Allowed

Approval of Resolution Plan - Starlite Infracon Pvt. Ltd. [Ia(Ib)No. 177/KB/2021 in Cp(Ib)No. 676(KB) 2019]

NCLT6 Jul 2022IA(IB)No. 177/KB/2021 in CP(IB)No. 676(KB) 2019

Case brief

AI extract

What is this about?

The National Company Law Tribunal Kolkata Bench approved the Resolution Plan of Starlite Infracon Private Limited, proposed by D N P Heights Welfare Association. The Tribunal found the plan viable and compliant with the Insolvency and Bankruptcy Code after receiving 100% approval from the Committee of Creditors.

What did the court decide?

Approval of the Resolution Plan; Direction to Resolution applicant to comply with statutory obligations within one year; Cessation of moratorium; Discharge of Resolution Professional.

Approval of Resolution Plan - Starlite Infracon Pvt… — Insolvency and Bankruptcy | NCLT (2022)

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IN THE NATIONAL COMPANY LAW TRIBUNAL KOLKATA BENCH

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IA(IB)No.177/KB/2021

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CP(IB)No.676(KB) 2019

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Application under section 30(6) and section31(1) of the Insolvency and Bankruptcy Code, 2016 for approval of Resolution Plan

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In the matter of:

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Reliance Home Finance Ltd.

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…Financial Creditor -Versus-

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Starlite Infracon Pvt. Ltd.

… Corporate Debtor

And

In the matter of:

Niraj Kumar Agrawal , Resolution Professional in respect of Starlite Infracon Private Limited.

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… Applicant Date of hearing: 04.03.2022 Date of pronouncement of order: 06.07.2022

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Coram:

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Shri Rohit Kapoor, Member (Judicial)

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Shri Harish Chander Suri, Member (Technical)

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Appearances (via video conference):

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For the Applicant/RP: 1. Shaunak Mitra, Advocate 2. Saurav Jain, Advocate 3. Niraj Kumar Agrawal, RP in person

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IN THE NATIONAL COMPANY LAW TRIBUNAL KOLKATA BENCH

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IA(IB)No.177/KB/2021 In CP(IB)No.676(KB) 2019

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ORDER

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1. This is an Application by Niraj Kumar Agrawal, Resolution Professional of STARLITE INFRACON PRIVATE LIMITED (CIN:U45400WB2013PTC189703), under section30(6)read with section 31(1) of the Insolvency and Bankruptcy Code,2016(“the Code”) for approval of Resolution Plan in respect of Starlite Infracon Private Limited, the Corporate Debtor (“CD”).

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2. The underlying Company Petition being C.P. (IB) No. 676/KB/2019 was filed by Reliance Home Finance Ltd. against the Corporate Debtor, under section 7 of the Code which was admitted into Corporate Insolvency Resolution Process (”CIRP”) by an order dated 16.03.2020.

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3. Mr. Niraj Kumar Agrawal was appointed as the Interim Resolution Professional (“IRP”), the Committee of Creditors (“CoC”) in its 1^st meeting held on 22.07..2020, resolved to appoint Mr. Niraj Kumar Agrawal [IBBI/IPA001/P-00949/2017-2018/11569] as the Resolution Professional (“RP”).

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4. The CIRP timeline was extended from time to time with approval of this Adjudicating Authority due to exclusion of Lockdown period (Date of Expiry of initial 180 days Period of CIRP after exclusion of period granted by Hon’ble AA by orders dated 14.9.20 & 07.01.2021 is 20.03.2021.Extension of CIRP period by 90 days under 12(2)/12(3) of IBC is approved under IA/324/KB/2021 .

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5. Invitation in Form ‘G’ for Expressions of Interest (“EoI”) from potential resolution applicants was published on 08.09.2020 for submission of resolution plans for the Corporate Debtor, in terms of the provisions of section 25(2)(h) of the Code read with regulation 36A(1) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016.The last date for receipt of EOI was 05.10.2020. The time to submit Resolution Plans was thereafter extended by the CoC upto 31.12.2020.

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6. The Applicant submits that 2 Persons namely ,D N P Heights Welfare Association & Harshvardhan Reddy were selected as Final resolution Applicants.

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7. Pursuant to the invitation for EOI published on 08.09.2020, Resolution Plans were submitted to the Resolution Professional within the stipulated last date, by

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IA(IB)No.177/KB/2021 In CP(IB)No.676(KB) 2019

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the following applicant:-

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NAME	PAN	ADDRESS
D N P Heights	AAGAD2394B	11, Dr. B C Ray Road,
welfare Association		Kolkata-700151

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8. On 04.01.2021, the CoC at its 7^th meeting, considered the plan. After discussion/negotiations with Resolution Applicants the CoC accepted the offer of Resolution Applicant in principle and the same was put up for approval by E voting from 08.01.2021 to 11.01.2021 . The CoC approved the Resolution Plan submitted by D N P Heights Welfare association with 100% vote share.

