State Bank of India vs Shree Padmawati Metaliks Private Limited

Per Bidisha Banerjee, Member (Judicial)

The instant application has been preferred by Vijendar Sharma, Resolution Professional of M/s. Shree Padmawati Metaliks Private Limited, the Corporate Debtor, under Section 30(6) of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as the “Code”), seeking approval of the Resolution Plan submitted by M/s. Hark Industries Private Limited, who has been declared as the Successful Resolution Applicant (“SRA”) by the Committee of Creditors (“CoC”).

The Resolution Plan was approved by the sole CoC member, State Bank of India, with 100% voting share in the 16^th CoC Meeting held on 27.08.2025, and the final approval was recorded on 08.01.2026. The present application has been filed on 30.01.2026 for approval of the said Resolution Plan in terms of Section 31(1) of the Code.

Prologue:

a. The present Interlocutory Application has been preferred under Sections 30(6) and 31 of the Insolvency and Bankruptcy Code, 2016 read with Regulation 39(4) of the CIRP Regulations, seeking approval of the Resolution Plan in respect of Shree Padmawati Metaliks Private Limited, the Corporate Debtor.

b. The Corporate Insolvency Resolution Process (CIRP) of the Corporate Debtor was initiated on 23.09.2024 pursuant to admission of the petition filed by the Financial Creditor. Consequent upon the initiation of CIRP, the Interim Resolution Professional was appointed and subsequently confirmed/replaced as Resolution Professional in accordance with law.

c. During the course of CIRP, Expressions of Interest were invited through publication of Form G on two occasions. The Resolution Professional issued the Information Memorandum along with addendums reflecting revised asset details, including clarification regarding land area available for resolution. It is pertinent to note that certain transactions relating to alienation of land parcels came to light during CIRP, leading to filing of applications under Section 66 and other relevant provisions of the Code.

d. The Resolution Plan submitted by M/s. Hark Industries Private Limited, the Successful Resolution Applicant, was placed before the Committee of Creditors. After due deliberations and evaluation in accordance with the approved Evaluation Matrix, the Committee of Creditors approved the Resolution Plan with 100% voting share (sole CoC member State Bank of India) in its meeting held on 08.01.2026.

e. The Resolution Professional has certified that the Plan complies with the requirements of Sections 30(2) and 30(4) of the Code and Regulations 38 and 39 of the CIRP Regulations. Performance security in terms of the Request for Resolution Plan has also been furnished by the Successful Resolution Applicant.

f. The present application, therefore, seeks approval of the Resolution Plan so approved by the Committee of Creditors, placing the same before this Adjudicating Authority for judicial scrutiny within the limited parameters prescribed under Section 31 of the Code.

Initiation of CIRP and Appointment of RP:

a. The Corporate Insolvency Resolution Process (CIRP) of Shree Padmawati Metaliks Private Limited, the Corporate Debtor, was initiated by this Adjudicating Authority vide order dated 23.09.2024 passed in C.P. (IB) No. 165/KB/2022 under Section 7 of the Insolvency and Bankruptcy Code, 2016. Upon admission of the petition, moratorium under Section 14 of the Code was declared and public announcement was directed to be made in terms of Section 15 of the Code read with Regulation 6 of the CIRP Regulations.

b. Consequent thereto, Mr. Vijender Sharma was appointed as the Interim Resolution Professional (IRP). The IRP made public announcement, invited claims from creditors, constituted the Committee of Creditors (CoC) after collation and verification of claims, and thereafter convened the first meeting of the CoC in accordance with Section 22 of the Code.

c. In the first meeting of the Committee of Creditors, the CoC resolved to appoint Mr. Vijender Sharma as the Resolution Professional (RP) to conduct the CIRP of the Corporate Debtor. The appointment was duly confirmed by this Adjudicating Authority. Thereafter, the Resolution Professional took over the management of the affairs of the Corporate Debtor in terms of Sections 17 and 23 of the Code and proceeded with the CIRP in accordance with the statutory framework.

