1- For removal of doubts, it is hereby clarified that a distribution in accordance with the provisions of this clause shall be fair and equitable to such creditors.

a. The liquidation value of the Operational Creditor is Nil.

b. Operational Creditor claim/ dues: The claims of Operational Creditors (Workmen) are nil. The claims of Operational Creditors (Government Dues) as per the IM amounts to Rs.33,119,351/- and the RP has identified possible claims of Rs. 0/- based on liabilities outstanding in the books of accounts.

c. Operational Creditor Treatment (Government Dues): The SRA proposes to allocate a sum of Rs.2,00,000/- towards the settlement of Operational Creditors (Government Dues). However, in future, if due to any reasons whatsoever including the judgement of Hon'ble Supreme Court in the case of Rainbow Papers Ltd. vs. State Tax Officer Ltd. or due to any other reason, the amount to be paid VAT, then the SRA undertakes to bring additional sources

d. Gratuity Claim/ Dues (Ex-employees): As per the information provided by the RP, a sum of Rs. 23,95,025.57 pertaining to gratuity provision is payable to the ex-employees of the Corporate Debtor, and shall be paid in full by the SRA. The said amount shall be paid in entirety by the SRA.

e. Gratuity Treatment (Ex-employees): The SRA will deposit the sum of Rs.23,95,025/- in an Escrow Account with the Corporate Debtor and the respective payments to various ex-employees can be made from this Account.

f. Gratuity Claim/ Dues (current employees): The outstanding Gratuity Liability with respect to the current employees of the Corporate Debtor is Rs. 28,67,079.79. As the Corporate Debtor is maintained as a going concern, the SRA confirms that it will make payment of the gratuity liability as and when it will become due for payment.

g. Gratuity Treatment (current employees): Further, the SRA proposes to deposit a sum of Rs.29,00,000/- in a separate fund maintained with the Corporate Debtor to meet this liability as and when the same arises for payment. The Gratuity payable to any employee retiring/ resigning from the Corporate Debtor shall be computed as per the Payment of Gratuity Act, 1972, based on the entire tenure of the employee with the Corporate Debtor and paid at the time of retirement/ resignation of the employee.

h. Operational Creditor (Employees): The claims of Operational Creditors (Employees), which have been admitted amount to Rs. NIL as against total claim amount of Rs. NIL.

i.

Operational Creditors (Other than Workmen, Employees and Government Dues) : The claims of Operational Creditors (Other than Workmen, Employees and Government Dues), which have been admitted as per the IM amounts to Rs.5.12 Crores as against the total claim amount of Rs.6.46 Crores and the same shall be settled by making payment of Rs.2,00,000/- proportionately in the ratio of the admitted claims of such Operational Creditors. It is further proposed that the SRA will deposit this amount in an Escrow Account with the Corporate Debtor and the respective payments to various creditors can be made from this Account.

j. The individual payments to the respective Operational Creditors will be made proportionately in the ratio of the admitted claims of such Operational Creditors.

k. Further, the SRA has undertaken that in case any Operational Creditor is found to have a higher entitlement than the amount provided under the Resolution Plan, then such higher entitlement will be paid to the said Operational Creditor in the same ratio by the SRA.

Amount provided overtime under the Resolution Plan and includes the estimated value of non-cash components. It is not NPV.

Regulatory fee payable to IBBI in compliance with Regulation 31(A)(1) of CIRP Regulations (0.25% of the realizable value to creditors) i.e. Rs. 0.059 Crs., has been proposed by the SRA over and above the other amounts committed in the plan (amounting to Rs. 24 Cr) as mentioned at Page no. 15 of the Resolution Plan.

*There is no liability of any statutory authority falling under the category of Secured dues in the books of the Corporate Debtor, nor any claim has been filed by any such secured creditor. Therefore, the judgment passed by the Hon'ble Supreme Court in the matter of Rainbow papers does not apply to the present case. However, the SRA has undertaken that if any additional liability arises due to rainbow paper judgment, Resolution Applicant will bring additional resources to fund the same without affecting the amount payable to other creditors including financial creditors as envisaged in the Resolution Plan.

**No claim has been received against the gratuity of the ex-employees and the current employees of the CD. However, the SRA has proposed payment of full amount of the book liability against the dues of the gratuity. With regard to PF, claim was received belatedly and thus the same has been rejected. Thus, nothing has been provided for PF in accordance with the judgments.

* This is classified as Long term and short term in balance sheet. Re-grouping done for the sake of clarity only

“The Resolution Applicant shall identify and appoint suitable professional to manage the affairs of the company on a day-to-day basis, with the support of the Key Managerial personnel of the Company and with the guidance from the Board of Directors.”

