Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2024 Supreme(Online)(NCLT) 1803

NATIONAL COMPANY LAW TRIBUNAL
SMT. BIDISHA BANERJEE, SHRI. D. ARVIND, JJ
State Bank of India – Appellant
Versus
N.S. Engineering Projects Private Limited – Respondent
I.A. (IB) No. 2044/KB/2023 | Company Petition (IB) No. 1905/KB/2019

Advocates:
For the Appellants/Petitioners:
For the Respondents: Mr. Shaunak Mitra, Adv., Mr. Rahul Parasrampuria, PCS

The court affirmed that a resolution plan, once approved by the Committee of Creditors under the IBC, is binding and must comply with statutory provisions for effective business revival.

Headnote:(A) Insolvency and Bankruptcy Code, 2016 - Sections 30(6) and 31 - Approval of Resolution Plan - Resolution Plan submitted by M/s. Cosmic CRF Limited was approved by the Committee of Creditors with 100% voting in favor - The plan complies with legal provisions and is viable for revival - Moratorium ceases from the date of approval - The Resolution Plan is binding on the corporate debtor and stakeholders as per Section 31. (Paras 25, 64, 66)

Facts of the case:
The application for approval of the resolution plan was filed for N.S. Engineering Projects Private Limited; the Financial Creditor, State Bank of India, initiated Corporate Insolvency Resolution Process, appointing Mr. Anil Anchalia as the Resolution Professional. Three resolution plans were submitted, and after a challenge mechanism, Cosmic CRF Limited was declared the Successful Resolution Applicant. (Paras 4, 7, 24)

Findings of Court:
The approved resolution plan meets compliance as envisioned under the IBC and relevant regulations, ensuring effective revival of the Corporate Debtor while extinguishing claims not covered under the plan. (Paras 66, 54)

Issues: Whether the resolution plan complied with legal requirements and if it should be approved by this Adjudicating Authority. (Paras 61, 45)

Ratio Decidendi: The court held that the resolution plan must conform to Sections 30 and 31 of the IBC, emphasizing that the Committee of Creditors' commercial wisdom in approving the plan is not to be interfered with unless it violates specified requirements. (Paras 62, 35)

Result: Resolution Plan approved and sanctioned.

ORDER

Per: Bidisha Banerjee, Member (Judicial)

1. The Court congregated through hybrid mode.

Table of Contents I.A. (IB) No. 2044/KB/2023 ........................................................ 3

Prologue .................................................................................. 3

Commencement of the Corporate Insolvency Resolution Process (CIR Process) of the N.S. Engineering Projects Private Limited . 5

Public Announcement .............................................................. 5

Constitution of the Committee of Creditors and its Meetings ... 6

Appointment of Registered Valuers ......................................... 7

Collation of Claims .................................................................. 8

Corporate Insolvency Resolution Process and Compliance ....... 8

Evaluation and Voting ........................................................... 10

Compliance of the Resolution Plan submitted by the SRA with various provisions. ................................................................ 13

Details of the Resolution Plan and/or Payment Schedule ...... 22

Distribution of Financial Outlay ........................................... 24

Management And Control of Affairs of Corporate Debtor after The Approval of Resolution Plan ........................................... 30

Reliefs And Concessions sought by Resolution Applicant ...... 30

Our Inference ........................................................................ 51

I.A. (IB) No. 2044/KB/2023

2. Heard the Learned Counsel, Mr. Shaunak Mitra, Adv. and Mr. Rahul Parasrampuria, PCS appearing on behalf of the Resolution Professional of N.S. Engineering Projects Private Limited (Corporate Debtor) and perused the Resolution Plan which has been unanimously approved by the Committee of Creditors (for brevity “CoC”) of N.S. Engineering Projects Private Limited.

Prologue

3. The instant application is filed under Section 30 (6) and 31 of the Insolvency and Bankruptcy Code, 2016 for brevity “I&B Code” read with Regulation 39(4) of IBBI (Insolvency Regulations Process of Corporate Persons) Regulations, 2016, for brevity “IBBI Corporate Persons Regulations” for the approval of the Resolution Plan by Mr. Anil Anchalia (Registration no.: IBBI/IPA- 001/IP-P00049/2017-2018/10123), Resolution Professional of N.S. Engineering Projects Private Limited, hereinafter referred to as the “Applicant”.

4. The Learned Counsel, Mr. Shaunak Mitra, Adv. for the Resolution Professional (RP) submits that on the 8th meeting of the Committee of Creditors (CoC) of the N.S. Engineering Projects Private Limited (Corporate Debtor) convened on 08.11.2023, the Resolution Plan, submitted on 03.08.2023, annexed at Pages 109-193 to the application, as Annexure “G”, by the Resolution Applicant, “M/s. Cosmic CRF Limited” has been approved unanimously with a 100% voting share in its favour and declared M/s. Cosmic CRF Limited as “Successful Resolution Applicant”, for brevity “SRA”

5. It is submitted that there are three Resolution Plans received that were put in for e-voting at the 8^th CoC meeting. The e-voting of the 8th CoC meeting started on 08.11.2023 and concluded on 05.12.2023.

6. It is contended that the applicant (RP) informed the SRA regarding the decision of the CoC on 05.12.2023, by e-mail and issued a Letter of Intent, for brevity “LoI” which was accepted by the SRA and furnished a Performance Security for an amount of Rs. One Crore in favour of the Corporate Debtor by RTGS. The Copy of the Letter of Intent dated 05.12.2023 and such was duly accepted by the Resolution Applicant vide e-mail dated 07.12.2023 annexed at Pages 103 to 106, as Annexure “E” to the application. The Copy of the bank statements towards payment of performance security amounting to Rs. One Crore is annexed to the application as Annexure “F” at Pages 107-108.

Commencement of the Corporate Insolvency Resolution Process (CIR Process) of the N.S. Engineering Projects Private Limited

7. Vide an Order dated 31.03.2023, passed in Company Pet