Collations and Verification of Claims:

a. Pursuant to initiation of CIRP and in compliance with Section 15 of the Insolvency and Bankruptcy Code, 2016 read with Regulation 6 of the CIRP Regulations, the Interim Resolution Professional made a public announcement inviting claims from all creditors of the Corporate Debtor in the prescribed forms.

b. In response thereto, claims were received from Financial Creditors, Operational Creditors, and other stakeholders. The Interim Resolution Professional/Resolution Professional verified the claims in terms of Section 18(1)(b) and Regulation 13 of the CIRP Regulations on the basis of supporting documents, records available with the Corporate Debtor, information utility data, and other relevant materials.

c. Upon verification and collation of claims, the Committee of Creditors was constituted in accordance with Section 21 of the Code. It is recorded that State Bank of India is the sole Financial Creditor forming part of the Committee of Creditors and holds 100% voting share in the CoC.

d. The details of claims received, admitted, and rejected were duly placed before the CoC from time to time. The updated list of creditors, reflecting the amounts claimed and admitted, forms part of the record placed before this Adjudicating Authority.

e. The Resolution Professional has certified that the claims were collated and verified in accordance with the provisions of the Code and the CIRP Regulations and that the constitution of the CoC was carried out strictly in compliance with law.

f. The RP submits the amounts claimed and admitted are summarized below:

Evaluation of the Resolution Plan:

a. Pursuant to the constitution of the Committee of Creditors and in compliance with Regulation 36A of the CIRP Regulations, the Resolution Professional published Form G inviting Expressions of Interest (EOI) from prospective resolution applicants. The eligibility criteria and Evaluation Matrix were approved by the Committee of Creditors in accordance with Section 25(2)(h) of the Code and Regulation 36B.

b. Upon receipt of EOIs and subsequent issuance of the Request for Resolution Plan (RFRP), eligible prospective resolution applicants were provided access to the Information Memorandum and relevant data room documents. The Resolution Professional conducted due diligence under Section 29A of the Code to ascertain the eligibility of the prospective applicants.

c. The Resolution Plan submitted by M/s. Hark Industries Private Limited was received within the stipulated timeline and was examined by the Resolution Professional for compliance with Section 30(2) of the Code and Regulation 38 of the CIRP Regulations. The Resolution Professional placed the compliant plan before the Committee of Creditors along with his compliance certificate in Form H.

The Committee of Creditors evaluated the Resolution Plan in terms of the approved Evaluation Matrix, taking into consideration inter alia:

a. The feasibility and viability of the plan;

b. The financial proposal and upfront infusion;

c. The proposed distribution mechanism to stakeholders;

d. Compliance with statutory requirements;

e. Implementation schedule and monitoring mechanism;

f. The capability and financial strength of the Resolution Applicant.

After detailed deliberations in the CoC meetings, negotiations were undertaken, and modifications were sought to maximise value of the assets of the Corporate Debtor in line with the objectives of the Code.

Upon final evaluation and satisfaction regarding feasibility and viability, the Resolution Plan submitted by M/s. Hark Industries Private Limited was approved by the sole member of the Committee of Creditors, namely State Bank of India, with 100% voting share in its meeting held on 08.01.2026.

The Resolution Professional has certified that the Resolution Plan complies with the provisions of Section 30(2) of the Code, Regulation 38 of the CIRP Regulations, and does not contravene any provisions of law for the time being in force. The approved plan has therefore been placed before this Adjudicating Authority under Section 30(6) of the Code for approval under Section 31.

The Resolution Professional has examined the Resolution Plan submitted by Hark Industries Private Limited, the Successful Resolution Applicant (SRA), in light of the requirements stipulated under Section 30(2) of the Insolvency and Bankruptcy Code, 2016 and the relevant provisions of the CIRP Regulations. Upon such examination, the following compliances are recorded:

Financial Proposal:

In INR

a. In terms of Regulation 27 of the CIRP Regulations, the RP appointed registered valuers on 09.11.2024 and 28.08.2025, to determine the fair and liquidation value of the Corporate Debtor.

b. It is submitted that the members of the CoC had submitted an undertaking to the effect that it will maintain the confidentiality of the fair value and the liquidation value and shall not use such valuers to cause undue gain or undue loss to itself or any other person and comply with the requirements under 29(2) of the I&B Code.

c. The average fair value and the liquidation values obtained from the appointed Registered valuers and comparison with the realisable amount under the plan are as follows:

a. Upon hearing the submissions advanced by the Learned Counsel appearing on behalf of the Resolution Professional and upon perusal of the records and documents placed before this Adjudicating Authority in I.A. (Plan) No. 1/KB/2026, it is observed that the Revised Resolution Plan dated 20th June 2025, along with all addenda thereto submitted by the Resolution Applicant, has been placed on record. The said Resolution Plan was considered and approved by the Committee of Creditors with 99.72% voting share at its 36th Meeting held on 29th June 2025, and accordingly, the Resolution Applicant has been declared as the Successful Resolution Applicant (SRA).