“The term of the plan shall be the period in which amounts committed to be paid to Creditors under this plan are paid. In the present resolution plan, Resolution Applicant is proposing a period of 180 days from the effective date as term of the plan. The Plan shall be put into implementation immediately after the acquisition is complete on payment of settlement Amount or upon entering into of definite agreement of unpaid settlement amount. It is envisaged that an effective Implementation and Monitoring Committee (IMC) shall co-ordinate in implementation of the Resolution Plan by the Resolution Applicant. This Committee shall include two nominees from the Secured Financial Creditors/CoC representing the Secured Financial Creditors, to safeguard the interests of the Lender and two nominees from Resolution Applicant, and Present Resolution Professional. The Chairman of this Committee will be nominated by the nominees of the Resolution Applicant The RP shall handover the management control of the CD to the new board upon approval of the plan by Hon'ble NCLT. The new Board shall be responsible for the day-to-day affairs of the Corporate Debtor under supervision of the IMC till the date on which the Resolution Applicant fulfils all its obligations as proposed under the Resolution Plan, including the payment to the Financial Creditors and Board shall keep IMC informed on progress on implementation of plan from time to time. Vesting of ownership/control of Corporate Debtor in favour of Resolution Applicant shall be effective only after payment of the entire payment envisaged under the Resolution Plan by the Resolution Applicant and only post the receipt of the entire payment as envisaged under the approved Resolution Plan, the Monitoring Committee shall be dissolved."

"The Resolution Plan has been prepared after taking into consideration compliance of all applicable laws and regulations and does not contravene any of the provisions of the law for the time being in force."

"The resolution plan has been prepared taking every aspect into consideration so as to confirm to such other requirements as may be specified by Board."

(e)

Further, it has been ascertained that the Resolution Professional has duly received claims totaling Rs. 3,27,68,881/- from the Custom Department, and an additional claim in the amount of Rs. 3,50,470/- from the Income Tax Officer (TDS), Patiala. It is imperative to note that the aforementioned claims have been admitted in their entirety by the Resolution Professional.

(f)

It is pertinent to mention that the RP had received a claim of the EPFO department amounting to Rs. 14,02,699/- (PF dues + damages & interest+ Short deposits) with respect to the pre & post CIRP initiation period in form B dated 02.12.2023 which is after the approval of the Resolution Plan from the CoC and has been rejected therefore.

(g)

That there is no liability of any other Statutory Authority falling under the category of Secured dues in the books of the Corporate Debtor, nor any claim has been filed by such secured creditor. Therefore, the judgment passed by the Hon'ble Supreme Court in the matter of Rainbow Papers does not apply to the present case. However, the SRA has undertaken that if any additional liability arises due to the Rainbow Papers judgment, SRA will bring additional resources to fund the same without affecting the amount payable to other creditors including financial creditors as envisaged in the Resolution Plan.

(i)

Given that the Resolution Applicant will acquire control of the affairs of the Corporate Debtor on the Effective Date, all Government and Statutory Authorities (as they are Operational Creditors) to waive any financial penalties, or any other financial liabilities and dues that may arise from any defaults or non-compliances by the Corporate Debtor prior to the Effective Date of Applicable Laws, including but not limited to the provisions of the Companies Act, 2013, , Contract Labour (Regulation and Abolition) Act, 1970, all relevant and applicable labour laws, all relevant and applicable Direct and Indirect tax laws, the relevant stamp acts of the different States of India, relevant environmental laws and any other government instrumentality.

(ii)

The change in shareholding of the Corporate Debtor pursuant to the Resolution Plan shall not lead to lapse of any brought forward losses of the Corporate Debtor and provisions of Section 79 (2) of the Income Tax Act, 1961 are not applicable. The RA is allowed to carry forward and set off all the losses and specific directions be issued to the Jurisdictional and Principal Commissioner of Income Tax.

(iii)

The Resolution Applicant would have the right to renegotiate all the existing Agreements with all the clients as well as with vendors/contracts or with any other persons. All the benefits realizing out of this should accrue to the Applicant/ Corporate Debtor.

(iv)

The Resolution Applicant would have the right to renegotiate all contract. All the benefits realizing out of the contracts entered into by the Corporate Debtor should accrue to the Applicant.

(v)

As the Resolution Applicant is required to take over the Corporate Debtor's Business on a "going concern" basis, all consents, licenses, approvals, clearances, rights, entitlements, benefits and privileges whether under law, contract, lease or license, granted in favour of the Corporate Debtor or to which the Corporate Debtor is entitled or

(vi)

accustomed to, shall continue to remain valid, notwithstanding any provision to the contrary in their terms, and provided that in case of consents, licenses, approvals, rights, entitlements, benefits and privileges that have expired or lapsed, notwithstanding that they may have already lapsed or expired due to any breach, non-compliance or efflux of time, be deemed to continue without disruption, for the benefit of the Corporate Debtor, for a period of 12 (twelve) months from the Effective Date or such other period as required under Applicable Law.

(vii)

Credit in respect of minimum alternate tax paid by the Corporate Debtor shall continue with the Corporate Debtor on a going concern basis and shall be available for the benefit of the Resolution Applicant or the Corporate Debtor, as the case may be. The Corporate Debtor or the Resolution Applicant shall not, at any point of time, be held financially liable under the provisions in relation to the liability of the Corporate Debtor as per Section 170 of the Income Tax Act, 1961 in respect of any transaction carried out before the Effective Date or contemplated under the Resolution Plan or on account of any action taken pursuant to this Resolution Plan including acquisition of control by the Resolution Applicant over the Corporate Debtor pursuant to this Resolution Plan.

