TaxTMI 
TaxTMI 
2026 (1) TMI 1089
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....lvency Resolution Process (CIRP) of the Corporate Debtor commenced by an order dated 01.08.2023 passed in application under Section 7 filed by the State Bank of India alleging default of Rs.29 Crores. Public announcement was made under Form A. Form G was issued. Appellant had challenged the order dated 01.08.2023 by filing a Company Appeal (AT) (Insolvency) No.1076 of 2023 which came to be dismissed by this Tribunal on 27.03.2024. On 15.06.2024 in 12th CoC meeting, the Resolution Plan submitted by Respondent No.3 was approved with 100% vote share. Appellant filed an IA No.5201 of 2024 praying for rejection of the Resolution Plan with certain other prayers. The application IA No.5201 of 2024 came to be heard and dismissed by the Adjudicating Authority vide order dated 15.09.2025. In the application IA No.5201 of 2024, Appellant has questioned the eligibility of SRA. The Adjudicating Authority by the impugned order has allowed the IA filed by the Resolution Professional for approval of the plan and Resolution Plan has been approved. 3. We have heard Shri Sumant Batra, Learned Counsel for the Appellant, Shri Abhishek Anand, Learned Counsel appearing for the Respondent No.1 and Shri....
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....btor. Learned Counsel for the Appellant has relied on Section 5(24)(h) of the IBC which is as follows:- "5. Definitions. -(24) "related party", in relation to a corporate debtor, means- (h) any person on whose advice, directions or instructions, a director, partner or manager of the corporate debtor is accustomed to act;" 9. The ineligibility of the SRA is contended on the basis of 'non-binding term sheet- subject to contract' dated 09.06.2022 which has been brought on record as Annexure A-3 to the Appeal. Counsel for the Appellant submits that several clauses of the term-sheet indicate that main investor Shipra Gupta who is SRA was to act as operating partner and investor was to get 75% in the company. Learned Counsel for the Appellant has referred to Clauses 8, 12, 13, 19 and 20 of the term sheet which is as follows:- "8. One Time Settlement or OTS: The amount required to be infused by Investors to settle all Principal and interest obligations of Term Loans and Working Capital Limited taken by Company from State Bank of India (earlier State Bank of Travancore) from time to time over the years 2013 till date. As per current discussions, we understand ....
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....ts are valid However, such permission shall not be unreasonably withheld if such a lien is offered to financial institutions and/or banks for seeking funds for the Company's activity. 20. Lock-in Period: Existing Promoters will not sell their shares to any third party prior to the third anniversary of the Closing of this investment." 10. Counsel for the Respondent referring to the term sheet has referred to condition precedent which are dealt in clauses 32, 33 and 34. It is submitted that the term sheet contemplated a futuristic business plan and investor was to get 75% in company after definite agreement was to be executed. It is submitted that no definite agreement was ever executed and when definite documentation did not take place, the business plan did not come into existence, hence, there was no occasion for director or partner of the company to advice on the direction or instructions of the investors. 11. From the relevant clauses of the term sheet, as noticed above, it is clear that term sheet is non-binding term sheet which was subject to contract. The contract which is definite documentation never took place and the allotment of share was proposed at cl....
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....therefore not ineligible to submit Resolution Plan in terms of Section 29A(j) of the IBC." 15. The submission of the Appellant that the Adjudicating Authority has held that the issue shall be independently considered while considering IA No.30 of 2024 also need consideration. The said observation has been made in paragraph 13:- "13. The Applicant has, also alleged that the Resolution plan submitted by the SRA lacks a clear, detailed financial strategy or projections, which undermines its feasibility. Section 31 requires the Adjudicating Authority to ensure that the plan is viable and capable of implementation. The Applicant has also stated that Section 31 mandates that creditors, particularly operational creditors, must receive at least the liquidation value in a resolution plan. It is further submitted by the Applicant that the steep reduction in payments to operational creditors as outlined in this plan is indicative of non-compliance with this requirement. By offering creditors substantially less than what they would receive under liquidation, the plan is not in adherence to the liquidation value provision. It is further contended that the plan does not comply with t....