AI OCR 
TaxTMI 
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TaxTMI 
2025 (9) TMI 1473
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....hich I.A No. 6038 of 2024 filed by the Appellant under Section 60(5) of the Code has been dismissed. 2. The facts of this case are that M/s Mayyoga Investments Ltd./ Respondent No. 2.e filed the application under Section 7 of the Code against M/s M K Overseas Pvt. Ltd. (CD) for the resolution of its debt before NCLT, New Delhi which was admitted on 19.09.2019 and Suresh Kr. Jain was appointed as the IRP who was later on confirmed as RP on 23.10.2019 in the second meeting of the CoC. 3. The IRP, in compliance with Regulation 6 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulation, 2016 (in short 'Regulations'), made public announcement on 21.09.2019 about commencement of CIRP proceedings against the CD to invite the claim from the creditors of the CD. 4. After the claims were received, IRP/RP constituted the CoC with the following members (1) Venus India Asset Finance Pvt. Ltd. (2) HDFC Bank Ltd. (3) Yes Bank Ltd. (4) Drip Capital Pvt. Ltd. and (5) Mayoga Investments Ltd .. 5. The RP published form G (invitation for Expression of Interest 'EOI') under Regulation 36A(1) of the Regulations in Financial Express and Jansatta (all edition) ....
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....red to be infused for the resolution of the Corporate Debtor. v. The plan should contain provisions for effective implementation of plan. 12. Although, it is alleged that the Tribunal, vide its order dated 08.07.2024, remitted the resolution plan to the CoC for reconsideration on certain specific observations mentioned herein above which implies that the remaining plan was found in compliance with the provisions of the Code and no further modifications, beyond the scope of the said observations, were warranted yet Respondent No. 1/RP, acting beyond the order dated 08.07.2024, sent an email dated 16.11.2024 to the Appellant seeking changes contrary to the observations made by the Tribunal. The changes sought by the RP are as follows :- This is with reference to the Revised Resolution Plan dated 16.09.2024 ("Plan") submitted by Exclusive Motors Pvt. Ltd. ("RA") in the matter of MK Overseas Private Limited. During the review and compliance check of the Plan, several preliminary observations and queries have been noted regarding IBC compliances, RFRP requirements and other related aspects. Kindly review the following points and provide appropriate response....
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....the plan, it has been mentioned that any modifications as may be imposed or directed by the Hon'ble NCLT shall become operative from the closing date. Change this to "effective date". 10. Clause 6.7: Implementation schedule: Steps 3, 4, 5, 7, 8 and 9 of Clause 6.7 are stringent and impractical. Please amend these timelines to ensure effective implementation. 11. Clause 7.1: Clause 7.1 does not specify the decision-making process in the monitoring Committee. Please clarify. 12. RFRP related issues/ observations a. Annexures to RFRP: i. RA should undertake that APPENDIX 5: Undertaking by Resolution Applicant(s)", "APPENDIX 6: Format for Power of Attorney", "APPENDIX 6B: Format for Board Resolution", remains unchanged and valid as on date of submission of resolution pan dated 16.09.2024. ii. Please provide updated "APPENDIX 9: Composition and Ownership Structure of the Resolution Applicant(s)" iii. Please provide updated "APPENDIX 10: format of 29A Affidavit" iv. Please provide updated "APPENDIX 11: Covering Letter for Submission of Resolution Plan" b. Other points related to RFRP: i. In term....
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.... vide order dated 08.07.2024 and the said judgment doesn't call for reappraisal of the Resolution Plan and the COC is required to consider the Resolution Plan strictly in accordance with the observations made thereunder in the said judgment. However, without prejudice to the above as well our rights and contentions, the para wise response to your email is as under: 1. That we are ready and willing to comply with the law laid down with regard to payment of EPF, gratuity and ESIC. As per the list of creditors provided by you, the admitted claim of EPF is Rs.41,33,558/ - and ESIC claim is Rs. 11,00,013/. We propose to pay the said admitted amount in priority over other dues without prejudice to our rights and contentions as may be available under law. 2. Affidavit and Undertaking is attached. 3. In this regard, please refer to table of payment mentioned at Clause 5.11.3 and the total upfront payment shall be read in accordance with the same at every other places. 4. The distribution pattern qua clause 5.6.3 shall be made on pro rata basis. 5. The latest balance sheet as well as net worth certificate are attached for your refere....
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....ssigned its rights by way of agreement dated 01.10.2024 to JCFARC. 17. In simple words, at the time when the CoC was first constituted the following were the members with voting share (i) Venus India Asset Finance Pvt. Ltd. having 74.55% (ii) HDFC Bank having 12.02% voting share (iii) Yes Bank Ltd. having 11.29 % voting share (iv) Drip Capital Pvt. Ltd. having 2.05% voting share and (v) Mayoga Investments ltd. having 0.09% voting share. 18. The plan was approved by this CoC on 02.12.2020 with 76.69% voting share. 19. After approval of the plan by the aforesaid CoC and submission of the application by the RP to the Tribunal for approval of the plan, HDFC Bank assigned its 12.02% voting share to JCFARC and Yes Bank limited assigned its 11.29% voting share to Standard Capital Markets Ltd. The position of the CoC after the first assignment or the composition of the second CoC is as under :- i. VSJ Investments Pvt. Ltd. having 74.55% voting share ii. JCFARC having 12.02% voting share iii. Standard Capital Markets Ltd. having 11.29% voting share iv. Dirp Capital Pvt. Ltd. having 2.05% voting share v. Mayoga Investments Ltd. having 0.09& ....