(viii)

In the interest of keeping the Corporate Debtor a going concern, unless otherwise specified in this Resolution Plan, all contracts and agreements shall continue to remain valid and notwithstanding any lapse, non-compliance, breach or expiry of underlying terms of such contracts and agreements, these contracts and agreements shall be deemed to continue without disruption for the benefit of the Corporate Debtor for their original tenure.

(ix)

All contractual arrangements (except for any contracts that vest property rights in the Corporate Debtor) entered into by the Corporate Debtor with the Related Party of the Corporate Debtor, including (including any contracts of employment or consultancy with, and any benefits, fees, commissions, perquisites or profits in lieu of or in addition to any salary or wages or any policy of providing such benefits, fees, commissions, perquisites or profits extended by the Corporate Debtor) shall be deemed to be terminated on and from the Hon'ble NCLT Approval Date. Any claims or financial liabilities arising as a consequence of any termination of such contracts till the Hon'ble NCLT Approval Date shall be cancelled and written-off on the Hon'ble NCLT Approval Date, and shall be permanently extinguished and written-off on the Hon'ble NCLT Approval Date.

(x)

The Resolution Applicant, or the Corporate Debtor shall not be liable to pay any Taxes (direct or indirect) whatsoever arising (directly or indirectly on such entity) as a result of the actions taken by the Corporate Debtor prior to the Effective Date or arising from the actions under this Resolution Plan. It may also be clarified that any Tax liabilities pertaining to any period or action prior to the Effective Date, whether assessed or un-assessed, by the relevant Government and Statutory Authority shall be deemed to have been extinguished and written-off on the Hon'ble NCLT Approval Date.

(xi)

All penalties and dues arising out of any short supply of power/unfulfilled contracts/quality issues in supply in the past or till the approval of Resolution Plan by the Adjudicating Authority shall be deemed to have been extinguished and waived off on the Hon'ble NCLT Approval Date. No liability shall accrue due to this and all benefits and deposits shall be refunded fore with to the Resolution Applicant.

(xii)

All financial liabilities (including any contingent claims) relating to any investigations, inquiries, show-cause notices, causes of actions, suits, claims, disputes, litigations, arbitrations or other judicial or regulatory or administrative proceedings shall be deemed to be extinguished and written-off.

(xiii)

Any and all other claims, rights and entitlements of any Person, including any actual or potential Creditors of the Corporate Debtor (including but not limited to all Financial Creditors, Operational Creditors, Other Creditors, and Government and Statutory Authorities and any person who may claim to be a creditor by way of exercise of rights under Applicable Laws or equity), whether or not such claims rights or entitlements (including any demand for any losses or damages, principal, interest, compound interest, penal interest, liquidated damages, and other charges already accrued/accruing or in connection with any third party claims) have been filed before the Resolution Professional or not, whether admitted by the Resolution Professional or not, whether or not set out in the Information Memorandum, the balance sheets of the Corporate Debtor or the profit and loss account statements of the Corporate Debtor, being due or contingent, asserted or unasserted, crystallized or uncrystallised, known or unknown, disputed or undisputed, in relation to any period prior to the Effective Date, shall be written-off and permanently extinguished with effect from the Effective Date. The Corporate Debtor or the Resolution Applicant shall at no point of time, directly or indirectly, have any obligation, liability or duty in relation thereto.

(xiv)

Financial Creditor will issue "No Dues Certificate" to the Resolution Applicant once all the payments envisaged in the Resolution Plan are made;

(xv)

Financial Creditors will ensure vacant possession of all immovable properties proposed to be acquired by the Resolution Applicant.

(xvi)

Extinguishment and write-off of any financial liabilities against the Corporate Debtor or the Resolution Applicant, including as result of the termination of any agreements by the Corporate Debtor.

(xvii)

Extinguishment and write-off all financial liabilities (including past liabilities) against the Corporate Debtor or the Resolution Applicant that may accrue due to non-compliance with any clearance issued by any Government and Statutory Authority.

(xviii)

Extinguishment of any other liability, investigations, inquiry pending against the Corporate Debtor due to non-compliance with any environmental clearance issued by any Government and Statutory Authority.

(xix)

The Corporate Debtor shall be entitled to carry forward and set off of all the accumulated Tax losses and unabsorbed depreciation of the Corporate Debtor in accordance with the returns of income filed under the Income-tax Act, 1961.

(xx)

All Disputes to be initiated against the Corporate Debtor (including those proceedings that relate to the Corporate Debtor) at any time till the Effective Date shall stand automatically abated, revoked, released, cancelled, withdrawn, dismissed and deemed null and void (as the case may be) and all financial obligations in relation to such Dispute shall be permanently extinguished on the Hon'ble NCLT Approval Date, after payments being made to any such Creditors if mandatorily required in accordance with the provisions of the Code.

