Approval of Resolution Plan - EMI Infrastructure Private Limited

IN THE NATIONAL COMPANY LAW TRIBUNAL DIVISION BENCH – II, CHENNAI IA(IBC)/Plan/07/(CHE)/2024 In CP(IB)/178(CHE)/ 2022 (filed under Section 30(6) of the Insolvency & Bankruptcy Code, 2016 read with Regulation 39(4) of Insolvency & Bankruptcy Board of India Regulations, 2016) (In the matter of EMI Infrastructure Private Limited)

RESOLUTION PROFESSIONAL M/S. EMI INFRASTRUCTURE PRIVATE LIMITED MATHUR SABHAPATHY VISWANATHAN … Applicant/Resolution Professional

In the matter of M/S SHRIRAM TRANSPORT FINANCE COMPANY LIMITED …Petitioner/Financial Creditor -Versus- M/S. EMI INFRASTRUCTURE PRIVATE LIMITED … Respondent/Corporate Debtor

Order Pronounced on 5th February 2025

CORAM SHRI JYOTI KUMAR TRIPATHI, MEMBER (J) SHRI RAVICHANDRAN RAMASAMY, MEMBER (T) Appearances: For Applicant : V Manivannan ORDER 1. IA(IBC)/Plan/07/(CHE)/2024 is an application filed on 23.07.2024 by the Resolution Professional of the Corporate Debtor Viz., M/s. EMI Infrastructure Private Limited under Section 30(6) of the Insolvency & Bankruptcy Code, 2016 (hereinafter referred to as (‚the Code‛)) read with Regulation 39(4) of the Insolvency &

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Bankruptcy Board of India Regulations, 2016 seeking reliefs as follows: i) To grant approval to the Resolution plan dated 23.03.2024 which was approved by the Committee of Creditors in the 17th CoC Meeting conducted on 03.04.2024. ii) To grant approval to the Reliefs sought by the Successful Resolution Applicant as set out in Paragraph 25 (25.1 and 25.2) of this Application. iii) To grant approval for the proceeds explained in paragraphs 18 & 19 to be distributed among the Committee of Creditors.

2. The Corporate Debtor has been engaged in the business of provide quality infrastructure management solutions and support to all type of construction companies to eliminate lack of quality in production and management. The executive summary of the Corporate Debtor is as hereunder, Name of the Corporate EMI Infrastructure Private Debtor Limited CIN U45208TN2008PTC066054 Date of Incorporation 14.01.2008 3. CORPORATE INSOLVENCY RESOLUTION PROCESS OF EMI INFRASTRUCTURE PRIVATE LIMITED 4. The Corporate Insolvency Resolution Process in respect of the Corporate Debtor viz., EMI Infrastructure Private Limited was initiated by this Adjudicating Authority vide its order dated 01.02.2023 based on an application moved by M/s Shriram Transport Finance Company Limited, in the capacity of Financial creditor under Section 7 of the code in CP (IB)178(CHE)/2022, Mr. Mathur Sabhapathy Viswanathan was appointed as the ‘Interim

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Resolution Professional’. The key dates and events during the Corporate Insolvency Resolution Process period are tabulated as hereunder,

S.NO. DATE EVENTS 1. 04.02.2023 Public Announcement regarding initiation of Corporate Insolvency Resolution Process. 2. 27.02.2023 The Committee of Creditors was constituted by the IRP based on the claims received. 3. 27.07.2023 1st CoC Meeting and resolution passed approving the IRP to continue as RP 4. 31.03.2023 2nd Coc Meeting-resolution to issue Form G inviting expression of interest. 5. 06.03.2023 Order appointing Mr. Mathur Sabhapathi Viswanathan as the RP was passed. 6. 12.07.2023 Appointment of Registered Valuers. 7. 31.07.2023 End of 180 days of Corporate Insolvency Resolution Process Period. 8. 03.08.2023 Corporate Insolvency Resolution Process Period was extended for 90 days by order of this Adjudicating Authority. 9. 07.11.2023 CIRP Period was further extended for period of 60 days, expiring on 30.10.2023. 10. 15.07.2024 CIRP period was extended upto 26.07.2024 11. 08.04.2024 A Resolution Plan was approved by the CoC and the same was filed before this Adjudicating Authority for approval. 12. 22.07.2024 Date of Filing of resolution plan with adjudicating authority. 13. 21.06.2024 Form G (Expression of Interest (EoI)) was published. 14. 25.09.2024 Last date of submission of Resolution Plan. 15. 20.07.2023 Performance Security to the tune of Rs 35

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Lakhs was deposited by the SRA.