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9. Executive Summary of the Resolution Plan

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Stakehold ers	Amount Admitted Rs.	As a % of Total Liabil ity	Amount /Consideration Offered. Durationfrom effective date	Offere d Amt. (Rs.)
CIRP Cost (IRP/RP)	-	-	40,00,000 (Approx.) within 2-3 Months	40,00,000/-
Financial Creditor- Class of Creditor - Home Buyers	10,00,29,258/- (Excluding Notional Int & Cancellation) (14,24,08,221/ - With Notional Interest)	63.59 %	Complete Construction of all the Flats of Block-A & B as per agreement of sales within 18 Months subject to as specified in clause 4.2 (f) ref page 86	Construction to be completed and handover on Receipt of Outstanding

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IA(IB)No.177/KB/2021 In CP(IB)No.676(KB) 2019

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Stakehold ers	Amount Admitted Rs.	As a % of Total Liabil ity	Amount /Consideration Offered. Durationfrom effective date	Offere d Amt. (Rs.)
a. Financial Creditors- Reliance Home Finance Limited (RHFL)	7,54,27,773/-	33.68 %	It is proposed that Realization out of following properties and assets to be paid to RHFL Unsold inventory of Block- A & B (List enclosed Annexure-II) or sell consideration of the same Minimum Expected amount 1.25 Cr and Sale consideration out of conversion of any space into commercial space if permitted out of Tower A & B and Realization from the suspended director pursuant to applications filed with NCLT on account of avoidable transaction application Under Sec 43 under IBC,2016. App amount 4.36 Cr.	5,61,00,000/- (1,25,00,000/- unsold inventory+ 4,36,00,000/- realization from avoidable transactions)

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IA(IB)No.177/KB/2021 In CP(IB)No.676(KB) 2019

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Stakehold ers	Amount Admitted Rs.	As a % of Total Liabil ity	Amount /Consideration Offered. Durationfrom effective date	Offere d Amt. (Rs.)
			o be handed to RH making payment of CIRP co ayment to ope creditor as roposed in the proportion to debt/claim outstandi ecured Creditor and Home uyers who have c their flats up to 50% Outstanding ancellation mount)
b. Home Buyers cancellatio n amount	46,86,879/- (Excluding Notional Int) (61,03,176/- with notional Int)	2.73%	Home Buyers who have cancelled their flats (up to 50% of the Outstanding cancellation amount)	23,43,440/-
Operationa l Creditors	34,40,143/-		10% of the amount admitted i.e offered Rs. 3.44 Lakhs as full and final settlement in proportion to amount due Within 3 months	3,44,000/-
Workmen & Employees	0	0
Workmen & Employees ( ESI & PF)	0	0

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IA(IB)No.177/KB/2021 In CP(IB)No.676(KB) 2019

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Stakehold ers	Amount Admitted Rs.	As a % of Total Liabil ity	Offere d Amt. (Rs.)
Statutory Liabilities	0	0
Other Creditors	1,02,59,765/-		0
Total	23,76,39,078/- (Excluding Notional Int)	100%

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Various compliances as envisaged by the Code and the CIRP Regulations which a Resolution Plan is required to adhere to, are as follows:-

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I. Submission of Resolution Plan in terms of section 30(2) of the Code

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The compliance of the Resolution Plan is as under:

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*Clause* of *s.30(2)*	*Requirement*	*How dealt within the Plan*
(a)	Plan must provide for payment of CIRP cost in priority to repayment of other debts of CD in the manner specified by the Board.	Para 4 sub para 4.2(a), internal page 21 of the Resolution Plan.
(b)	Plan must provide for repayment of debts of Operational Creditors in such manner as may be specified by the Board which shall not be less than-	4.1 & 4.2B, internal pages 21-22 of the Resolution Plan.
	(i)the amount payable to such creditors in the event of liquidation under section 53; or
	(ii)the amount that

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	would have been paid
	to such creditors, if the
	amount to be distributed under the resolution plan had been distributed in accordance with the order of priority in sub-section(1) of section 53, whichever is higher; and
	(iii) provides for payment of debts of financial creditors who do not vote in favour of the resolution plan, in such manner as may be specified by the Board.	Resolution Plan approved with 100% votes of CoC
(c)	Management of the affairs of the Corporate Debtor after approval of the Resolution Plan.	4.4, internal pages26-28 of the Resolution Plan
*Clause* of *s.30(2)*	*Requirement*	*How dealt with in the Plan*
(d)	Implementation and Supervision.	4.5, internal pages 29 of the Resolution Plan.
(e)	Plan does not contravene any of the provisions of the law for the time being in force.	Part 2.1 (K), para 8, internal pages 15 of the Resolution Plan.
(f)	Confirms to such other requirements as may be specified by the Board.	No specific provision in the Plan. However, the Resolution Professional submits and confirms that the plan confirms to

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requirements specified by the Board.