(xxi)

All benefits and incentives, including but not limited to, under all such incentive schemes, subsidy schemes and policies that the Corporate Debtor is entitled under, and all such benefits shall remain vested in the Corporate Debtor with effect from the Effective Date;

(xxii)

On and from the Hon'ble NCLT Approval Date, by order of the Hon'ble NCLT sanctioning this Resolution Plan, a restraint on, and prohibition of, all Adverse Actions shall be deemed to be declared until the Effective Date;

(xxiii)

On and from the Hon'ble NCLT approval date by order or the NCLT any contingent liabilities past, existing or future arising out the past or existing contracts will come to an end. Resolution Applicant will not be liable and responsible for honouring those contingent liabilities, warranties, and claims of any nature whatsoever which have either arisen or will arise in future date due to conditions of the Contracts or by virtue of any court order.

(xxiv)

Resolution Applicant (RA) is proposing to acquire all the existing agreed debt of Secured Financial Creditors by way of settlement. The Resolution Applicant will make payment to the Secured Financial Creditors ("Secured Financial Creditors Payments"), as consideration for Corporate Resolution process under the IBC settlement of the Admitted Secured Financial Creditor Debt ("Admitted Secured Financial Creditors Debt Acquisition") from the Financial Creditors.

Post order of NCLT for Corporate Insolvency Resolution of Corporate Debtor acquisition, no additional claims can arise to the account of RA and all the rights of the secured financial creditors shall stand vested with the RA. All Admitted Secured Financial Creditors Debt shall be extinguished upon the approval of this resolution plan and consequent payment by the resolution applicant. The manner of distribution of the Secured Financial Creditor payments amongst the Secured Financial Creditors shall be pro-rata to the Admitted Secured Financial Creditor Debt.

(xxv)

Upon Secured Financial Creditor payments as per the value proposed in the Resolution Plan, neither the Corporate Debtor nor the Resolution Applicant shall have any liability to make any payments to any Secured Financial Creditor and all liabilities of the Corporate Debtor and the Resolution Applicant towards the Secured Financial Creditors shall be settled fully and finally, on and from Implementation Date. Upon completion of the Admitted Secured Financial Creditors Debt settlement, the Secured Financial Creditors shall have no further liability towards the Resolution Applicant or Corporate Debtor.

(xxvi)

All Governmental Authorities (including the Income Tax authority, Service Tax department and VAT department, GST department, Provident Fund, Employee State Insurance) to provide relief to the Corporate Debtor from all past litigations pending at different levels and provide waiver from tax dues/other dues including interest and penalty on such litigations as on the Approval Date. Further, all demands/ interest and penalty charged against the dues of the sales tax/VAT/GST authority a till date to be waived;

(xxvii)

The lenders (including Institutional Financial Creditors) to the Corporate Debtor shall regularise all the loan accounts of the Corporate Debtor and shall ensure that the asset classification of such loan account is "standard" in their books with effect from the Approval Date.

(xxviii)

The resolution applicant shall obtain the applicable approval, if 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 (1) of the Code or within such period as provided for in such law, whichever is later as per section 31(4) of the Code.

(xxix)

The approval of this Plan by the Hon'ble NCLT shall be deemed to have waived all the procedural requirements in terms of Section 66, Section 42, Section 62, Section 71 of the Companies Act, 2013 and relevant rules made thereunder, in relation to reduction of share capital of the Corporate Debtor, subscription of debentures by the Corporate Debtor.

(xxx)

All Governmental Authorities (including the Income Tax authority, Provident Fund, Employee State Insurance) to waive the non-compliances of the Corporate Debtor or further claims of the Governmental Authorities on the Corporate Debtor arising out of or in relation to the past claims or non-compliances, prior to the Approval date.

(xxxi)

All creditors (including the Institutional Financial Creditors and Operational Creditors) of the Corporate Debtor to withdraw all legal proceedings commenced against the Corporate Debtor in relation to Claims including proceedings under Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 and Recovery of Debt and Bankruptcy Act, 1993 and seek quashing of criminal proceedings including proceedings under section 138 of the Negotiable Instruments Act, 1881, within a period of 30 (Thirty) days of the Approval Date.

(xxxii)

Issuance of necessary direction to the concerned government authority for waiver of the stamp duty, registration charges, filing fees and other moneys payable to the government if applicable and in relation to this Resolution Plan and its implementation including settlement of loan agreement as is envisaged in this Resolution Plan but not limited to reduction of share capital of the Corporate Debtor, issuance of Equity Shares and documentation in relation thereto, to the extent permissible under Applicable Laws.

(xxxiii)

The Hon'ble NCLT be pleased to issue necessary directions to the local district administration of the respective states where the assets of the Corporate Debtor are situated to give assistance to the Resolution Applicant (s) for the implementation of the Resolution Plan, as and when required by the Resolution Applicants.

(xxxiv)

To direct the concerned Registrar of Companies to expeditiously associate, as per Applicable Laws, the Directors Identification Numbers (DIN) of the Directors who would be taking charge collectively as Board of Directors of the Corporate Debtor, pursuant to the approval of the Resolution Plan.

(xxxv)

The Government Authorities, Electricity Board/Electricity department of Punjab, and discoms will provide forthwith the electricity connection/reconnection after the acquisition of Corporate Debtor by the Resolution Applicant without payment of any dues related to the period up to the Effective Date to them by Corporate Debtor. The relevant authorities/departments of Punjab Government shall also issue no objection certificate/no dues certificate to the Corporate Debtor..

