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2026 (5) TMI 17
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....evity, they are being taken up together. 2. An entity under the name of M/s. YKM Entertainment and Hotels Private Limited, being a family venture, was incorporated by the Appellants of each of the Company Appeals, as family members enterprise on 16.06.2008. The objective of the aforesaid company was to establish a five-star hotel near Renigunta airport, Tirupathi, in order to offer a comfortable stay to the devotees of Lord Tirumala Balaji. The project, which was thus ventured by the Appellants, under the name and style of M/s. YKM Entertainment and Hotels Private Limited, was made as a part of a well-known five-star chain of hotels, namely, Holiday Inn, at Tirupati. The construction of the aforesaid project was completed in June 2017. The entire superstructure was completed along with 215 rooms in it, and only a few minor superstructure, landscaping and other ancillary work was required to be completed. 3. For the said purpose, M/s. YKM Entertainment and Hotels Private Limited, is said to have availed financial assistance, from a consortium of lenders, which ultimately later on merged into the State Bank of India, i.e., Respondent No.1 herein. 4. To fortify the requiremen....
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.... not able to operate the hotel. As a result, Corporate Debtor's Bank account was declared as NPA on 29.11.2016. 10. Hence, Respondent No.1 issued notice under Section 13(2) of the SARFAESI Act on 09.08.2018, for an outstanding amount of Rs. 181.71 crores that was due as on 30.06.2018 and accordingly, Respondent No.1 filed an OA No.767/2018 before DRT, wherein Respondent No.1 sought to recover Rs. 184,82,88,871 from the Corporate Debtor due as on 24.10.2018. Admittedly, a Possession Notice under Section 13(4) of the SARFAESI Act was issued by the Respondent No.1 on 30.11.2018, and the Sale Notice too was issued thereof on 10.01.2019. 11. The Corporate Debtor filed SA No.56/2019, challenging the Sale Notice of 10.01.2019. 12. It is during this period that, a One-Time Settlement Proposal, was proposed by the Corporate Debtor to pay an amount of Rs. 112 crores, as a full and final settlement, towards the one-time settlement of the entire outstanding amount. The same was accepted by Respondent No.1, and a joint compromise by Respondent No.1 and the Corporate Debtor was preferred before the DRT in order to settle the dues for Rs. 112 crores. Accordingly, the DRT was pleased to d....
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....22, stood initiated as against the respective personal guarantors, namely Mr. Yarlagadda Krishna Mohan, Ms. Yarlagadda Padmavathi & Mr. Yarlagadda Madhu Mohan respectively. On 27.08.2022, a report was submitted under Section 99 of the I & B Code, by the Resolution Professional recommending the admission of the Section 95 Petition as against the personal guarantors. The proceedings under Section 95 were contested by the personal guarantors as detailed above, who filed their counter on 05.12.2023. However, the Section 95 Petition was allowed by the Learned Tribunal vide its order of 27.02.2024, resulting into the commencement of the Personal Insolvency Resolution Process (PIRP) in respect of the Appellants. The admission of Section 95 application as against the personal guarantors was challenged by them by filing appeals in Comp App (AT) (CH) (Ins) No.155/2024, Comp App (AT) (CH) (Ins) No.154/2024 and Comp App (AT) (CH) (Ins) No.156/2024 respectively before this Appellate Tribunal, which have been dismissed by this Tribunal vide order dated 06.02.2025. 17. Pursuing action under PIRP, the Resolution Professional on 04.07.2024, filed an application report under Section 112(2)(d) of ....
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....editors for restructuring of his debts or affairs. (2) The repayment plan may authorise or require the resolution professional to- (a) carry on the debtor's business or trade on his behalf or in his name; or (b) realise the assets of the debtor; or (c) administer or dispose of any funds of the debtor. (3) The repayment plan shall include the following, namely:- (a) justification for preparation of such repayment plan and reasons on the basis of which the creditors may agree upon the plan; (b) provision for payment of fee to the resolution professional; (c) such other matters as may be specified." 21. It is made mandatory under Section 105(1) of the Code, for the debtor to submit the Repayment Plan along with a proposal for restructuring the debts. However, in accordance with the finding recorded in the impugned order, it is seen that Appellants did not submit the Repayment Plans, as contemplated under Section 105 of the I & B Code, though they have been submitting certain OTS proposals earlier. OTS Proposals in itself may not satisfy the parameters contemplated under Section 105 of the I & B Code, and theref....
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....s failure is treated as equivalent to rejection of repayment plan as contemplated under Section 115(2) of the Code and that, considering the above, in the absence of any repayment plan indicating resolution of personal insolvency, it finds just and proper to order commencement of bankruptcy proceedings against the personal guarantor in accordance with provisions of the code. (B) In the other two proceedings being IA/400/2025 in CP(IB) No.224/95/HDB/2022 and IA/402/2025 in CP(IB) No.222/95/HDB/2022, Learned Tribunal has recorded almost identical findings, as against the personal guarantors Ms. Y. Padmavathi and Mr. Y. Madhu Mohan respectively. 23. Ultimately, the Learned Tribunal proceeded to pass the impugned order dated 03.11.2025, in each of these Company Appeals directing the initiation of the bankruptcy proceedings against the personal guarantors, while considering the applications preferred under Form B, invoking the provisions as contained under Sections 121 to be read with 123 of the I & B Code which was to be read with Rule 7 of IBBI (Application to Adjudicating Authority Bankruptcy Process for Personal Guarantors to the Corporate Debtors), Rules 2019. A few com....
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....r creditors or by a debtor, to the Adjudicating Authority in the following circumstances, namely;- (a) where an order has been passed by an Adjudicating Authority under sub-section 4 of section 100; or (b) where an order has been passed by an Adjudicating Authority under sub-section 2 of section 115; or (c) where an order has been passed by an Adjudicating Authority under sub-section 3 of section 118. (2) An application for bankruptcy shall be filed within a period of three months of the date of the order passed by the Adjudicating Authority under the sections referred to in sub-section (1). (3) Where the debtor is a firm, the application under sub- section (1) may be filed by any of its partners." 26. Thus, the condition precedent for the invocation of Section 121 of the I & B Code, in order to pass an order on Section 123 of the I & B Code of initiation of the bankruptcy process are the orders passed by Adjudicating Authority either under Section 100(4) or under Section 115(2) or under Section 118(3) of the Code, as the case may be. In this case, Section 121 has been invoked on account of the order of Learned NCLT under Section 115(....
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....nder Section 102. The facts brought on the record indicates that there has been no communication from the Appellant after 24.08.2022. No Repayment Plan having prepared by the Debtor or submitted, no Proceeding for convening of the Meeting of Creditors or conduct of Meeting could take place. Section 111 provides for approval of Repayment Plan by Creditors, which is as follows: "111. Approval of repayment plan by creditors.-The repayment plan or any modification to the repayment plan shall be approved by a majority of more than three-fourth in value of the creditors present in person or by proxy and voting on the resolution in a meeting of the creditors." 13. In the present case, no Repayment Plan having been prepared there arose no occasion to pass an Order for either accepting or rejecting the Resolution Plan. Section 115 provides for effect of Order of Adjudicating Authority on Repayment Plan, which provision is as follows: "115: Effect of order of Adjudicating Authority on repayment plan.-(1) Where the Adjudicating Authority has approved the repayment plan under section 114, such repayment plan shall- (a) take effect as if proposed by the debtor in the ....