In the matter of State Bank of India v. T Padmavathi, [Ia No.588 of 2023 in Cp Ib No.111/95/HDB/2022]

NCLT13 Sept 2023IA No.588 of 2023 in CP IB No.111/95/HDB/2022

Case brief

AI extract

What is this about?

The NCLT approved a revised improved repayment plan submitted by Ms. T. Padmavati, a personal guarantor, to State Bank of India. Despite the sole creditor abstaining from voting, the Tribunal directed the Resolution Professional to supervise implementation and granted a discharge order upon completion.

What did the court decide?

Approval of the revised repayment plan with directions for supervision, discharge of liability upon completion, and extinguishment of existing and future security instruments.

In the matter of State Bank of India vs. T Padmavathi… — Insolvency and Bankruptcy | NCLT (2023)

¶1

HYDERABAD BENCH-1 NATIONAL COMPANY LAW TRIBUNAL

¶2

IA No.588 of 2023

¶3

¶4

CP IB No.111/95/HDB/2022

¶5

Applicationfiled under Section 114 ofIBC 2023

¶6

IN THE МАТТЕR OF

¶7

GUARANTOR) TO M/S CHADALAVADA INFRATECH LTD STATE BANK OF INDIA vs T. PADMAVATI (PERSONAL

¶8

(CORPORATE DEBTOR)

¶9

Resolution Professional Maligi Madhusudhana Reddy

¶10

...... Applicant/ Resolution Professional

¶11

Date of order 13.09.2023

¶12

Coram

¶13

Dr. N. Venkata Ramakrishna Badarinath, Hon'ble Member Judicial

¶14

Shri Charan Singh, Hon'ble Member Technical

¶15

Appearance

¶16

For Applicant:

¶17

Shri Suryanarayana Raju, Advocate Party in person

¶18

For Creditor:

¶19

दीयकम्पनीmmanyविधिLaw
Hydere

¶20

For Personal Guarantor: Ms. Sandhya Rani

PER: BENCH

ORDER

Padmavati, Personal Guarantor to Corporate Debtor M/s Chadalavada the Personal Guarantor. Infratech Limited, seeking approval of the repayment plan submitted by Rule 11 of NCLT Rules, 2016, by the Resolution Professional for Mr. T. & BankruptcyCode, read with 19 ofIBBI (Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Regulations, 2019 and This Application is filed under Section 112 (1) and 114 of the Insolvency

¶25

Professional. commencementof Insolvency Resolution Process against T. Padmavathi registration no. IBBI/IРА-001/IP-P00843/2017-18/11427, as Resolution (Personal Guarantor to the Corporate Debtor) to M/s Chadalavada Infratech Ltd and appointed Shri Maligi Madhusudhana Reddy, bearing To put precisely, this Tribunal vide order dated 26.09.2022 ordered

¶26

¶27

creditors by 01.11.2022. The last date for the Resolution Professional to (English) on 13.10.2022, calling claims from the Creditors from the Applicant herein caused public notice calling for claims in "Nava Telangana" (Telugu), Prajashakti (Telugu) & "Financial Express" Consequent to his taking over charge as Resolution Professional, the

¶28

submit his report under section 106 of IBC was 22.11.2022,

¶29

ComdnyLawT
मेराकम्पना

¶30

Hyde

¶31

¶32

forfeit its right to enforce the Personal Guarantor's security during the It is submitted that the Financial Creditor through its claim form, opted to

¶33

period ofRepayment Plan.

¶34

¶35

consultation with the Resolution Professional. The Personal Guarantor was asked by the Resolution Professional vide e- mail dated 19.10.2022 and 09.03.2023 to prepare a Repayment Plan in

¶36

only one claim i.e. from State Bank of India amounting to Rs. 6. Pursuant to public announcement, the Resolution Professional received Rs.278,07,60,753/-

¶37

¶38

on 26.12.2022. 31.10.2022 was placed before the 1st meeting of the creditors on 20.12.2022 by the Resolution Professional. After detail deliberations, the revised repayment plan of the Personal Guarantor was approved by the sole creditor SBI. The same was filed before this Tribunal, for approval The 1st repayment plan submitted by the Personal Guarantor on

¶39

¶40

to the notice of the creditor during a review meeting that the Vote casted Personal Guarantor, that has been earlier approved by the sole creditor moved a memo seeking withdrawal of the repayment plan submitted by and which is pending before this Tribunal, on the ground that, it had come Later the Resolution Professional, at the instance of the Sole Creditor

¶41

in "favour' ofthe repayment plan was inadvertent, instead of 'against' it and directed the Resolution Professional to place fresh Repayment Plan

