Umesh Harjivandas Ved vs Sadbhav Enterprises Pvt Ltd

"2.

The details of the CIRP are as under:

Sl. No.	Particulars	Description
1	Name of the CD	Sadbhav Enterprises Pvt. Ltd.,
	Date of Initiation of CIRP	19.09.2017
	Date of Appointment of IRP	19.09.2017
	Date of Publication of Public announcement	22.09.2017
	Date of Constitution of CoC	10.10.2017 13.10.2017 (Revised) 22.11.2017 (Revised)
	Date of Constitution of CoC	17.10.2017
	Date of Appointment of RP	11.06.2018 (5th CoC meeting)
	Date of Appointment of Registered Valuers	03.10.2017
	Date of Issue of Invitation for ROI	08.10.2018 (Original) 24.11.2018 (Revised)
	Date of Final list of eligible prospective resolution applicants	15.11.2018 (Original) 02.01.2019 (Revised)
	Date of invitation of Resolution Plan	06.11.2018 (Original) 23.12.2018 (Revised)
	Late date of submission of Resolution Plan	06.12.2018 (Original) 21.01.2019 (Revised)
	Date of approval of Resolution Plan by CoC	31.05.2019 (Pt. 22 in Application)
	Date of filing of Resolution Plan with Adjudicating Authority	07.06.2019
	Date of Expiry of 180 days of CIRP	18.03.2018
	Date of order extending the period of CIRP	10.04.2018
	Date of Expiry of extended period of CIRP	16.06.2018
	Fair value	Rs.18,12,15,195.00
	Liquidation Value	Rs.18,12,15,195.00
	Number of meetings of CoC held	18

It is certified that –

i.

The said Resolution Plan complies with all the provisions of the Insolvency and Bankruptcy Code 2016 (Code), the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (CIRP Regulations) and does not contravene any of the provisions of the law for the time being in force.

ii.

The Resolution Applicant (Kataria Automobiles Pvt. Ltd.) has submitted an affidavit pursuant to Section 30(1) of the Code confirming its eligibility under Section 29A of the Code to submit Resolution Plan. The contents of the said affidavit are in order.

iii.

The said Resolution Plan has been approved by the CoC in accordance with the provisions of the Code and the CIRP Regulations made thereunder. The Resolution Plan has been approved by 74.8526% of voting share of financial creditors after considering its feasibility and viability and other requirements specified by the CIRP Regulations.

iv.

The voting was held in the meeting of the CoC on 30.05.2019 where present members of the CoC voted.

The list of the Financial Creditors of the CD Sadbhav Enterprises Pvt. Ltd., being members of the CoC and distribution of voting share amount them is as under:

Sr. No.	Category of Stakeholders	Sub-category of Stakeholder	Amount Claimed	Amount admitted	Amount provided under the Plan#	Amount provided to the amount claimed (%)
(1)	(2)	(3)	(4)	(5)	(6)	(7)
1	Secured Financial Creditors	(a)Creditors not having a right to vote under sub-section (2) of section 21	N.A.	N.A.	N.A.	N.A.
		(b)Other than (a) above : (i)who did not vote in favour of the Resolution Plan (ii)who voted in favour of the Resolution Plan	(i)N.A. (ii) 8,89,23,428	(i)N.A. (ii) 8,89,23,428	(i)N.A. (ii) 8,89,23,428	(i)N.A. (ii)100%
		Total[(a)+(b)]	8,89,23,428	8,89,23,428	8,89,23,428	100%
2	Unsecured Financial Creditors	(a)Creditors not having a right to vote under sub-section (2) of section 21	N.A.	N.A.	N.A.	N.A.
		(b)Other than (a) above :	(i)61,53,998 (ii)	(i)61,53,998 (ii)	(i)61,53,998 (ii)	(i) 100% (ii) 100%

6.

The Resolution Plan includes a statement under regulations 38(1A) of the CIRP Regulations as to how it has dealt with the interests of all stakeholders in compliance with the Code and regulations made thereunder.

7.

