Union Bank Of India (Erstwhile Corporation Bank) vs Goenka Diamond And Jewels Limited

"1.

pass necessary order(s)/direction(s) under Section 31 of the Code, approving the Resolution Plan submitted by the Successful Resolution Applicant Shri Navneet Goenka, which has been approved by the COC with (86.56%) votes casted in favour of the Resolution Plan;

2.

pass necessary order(s)/direction(s) declaring that upon approval of the Resolution Plan by this Hon'ble Tribunal, the provisions of the Resolution Plan shall be binding on the Corporate Debtor, its creditors, guarantors, members, employees, statutory authorities and other stakeholders in accordance with Section 31 of the Code, and shall be given to and implemented pursuant to the order of this Hon'ble Tribunal;

3.

pass appropriate order/directions approving the appointment of the monitoring committee as stated in the Resolution Plan;

4.

pass necessary order(s)/direction(s) discharging the Resolution Professional Mr. Saurabh Malpani from the duties of the Resolution Professional of the Corporate Debtor;

5.

pass necessary order(s)/direction(s) in favour of the Successful Resolution Applicant absolving from/of all/any financial/statutory liabilities of the Corporate Debtor accrued prior to the commencement of the CIRP except whatever stated in the Resolution Plan in accordance with section 32A of the Code:

6.

pass necessary orders / directions for granting the requisite relief and concessions as sought under the Resolution Plan;

7.

Pass such other necessary order(s) /direction(s) as this Hon'ble Tribunal may deem fit and proper."

2) CIRP COST:

The CIRP Costs (to the extent unpaid) on 'Actual' basis shall be paid in priority to any other debt of the Corporate Debtor within 90 days from the Effective date. It is understood by the SRA that currently the CIRP cost is being paid by the Corporate Debtor from funds generated by the Corporate Debtor's business. It is further clarified that unpaid CIRP costs (including contribution by COC, if any), estimated at Rs. 50.00 lakh shall be paid in priority to any other payment under the Resolution Plan. In case the CIRP Costs exceed the amount of Rs. 50.00 lakh as mentioned above, SRA shall bring in the excess amount. Once CIRP cost is paid as per the provision above, then SRA shall have no further liability towards any cost incurred during the CIRP period by RP, CoC members or any other person.

3) COST OF SCHEME AND SOURCE OF FUNDS

Particulars	Amount in Rs. Lakh
Financial Outlay
CIRP Cost	50.00
Financial creditors	3,500.00
Unsecured Financial Creditors	-
Employees and Workmen dues	-
OCs - (Employee State Insurance Corporation)	1.90
OCs - (Income Tax & others Statutory dues)	-
OCs other than Workmen, Employee, Statutory dues	20.00
Working Capital / Contingencies (Note 1)	1,500.00
Total Resolution Amount	5,071.90
Means of Finance
Issue of equity shares to RA / its nominees	2,200.00
Issue of Equity shares / Unsecured debt / Quasi Equity / OCD / CD *	2,871.90
Total	5,071.90

* The terms of such debt/quasi equity/OCD/CD/ or any other instruments shall not be prejudicial to the interests of the Corporate Debtor. Further, the public shareholding and lock in requirements as applicable under the provisions of applicable laws shall be adhered to.

4)

Post approval of the resolution plan and within 90 days from the effective date the tentative capital structure is proposed to be as follows: -

Particulars	Category	Nos of Shares	Face Value	Share Capital	% of holding
SRA / its Nominees	Transfer of Existing Promoters Group Shareholding	1,82,42,925	1.00	1,82,42,925	7.25%
	Transfer of equities invoked by PNB	6,89,712	1.00	6,89,712	0.27%
	Infusion of Fresh Funds in form of Fully paid-up Equity	22,00,00,000	1.00	22,00,00,000	87.41%

Public Share Holders	1,27,67,363	1.0 0	1,27,67,363	5.07%
Total	25,17,00,00 0		25,17,00,00 0	100.00 %

5) Resolution Amount to be Paid to Secured Financial Creditors:

As per the Information Memorandum shared by RP, an amount of Rs. 49408.27 lakh was claimed by SFCs and an amount of Rs. 47338.19 lakh has been admitted by the RP. The RA proposes to discharge the liabilities of the SFCs as under:

a. Upfront Payment: Payment of Rs. 1000.00 lakh will be made to the SFCs on proportionate basis to their admitted claims within a period of 90 days from the Effective Date.

b. Deferred Payment: The RA will make a payment of Rs. 2500.00 lakh to SFCs on proportionate basis to their admitted claims in a phased manner within 810 days from Effective Date as full and final settlement of their claims / dues / debt and the respective share of the SFCs of the deferred payment is detailed in the payment schedule is as follows:

Timeline	Total
Upfront Payment (Within 90 days)-A	1000.00
Within *270 Days (01st Instalment)	1000.00
Within *540 Days (2nd Instalment)	1000.00
Within *810 Days (3rd Instalment)	500.00
Total Deferred Payment---B	2500.00
Total--- A+B	3500.00

c. The SRA has proposed the amount in the resolution plan in view of the proposal of the resolution applicant for extinguishment of their rights in respect of the personal and corporate guarantee. The following assets are identified by the RA as Non-core assets of the Corporate Debtor: Mumbai Residential Asset (Flat at Mount Unique) and Nagpur Commercial Asset

d. The SRA believes that the sale of the above non-core assets shall contribute to bringing in more working capital into the Corporate Debtor which shall ensure effective revival and turnaround of the Corporate Debtor. Thus, the SRA proposes for Release of charge on the Nagpur Commercial Asset within 15 days of payment of the 01st Instalment/tranche. Release of charge on the Mumbai Residential Asset (Flat at Mount Unique) within 15 days of payment of the 02nd Instalment/tranche.

e. Consequent to the above, the SFCs, shall return all title deeds and other documents (including charge documents, if any) held by them or on their behalf to the Resolution Applicant within 15 days of the respective instalment payment and also undertake necessary steps for satisfaction of charge with the ROC. Monitoring Committee shall ensure the same. That the RA undertakes that the implementation of this resolution plan is not conditional with regard to the sale of the above mentioned Non-core assets of the CD.

6) Treatment to Dissenting Financial Creditor:

The Resolution Applicant proposes to pay to the Dissenting Financial Creditors such amounts as are prescribed under Section 30(2)(b) of the Code and in such manner as laid down under regulation 38 (1) of the CIRP regulations along with Section 53 of the IBC.

7) Operational Creditors- Government Dues (Income Tax Department)

It is stated that as per the Information Memorandum shared by RP, an amount of Rs. 5,068.52 lakh was claimed by Income Tax Department (Mumbai + Jaipur) and RP has admitted Rs. 5,068.52 lakh. It is submitted that SRA is not aware of the Liquidation Value of the CD, but SRA believe that Liquidation Value of the CD in shall not be sufficient to repay the debt of even the Secured Financial Creditors and therefore, the liquidation value applicable to OCs in terms of sub clauses (i) and (ii) to section 30(2)(b) as mentioned above, would in all likelihood be NIL. Thus, the Resolution Applicant proposes to pay NIL Amount to above mentioned OCs in proportion of their admitted claims as full and final settlement of their claims.

III. The Term of the Resolution Plan is 810 Days from ("Term") from the Effective Date.

IV. Implementation Schedule in the Resolution Plan is as follows:

Description of Activity	Timeline - Estimated time period (in days)
Approval of Resolution Plan by Adjudicating Authority (Effective Date) and receipt of order by the Resolution Applicants OR Effective date	Y
Constitution of Monitoring Committee	Y
Reconstitution of Board	Y + 90 days
Upfront infusion of capital and funds	Y + 90 days

Payment of Insolvency Resolution Process Costs	Y+90 days
Payment of Operational Creditors (workmen, employees, government dues and others), dissenting FCs and other creditors	Y + 90 days
Upfront Payment of dues to Financial Creditors	Y + 90 Days
Complete handover of CD to RA	Y + 90 Days
1st Tranche of Deferred Payment to SFCs	Y + 270 Days
2nd Tranche of Deferred payment to SFCs	Y+ 540 Days
3rd Tranche of Deferred payment to SFCs	Y+810 Days

V. Monitoring Committee:

It is submitted that Monitoring Committee will come into force on the date of approval of Resolution Plan by Hon'ble NCLT. Monitoring Committee shall be constituted by Committee of Creditors in consultation with the SRA, which would comprise of the Resolution Professional as the Chairman, one representative of the SRA and one from Secured Financial Creditors of the CD. The RP shall be the Chairman of the committee and his fees shall be on a monthly basis as mutually decided between SRA and majority Financial Creditor. Thereafter the Monitoring Committee will supervise the implementation of the Resolution Plan as per the provisions contained herein. The Cost of the Monitoring Committee would be paid by the SRA on actual basis as may be negotiated / settled by mutual consent. The Monitoring Committee's scope shall be limited to the implementation of the Resolution Plan and the newly constituted Board of Directors shall be responsible for the operations of the Corporate Debtor. The implementation of the Resolution Plan shall be carried out by the Resolution Applicant under the supervision of the Monitoring Committee till the completion of all the resolution proposals as mentioned in the resolution plan. The Monitoring Committee shall be dissolved on the complete implementation of the resolution plan.

VI. RELIEFS AND CONCESSIONS SOUGHT BY THE SRA

a. It is stated that Save and except specifically dealt with under this Resolution Plan, no other payments or settlements (of any kind) shall be made to any other person in respect of claims filed under the CIRP (including, for avoidance of doubt, any unverified portion of their claims) and all claims against the corporate debtor along with any related legal proceedings, including civil proceedings, criminal proceedings and/or any other penal proceedings(whether admitted or not, ascertain or unascertained, disclosed or undisclosed, due or contingent, asserted or unasserted, crystallized or uncrystallized, known or unknown, secured or unsecured, disputed or undisputed, present or future), shall stand irrevocably and unconditionally abated, settled and extinguished in perpetuity on the effective date. Further no proceedings/penalty, etc. shall be initiated on Resolution Applicant or the corporate debtor pertaining to the period prior to the effective date.

b. On On making of payments as proposed in the Resolution Plan to the financial creditors, all encumbrances, security interest, liens and/or attachment (including pursuant to applicable acts & laws), whether covered in the Resolution Plan or not, created or suffered to exist over the assets of the corporate debtor (changed or not changed with the lenders) or over the securities of the corporate debtor, whether by contracts or by applicable law shall cease to exist and shall be irrevocably released and all enforcement commenced by any Secured Financial Creditors or any other person over any of the assets of the corporate debtor or over any securities of the corporate debtor shall stand extinguished as detailed in Chapter 5.

c. On the approval of Resolution Plan by Adjudicating Authority, any pending cases in DRT /DRAT, in the name of the corporate debtor shall stand withdrawn and the name of corporate debtor shall be removed from all future proceedings. Also, any pending cases from Enforcement Directorate, in the name of the Corporate Debtor shall stand withdrawn and the name of corporate debtor shall be removed from all future proceedings.

d. Any amount of GST balance/GST input credit or any other indirect tax balance and Income Tax refunds or any other refunds for direct or indirect tax, if available to the Corporate Debtor, then the same should be available as it is, and no adjustment shall be made against the same for the dues that have been extinguished as per the plan.

e. All pending Assessments/litigations/orders/demands/dues etc by Excise Department, Income Tax Department, Service Tax Department, VAT/GST department or any other department or any other person as applicable, including but not restricted to those mentioned in Information memorandum, whether admitted or not, ascertain or un-ascertain, disclosed or undisclosed, due or contingent, asserted or unasserted, crystallized or uncrystallized, present or future, known or unknown, secured or unsecured, disputed or undisputed, whether part of above claim of tax authorities or not, unless provided in the plan shall be deemed to be extinguished.

f. Further, the RA shall write off the outstanding receivables / Trade debtors in its books of accounts and no adverse income tax implication shall fall on the RA / CD due to such write off and treatment in accordance with applicable provisions of law shall be done. With the approval of this Resolution Plan by the National Company Law Tribunal (NCLT), it shall be deemed equivalent to approval from the Reserve Bank of India (RBI), confirming and accepting write off of the aforementioned receivables from the debtors.

g. All the penalty, fine, charges, interest, etc. with respect to all statutory/regulatory non-compliance including in respect to various provisions of Applicable Acts & Laws including SEBI, BSE having occurred prior to effective date, are waived and Resolution Applicant or Corporate Debtor shall not be liable to pay any amount with regards to the same. Further, the share trading and listing of the CD on NSE and BSE shall be regularized.

h. The losses as per income tax are mentioned in the balance sheet /information memorandum of the CD. The approval of Resolution Plan by Adjudicating Authority shall be deemed to be approval to Treat the accumulated losses and unabsorbed depreciation as stated above to be the loss of the Corporate Debtor for the year in which the approval of the Resolution Plan is received by the Resolution Applicant. Hence carried forward to 8 years will be from the year in which Resolution Plan is approved. The Hon'ble NCLT be pleased to give or issue necessary direction, instructions to the CBDT, Central board of Indirect Taxes and Customs and State GST authorities to exempt income/gain/profits, if any, arising as a result of giving effect to the Resolution plan and from being subjected to Income Tax in the hands of the Corporate Debtor or the Resolution Applicant under the provisions of value added tax, customs, octroi, excise duty, service tax, goods & services Tax, Income-Tax Act including but not limited to any income tax and Minimum Alternate Tax (MAT) liability arising on capital reduction in Corporate Debtor.

a. “The RA, CD, and their Directors, Officers, and Employees will not be held responsible for any CD liability or obligations prior to the effective date. They are immune from prosecution, and no legal or coercive action will be taken against the CD or its property for any offences committed or funds diversion before the CIRP commencement by the former promoters, ultimate beneficial owners, or CD's management.”

b. “Starting from the Effective Date, all inquiries, investigations, and proceedings by various agencies (CBL ED, DRI, EOW, Police, SEEL MCA, SFIO, PMO, etc.), whether civil or criminal, related to the CD or its affairs, prior to the Effective Date, will be closed, withdrawn, cancelled, settled, and dismissed. New inquiries or legal proceedings arising from actions before the Effective Date will be barred”.

"30. Submission of resolution plan

(1)

A resolution applicant may submit a resolution plan [along with an affidavit stating that he is eligible under section 29A] to the resolution professional prepared on the basis of the information memorandum.

(2)

The resolution professional shall examine each resolution plan received by him to confirm that each resolution plan--

(a)

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;

(b)

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 the 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.

Explanation 2.-- For the purposes of this clause, it is hereby declared that on and from the date of commencement of the Insolvency and Bankruptcy Code (Amendment) Act, 2019, the provisions of this clause shall also apply to the corporate insolvency resolution process of a corporate debtor—

(i)

where a resolution plan has not been approved or rejected by the Adjudicating Authority;

(ii)

where an appeal has been preferred under section 61 or section 62 or such an appeal is not time barred under any provision of law for the time being in force; or

(iii)

where a legal proceeding has been initiated in any court against the decision of the Adjudicating Authority in respect of a resolution plan;]

(c)

provides for the management of the affairs of the Corporate debtor after approval of the resolution plan;

(d)

the implementation and supervision of the resolution plan;

(e)

does not contravene any of the provisions of the law for the time being in force;

(f)

conforms to such other requirements as may be specified by the Board.

[Explanation.-- For the purposes of clause (e), if any approval of shareholders is required under the Companies Act, 2013 or any other law for the time being in force for the implementation of actions under the resolution plan, such approval shall be deemed to have been given and it shall not be a contravention of that Act or law];

(3)

The resolution professional shall present to the committee of creditors for its approval such resolution plans which confirm the conditions referred to in sub-section (2).

(4)

The committee of creditors may approve a resolution plan by a vote of not less than 6[sixty-six] per cent. of voting share of the financial creditors, after considering its feasibility and viability, 7[the] manner of distribution proposed, which may take into account the order of priority amongst creditors as laid down in sub-section (1) of section 53, including the priority and value of the security interest of a secured creditor] and such other requirements as may be specified by the Board:

Provided that the committee of creditors shall not approve a resolution plan, submitted before the commencement of the Insolvency and Bankruptcy Code (Amendment) Ordinance, 2017(Ord. 7 of 2017), where the resolution applicant is ineligible under section 29A and may require the resolution professional to invite a fresh resolution plan where no other resolution plan is available with it:

Provided further that where the resolution applicant referred to in the first proviso is ineligible under clause (c) of section 29A, the resolution applicant shall be allowed by the committee of creditors such period, not exceeding thirty days, to make payment of overdue amounts in accordance with the proviso to clause (c) of section 29A:

Provided also that nothing in the second proviso shall be construed as extension of period for the purposes of the proviso to sub-section (3) of section 12, and the corporate insolvency resolution process shall be completed within the period specified in that sub-section.]

Provided also that the eligibility criteria in section 29A as amended by the Insolvency and Bankruptcy Code (Amendment) Ordinance, 2018 shall apply to the resolution applicant who has not submitted resolution plan as on the date of commencement of the Insolvency and Bankruptcy Code (Amendment) Ordinance, 2018.

(5)

The resolution applicant may attend the meeting of the committee of creditors in which the resolution plan of the applicant is considered:

Provided that the resolution applicant shall not have a right to vote at the meeting of the committee of creditors unless such resolution applicant is also a financial creditor.

(6)

The resolution professional shall submit the resolution plan as approved by the committee of creditors to the Adjudicating Authority."

“28.

Once the plan is approved by the COC, the RP has to submit it for approval of the Adjudicating Authority. As per sub-section (1) of Section 31 of the IBC, if the Adjudicating Authority is satisfied that the resolution plan as approved by the COC under sub-section (4) of Section 30 meets the requirements of sub-section (2) of Section 30, it has to approve the resolution plan. On its approval, the plan becomes binding on the CD and its employees, members, creditors, including the Central Government, any State Government or any local authority to whom a debt in respect of the payment of dues arising under any law for the time being in force, such as authorities to whom statutory dues are owed, guarantors and other stakeholders involved in the resolution plan. But where the Adjudicating Authority is satisfied that the resolution plan does not conform to the requirements referred to in subsection (1), it may, in exercise of power under sub-section (2) of Section 31, by an order, reject the resolution plan.”

Issue No. 1

“Upon payment of the upfront amount to the secured financial creditors and payment of the outstanding Insolvency Resolution Process Cost, as provided above, all the personal and corporate guarantees given in respect of the financial debts of the Corporate Debtor shall stand extinguished and the security interest provided under said personal and corporate guarantees shall stand satisfied. On such extinguishment of guarantee and satisfaction of security interest, the secured financial creditors shall issue necessary NOC/NDC/letter and execute necessary documents in relation thereto and shall return all title deeds and other documents (including charge documents, if any) held by them or on their behalf not later than 15 days of the Upfront payment. Monitoring Committee shall pursue and ensure the same.”

“28.

The above judgment fully supports the submissions of the Appellant that security interest of dissenting Financial Creditor by virtue of personal guarantee of the ex-director of the Corporate Debtor could have been very well dealt in the Resolution Plan. It is further relevant to notice that each Financial Creditor has personal guarantee in their favour to secure the loan extended by them. All Financial Creditors has assented for relinquishment of such security except Bank of Baroda which had only 5.83% vote share. The decision of the CoC to accept the value for relinquishment of personal guarantee was a commercial decision of the CoC which cannot be allowed to be impugned at the instance of dissenting Financial Creditor.

29.

In view of the foregoing discussions, we are of the view that the Adjudicating Authority committed error in rejecting the Application for approval of the Resolution Plan on the ground that plan could not have contained a provision for extinguishment of personal guarantee of the personal guarantors. Plan allocates a plan value for extinguishment of personal guarantee which has been accepted by the Financial Creditors by a vote share of 78.04%. We, thus, are of the view that the order of the Adjudicating Authority dated 06.01.2023 is unsustainable. In result, we allow the Appeal and set aside the order dated 06.01.2023 passed by the Adjudicating Authority. We hold that the Resolution Plan submitted by the Appellant did not contravene any of the provisions of Section 30(2)(e) of the Code. The Adjudicating Authority shall proceed to pass a fresh order in IA 190 of 2021 praying for approval of the Resolution Plan along with necessary directions. Adjudicating Authority shall endeavour to pass fresh order on IA 190 of 2021 within a period of three months from the date when copy of this order is produced before it.”

“16.

The present is a case where CoC deliberated over the issue and on such deliberation and inputs, the Successful Resolution Applicant submitted revised Resolution Plan and the Resolution Plan dealt with security interest and the personal guarantee also. We, thus, answer Question No.(I) holding that Resolution Plan in question has consciously dealt with securities and personal guarantees given to the Financial Creditors including the dissenting Financial Creditors and the said clauses of the Resolution Plan do not contravene any provisions of Section 30, sub-section (2) as well as CIRP Regulations, 2016. The view of the Adjudicating Authority that Resolution Plan is contrary to provisions of Section 30, sub-section (2) is unsustainable and deserved to be set-aside.”

""C-3 Provision for Secured Financial Creditors of Corporate Debtor ...

It is further given to understand that this amount is secured inter alia by the properties of the Corporate Debtor, Guarantees of the promoters and certain assets of the promoters..."

ISSUE 2

38. Mandatory contents of the Resolution Plan.

(3). A resolution plan shall demonstrate that

(a)

it addresses the cause of default;

(b)

it is feasible and viable;

(c)

it has provisions for its effective implementation;

(d)

it has provisions for approvals required and the timeline for the same; and

(e)

the resolution applicant has the capability to implement the resolution plan.

"I, as the Resolution Applicant, recognize that the Corporate Debtor (CD) is facing challenges, primarily due to existing debt structures. To address the Cause of Default, I propose a revitalization plan that involves restructuring the current debt setup and injecting fresh capital. Our goal is to rectify the underlying "Cause of Default" by implementing these strategies. I firmly believe that with these steps, the CD's turnaround is not only feasible but also financially viable. We are committed to fostering the revival of the CD and creating a sustainable path forward."

"Looking at the current financial status of the corporate debtor and its future viability going forward, a business plan has been drawn including treatment of discharging liabilities of various class of creditors including the statutory dues and CIRP cost. It has taken into consideration all the provisions for its effective implementation which have been explained in the transaction structure, business plan, terms, and schedule to Resolution Plan. The terms of plans are feasible and viable, and its implementation is possible."

Means of Finance

Issue of equity shares to RA / its nominees	2,200.00
Issue of Equity shares / Unsecured debt / Quasi Equity / OCD / CD *	2,871.90
Total	5,071.90

Amount in Lakhs

- That RA / or its nominees shall further infuse Rs. 2200.00 Lakh as fresh equity towards 22,00,00,000 equity shares of Rs. 1.00 each within a period of 90 days from the effective date and such funds shall partially be used for upfront payment obligations and partially for working capital of the company.

- Further the RA / or its nominees shall bring in an amount of Rs. 2871.90 Lakh as per the provisions of this Resolution Plan in form of Equity / Unsecured Interest Free debt / Quasi Equity / Optionally Convertible Debentures / Convertible Debentures / or any other instruments, RA / its nominees seems fit. The terms of such debt/quasi equity/OCD/Cd / or any other instruments shall not be prejudicial to the interests of the Corporate Debtor. Further, the RA shall ensure the public shareholding and lock in requirements as applicable under the provisions of applicable laws are adhered to.

NAVNEET GOENKA

FLAT NO.4, 1ST FLOOR, MOUNT UNIQUE, 62-A, PEDDAR ROAD, MUMBAI-400026

Subject: Evidence of funding/ monies available to fund the Resolution Plan for Goenka Diamond & Jewels Limited

Dear Sir

I would like to mention that with reference to the plan submitted dated 03/01/2024, I am enclosing herewith the Net worth statement for your consideration.

Regarding the source of fund, we would like to mention that I will be disposing one of the land parcels owned by me and my wife which is not mortgaged to mobilize the initial fund for investment to implement the submitted resolution plan.

On becoming SRA, I will be disposing of the non-core assets of the company and will be utilizing the proceeds of sale of non-core assets for payment to secured creditors. Further I will be generating the cash flows by reviving the core business of the company.

During the implementation of plan, I will be raising funds through promoter equity/Unsecured loan and secondary finance for smooth operation of company so as to enable us to implement the submitted plan completely.

In case I am SRA, I will be providing the list of non-core assets we intend to dispose which will provide cash inflow to pay to stake holders and revive the business.

Mr. Navneet Nandlal Goenka

Enclosed -

1)

Net Worth Certificate

2)

Offer of buyer for purchasing the property dated 20/12/2023

Place: Mumbai

Date: 03/01/2024 A perusal of the aforementioned document makes it conspicuous that as per the SRA himself the funding of the Resolution plan by the SRA is contingent upon disposing off the land owned by the SRA and his wife. Further, the SRA has not produced any affidavit or undertaking from his wife concerning the sale of such land. Thus, the success of whole Resolution Plan hinges on sale of property and availability of the buyer at the relevant time.

'1.7.13 A Resolution Plan submitted by Resolution Applicant(s) shall be unconditional in nature. It is hereby clarified that any conditionality in the Resolution Plan shall lead to rendering of that Resolution Plan as non-responsive, and accordingly the CoC shall have the right to reject such Resolution Plan." ...

1.11.4

The Resolution Applicant(s) shall represent to the COC that they have the necessary financial resources available for supporting the Resolution Plan that will be submitted by them and for any further infusion/contribution for additional funds into the Corporate Debtor as may be indicated in the Resolution Plan."

“PROVIDED that the Adjudicating Authority shall, before passing an order for approval of resolution plan under this sub-section, satisfy that the resolution plan has provisions for its effective implementation.”

- "The RA, CD, and their Directors, Officers, and Employees will not be held responsible for any CD liability or obligations prior to the effective date. They are immune from prosecution, and no legal or coercive action will be taken against the CD or its property for any offences committed or funds diversion before the CIRP commencement by the former promoters, ultimate beneficial owners, or CD's management.

- Starting from the Effective Date, all inquiries, investigations, and proceedings by various agencies (CBI, ED, DRI, EOW, Police, SEBI, MCA, SFIO, PMO, etc.), whether civil or criminal, related to the CD or its affairs, prior to the Effective Date, will be closed, withdrawn, cancelled, settled, and dismissed. New inquiries or legal proceedings arising from actions before the Effective Date will be barred."

“67.

Thus, Section 32A broadly leads to:

a. Extinguishment of the criminal liability of the corporate debtor, if the control of the corporate debtor goes in the hands of the new management which is different from the original old management.

b. The prosecution in relation to "every person who was a "designated partner" as defined in Clause (j) of Section 2 of the Limited Liability Partnership Act 2008 (6 of 2009), or an" officer who is in default", as defined in Clause (60) of Section 2 of the Companies Act. 2013 (18 of 2013), or was in any manner in charge of, or responsible to the corporate debtor for the conduct of its business or associated with the corporate debtor in any manner and who was directly or indirectly involved in the commission of such offence" shall be proceeded and the law will take its own course. Only the corporate debtor (with new management) as held in Para 42 of P. Mohanraj will be safeguarded

c. If the old management takes over the corporate debtor (for MSME Section 29A does not apply (see 240A), hence for MSME old management can takeover) the corporate debtor itself is also not safeguarded from prosecution Under Section 138 or any other offences."

“44.4.

Although, the aspects aforesaid did not form the part of consideration of CoC but, they cannot be ignored merely with reference to the status assigned to the commercial wisdom of CoC. The principles underlying the decisions of this Court respecting the commercial wisdom of CoC cannot be over-expanded to brush aside a significant shortcoming in the decision making of CoC when it had not duly taken note of the operation of any provision of law for the time being in force.” Thus, the decisions of the CoC have to be in compliance of the provisions of the Code and the relevant laws.

“35.

Since the Tribunal had some reservations on some issues, therefore, it remanded the case back to the CoC, following the decision of the Hon’ble Supreme Court in the case of Ebix Singapore (Supra) and Prabhjit Singh (Supra) in which it has been categorically held that the AA can only direct the CoC to reconsider certain elements of the resolution plan to ensure compliance under Section 30(2) before exercising its powers of approval or rejection as the case may be but in essence, the Tribunal has no jurisdiction to remand or remit the plan for a total reconsideration as it goes against the law laid down by the Hon’ble Supreme Court in the case of Ebix Singapore (Supra) because the Tribunal has the jurisdiction either to approve the plan or reject the same and call for a fresh plan but the entire plan cannot be sent back for reconsideration.”