¶42

application if any. Accordingly, the Tribunal allowed the withdrawal of Application IA(IBC) No. 1585/2022 on 06.02.2023, granting liberty to file a fresh Guarantors so that a collective decision on all the plans can be considered on commercial grounds and keeping in view, the spirit of the Code. of Smt. T. Padmavati in the next meeting along with the plans ofother

¶43

¶44

guarantor, fourth creditor's meetings were conducted by the Resolution resolution professional for their consideration. the IBC 2016 and its Regulations, was shared with the Creditor by the Professional and based on the discussions, copy of the repayment plan submitted by the guarantor along with the compliance particulars under It is further submitted that during the process of insolvency of the

¶45

1. attached as Annexure-7. Thereafter, the following resolution with respect with statement of affairs with assets and liabilities was discussed in detail affairs is annexed as Annexure -6. The revised improved repayment plan submitted by the Guarantor along in the 4th meeting of creditors. The Copy of revised Repayment Plan is The Resolution Professional has complied the Statement of Affairs in Board of India (Insolvency Resolution Process for Personal Guarantors to accordance with Regulation 10(1) of the Insolvency and Bankruptcy the Corporate Debtor) Regulations, 2019. The copy of the statement of

¶46

to revised repayment plan was placed for e-voting from 6 pm, 3rd April

¶47

2023 to 6 pm, 4th April 2023 by the resolution professional for approval.

¶48

revised payment schedule of: within 30 days of approval by the is hereby approved." Hon'ble Adjudicating Authority - Rs.3,87,50,000/- and within 60 days by Mr. T. Padmavati, Personal Guarantor to the Corporate Debtor M/s. of the approval of Adjudicating Authority - Rs.11,62,50,000/- be and Chadalvada Infratech Private Limited for Rs.15,50,00,000/- with the “RESOLVED THAT the Revised Improved Repayment Plan submitted

¶49

and opted to Abstain from voting. However, the sole Creditor has neither approved nor rejected the above resolution

¶50

Annexure -8. voting and the creditor opted to abstain is annexed and marked The copy of the voting record where the repayment plan placed for

¶51

submitted vide Guarantor's letter dated 13.03.2023 is annexed and marked as Annexure 7 to the Application. The salient features of the Repayment plan along with the concessions and reliefs prayed for, as 12. SALIENT FEATURES OF THE REPAYMENT PLAN: The revised improved repayment plan (revised as on 13.03.2023) extracted from the Repayment plan is given below:

¶52

(i)

¶53

Brief details about the engagement of debtor with the CD :

¶54

Company's borrowings from SBI and signed agreements accordingly. Chadalavada Infratech Ltd the Corporate Debtor in connection with the The debtor Mrs. T. Padmavati, stood as Personal Guarantor to M/s

¶55

facilities availed by the Corporate Debtor.

¶56

arabad

¶57

1
creditor
SBI
S.
the
Rajendranagar Mandal of
at ORR junction,
No.
T. Padmavathi, T. Pavani, T.
Rangareddy district(A.P)
Name of
standing in the name of Smt.
Sy. Nos. 349/A 1, 2, 3,
Sri Ganesh and T.
voting right %
Guntas (Ac 14.15 cents) in
2,78,07,60,753/-
349/A/1, 349/Vuu/2 and
situated at Narsing Village,
Yugandhar.
Agricultural Land
Amount Claimed
admeasuring Ac 14.06
Medak Dist (Telangana
347/B/3,
admitted
100%
State)standing in the name
3.00 Cents in Sy. No 189/A
Village, RC Puram Mandal,
Security interest if any
2) Land admeasuring Ac
348/АЛ/2, 349/A, situated
349/u/3 situated at Velimela
of Sat T. Padmavathi, W/o
at Chanduguda, Velimela
Sri T. Devender.
347/B/1, 349/A/1, 347/E/2,
Claims from Banks
2,78,07,60,753/-
Amount
Village and Sy. Nos. 348/А,
348/AA/1,

¶58

(ii) Details of the excluded assets and excluded debts:

¶59

(iii)

¶60

However, it is stated that the debtor wants to exclude Rs. 1,00,000/-within liabilities within the criteria of excluded debts under Section 79 (15) and It is stated in the repayment plan that the debtor does not have any the criteria of excluded assets under Section 79 (14) as such has not proposed to avail the benefit of excluded asset(s) if any.