4. DELIBERATION OF THE COC ON THE FEASIBILITY OF THE PLAN During the CoC Meeting held on 04.09.2024 deliberations were made by the members of the CoC on the Resolution Plan submitted by the SRA. Accordingly, the Resolution Plan was approved with 67.36% by e voting. The resolution is as hereunder, "RESOLVED THAT The Resolution Plan (As amended dated 23.03.2024) submitted by the Resolution Applicant M/s. Ajit Transport company represented by its proprietor Mr.Ajit Singh Harbans Singh Kohli, in respect of the Corporate Debtor, EMI Infrastructure Private Limited is hereby approved and confirmed by this committee U/s.30(4) of the Insolvency and Bankruptcy Code, 2016 (IBC) and the Resolution Professional shall submit the Resolution Plan as approved by the committee of creditors to the Adjudicating Authority for its approval.

5. DETAILS OF THE SUCCESSFUL RESOLUTION APPLICANT

NAME CATEGORY Mr. Ajit Singh Harbans Singh Proprietor of M/s Ajit Kohli. Transport company/Equinox Equipment

It is submitted that Successful resolution applicant is a sole proprietor of M/s Ajith Transport company/ Equinox Equipment’s and Infras in the field of large scale construction support services by supplying transit mixers and Tippers for transportation.

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It is submitted that the RA has not been declared as ‚wilful defaulter‛ as per law. Affidavit is submitted to the effect of section 29A by way of memo filed dated 08.01.2025.

6. SOURCE OF FUND 6.1 In section 5 part 4 of the Plan states about the Source of Funds It is submitted that Resolution Applicant shall apportioned the funds from his own business. 6.2 It is submitted that The Source of Funds for the Resolution Applicant shall be apportioned from his own business income, deposits made towards EMD and Performance Security for the resolution process. And bank balance is maintained by the resolution applicant 6.3 It is submitted that the Resolution Applicant is having sufficient means to make the entire payment of the Resolution Plan amount but however is proposing to raise 40% to 50% of the Resolution Plan amount through credit facilities with his existing bankers. 6.9 Application of Funds, Sl Payment schedule Payment Amount Total no (In Lakhs) 1 Deposit released on Fixed Deposit made 15,00,000 15,00,000 approval of resolution towards EMD at the time plan of submisiion of EOI 2 Within 07 days from the 35,00,000 35,00,000 date of Approval of the Performance Guarantee Resolution Plan by COC. 90 days from approval of the resolution plan by Adjudicating authority. 3 Within 30 days from the Payment through own 50,00,000 50,00,000 date of Approval of the funds. Resolution Plan by adjucating authority

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4 On or before 90 days Payment 1,60,00,000 1,60,00,000 from the date of Approval of the Resolution Plan by Adjudicating Authority TOTAL 2,60,00,000.

6.10 Timeline of payment 1 Payment of CIRP cost E+30 days 2 Payment To Operational creditor in priority over E+90 days Financial Creditor 3 Payment to secured Financial creditor E+90 days 4 Payment of Liquidation value to the dissenting E+90 days creditors. Note:  CIRP Costs are estimated and may vary based on actuals E Date of approval of resolution plan by Adjudicating Authority. 7. SALIENT FEATURES OF THE RESOLUTION PLAN 7.1 The Resolution Applicant has examined the present physical conditions of the vehicles and the estimated costs for making them operational and functional for commercial activities. The resolution plan submitted is based only on the number of vehicles available under the possession of the RP as the CD is not possessed with any other intrinsic or inherent value apart from the said vehicles and the revival of the CD is reliant on the operation of the existing vehicles and infusion of further such capital and taking up new business through the efforts of the Resolution Applicant for the CD. 7.2 Since to the nature of the assets of the CD being movable and being scattered across various locations, the Resolution Applicant will be making all expenses to bring the same back to running condition and full utility. The the existing assets as set out are being taken over upon payment of the entire resolution plan amount, the period for implementation of the resolution plan itself shall be 90 days. 7.3 In section 5 of the resolution plan two scenario was set out for payment schedule and plan amount in the event of 5 Chassis vehicles if identified and brought into possession Rs 2,60,00,000/- (scenario 1) and if 5 chassis vehicles are not identified Rs 2,20,00,000/-( scenario 2) vide order dated 08.01.2025 we had sought the for applicant to file an affidavit that which senario would be applicable for consideration of the plan vide memo dated

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17.01.2025 it was submitted vide confirmation letter dated 09.01.2025 that senario 1 would be applicable.

