Sunpoint Trading Limited

The instant application being IA/04(AHM)2025 is filed on 07.02.2025 vide diary no. E00419 by the Applicant/Resolution Professional (Ms. Gomti Ramchandra Choudhary) of the Corporate Debtor – Sunpoint Trading Limited under Sections 30 and 31 of the Insolvency and Bankruptcy Code, 2016 (for short “Code”), read with Regulation 39(4) of the IBBI (Insolvency Process of Corporate Persons) Regulations, 2016 seeks the following prayers: -

Relevant facts as available in the Plan Application are summarized below:

a. Appointment of the IRP as Resolution Professional ('RP') of the Corporate Debtor.

b. Initiation of the EOI process and to fix the criteria under Section 25(2)(h) of the Code.

c. Reduction in the notice period from 5 days to 24 hours.

During the hearing on 21.02.2025, this Tribunal found some discrepancies in Form-H and directed the applicant to filed copies of RFRP and Information Memorandum as well as the copies of the claim Form/documents submitted by Income Tax Department. The relevant portion of the said order is reproduced hereunder:

In compliance of the order dated 21.02.2025, the Applicant has filed an additional affidavit on 20.03.2025 vide inward diary no. D1870 to place on record Revised Form-H as well as other relevant documents such as

a. Revised Form-H on account of discrepancy qua status of claims.

b. All relevant documents of notices along with any proof of delivery showcasing convening of the CoC meeting in which Resolution Plan came to be approved;

c. Copy of Information memorandum, Copies of Request of Resolution Plan (RFRP);

d. Copy of claim form along with documents submitted by the Income Tax Department and

e. Issuance of Notice upon the Income Tax Department along with proof of service.

It is seen that the Applicant has filed an additional affidavit on 01.04.2025 vide inward diary no. D2174, in compliance of the order dated 21.03.2025 wherein this Tribunal had directed the Applicant to serve notice upon the Income Tax Department through registered post and other modes. The relevant portion of the order is reproduced as under:

In compliance of the aforesaid order, the Applicant filed an additional affidavit on 21.04.2025 vide inward diary no D2611 as a convenience proforma.

This Tribunal vide order dated 22.04.2025 directed the Applicant to file 29A declaration and proof of the net worth on the SRA as well as source of funding towards the implementation of the plan. The relevant portion of the said order is produced as under:

In compliance of the order dated 22.04.2025, the Applicant filed an additional affidavit on 02.06.2025 vide inward diary no. D2972 to place on record revised affidavit of declaration of compliance u/s 29A of the IBC along with DIN numbers on the accounts of certain discrepancies. The contents of the affidavits are produced as under:

However, vide order dated 05.05.2025 this Tribunal further observed as under:

Therefore, the applicant complied with the order dated 05.05.2025 by filing the revised affidavit on 02.06.2025 vide inward diary no. D-2972 as well as another affidavit of compliance qua 29A through inward no. D3401.

On 24.06.2025, during the hearing, the applicant counsel sought indulgence to file a revised Form-H provided by the IBBI in terms of fresh notification issued in the month of April, 2025, along with convenience compilation chart of the consolidated summary of the pleadings. The relevant portion of the said order is reproduced as under:

Thereafter, the Applicant filed an additional affidavit on 14.07.2025 vide inward diary no. D4674 in compliance with the above mentioned order. The contents as reproduced as reproduced as under:

As per clause 6 of the Resolution Plan, the summary of proposal is as under: -

The Resolution Applicant has provided with an estimate of the CIRP costs at Rs.15,00,000/- which shall be paid in full and priority as per the provisions of the Code and in case it exceeds the said amount the said amount shall be adjusted from payment to other creditors subject to total outflow not exceeding Rs.27,00,000/- to all the creditors of the corporate debtor.

Pursuant to Regulation 38(1A) of CIRP Regulation, The Resolution Applicant is submitting The Resolution Plan which takes care of interest of all the stakeholders. A brief snapshot of financial proposal for settlement of all the creditors of corporate debtor is as under:

As per 9.1 and 9.2 of the Resolution Plan, Infusion/ Source of Funds are as under: -

From the date of NCLT Order approving the Resolution Plan the Resolution Applicant is proposing a plan size of Rs 52,00,000/- for the Resolution of the Corporate Debtor. Out of the entire resolution plan, a sum of Rs. 25,00,000/- shall be paid by subscription to 2,50,000 equities of Rs. 10/- (Rs. Ten only) each. Remaining Rs 27,00,000/- shall be paid as loan, which shall be interest free for nine months and thereafter shall have option to convert into the equity shares of equal amount as per market value and Rs 25,00,000/- as working capital. All Infusion in the Corporate Debtor shall be from Special Purpose Vehicle either to be formed or through the existing entity such as Partnership firm or a private limited company or a public limited company as the case may be.