(xxxvi)

Entire land owned by the Corporate Debtor shall be deemed to be converted to NA (Non-Agriculture) without any further payment to any of the Government Authorities.

(xxxvii)

To grant all approvals under FEMA, RBI, PMLA or any other Act, Rules or Regulations for foreign investment or disinvestment or capital write-off upto the date of approval of the Resolution Plan, without any payment.

(xxxviii) All of any of the previous defaults reported to CIBIL, RBI, FEMA or any other authority/institution due to the corporate debtor to be corrected with 6 months from the date of approval of Resolution Plan.

(xxxix)

For such further or other relief/s be granted and/or directions be given as the Hon'ble NCLT may deem fit and proper in the facts and circumstances of the case and in the interests of resolution of the insolvency of the Corporate Debtor.

(xl)

The Collector of Stamps, Revenue Department of any state government and the Ministry of Corporate Affairs to exempt the Resolution Applicant and the Corporate Debtor, from the levy of stamp duty and fees applicable in relation to this Resolution Plan, its implementation, including any stamp duty applicable on the issue of shares by the corporate debtor.

(xli)

The relevant State Pollution Control Boards to approve renewal of the consents to establish/ operate obtained by the Corporate Debtor under applicable provisions of the Water (Prevention and control of Pollution) Act 1974, Air (Prevention and control of Pollution Act, 1981 and other applicable regulations.

(xlii)

The relevant Governmental Authorities to waive all past non-compliances of the Corporate under any applicable law, including but not limited to provisions of the Industrial Disputes Act 1947, the Factories Act ,1948 and the relevant Shops and Establishment Acts and any rules, circulars and regulations framed thereunder.

(xliii)

All Governmental Authorities to grant any relief, concession or dispensation as may be required for implementation of the transactions contemplated under the Resolution Plan in accordance with its terms and conditions.

(xliv)

All relevant Governmental Authorities (including, for the avoidance of doubt, the enforcement Directorate and the Serious Fraud Investigation Office, Central Bureau of Investigation (CBI) to not attach, take any other action including initiating criminal proceedings against or in respect of the Company, its subsidiaries and their respective assets and properties under the Prevention of Money Laundering Act 2002. Prevention Corruption Act,1988. The Companies Act,2013, the Indian Penal Code or any other similar Applicable Law dealing with fraud, money laundering or any other economic offences.

(xlv)

On and from the Hon'ble NCLT Approval Date, by order of the Hon'ble NCLT sanctioning this Resolution Plan, a restraint on, and prohibition of, all Adverse Actions shall be deemed to be declared until the Effective Date and in any case till the implementation of this Resolution Plan in full. All stakeholders shall be bound by the provisions of this Resolution Plan and such restraint and prohibition.

(xlvi)

On approval of plan by Hon'ble NCLT, the Resolution Applicant shall request the state and central governments to treat the operations of the Corporate Debtor as the New Industrial Unit or to allow the incentives available to new industrial units and/or sick industrial units under the latest Industrial Policy of the State Government as amended from time to time and consequently grant all the relief/ concession as available to a New Industrial Unit under the said scheme. However, the revival of the Corporate Debtor and/or implementation of the Resolution plan is not contingent of it.

(xlvii)

To withdraw any suits/ applications filed against Corporate Debtor by the Financial Creditors and any person/entity/whatsoever pending in any court of law and effect of suits/applications thereafter related to past events will be nullified after approval of plan.

(xlviii)

The Resolution Applicant will have the option to pre pay the dues of the Financial Creditors committed under this Resolution Plan, without any additional levies.

(xlix)

The Resolution Applicant will have liberty to change the name of the company and the approval of the State Government without any tax implications.

(l)

The resolution applicant will be exempt from section 41 of the Income Tax Act with respect to any Income which may arises due to write back of liabilities against the existing Brought Forward Losses and unabsorbed Depreciation pursuant to the Approval of the Resolution Plan.

(li)

On the approval of the Resolution Plan by Hon'ble NCLT, the Resolution Applicant shall be the sole beneficiary of any amount recovered by the Resolution Applicant post acquisition, previously written off by the corporate Debtor. Further, the Resolution Applicant shall have full right to recover/ proceed against the party, whose account is recoverable in the books of corporate debtor as on Effective Date and It shall be the sole beneficiary of the amount so recovered.

(lii)

Resolution Applicant has prepared this Resolution Plan with utmost care and due diligence in spite of that if in future any hidden financial liability towards discharge of any legal obligation, of any nature whether known or unknown, defined or non-defined, admitted or non admitted, arise on Resolution Applicant, the Resolution Applicant must be protected from such liability and must be allowed to approach Hon'ble NCLT for reliefs, if needed.

(liii)

Resolution Applicant request NCLT for Specific Order to the Financial Creditors to "UPGRADE" the Account of Corporate Debtor with Banks/FI under the CIBIL Mechanism to "Standard Category" from NPA on the approval of Resolution Plan by Hon'ble NCLT as per applicable RBI Guidelines so as to enable the New Promoter (Resolution Applicant) to revive the business of Corporate Debtor afresh and such action would enable the Resolution Applicant to quickly turn around the business.