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....on Plan). 2. In terms of Clause 5.20.3 of the Plan, the Applicant proposed to continue with EMD of INR 10 crores deposited as performance security after approval by CoC. The non-deposit of performance security by the SRA is violative of Regulation 36B(4A) of the CIRP Regulations, and thereby is in contravention of Section 30(4) of the Code. The Applicant undertakes to give Performance Guarantee in accordance with Clause 1.9.1 of the RFRP. (Refer to Clause 5.19 @ Pg No. 59 of the Revised Resolution Plan) 3. Clause 11.8.1 of the Plan empowers the Applicant to terminate the Plan in case the reliefs and concessions sought by it, in clauses 5.15.2 of the Plan are not granted by this Adjudicating Authority, which makes the plan conditional. Clause 11.8.1 of the Resolution Plan makes the Plan conditional and hence, it fails the test of 'feasibility and viability' as laid down under Section 30(4) of the Code. Clause 11.8.1 has been modified and the Revised Resolution Plan is in compliance with Section 30(4) of the Code. (Refer to Clause 11.8 @ Pg No. 74-75 of the Revised Resolution Plan) 4. The SRA has failed to disclose the source of funds t....
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.... the plan after the reconstitution of the CoC on assignments because once the plan has been approved by the creditor it cannot be rejected by same creditor or its assignee after the plan is remanded because the plan once approved is binding on the members of the CoC and assignee in whose favour debt was assigned by the original member of the CoC and cannot be permitted to reconsider qua the assent given by original members of the original CoC otherwise it would undermine the sanctity of the plan. The Appellant has further submitted that once the order was passed by the court and the matter is remanded on a particular issue by the Appellate Court, the original court has to deal with the issues on which the order has been passed and it cannot reopen the entire decision. In this regard, reliance has been placed upon a decision of the Hon'ble Supreme Court in the case of Ebix Singapore Pvt. Ltd. Vs. CoC of Educomp Solutions Ltd. & Anr., Civil Appeal No. 3224 of 2020 in which it has been held that "the AA can only direct the CoC to reconsider certain elements of the resolution plan to ensure compliance under Section 30(2) of the Code, before exercising its powers of approval or reje....
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.... to satisfy the CoC that they have available for supporting the plan. The necessary financial resources Appellant, to support the financial capability provided a networth certificate of its director of Rs. 151.47 Cr. as on 30.09.2024 and its networth certificate of Rs. 156.59 Cr. as on same date. It is further submitted that in the 31st meeting of the CoC held on 04.12.2024 in which a concern was raised regarding source of funds and at the time of conclusion of the meeting it was agreed that the resolution applicant shall provide an addendum addressing all compliance issues by 2PM, 05.12.2024. The RA was to provide comfort letter or sanction letter for funding. In this regard, it is submitted that additional comfort letter from Lucky Holdings was placed before the CoC. It is submitted that the discussion regarding the supporting document to the CD was prior to the admission of the representative of the appellant in the meeting held on 05.12.2024. It is also submitted that the Appellant had no access to the minutes of the meeting of the CoC till it is annexed with the reply dated 16.01.2025 filed by JCFARC. It is argued that Lucky Holdings Pvt. Ltd. had liquid assets and legal capab....
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....ional experience, and market presence required for revival. 27. Counsel for Respondent No. 1 has submitted that the plan was not remitted to the CoC for reconsideration rather it was sent for fresh consideration. It is further submitted that after the remand for reconsideration, any proceedings carried out in respect of earlier plan became redundant and voting was required in the revised plan of the Appellant. It is further submitted that the Tribunal had never restrained reconsideration of the entire plan with any specific requirement rather the entire plan was sent for fresh reconsideration which allowed Respondent No. 1 to verify the compliances and CoC to reconsider the feasibility and viability of the same. He has further submitted that the Hon'ble Supreme Court in the case of K. Sashidhar Vs. Indian Overseas Bank & Ors. (2019) 12 SCC 150 has held that the commercial wisdom of the CoC shall prevail and it is non-justiciable. He has also submitted that in the case of Jaypee Kensington Boulevard Welfare Association & Ors. Vs. NBCC (India) Ltd. & Ors., 2021 SCC OnLine 253 it has been held that in case a resolution plan requires modification, the AA must send back the plan ....
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....wever, the Appellant has placed before this Court the financial statement of Lucky Holdings Pvt. Ltd. by way of an additional affidavit. It is also submitted that the CoC has taken into consideration the FIR against the director of the Appellant. It is further submitted that the plan was sent for reconsideration before the CoC and that the Appellant has offered differential treatment to the same class of creditors but it is not denied that in the revised plan the appellant has given same treatment to the financial creditors whereby the claim of HDFC Bank was reduced. 29. In rebuttal, Counsel for the Appellant has submitted that against the order of admission against Sulojay Realty Pvt. Ltd. dated 14.03.2024, appeal was filed in which the IRP was directed not to take any further steps except for collation of claims received subject to deposition of the entire amount claimed. Pursuant to order dated 18.12.2024, Sulojay Realty had deposited the entire amount claimed with the Registrar of the NCLAT and hence the CIRP of Sulojay is stayed. Besides this, it is submitted that a letter dated 04.07.2025 was issued by ICICI Bank stating that instalments of the loan extended to Sulojay wer....
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...., firstly, JCFARC purchased the rights of HDFC Bank having voting share 12.02% and Standard Capital Markets Ltd. purchased the rights of Yes Bank having 11.29% by way of assignment. 33. It is also pertinent to mention that right of Venus India Asset (major creditor) were taken over by VSJIPL with 74.55% voting share and that right of VSJIPL were taken over by JCFARC with the same percentage of voting share. 34. In this game of musical chair, the faces of the members of the CoC kept on changing but the fact remains that they entered into shoes of original members of the CoC who had approved the plan on 27.11.2020 by 76.69% voting share. 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 ....