As per Clause 4.9 of the Resolution Plan, the Board of Directors is as under: -

Following table contains the core skills/expertise/competencies identified by the board of directors as required in the context of its business(es) and sector(s) for it to function effectively and those actually available with the Board after the approval of Resolution Plan

As per Clause 12 of the Resolution Plan, the Term and timeline under the Resolution Plan is as under: -

Resolution Applicant proposes to implement the Resolution Plan in following milestone –

As per Clause 11.1 of the Resolution Plan, the Monitoring Committee and the Supervision of Implementation of the Resolution Plan is as under: -

- The Form G titled, (Invitation for Expression of Interest for Sunpoint Trading Limited dated 01.10.2024 stated that the company does not have any fixed assets, and has no manufacturing unit and no business operations. There are no employees other than a company secretary.

- Information relevant to the present proceedings, as available in the audited accounts of the CD for the financial year 2023-2024, is given below (the RP provided the information based on the directions issued by this Tribunal)

- The share capital of the company as on 31.03.2024 and 31.03.2023 was Rs 303.34 lacs. The name of the shareholder holding more than 5% shares and promoters are disclosed which are as follows:

(In Lacs)

- Reserves and surplus of the company as on 31.03.2024 and 31.03.2023 were Rs -408.89 lakhs and Rs -253.21 lakhs respectively. The bifurcation of reserve and surplus are as such General Reserve of Rs. 77.08 lakhs, Statutory Reserve 0.00 and Retained Earnings of Rs. (-) 485.96 for the year 31.03.2024 and General Reserve of Rs. 0.65 lakhs, Statutory Reserve 76.43 lakhs and Retained Earnings of Rs. (-) 330.29 for the year 31.03.2023. The retained earnings in negative indicates the accumulated business loss.

- Long-term borrowings respectively as on 31.03.2024 and 31.03.2023 were Rs. 131.77 lakhs and NIL. - There was no borrowings as on 31.03.2023. The Unsecured financial creditor, Jhavery Trading and Investment (P) Ltd. Provided a loan of Rs 1,25,00,000 and later filed application under section 7 on 2.4.2024. - Tangible assets were of Rs 1.58 lakhs and Rs 12.06 lakhs respectively as on 31.03.2024 and 31.03.2023. - Other Non-Current Assets were of Rs 0.51 lakhs as on 31.03.2024 and 31.03.2023. - Current assets comprising current investments, cash and cash equivalents, short-term loans and advances, and other current assets were of Rs 2.70 lakhs and Rs 154.60 lakhs, respectively, as on 31.03.2024 and 31.03.2023.

- As on 31.03.2024 and 31.03.2023, respectively the Company had a loss before tax of Rs 165.08 lakhs and 416.06 lakhs. - The company made nil revenue from Operations in the FY 2023-2024 and 2022-2023.

Similarly, the information for the financial year 2021-2022 is given below:

- The share capital of the company as on 31.03.2022 and 31.03.2021 was Rs 303.34 lakhs. - Reserves and surplus of the company as on 31.03.2022 and 31.03.2021 were Rs 155.89 lakhs and Rs.194.13 lakhs, respectively. - Tangible assets were of Rs 15.98 Lakhs and Rs. 19.26 Lakhs respectively as on 31.03.2022 and 31.03.2021.

- Current assets comprising of current investments, cash and cash equivalents, short term loans and advances, and other current assets were of Rs 430.27 lakhs and 341.66 lakhs respectively as on 31.03.2022 and 31.03.2021. - As on 31.03.2022 and 31.03.2021 respectively the Company had total revenue of Rs.51 Lakhs and Rs.235.04 lakhs. - As on 31.03.2022 and 31.03.2021 respectively, the company had total expenses of Rs 79.11 lakhs, and Rs. 212.41 Lakhs. - As on 31.03.2022 and 31.03.2021, respectively the Company had a Profit/loss before tax of Rs (73.62) lakhs and 0.10 lakhs.