I, Jalesh Kumar Grover, S/o Shri N R Grover, resident of H. No 1036, Sector 15, Panchkula – 134113, do hereby solemnly affirm and state that based on the CIBIL reports, data available on public domain and based on the 29A affidavit submitted by Successful Resolution Applicant, due diligence of the Successful Resolution Applicant – Mr. Rajesh Singla under Section 29A of the IB Code 2016 was conducted and the Successful Resolution Applicant was found eligible to submit Resolution Plan of Nexgen Laminators Private Limited. I further state as follows:

(a)

I state that based on the CIBIL reports, data available on public domain and based on Section 29A affidavit submitted by Successful Resolution Applicant, due diligence of the Successful Resolution Applicant i.e., Mr. Rajesh Singla under Section 29A of the IB Code 2016 was conducted and the Successful Resolution Applicant was found eligible to submit Resolution Plan of Nexgen Laminators Private Limited.

(b)

I state that in view of Section 240A (1) of the IB Code, 2016, the provisions of clauses (c) and (h) of Section 29A shall not apply to the Resolution Applicant (who is the promoter & director of the Corporate Debtor) in respect of Corporate Insolvency Resolution Process of any Micro, Small and Medium Enterprises. Therefore, the SRA, who is the promoter & director (power suspended) of the Corporate Debtor, being an MSME, is not barred under Section 29A clause (c) and/or (h) from submitting his Resolution Plan for the Corporate Debtor.

(c)

I state that I have examined the web portal of IBBI but no information /orders/ongoing matters were found in respect of the insolvency of the Successful Resolution Applicant (Mr. Rajesh Singla). On the basis of the search outcome, I believed that Mr. Rajesh Singla is not an undischarged insolvent.

(d)

I state that I have searched the web portal of different Tribunals/Courts and used the searched criteria to look out for any orders in the name of Mr. Rajesh Singla but no such information was found on any web portals of the tribunals/courts. Based on the said search outcome, I state that Mr. Rajesh Singla is not convicted of any offense.

(e)

I state that I have checked the website of the Ministry of Corporate Affairs, the list of disqualified Directors issued by the Ministry from time to time and the list of defaulter companies in complying with the provisions of the Companies Act,2013. No disqualification was found against Mr. Rajesh Singla. In accordance with the same, I state that Mr. Rajesh Singla is not disqualified to act as a director under the Companies Act 2013.

(f)

I state that I have searched the website of the Securities and Exchange Board of India but nothing negative was observed in the search results shown at the website. Based on the outcome, I state that Mr. Rajesh Singla is not prohibited by the Securities and Exchange Board of India from trading in securities or accessing the securities markets.

(g)

I state that I have searched the IBBI web portal and did not find any information to believe that Mr. Rajesh Singla is a promoter or in the management or control of a Corporate Debtor in which a preferential transaction, undervalued transaction, extortionate credit transaction or fraudulent transaction has taken place and in respect of which an order has been made by the Adjudicating Authority under IB Code 2016. However, an application under Section 43 of the IB Code, 2016, was filed, which has been disposed off on 02.09.2022, as a sum of Rs. 24.17 Lacs has been recovered from the Respondents and is maintained in the Bank Account of the Corporate Debtor opened for the CIRP proceedings and shall be for the benefit of all the creditors and shall be distributed as per Section 53 of IB Code, 2016.

(h)

I state that the deponent got conducted due diligence of the SRA from an independent professional with respect to the eligibility under Section 29A wherein no adverse opinion or observation was made against the SRA.

(i)

I state that apart from the above-mentioned search and examination of documents, I further made enquiry about Mr. Rajesh Singla through Google search Engine to look up for information that may impact their eligibility under section 29 A of IBC, 2016, but to the best of my knowledge and in accordance with information available in public domains, Mr. Rajesh Singla is not subject to any disability, corresponding to clauses (a) to (h) above, under any law in a jurisdiction outside India and further Successful Resolution Applicant do not have a connected person in respect of such person who meets any of the criteria specified in clauses (a) to (i) above.

I, Jalesh Kumar Grover, aged about 54 years, S/o Sh. N R Grover, resident of H No. 1036, Sector 15, Panchkula – 134113, do hereby solemnly affirm and state as follows:

(a)

I state that based on the CIBIL reports, data available on public domain and based on Section 29A affidavit submitted by Successful Resolution Applicant, due diligence of the Successful Resolution Applicant i.e., Mr. Rajesh Singla under Section 29A of the IB Code 2016 was conducted and the Successful Resolution Applicant was found eligible to submit Resolution Plan of Nexgen Laminators Private Limited.