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II. Measures required for implementation of the Resolution Plan in terms of Regulation 37 of CIRP Regulations:

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*Particulars*	*Relevant* *Provision* of *Resolution Plan dealing* *Regulation 37*	*the* *with*
A resolution plan shall provide for the for insolvency resolution of the corp value of its assets, including but not li	measures, as may be necessa orate debtor for maximization mited to the following:-	ry, of
Transfer of all or part of the assets of the corporate debtor to one or morepersons;	Not proposed by the RA
(b) sale of all or part of the assets whether subject to any security interest or not;	Not proposed by the RA
(c) restructuring of the corporate debtor, by way of merger, amalgamation and demerger	Not proposed by the RA
(d) the substantial acquisition of shares of the corporate debtor, or the merger or consolidation of the corporate debtor with one or more persons;	6.1(a) (b) internal page 39 the Plan	of
(e) cancellation or delisting of any shares of the corporate debtor, if applicable;	6.1(a) page 102
(f) satisfaction or modification of any security interest;	Para 5, sub para 5.2, internal 36-38 of the Plan	page
(g) curing or waiving of any breach of the terms of any debt due from the corporate debtor;	Not applicable.

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(h) reduction in the amount payable to the creditors;	Para-4, sub para 4.2, internal page 21-24 of the Plan read with SECTION-2, para 2.2, internal page 15-16 of the Plan
(i) extension of a maturity date or a change in interest rate or other terms of a debt due from the corporate debtor;	Settlement at Rs. 1.25 Crore on account of unsold flats (inventories) and Rs. 4.36 core to be paid if realized on account of application of Avoidable transaction. No maturity extension sought.
(j)amendment of the constitutional documents of the corporate debtor;	Not Applicable.
(k)issuance of securities of the corporate debtor, for cash, property, securities, or in exchange for claims or interests, or other appropriate purpose;	Not Applicable.
(l)change in portfolio of goods or services produced or rendered by the corporate debtor;	Not proposed by the RA.
(m) change in technology used by the corporate debtor; and	Not proposed by RA.
(n) obtaining necessary approvals from the Central and State Governments and other authorities.	Clause 4 sub clause 4.2(8) ref page of application 88.

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III. Mandatory contents of Resolution Plan in terms of Regulation 38 of CIRP Regulations:

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*Reference*	to *Requirement*	*How dealt within the Plan*
*relevant*
*Regulation*

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38(1)	The amount payable to the operational creditors under a resolution plan shall be paid in priority over financial creditors. The amount payable to the Financial creditors under a resolution plan, who have a right to vote under section 21(2) and did not vote in favour of the resolution plan shall be paid in priority over financial creditors who voted in favour of the Plan.	4.1 & 4.2B, internal pages 21-22 of the Resolution Plan. Resolution Plan approved with 100% vote of CoC members
38(1A)	A resolution plan shall include a statement as to how it has dealt with the interests of all stakeholders, including financial creditors and operational creditors of the corporate debtor.	Part-4 Para 4.2, internal page 21- 24 of the Plan
*Reference to* *relevant* *Regulation*	*Requirement*	*How dealt within the Plan*

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38(1B)	A resolution plan shall include a statement giving details if the resolution applicant or any of its related parties has failed to implement or contributed to the failure of implementation of any other resolution plan approved by the Adjudicating Authority at any time in thepast.	No such failure by the RA or any of its related parties. Part-3, para 3.4, internal page 18 of the Plan
38(2)	A resolution plan shall provide: (a)the term of the plan and its implementation schedule;	Para 4 internal pages 24-26 of the Plan read with Part-5 para 5.1 internal Pg 32-33
	(b) the management and control of the business of the corporate debtor during its term; and	4.4, internal pages 26-28 of the Resolution Plan.
	(c) adequate means for supervising its implementation.	4.5, internal pages 29 of the Resolution Plan.
38(3)	A resolution plan shall demonstrate that – It addresses the cause of default;	Part 4, para4.6, internal page 29-30 of the Plan
	(b)it is feasible and viable;	Part 4, para 4.6, internal page 30 of the Plan
	It has provisions for its effective implementation;	Part 4, para 4.5, internal page 29 of the Plan

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(d) it has for required timeline same; and	provis appro and for	ions vals the the	Part 4 internal pages 24-26 of Plan	the
(e) the Applicant capability implement resolution	Resolu has plan.	tion the to the	Part 3, para 3.7 read with internal page 19-20of Resolution Plan	3.6, the

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The successful Resolution Applicant has submitted a certificate of eligibility under section 29A of the Code.

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A Compliance Certificate in prescribed form, i.e., Form ‘H’ in compliance with regulation 39(4) of the Insolvency & Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, has been annexed. Evidence of receipt of performance security as required under Regulation 36B(4A) is disclosed .