b. It is further recorded that the Committee of Creditors, after due deliberation and evaluation, has found the Resolution Plan to be viable and feasible for revival of the Corporate Debtor. The Resolution Professional has certified that the Successful Resolution Applicant has complied with all procedural and statutory requirements necessary to render the Resolution Plan effective upon approval by this Adjudicating Authority.

c. From the record, it is noted that the Average Fair Value of the Corporate Debtor has been determined at Rs. 3,55,38,936/- and the Average Liquidation Value has been determined at Rs. 2,87,02,095/-, as per the valuation reports submitted in accordance with Regulation 35 of the CIRP Regulations.

d. During the course of hearing, Learned Counsel for the Resolution Professional submitted that the Resolution Plan complies with the provisions of the Insolvency and Bankruptcy Code, 2016, and the applicable provisions of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, and does not contravene any law for the time being in force.

e. Upon careful examination of the Resolution Plan, the compliance certificate in Form-H, and the documents placed on record, this Adjudicating Authority is satisfied that the Resolution Plan submitted by the Successful Resolution Applicant is in conformity with the requirements of Sections 30(2) and 31 of the Insolvency and Bankruptcy Code, 2016, and is compliant with Regulations 38 and 39 of the CIRP Regulations, 2016. Accordingly, the Plan meets the statutory parameters laid down under the Code for approval.

f. During the course of the hearing, the Learned Counsel for the Resolution Professional would submit that the Resolution Plan complies with all the provisions of the Insolvency and Bankruptcy Code, 2016, read with relevant Regulations of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 and does not contravene any of the provisions of law for the time being in force.

g. Upon perusal of the documents on record and/or documents, we are satisfied that the Resolution Plan submitted by Hark Industries Private Limited, is in accordance with sections 30 and 31 of the I&B Code, 2016 and also complies with regulations 38 and 39 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016.

As far as the question of granting time to comply with the statutory obligations or seeking approvals from authorities is concerned, the Resolution Applicant is directed to do so within one year from the date of this order, as prescribed under section 31(4) of the I&B Code.

We have perused the reliefs, waivers and concessions as sought in the Resolution Plan. It is evident that some of the reliefs, waivers and concessions sought by the Resolution Applicant come within the ambit of the I&B Code and the Companies Act 2013, while many others fall under the power and jurisdiction of different government authorities/departments.

This Adjudicating Authority has the power to grant only such reliefs, waivers and concessions that are directly in tune with the I&B Code and the Companies Act (within the powers of the NCLT). The reliefs, waivers and concessions that pertain to other governmental authorities/departments may be dealt with by the respective competent authorities/forums/offices, Government or Semi-Government of the State or Central Government concerning the respective reliefs, waivers and concession, whenever sought for. The competent authorities including the Appellate authorities may consider granting such reliefs, waivers and concessions keeping in view the spirit of the I&B Code, 2016 and the Companies Act, 2013.

It is almost trite and fairly well-settled that the Resolution Plan must be consistent with the extant law. The Resolution Applicant shall make necessary applications to the concerned regulatory or statutory authorities for the renewal of business permits and supply of essential services, if required, and all necessary forms along with filing fees etc. and such authority shall also consider the same keeping in mind the objectives of the Code, which is essentially the resolving the insolvency of the Corporate Debtor.

In this context, we would rely upon the judgment in Embassy Property Developments Pvt. Ltd. vs. State of Karnataka reported at MANU/SC/1661/2019: (2020) 13 SCC 308, wherein, the Hon’ble Apex Court has laid down that:

The reliefs sought for subsisting contracts/agreements can be granted, and no blanket orders can be granted in the absence of the parties to the contracts and agreements.

Concerning the waivers with regard to the extinguishment of claims which arose prior to the initiation of the CIR Process and which have not been claimed are granted in terms of the law laid down by the Hon’ble Apex Court in Ghanashyam Mishra and Sons Private Limited vs. Edelweiss Asset Reconstruction Company Limited reported in MANU/SC/0273/2021: (2021)9SCC657: [2021]13SCR737 that “once a resolution plan is duly

Further, the relevant part of the Ghanshyam Mishra Judgment (supra) in this regard is given below:

In this regard, we would also rely upon the judgement of the Hon’ble High Court of Rajasthan in the matter of EMC v. State of Rajasthan, Civil Writ Petition No. 6048/2020 with 6204/2020 reported in (2023) ibclaw.in 42 HC, wherein it has been inter-alia held that:

Thus, on the date of approval of the resolution plan by the Adjudicating Authority, all such claims, that are not a part of the resolution plan, shall stand extinguished and no person will be entitled to initiate or continue any proceedings in respect to a claim, which is not part of the resolution plan. The Hon’ble Supreme Court of India further laid down that all the dues including the statutory dues owed to the Central Govt, any State Govt or any local authority, if not part of the resolution plan, shall stand extinguished and no proceedings in respect of such dues for the period before the date on which the Adjudicating Authority grants its approval under Section 31 of the I&B Code could be continued.