¶61

Payment to the creditors:

¶62

100
1
15,50,00,000/-
right %
15,50,00,000/-
Total
S.No.
Amount Rs.
State Bank of India
Name of the creditor
Fifteen Crores fifty lakhs only) to the creditor as under:-
voting
The debtor has proposed to make payment of Rs.15,50,00,000/-(Rupees

¶63

The above amount proposed will be paid in instalmentseas hereunder

¶64

Proposed Revised Repayment Plan:

¶65

S.No.	Particulars
1	With 30 days of the approval of Adjudicating Authority (25%)	Amount Rs. 3,87,50,000/-
2	With 60 days of the approval of Adjudicating Authority (75%)	11,62,50,000/-
	TOTAL	15,50,00,000/-

¶66

(iv) filed. for payment to creditors as stated in the repayment plan which has been letter obtained from the prospective buyer to confirm the source of funds priority over any other creditors. The Guarantor has provided comfort and sale of other personal assets. That such payment shall be made in Sources of funding: The source of funding is from sale of the properties

¶67

(v) Reliefs as claimed by the Personal Guarantor:

¶68

(b) (a) 4294/2005. guarantee agreement and issue a Discharge Certificate certifying that

¶69

admeasuring Ac 14.06 Guntas in Sy. No 349/A-1,2,3 349/A/1, 349/vuu/2 and 349/vu/3 Situated at Velimela village and Sy. Nos. understanding that there shall be no more financial obligations towards State Bank of India and the Bank shall return her original

¶70

348/A, 347/E/1, 349/A/1, 347/E/2, 348/AA/1, 347/E/3, 348/AA/2 The amount that is being paid by the Guarantor is on the distinct

¶71

Puram Mandal, Medak District (Telangana State) standing in the name ofSmt.T Padmavathi, wife of SrjT Deyender Vide Doc NoDocuments on the properties mortgaged bearing: a. Agricultural land

¶72

349A, 347/AA/2 situated at Chanduguda, Velimela village, RC The State Bank of India shall return the Original Registered her liability as a guarantor to the Corporate Debtor, M/s. Chadalavada InfratechLtd. is totally discharged.

¶73

executed in favour of creditor." possession on said properties. value of the securities offered by me and for personal guarantee

¶74

¶75

112 ofthe Code that - creditors on repayment plan.

¶76

The Resolution Professional further confirms that he has complied resolution professional is annexed and marked as Annexure -9.

below:

implemented; and

by this Tribunal. if meeting ofthe creditors is not required to be summoned, reasons for the required, to consider the repayment plan: same shall be provided. (c) there is a necessity of summoning a meeting of the creditors, RP to convene a meeting for the purpose of seeking approval of the

¶82

However, in this case on hand the sole member of creditor chose to accept or reject or even suggest modifications in the repayment plan. abstain. In the circumstances, the Creditor's meeting conveyed no decision on the approval of the Plan.

¶83

with section 112 of IBС, 2016. are passing an order on the basis ofreport prepared by RP under section 106 of the Code which confirms that repayment plan is under compliance

¶84

Resolution Process for the Personal Guarantor has been conducted in The Resolution Professional further submits that the Insolvency

¶85

Corporate Debtors) Regulations, 2019. compliance of the IBC 2016 and the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Personal Guarantors to

¶86

We therefore, hereby approve the same with effect from the date of this order, with the following directions:-

¶87

(b) plan.

¶88

(a) The Resolution Professional shall supervise the implementation of the Repayment Plan as per the terms and conditions mentioned therein and

¶89

against the debtor within one month of the fulfilment of repayment

¶90

(c) The creditors shall withdraw all the legal proceedings before various fora obligations by the debtor in accordance with the terms of the repayment completionof the timelines mentioned in the plan, whichever is earlier. shallcomply with the provisions stated in Section 117 of the Code. Upon completion of the Repayment Plan, the Resolution Professional file his final report soon after the implementation of the plan or upon

¶91

subject to any kind of tax.

¶92

(d) Any liability arising out of the settlement with creditors shall not be

¶93

(e) All outstanding negotiable instruments issued by the Personal Guarantor in favour of the financial creditor including demand promissory notes and

¶94

(f) executed by personal guarantor shall not be operative and it shall be treated as null and void. personal guarantor or to others extended based on the personal guaranteе collateral/prime security for the credit facilities extended either to the property/future property of the personal guarantor stipulating will become personal guarantor with regard to after acquired property or later acquired The clauses, if any in the loan agreements/documents executed by instruments shall stand extinguished.

¶95

(g)

¶96

(g) and order of this Tribunalapproving this repayment plan with third parties The debtor is permitted to share a certified copy of this repayment plan

¶97

(h) The approval of the Repayment Plan shall not be construed as waiver of including statutory/government authorities wherever needed. excluded debts as defined u/s 79(14) if any.

¶98