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Details of Resolution Plan/Payment Schedule

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The relevant information with regard to the amount claimed, amount admitted and the amount proposed to be paid by the Resolution Applicant, i.e., D N P Heights Welfare Association, under the said Resolution Plan is tabulated as under:

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Sl.	Amount	Amount	%	Amount
No	Claimed	Admitted	share	proposed in
	*(in Rs.)*	*(in Rs.)*	in	Resolution
			COC	*Plan(in Rs.)***

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Financial Creditors

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1 Financial Creditor- Class of	10,84,48,616/- (Excluding Notional Int &	10,00,29,258/- (Excluding Notional Int &	63.59% Construction to be completed and handover on
Creditor -	Cancellation)	Cancellation)	Receipt of
Home	(287940967/-	(14,24,08,221/-	Outstanding
Buyers	With Notional	with notional
	Interest)	Interest)

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2	a. Financial Creditors- Reliance Home Finance Limited (RHFL)	8,72,28,798/-	7,54,27,773/-	33.68%	5,61,00,000/- (1,25,00,000/- unsold inventory+ 4,36,00,000/- realization from avoidable transactions)
	b. Home Buyers cancellation amount	47,64,370/- (Excluding Notional Int) (73,56,194/- with notional Int)	46,86,879/- (Excluding Notional Int) (6103176/- with notional Int)	2.73%	23,43,440/-
	c. Other Home Buyers	3,37,65,262/- (Excluding Notional Int) (34467766/- with Interest) Opera	NIL tional Creditors		NIL
1	Workmen and Employees	N/A	N/A	N/A	---
2.	Other operational creditors	2,11,77,995/-	34,40,143/-	---	3,44,000/-
3	Governmen t’s dues	NIL	NIL	---	NIL
4	Other Creditors (Shareholde r & Related Party advances)	2,00,69,765/-	102,59,765/-	-	NIL

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CIRP 1	TOTAL Cost CIRP Cost (Estimated)	45,82,41,485/- (With Notional Interest) 40,00,000	23,76,39,078/- (With Notional Interest) 40,00,000	N/A	40,00,000

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The total plan is of Rs.366.90 lakhs inclusive of the Capital Expenditure and Working Capital for development of the assets and operation of the Corporate

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Debtor,

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Sl.No.	Type of debts	Amount Proposed ( Rs. Lakhs)
1.	Estimated CIRP Cost	40.00
2.	Secured Financial Creditors	125.00
3.	Workmen and Employees	0.00
4.	Unsecured Financial Creditors (Cancellation amount of Home Buyers)	23.46
5.	Others Unsecured Financial Creditors (Related Parties )	0.00
6.	Operational Creditors (other than Statutory)	3.44
7.	Statutory Liabilities	0.00
8.	Shareholders	0.00
9.	Contingent to Govt Department	0.00
10.	Contingent/Unforeseen Cost	0.00
	Total payment to creditors	191.90
	Capital Expenditure and Working Capital for development of the Assets and operations of the CD	175.00

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Additional sum	fo	0.00
repayment workmen/employees	to
Total Plan Outlay		366.90

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15. Majority of Homebuyers, has submitted an affidavit confirming that they have understood and agreed to all terms of the Proposed Resolution Plan including in particular the following clauses: -

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Clause 3.7

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The resolution applicant is in the capacity to manage and fund for completion of construction work estimated cost is 1.5-2 cr. (Approx).

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Clause 4.2 (F)

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Construction of House property in Block A & B and handover possession and Registration as per transfer of Property act and other applicable act subject to payment of outstanding receivable amount along with proportionate extra cost of construction and services (including Transformer ) of respective Block and Common area cost to be shared by both the block and Registration charges as applicable need to be paid afresh by the respective home Buyers to get registration.

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Summary of the financial proposal/payment under the Resolution Plan is tabulated hereunder:

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Particulars	Amount
Admissible Debt to be	Rs 40,00,000/- or actual amount whichever is higher
paid to the CIRP	with 2 to 3 months of Approval date
Expenses
Admissible Debt to be	Rs 3,44,000/- or actual amount whichever is higher
paid to the	with 2 to 3 months of Approval date
Operational Creditors

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Admissible Debt to be paid to Financial Creditors

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Reliance ltd.	Home	Finance	Value of Unsold inventories (Flats) Rs. 1,25,00,000/- within 4 to 60 months and Rs. 4,36,00,000/- only on realization of avoidable transactions (Immediately on realization)
Home		Buyers	Rs. 23,46,000/- within 4 to 60 months of Approval
(Cancellat	ion A	mount)	date
Home		Buyers	Within 4 to 60^thMonths
Handover Flats	Con	structed

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17. Details on Management/ Implementation and Reliefs as per the Resolution Plan-

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The Resolution Plan also provides for–

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a. Management of Company after resolution in Part 4, Para 4.4 at internal page No. 25 of the Plan;

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b. Term of the resolution plan as per Part 4 at internal page No. 24 of the Plan;

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c. Indicative timelines of events for implementation in Part 4 Page-88-89 read with Part 5 at internal pages 95-96 and 41 of the Plan; and

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d. Implementation and Supervision of the resolution plan in Para 4, Sub Para 4.5 .