Jhaveri Trading and Investment Private Limited granted Inter Corporate Deposit loan facility (for short “ICD”) of Rs. 1,25,00,000/- through Sanctioned letter dated 25.02.2023 to the Corporate Debtor i.e. M/s Sunpoint Trading Limited.

As the loan was not repaid by the CD, the FC filed application under section 7 of the IBC and the Corporate Debtor replied that, “We would like to inform you that due to volatility and downfall of market for the purpose of non-payment of financial debt” and “the Respondent admits to having defaulted in repaying the financial debt in question”.

The RP has not submitted a copy of valuation reports with this Tribunal and only submitted that one valuer, namely Janak Jagivan Shah, had valued the fair value of the CD at Rs. 10,10,382/- and Liquidation Value of Rs. 94,812/-. Another valuer was Mr. Manish Buchasia who valued the CD at fair value of Rs. 12,49,052/- and Liquidation Value of Rs. 1,12,052.

No information on the assets valued is provided. It appears that these were cash and bank balances, financial assets and investments. It is unclear whether the valuation reports were also sought by the sole CoC member to understand the net worth of the CD.

The Resolution Plan seeks various waivers and concessions. Some of these waivers and concessions sought have no nexus with the real facts and ground situation of the Corporate Debtor.

The Plan states that avoidance transactions if any under Chapter III or fraudulent transactions will be pursued by the RA. This indicates that the RP has not informed and CoC has not considered that no such avoidance transactions or fraudulent transactions have been identified as no transaction auditor was appointed.

The Resolution Plan states that the name of the Corporate Debtor was changed to Sunpoint Trading Limited from SUN Finlease (Gujarat) Limited on 10.11.2023. The Corporate Debtor is owned 23.61% by the promoters and 76.39% by Public.

A total claims of Rs 16,83,22,347 were received by the RP and that included Rs 15,36,21,163 from the Income Tax Department (Government Dues). Claims of the operational creditors include that of Bombay Stock Exchange, SEBI, NSDL, CSDL etc. (Page 167 of the Plan Application).

The Plan provides a total payout of Rs 27,00,000 and it states that this amount will be used as decided by the RP in consultant with the CoC member. The plan states that estimated CIRP cost as provided by the RP is Rs 15,00,000.

On being requested by this Tribunal, the Rp has provided copy of income tax assessment orders incase of CD. An addition of Rs 5,00,00,000 was made to the income of the CD for Assessment Year 2018-2019. For Assessment Year 2015-2016, the total income was determined at Rs 12,74,99,391 and additions of more than Rs 12 cores were made and most of these additions are on account of transactions covered by fraudulent transactions and the promoters could have benefitted by these transactions and money was taken out of the CD. Still, the CoC did not propose carrying out the transaction audit.

The cash flow statement for the year ended 31.03.2023 shows that the company had sold fixed assets for Rs 16.76 lakhs and accordingly there were no fixed assets on the date of issue of Form G. The company also sold financial instruments in the year ended 31.03.2023 and net loss on such instruments was Rs 353.14 lakhs. Indicating that the Corporate Debtor sold most of its assets in the year 2022-2023 before the start of the CIRP but neither the RP nor the CoC took note of it. The company suffered a loss of Rs 409.09 lakhs in the year 2022-2023.

There has been no revenue from the operations during financial years 2022-2023 and 2023-2024.

The balance sheet for the year ending 31.03.2024 shows that the company has a cash and bank balance of Rs 0.66 lakhs, deferred tax asset of Rs 22 lakhs, investments of Rs 0.51 lakhs, and other current assets of Rs 1.53 lakhs. The company had borrowings of Rs 131.77 lakhs as on 31.03.2024 which was nil as on 31.03.2023.

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

- The Corporate Debtor had availed the ICD loan of Rs 1,25,00,000 from one M/s Jhaveri Trading and Investment Private Limited. The agreement between parties is of 27.02.2023 and the disbursements are stated to be on 27.02.2023 of Rs 50 lakhs, on 28.02.2023 of Rs 50 lakhs, and Rs 25 lakhs on 4.3.2023. This borrowing is shown as Rs 125 lakhs in the balance sheet as on 31.03.2023. - The facts stated above in the orders show that the company had no business during the year 2022-2023 and sold its remaining fixed assets in the year. - Jhavery Trading and Investment (P) Ltd is the only member of the CoC. The Corporate Debtor has no loans from any part except this creditor.