(b)

I state that in view of Section 240A (1) of the IB Code, 2016, the provisions of clauses (c) and (h) of Section 29A shall not apply to the Resolution Applicant (who is the promoter & director of the Corporate Debtor) in respect of Corporate Insolvency Resolution Process of any micro, small and medium enterprises. Therefore, the SRA, who is the promoter & director (power suspended) of the Corporate Debtor, being an MSME, is not barred under Section 29A, clause (c) and/or (h) from submitting his Resolution Plan for the Corporate Debtor

(c)

I state that the Udhyog Registration number of the Corporate Debtor is UDYAM-PB-17-0000303. I have examined the web portal of MSME and checked the validity of the Acknowledged Entrepreneurs Memorandum and found that no proceedings for the cancellation of the same have been undertaken by the Authorities and the same is valid on the date of CIRP, i.e., 25.11.2019. Copy of the Udyam Registration Certificate is annexed herewith and marked as ANNEXURE A.

N/4/2020 Print : Udiyam Registration Certificate भारत सरकार Government of India शुल्क लघु एवं मध्यम उद्यम मंत्रालय Ministry of Micro, Small and Medium Enterprises UDYAM REGISTRATION CERTIFICATE Our small hands to make you LARGE TYPE OF ENTERPRISE MDI/UM MANUFACTURING UDYAM-PB-17-0000310 NAME OF ENTERPRISE M/S NEXGEN LAMINATORS PRIVATE LIMITED SOCIAL CATEGORY OF ENTREPRENEUR NA NAME OF UNITS Office/Block No. Nexgen Laminators Name of Pencilary/Building Nexgen Laminators Private Limited Voltage/From Taste Bahadurgarh Block Bohadragarh Road/Street/Lane Retired Milk Feed City Patiala State PUNJAB District PM/MLA, Pin 147031 Mobile N/7/0000302 Email [email protected] DATE OF INCORPORATION / REGISTRATION OF ENTERPRISE 04/01/2011 DATE OF COMMENCEMENT OF PRODUCTION/BUSINESS 04/01/2011 NATIONAL INDUSTRY CLASSIFICATION CODING NATIONAL INDUSTRY CLASSIFICATION CODING 04/01/2011 DATE OF UDYSAM REGISTRATION ENa NIC 2 Digis NIC 4 Digis NIC 5 Digis Activity 1 32 - Manufacturer of rubber and plastics products 2220 - Manufacturer of plastics articles for the painting of goods (plastic bags, tanks, containers, boxes, cases, cutboys, bottles etc) Manufacturing DATE OF UDYSAM REGISTRATION 22/07/2020 Disclaimer: This is computer generated statement, no signature required. Printed from https://udyamregistrations.gov.in For any assistance, you may contact:

1.

DIC PATIALA

2.

MSME-UI LUDHIANA pic://udyamregistrations.gov.in/Print/Application.aspx?ftid=0QuZTrUiyBattPdtL++laJain= BE A CHAMPION with the

The Committee took note of the same.

ITEM NO. 08:08

To take note of actions taken by Resolution Professional

The Chairperson apprised the members about the major actions taken by RP. The details are summarized as below:

“20.

The common submission thus, is that while interpreting Section 240A, the reason for carving out an exception in micro, small and medium industries is set out on the date of application for making the bid as the crucial date. The submission is that while for some other aspects the initiation of the CIRP proceedings would be the cut off date, the same would not apply in the case of Section 240A, in view of the statement by the Minister themselves while introducing the amendment Bill.

21.

We are inclined to accept the aforesaid plea as it is quite obvious that while seeking to protect this category of industries, the disqualification is not to be incurred, especially in view of the “notwithstanding clause”.

22.

We certainly can look to the statement of the Minister for purposes of a cut off date that “there is no other specific provision providing for cut off date” which submits that it should be the date of application of making a bid. Thus, to opine that it is the initiation of the CIRP proceedings which is the relevant date, cannot be said to reflect the correct legal view and thus, we are constrained to observe that the law laid down in Digambar Anand Rao Pigle (supra) case by the Tribunal is not the correct position in law and the cut off date will be the date of submission of resolution plan.”

As mentioned in the Resolution Plan, “The proceeds, if any, from such proceedings under Regulation 38(2) (d) shall be distributed amongst those creditors to whom some haircut has been applied in proportion of their remaining debt in compliance of Section 53. However, if this amount is in excess of the haircut amount, then such excess amount will be retained with the Corporate Debtor and will be used by it for working capital in any case this amount will not be kept by the Resolution Applicant.”

15.

Based on the review of the Forensic Audit Report and the underlying documentation relating to the relevant transactions, the Resolution Professional is of the view that the following transactions fall within the meaning of preferential transaction under Section 43 of the Code.

TRANSACTION: REPAYMENT OF UNSECURED LOANS

{PREFERENTIAL TRANSACTION U/S 43 (2)}

I. The summary of transactions covered under Sec 43(2) of IBC, 2016 as per the Forensic audit report is reproduced hereunder:

Sr. No.	Name of the person	Transactions	Amount (Rs. in lacs)	Page No. as per Report annexed
1	Mr. Abhinav Tiwari	Repayment of Unsecured Loan	12.55	254
2	Mr. Prem	Repayment of Unsecured Loan	8.82	274
3	Ms. Tanima Tiwari	Repayment of Unsecured Loan	1.36	283
4	Ms. Yogasvi Tiwari	Repayment of Unsecured Loan	1.44	284
TOTAL			24.17

XV. That in view of the above mentioned transactions:

a. It is pertinent to mention here that all the above mentioned transactions have been entered into by the Corporate Debtor through its directors i.e. Respondent No 1 and 2 during the relevant period defined under section 43 i.e. during the period of one year preceding the Insolvency Commencement Date thereby giving preference to above mentioned unsecured creditors over other Creditors of the Corporate Debtor, as mentioned in Section 43(4) (b) of the Code.

b. That the repayment of unsecured loans were preferential transactions as defined u/s 43(2) (b) of the Code as the unsecured creditors have been put into a beneficial position as they would have been in case of distribution of assets in accordance with section 53 of the code, since they are unsecured creditors and can receive their amount only after satisfaction of the claims of the Secured creditors and workmen & employees. Further it shall be noted that, liquidation value of the Corporate Debtor is not sufficient even for secured creditors.