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Waivers, Reliefs and Exemptions

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In Part 6 of the Plan para 6.2, internal page 43-51, Resolution applicant has prayed below mentioned waivers, reliefs and exemptions for the effectiveness or implementation of the Resolution Plan:-

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Sl. Waivers, Reliefs and Exemptions sought Orders thereon No. from Hon’ble NCLT

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1.	Waiver of the Statutory Liabilities/ Contingent Liabilities incurred and accrued / due to statutory authorities viz. VAT, Sales Tax, GST, Income Tax, Excise, Customs, FEMA & Export Obligation, etc.:	This is appropriate authorities the same in with the rel	for the taxing to consider accordance evant law.
2.	Waivers of MAT liability arising on account of write off of loans	This is appropriate authorities the same in with the rel	for the taxing to consider accordance evant law.
3.	Waiver of the dues of the Operational Creditors and other current liabilities and any other operational liability accrued and incurred before Insolvency (CIRP)	Granted in *Ghanashya* *and Sons* *Edelweiss*	terms of the m *Mishra* *Pvt Ltd v* *Asset*
	commencement date other than one expressly included in the resolution Plan	*Reconstruc* *Company L*	*tion* *td,*¹ wherein
4.	Waiver of all liabilities incurred and accrued before Insolvency (CIRP) commencement date towards Workmen and Employees	the Hon'b Court has 95(i) tha resolution	le Supreme held in para t once a plan is duly
5.	Waiver of any liability incurred and accrued before Insolvency (CIRP)	approved Adjudicatin	by the g Authority
	commencement date on account of	under sub-s	ection (1) of
	Financial Debt owed to Unsecured	section 31,	the claims
	Creditors other than one expressly included in the resolution Plan	as provid resolution	ed in the plan shall
6.	Waiver of all the Contingent Liabilities	stand froze	n and will be
	arising out of any acts or actions of the company done before the Insolvency	binding Corporate	on the Debtor and

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1 2021 SCC OnLine SC 313 decided on 13.04.2021.

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	(CIRP) commencement date other than one expressly included in the resolution Plan	its employees, members, creditors,
7.	Waiver from all Corporate Guarantees	including the Central
	given by the company before the	Govt, any State Govt or
	Insolvency (CIRP) commencement date	any local authority,
8.	No recourse on corporate debt or against any amount recovered from personal	guarantors and other stakeholders. On the
	guarantors (erstwhile guarantors) or	date of approval of
	corporate guarantors, if any	resolution plan by the Adjudicating Authority, all such claims, which
		are not a part of
		resolution plan, shall
		stand extinguished and
		no person will be
		entitled to initiate or
		continue any
		proceedings in respect to a claim, which is not
		part of the resolution
		plan. The Hon'ble
		Supreme Court also
		held that all the dues
		including the statutory
		dues owed to the
		Central Govt, any State
		Govt or any local
		authority, if not part of
		the resolution plan,
		shall stand extinguished
		and no proceedings in

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		respect of such dues for the period prior to the date on which the
		Adjudicating Authority grants its approval under section 31 could be continued.
9.	Waivers for any/all liabilities arising under Companies Act 1956/ Companies Act	Granted.
	2013/FEMA Regulations/Labor Laws, etc
10.	For unknown liabilities/off balance sheet transactions	Granted in terms of the *Ghanashyam* *Mishra*
		*and Sons Pvt Ltd v*
		*Edelweiss* *Asset*
		*Reconstruction*
		*Company Ltd,*² wherein
		the Hon'ble Supreme
		Court has held in para
		95(i) that once a
		resolution plan is duly
		approved by the
		Adjudicating Authority
		under sub-section (1) of
		section 31, the claims
		as provided in the
		resolution plan shall
		stand frozen and will be
		binding on the
		Corporate Debtor and
		its employees,

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2 2021 SCC OnLine SC 313 decided on 13.04.2021.

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members, creditors,
including the Central
Govt, any State Govt or
any local authority,
guarantors and other
stakeholders. On the
date of approval of
resolution plan by the
Adjudicating Authority,
all such claims, which
are not a part of
resolution plan, shall
stand extinguished and
no person will be
entitled to initiate or
continue any
proceedings in respect
to a claim, which is not
part of the resolution
plan. The Hon'ble
Supreme Court also
held that all the dues
including the statutory
dues owed to the
Central Govt, any State
Govt or any local
authority, if not part of
the resolution plan,
shall stand extinguished
and no proceedings in
respect of such dues for

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		the period prior to the date on which the Adjudicating Authority grants its approval under section 31 could be continued.
11.	Exclusion of time period of CIRP if any committed under any ongoing contract/Agreement/Joint Venture/Demand raised by electricity authority or any other department for supply of services or goods after approval of the Proposed Resolution Plan	Cannot be granted at this stage as the Resolution Professional was under duty to manage the affairs of the Corporate Debtor during CIRP.
12.	The newly appointed Board of director shall execute material agreements as required under the plan, initiate approvals and process to subscribe to equity shares of the Company and infuse funds as required under the Proposed Plan. The newly appointed Board of director by Resolution Applicant shall be treated as authorized signatory for all material agreement ongoing or to be entered into by company	Granted.
13.	That the claims or properties/assets for which applications are made under	The same shall be with respect to the order
	Avoidable Transactions or any other	passed in the
	application is made to NCLT/NCLAT or any other Tribunal and court would only be	application for the Avoidable
	discharged after decision of the adjudicating authorities	Transactions.
14.	That post approval of Resolution Plan	Granted.

