Approval of Resolution Plan - Churakulam Tea Estates Private Limited

This Application has been filed by the Resolution Professional in the matter of Churakulam Tea Estate Private Limited under Section 30(6) and 31 of Insolvency and Bankruptcy Code, 2016 in IBA/21/KOB/2019 which was admitted vide order of this Tribunal dated 28.11.2019 initiating Corporate Insolvency Resolution Process against Churakulam Tea Estate Private Limited (hereinafter referred to as the ‘Corporate Debtor’). He sought orders of this Tribunal approving the Resolution Plan submitted by the Resolution Applicant.

2. In the abovementioned order dated 28.11.2019 Mr. C. A. Jasin Jose (Registration No. IBBI/IPA-001/IP-P00695/2017-18/11225) has been appointed as the Interim Resolution Professional (IRP). The Committee of Creditors (CoC) later resolved to appoint Mr. C. A. Jasin Jose as the Resolution Professional from 16.01.2020. The applicant

Resolution Professional submits that the CIRP ordered by this Tribunal was conducted in compliance with the terms of the Code and the relevant Rules and Regulations.

3. The Resolution Professional submits that advertisements inviting claims from the creditors were issued, advertisement inviting Expression of Interest (EOI) was published in two newspapers and on publishing of Form G, Resolution Professional has received Expression of Interest from 2 prospective Resolution Applicants.

4. As per Section 36A (8) of IBC, 2016 the Resolution Professional shall conduct due diligence based on the material on record in order to satisfy that the prospective Resolution Applicant complies with the following: - a) The provisions of clause (h) of Sub-Section (2) of Section 25. b) The applicable provisions of Section 29A. c) Other requirements as specified in the invitation for Expression of Interest.

5. On verification of the Resolution Applications received, it was found that one of the applicant's history was not satisfactory to include in the provisional list of Resolution Applicants and same was conveyed to CoC in the third CoC Meeting. 6. The Resolution Professional further stated that the third CoC was convened on 15.02.2020 with main agenda 'to approve the Provisional List of Resolution Applicants/Extend the time for submission of EOI/To Reissue EOI/Additional Advertisement, in which the third CoC decided to extend the time for submission of EOI for further 10 days and reissue the Form G. Pursuant to third CoC meeting Resolution Professional published Form G in two newspapers as per Regulation 36(A)l, one in Business line -All Kerala Edition and another in Desabhimani in Malayalam Daily. Further to publishing the Form G inviting of EOI was published as advertisement in Gulf Madhyamam in UAE Edition Inviting Resolution Plan from overseas Kerala based NRI investors. Even after reissue of Form G, no fresh EOI has been received and the only one Resolution Application was received from Mr. Jose Pradeep which was received as per the first issue of Form G. 7. The provisional list of Resolution Applicants circulated to CoC members on 23/03/2020 for obtaining objection, if any, but the Resolution Professional has not received any objection and the Provisional List was finalized with one Resolution Applicant -Mr Jose Pradeep.

8. The Resolution Professional submitted that the CoC unanimously with 99% voting right resolved to extend 15 days more to the Resolution Applicant to submit the Resolution Plan stating that, if further Resolution Plan is not received within the extended time, immediately CoC to be convened to decide whether to invite fresh EOI/file application to this Tribunal for Liquidation of the company. The Resolution Plan was received on 26/08/2020 as per the extended date. Since few of the valuers were from out of Kerala, they could not complete the valuation as per their original schedule and the valuation reports from all six valuers received and the last date at which the report received is on 09/09/2020 and 10/09/2020. CoC unanimously decided to give time up to 24/09/2020 to submit the revised Resolution Plan and proposed to call for CoC meeting on 28/09/2020 to consider and vote the revised Resolution Plan. Further resolved to file application under Sec 40 (2) of CIRP Regulation and as per Sec 12(2) of IBC 2016 for a time period extension of 30 days with effect from 13/09/2020 so as to consider and evaluate the revised Resolution Plan 9. In view of the above, the Resolution Applicant filed an application before this Tribunal and requested for time extension of 30 days.

Vide order dated 25.09.2020 in IA/142/KOB/2020, this Tribunal allowed the prayer and extended the time up to 12/10/2020. 10. The seventh CoC was held on 28/09/2020 to consider the Revised Plan but the Plan was not finalized and put-on negotiation for final consideration. 11. The eighth CoC was held on 09/10/2020 and the counsel to the Resolution Applicant appeared in that meeting and informed that the Resolution Applicant is tested with COVID positive and is under hospitalization in Renai Medicity Hospital, Ernakulam. Hence, he requires additional two weeks’ time to discuss with the Resolution Applicant to finalize the plan. The Eighth CoC allowed two weeks’ time to the Resolution Professional unanimously with 100% voting to file an application for extension of CIRP period for further 45 days. This Tribunal allowed further extension of 45 days from 12/10/2020 to 26/11/2020 to complete the Corporate Insolvency Process.

12. On 29/10/2020 Resolution Applicant has submitted the Revised Resolution Plan and CoC Considered same in the 9th CoC meeting convened on 4th November 2020, deliberated on the Resolution Plan and concluded the CoC with the following resolution: - “It is resolved with 89.12% to hold a CoC immediately for obtaining the legal opinion pertaining to release of Personal Guarantee of Directors to consider and approve the Resolution Plan since all other matters are settled”. 13. It is submitted by the Resolution Professional that he received Resolution Plan from the Resolution Applicant which confirmed to the conditions U/s 30 (2) of the I&B Code and the Resolution Professional placed Resolution Plan before the CoC certifying the same stating that the Resolution Applicant aims and believes that there is a potential to revive the Corporate Debtor and that he is going to put its assets to better use and turn the estate in order to provide stability to existing employment of the estate and to have income from such business.

14. The Resolution Plan was discussed and voted upon in the 10th CoC meeting dated 20.11.2020. The CoC unanimously approved with 100% voting right the Revised Resolution Plan submitted by the Resolution Applicant. The RP has certified that the said Resolution Plan, as approved by CoC, is in compliance with the provisions of the I&B Code.

15. In the 10th CoC, the South Indian Bank, M/s Stancash Chits Pvt Ltd and Finance Excellence attended through Video Conferencing. Erstwhile Directors Mr. Joseph Joseph and Sumesh Joseph and Mikesh Joseph did not attend the Meeting. However, the suspended Director. Mr. Rajesh Joseph attend the meeting and quorum for meeting was present with 100% voting.

16. It is stated by the Resolution Professional that he examined the Resolution Plan as per Section 30(2) of the IBC. The following clauses in the Resolution Plan has been confirmed by the Resolution Applicant: -

I. Financial Re-structuring- Resolution Applicant proposes payment of Rs. 17.42 Crores towards the entire claim amount of all the three Financial Creditors i.e., 17.42 Crores as on cut-off date as follows:

a) An amount of Rs. 15.43 Crores will be paid to the South Indian Bank (interim fund infused by South Indian Bank will be repaid separately before 31 January 2021, towards the entire claim amount of Rs. 15.43 Crores as follows: i. Rs. 1.54 Crores to be paid on or before 30 November, 2021 or 30 days from the date of approval of the Resolution Plan by AA, whichever is later. ii. Rs. 13.89 Crores to be paid on or before 31 January, 2021 or 90 days from the date of approval of the Resolution Plan by AA, whichever is later. b) An amount of Rs. 1.72 Crores will be paid to Stancash Chits Private Limited towards the entire claim amount of Rs. 1.72 Crores as follows: i. Rs. 17.20 Lakhs to be paid on or before 30 November, 2021 or 30 days from the date of approval of the Resolution Plan by AA whichever is later. ii. Rs. 1.54 Crores to be paid on or before 31 January, 2021 or 90 days from the date of approval of the Resolution Plan by AA whichever is later. c) An amount of Rs. 15.43 Lakhs will be paid to Financial Excellence towards the entire claim amount of Rs. 25.63 Lakhs as follows: i. Rs. 1.54 Lakhs to be paid on or before 30 November, 2021 or 30 days from the date of approval of the Resolution Plan by AA whichever is later. ii.

Rs. 13.89 Lakhs to be paid on or before 31 January, 2021 or 90 days from the date of approval of the Resolution Plan by AA whichever is later. II. Payment of Operational Creditors and other Creditors- Resolution Applicant proposes to pay the entire dues of Operational Creditors (other than Provident Fund dues), Rs 2.02 Crores, without payment of any interest, penal interest or damages separately, in full at least 7 days before the payment is made to the Financial Creditors to be in compliance with IBC, 2016 provisions and applicable rules. III. Means of Finance- a) Infusion of Funds by resolution Applicant: - The Resolution Plan proposes that the amount proposed in this Resolution Plan for settling all the dues of the Corporate Debtor at Rs. 26.75 Crores would be sourced by the Resolution Applicant in the following manner: (i) Upfront contribution towards performance guarantee. (ii) Immediate settlement of CIRP & Interim Fund with 2 weeks of approval of Resolution Plan by AA. (iii) Settlement of Operational Creditors including Employees & Workmen Dues, Statutory Dues and Operational Creditors at least 7 days before the payment is made to the Financial Creditors.

(iv) Settlement of 10.00% of approved financial claims to Financial Creditors paid on or before 30th November, 2021 or 30 days from the date of approval of the Resolution Plan by AA, whichever is later. (v) Settlement of balance 90.00% approved financial claims to Financial Creditors paid on or before 31 January, 2021 or 90 days from the date of approval of the Resolution Plan by AA, whichever is later. b) Funds from cash flow of operations from the estate: Resolution Applicant proposes to operate the estate from cash flow from the operations. Detailed projected balance sheet, profit & loss a/c and cash flow as stated in the enclosed statement with Resolution Plan.

Mandatory contents of the Resolution Plan (As per Section 38 of IBC

Regulation)

Particulars Complied-Yes/No Clause and Page No in Plan (1) The amount due to the Yes Operational Creditors under a Resolution As per the Liquidation Plan shall be given Value the Operational priority in payment Creditors are eligible to over Financial get their full claim amount Creditors. in priority to Financial Creditors under Resolution Plan. Plan in full claim admitted at least 7 days before payment to Financial Creditors (1A) A Resolution Plan shall Yes 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. (2) A Resolution Plan shall provide: (a) The term of the plan Yes-Implementation and its implementation schedule is from approval schedule of plan to 31.01.2021 or 90 days from the date of approval of the Resolution Plan by AA which ever later. (b) The management and Yes control of the business The Resolution Applicant of the Corporate Debtor propose to join the board during its term; and of the Company and induct two Ex SBI Bankers Mr. Ashokan N. and Mr. Prem Kumar Varma till the repayment completes as per the plan (c) Adequate means for Yes supervising its Resolution Applicant implementation propose to bring Rs. 26.75 Crores within 31.01.2021 or 90 days from the date of approval of the Resolution Plan by AA which ever later

A Resolution Plan shall (a) Yes demonstrate that (b) The Resolution Plan (a) It addresses the cause is annexed with a of default; projected financial. (b) It is feasible and viable; (c) The plan is (c) It has provisions for its supported with the effective projected financials implementation; and it is mentioned (d) It has provisions for in the plan that approvals required and the timeline for the same; and Resolution Implementation of Applicant has the the plan will begin capability to implement once the plan is the Resolution Plan approved by the committee and AA To ensure smooth implementation Resolution Applicant has already identified a core tea, with strong experience additionally with 2 Senior Ex Bankers in BOD and propose to appoint the present Resolution Professional/ any other professional/ CA firm to supervise the Implementation of the plan. (e) No specific time line for any approvals is mentioned in the plan (f) The Resolution Applicant is mainly experienced in Hospitality sector however he is also experienced in managing 70+ Acres of family estate (g) He is occupied with various positions- Secretary/ Treasurer/ Executive Committee member of Kerala Travel Mart Society (KTM) Association of approved and classified Hotels of Kerala (AACHK) and FH&RA India and SIHRA 17. Other reliefs sought by the Resolution Applicant in the plan are as under: - a) To withdraw any suits/ applications filed against Churakulam Tea Estate Private Limited.

b) Churakulam Tea Estate Private Limited will have the option to prepay the dues of the Financial Creditors, without any additional levies as when arranges fund through investors or through their own sources: c) For any default in making the final payment to the Financial Creditors as specified in this plan, a cure period of a maximum of 20 days would be provided to cure the default/delayed payment. d) The Resolution Applicant and the Company shall be entitled to share certified copy of the Resolution Plan and the order of the Adjudicating Authority approving this Resolution Plan with the third parties including Government agencies. e) The Resolution Plan once approved by CoC and then the Adjudicating Authority along with such conditions as may be stipulated by the Adjudicating Authority, shall be binding on the Resolution Applicant, the Company, all the stakeholders, creditors, members, erstwhile promoters and employees and all other parties in interest and each of their respective successors and assign in accordance with Section 31(1) and 238 of IBC Code. f) The Resolution Applicant reserves right to apply to Adjudicating Authority for appropriate modification of such provisions of the Resolution Plan, to satisfaction of the Adjudicating Authority, to cure such invalidity or unenforceability of the provisions of the Resolution Plan shall not render the whole Resolution Plan ineffective, unless otherwise directed by the Adjudicating Authority by an order. g) The Resolution Applicant reserves and retains the right to modify the proposed Resolution in the event of amount proposed in this plan for settling the dues to the Financial Creditor and other Creditors is revised based on the discussions between members of the CoC and the Resolution Applicant. h) The Resolution Applicant has made every possible effort to prepare and submit the Resolution Plan strictly in accordance with the various provisions of the Code. However, if there is any inadvertent inadequacy/shortcoming/defect in the Resolution Plan, the Resolution

Applicant shall be given an opportunity for rectifying and removal of such inadequacy/shortcoming/defects so observed. i) Any Financial Creditor may assign is rights under this Resolution Plan, subject to the transferee unconditionally agreeing to be bound by the terms of this Resolution Plan.

18. The Resolution Plan submitted by the Resolution Applicant Mr. Jose Pradeep, Valiyaparambil House, St. Vincent Road, Ernakulam North, Kerala – 682 018 which is self-explanatory, is enclosed in its entirety for further reference.

FINDINGS: -

19. I have heard the submissions made by the Resolution Professional who appeared in person through video conferencing. It is seen that the Resolution Plan submitted by Mr. Jose Pradeep has been approved by the CoC with 100% voting right and that the CoC found that the plan stands the requirement of being viable and feasible for revival of the Corporate Debtor. By and large, all the compliances have been done by the Resolution Applicant for making the Resolution Plan effective, after approval by this Bench. 20.The Resolution Applicant in the Resolution Plan has dealt with interests of all stakeholders of the Corporate Debtor, including the Financial Creditors, the Operational Creditors and the CIRP cost. 21. Section 30 of the Code provides as below:

“(1) A resolution applicant may submit a resolution plan to the resolution professional prepared on the basis of the information memorandum. (2) The resolution professional shall examine each resolution plan received by him to confirm that each resolution plan— (a) provides for the payment of insolvency resolution process costs in a manner specified by the Board in priority to the [payment] of other debts of the corporate debtor; (b) provides for the [payment] of the debts of operational creditors in such manner as may be specified by the Board which shall not be less than the amount to be paid to the operational creditors in the event of a liquidation of the corporate debtor under section 53; (c) provides for the management of the affairs of the Corporate debtor after approval of the resolution plan; (d) the implementation and supervision of the resolution plan; (e) does not contravene any of the provisions of the law for the time being in force; (f) conforms to such other requirements as may be specified by the Board. [Explanation-For the purpose of clause €, if any approval od shareholders is required under the Companies Act, 2013 (18 of 2013) or any other law for the time being in force for the implementation of actions under the resolution plan, such approval shall be deemed to have been given and it shall not be a contravention of that Act or law.]

(3) The resolution professional shall present to the committee of creditors for its approval such resolution plans which confirm the conditions referred to in subsection (2). (4) The committee of creditors may approve a resolution plan by a vote of not less than [sixty-six] percent of voting share of the financial creditors, after considering the feasibility and viability, and such other requirements as may be specified by the Board: Provided that the Committee of Creditors shall not approve a resolution plan, submitted before the commencement of the Insolvency and Bankruptcy Code, (Amendment) Ordinance, 2017 (Ord. 7 of 2017), where the resolution applicant is ineligible under Section 29A and may require the resolution professional to invite a fresh resolution plan where no other resolution plan is available with it: Provided further that where the resolution applicant referred to in the first proviso is ineligible under clause (c) of Section 29A, the resolution applicant shall be allowed by the Committee of Creditors such period, not exceeding thirty days, to make payment of overdue amounts in accordance with the proviso to clause (c) of Section 29A.

Provided also that nothing in the second proviso shall be construed as extension of period for the purpose of the proviso to Sub-Section (3) of Section 12, and the corporate insolvency resolution process shall be completed within the period specified in that Sub-Section.]

[Provided also that the eligibility criteria in Section 29A as amended by the Insolvency and Bankruptcy Code, (Amendment) Ordinance, 2018 (Ord. 6 of 2018) shall apply to the resolution applicant who has not submitted resolution plan as on the date of commencement of the Insolvency and Bankruptcy Code (Amendment) Ordinance, 2018 (Ord. 6 of 2018).] (5) The resolution applicant may attend the meeting of the committee of creditors in which the resolution plan of the applicant is considered: Provided that the resolution applicant shall not have a right to vote at the meeting of the committee of creditors unless such resolution applicant is also a financial creditor. (6) The resolution professional shall submit the resolution plan as approved by the committee of creditors to the Adjudicating Authority” 22. Section 31 of the Code provides as below:

“(1) If the Adjudicating Authority is satisfied that the resolution plan as approved by the committee of creditors under sub-section (4) of section 30 meets the requirements as referred to in sub-section (2) of section 30, it shall by order approve the resolution plan which shall be binding on the corporate debtor and its employees, members, creditors, guarantors and other stakeholders involved in the resolution plan. [Provided that the Adjudicating Authority shall, before passing an order for approval of resolution plan under this Sub-Section, satisfy that the resolution plan has provisions for its effective implementation.] (2) Where the Adjudicating Authority is satisfied that the resolution plan does not confirm to the requirements referred to in sub-section (1), it may, by an order, reject the resolution plan. (3) After the order of approval under sub-section (1), — (a) the moratorium order passed by the Adjudicating Authority under section 14 shall cease to have effect; and (b) the resolution professional shall forward all records relating to the conduct of the corporate insolvency resolution process and the resolution plan to the Board to be recorded on its database.” [(4) The resolution applicant shall, pursuant to the resolution plan approved under Sub-Section (1), obtain necessary approval required under any law for the time being in force within a period of one year from the date of approval of the resolution plan by the Adjudicating

Authority under Sub-Section (1) or within such period as provided for in such law, whichever is later: Provided that where the resolution plan contains a provision for combination as referred to in Section 5 of the Competition Act, 2002 (12 of 2003), the resolution applicant shall obtain the approval of the Competition Commission of India under that Act prior to the approval of such resolution plan by the Committee of Creditors.]

23. It is also necessary to refer the provisions of Regulation 38 and 39 of CIRP Regulations to come to a conclusion that requirements of the Regulations are fulfilled. Regulation 38 and 39 are as follows: -

Regulation 38 - Mandatory contents of the resolution plan: [(1) The amount due to the operational creditors under a resolution plan shall be given priority in payment over financial creditors.] [(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.] (2) A resolution plan shall provide: (a) the term of the plan and its implementation schedule; (b) the management and control of the business of the corporate debtor during its term; and (c) adequate means for supervising its implementation. [(3) A resolution plan shall demonstrate that – (a) it addresses the cause of default; (b) it is feasible and viable; (c) it has provisions for its effective implementation; (d) it has provisions for approvals required and the timeline for the same; and (e) the resolution applicant has the capability to implement the resolution plan.

Regulation 39 - Approval of resolution plan: (1) A prospective resolution applicant in the final list may submit resolution plan or plans prepared in accordance with the Code and these regulations to the resolution professional electronically within the time given in the request for resolution plans under regulation 36B along with (a) an affidavit stating that it is eligible under section 29A to submit resolution plans; (c) an undertaking by the prospective resolution applicant that every information and records provided in connection with or in the resolution plan is true and correct and discovery of false information and record at any time will render the applicant ineligible to continue in the corporate insolvency resolution process, forfeit any refundable deposit, and attract penal action under the Code. (1A) A resolution plan which does not comply with the provisions of sub-regulation (1) shall be rejected. (2) The resolution professional shall submit to the committee all resolution plans which comply with the requirements of the Code and regulations made thereunder along with the details of following transactions, if any, observed, found or determined by him: - a. preferential transactions under section 43; b. undervalued transactions under section 45; c. extortionate credit transactions under section 50; and d. fraudulent transactions under section 66, (3) The committee shall evaluate the resolution plans received under sub-regulation (1) strictly as per the evaluation matrix to identify the best resolution plan and may approve it with such modifications as it deems fit: Provided that the committee shall record the reasons for approving or rejecting a resolution plan.

[(4) The resolution professional shall endeavour to submit the resolution plan approved by the committee to the Adjudicating Authority at least fifteen days before the maximum period for completion of corporate insolvency resolution process under section 12, along with a compliance certificate in Form H of the Schedule and the evidence of receipt of performance security required under Sub- Regulation (4A) of Regulation 36B]. (5) The resolution professional shall forthwith send a copy of the order of the Adjudicating Authority approving or rejecting a resolution plan to the participants and the resolution applicant. (6) A provision in a resolution plan which would otherwise require the consent of the members or partners of the corporate debtor, as the case may be, under the terms of the constitutional documents of the corporate debtor, shareholders’ agreement, joint venture agreement or other document of a similar nature, shall take effect notwithstanding that such consent has not been obtained.

(7) No proceedings shall be initiated against the interim resolution professional or the resolution professional, as the case may be, for any actions of the corporate debtor, prior to the insolvency commencement date. (8) A person in charge of the management or control of the business and operations of the corporate debtor after a resolution plan is approved by the Adjudicating Authority, may make an application to the Adjudicating Authority for an order seeking the assistance of the local district administration in implementing the terms of a resolution plan. [(9) A creditor, who is aggrieved by non-implementation of a resolution plan approved under Sub-Section (1) of Section 31, may apply to the Adjudicating Authority for directions] 24. As discussed above, the Resolution Plan is in accordance with Section 30 and 31 of the Code and also complies with the requirement of Regulations 38 and 39 of CIRP Regulations.

25. The Resolution Plan approved by the CoC with the required majority satisfies all the criteria required for approval of Resolution Plan by the Adjudicating Authority.

26. The Resolution Applicant, on taking control of the Corporate Debtor, shall ensure compliance of all applicable law for the time being in force.

27. It is clarified that the Resolution Applicant shall take over the Corporate Debtor with all its assets and liabilities as per terms of the approved Resolution Plan. If any relief concerning any identified liability of the Corporate Debtor is required, then that needs to be specifically mentioned and sought for in the Resolution Plan.

28. On perusal of the Resolution Plan, I found that the Resolution Plan has been prepared with necessary provisions for its effective implementation.

29. The approved Resolution Plan, shall be binding on the Corporate Debtor and its employees, members, creditors, guarantors, Resolution Applicant and other stakeholders involved in the Resolution Plan.

30. On-going through the relief sought by the Resolution Professional, it is seen that the reliefs sought for under reliefs (f), (g) and (h) (see page no. ____) cannot be granted, as once the Resolution Plan is approved the Resolution Applicant cannot seek any alternation or modification of the Resolution Plan from this Tribunal.

31. On approval of the Resolution Plan as sought by the Resolution Professional, this Bench hereby discharges the Resolution Professional from duties of the RP by submitting all the records maintained by him to the Insolvency and Bankruptcy Board of India as provided under the Insolvency and Bankruptcy Code, 2016 and the Regulations thereunder.

32. The Resolution Applicant shall, pursuant to the Resolution Plan approved under Sub-Section (1) of Section 31, obtain necessary approval required under any law for the time being in force within a period of one year from the date of approval of the Resolution Plan by this Tribunal under Sub-Section (1) of Section 31 or within such period as provided for in such law, whichever is later.

33. Subject to the observations made in this Order, the Resolution Plan submitted by Mr. Jose Pradeep is hereby APPROVED by this Bench.

34. Any relief sought for in the Resolution Plan, where the contract/agreement/understanding/proceedings/actions/notice etc. not specifically identified or is for future and contingent liability, is at this moment rejected.

35. The order of Moratorium dated 28.11.2019 passed by this Adjudicating Authority under Section 14 of the I&B Code, 2016 shall cease to have effect from the date of passing of this Order.

36. The Resolution Professional shall forward all records relating to the conduct of the CIRP along with the ‘Resolution Plan’ to the IBBI, so that the Board may record the same on its data-base.

37. The directions embodied and period of implementation provided herein above shall be effective from the date of this Order

38. Certified copy of this Order be issued on demand to the concerned parties, upon due compliance. Liberty is hereby granted for moving any Miscellaneous Application, if required, in connection with implementation of this Resolution Plan.

39. With the above Order of approval of the Resolution Plan, this IA/202/KOB/2020 stands disposed of. Dated the 8th day of January, 2021 Sd/- (Ashok Kumar Borah) Member (Judicial)

RESOLUTION PLAN (Revision3)

IN TH CORPORATE INSOLVENCY RESOLUTION PROCESS OF M/S CHURAKULAM TEA ESTATE PRIVATE LIMITED THE CORPROATE DEBTOR

BY JOSE PRADEEP PROPOSED RESOLUTION APPLICANT/

S.NO. PARTICULARS PAGE NO. 1 Definitions 2. Background of Resolution Applicant 3. Background of the Corporate Debtor 4. Resolution Plan 5. Conclusion

1. DEFINITIONS AND INTERPRETATIONS:

The terms provided under this plan are explained below as follow:

1. ‘IBC’ or the Code’ shall mean Insolvency and Bankruptcy Code, 2016.

2. ‘CIRP Regulations’ means Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016).

3. ‘Corporate Debtor’ (“CD”) shall have the meaning assigned to the term under section 3(8) of IBC, i.e. Churakulam Tea Estate Private Limited (hereinafter referred to as CTEPL).

4. ‘Resolution Applicant’ (RA) shall have the meaning assigned to the term under Section 5(25) of IBC, i.e. Jose Pradeep.

5. ‘Cut-off Date’ shall be the Insolvency Commencement date i.e. 28/11/2019.

6. ‘Corporate Insolvency Resolution Process (‘CIRP’) shall mean the process under Chapter II of Part II of IBC.

7. ‘RP’ shall mean Resolution Professional of the Corporate Debtor.

8. ‘Committee of Creditors’ (hereinafter referred to as CoC) shall mean a committee of creditors of the Corporate Debtor constituted by the RP in accordance with the provisions of the IBC.

9. ‘Financial Creditor’ (hereinafter referred to as ‘FC’) shall have the meaning assigned to the term under Section 5(7) of IBC, 2016. Financial Creditors – South Indian Bank Limited is referred as “SIB”, Stancash Chits Pvt. Ltd. is referred as “SCC” and Finance Excellence is referred as “FEE”

10. ‘Operational Creditor’ (hereinafter referred to as ‘OC’) shall have the meaning assigned to the term under Section 5(20) of IBC.

11. ‘Insolvency Resolution Process Costs’ shall have the meaning assigned to them under the provisions of IBC read with CIRP Regulations.

12. ‘Claim’ shall have the meaning assigned to the term under Section 3(6) of IBC.

13. ‘Adjudicating Authority’ shall have the meaning assigned to the term under Section 60 of IBC.

14. ‘Liquidation Value’ shall have the meaning assigned to the term under Regulation 2(1)(k) of CIRP Regulations.

15. Liquidation shall mean the process under Chapter III of Part II of IBC. 2. Background of the Resolution Applicant 2 (a) Details of Resolution Applicant

Name of the Resolution Applicant JOSE PRADEEP Principal Business Activities Business & Agriculture Contact Details Valiyaparambil House, St. Vincent Road, Ernakulam North, Kerala 682 018 Date of submission of Resolution Plan 26.08.2020

I, Jose Pradeep, the Resolution Applicant herein am a businessman and a farmer with business interests in hospitality and agricultural experience in plantations. The applicant has 20+ years’ experience running the family estate of about 70.00 acres+ at Tiruvillamala, Kerala and 30+ years’ experience in Hospitality Sector. The applicant has a net worth of Rs. 12.63 crores. The Resolution Applicant graduated from MG University and holds MBA from St. Joseph’s College, Bangalore. He started his career with TAJ Group of Hotels before taking over the Management of Yuvarani Residency, a 4 Star Classified Hotel in Kochi, Kerala.

I am the democratically elected Honorary Secretary of Kerala Travel Mart Society (KTM) and Treasurer of Association of Approved and Classified Hotels of Kerala (AACHK). I am also the Executive Committee Member of The Federation of Hotel and Restaurant Associations of India (FH&RA India) and South India Hotels and Restaurants Association (SIHRA).

2 (b) Eligibility of the Resolution Applicant The Resolution Applicant is eligible to submit a Resolution Plan in terms of ‘invitation seeking Resolution Plan for “Churakulam Tea Estate Private Limited” as published and has obtained a copy of Information Memorandum along with other information available with the Resolution Professional.

2 (c) Declaration I hereby declare that I have read and understood all the terms and conditions relating to the formulation of resolution plan and hereby express my interest in the submission of resolution plan for the said company.

I also hereby declare that any confidential information of the Corporate Debtor that has come to my knowledge or might come to my knowledge during the resolution process shall not be divulged by me. Further, I confirm that this Resolution Plan is in full compliance with the provisions of Section 29A of the Insolvency and Bankruptcy Code, 2016.

2 (d) COMPLIANCE WITH THE CODE

The Resolution Applicant is recording hereunder aspects pertaining to the compliance or conformity to the requirements to the Code for ease of reference and evaluation.

Section/ Requirement Compliance (Yes/ No) and Regulation Remarks STATEMENT OF COMPLIANCE OF SECTION 29A OF THE CODE Section 29A of A Person shall not be eligible to submit a Resolution Plan, if such person the Code or any other person acting jointly or concert with such person

Section 29A of (a) Is an undercharged insolvent Applicant is not An the Code undischarged insolvent. (b) Is a wilful defaulter in accordance Applicant is not declared as with the guidelines of the Reserve Bank Wilful Defaulter. of India issued under Banking Regulation Act, 1949 (c) At the time of submission of Applicant does not have any Resolution Plan has an account account which is classified classified as Non-Performing Asset in as Non accordance with the guidelines of the Performing Asset. Reserve Bank of India issued under the Banking Regulation Act, 1949 and at least one years has been lapsed from the date of such classification till the date of commencement of the corporate insolvency resolution process of the CD (d) Has been convicted for any offence Resolution Applicant is not punishable with imprisonment for two convicted / punished under years or more under Twelfth Schedule any act. any act or seven years or more under under any act (e) Is disqualified to act as director Resolution Applicant is not under the Companies Act, 2013 disqualified under Companies Act, 2013. (f) Is prohibited by the Securities and Resolution Applicant is not Exchange Board of India from trading in prohibited by SEBI in any securities or accessing the securities matter. markets (g) Has been a promoter or in the Resolution Applicant is not management or control of a corporate disqualified under this debtor in which a preferential clause. transaction, undervalued transaction, extortionate transaction or fraudulent transaction taken place (h) Has executed a guarantee in favour Resolution Applicant is not of a creditor in respect of a corporate disqualified under this debtor against which an application for clause. insolvency resolution made by such creditor has been admitted under this code and such guarantee has been invoked by the creditor and remains unpaid in full or part (i) Is subject to any disability, Resolution Applicant is not corresponding to clauses (a) to (h) under disqualified under this any law in a jurisdiction outside India clause.

(j) Has a connected person not Resolution Applicant is not eligible under clause (a) to (h) disqualified under this clause.

STATEMENT OF COMPLIANCE OF SECTION 30(2) OF THE CODE AND REGULATION 38 OF CIRP REGULATIONS Section 30(2) The resolution professional shall examine each resolution plan received by him to confirm that each resolution plan:- Section 30(2)(a) (a) provides for the payment of YES of the Code insolvency resolution process costs in a manner specified by the Board in priority to the repayment of other debts of the corporate debtor; Section 30(2)(b) (b) provides for the repayment of the YES debts of operational creditors in such of the Code manner as may be specified by the Board which shall not be less than the amount to be paid to the operational creditors in the event of a liquidation of the corporate debtor under section 53; Section 30(2)(c) (c) provides for the management of the YES of the Code affairs of the Corporate debtor after approval of the resolution plan; Section 30(2)(d) (d) the implementation and supervision YES of the Code of the resolution plan; Section 30(2)(e) (e) does not contravene any of the YES of the Code provisions of the law for the time being in force; Section 30(2)(f) of (f) Conforms to such other requirements YES the Code as may be specified by the Board. Regulation (1) A resolution plan shall identify specific YES 38(1)(a) of the sources of funds that will be used to pay CIRP Regulations the - (a) insolvency resolution process costs and provide that the insolvency resolution process costs will be paid in priority to any other creditor; Regulation (b) liquidation value due to operational YES 38(1)(b) of the creditors and provide for such payment in CIRP Regulations priority to any financial creditor which shall in any event be made before the expiry of thirty days after the approval of a resolution plan by the Adjudicating Authority; and Regulation (c) Liquidation value due to dissenting YES 38(1)(c) of the financial creditors and provide that such CIRP Regulations payment is made before any recoveries are made by the financial creditors who voted in favour of the resolution plan. Regulation 38(1A) (1A) A resolution plan shall include a YES of the CIRP statement as to how it has dealt with the Regulations interests of all stakeholders, including financial creditors and operational creditors, of the corporate debtor.”

Regulation (2) A resolution plan shall provide: YES 38(2)(a) of the (a) the term of the plan and its CIRP Regulations implementation schedule; Regulation (b) the management and control of the YES 38(2)(b) of the business of the corporate debtor during CIRP Regulations its term; and (c) Adequate means for supervising its YES implementation. Regulation 38(3) 3A resolution plan shall demonstrate YES of the CIRP that Regulations (a) it addresses the cause of default; (b) it is feasible and viable; (c) it has provisions for its effective implementation; (d) it has provisions for approvals required and the timeline for the same; and (e) The resolution applicant has the capability to implement the resolution plan.”

3. Background of the Corporate Debtor Churakulam Tea Estate Private Limited owns and manages a tea estate with several other farming activities also undertaken by the Company. The state was established in the early 1900 by the English and was handed over to Mr. Krishan Iyer of Haripad Madam, Kottayam. In the early 1964, a company by the name Churakulam Tea Estate Private Limited was incorporated and all the tea and coffee area was brought under the company totally to around 1700 acres in Peermade Taluk. An orthodox Tea Factory for manufacturing Black tea was established in the year 1928. Churakulam has been producing Premium Teas since then. MMJ Group under the leadership of Sri. Joseph Michael (Pappen), Chairman, his brother Joseph Mathew and Mr. Joseph Joseph took over the company in the year 1977. Later in the year 1992, the Company was transferred to Sri Joseph Joseph, Chairman and Managing Director of the Company. The Company lost its factory by fire accident in 2009 and the company has since built new CTC Tea manufacturing unit. On 28/11/2019, NCLT, Kochi bench initiated Corporate Insolvency Resolution Process suspending the Board of Directors of the Company.

Since then, the Company has been under the management of Resolution Professional Mr. Jasin Jose and the Committee of Creditors. Location The Tea Estate is located at Vandiperiyar, Idukki District, Kerala Sate, India at around 2000-2500 feet above the Sea lavel. The National Highway 183 from Qulion to Theni passes through the estate and is adjecent to the Vandiperiyar Town-one of the main trading center in the region. The estate is just 15km from Kumily/Thekkady (Border Town) were the famous wild life sanctuary and tiger reserve forest is located. It is also near to the Major tourist spot ‘Gavi’- Dam and forest area, Pullumedu Pilgrim station route to Sabrimala and Pathanamthitta. Vaghmon – another Tourist destination is just 45 KM away from the area. The annual average rainfall is around 250 cm. The temperature varies from highest of 35 dcg in summer to the lowest of 10 dcg. in winter, during day time which is ideal from Tea, Pepper, Cardamaom & Coffee Plantation.The Teas from Periyar valley is known, for its flavour and strength which is suitable for dust grade teas. The estate has been producing Premium teas since then.

The company has received THE GOLDEN TEA LEAF AWARD-southern region from TEA BOARD and UPASI in the year 2009. The ‘Queen of spices’ cardamom is produced from this region. Similarly the best Quality “ Black Gold”- the pepper form high range is also cultivated here in plenty. Extent The total extent of the estate is around 508 acres of which tea consist of 488 acres and 20 acres of Cardamom, Coffee and Aracanut. Almost 65% of the area is inter planted with Grevellia ( Silver oak trees ) as shade trees which bears pepper vines on it. It also has large number of valuable trees population like Teak, Mahagoney, Rosewood, Vines, Jack wood etc.The tea factory is situated in one acre plot. The 500 acres consist of three Divisions ie,

• Lower Division - Consisting of 182.34 Acres of Tea, Pepper and coffee and accommodates. The New Factory, Directors Bungalow, Managers Bungalow, Staff quarters, Office, Clinic, Labour lines etc. It is situated adjacent to Vandiperiyar town and the Periyara River. • Upper Division- The Biggest Division having 225.47 Acres of tea Pepper, cardamom, has an Asst. Manager Bungalow, staff quarters and labour lines. • Ayyappan Coil Division – The Division with 100.37 acres, on the other side of Periyar River. As in the name there is a very old ‘AYYAPPAN’ Temple on the Rive • r banks belonging to Poojar Koyikkal, The temple was formerly managed by the company, but later on given to the family back by us. It was supposed to by the ‘Eda thavalam’ to Pandiyan rules of Madurai who visited Sabarimala annually. The Poonjanr Kovilakam and Pandiya raja had good relations during the period. The Division consists of 100.37 acres of Tea, Pepper, Cardamom and Coffee.

All the area is accessible by road from the NH the maximum distance to any corner of the estate is only 2 km. Apart form the plants and tea factory it also has buildings as Directors Bungalow, Manager Bungalow, Staff Quarters & supervisors and labour lines, store and clinic, crèche building etc inside the property. It maintains a permanent work force of 145 workers, 12 staff and supervisors. The Proximity to the town, Government & Private schools, Hospitals, Panchayath office, Market etc. is a major advantage for the people. The Company had an orthodox tea (Black Tea) Factory since 1946 to produce around 30,000 Kg of Green leaf every day. Due to a fire accident in 2009, whole factory was burnt. The construction of new factory started in 2015 and is completed. It has a new modern Black Leaf ( CTC ) manufacturing facilities with a capacity to process 20,000 kg of Green Tea per day. It is a fully automatic facility with requirement of 6-7 workers per shift.

DIRECTORS OF THE CORPORATE DEBTOR

DIN/PAN NAME 1119734 Joseph Joseph 1638150 Mikesh Joseph 1806239 Rajesh Joseph 1806240 Sumesh Joseph

CAPITAL STRUCTURE & SHARE HOLDING PATTERN OF CORPORATE DEBTOR AS ON CIRP COMMENCEMENT DATE

Total Assets of the Corporate Debtor The asset overview of the corporate debtor has been detailed below: Type Description Detailed List is enclosed as Annexure Land Factory Machinery Detailed List is enclosed as Annexure

DEBTS AVAILED FOR ASSETS/OPERATIONS OF THE CORPORATE DEBTOR 3.5.1. FINANCING FACILITIES: M/s. Churakulam Tea Estate Private Limited had debt financing arrangements with the following three institutions: a. South Indian Bank b. Stancash Chits Pvt. Ltd. c. Finance Excellence

As per Audited Balance sheets, the company financial performance for last two years is as below:- (Rs. in Cr)

The major impact for the Loss of the company so far as under:

a. Due to the loss of the Company’s old tea factory due to fire, there has been no value addition / processing of the tea from the estate. The company as selling tea leaves as raw material to other factories. Hence, low turnover.

b. The tea industry as a whole was under stress for the last many years due to higher COP, wage increase (one of the highest in the country) and lower yield due to climate changes.

c. Low price realization for South Indian teas.

d. The new factory could not be commissioned in time due to cost escalation and lack of timely funds.

e. The disturbance / unrest during last few years in Kerala because of floods, landslides, labour strikes for wage revision (pembulai orumai in Munnar etc.), sabarimala issue etc. has impacted production, crops and sales.

f. Lack of timely application of inputs due to financial problem faced by the Company has deteriorated the plants and it's yield largely. Thus, affected the profitability and increased accumulated loss.

g. The majority of the tea plants are old and hence low productivity. Replanting of tea plants is necessary to improve the yield77 b.

Financial Creditors: The amount of dues towards the Financial Creditors, based on the claims admitted by the Resolution Professional (RP), along with the share of each financial creditor in the total debt is provided below:

Two of the above three claims are secured with specific charge on Company properties. Apart from the above financial creditors, the following are the unsecured financial creditors who are related party to the Corporate Debtors and for which claims have not been submitted to the RP in the CIRP:

Operational Creditors As communicated by the Resolution Professional, apart from the financial creditors mentioned above, Operational Creditors of the Corporate Debtor have also filed their claims. Totally, the Resolution Professional has admitted claims from four operational creditors for a total claim amount from Operational Creditors of Rs 2.02 crores as below:

Employees & Workmen dues According to the information memorandum, a claim to the tune of Rs 1.28 crores was admitted by the Resolution Professional as Employees & Workmen dues as below:

4. Proposed Resolution Plan Broad Resolution Strategies

On the basis of the information discussed above, along with the additional information available with the Resolution Applicant, and the specific demands made by South Indian Bank (Lead Financial Creditor with requisite majority vote). the Resolution Applicant submits the following amended and revised Resolution Plan which is in compliance with the provisions of section 30(2) (a) to 30(2) (f) of the IBC, 2016 and also fulfills the mandatory requirements as contained under Regulation 38 of the Insolvency & Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016.;

The Resolution Plan, as detailed in the following paragraphs primarily envisages the following strategies: i. Cut-off date for the purpose of determining the liability to be settled under this proposed Resolution Plan has been considered as 28th November 2019, which is also the insolvency commencement date.

ii. Effective Date for the purpose of implementation of this plan means the date on which the Resolution Plan submitted by the Resolution Applicant is approved by the Hon’ble NCLT under Section 31 (1) of the Code after the same is approved by the COC under Section 30(4) of the Code.

iii. Insolvency Resolution Process Cost to be paid in priority to all other debts.

iv. Financial Re-structuring – Resolution Applicant proposes payment of Rs. 17.42 crores towards the entire claim amount of all the three financial creditors i.e. 17.42 crores as on cutoff date as follows:

a. An amount of Rs. 15.43 crores will be paid to South Indian Bank (interim fund infused by South Indian Bank will be repaid separately before 31 January, 2021) towards the entire claim amount of Rs. 15.43 crores as follows: i. Rs. 1.54 Crores to be paid on or before 30 November, 2021 or 30 days from the date of approval of the Resolution Plan by AA whichever is later. ii. Rs. 13.89 Crores to be paid on or before 31 January, 2021 or 90 days from the date of approval of the Resolution Plan by AA whichever is later.

b. An amount of Rs. 1.72 crores will be paid to Stancash Chits Private Limited towards the entire claim amount of Rs. 1.72 Crores as follows: i. Rs. 17.20 Lacs to be paid on or before 30 November, 2021 or 30 days from the date of approval of the Resolution Plan by AA whichever is later. ii. Rs. 1.54 Crores to be paid on or before 31 January, 2021 or 90 days from the date of approval of the Resolution Plan by AA whichever is later. c. An amount of Rs. 15.43 Lacs will be paid to Financial Excellence towards the entire claim amount of Rs. 25.63 Lacs) as follows: i. Rs. 1.54 Lacs to be paid on or before 30 November, 2021 or 30 days from the date of approval of the Resolution Plan by AA whichever is later. ii. Rs. 13.89 Lacs to be paid on or before 31 January, 2021 or 90 days from the date of approval of the Resolution Plan by AA whichever is later. iii. Note: RP has recently revised the financial claim of Financial Excellence to Rs. 15,43,32,486.00 The Resolution Plan is revised to the extent here that payment of ONLY Rs. 15,43,32,486.00 will be made to Financial Excellence as per the revised Resolution Plan, The Resolution Applicant is not making any consequent change in the overall figures in this Resolution Plan due to paucity of time.

v. Corporate Reorganization – 100.00% of existing shares will stand extinguished on approval of the Resolution Plan. New shares shall be issued to the Resolution Applicant or his nominees based on the amounts brought in by the Resolution Applicant as per the Resolution Plan. The Resolution Applicant proposes to reconstitute the Board of Directors of the Corporate Debtor by appointing new members on the Board of the Corporate Debtor as maybe decided by the Resolution Applicant. The Resolution Applicant will join the Board of the Corporate Debtor. Additionally, to inspire confidence in the Resolution Plan, the Resolution Applicant proposes to appoint two ex SBI Senior Bankers – Mr. Asokan N and Mr. Prem Kumar Varma to the Board of Directors till at least the entire claim amount of the Financial Creditors are paid off in full as per the Resolution Plan.

vi. Payment to Employees & Workmens Dues – Resolution Applicant proposes to pay the entire dues of Employees and Workmen, Rs. 1.28 Crores, without payment of any interest, penal interest or damages separately, in full at least 7 days before the payment is made to the Financial Creditors to be in compliance with IBC 2016 provisions and applicable rules. Note: RP has clarified recently that the Employees and Workers Dues are subject to further verification with the books of the Corporate Debtor. Hence, it is clarified that though the Resolution Plan envisages an upper limit of Rs. 1.28 crores payment to Employees and Workmen’s Dues, the payment will be subject to verification and validation of the dues as per the books of the Corporate Debtor. However, the Resolution Applicant is not making any consequent change in the overall figures in this Resolution Plan due to paucity of time. vii. Payment to Operational Creditors & other creditors – Resolution Applicant proposes to pay the entire dues of Operational Creditors (other than Provident fund dues), Rs. 2.02 Crores, without payment of any interest, penal interest or damages separately, in full at least 7 days before the payment is made to the Financial Creditors to be in compliance with IBC 2016 provisions and applicable rules. Note: RP has recently revised the operational claim of Jimsam Tea Equipments Pvt. Ltd. to Rs. 49,35,034.00. The Resolution Plan is revised to the extent here that payment of ONLY Rs. 49,35,034.00 will be made to Jimsam Tea Equipments Pvt. Ltd. as per the revised Resolution Plan, The Resolution Applicant is not making any consequent change in the overall figures in this Resolution Plan due to paucity of time. viii. Payment of Statutory dues – There is Rs. 1.18 crores payable to provident fund department and the same will be paid in full in full at least 7 days before the payment is made to the Financial Creditors to be in compliance with IBC 2016 provisions and applicable rules ix. Payment of Contingent / Other Liabilities – The Resolution Applicant has provided for Rs. 100.00 Lacs towards meeting Contingent / Other Liabilities to Creditors who may not have filed claims during CIRP to ensure smooth functional relationship for the Corporate Debtor as the Resolution Plan is implemented.

x. Repayment & Sources of finance - The Resolution Applicant proposes to pay

Repayment of Rs. 26.75 Source of Finance crores + Performance Guarantee + Provision for Contingency & Working Capital CIRP Costs of Rs. 25.00 Lacs Funds brought in by Resolution Applicant Repayment of Interim Fund of Funds brought in by Resolution Rs. 1.60 crore Applicant Repayment of Rs. 17.42 crores Funds brought in by Resolution towards Financial Claims. Applicant Repayment of Rs. 1.18 crores Funds brought in by Resolution towards EPF Dues. Applicant

Repayment of Operational Funds brought in by Resolution Creditors of Rs. 2.02 Crores Applicant Employees and Workmens Funds brought in by Resolution Dues of Rs. 1.28 crores Applicant Performance Guarantee Rs. Funds brought in by Resolution 1.00 Crore Applicant Working Capital Rs. 1.00 crore Funds brought in by Resolution Applicant Contingent / Other Liabilities / Funds brought in by Resolution Improvement Rs. 1.00 crore Applicant

The detailed terms and conditions of the Resolution Plan stated above have been provided point wise in the following sections.

Detailed terms & conditions of the Resolution Plan Cut-off Date – The cut-off date for the preparation of this Resolution Plan has been taken as 28th November 2019, i.e. the insolvency commencement date.

Estimated CIRP Cost - According to the details provided, the CIRP cost amounts to Rs. 25.00 Lacs. According to the provisions of Section 30 of the IBC read with Regulation 38 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulation, 2016, the Insolvency Resolution Process Cost will be paid in priority. This has been paid out already from the Interim Funds. Necessary provisions for repayment of the same (Interim Funds) in priority to all other debts of the Company, has been envisaged in the Resolution Plan.

Cost of Plan & Source of Finance

Cost of Resolution Plan Considering the payments envisaged in this Resolution Plan, the total cost and means of finance is as under:

The total Cost of Resolution Plan is Rs. 26.75 Crores which is inclusive of dues payable to Financial Creditor Banks, Operational Creditors, Employee’s Dues 7 Statutory Dues as on cutoff date. Out of the above total cost, Rs. 25.00 lakhs will be utilized towards payment of CIRP cost in priority to all other dues and CIRP cost payout is subject to actual cost as ratified by COC. The balance payment as follows:

Churakulam Tea Estate Pvt. Ltd. (in INR Crores) Funds to be brought in by RA for Resolution Amount to be brought in on or before 31 Jan, 2021 (or 90 days from approval of the Resolution Plan by AA) Amount Introduced by RA 26.75 Fund Utilization CIRP 0.25 Interim Fund 1.60 Employees & Workmens Dues 1.28 Statutory Dues - PF 1.18 Operational Creditors 2.02 Financial Creditors 17.42 Performance Guarantee 1.00 Working capital 1.00 Contingency 1.00 Total 26.75 26.75

Means of Finance a) Infusion of Funds by Resolution Applicant

The Resolution Plan proposes that the amount proposed in this Resolution Plan for settling all the dues of the Corporate Debtor at Rs. 26.75 crores would be sourced by the Resolution Applicant in the following manner: (I) Upfront contribution towards performance guarantee. (II) Immediate settlement of CIRP & Interim Fund with 2 weeks of approval of Resolution Plan by AA (III) Settlement of Operational Creditors including Employees & Workmens Dues, Statutory Dues and Operational Creditors at least 7 days before the payment is made to the Financial Creditors. (IV) Settlement of 10.00% of approved financial claims to Financial Creditors on paid on or before 30 November, 2021 or 30 days from the date of approval of the Resolution Plan by AA whichever is later. (V) Settlement of balance 90.00% of approved financial claims to Financial Creditors on paid on or before 31 January, 2021 or 90 days from the date of approval of the Resolution Plan by AA whichever is later.

b) Funds from cash flow of operations from the estate: Resolution Applicant proposes to operate the estate from cash flow from operations Detail projected balance sheet, profit & loss a/c and Cash Flow is listed as Annexure C.

Proposed Restructuring of Dues and Repayment:

Financial Creditors: Based on the information provided in the information memorandum and the further information obtained from the audited financial statements, the claims admitted by RP and the outstanding in the books of the Corporate Debtor towards financial creditors, the Resolution Applicant propose to repay the financial creditors are as follows:

d. An amount of Rs. 15.43 crores will be paid to South Indian Bank (interim fund infused by South Indian Bank will be repaid separately before 31 January, 2021) towards the entire claim amount of Rs. 15.43 crores as follows: iii. Rs. 1.54 Crores to be paid on or before 30 November, 2021 or 30 days from the date of approval of the Resolution Plan by AA whichever is later. iv. Rs. 13.89 Crores to be paid on or before 31 January, 2021 or 90 days from the date of approval of the Resolution Plan by AA whichever is later.

e. An amount of Rs. 1.72 crores will be paid to Stancash Chits Private Limited towards the entire claim amount of Rs. 1.72 Crores as follows: iii. Rs. 17.20 Lacs to be paid on or before 30 November, 2021 or 30 days from the date of approval of the Resolution Plan by AA whichever is later. iv. Rs. 1.54 Crores to be paid on or before 31 January, 2021 or 90 days from the date of approval of the Resolution Plan by AA whichever is later. f. An amount of Rs. 25.63 Lacs will be paid to Financial Excellence towards the entire claim amount of Rs. 25.63 Lacs) as follows: xi. Rs. 2.56 Lacs to be paid on or before 30 November, 2021 or 30 days from the date of approval of the Resolution Plan by AA whichever is later.

xii. Rs. 23.07 Lacs to be paid on or before 31 January, 2021 or 90 days from the date of approval of the Resolution Plan by AA whichever is later. b. The Resolution Plan only takes into account financial claims admitted by the Resolution Professional. Hence, all other liabilities in the Balance Sheet and in the Books of Account of the Corporate Debtor including all amounts due to the erstwhile Promoters / Shareholders / their Group Companies & Firms shall stand fully extinguished on approval of this Resolution Plan. (All receivables of the Company shall continue and the Resolution Applicant intends to pursue all outstanding receivables including any receivables from the erstwhile Promoters / Shareholders / their Group Companies & Firms in every manner possible to collect the dues thereby additionally strengthening the financial position of the Company).

Operational Creditors a) Workmens and Employees Dues and Provident Fund

The Resolution Applicant proposes to pay Rs. 2.46 crores towards Workmens and Employees Dues and Provident Fund at least 7 days before the payment is made to the Financial Creditors.

b) Trade Creditors & Other creditors According to the provisions of Section 30(2) (b) of the IBC, 2016 read with Regulation 38 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulation, 2016, a Resolution Plan should necessarily provide for the liquidation value due to the operational creditors which should be paid in priority to any financial creditor and should be paid before the expiry of thirty days after the approval of the Resolution Plan by the NCLT. Resolution Applicant is proposing to pay all claims submitted and approved by the RP in full at least 7 days before making the payment to Financial Creditors.

The Resolution Plan only takes into account operational claims admitted by the Resolution Professional. Hence, all other liabilities in the Balance Sheet and in the Books of Account of the Corporate Debtor including all unclaimed statutory dues shall stand fully extinguished on approval of this Resolution Plan.

4.3 Other Terms Management of Affairs of Churakulam Tea Estate Private Limited after approval of Resolution Plan RELEASE OF RESOLUTION PROFESSIONAL AND DISSOLUTION OF THE COC (a) The Resolution Applicant will join the Board of Directors immediately after approval of the plan by Hon’ble NCLT. The Resolution Professional was appointed by the Adjudicating Authority and the COC formed by the Resolution Professional pursuant to the Corporate Insolvency Resolution Process of the Corporate Debtor. Additionally, to inspire confidence in the Resolution Plan, the Resolution Applicant proposes to appoint two ex Senior SBI

Bankers – Mr. Asokan N and Mr. Prem Kumar Varma to the Board of Directors till at least the entire claim amount of the Financial Creditors are paid off in full as per the Resolution Plan. The Resolution Applicant will have full freedom to appoint the Directors on the Board of Directors of the Corporate Debtor from the date of approval of the Resolution Plan till the payments are made in full as proposed in this Resolution Plan and naturally thereafter as long as he holds controlling majority stake in the Corporate Debtor post approval of the Resolution Plan. (b) The Resolution Professional shall be released of his duties and responsibilities and the COC shall be dissolved with effect from the effective date. INTERIM PERIOD BETWEEN CUTOFF DATE AND EFFECTIVE DATE: (a) With the effective from the cut-off date and until the effective date, the Resolution Professional shall manage the Company and exercise all the powers. GOING CONCERN The Company shall continue as going concern and operate in its normal course of business upon implementation of the Resolution Plan. The management of affairs of the Company after effective date would be resumed under the direction of the newly constituted Board of Directors appointed by the Resolution Applicant.

The MOST IMPORTANT STEP in this Resolution Plan is making the new non operative factory operational immediately and latest before 31 March, 2020 which will support selling the produce from the estate and nearby estate as value added branded product bringing additional revenue and increased margins to the Company in the coming years. Corporate Actions: The Company shall make appropriate actions necessary for implementation of all the provisions of the Resolution Plan, which includes (i) Filing of appropriate forms or documents amongst others with the Registrar of Companies (ii) 100.00% extinguishment of existing share capital. (iii) issuance of shares to the Resolution Applicant as provided in the Resolution Plan (New shares shall be issued to the Resolution Applicant or his nominees based on the amounts brought in by the Resolution Applicant as per the Resolution Plan). and (iv) other compliance as per the governing law. Provision for Implementation & Supervision of the Resolution Plan The term of the proposed Resolution Plan will commence from the effective date. The implementation of the plan will begin once the plan is approved by the Committee of Creditors and Adjudicating Authority in accordance with the Code.

In order to ensure smooth implementation of the Resolution Plan, the Resolution Applicant has already identified a core team with a strong experience in the relevant field. Additionally, the two senior Bankers will provide guidance and support to the management from the Board of Directors. The Resolution Applicant also proposes appointment of the present Resolution Professional to supervise the implementation of the Resolution plan on behalf of the COC on monthly fee basis and the Resolution Applicant is willing to bear the cost of RP on same terms as during the CIRP so as to ensure implementation of the Resolution Plan in an effective manner. The current Committee of Creditors shall continue as the Monitoring Committee till the last dues of the Financial Creditors are cleared in full as envisaged in this Resolution Plan. Release of Securities • On receipt of the payment of full dues of Financial Creditors - South Indian Bank and the two Chit Funds - as per this Resolution Plan, they shall unconditionally transfer all securities / Corporate Guarantees / collaterals (pertaining to the Company) / personal guarantees provided as security against the debt availed by the Company and the Secured Financial Creditors in favor of the Resolution Applicant with full rights enjoyed by the respective Financial Creditor/s. • On receipt of the payment of full dues of Financial Creditors – South Indian Bank and the two Chit Funds - as per this Resolution Plan, the Financial Creditors – South Indian Bank and the two Chit Funds - shall release / transfer their charge over the assets of the Churakulam Tea Estate Private Limited which have been provided as security against the facilities availed from the financial lenders and also the corporate guarantees held by them after receipt of full payment as per the Resolution Plan. • On receipt of the payment of full dues of Financial Creditors – South Indian Bank and the two Chit Funds - as per this Resolution Plan, the Financial Creditor Bank and the two Chit Funds shall transfer (release) the Personal Guarantee of the erstwhile Promoters, if any, in favor of the Resolution Applicant with full rights to enforce the Personal Guarantee against them as the Resolution Applicant intends to pursue the personal guarantee to potentially raise additional funds from the erstwhile Promoters to strengthen the financial position of the Company by negotiating closure of their personal guarantee for value to be discussed and agreed upon by the Resolution Applicant and the erstwhile Promoters.

Consequence of Default : In the event the Resolution Plan is revoked or restructuring of the Company under this Resolution Plan fails, the existing facilities of the creditors, the rights and remedies of the creditors under their respective existing financing documents would continue as if they had not been waived, amended, modified, superseded or replaced by the Resolution Plan and the creditors shall be entitled to enforce such rights and remedies under the existing financing documents. Other Reliefs • To withdraw any suits/ applications filed against Churakulam Tea Estate Private Limited. • Churakulam Tea Estate Private Limited will have the option to prepay the dues of the Financial Creditors, without any additional levies as when arranges fund through investors or through their own sources;

• For any default in making the final payment to the financial creditors as specified in this plan, a cure period of a maximum of 20 days would be provided to cure the default/delayed payment. • The Resolution Applicant and the Company shall be entitled to share certified copy of the Resolution Plan and the order of the Adjudicating Authority approving this Resolution Plan with the third parties including Government Agencies. • The Resolution Plan once approved by COC and then the Adjudicating Authority along with such conditions as may be stipulated by the Adjudicating Authority, shall be binding on the Resolution Applicant, the Company, all the stakeholders, Creditors, members, erstwhile promoters and employees and all other parties in interest and each of their respective successors and assign in accordance with Section 31(1) and 238 pf IBC Code. • The Resolution Applicant reserves right to apply to Adjudicating Authority for appropriate modification of such provisions of the Resolution Plan, to satisfaction of the Adjudicating Authority, to cure such invalidity or unenforceability of the provisions of the Resolution Plan if any. Any invalidity and/or unenforceability of the provisions of the Resolution Plan shall not render the whole Resolution Plan ineffective, unless otherwise directed by the Adjudicating Authority by an order. • The Resolution Applicant reserves and retains the right to modify the proposed Resolution in the event of amount proposed in this Plan for settling the dues to the Financial Creditor and other Creditors is revised based on the discussions between members of the COC and the Resolution Applicant. • The Resolution Applicant has made every possible effort to prepare and submit the Resolution Plan strictly in accordance with the various provisions of the Code. However, if there is any inadvertent inadequacy/shortcoming/defect in the Resolution Plan, the Resolution Applicant shall be given an opportunity for rectifying and removal of such inadequacy/shortcomings/defects so observed. • Any financial creditor may assign its rights under this Resolution Plan, subject to the transferee unconditionally agreeing to be bound by the terms of this Resolution Plan.

5. Conclusion The Proposed Resolution Plan has been made by considering all the relevant provisions of the Insolvency & Bankruptcy Code, 2016. Further, the Resolution Applicant has enough expertise and potential to implement the resolution plan proposed above. The Resolution plan strives to achieve the following: • This proposed Resolution Plan provides for payment of Financial Creditors in full. • This proposed Resolution Plan provides for payment of Operational Creditors including Employees and Workmen dues and statutory dues in full.

• The proposed Resolution Plan keeps company as going concern and provides and assures continued direct employment opportunity to not less than 200 persons and indirect employment to more than 100 people. • The Proposed Resolution Plan preserves and maximise the asset value. • The Proposed Resolution Plan fulfils the objectives spelt out in the provisions of IBC Code. • The Estate has the potential to generate average annual revenue of nearly Rs. 25.00 crores in the financial year 2025 which is significant contribution to Nation's GDP • Interest of all the stake holders including Government dues duly taken care

It is hoped the Resolution Professional would find this plan suitable for presentation before the Committee of Creditors for approval as it takes care of interest of all stakeholders involved in the Corporate Debtor. We further request the Resolution Professional and members of the CoC to give us an opportunity to modify our plan if required. In case of any query kindly contact us.

Thanking you, Yours Sincerely,

PROPOSED RESOLUTION APPLICANT. JOSE PRADEEP

CHURAKULAM TEA ESTATES PRIVATE LIMITED, VANDIPERIYAR PROJECTED BALANCE SHEET I II III IV V PARTICULARS 2020-21 2021-22 2022-23 2023-24 2024-25 A EQUITY AND LIABILITIES 1 SHAREHOLDERS'S FUNDS ( a) Share Capital 2,225,000.00 52,225,000.00 52,225,000.00 52,225,000.00 52,225,000.00 ( b) Reserves and surplus -97,659,027.00 -74,024,884.40 -46,858,699.44 -18,773,647.24 10,318,897.57 -95,434,027.00 -21,799,884.40 5,366,300.56 33,451,352.76 62,543,897.57 2 NON-CURRENT LIABILITIES ( a) Long term borrowings: From banks- Unsecured from RA 225,000,000.00 140,000,000.00 110,000,000.00 70,000,000.00 32,500,000.00 225,000,000.00 140,000,000.00 110,000,000.00 70,000,000.00 32,500,000.00 ( b) Long term provisions ( c) Deffered tax liability - - - - - 225,000,000.00 140,000,000.00 110,000,000.00 70,000,000.00 32,500,000.00 3 CURRENT LIABILITIES ( a) Short term borrowings-chitty ( b) Trade payables-creditors 2,200,000.00 3,000,000.00 3,200,000.00 3,100,000.00 2,600,000.00 ( c) Other curt. Liabilities 15,000,000.00 15,000,000.00 9,000,000.00 8,200,000.00 7,900,000.00 17,200,000.00 18,000,000.00 12,200,000.00 11,300,000.00 10,500,000.00 Total 146,765,973.00 136,200,115.60 127,566,300.56 114,751,352.76 105,543,897.57 B ASSETS 1 NON- CURRENT ASSETS ( a) Fixed assets 88,200,000.00 84,892,500.00 72,158,625.00 61,334,831.00 52,134,606.00 Less: Depreciation -3,307,500.00 -12,733,875.00 -10,823,794.00 -9,200,225.00 -7,820,191.00 84,892,500.00 72,158,625.00 61,334,831.00 52,134,606.00 44,314,415.00 Estate development 500,000.00 500,000.00 2,100,000.00 2,500,000.00 5,000,000.00 ( b) Deffered tax asset - - - - - ( c) Long term loans & deposits 58,200,000.00 58,200,000.00 58,500,000.00 54,871,379.76 50,355,924.57 143,592,500.00 130,858,625.00 121,934,831.00 109,505,985.76 99,670,339.57 2 CURRENT ASSETS ( a) Inventories 300,000.00 1,850,000.00 1,960,000.00 2,045,000.00 2,194,000.00 ( b) Cash & Bank Balances 1,600,000.00 2,265,142.60 2,430,327.56 2,959,225.00 3,006,416.00 ( c) Other current assets 1,273,473.00 1,226,348.00 1,241,142.00 241,142.00 673,142.00 3,173,473.00 5,341,490.60 5,631,469.56 5,245,367.00 5,873,558.00 Total 146,765,973.00 136,200,115.60 127,566,300.56 114,751,352.76 105,543,897.57

CHURAKULAM TEA ESTATES PRIVATE LIMITED, VANDIPERIYAR PROJECTED TRADING AND PROFIT & LOSS ACCOUNT 2021 2022 2023 2024 2025 Green Leaf own production(Kgms) 800000 840000 882000 926100 972405 Green Leaf out side Purchase (Kgms) 600000 4500000 4500000 4500000 4500000 Total 1400000 5340000 5382000 5426100 5472405 Opening Stock 0.00 3.00 18.50 19.43 20.40 Made Tea (Kgms) 147240 1310436 1320743 1331565 1342928 Less: Packet tea sold 7362 95338 132074 133156 134298 Made tea sold 139878 1215098 1188669 1198409 1208630 Cost Of Production Purchase of Green Leaf 102.00 810.00 810.00 810.00 810.00 Employees Cost Plucking 88.00 92.40 97.02 101.87 106.96 Weeding 13.00 7.06 7.41 7.78 8.17 Provident Fund 21.00 22.05 23.15 24.31 25.53 Medical Expenses 7.00 7.35 7.72 8.10 8.51 Sickness Benefits 3.25 3.41 3.58 3.76 3.95 Uniforms 0.50 0.53 0.55 0.58 0.61 Salary Expenses 24.00 25.20 26.46 27.78 29.17 Bonus & Gratuity Expenses 14.00 14.70 15.44 16.21 17.02 Workers Aminities 18.00 18.90 19.85 20.84 21.88 Other Welfare Expenses 1.00 1.05 1.10 1.16 1.22 Over Time &leave with Wages 6.00 6.30 6.62 6.95 7.29 Festival Holiday Wages 7.00 7.35 7.72 8.10 8.51 Staff Expenses 2.00 2.10 2.21 2.32 2.43 watchers Expenses 12.00 12.60 13.23 13.89 14.59 Cultivation Expenses Cultivation Expenses 3.00 3.15 3.31 3.47 3.65 Micro Nutrients & Stimulents Expenses 7.00 7.50 8.00 8.50 9.00 Manuring 10.00 7.06 7.41 7.78 8.17 Pruning 3.60 3.02 3.18 3.33 3.50 Pests Control Expenses 6.00 6.50 7.00 8.00 8.40 Fungicide 1.00 1.05 1.10 1.16 1.22 Manufacturing Expenses Electricity Expenses 9.50 38.00 39.90 41.90 43.99 Fire Wood Expenses 7.36 65.52 66.04 66.58 67.15 Manufacturing Expenses 9.64 132.36 131.80 131.21 130.59 Duty 0.42 3.65 3.57 3.60 3.77 H S D Oil 2.80 2.94 3.09 3.24 3.40 Vehicle Running Expenses 0.60 0.63 0.66 0.69 0.73 Packet tea packing expenses 6.30 30.00 35.00 40.00 45.00 Repairs & Maintenance Repairs & Maintenance 3.00 5.25 5.51 5.79 6.08 Lines Up keep 6.00 6.30 6.62 6.95 7.29 Wells & water Supply 2.50 2.63 2.76 2.89 3.04 Roads & Drains 2.00 2.10 2.21 2.32 2.43 Guest Bungalow Expenses 1.00 1.05 1.10 1.16 1.22 Administrative Expenses Travelling expenses 0.75 0.79 0.83 0.87 0.91 Rates, Taxes & License fee 0.50 0.53 0.55 0.58 0.61 Insurance 1.00 1.00 1.00 1.00 1.00 Printing & Stationery 0.50 0.53 0.55 0.58 0.61 Postage & Telephone Charges 1.00 1.05 1.10 1.16 1.22 Other Administrative Expenses 5.00 5.50 6.00 6.30 6.62 Cardamom Area Expenses 11.00 11.55 12.13 12.73 13.37 Coffee Estate Expenses 22.00 23.10 24.26 25.47 26.74 Pepper Area Expenses 10.00 12.00 14.00 15.00 16.00 Depreciation 33.07 127.34 108.24 92.00 78.20 Cost of Production 485.29 1536.07 1557.43 1567.31 1580.11 ADMINISTRATIVE EXPENSES Salary & Allowances 8.00 8.50 9.00 9.50 10.00 Vehicle Running Expenses 1.00 1.05 1.10 1.16 1.22 Other Administrative Expenses 5.00 5.25 5.51 5.79 6.08 Printing & Packaging 2.17 8.70 9.14 9.59 10.07 Total 16.17 23.50 24.75 26.04 27.36 Total Cost 501.46 1559.57 1582.18 1593.35 1607.48 Income Sale of Green Leaf@ 20 160.00 Sale of Tea 160.86 1458.12 1426.40 1438.09 1450.36 Sale of Packet Tea 16.20 209.74 290.56 292.94 295.46 Coffee 36.00 37.80 39.69 41.20 43.26 Pepper 30.00 35.00 39.00 41.00 44.85 Cadamom 35.00 36.75 38.59 40.52 42.54 Closing stock 3.00 18.50 19.60 20.45 21.94 Total 441.06 1795.91 1853.84 1874.20 1898.40 Profit before Interest - 60.41 236.34 271.66 280.85 290.93 Finance cost Interest on bank Loan (R.P) 6.50 Total 6.50 0.00 0.00 0.00 0.00 OPERATING PROFIT - 66.91 236.34 271.66 280.85 290.93

CHURAKULAM TEA ESTATES PRIVATE LIMITED, VANDIPERIYAR PROJECTED CASH FLOW STATEMENT II III IV V 2021-22 2022-23 2023-24 2024-25 Source Of funds Proceeds from issue of Share capital 50,000,000.00 - - Profit before tax. 23,634,142.60 27,166,184.96 28,085,052.20 29,092,544.81 Add : Non Cash items : Depreciation 12,733,875.00 10,823,794.00 9,200,225.00 7,820,191.00 Change in provisions - Decrease in Current Assets 47,125.00 1,000,000.00 Increase in Trade payable 800,000.00 200,000.00 Decrease in Non current Assets - 3,628,620.24 4,515,455.19 TOTAL 87,215,142.60 38,189,978.96 41,913,897.44 41,428,191.00 Application Of funds Repayment of Term Loans - - - - Repayment of Loan -chitty - - - - Repayment of unsecured loan-RA 85,000,000.00 30,000,000.00 40,000,000.00 37,500,000.00 Increase in current assets 14,794.00 - 432,000.00 Increase in Inventories 1,550,000.00 110,000.00 85,000.00 149,000.00 Decrease in Trade Payables 100,000.00 500,000.00 Decrease in Other Current Laibilities - 6,000,000.00 800,000.00 300,000.00 Estate Development 1,600,000.00 400,000.00 2,500,000.00 Increase in Non current Assets 300,000.00 TOTAL 86,550,000.00 38,024,794.00 41,385,000.00 41,381,000.00 Cash & Bank balances Opening Balance 1,600,000.00 2,265,142.60 2,430,327.56 2,959,225.00 Surplus 665,142.60 165,184.96 528,897.44 47,191.00 Closing balance 2,265,142.60 2,430,327.56 2,959,225.00 3,006,416.00

IA 202/KOB/2020 in IBA 21/KOB/2019