XVI. That the repayment of the unsecured loan of approx. Rs.24.17Lacs to the unrelated partieshave been made during the prescribed relevant time which falls within the ambit of preferential transaction under Section 43(2)(b) of the Code. It may be noted that during the relevant period, the Corporate Debtor defaulted in the repayment to its secured creditor. However, it continued to make repayment of the loans availed from unsecured creditors, thereby putting them in a beneficial position than it would have been in the event of a distribution of assets being made in accordance with Section 53 of the Code, since unsecured creditors can receive the amount due to them only after satisfaction of the claims of the secured creditors and workmen & employees in terms of Section 53.

XXIV. That in view of the provisions of the Code and the Judgment passed by the Hon'ble Supreme Court, the aforementioned transactions occurred during the relevant time fall within the purview of preferential transactions in terms of Section 43 of the Code since the due to the said transactions incurred by the Corporate Debtor through its directors with the above mentioned unsecured creditors have been put in a beneficial position over the other creditors of the Corporate Debtor.

XXV. That based on the Transaction Audit report, the Applicant issued a letter to the suspended directors of corporate debtor on 16th July 2020 to pay the above said amount of Rs. 24.17 Lacs immediately, failing which Applicant shall be constrained to file an appropriate application with Adjudicating Authority. A copy of the letter issued by the applicant on dated 16th July 2020 to Respondent 1 is annexed herewith and marked as ANNEXURE-A-8.

XXVI. That the Respondent No.1 submitted their reply stating that the payment to the unsecured creditors were contractual payment which were made to avoid legal action since the Corporate Debtor had issued post dated cheques. Accordingly, the suspended management submitted that the payment made has not diluted the interest of secured creditors. Copy of the reply received from Respondent No. 1 is annexed herewith and marked as ANNEXURE- A-9.

XXVII. That the Applicant unsatisfied with the reply of Respondent No.1, again issued reminder letter dated 20th October 2020 requesting the suspended board to pay the above said amount of Rs. 24.17 Lacs immediately, failing which Applicant shall be constrained to file an appropriate application with this Hon'ble Adjudicating Authority. A copy of the reminder letter issued by the Applicant on dated 20th October 2020 to suspended management is attached herewith and marked as ANNEXUREA-10.

XXVIII. That in response to the above letter issued by the Applicant, Respondent No. 1 submitted in the 16th CoC meeting held on 21st December, 2020 that he is ready to pay back the above said amount in installments of Rs. 2 Lakh per month and in any case complete payment shall be made before approval of Resolution Plan by the Adjudicating Authority and the CoC members has not objected the request of Respondent No.1. Copy of the mail sent to Respondent No.1 and copy of reply received along with Copy of minutes of 16th CoC meeting dated 21st December, 2020 are annexed herewith and marked as ANNEXUREA-11(COLLY).

XXIX. It is submitted that the Respondent No.1 has paid Rs. 2,00,000/- for the month of January and February, 2021 respectively. That under Section 25(2) (j) of the Code, it is the duty of the Resolution Professional to file an application for avoidance of transactions in accordance with Chapter III of the Code. Accordingly, the Applicant in terms of duties mandated under the Code read with the underlying regulations is filing the present Application to report avoidance of transactions so that appropriate remedial and/or punitive action can be taken by this Hon'ble Adjudicating Authority.

XXX. That the present Application is made bonafide and in the interest of justice.

PRAYER

It is, therefore, most respectfully prayed that this Hon'ble Adjudicating Authority may kindly be pleased to:

a)

Allow the present application under Sections 43 and pass Order in terms of Section 44 of the Insolvency and Bankruptcy Code, 2016 against Respondents 1 to 6 to pay such amount in respect of benefit received by them from the Corporate Debtor; or

b)

In the alternative, allow the Applicant to accept the contribution made by Respondent No.1 and 2 and issue further directions, if any; and

c)

Pass any other order(s) as this Hon'ble Adjudicating Authority may deem fit.

“29A. Persons not eligible to be resolution applicant. - A person shall not be eligible to submit a resolution plan, if such person, or any other person acting jointly or in concert with such person-xxxxxxxxxxxxxxxxxxxx

(g)

has been a promoter or in the management or control of a corporate debtor in which a preferential transaction, undervalued transaction, extortionate credit transaction or fraudulent transaction has taken place and in respect of which an order has been made by the Adjudicating Authority under this Code: xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx”