Tribunal orders consolidation of CIRP for Lavasa Corp. and subsidiaries; debts resolution for WPSL & DRL included.

The Tribunal ordered the consolidation of the Corporate Insolvency Resolution Process (CIRP) for Lavasa Corporation Limited (LCL) and its subsidiaries, including the resolution of debts for Warasgaon Power Supply Limited (WPSL) and Dasve Retail Limited (DRL). The Tribunal directed the reconciliation of the List of Creditors and the submission of a consolidated resolution plan for all entities. Additionally, the resolution of debts for WPSL and DRL was allowed as part of the consolidated plan, with the appointment of the Resolution Professional for the consolidated CIRP and a 60-day timeline for completion granted.

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Issues Involved:
1. Consolidation of Corporate Insolvency Resolution Process (CIRP) for Lavasa Corporation Limited (LCL) and its subsidiaries.
2. Reconciliation of the List of Creditors for LCL, WAML, and DCCL.
3. Submission and approval of a consolidated resolution plan.
4. Resolution of the Debt of Warasgaon Power Supply Limited (WPSL) and Dasve Retail Limited (DRL).

Detailed Analysis:

1. Consolidation of CIRP for LCL and its Subsidiaries
The application was filed by financial creditors seeking the consolidation of the insolvencies of LCL and its wholly-owned subsidiaries WAML and DCCL, along with the resolution of debts of WPSL and DRL. The Tribunal noted that LCL and its subsidiaries are interlinked and their businesses are interdependent. The Tribunal emphasized that any stand-alone resolution would defeat the objective of maximizing the value of the corporate debtor, as the subsidiaries' operations and revenue streams are intrinsically tied to LCL.

The Tribunal compared this case to the consolidation of the Videocon Group's insolvency proceedings, referencing the State Bank of India v. Videocon Industries Ltd. case, which enumerated 13 yardsticks for consolidation. The Tribunal found that LCL and its subsidiaries met these criteria, including common control, common directors, common assets, common liabilities, inter-dependence, inter-lacing of finance, pooling of resources, co-existence for survival, intricate link of subsidiaries, inter-twined accounts, inter-looping of debts, singleness of economic units, and common financial creditors.

2. Reconciliation of the List of Creditors
The Tribunal directed the reconciliation of the List of Creditors for LCL, WAML, and DCCL by the respective Resolution Professionals. This step was necessary to ensure accuracy and transparency in the consolidated resolution process.

3. Submission and Approval of a Consolidated Resolution Plan
The Tribunal ordered the submission and approval of one consolidated resolution plan for LCL, WAML, and DCCL. It acknowledged that the resolution applicants had proposed consolidation as a pre-condition for their resolution plans, indicating that a coordinated approach would maximize value.

4. Resolution of the Debt of WPSL and DRL
The Tribunal noted that WPSL and DRL, although not undergoing CIRP, are wholly-owned subsidiaries of LCL with their financial debts guaranteed by LCL. The sole financial creditors of WPSL (L&T Infrastructure Finance Company Limited) and DRL (Central Bank of India) preferred their debts to be resolved as part of the consolidated resolution plan for LCL. The Tribunal allowed this, stating that the consolidated Committee of Creditors (CoC) of LCL, WAML, and DCCL should take an informed decision regarding the resolution of debts of WPSL and DRL.

Findings and Orders:
1. Consolidation of CIRP: The Tribunal ordered a consolidated CIRP for LCL and its 100% subsidiary companies WAML and DCCL, all of which are undergoing CIRP.
2. Resolution of Debts for WPSL and DRL: The Tribunal allowed the resolution of debts for WPSL and DRL as part of the consolidated resolution plan, subject to the decision of the consolidated CoC.
3. Appointment of Resolution Professional: The Tribunal appointed the Resolution Professional of LCL as the Resolution Professional for the consolidated CIRP.
4. Time Period: An initial period of 60 days from the date of the order was granted for the completion of the consolidated CIRP, with provisions for further extensions if necessary.

The application MA 3664/2019 in CP 1765, 1757, and 574 of 2018 was "Allowed" as indicated above.

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