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	Resolution Applicant would authorize the newly appointed Board of Directors of the corporate Debtor to pursue, represent, make application if required as Respondent or Applicant in place of Resolution Professional in all matters pertaining to Corporate Debtors
15.	Approval of Resolution Plan should not be treated as closure of all application made by the Resolution Applicant which are not yet disposed of by the concerned authorities and Resolution Applicant would continue proceedings till final disposal of the matter for protection &maximization of assets of the Corporate Debtor	Such a relief cannot be granted at this stage.

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19. Extinguishment of Claims / Entitlements as follows:-

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Sl.	Extinguishment of Claims / Entitlements	Orders thereon
No.
1.	The Resolution Professional issued a	Granted in terms of the
	notice inviting all potential claimants to	Ghanashyam Mishra and
	submit their proofs of Claim. This was	Sons Pvt Ltd v Edelweiss
	published in newspapers in accordance	Asset Reconstruction
	with Applicable Law. Pursuant to this	Company Ltd,³ wherein the
	notice the Resolution Professional may	Hon'ble Supreme Court
	have received letters from Persons whose	has held in para 95(i) that
	Claims have not been crystalised as of the	once a resolution plan is
	Insolvency Commencement Date. The	duly approved by the
	Plan is being proposed in order to	Adjudicating Authority

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3 2021 SCC OnLine SC 313 decided on 13.04.2021.

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restructure the assets and liabilities of the	under sub-section (1) of
Corporate Debtor and for the best interests	section 31, the claims as
of stakeholders of the Corporate Debtor to	provided in the resolution
the extent possible. With this objective, the	plan shall stand frozen and
Resolution Applicants assumes that all	will be binding on the
Persons that have any Claims against the	Corporate Debtor and its
Corporate Debtor have filed their Claims	employees, members,
and the verifiable Claims have been	creditors, including the
admitted by the Resolution Professional	Central Govt, any State
and disclosed in the Information	Govt or any local
Memorandum. Accordingly, the	authority, guarantors and
Resolution Applicants and the Corporate	other stakeholders. On the
Debtor shall have no responsibility or	date of approval of
liability in respect of any Claims against	resolution plan by the
the Corporate Debtor attributable to the	Adjudicating Authority, all
period prior to the date of implementation	such claims, which are not
of the resolution plan other than any	a part of resolution plan,
payments to be made as specifically agreed	shall stand extinguished
under the plan. The Resolution Applicants	and no person will be
undertakes to pay the creditors the amount	entitled to initiate or
committed under this plan to take-over the	continue any proceedings
Corporate Debtor. The Corporate Debtor	in respect to a claim,
or the Resolution Applicants shall not be	which is not part of the
held liable to pay any amount to the	resolution plan. The
creditors pursuant to the invocation by the	Hon'ble Supreme Court
creditor of any Collateral security/	also held that all the dues
Personal Guarantee/ Corporate Guarantee	including the statutory
offered to them to secure the debt availed	dues owed to the Central
by the Corporate Debtor either but not	Govt, any State Govt or
limited to by the Promoter/Directors/Any	any local authority, if not
other third parties, Associate/Subsidiary	part of the resolution plan,

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/Group/ Related Concern or from any other entities but not from the Corporate Debtor	shall stand extinguished and no proceedings in
and Resolution Applicants towards recovery of balance claim amount."	respect of such dues for the period prior to the date
2. On and with effect from the date of implementation of the resolution plan, the guarantors, indemnity providers and like persons that have provided guarantees,	on which the Adjudicating Authority grants its approval under section 31 could be continued.
indemnities, co-borrowing or like arrangements for and on behalf of the Corporate Debtor, including in order to secure the Debt availed of by the Corporate Debtor, shall not be entitled to exercise or enforce any subrogation rights (or similar rights) in respect of such arrangements, even where such rights have already been exercised. On and with effect from the date of implementation of the resolution plan, all rights and claims (whether contingent or otherwise) of what so ever nature of the Existing Promoters against the Corporate Debtor shall stand irrevocably and unconditionally extinguished in perpetuity.	In**Lalit Kumar Jain v Union of India & ors,*⁴the Hon'ble Supreme Court held in para 133 that sanction of a resolution plan and finality imparted to it by section 31 does not per* se operate as a discharge of the guarantor's liability. The provisions of section 32A of the IBC will also apply.
3. As of the date of implementation of the resolution plan, any Debt owed by the Corporate Debtor which is barred by	Granted in terms of the Ghanashyam Mishra and Sons Pvt Ltd v Edelweiss
limitation under Applicable Law, shall immediately, irrevocably and	Asset Reconstruction Company Ltd,⁵ wherein the

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4 2021 SCC OnLine SC 396 decided on 21.05.2021.

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5 2021 SCC OnLine SC 313 decided on 13.04.2021.

