Allowed

Approval of Resolution Plan - Rentail Stay Private Limited [Ia No.644-2023 in Cp (Ib) No.91-ALD-2022]

NCLT12 Mar 2024IA No.644-2023 in CP (IB) No.91-ALD-2022

Case brief

AI extract

What is this about?

The NCLT Allahabad Bench approved a resolution plan for Rental Stay Private Limited proposed by Subhlaxmi Investment Advisory Pvt. Ltd. The plan, approved by 100% CoC voting, involves a payment of Rs. 16.50 Lakhs. The court lifted the moratorium, constituted a monitoring committee, and directed the discharge of the resolution professional.

What did the court decide?

Approved the resolution plan of Rs. 16.50 Lakhs; lifted moratorium; constituted monitoring committee; discharged resolution professional.

Approval of Resolution Plan - Rentail Stay Private… — Insolvency and Bankruptcy | NCLT (2024)

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IN THE NATIONAL COMPANY LAW TRIBUNAL ALLAHABAD BENCH, PRAYAGRAJ

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IA No.644/2023 IN CP (IB) No.91/ALD/2022

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IN THE MATTER OF:

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Application under Section 30(6) and Section 60(5) of the Insolvency and Bankruptcy Code, 2016 read with Regulation 39 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 and Rule 11 of NCLT Rules, 2016

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IN THE MATTER OF:

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MOHIT GOYAL

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RESOLUTION PROFESSIONAL INSOLVENCY RESOLUTION PROCESS OF

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RENTAL STAY PVT LTD IBBI/IPA-001/IP-P-02395/2021-22/13636 17, LGF, Defence Enclave Vikas Marg, Delhi-110092

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--------Applicant/Resolution Professional

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VERSUS

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SUBHLAXMI INVESTMENT

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ADVISORY PVT. LTD.

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UNIT NO.111, ACY-AGGARWAL CITY SQUARE SECTOR-3, ROHINI, NEW DELHI-110085

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……….Respondent/Resolution Applicant

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Page 1 of 41

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IA No.644/2023 IN CP (IB) No.91/ALD/2022

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AND

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IN THE MATTER OF:

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Application under Section 10 of the Insolvency and Bankruptcy Code, 2016

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IN THE MATTER OF:

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M/S RENTAL STAY PRIVATE LIMITED

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Having its Registered Office:

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Placio Office 3, 8^th Floor, Plot No.A-14 Eco Towers, Sector-125, Noida-201301, Uttar Pradesh.

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Also at:

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E-3, Amity Innovation Incubator, Amity University, Sector-125, Noida-201301, Uttar Pradesh

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………Corporate Applicant/Corporate Debtor Order pronounced on 12^th March, 2024.

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Coram:

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Mr. Praveen Gupta. : Member (Judicial) Mr. Ashish Verma : Member (Technical) Appearances:

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Sh. Sujit Kumar Singh, Adv. : For the Applicant/RP Sh. Mohit Goyal present in person in IA No.644/2023

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Page 2 of 41

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IA No.644/2023 IN CP (IB) No.91/ALD/2022

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ORDER

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The present interlocutory application bearing IA. No. 644/2023 was moved on behalf of Mr. Mohit Goyal, Resolution Professional (“RP”) of Rental Stay Private Limited (u nder the provisions of Sections 30(6) and 31(1)of the Insolvency & Bankruptcy Code, 2016 [hereinafter referred to as “the Code ” or “IBC” ] read with Regulation 39(4) of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 ( “CIRP Regulations” ) for approval of the Resolution Plan in respect of M/s Rental Stay Private Limited. (“Corporate Debtor”).

¶34

The underlying Company Petition CP (IB) No.91/ALD/2022 filed by the Corporate Debtor/Corporate Applicant namely, M/s Rental Stay Private Limited under Section 10 of the Code for initiation of Corporate Insolvency Resolution Process (“ CIRP ”) which was admitted by this Adjudicating Authority vide its order dated 11.04.2023 (“ Admission Order ”). On that date, i.e., 11.4.2023 ( “ Insolvency Commencement Date ”), Mr. Mohit Goyal (IBBI Reg. No. IBBI/IPA-001/IP-P-02395/202122/13636) was appointed as IRP. Subsequently, IRP Conducted 1^st CoC meeting on 11.05.2023 whereby IRP was confirmed to be appointed as RP.

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Page 3 of 41

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IA No.644/2023 IN CP (IB) No.91/ALD/2022

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Collation of claims by RP

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It is stated in Resolution Plan that the public announcement was made in prescribed Form-A dated 12.04.2023 on 13.04.2023 in Financial Express (English) and Jansatta (Hindi), the last date for submission of claims was 26.04.2023, and RP called for proof of claims from the creditors of the Corporate Debtor and informed lenders to submit their claims as envisaged under the Code.

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Thereafter, Applicant/RP constituted the CoC on the basis of the financial statements interalia information available and provided at the relevant time. The CoC is constituted with the following operational creditors by mentioning their voting percentage are as under:-

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Name of th	e Operational Credi	tors
Name	Claim Admitted (in Rs.)	Voting Rights
Chatterjee Cleaning	36,21,316	100%
Arts Services Limited
through Authorized
Representative Mr.
Mithilesh Kumar
Total	36,21,316	100%

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Page 4 of 41

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IA No.644/2023 IN CP (IB) No.91/ALD/2022

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The details of claims submitted are as follows:

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Particulars	Amount		Claim
	Claimed	in	Admitted	in
	Rupees		Rupees
CIRP Cost	N.A.		6,50,000
Secured Financial	NIL		NIL
Creditors
Unsecured	NIL		NIL
Financial Creditors
Workmen &	NIL		NIL
Employees
Government Dues	NIL		NIL
Other Operational	36,21,316		36,21,316
Creditors
Total	42,71,316		42,71,316

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The RP submits that a total of 05 CoC meetings have been held during the whole CIRP period.

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Page 5 of 41

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IA No.644/2023 IN CP (IB) No.91/ALD/2022

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Evaluation and voting

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It is stated in the Resolution plan that the 2^nd CoC was held on 05.06.2023 whereby the CoC Inter alia approved the publication of Form G, Request for Resolution plan, Evaluation Matrix, and eligibility criteria with 100% votes. In addition to this, Agenda of appointment of transactional auditor was also approved with 100% votes.

¶50

In the 3^rd COC Meeting held on 11.7.2023, RP informed to the COC member that invitations for Expression of Interest (EoIs) in Form-G were published on 12.06.2023 in two newspapers namely, Financial Express and Jansatta wherein last date for submission of EOI was 27.06.2023. Consequent thereupon, RP received three expression of interest from M/s B&B Global Enterprises, M/s Subhlaxmi Investment Advisory Pvt. Ltd. And Mr. CA Sunil Kumar Kabra. RP also informed that Information Memorandum will be shared upon receiving undertaking from the PRA.

¶51

In the 4^th Meeting of CoC, which held on 31.8.2023, RP informed the COC member that he has received Resolution Plan only from one PRA i.e. M/s Subhlaxmi Investment Advisory Pvt. Ltd. The other two PRA has requested to withdraw from the process

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of submission of resolution plan of the Corporate Debtor. The

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IA No.644/2023 IN CP (IB) No.91/ALD/2022

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Resolution Plan was put forth for deliberation in the meeting and COC advised the PRA to make certain amendments in their plan as suggested by them. The Resolution Applicant agreed to submit a revise plan.

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Further, the CoC in its 5^th meeting which was held on 18.10.2023 PRA submitted the revised resolution plan which was put before the COC for voting. The COC considered the Resolution Plan, approved the Final Resolution Plan submitted by the M/s Subhlaxmi Investment Advisory Pvt. Ltd with 100% voting share declaring as Successful Resolution Applicants (SRA). Accordingly, Letter of Intent dated 21.10.2023 was issued to the Successful Resolution Applicant. The relevant portion of the 5^th COC meeting dated 18.10.2023 approving the resolution plan is reproduced

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hereunder:-

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Name of the Member of the CoC participated in the voting

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1. Chatterjee Cleaning Arts Services Limited

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Agenda	Agenda Placed for voting	Voting %	Voting	Decision
Item	in the COC	Required	Achieved
No.
Item	To vote on the	66%	100%	Approved
No. B-1	compliant resolution
	plan given by the PRA
	“Subhlaxmi Investment

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IA No.644/2023 IN CP (IB) No.91/ALD/2022

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Advisory Private Limited” Draft Resolution:
To *consider* *and,* if
*thought fit, to pass with*
*or without modification* *the following resolution:*
"RESOLVED THAT the
Revised Resolution Plan
dated 14.10.2023 (sent on
16.10.2023 to the CoC
members) submitted by
Subhlaxmi Investment
Advisory Private Limited
(hereinafter to be referred
as Resolution Applicant
(RA) including further
submissions (based upon
the negotiations with the
COC members), which is
duly compliant under
Section 30(1)and (2) of IBC,
2016 and regulation 38 of
IBBI (Insolvency Resolution
Process for Corporate
Persons) Regulations, 2016
and which is feasible and
viable and therefore the

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Page 8 of 41

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IA No.644/2023 IN CP (IB) No.91/ALD/2022

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Resolution Plan of
Subhlaxmi Investment Advisory Private Limited be and is hereby approved. RESOLVED FURTHER
THAT the RP is hereby
directed to file an
application before the
Hon'ble NCLT pursuant to
Section 30(6) of the IBC,
2016 seeking approval on
the Resolution Plan by the
COC Members. RESOLVED FURTHER
THAT the RP is authorized
to finalize the terms of the
Letter of Intent (LOI) as per
the resolution plan for
issuing Letter of Intent to
the successful Resolution
Applicant (SRA) and the RP
shall issue the Letter of
Intent (LOI) upon the SRA of
the Resolution Plan by the
CoC members. "

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The COC Member apprised the reasons of approving the

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resolution plan for Corporate Applicant, M/s Rental Stay Private

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Page 9 of 41

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IA No.644/2023 IN CP (IB) No.91/ALD/2022

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Limited submitted by the PRA, M/s Subhlaxmi Investment Advisory Pvt. Ltd. as below.

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a. The Resolution Applicant namely M/s Subhlaxmi Investment Advisory Pvt. Ltd. will be paying resolution amount of Rs 16,50,000. As upfront payment with 30 days approval of NCLT.

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b. The sole COC Member i.e. M/s Chatterjee Cleaning Arts Services Limited voted in favour of the Resolution by 100% votes. Therefore, the Resolution was declared as Approved by 100% voting right.

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This Adjudicating Authority has granted extension of 90 days beyond 180 days vide order dated 17.11.2023 for completion of CIR Process from 09.10.2023 to 06.01.2023.

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The compliance Certificate to the Resolution plan in prescribed Form H under regulation 39 (4) of the CIRP Regulations was filed before this tribunal. As per the FORM-H, the fair value of the corporate debtor is Rs. 6,56,070 and the liquidation value is

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Rs. 6,56,070, as per the registered valuers report.

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Details of Resolution Plan/ Payment Schedule

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The Successful Resolution Applicant i.e. M/s Subhlaxmi Investment Advisory Pvt. Ltd. is a company incorporated under the Companies Act, 2013 in the year 2008 for the purpose of providing

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IA No.644/2023 IN CP (IB) No.91/ALD/2022

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financial services, advisory and consultancy services on shares, stocks etc. and to purchase, sell, acquire, hold, dispose off in shares, stocks, securities, bonds etc. As per SRA, the Resolution Plan aims at reviving the Corporate Debtor and it meets all the requirements specified under the IBC,2 016 .

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The amount proposed in the Resolution Plan are tabulated

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below:-

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Sl.	Types of debts	Resolution	Payment
No.		Amount (In Rs.)	Term
1.	CIRP Cost	6,50,000	Within 30 days from the date of approval of Plan by the Adjudicating Authority
2.	Financial Creditors	NIL	NIL
	Financial Creditors (Un-secured)	NIL	NIL

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Sl.	Types of debts	Resolution	Payment
No.		Amount (In Rs.)	Term
3.	Operational Creditors (Trade payables)	10,00,000	Within 30 days from the date of approval of Plan by the Adjudicating Authority
4.	Workmen/ Employees	NIL	NIL
	Other Employee related Dues	NIL	NIL
5.	Contingent Liabilities (Non Statutory)	NIL	NIL
6.	Statutory Dues as per Information Memorandum	NIL	NIL
7.	Infusion of funds for Capex	NIL	NIL

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Estimated Total Amount Proposed to be brought in the

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Corporate Debtor for the turnaround of the Corporate Debtor:-

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S.NO	PARTICULARS	In RS.
A	CIRP Cost	6,50,000
B	Upfront cash payment to the Financial Creditors to be paid within 30 days from the Cut-Off date	NIL
C	Total Upfront Cash Payment as part of Resolution Plan	6,50,000
D	Deferred payment to the Financial Creditors to be paid within 180 days from the Cut-Off date	NIL
E	Provision of interest with regard to deferred payment to the Financial Creditors	NIL
F	Workmen & Employee /due/claim retirement benefit	NIL
G	Operational Creditor	10,00,000

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H	Other Creditors	NIL
I	Payment to outside party (C+D+E+F+G+H)
J	Repairs /Refurbishment (To be brought through equity)
K	Working capital margin (To be brought through equity)
L	Total Fund Required (C+G)	16,50,000
Sou	rces of Funds

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It is stated in Section 8.11 of the Resolution Plan that Resolution Applicant has net worth of Rs. 22.39 crores with leveraging capabilities of Rs. 40 crores. The Applicant has liquidity of owned funds.

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Particulars	Amount	Timeline
EMD with EOI	Rs. 1,00,000/-	Paid at time of EOI
	(Returnable)
EMD with Resolution	Rs. 5,00,000/-	Paid at time of
Plan	(Returnable)	Resolution Plan
Upfront cash payment	Rs. 6,50,000/-	Within 30 days of
(1^stInstalment)		Resolution plan
		approval from NCLT
TOTAL	16,50,000/-

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IA No.644/2023 IN CP (IB) No.91/ALD/2022

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Compliance of the successful Resolution Plan with various

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provisions:

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The Applicant has submitted the details of various compliances as envisaged by the Code and the CIRP Regulations which a Resolution Plan is required to adhere to, as follows:-

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Table (i) - Compliance under Section 30(2) of the I &B Code,

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2016:

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Section 30(2) of	Compliance	Relevant Page
Insolvency and	under	Number of
Bankruptcy Code, 2016	Resolution Plan	Section 30 Application
(a) Plan must provide for	Provided in	Provided at
payment of CIRP cost in	Section 5.1 of	Page 20 of
priority to repayment of	the Resolution	Resolution Plan
other debts of the CD in the	Plan	(Page 53 of the
manner specified by the		Application)
Board.
(b) Plan must provide for	Provided in	Provided at
repayment of debts of OCs	Section 5.2.3 of	Page 20-23 of
in such manner as may be		Resolution Plan

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specified by the Board	the Resolution	(Page No. 54-56
which shall not be less	Plan	of the
than		Application.)
(b)(i) the amount payable to	Provided in	Page 20-23 of
them in the event of	Section 5.2.3 of	the Resolution
liquidation u/s 53; or	the Resolution plan	Plan (Page No. 54-56 of the Application.)
(b)(ii) Plan must provide for	Provided in	Page 20-23 of
repayment of debts of OCs	Section 5.2.3 of	the Resolution
in such manner as may be	the Resolution	Plan (Page No.
specified by the Board	plan	54-56 of the
which shall not be not less		Application.)
than amount that 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

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sub-section (1) of section
53, whichever is higher and
b (iii) provides for payment	Provided in	Page 20 of the
of debts of financial	Section 5.2.1.1	Resolution Plan
creditors who do not vote in	r/w section	(Page 53 of the
favour of the resolution	5.2.2.1 and	Application)
plan, in such manner as	Section 5.3.2 of
may be specified by the	the Resolution
Board.	Plan
(c)Management of the	Provided in	Page 36 of
affairs of the Corporate	Section 8.4 of	Resolution Plan
Debtor after approval of the	Resolution Plan	(Page 69 of the
Resolution Plan.		Application)
(d) Implementation and	Provided in	Page 33-34 and
Supervision.	Section 7 r/w	Page 36 of the
	section 8.3 of	Resolution plan
	the Resolution Plan	(Page 66-67 of the Application and 69 of the
		Application)

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(e) Plan does not	Provided in	Page 38 of
contravene any of the	Section 8.13 of	Resolution Plan
provisions of the law for the	the Resolution	(Page 71 of the
time being in force.	Plan	Application)
(f) Conforms to such other	Provided in	Page 07 of
requirements as may be	Section 1.3 of	Resolution Plan
specified by the Board.	the Resolution	(Page 40 of the
	plan	Application)

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Table (ii) - Mandatory contents of Resolution Plan in terms of

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Regulation 37 of CIRP Regulations.

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Regulation	37 of	Compliance under	Relevant	Page
Insolvency	and	Resolution Plan	Number	of
Bankruptcy			Section	30
Board of	India		Applicatio	n
(Insolvency
Resolution
Process	for
Corporate
Persons)
Regulations	,
2016

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a)transfer of all or	All (including properties,	Page 42 of the
part of the assets	moveable immovable,	Resolution Plan
of the corporate	whether assets or	(Page 75 of the
debtor to one or	freehold, leasehold or	Application)
more persons;	license basis, current
	assets like Inventory,
	Debtors, Cash and Bank
	balance etc.) of the
	Corporate Debtor
	disclosed/ Undisclosed
	shall continue to be vested
	in the Corporate Debtor
	on and from the upon the
	payment of entire amount
	as contemplated in the
	plan, free and clear of all
	Encumbrances in favour
	of any Governmental
	Authority pursuant to the
	provisions of Applicable
	Law and free and clear of

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	all Encumbrances	in
	favour of all Finan	cial
	Creditors. Provided	in
	Section 9.7.1 of Resolution plan.	the
b)sale of all or part	Provided in Section 9.	7.1	Page 42 of the
of the assets	of the Resolution plan	.	Resolution Plan
whether subject to			(Page 75 of the
any security			Application)
interest or not;
ba) restructuring	No restructuring	is	Page 72 of the
of the corporate	proposed under	the	Application
debtor, by way of	resolution plan as st	ated	(Page 39 of the
merger,	in section 8.20 of the p	lan.	Resolution
amalgamation and			Plan).
demerger;
c)the substantial	The Existing equity sh	ares	Page 25 of
acquisition of	of the Corporate De	btor	Resolution Plan
shares of the	will be transferred in	full	(Page 58 of the
corporate debtor,	and new equity shares	will	Application)
or the merger or	be issues to	the

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the consolidation	Resolution Applicant as
of the corporate	specified in section 5.4 of
debtor with one or	the Resolution Plan.
more persons;	Entire fully paid-share capital of Rs. 54,04,343 of the Corporate Debtor shall stand transferred to Gobindgarh Castings
	private Limited the
	proposed shareholder
	may include any other person as well as specified under section 5.5 of Resolution Plan
ca) cancellation or	Authorized Share Capital	Page 25 of
delisting of any	will remain intact and will	Resolution Plan
shares of the	be used to issue fresh	(Page 58 of the
corporate debtor,	equity shares to the	Application)
if applicable;	Resolution Applicant or any other person in future after approval of

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	Resolutio0n Plan as specified in Clause 5.5.2 of Resolution Plan
d) satisfaction or	Provided in Section 6 of	Page 32	of
modification of	the Resolution Plan.	Resolution	Plan
any security	Resolution Applicant	(Page 65 of	the
interest;	seeks possession of any assets, if any mortgaged with any creditor.	Application	)
e) curing or	Provided in Section 5.6	Page 25 an	d 42
waiving of any	r/w Section 9.9 of the	of Resolu	tion
breach of the	Resolution Plan.	Plan. (Page	58
terms of any debt		and 75-76	of
due from the		the Applica	tion)
corporate debtor;
f) reduction in the	Provided in Section 8.21 of	Page 39	of
amount payable to	the Resolution Plan	Resolution	Plan
the creditors;		(Page 72 of Application	the )
g) extension of a	The Resolution Applicant	Page 39	of
maturity date or a	do not provide any	Resolution	Plan

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change in interest	restructuring of the	(Page 72 of	the
rate or other terms	Corporate debtor by way	Application)
of a debt due from	of merger , demerger and
the corporate	amalgamation of the
debtor;	resolution Plan as provided in Section 8.22 of the Resolution plan
h) amendment of	Not proposed by the	Page 71 of	the
the constitutional	resolution applicant in the	Application
documents of the	plan as specified in	(Page 38 of	the
corporate debtor	Section 8.15 of the resolution plan.	Resolution Plan)
i) issuance of	The Resolution Applicant	Page 71 and	58
securities of the	proposes to issue fully	of	the
corporate debtor,	paid-up Equity Share	Application
for cash, property,	Capital of Rs. 10/- each to	(Page 38 and	25
securities, or in	nominees of the	of	the
exchange for	Resolution Applicant for	Resolution
claims or	an amount subsequent to	Plan)
interests, or other	the approval of the Plan.
	For balance consideration

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appropriate	the RS proposes to issue
purpose;	Equity/Quasi-
	Equity/debt instrument
	in the name as may be
	decided by RA at that time. Specified in section 8.16 r/w Section 5.4 of the Resolution Plan
j) change in	Provided in Section 8.17 of	Page 71-72
portfolio of goods	Resolution Plan	(Page 38-39 of
or services		Resolution
produced or		Plan)
rendered by the corporate debtor;
k) change in	Not proposed by the	Page 72 (Page
technology used	Resolution Applicant in	39 of Resolution
by the corporate	resolution plan as stated	Plan)
debtor; and	in section 8.18 of the plan.
l) obtaining	Provided in Section 8.8 of	Page 70 (Page
necessary	the Resolution Plan	37 of Resolution
approvals from the		Plan)

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Central and State Governments and other authorities.

¶138

Table (iii) - Mandatory contents of Resolution Plan in terms of

¶139

Regulation 38(1) of CIRP Regulations:-

¶140

Regulation 38(1) and (2) of	Compliance under Relev	ant	Page
Insolvency and	Resolution Plan Numb	er	of
Bankruptcy Board of India	Appli	cation
(Insolvency Resolution
Process for Corporate
Persons) Regulations, 2016
38(1)(a) The amount due to	Provided in section Page	53-5	6 of
the operational creditors	5.2.3 of the Applic	ation	and
under a resolution plan shall	Resolution plan Page	No.2	0-23
be given priority in payment	of		the
over financial creditors	Resol	ution	Plan.
38(1)(b) The amount payable	Provided in section Page	53	of
under a resolution plan -	5.2.1 and 5.2.2 of the Applic	ation	and
(b) to the financial creditors,	Resolution plan Page	No.2	0 of
who have a right to vote

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under sub-section (2) of section 21 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.		the Plan.	Resolution
38 (1A) Shall include a	Provided in Section	Page	68 of
statement as to how it has	8.2 of the Resolution	Appli	cation and
dealt with the interests of all	plan	Page	No.35 of
the stakeholder, including		the	Resolution
financial creditors and		Plan.
operational creditors of the Corporate Debtor
38 (1B) shall include a	Provided in Section	Page	68 of
statement giving details if	8.1 of the Resolution	Appli	cation and
the resolution applicant or	plan	Page	No.35 of
any of its related parties has		the	Resolution
failed to implement or		Plan.
contributed to the failure of
implementation of any other

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resolution plan approved by the Adjudicating Authority at any time in the past
38 (2)(a) shall provide for the	Provided in Section	Page	68 of
term of the plan and its	8.3 of the resolution	Appli	cation and
implementation schedule;	plan	Page the Plan	No. 35 of Resolution
38 (2)(b) shall provide for the management and control of
the business of the
Corporate Debtor during its term
38 (2)(c) Shall provide for the	Provided in	Page	392-395 of
adequate means for	paragraph 10.2 of the	Appli	cation and
supervising its	resolution plan	Page	No.50-53
implementation.		of Resol	the ution Plan

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38 (3) A resolution plan shal	l This has been	Page 69 of
demonstrate that –	provided Section 8.6	Application and
it addresses the cause o default;	f of the resolution Plan.	Page No.36 of the Resolution Plan.
it is feasible and viable;	Provided in Section 8.7 of the resolution plan	Page 69-70 of Application and Page No.36-37 of the Resolution Plan.
it has provisions for its effective implementation	Provided in Section 8.3 of the Resolution Plan	Page no. 69 of the Application and Page no. 36 of the Resolution plan
It has provisions for approvals required and the timeline for the same; and	Provided in Section 8.8 of the resolution plan	Page No. 70 of the Application and Page 37 of the Resolution plan

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The resolution applicant has	Provided in Section	Page 51 and 70
the capability to implement	4.3 and section 8.9	of the
the resolution plan.	of the resolution Plan.	Application (Page no.18 and 37 of the Resolution plan).

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The Applicant submits that the Successful Resolution

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Applicant has submitted an affidavit in regard to the eligibility under section 29A of the Code, as required by Regulation 39(1)(a) of the CIRP Regulations. An undertaking has also been submitted by the Successful Resolution Applicant, as mandated in terms of regulation 39(1) (c) of the CIRP Regulations. The affidavit under Section 29A is at page no. 90-93 in the application, which is reproduced thereunder:-

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“1. I state that an insolvency resolution process has been initiated against Rental Stay Private Limited) (Corporate Debtor) vide order dated 11.04.2023 (Admission Order) passed by the National Company Law Tribunal, Allahabad Bench (Adjudicating Authority) or an application filed by Corporate

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Applicant under Section 10 of the Insolvency and Bankruptcy Code, 2016 (IBC).

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2. I state that the present affidavit is sworn by me on behalf of the Resolution Applicant in compliance of section 29A of the IBC.

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3. I on behalf of the Resolution Applicant and any other person acting jointly or in concert with the Resolution Applicant hereby confirm that:

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(i) The Resolution Applicant and any connected person as per the Explanation I provided under section 29A of the IBC is not an undischarged insolvent; or

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(ii) The Resolution Applicant and any connected person as per Explanation I provided under section 29A of the IBC, is not identified as a wilful defaulter in accordance with the guidelines of the Reserve Bank of India issued under the Banking Regulation Act, 1949;

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(iii) At the time of submission of the Resolution Plan, the account of the Resolution Applicant and any connected person as per Explanation I provided under section 29A of the IBC or

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an account of the corporate debtor under the management or

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control of such person of whom such person is a promoter, IBC is not classified as non-performing asset in accordance with the guidelines of the Reserve Bank of India issued under the Banking Regulation Act, 1949 or guidelines of a financial sector regulator issued under any other law at the time being in force and at least a period of one year or more has lapsed from the date of such classification till the date of commencement of corporate insolvency resolution process of the corporate debtor and that I have not failed to make the payment of all overdue amounts with interest thereon and charges relating to non-performing asset before submission of Resolution Plan; or

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(iv) The Resolution Applicant and any connected person as per Explanation I provided under section 29A of the IBC have not been convicted for any offence punishable with imprisonment for 2 years or more under any Act specified in the Twelfth Schedule or for seven years or more under any law for the time being in force or a period of two years has expired from the date of release of such imprisonment; or

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(v) The Resolution Applicant and any connected person as per Explanation I provided under section 29A of the IBC have not

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been disqualified to act as a director under the Companies Act

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2013; or

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(vi) The Resolution Applicant and any connected person as per Explanation I provided under section 29A of the IBC have not been prohibited by the Securities and Exchange Board of India from trading in securities or assessing the securities markets; or

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(vii) The Resolution Applicant and any connected person as per Explanation I provided under section 29A of the IBC have not indulged in preferential transaction or undervalued transaction or fraudulent transaction in respect of which an order has been made by the Adjudicating Authority under the IBC; or,

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(viii) The Resolution Applicant and any connected person as per Explanation I provided under section 29A of the IBC have not executed a guarantee in favour of a creditor, in respect of a corporate debtor against which an application for insolvency resolution made by such creditor has been admitted under the IBC and no such guarantee has been invoked by the creditor or remains unpaid in full or part; or

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(ix) The Resolution Applicant and any connected person as per

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Explanation I provided under section 29A of the IBC are not subject to any disability, corresponding to clauses mentioned above under any law in a jurisdiction outside India.”

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The Applicant has filed a Compliance Certificate in prescribed Form, i.e. Form ‘H’ in compliance with Regulation 39(4) of the CIRP Regulations. The RP has issued the Letter of Intent dated 21.10.2023 to the Successful Resolution Applicant and the Successful Resolution Applicant provided the Performance Bank Guarantee of Rs.10,00,000/- (Rupees Ten Lakhs Only) dated 21.10.2023 has already been paid, which is required under Regulation 36B (4A) of CIRP Regulations, 2016.

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Details of Resolution Plan/ Payment Schedule

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The Applicant submits the relevant information about the amount claimed, the amount admitted, and the amount proposed to be paid by the Successful Resolution Applicant, i.e., M/s Subhlaxmi Investment Advisory Pvt. Ltd. under the said Resolution Plan which is tabulated as under:

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Sl. No.	Types of debts	Resolution Amount (In Rs.)	Payment Term
1.	CIRP Cost	6,50,000	Within the period of 30 days from the date of approval of the plan by the Adjudicating Authority
2.	Financial Creditors	NIL	NIL
3.	Operational Creditors (Trade payables)	NIL	NIL
4.	Workmen/ Employees	NIL	NIL
5.	Other Employees Related dues
6.	Government Dues	NIL	NIL
7.	Operational Creditors (other than workman, employees and Government Dues)	10,00,000	Within the period of 30 days from the date of approval of the plan by the Adjudicating Authority
8.	Contingent Liabilities (Non- Statutory)	NIL	NIL
9.	Statutory Dues as per Information Memorandum	NIL	NIL
10.	Infusion of funds for Capex	NIL	NIL

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The Resolution plan size is approximately of Rs. 16,50,000

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(Rupees Sixteen Lakhs Fifteen Thousand Only). The amount

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stated in the plan is by way of liquidity of funds owned by the Resolution Applicant.

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Details on Management and Implementation as per the Resolution Plan

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The Resolution Plan also provides for details of management and control, implementation and supervision of the Resolution Plan and term of plan and the same is already set out in Section 7 and 8 of the resolution plan as stated above.

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Details on fraudulent and avoidance transaction

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The Resolution Professional via Form-H confirms that the suspended Board of Directors of the Corporate Debtor has not been engaged in the any kind of fraudulent and avoidance transaction.

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Waivers, Reliefs and Exemptions

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The SRA has sought/prayed for the reliefs, waivers and concessions as enumerated under the Resolution Plan approved

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by the CoC, that from the plan approval date all inquiries, investigation and proceedings, whether civil or criminal, suits, claims, disputes, interests and damages in connection with the Corporate Debtor or the affairs of the Corporate Debtor, pending or threatened, present or future in relation to any period prior to

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the plan approval date, or arising on account of implementation of

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this Resolution Plan, shall stand withdrawn, satisfied and

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discharged. From the date of approval of the ‘Resolution Plan’, the Resolution Applicant shall be legally authorized to seek appropriate orders from respective authorities/courts/tribunals for renewal of licenses/withdrawal/dismissal or abetment of the proceedings as the case may be.

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Analysis & 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 by the CoC with 100% of the members voting in favour of the Resolution Plan. As per the CoC, the Plan meets the requirement of being a viable and feasible revival of the Corporate Debtor. By and large, there are provisions for making the Plan effective after approval by this Bench.

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On perusal of the documents on record, we are satisfied that the Resolution Plan is in accordance with Sections 30 and 31 of the IBC and also complies with regulations 38 and 39 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016.

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The reliefs, concessions and waivers sought by the Successful Resolution Applicant will be dealt with strictly in accordance with the applicable laws.

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It may be clarified that litigations wherever pending against the corporate debtor would be governed by Section 32A of the Code.

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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. While going through record we found that there is no specific averments made regarding the Performance Bank Guarantee to be furnished by the SRA in whose favor the plan has been approved by the CoC. However, the Ld. Counsel representing the RP, during the course of hearing on 13.02.2024, submitted that insofar as the amount of Rs.10 lakh with respect to the performance bank guarantee is concerned, it was required to be paid within a period of three business days already stands satisfied as the amount of Rs.10 lakh is stated to have already been paid. .

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In case of non-compliance with this order or withdrawal of the Resolution Plan within the stipulated time, in addition to other consequences which follow under law, the CoC shall forfeit the EMD amount of Rs.06 Lakh already paid by the Resolution Applicant as well as the Performance Bank Guarantee of Rs.10,00,000/-.

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ORDERS

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Subject to the observations made in this Order, the Resolution Plan of Rs.16,50,000 (Rupees Sixteen Lakhs Fifty Thousand Only) including CIRP cost on actual basis shall be paid by upfront cash payment within 30 days of the approval of the Plan by RA, containing the mandatory contents of Resolution Plan in terms of Regulation 38(1), is hereby approved as per Section 31(1), after satisfying ourselves that the resolution plan as approved by the COC under sub- section (4) of Section 30 on 18.10.2023 meets the requirements as referred to in sub section (2) of Section 30. The Resolution Plan shall form part of this Order.

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The reliefs, concessions and waivers sought/prayed by the Successful Resolution Applicant will be dealt with strictly in

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accordance with the applicable laws including Companies Act, 2013 and Income Tax Act, 1961, etc.

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

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The Resolution Professional shall submit the records collected during the commencement of the proceedings to the Insolvency & Bankruptcy Board of India for their record.

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The Monitoring Committee as proposed in Section 7 of the resolution plan shall comprises of the followings members stated as under:-

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(i) Insolvency Resolution Professional as Chairman

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(ii) Any one individual on behalf of the Resolution Applicant

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(iii) One Representative to be nominated by the operational Creditor.

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The above Monitoring Committee shall ensure timely & successful implementation of Resolution Plan approved by this order.

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The present IA No.644/2023 therefore, shall stand disposed of accordingly.

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A copy of this Order shall be filed by the Resolution Professional with the Registrar of Companies.

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The Resolution Professional shall stand discharged from his duties with effect from the date of this Order, save and except those duties that are enjoined upon him for implementation of the approved Resolution Plan.

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The Resolution Professional is further directed to hand over all records, premises/ factories/documents available with it to the Resolution Applicant to finalize the further line of action required for starting of the operation. The Resolution Applicant shall have access to all the records and premises through the Resolution Professional to finalize the further course of action required for starting of operations of the Corporate Debtor.

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