Concerning the waivers sought in relation to guarantors, the Hon’ble Apex Court held in Lalit Kumar Jain v. Union of India reported in MANU/SC/0352/2021: (2021) 9 SCC 321: (2021) ibclaw.in 61 SC that the sanction of a resolution plan and finality imparted to it by Section 31 does not per se operate as a discharge of the guarantor's liability. As to the nature and extent of the liability, much would depend on the terms of the guarantee itself.

Further, in Maitreya Doshi vs. Anand Rathi Global Finance Ltd. reported in MANU/SC/1216/2022, the Hon’ble Apex Court laid down that:

Further, we would rely upon the judgment rendered by the NCLAT in Roshan Lal Mittal v. Rishabh Jain reported in (2023) ibclaw.in 803 NCLAT that:

Hence, we would infer that all the guarantees whether personal or corporate in nature, will not be redeemed by the virtue of the approval of this resolution plan. Thus, if there are any guarantors of the corporate debtor, the creditor(s) will invoke those guarantees and an appropriate action against them, as per law, be taken.

For the reliefs and waivers sought for all inquiries, litigations, investigations, and proceedings shall be granted strictly as per section 32A of the I&B Code, 2016 and the provisions of the law as may be applicable.

In this context, we would infer that upon the approval of the Resolution Plan, the Corporate Debtor avails the limbs of new management to revive its business. Thus, all the past liabilities of the Corporate Debtor including criminal liability prior to the initiation of the CIR Process shall stand effaced and the new management will step into the shoes of the company with a fresh or clean slate. Hence, the old management shall be liable to face all the offences committed prior to the commencement of the CIR Process. At this juncture, we would rely upon the judgment rendered by the Hon’ble Apex Court in Ajay Kumar Radheyshyam Goenka vs. Tourism Finance Corporation of India Ltd. reported in MANU/SC/0244/2023: (2023) 10 SCC 545 that:

Further, the Hon’ble High Court of Madras in Vasan Healthcare Pvt. Ltd. vs. The Deputy Director of Income Tax (Investigation), Unit 3(2) reported in MANU/TN/0243/2024: (2024) ibclaw.in 80 HC, (hereinafter referred to as ‘Vasan Healthcare Pvt. Ltd. I’) has held that:

Further, the Hon’ble Madras High Court in M/s. Vasan Healthcare Pvt Ltd v. M/s. India Infoline Finance Ltd, Crl O.P. No. 1772 of 2024, reported in (2024) ibclaw.in 700 HC, (hereinafter referred to as ‘Vasan Healthcare Pvt. Ltd. II’) has observed that:

Very recently, the Hon’ble Delhi High Court in Bhushan Power & Steel Limited v. Union of India in W.P. (CRL) 1261/2024, judgment dated 30.01.2025, has laid down that:

Further, in SREI Infrastructure Finance Limited vs. State of Tripura reported in MANU/TR/0474/2024, the Hon’ble High Court of Tripura has laid down that:

As far as the question of granting time to comply with the statutory obligations or seeking approvals from authorities is concerned, the Resolution Applicant is directed to do so within one year from the date of this order, as prescribed under section 31(4) of the I&B Code.

In case of non-compliance with this order or withdrawal of the Resolution Plan, the payments already made by the Resolution Applicant shall be liable for forfeiture.

In so far as the approval of the Resolution Plan dated submitted by KN Commotrade Private Limited (Successful Resolution Applicant) is concerned, this Adjudicating Authority is bound by the judgement of the Hon’ble Supreme Court of India in K. Sashidhar vs. Indian Overseas Bank and Ors. reported in (2019) 12 SCC 150: MANU/SC/0189/2019, wherein it is held that:

Further, the Hon’ble Apex Court in Jaypee Kensington Boulevard Apartments Welfare Association and Ors. vs. NBCC (India) Ltd. and Ors. reported in (2022) 1 SCC 401: MANU/SC/0206/2021 at Para 216, has laid down that:

Further, in Committee of Creditors of Essar Steel India Limited vs. Satish Kumar Gupta reported at (2020) 8 SCC 531: MANU/SC/1577/2019, the Hon’ble Apex Court has propounded that:

Reinforcing the above, the Hon’ble Apex Court in Vallal RCK vs. Siva Industries and Holdings Limited reported in MANU/SC/0753/2022, has held that:

In the present case, we note that the Resolution Plan submitted by Hark Industries Private Limited, the Successful Resolution Applicant, has been approved by the Committee of Creditors of the Corporate Debtor in its 16th CoC Meeting through voting by ballot paper, and thereafter formally approved on 08.01.2026 by the sole CoC member, State Bank of India, recording 100% voting share in favour of the Resolution Plan, as reflected in the voting results placed on record.

We further note from the record that the Letter of Intent (LoI) was issued in favour of the Resolution Applicant on 29.06.2025, which was duly and unconditionally accepted by Hark Industries Private Limited. It is also placed on record that the Successful Resolution Applicant has furnished the requisite Performance Bank Guarantee (PBG), including an amount of Rs. 13,50,000/- (as reflected at Page No. 544 of the application) and a further amount of Rs. 25,00,000/- (as reflected at Page No. 332 of the application), in compliance with the requirements of the Code and the CIRP Regulations. Accordingly, Hark Industries Private Limited stands declared as the “Successful Resolution Applicant”. In view of the above and considering the overall facts and circumstances of the case, this Adjudicating Authority finds no reason to interfere with the commercial wisdom exercised by the Committee of Creditors of the Corporate Debtor in approving the Resolution Plan.

In the light of the enumerations and observations made in this Order supra, we hereby APPROVE and FINALLY SANCTION the Resolution Plan submitted by Hark Industries Private Limited with a Plan Value of Rs. 58,52,00,000/- (Fifty Eight Crores Fifty-two Lakhs only) including Relisable amount of Rs. 3,15,00,000/-, CAPEX / WC of Rs. 55,00,00,000/- and CIRP Cost of Rs. 37,00,000/- and the details of the Resolution Plan for Financial Plan and Mandatory Payment compliance with the regulation 38 of the IBBI(Insolvency Resolution Process for Corporate Persons) Regulations, 2016 as stated in “Clause 5” of the Resolution Plan submitted by Successful Resolution Applicant namely Hark Industries Private Limited.

The Resolution Plan shall form part of this Order and shall be read along with this order for implementation. The Resolution Plan thus approved shall be binding on the Corporate Debtor and all other stakeholders involved in terms of Section 31 of the I&B Code, so that the revival of the Corporate Debtor Company shall come into force with immediate effect without any delay.

The Moratorium imposed under section 14 of the Code by virtue of the order initiating the CIR Process, shall cease to have effect from the date of this order.

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 them to the Resolution Applicant or New Promoters.

Liberty is hereby granted for moving any application, if required, in connection with the successful implementation of this Resolution Plan.

A copy of this Order is to be submitted to the Registrar of Companies (RoC) to whom the company is registered, by the Resolution Professional.

A copy of this Order be served upon the Insolvency and Bankruptcy Board of India (IBBI) by the RP.

We find that the Applicant has submitted in Form H that the Resolution Professional has opined and determined the existence of PUFE transactions within the timelines and appointed the Transaction Auditor also within the timeline. We would infer that approval of the Resolution Plan shall not affect the proceedings of the PUFE applications and the Resolution Professional shall continue to pursue those applications sans any barrier with the approval of the CoC of the Corporate Debtor upon communication to the SRA. We would refer to the judgment rendered by the Hon’ble Delhi High Court in Tata Steel BSL Vs Venus Recruiters reported at 2023/DHC/000257 wherein it is held that:

The Resolution Professional is further directed to hand over all records, premises/ factories/ documents to the Resolution Applicant to finalise the further line of action required for starting the operation. The Resolution Applicant shall have access to all the records/ premises/ factories/ documents through the Resolution Professional to finalise the further line of action required for starting the operation.

The Resolution Professional shall stand discharged from his duties with effect from the date of this Order. However, he is required to comply with our direction given in respect of PUFE application.

The Registry of this Adjudicating Authority is directed to send e-mail copies of the order forthwith to all the parties and their Learned Counsels for information and for taking necessary steps.

In view of the above directions, the interlocutory application I.A. (IB) (Plan) No. 1/KB/2026 along with C.P.(IB) No. 165(KB)/2022 stands disposed of accordingly.

Certified copy of the orders, if applied for with the Registry, be supplied to the parties upon compliance with all requisite formalities.