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unconditionally stand extinguished,	Hon'ble Supreme Court
waived, and withdrawn on and from the	has held in para 95(i) that
date of implementation of the resolution	once a resolution plan is
plan and no Person shall have any further	duly approved by the
rights or Claims against the Corporate	Adjudicating Authority
Debtor in this regard. The Resolution	under sub-section (1) of
Applicants undertakes to pay the creditors	section 31, the claims as
the amount committed under this plan to	provided in the resolution
take over the Corporate. The Corporate	plan shall stand frozen and
Debtor or the Resolution Applicants shall	will be binding on the
not be held liable to pay any amount to	Corporate Debtor and its
the creditors pursuant to the invocation by	employees, members,
the creditor of any Collateral	creditors, including the
Security/Personal Guarantee/Corporate	Central Govt, any State
Guarantee offered to them to secure the	Govt or any local
debt availed by the Corporate Debtor	authority, guarantors and
either but not limited to by the	other stakeholders. On the
Promoter/Directors/Any other third	date of approval of
parties, Associate/Subsidiary /Group/	resolution plan by the
Related Concern or from any other	Adjudicating Authority, all
entities but not from the Corporate Debtor	such claims, which are not
and Resolution Applicants towards the	a part of resolution plan,
recovery of the balance claim amount.	shall stand extinguished
	and no person will be
	entitled to initiate or continue any proceedings
	in respect to a claim,
	which is not part of the
	resolution plan. The
	Hon'ble Supreme Court also held that all the dues

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		including the statutory dues owed to the Central Govt, any State Govt or any local authority, if not part of the resolution plan, shall stand extinguished
		and no proceedings in
		respect of such dues for the period prior to the date on which the Adjudicating
		Authority grants its
		approval under section 31 could be continued.
4.	Any Encumbrance, whether over	Granted.
	immovable, movable assets, fixed
	deposits or cash or any other rights or
	privileges and including without
	limitation, security, letter of credit, bank
	guarantee or pledge provided by
	Corporate Debtor to the financial
	creditors, that was
	created/granted/arranged in connection
	with any Financial Debt or Operational
	Debt or any other debt or obligation of
	the Corporate Debtor, at any time prior to
	the Approval Date, shall automatically be
	released and all liabilities and obligations of the Corporate Debtor in relation to
	such Encumbrance or other form of
	collateral (including those created/
	arranged by the Corporate Debtor as a

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guarantor or a third party security
provider in relation to its subsidiaries,
joint ventures, related parties or
associates, if any) shall stand permanently
extinguished and released on the approval of this Resolution Plan by the NCLT.
All title deeds and other documents
(including charge documents, if any) held
by the Financial Creditors or any
trustee/agent on their behalf in relation to
the Existing Encumbrances shall be
immediately returned to the Corporate
Debtor as per the terms set out in Part-5
Page No-100 sub clause (III). No existing
Encumbrance shall be enforced by any
creditor after Approval Date or otherwise
and all existing proceedings /enforcement action shall be immediately withdrawn.
The Resolution Applicants undertakes to
pay the creditors the amount committed
under this plan to take over the Corporate
Debtor. The Corporate Debtor or the
Resolution Applicants shall not be held
liable to pay any amount to the creditors
pursuant to the invocation by the creditor
of any Collateral security/Personal
Guarantee/Corporate Guarantee offered to
them to secure the debt availed by the
Corporate Debtor either but not limited to
by the Promoter/Directors/Any other third parties, Associate/Subsidiary /Group/

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Related Concern or from any other entities but not from the Corporate Debtor and Resolution Applicants towards recovery of balance claim amount.
5. All liabilities (whether contingent or crystallized) in relation to any corporate guarantees, indemnities and all other forms of credit support including those availed by Corporate Debtor on a co-borrower arrangement, along with, any third party provided by the Corporate Debtor prior to	Granted in terms of the Ghanashyam Mishra and Sons Pvt Ltd v Edelweiss Asset Reconstruction Company Ltd,⁶ wherein the Hon'ble Supreme Court has held in para 95(i) that
the Implementation Date, and all	once a resolution plan is
contingent liabilities disclosed in the annual audited financial statements of the Corporate Debtor and liabilities which are not in notice of Corporate Debtor or not	duly approved by the Adjudicating Authority under sub-section (1) of section 31, the claims as
acknowledged by the Corporate Debtor, shall stand extinguished and discharged on and with effect from the Implementation	provided in the resolution plan shall stand frozen and will be binding on the
Date, at a Nil value. The Resolution Applicants undertakes to pay the creditors the amount committed under this plan to	Corporate Debtor and its employees, members, creditors, including the
take-over of the Corporate Debtor. The	Central Govt, any State
Corporate Debtor or the Resolution	Govt or any local
Applicants shall not be held liable to pay	authority, guarantors and
any amount to the creditors pursuant to the	other stakeholders. On the
invocation by the creditor of any Collateral	date of approval of
security/Personal Guarantee/Corporate	resolution plan by the
Guarantee offered to them to secure the debt availed by the Corporate Debtor	Adjudicating Authority, all such claims, which are not

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6 2021 SCC OnLine SC 313 decided on 13.04.2021.