- The information available on the record does not show the purpose for which this loan received was used. No transaction audit (for determining avoidance or fraudulent transactions) has been carried out in the case. As per the revised Form H, the fair value of the CD is Rs 11,29,717 and Liquidation value is Rs 1,03,432. - The Financial Creditor, namely Jhaveri Trading and Investment Private Limited, had filed the application under section 7 of the IBC, 2016, against the CD on 02.04.2024. - The information on various assets and liabilities as noted in the balance sheet of the CD as on 31.03.2021, 31.03.2022, and 31.03.2023 and 31.03.2024 is noted in this order. There are huge liabilities, and surprisingly, none have made any claims against the CD. The CD also did not make any claims or recover any amount. - The CD has practically no business prior to the admission to the CIRP, and also not during the period of the CIRP. - The CD has no assets (no factory, no office, or other premises) as on 30.09.2024, and it has only financial assets, and those are valued at liquidation value of less than one lakh. - The CD had no employees at the time of admission of the CD in the CIRP, and during the CIRP and at present, the CD has no employees. - The CD has a huge business loss (indicated by the negative reserves and surplus of Rs 408 lakhs as on 31.03.2024) However, this asset is not valued.

- The Plan provides that the RA will contribute Rs 27,00,000 in the form of a loan and this will be used to pay CIRP cost of Rs 15,00,000 and a balance of Rs 12, 00,000 will be used to pay lone creditor i.e. Jhavery Trading and Investment Private Limited.

- The Income Tax Department made a claim of Rs 15,36,21,163 but there is nothing on the record about due diligence carried out by the CoC about reasons of this tax demand. Rs 12,00,000, out of plan payment of Rs 27,00,000, is proposed to go to the unsecured financial creditor (who gave loan) and who was the sole CoC member. The RP admitted claims of Rs 8,65,47,963 for the Income Tax Department.

- The Resolution Applicant has proposed to infuse an amount of Rs 25 lakhs in the equity of the company.

- The total realizable amount under the plan is Rs 27,00,000 and only Rs 12,00,000 will be available to meet the claims from the unsecured financial creditors. Less than 1% will be realized out of total claims received by the RP. No other claimants including the Income Tax Department will get anything.

- The revised Form H provides that the CD has a business loss of Rs 4,60,76,225 and unabsorbed depreciation of Rs 7,98,557 and these amounts are available for carry forward under section 79 (2) (c) of the Income Tax Act, 1961.

- No transactions under sections 43, 45, 50, and 66 are identified and this is a failure of CoC and RP considering the fact that the company had a tax demand of more than Rs 15 crores. The CD took a loan of Rs 1.25 crores when it had no business and within a year the same lender filed the application under section 7 and became the sole CoC member.

- The Records indicated that the suspended board of directors never attended any CoC meetings.

The CoC appears to have no idea about the business of the CD and it never asked any questions or raised any doubts about the transactions undertaken by the CD. The CD was neither subjected to any forensic audit nor the transaction audit nor were the transactions referred to any auditor for identifying the preferential transactions under section 43, undervalued transactions under section 45, extortionate transactions under section 50, and fraudulent transactions under section 66 of the IBC, 2016.

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

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

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

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

We note that, as far as the amounts provided by the RA in the Plan are concerned. It provides for the utilization of Rs 27,00,000. Rs 15,00,000 will be used to meet the CIRP cost. Balance of Rs 12,00,000 will be paid to the sole CoC member against the claim amount of Rs 1,46,59,589. Nothing will be paid to the Income Tax Department having claims of Rs 15,36,21,163. There is an operational creditor for Rs 41,595 who will also not get anything. It is noted that the fair value of financial assets is Rs 11,29,717.

There is nothing in the plan for effective implementation of the plan except the receipt of Rs 27,00,000 and utilization of the same. In the case of the CD, the plan does not benefit anyone except the CoC member sold. The CD has no other stakeholders like employees or customers who will benefit. In fact, there is nothing in the plan that provides for insolvency resolution of the CD or revival of the CD. The CD has already sold all the assets even during the year 2022-2023. It is obvious because there is nothing in the CD except its name, business losses, and financial assets having liquidation value of about Rs 1.03 lakhs. From the revised Form-H it is clear that the company has carry forward losses as per ITR for F.Y 2023-2024 are as such Business Losses: Rs. 4,60,76,225 and Unabsorbed Depreciation: Rs. 7,98,557. The case has potential of misuse of the business losses and long-term capital loss for income tax purposes. This concern arises under Section 79 of the Income Tax Act, 1961, which restricts carry-forward of losses upon change in shareholding exceeding 51%, unless exempted for IBC resolutions.