The amounts provided for the stakeholders under the Resolution Plan is as under:

Sr. No.	Category of Stakeholders	Sub-category of Stakeholder	Amount Claimed	Amount admitted	Amount provided under the Plan#	Amount provided to the amount claimed (%)
(1)	(2)	(3)	(4)	(5)	(6)	(7)
1	Secured Financial Creditors	(a)Creditors not having a right to vote under sub-section (2) of section 21	N.A.	N.A.	N.A.	N.A.
		(b)Other than (a) above : (i)who did not vote in favour of the Resolution Plan (ii)who voted in favour of the Resolution Plan	(i)N.A. (ii) 8,89,23,428	(i)N.A. (ii) 8,89,23,428	(i)N.A. (ii) 8,89,23,428	(i)N.A. (ii)100%
		Total[(a)+(b)]	8,89,23,428	8,89,23,428	8,89,23,428	100%
2	Unsecured Financial Creditors	(a)Creditors not having a right to vote under sub-section (2) of section 21	N.A.	N.A.	N.A.	N.A.
		(b)Other than (a) above :	(i)61,53,998 (ii)	(i)61,53,998 (ii)	(i)61,53,998 (ii)	(i) 100% (ii) 100%

		(i)who did not vote in favour of the Resolution Plan (ii)who voted in favour of the Resolution Plan	6,01,27,710	6,01,27,710	6,01,27,710
		Total(ii)+[b]	6,62,81,708	6,62,81,708	6,62,81,708	100%
3	Operational Creditors	(a)Related Party of Corporate Debtor	N.A.	N.A.	N.A.	N.A.
		(b)Other than (a) above (i)Suppliers	4,55,70,530	4,55,70,530	4,55,70,530	100%
		Total(ii)+[b]	4,55,70,530	4,55,70,530	4,55,70,530	100%
4	Other debts and dues		N.A.	N.A.	N.A.	N.A.
Grand Total		[1+2+3+4]	20,07,75,666	20,07,75,666	20,07,75,666	100%

8.

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

Sr. No.	Category of Share Holder	No. of shares held before CIRP	No. of shares held after the CIRP	Voting share (%) held before CIRP	Voting Share (%) held after CIRP
1.	Equity	126720	126720	100%	100%
2.	Preference	N.A.	N.A.	N.A.	N.A.

10.

The CIRP has been conducted as per the timeline indicated as under:

Section of the Code/ Regulation No.	Description of Activity	Actual Date
Section 16(1)	Commencement of CIRP and Appointment of IRP	19.09.2017
Regulation 6(1)	Publication of Public announcement	22.09.2017
Section 15(1)(c) / Regulation 12(1)	Submission of Claims	03.10.2017 15.11.2017
Regulation 13(1)	Verification of Claims	10.10.2017 22.11.2017
Section 26(6A)/ / Regulation 15A	Application for appointment of authorised representative, if necessary	10.10.2017
Regulation 17(1)	Filing of report certifying constitution of CoC	10.10.2017 13.10.2017 22.11.2017
Section 22(1) and Regulation 17(2)	First meeting of the CoC	17.10.2017
Regulation 35A	Determination of fraudulent and other transactions	10.08.2018
Regulation 27	Appointment of two Registered Valuers	03.10.2017
Regulation 36(1)	Submission of Information Memorandum of CoC	17.10.2017
Regulation 36A	Invitation of EOI	08.10.2018(Original) 24.11.2018(Revised)
	Publication of Form G	08.10.2018(Original) 24.11.2018(Revised)
	Provisional List of Resolution Applicants	02.11.2018(Original) 18.12.2018(Revised)
	Final List of Resolution Applicants	15.11.2018(Original) 02.01.2019(Revised)
Regulation 36B	Issue of request for Resolution Plan, which includes Evaluation Matrix and Information Memorandum to Resolution Applicants	06.11.2018(Original) 23.12.2018(Revised)
Section 30(6)/ Regulation 39(4)	Submission of CoC approved Resolution Plan	07.06.2019
Section 31(1)	Approval of Resolution Plan	Order reserved on 27.09.2019

11.

The time frame proposed for obtaining relevant approvals is as under : N.A.

12.

The Resolution Plan is not subject to any contingency.

Or

The Resolution Plan is subject to the following contingencies

(i)

The RA has provided an undertaking to take into consideration the claim of V.R.Polyfab Pvt. Ltd., as per the decision of the Adjudicating Authority, the amount under contingent provision (Rs.4,66,74,065/-) will replace the amount under existing provision (Rs.61,53,998/-) as mentioned in the application.

13.

Following are the deviations/non-compliances of the provisions of the Insolvency and Bankruptcy Code, 2016 regulations made or circulars issued thereunder (If an deviation/non-compliances were observed, please state the details and reasons for the same : N.A.

14.

The Resolution Plan is being filed, before the expiry of the period of CIRP provided in Section 12 of the Code.

15.

Provide details of Section 66 or avoidance application filed/pending- N.A.

No transaction was observed & hence no application made placing reliance on /certificate."

C. COST AND MEANS OF RESOLUTION PLAN : COST OF RESOLUTION PLAN:

1)

Insolvency Resolution Process Cost: Proposal for payment of the Insolvency Resolution Process Cost in priority to the payment of other debts of the Corporate Debtor and identification of specific sources of funds for payment of the same.

i.

Insolvency Resolution Process Cost: NIL

ii.

Identification of specific sources of funds for payment of the same: N.A.

2)

Payment of Secured Financial Creditors

i.

Amount: Rs.9,08,25,558/-

ii.

Waiver sought: NIL

iii.

Details of concessions or reliefs to be sought from Financial Creditor: NIL

iv.

Any other terms: NIL

v.

Payment schedule of the secured financial creditors: As per their Sanction Letter & calculation shown under Annexure 'B'

vi.

Identification of specific sources of funds for payment of the same: Out of the Realisable Trade Receivables and Other Current Assets of the Corporate Debtor and out of the Net Worth of the Resolution Applicant calculation shown under Annexure 'E'.

3)

Provisions relating to payment of dues equivalent to the liquidation value of dissenting secured Financial Creditors in priority to consenting Financial Creditors.

i.

Amount Zero. In case of liquidation, Assets Realisable Value would be as under Rs.1,95,83,680/- Trade Receivables – more than 6 months value is Zero & Less than 6 months is Rs.4,31,65,545/- Other current assets – Rs.40,61,580/-

ii.

Payment schedule N.A.

iii.

Identification of specific sources of funds for payment of the same. N.A.

4)

Proposal for payment of Unsecured Financial Creditors

i.

Amount Rs.6,62,81,708/-

ii.

Waiver sought NIL

iii.

Details of concessions or reliefs to be sought To be repaid with 7% p.a. interest payable yearly, i.e. relief of 2% p.a. is sought. 1 year moratorium for all Unsecured Creditors other than VR Polyfab Pvt. Ltd.,

iv.

Any other terms NIL

v.

Payment schedule Payable in 7 years in 7 equated instalments to VR Polyfab Pvt. Ltd., and for all other Unsecured Creditors, only interest payable at the end of 1st year and subsequently from 2nd year onwards payable in 7 years in 7 equated instalments as per calculation shown under Annexure 'C'.

vi.

Identification of specific sources of funds for payment of the same: Out of the Realisable Trade Receivables and Other Current Assets of the Corporate Debtor and out of the New Worth of the Resolution Applicant calculation shown under Annexure 'E'.

6)

Proposal for payment to Statutory Dues:

i.

Amount: NIL ii. Provisions relating to payment of dues equivalent to the liquidation value in priority to consenting Financial Creditors NIL

iii.

Waiver sought NIL

iv.

Details of concessions or reliefs to be sought NIL

v.

Any other terms NIL

vi.

Payment schedule NIL

vii.

Identification of specific sources of funds for payment of the same N.A.

Means of Resolution Plan

7)

Details of parties that will infuse the capital

i.

Mode of infusion: Non-interest bearing Unsecured Loan/Quasi Equity

ii.

Details of the amount of capital infused: Calculation shown under Annexure 'E'

iii.

Time period within which capital will be raised; Calculation shown under Annexure 'E'

iv.

Source of such capital infusion; Out of the Net Worth of the Resolution Applicant

v.

Nature/type of instrument for infusion of contribution into the Corporate Debtor and key terms thereof; Non-interest bearing Unsecured Loan/Quasi Equity.

vi.

Utilization of such capital: For payment of outstanding dues to Secured Financial Creditors, Unsecured Financial Creditors & Operational Creditors.

8)

A statement as to how it has dealt with the interests of all stakeholders, including Financial Creditors and Operational Creditors, of the Corporate Debtor.

Sr. No.	Class of Creditor	Protection	Remarks
1.	Secured Financial Creditors	100% Protected	As per terms of their Sanction Letters & Repayment as per Annexure B
2.	Unsecured Financial Creditors	100% Protected	Reduction in Interest Rate from 9% to 7% & Repayment as per Annexure 'C'
3.	Operational Creditors	100% Protected	Repayment as per Annexure 'D'
4.	Statutory Dues	100% Protected	-
5.	Unsecured Loans from the Promoters	-	Not to be repaid during the currency of the Resolution Plan

9)

Proposal relating to term of the resolution plan along with point-wise timelines for proposed payments and its implementation schedule including: Term of Resolution Plan & Timeline of Proposed Payments shown under Annexure 'B', Annexure 'C', Annexure 'D' & Annexure 'E'

i.

Proposal relating to the management and control of the business of the Corporate Debtor during its term: Mr.Vivek Jain will act as CEO.

ii.

Proposal relating to adequate means for supervising its implementation: CEO will act under the supervision and control of the Board of Directors of the Resolution applicant.

10)

Where the Plan provides for acquisition of management control of the company through purchase of shares or issuance of shares or any other medium such that the ownership of the Corporate Debtor moves to the Resolution applicant

i.

Outstanding Debt: Rs.18,45,36,583/- shown under Annexure 'E'

ii.

All terms and conditions being offered in relation to the outstanding debt including the proposed issuance of/conversion into financial instruments, whether convertible or non-convertible, including debt, preference shares, debentures, etc.

a)

Type of Instrument; Debt/Unsecured Debenture

b)

Amount of the Outstanding Debt to be converted into the relevant instrument; 100%

c)

The substantial acquisition of shares of the Corporate Debtor, or the merger or consolidation of the Corporate Debtor with one or more persons; NIL

d)

Satisfaction or modification of any security interest; As per terms of sanction

e)

Curing or waving of any breach of the terms of any debt due from the Corporate Debtor

Sr. No.	Class of Creditor	Relief Sought
1.	Secured Financial Creditors	NIL
2.	Unsecured	Reduction in Interest Rate from 9% to

	Financial Creditors	7% & Repayment Period as per Annexure 'C'
3.	Operational Creditors	Repayment Period as per Annexure 'D'

f)

Reduction in the amount payable to the creditors: NIL

g)

Extension of a maturity date or a change in interest rate or other terms of a debt due from the Corporate Debtor:

Sr. No.	Class of Creditor	Relief Sought
1.	Secured Financial Creditors	NIL
2.	Unsecured Financial Creditors	Reduction in Interest Rate from 9% to 7% & Repayment Period as per Annexure 'C'
3.	Operational Creditors	Repayment Period as per Annexure 'D'

h)

Amendment of the constitutional documents of the Corporate Debtor NIL

i)

Issuance of securities of the Corporate Debtor, for cash, property, securities, or in exchange for claims or interests or other appropriate purpose; NIL

j)

Change in portfolio of goods and services produced or rendered by the Corporate Debtor. NIL

k)

Change in technology used by the Corporate Debtor NIL

l)

Obtaining necessary approval from the Central and State Governments and other authorities N.A.

It is submitted that the intent of the Code is to resolve the CD and not liquidation, as the basic purpose is to keep the CD as a going concern. It is submitted that substantial time of the CIRP was non-functional and no business was transacted due to conflicting situation. It is submitted that statutory period of 270 days would expire on 16.06.2018 and if standstill time of 182 days is not excluded from the 270 days, then the CD would automatically go into liquidation, where there is chance of the revival, which per-se is not the object of the Code. It is submitted that the provisions of Section 12, 14 and 15 of the Limitation Act, 1963 permits for exclusion of tie consumed in legal proceedings before the court of law. Further, the Applicant has also referred to the various views of the coordinate benches of the NCLT in support of his contentions.

Accordingly, the Applicant has sought the following reliefs – “a) To allow the present application; b) To pass an appropriate order under Section 12 read with Section 5 of the Code read with Section 15 of the Limitation Act, 1963 read with Rule 11, 15, 51 & 153 of the NCLT Rules for exclusion of standstill period of 182 days falling between 13.12.2017 to 12.06.2018 should not be counted for any purpose and therefore has to be excluded from total CIRP period of 270 days; c) To note the decision of the CoC taken in the 5th meeting of CoC held on 11.06.2018, that IRP will continued as RP; d) To grant any other relief or reliefs as may deem fit in the interest of justice.”

(1)

Pass appropriate order approving the resolution plan of the Resolution Applicant, Kataria Automobiles Pvt. Ltd. qua Sadbhav Enterprises Pvt. Ltd., (the Corporate Debtor); and Pass any other order(s) that this Hon'ble Adjudicating Authority deems fit.

ORDER