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either but not limited to by the Promoter/Directors/Any other third parties,	a part of resolution plan, shall stand extinguished
Associate/Subsidiary /Group/ Related	and no person will be
Concern or from any other entities but not	entitled to initiate or
from the Corporate Debtor and Resolution	continue any proceedings
Applicants towards recovery of balance	in respect to a claim,
claim amount."	which is not part of the
6. The payment to Persons contemplated - Proposal for all kinds of Creditors of the Corporate Debtor shall be the Corporate Debtor’s and Resolution Applicant’s full and final performance and satisfaction of all it so obligations to such Persons and all Claims (including, for the avoidance of doubt, any unverified portion of their	resolution plan. The Hon'ble Supreme Court also held that all the dues including the statutory dues owed to the Central Govt, any State Govt or any local authority, if not part of the resolution plan,
Claims) of such Persons against the	shall stand extinguished
Corporate Debtor shall stand irrevocably	and no proceedings in
and unconditionally settled and	respect of such dues for
extinguished in perpetuity upon such	the period prior to the date
discharge. The Resolution Applicant	on which the Adjudicating
undertakes to pay the creditors the amount	Authority grants its
committed under this plan for taking over the Corporate Debtor. The Corporate Debtor or the Resolution Applicant shall not be held liable to pay any amount to the creditors pursuant to the invocation by the creditor of any Collateral security/Personal	approval under section 31 could be continued.
Guarantee/Corporate The guarantee offered to them to secure the debt availed
by the Corporate Debtor but not limited to by the Promoter/Directors/Any other third

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parties, Associate/Subsidiary /Group/ Related Concern or from any other entities but not from the Corporate Debtor and
Resolution Applicant towards the recovery of balance claim amount."
7. On and with effect from the date of implementation of the resolution plan, all the outstanding negotiable instruments issued by the Corporate Debtor or by any Person on behalf of the Corporate Debtor including demand promissory notes, post- dated cheques and letters of credit, shall stand terminated and the Corporate Debtor’s liability under such instruments shall stand extinguished. The Resolution Applicant undertakes to pay the creditors the amount committed under this plan for takeover of the Corporate Debtor. The Corporate Debtor or the Resolution Applicant shall not be held liable to pay any amount to the creditors pursuant to the invocation by the creditor of any Collateral security/Personal Guarantee/Corporate Guarantee offered to them to secure the debt availed by the Corporate Debtor	Granted.
either but not limited to by the Promoter/Directors/Any other third parties, Associate/Subsidiary /Group/ Related Concern or from any other entities but not from the Corporate Debtor and Resolution Applicant towards recovery of balance

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	claim amount.
8.	Upon the approval of the	Plan by the	Granted.
	NCLT under Section 31 of t	he Code, all
	pending proceedings relati winding-up of the Corporate stand irrevocably and un abated in perpetuity.	ng to the Debtor shall conditionally
9.	On and with effect	from the	Granted.
	Implementation Date, all	securities
	convertible or exchangeable Shares and all rights to subscr	into Equity ibe to Equity
	Shares, including convertible convertible preference shares	debentures, , convertible
	loans (whether compulsorily	or partially
	convertible or not), warrants,	subscription
	rights under shareholders	agreements
	entered into by the Existing any, shall stand immediately and settled.	Promoters if extinguished

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FINDINGS

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On hearing the submissions made by the Ld. Counsel for the Resolution Professional, and perusing the record, we find that the Resolution Plan has been approved with100% voting share. As per the CoC, the Plan meets the requirement of being viable and feasible for revival of the Corporate Debtor. By and large, all the compliances have been done by the RP and the Resolution Applicant for making the Plan effective after approval by this Bench.

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On perusal of the documents on record, we are also satisfied that the Resolution Plan is in accordance with sections 30 and 31 of the Code and also complies with regulations 38 and 39 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. No circumstances exist that militate against grant of approval for the Resolution Plan.

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As far as the question of granting time to comply with the statutory obligations/seeking sanctions from governmental authorities is concerned, the Resolution Applicant is directed to do the same within one year as prescribed under section 31(4) of the Code.

¶203

Therefore, subject to the observations made in this Order, the Resolution Plan in question is hereby approved by this Bench. The Resolution Plan shall form part of this Order.

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The Resolution Plan is binding on the Corporate Debtor, its employees, members, and all its creditors including but not limited to secured, unsecured, financial and operational creditors, guarantors, government and statutory and local authorities and other stakeholders involved so that revival of the Corporate Debtor can come into force with immediate effect.

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The Moratorium imposed under section 14 shall cease to have effect from the date of this order.

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The Resolution Professional shall stand discharged from his duties with effect from the date of this Order. However, he shall perform his duties in terms of the Resolution Plan as approved by this Adjudicating Authority.

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The Resolution Applicant shall have access to all the Corporate Debtor’s records, documents, assets and premises with effect from the date of this order.

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The Resolution Professional is further directed to handover all records, documents and properties of the Corporate Debtor to the Resolution Applicant to enable the Resolution Applicant to finalize the further line of action required for starting of the operations.

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In case of non-compliance of this order or withdrawal of Resolution Plan, the CoC shall forfeit the EMD amount already paid by the Resolution Applicant.

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