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

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

The facts suggest that there is no business of the CD, no employees, no assets (other than financial assets which are valued), the remaining fixed assets are sold in the year 2022-2023. The CD took a loan of Rs 1.25 crores at the time when it was selling all the assets and even changed its name.

These facts raise serious doubts about the whole CIRP process initiated based on the application of Jhavery Trading and Investment Private Limited. The whole exercise suggests accommodation or collusive arrangement with the sole purpose of helping the CD get benefits of reliefs and concessions under Section 32A of the IBC, 2016 and raises concerns about its alignment with the IBC's objective of genuine insolvency resolution.

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

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

The RP has not filed any IA before this Tribunal regarding non-co-operation from the CD. The RP has neither proposed nor has any initiative taken by the CoC for identifying the avoidance transaction.

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

Commercial wisdom of the CoC: The role of CoC is questionable. The decision of the CoC to approve everything put up to it with a 100% majority and without raising any pertinent questions/clarifications on anything during the whole CIRP indicates a behavior not of prudent decision makers and at arm's length. The CoC's approval of the resolution plan with a 100% majority, without questioning significant transactions undertaken and particularly of selling the assets by the CD just prior to taking loan. Such failure to exercise due diligence violates the CoC's duty to maximise value under Section 30(4) and undermines the IBC's objectives. The facts indicate that their decisions were motivated with the sole intention of getting the approval of this Tribunal and getting all types of benefits, reliefs and concessions available due to the approval of the plan to all involved in the transactions. There appears to be no intention to resolve the insolvency, as the CD has no ongoing business and no party is interested other than the sole CoC member.

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

In view of the facts discussed above, the CoC not only acted in a "capricious, arbitrary, irrational" manner but also approved the plans that contravene the provisions of IBC and the Regulations. In that regard, the CoC has failed to exercise its commercial wisdom in deciding on the Resolution Plan, which, in a real sense, does not take into account the ground realities of the CD and is not commercially feasible and viable. It does not lead to value maximisation from the assets of the CD.

Therefore, we are of the view that the resolution plan has no provisions for its effective implementation as required by Section 31 (1) of the IBC, as there is nothing in the plan except payment to CoC member of Rs 12 lakhs and meeting of CIRP cost of Rs 15 lakhs.

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

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

The plan lacks financial depth and strategic clarity to justify its feasibility and viability, as it provides no business projections to revive the Corporate Debtor, which has no ongoing operations, employees, or plant and machinery. Moreover, there is no demonstrable vision to restart the business of the CD and no capability is shown on the part of the Resolution Applicant to implement the plan. In fact, does not provide any information on the business projections of the CD and how will it be achieved.

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

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

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

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

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

The Hon'ble Supreme Court in the case of Ramkrishna Forging Ltd. (Supra), in paragraph 29 referred to the decisions in the cases of Innoventive Industries Ltd. v. ICICI Bank Ltd. [2017] 84 taxmann.com 320/ 1 SCC 407 and Swiss Ribbons (P) Ltd. v. Union of India [2019] 101 taxmann.com 389/4 SCC 17 in which it was explained that the Code was specifically introduced by the Parliament for ensuring quick and time bound resolution of insolvency of corporate entities in financial trouble, by first attempting to revive the Corporate Debtor, failure whereof would entail liquidation of the corporate debtor's assets.

As a consequence, following the rejection of the resolution plan under Section 31(2) for non-compliance with statutory requirements, and given the mandatory requirement under Section 33(1)(b) to initiate liquidation upon failure to approve a resolution plan within the CIRP period (expired on 25.02.2025), the Tribunal orders the liquidation of the Corporate Debtor to maximize creditor value and conclude the insolvency process.

Considering that not much work/process is involved in the liquidation of this case, we direct that the RP continue as the liquidator.

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

Considering that, the CD has only a few financial assets and these can be sold easily. The liquidator is directed to complete the process at the earliest and file an application for the dissolution of the CD. The Liquidator, in consultation with the Stakeholders' Consultation Committee shall determine the mode of sale under Regulation 32 of the Liquidation Regulations, ensuring no misuse of tax benefits under the Income Tax Act, 1961. He shall sell the assets and the CD should not be sold as a going concern or business as a going concern to avoid the misuse of the tax losses.

Accordingly, IA (Plan) No. 04 of 2025 in CP(IB) No. 149 of 2024 stands dismissed and disposed of.

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