8. PAY-OUT TO STAKEHOLDERS AS PROPOSED IN THE PLAN

Sl.No Category of Stakeholder Amount Amount Amount Provide Claimed Admitted Under Plan

1 Financial Creditors Indostar Capital 7,14,44,333 7,14,44,333 45,00,698 Finance Ltd Shriram Finance 7,87,78,328 7,66,95,954 48,32,599 Limited DCB Bank Limited 2,62,65,700 2,56,77,116 16,16,589 HDB Financial 1,06,13,869 1,06,13,869 6,66,664 services Limited Sundaram Finance 4,72,57,560 4,72,57,560 29,75,668 Limited The Federal Bank Ltd 3,46,35,017.9 3,46,35,018 21,83,110 Cholamandalam 1,00,65,263 1,00,65,263 6,35,191 Investment and Finance Mahindra & 2,16,12,894 2,16,12,894 13,61,940 Mahindra Financial services Ltd IDFC First Bank 1,66,44,948 1,15,38,459 1,54,057 Limited YES Bank assigned to 1,26,42,006 1,15,31,750 1,54,057 J.C Flowers ARC Equitas Small 1,0023,072 1,00,23,072 1,34,041 Finance Bank SREI Equipment 1,12,80,349 1,12,80,349 1,50,417 Finance Limited TATA Motors 7,99,42,226 7,99,42,226 10,67,479 Finance Services Limited TATA Capital 1,05,82,119 1,04,72,104 1,40,107 Finance Services Limited Kotak Mahindra 2,13,99,151.7 2,13,99,152 2,85,672

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Bank Ltd Total 46,31,86,836. 45,41,89,11 2,08,58,288 72 9 3 Operational Creditor Sri Sendhur Tyres 5,71,248 5,46,248 30,000 LNB Filling Station 7,69,734 7,69,734 40,000 Sleek Speciality 2,97,919 2,97,919 15,000 Lubricants EXELFIN Advisors 52,160 41,560 3000 Private Limited Iv & Associates 3,90,880 3,90,880 20,000 G.S.Uma w/o Late Mr 7,44,000 7,44,000 40,000 Venkatraman Company secretary Employees state 11,15,499 0 0 Insurance Corporation Total 39,41,440 27,90,341 1,48,000 4 Other debts and dues NIL NIL NIL CIRP Cost 49,93,712/-

9. IMPLEMENTATION & MONITORING COMMITTEE (IMC) 9.1 It is submitted that the monitoring committee shall consist of the 1) Resolution Professional (Chairman of the Committee) 2) One representative from the Financial creditor 3) Resolution Applicant. 9.2 The IMC shall continue till all payments under the Resolution plan are made. 9.3 The Monitoring Committee shall monitor and supervise the implementation of the plan and shall be required and entitle to do acts, deeds which are necessary in order to implement and give effect to Resolution Plan. 9.4 Monitoring committee shall coordinate with stakeholders and ensure implementation of Plan.

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9.5 The Monitoring Committee shall further be responsible for the distribution of the proceeds received from the Resolution Applicant under the Plan. For the said purpose, the Chairman of the Monitoring Committee shall be paid a fee of Rs.2,00,000/- (Rupees Two lakhs Only) plus applicable GST per month along with out-of-pocket expenses on actuals from the date of approval of the Resolution Plan to till the period Monitoring Committee dissolves.

10. MANAGEMENT OF THE CORPORATE DEBTOR 10.1 The Resolution Applicant shall control the management of the corporate debtor, The Resolution Applicant will be in charge of key administrative functions, securing orders, Finance etc. 10.2 Since there is no existing workforce of the CD, the Resolution Applicant to appoint suitable staff members and supervisors for executing the business plan projected for the CD. The Resolution Applicant to have staff for both technical and commercial operations who are experienced in their line of activities. 10.3 The existing Statutory Auditor of the Company will be reviewed and if necessary, a new Auditor nominated by the Resolution Applicant shall be appointed as the Statutory Auditor of the Company. 10.4 The existing contracts across product and service arrangements including maintenance, lease etc. shall be renegotiated and fresh contracts entered into by the Resolution Applicant as may be required. 10.5 As only the existing assets as set out are being taken over upon payment of the entire resolution plan amount, the period for implementation of the resolution plan shall be 90 days.

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10.6 Business plan as submitted in the Plan

11. MANDATORY COMPLIANCE UNDER IBC & REGULATIONS From the averments made in the application as well as on perusal of Revised Form H, as filed by the Resolution Professional in relation to the procedural aspects, the same seems to have been duly complied with for which the Resolution Professional has issued a certificate and it is not necessary for this Authority to go into the same. However, this Authority is duty bound to examine the Resolution Plan within the contours of Section 30 (2) of the IBC, 2016.

A Comparison vis-à-vis with the Mandatory compliance under the IBC and the Compliance made under the Resolution Plan.

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MANDATORY COMPLIANCE UNDER COMPLIANCE UNDER IBC,2016 RESOLUTION PLAN S. 30(1) - Resolution Applicant to submit an In page 7 of Compliance memo affidavit stating that he is eligible under dated 07.01.2025 Sec.29A of the Code, 2016 S.30(2)(a)- Payment of Insolvency and In section 5 1.1 of the Resolution Resolution cost in the manner specified by Plan provides for the payment of the Board CIRP costs in priority. S.30(2)(b) -Payment of debts of Operational Section 5 point 2 of the Resolution Creditors in such manner as may be specified Plan provides for the discharge of Operational Creditor claims. 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 Sec. 53. S. 30(2)(c)– Management of the affairs of the Section 7 of the Resolution Plan Corporate Debtor after approval of the provides for Management and Resolution Plan. control of the operations of the Corporate Debtor. S.30(2)(d)– Implementation and Supervision Section 6. of the Plan provides for of the Resolution Plan. implementation & supervision of the plan. S. 30(2)(e)– The plan does not contravene any Section 11 of the plan expresses that of the provisions of the law for the time being the plan does not contravene any in force. provisions of the law for the time being in force. S.30(4) - Committee of Creditors approve the In page 245 Annexure 16 of the Resolution Plan by not less than 66% of the Application by e voting from voting share of Financial Creditors, after 04.04.2024 to 08.04.2024 considering its feasibility, viability and such other requirement as specified by the Board

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MANDATORY CONTENTS OF THE RESOLUTION PLAN IN TERMS OF REGULATION 38 OF CIRP REGULATIONS. MANDATORY COMPLIANCE UNDER CIRP COMPLIANCE REGULATION UNDER RESOLUTION PLAN 38(1) The amount due to the Operational Creditor Section 5 of the under Resolution Plan shall be given priority Plan in payment over Financial Creditor.

38(1A) A Resolution Plan shall include statements as Section 5 of the to how it has dealt with the interest of all Plan stakeholders, including Financial Creditors and Operational Creditors of the Corporate Debtor. 38(1B) A Resolution Plan shall include a statement Section 12 of the giving details if the Resolution Applicant or Plan any of its related parties has failed to implement or contributed to the failure of implementation of any other resolution plan approved by the Adjudicating Authority at any time in the past.

a) term of the plan and its implementation Section 13 of the schedule Plan b) management and control of the business of Section 7, section 38(2) the Corporate Debtor during its term; 14 of the Plan c) adequate means for supervising its Section 6 of the implementation Plan a) it address the cause of default; Section 3 of the Plan b) it is feasible and viable Section 10 of the plan c) it has provisions for effective Section 8 of the implementation Plan 38(3) d) it has provisions for approval required and Section 13 of the the timeline for the same; and plan e) the resolution applicant has the capability to Section 4 of the implement the Resolution Plan. Plan

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12. JUDICIAL PRONOUNCEMENTS OF THE HON’BLE SUPREME COURT IN RELATION TO APPROVAL OF A RESOLUTION PLAN

12.1 In so far as the approval of the Resolution Plan is concerned, this Authority is not sitting in appeal against the decision of the Committee of Creditors and this Authority is duty bound to follow the Judgment of the Hon’ble Supreme Court in the matter of K. Sashidhar –Vs– Indian Overseas Bank (2019) 12 SCC 150, decided on 05.02.2019 wherein in para 19 and 62 it is held as under;

‚19…….In the present case, however, our focus must be on the dispensation governing the process of approval or rejection of resolution plan by the CoC. The CoC is called upon to consider the resolution plan under Section 30(4) of the I&B Code after it is verified and vetted by the resolution professional as being compliant with all the statutory requirements specified in Section 30(2). 62. ………In the present case, however, we are concerned with the provisions of I&B Code dealing with the resolution process. The dispensation provided in the I&B Code is entirely different. In terms of Section 30 of the I&B Code, the decision is taken collectively after due negotiations between the financial creditors who are constituents of the CoC and they express their opinion on the proposed resolution plan in the form of votes, as per their voting share. In the meeting of the CoC, the proposed resolution plan is placed for discussion and after full interaction in the presence of all concerned and the Resolution Professional, the constituents of the CoC finally proceed to exercise their option (business/commercial decision) to approve or not to approve the proposed resolution plan. In such a case, non-recording of reasons would not per-se vitiate the collective decision of the financial creditors. The legislature has not envisaged challenge to the ‚commercial/business decision‛ of the financial creditors taken collectively or for that matter their individual opinion, as the case may be, on this count.‛

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12.2 Further the Hon’ble Supreme Court in the matter of K. Sashidhar v. Indian Overseas Bank and Ors. (2019) 12 SCC 150 decided on 05.02.2019 has lucidly delineated the scope and interference of the Adjudicating Authority in the process of approval of the Resolution Plan and held as under; ‚55. Whereas, the discretion of the adjudicating authority (NCLT) is circumscribed by Section 31 limited to scrutiny of the resolution plan ‚as approved‛ by the requisite per cent of voting share of financial creditors. Even in that enquiry, the grounds on which the adjudicating authority can reject the resolution plan is in reference to matters specified in Section 30(2), when the resolution plan does not conform to the stated requirements. Reverting to Section 30(2), the enquiry to be done is in respect of whether the resolution plan provides: (i) the payment of insolvency resolution process costs in a specified manner in priority to the repayment of other debts of the corporate debtor, (ii) the repayment of the debts of operational creditors in prescribed manner, (iii) the management of the affairs of the corporate debtor, (iv) the implementation and supervision of the resolution plan, (v) does not contravene any of the provisions of the law for the time being in force, (vi) conforms to such other requirements as may be specified by the Board.

The Board referred to is established under Section 188 of the I&B Code. The powers and functions of the Board have been delineated in Section 196 of the I&B Code. None of the specified functions of the Board, directly or indirectly, pertain to regulating the manner in which the financial creditors ought to or ought not to exercise their commercial wisdom during the voting on the resolution plan under Section 30(4) of the I&B Code. The subjective satisfaction of the financial creditors at the time of voting is bound to be a mixed baggage of variety of factors. To wit, the feasibility and viability of the proposed resolution plan and including their perceptions about the general capability of the resolution applicant to translate the projected plan into a reality. The resolution applicant may have given projections backed by normative data but still in the opinion of the dissenting financial creditors, it would not be free from being speculative. These aspects are completely within the domain of the financial creditors who are called upon to vote on the resolution plan under Section 30(4) of the I&B Code.

58. Indubitably, the inquiry in such an appeal would be limited to the power exercisable by the resolution professional under Section 30(2) of the I&B Code or, at best, by the adjudicating authority (NCLT) under Section 31(2) read with Section 31(1) of the I&B Code. No other inquiry would be permissible. Further, the jurisdiction bestowed

IA(IBC)/07/(CHE)/2024 in CP(IB)178(CHE)2022 In the matter M/s.EMI Infrastructure Private Limited 14 of 28 upon the appellate authority (NCLAT) is also expressly circumscribed. It can examine the challenge only in relation to the grounds specified in Section 61(3) of the I&B Code, which is limited to matters ‚other than‛ enquiry into the autonomy or commercial wisdom of the dissenting financial creditors. Thus, the prescribed authorities (NCLT/NCLAT) have been endowed with limited jurisdiction as specified in the I&B Code and not to act as a court of equity or exercise plenary powers.‛ (emphasis supplied) 12.3 The Hon’ble Supreme Court of India in the matter of Committee of Creditors of Essar Steels –Vs– Satish Kumar Gupta & Ors. in Civil Appeal No. 8766 – 67 of 2019 decided on 15.11.2019 at para 42 has held as under; 42. ………Thus, it is clear that the limited judicial review available, which can in no circumstance trespass upon a business decision of the majority of the Committee of Creditors, has to be within the four corners of Section 30(2) of the Code, insofar as the Adjudicating Authority is concerned, and Section 32 read with Section 61(3) of the Code, insofar as the Appellate Tribunal is concerned, the parameters of such review having been clearly laid down in K. Sashidhar (supra).

12.4 Also the Hon’ble Supreme Court of India in the matter of Committee of Creditors of Essar Steel India Limited v. Satish Kumar Gupta and Ors. (2020) 8 SCC 531 decided on 15.11.2019 after referring to the decision in K. Sashidhar (supra) has held as under; ‚73. There is no doubt whatsoever that the ultimate discretion of what to pay and how much to pay each class or sub-class of creditors is with the Committee of Creditors, but, the decision of such Committee must reflect the fact that it has taken into account maximizing the value of the assets of the corporate debtor and the fact that it has adequately balanced the interests of all stakeholders including operational creditors. This being the case, judicial review of the Adjudicating Authority that the resolution plan as approved by the Committee of Creditors has met the requirements referred to in Section 30(2) would include judicial review that is mentioned in Section 30(2)(e), as the provisions of the Code are also provisions of IA(IBC)/07/(CHE)/2024 in CP(IB)178(CHE)2022 In the matter M/s.EMI Infrastructure Private Limited 15 of 28 law for the time being in force.

Thus, while the Adjudicating Authority cannot interfere on merits with the commercial decision taken by the Committee of Creditors, the limited judicial review available is to see that the Committee of Creditors has taken into account the fact that the corporate debtor needs to keep going as a going concern during the insolvency resolution process; that it needs to maximise the value of its assets; and that the interests of all stakeholders including operational creditors has been taken care of. If the Adjudicating Authority finds, on a given set of facts, that the aforesaid parameters have not been kept in view, it may send a resolution plan back to the Committee of Creditors to re-submit such plan after satisfying the aforesaid parameters. The reasons given by the Committee of Creditors while approving a resolution plan may thus be looked at by the Adjudicating Authority only from this point of view, and once it is satisfied that the Committee of Creditors has paid attention to these key features, it must then pass the resolution plan, other things being equal.‛ (emphasis supplied) 12.5 The Hon’ble Supreme Court in its recent decision in Jaypee Kensington Boulevard Apartments Welfare Association & Ors. –Vs- NBCC (India) Ltd. & Ors in Civil Appeal no. 3395 of 2020 decided 24.03.2021 has held as under; 76. The expositions aforesaid make it clear that the decision as to whether corporate debtor should continue as a going concern or should be liquidated is essentially a business decision; and in the scheme of IBC, this decision has been left to the Committee of Creditors, comprising of the financial creditors.

Differently put, in regard to the insolvency resolution, the decision as to whether a particular resolution plan is to be accepted or not is ultimately in the hands of the Committee of Creditors; and even in such a decision-making process, a resolution plan cannot be taken as approved if the same is not approved by votes of at least 66% of the voting share of financial creditors. Thus, broadly put, a resolution plan is approved only when the collective commercial wisdom of the financial creditors, having at least 2/3rd majority of voting share in the Committee of Creditors, stands in its favour.

77. In the scheme of IBC, where approval of resolution plan is exclusively in the domain of the commercial wisdom of CoC, the scope of judicial review is correspondingly circumscribed by the provisions contained in Section 31 as regards approval of the Adjudicating

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Authority and in Section 32 read with Section 61 as regards the scope of appeal against the order of approval.

77.1. Such limitations on judicial review have been duly underscored by this Court in the decisions above-referred, where it has been laid down in explicit terms that the powers of the Adjudicating Authority dealing with the resolution plan do not extend to examine the correctness or otherwise of the commercial wisdom exercised by the CoC. The limited judicial review available to Adjudicating Authority lies within the four corners of Section 30(2) of the Code, which would essentially be to examine that the resolution plan does not contravene any of the provisions of law for the time being in force, it conforms to such other requirements as may be specified by the Board, and it provides for: (a) payment of insolvency resolution process costs in priority; (b) payment of debts of operational creditors; (c) payment of debts of dissenting financial creditors; (d) for management of affairs of corporate debtor after approval of the resolution plan; and (e) implementation and supervision of the resolution plan.

77.2. The limitations on the scope of judicial review are reinforced by the limited ground provided for an appeal against an order approving a resolution plan, namely, if the plan is in contravention of the provisions of any law for the time being in force; or there has been material irregularity in exercise of the powers by the resolution professional during the corporate insolvency resolution period; or the debts owed to the operational creditors have not been provided for; or the insolvency resolution process costs have not been provided for repayment in priority; or the resolution plan does not comply with any other criteria specified by the Board

77.6.1. The assessment about maximization of the value of assets, in the scheme of the Code, would always be subjective in nature and the question, as to whether a particular resolution plan and its propositions are leading to maximization of value of assets or not, would be the matter of enquiry and assessment of the Committee of Creditors alone. When the Committee of Creditors takes the decision in its commercial wisdom and by the requisite majority; and there is no valid reason in law to question the decision so taken by the Committee of Creditors, the adjudicatory process, whether by the Adjudicating Authority or the Appellate Authority, cannot enter into any quantitative analysis to adjudge as to whether the prescription of the resolution plan results in maximization of the value of assets or not. The generalised submissions and objections made in relation to this aspect of value maximisation do not, by themselves, make out a case of interference in the decision taken by the Committee of Creditors in its commercial wisdom

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78. To put in a nutshell, the Adjudicating Authority has limited jurisdiction in the matter of approval of a resolution plan, which is well defined and circumscribed by Sections 30(2) and 31 of the Code read with the parameters delineated by this Court in the decisions above referred. The jurisdiction of the Appellate Authority is also circumscribed by the limited grounds of appeal provided in Section 61 of the Code. In the adjudicatory process concerning a resolution plan under IBC, there is no scope for interference with the commercial aspects of the decision of the CoC; and there is no scope for substituting any commercial term of the resolution plan approved by the CoC. Within its limited jurisdiction, if the Adjudicating Authority or the Appellate Authority, as the case may be, would find any shortcoming in the resolution plan vis-à-vis the specified parameters, it would only send the resolution plan back to the Committee of Creditors, for re-submission after satisfying the parameters delineated by Code and exposited by this Court.

12.6 The Hon’ble Supreme Court in its recent decision in Paschimanchal Vidyut Vitran Nigam Ltd. Verus Raman Ispat Private Limited & Ors. In Civil Appeal no. 7976 of 2029 decided 17.07.2023 has held as under; 49. Rainbow Papers (Supra) did not notice the ‘waterfall mechanism’ under Section 53 – the provision had not been adverted to or extracted in the Judgement. Furthermore, Rainbow Papers (Supra) was in the context of a resolution process and not during liquidation. Section 53, as held earlier, enacts the waterfall mechanism providing for the hierarchy or priority of claims of various classes of creditors. The careful design of Section 53, locates amounts payable to secured creditors and workmen at the second place, after the costs & expenses of the liquidator payable during the liquidation proceedings. However, the dues payable to the government are placed much below those of secured creditors and even unsecured creditors. This design was either not brought to the notice of the Court in Rainbow Papers (supra) or was missed altogether. In any event, the Judgment has not taken note of the provisions of the IBC which treat the dues payable to secured creditors at a higher footing than dues payable to central or state Government. (emphasis supplied)

12.7 Thus, from the catena of judgments rendered by the Hon’ble Supreme Court on the scope of approval of the Resolution Plan, it is crystal clear that only limited judicial

IA(IBC)/07/(CHE)/2024 in CP(IB)178(CHE)2022 In the matter M/s.EMI Infrastructure Private Limited 18 of 28 review is available for the Adjudicating Authority under Section 30(2) and Section 31 of IBC, 2016 and this Adjudicating Authority cannot venture into the commercial aspects of the decisions taken by the Committee of Creditors.

13. RELIEF & CONCESSIONS:

The Resolution Applicant has sought for various waivers and Concessions in Section 15 of the Resolution Plan, which are as follows, SL. RELIEF / CONCESSIONS SOUGHT FROM ORDERS NO. FINANCIAL CREDITORS THEREON 1. The approval of the Adjudicating Authority and the CoC shall constitute adequate approval and cancellation of the existing share capital Granted and accordingly, no approval/consent shall be subject to the necessary from any other Person / provisions of Governmental Authority in relation to either of companies these actions under any agreement, the act IBC other constitutional documents or under any applicable Applicable Law. It is also clarified that the laws. Resolution Applicant shall not be required to deal with the dissenting / abstaining Financial Creditors in any manner other than as provided under the Code. 2. All convertible instruments issued by the Corporate Debtor either to the promoters, Granted shareholders, or any third party shall stand subject to the cancelled pursuant to approval of this provisions of Resolution Plan by the Adjudicating Authority companies and no separate sanction / approval / consent act IBC other shall be necessary forum any other Person / applicable Governmental Authority in relation to either of laws these actions under any agreement, the constitutional documents or under any Applicable Law.

3. Approval of this plan shall be deemed approval for waiver from filing of statutory Granted returns (including but not limited to any subject to the IA(IBC)/07/(CHE)/2024 in CP(IB)178(CHE)2022 In the matter M/s.EMI Infrastructure Private Limited 19 of 28 filings for registrar of Companies, Direct & provisions of Indirect tax authorities, plant related annual companies filings, etc), for a period prior to Effective Date. act IBC other Certified copy of the order approving applicable Resolution Plan shall be a direction on such laws statutory authorities to allow WCMIL to do compliance(s) with effect from and after the date of approval of Resolution Plan by the Adjudicating Authority. 4. Approval of this plan shall be deemed Granted approval for removal of Directors from the subject to the record of the Company as appearing on the provisions of MCA portal/ website/ income tax web site/ companies Any Indirect tax website. Certified copy of the act IBC other order approving Resolution Plan shall be a applicable direction on such statutory authorities to do laws the needful. 5. In case of capital reduction, the requirement of Granted adding "and reduced" in the name of the subject to the Corporate Debtor to be dispensed with on provisions of account of reduction of share capital of the companies Corporate Debtor. act IBC other applicable laws 6. The approval of this Plan by the Adjudicating Authority shall be deemed to have waived all Not Granted the procedural requirements in terms of will be Section 66, Section 42 and Section 62(1)(c) of adjudicated the Companie Act, 2013 Act, and the NCLT by the (Procedure for Reduction of Share Capital) adjudicating Rules, 2016 for reduction of share capital and authority issuance of equity shares to the Resolution Applicant and/or the Financial Creditors 7. Waiver of any fee payable to any statutory Appropriate regulatory body towards any past dues or authorities to towards fee dues pursuant to any of the steps consider as contemplated in the Resolution Plan keeping in including but not limited to any fee payable to view the Registrar of Companies (RoC), etc. object of IBC, 2016 8. Waiver of any pending Liabilities, past penalty Appropriate or any offence linked with the Vehicles/Transit authorities to Mixers/Batching Plant/Any other Assets consider belonging to the CD or against the CD of any keeping in nature before any Law Enforcement

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Authorities including Police, Investigation view the Authorities, Courts, Tribunals, Transport object of Ministry/Authorities., Etc., IBC, 2016 9. Licenses and approvals held by the Company, which expire prior to Completion Date or within a period of 6 (six) months thereafter, shall be renewed / extended by the relevant Governmental Authorities, and the Company Appropriate shall be permitted to continue its business and authorities to assets in the manner operated prior to consider submission of this plan until the keeping in renewal/extension of such licenses and view the approvals. The relevant Governmental Authorities will be provided a reasonable object of period of time after Completion Date in order IBC, 2016 for the Resolution Applicant to:

A. Assess the status of licenses and approvals required by the Company and to procure that the Company applies for the same;

B. Regularize any non-compliances under the Applicable Law (including nonregistration, inadequate/non-stamping of documents as required under Applicable Law) existing prior to the Closing Date 10. Extension of validity of Road Tax, Insurance Appropriate and permits obtained in the name of the authorities to Corporate Debtor with respect to its assets for consider 6 months post approval of the Resolution Plan keeping in by the Adjudicating Authority. Further, grant view the of Waiver of Penalties by RTO/Min of object of Transport/Highways till the date of sanction of IBC, 2016 RP. 11. That the trade receivables of the CD shall be Granted taken over by the Resolution Applicant on "as subject to the is" basis when the management and control of provisions of the business of the Company is taken over companies under the Resolution Plan. act IBC other applicable laws 12. The relevant Governmental / Statutory / Regulatory Authorities shall not initiate any investigations, actions or proceeding in relation to any non-compliances with IA(IBC)/07/(CHE)/2024 in CP(IB)178(CHE)2022 In the matter M/s.EMI Infrastructure Private Limited 21 of 28

Applicable Law by the CD during the period prior to the Completion Date. Neither shall the Resolution Applicant, nor the CD, nor their respective directors, officers and employee Appropriate appointed on and as of the Completion Date authorities to be liable for any violations, liabilities, penalties consider or fines with respect to or pursuant to the keeping in Company not having in place requisite licenses view the and approvals required to undertake its object of business as per Applicable Law, or any non-compliances of Applicable Law by the IBC, 2016 Company. Further, the relevant Governmental Authorities will provide a reasonable period of time after the Completion Date, for the Resolution Applicant to assess the status of any non-compliances under the Applicable Law (including with respect to applicable Transport laws, directions or orders by the Ministry of Transport and Highways, permits clearances and transport related clearances) and to procure that the Company regularizes such non-compliances under the Applicable Law existing prior to the Completion 13. Withdrawal of litigations initiated by the Financial Creditors against Corporate Debtor, Granted issue no-dues certificate(s) in favour of subject to the Corporate Debtor and release their respective provisions of charges on the securities in full and complete companies satisfaction of all debts owed to the Financial act IBC other Creditors by Corporate Debtor, including all applicable guarantees which may have been provided to laws. the Financial Creditors, for credit facilities availed by Corporate Debtor. 14. Any and all dues to, liabilities or obligations payable to, claims, counter-claims, demands, actions or penalties, made or imposed by or any arrears, dividend or obligations owed or Granted payable to (including but not limited to all subject to the interests, damages, losses, expenses and third provisions of party claims), and any right, title, interest companies enjoyed by, any actual or potential other act IBC other stakeholders of the Corporate Debtor applicable including any group companies whether under law or otherwise, whether or not laws claimed, whether or not filed, whether or not crystallised, whether or not accrued, whether

IA(IBC)/07/(CHE)/2024 in CP(IB)178(CHE)2022 In the matter M/s.EMI Infrastructure Private Limited 22 of 28 or not admitted, whether or not notional, whether or not known, whether due or contingent, whether or not disputed, present or future, whether or not being adjudicated in any proceedings, whether or not decreed, whether or not reflected in the financial statements of the Corporate Debtor, or whether or not reflected in any record, document, statement, statutory or otherwise, arising prior to or after the Effective Date, but pertaining to period prior to the Effective Date, and / or arising in connection with Assignment or acquisition of shares of the company by the investors or conversion of the Conversion Debt into Equity or restructuring of the Assigned Debt or in any other manner as a result of or in connection with this Plan, shall be deemed to have been irrecoverably waived and permanently extinguished and written off in full with effect from the Effective Date. To give effect to such waiver and extinguishment, any contract, agreement, deed or document, whether oral or written, expressed or implied, statutory or otherwise, pursuant to which any such dues, liabilities, obligations, claims, counterclaims, demands, actions, penalties, right, title or interest in claimed (other than as specifically mentioned herein) shall stand modified with effect from the Effective Date without any further act, deed and approval of the Resolution Plan by Adjudicating Authority shall be deemed to be sufficient notice which may be required to be given to any person for such matters and no further notice shall be required to be given.

15. Extinguishment and waiver of all dues to the Granted as Existing Promoters/Suspended Directors of the per the plan CD by the Corporate Debtor including but not and is limited to any Financial Debt owed to them. subject to provisions of IBC and Companies act 16. An order approving the Resolution Plan shall Granted be a deemed order upon Financial Creditors to subject to the IA(IBC)/07/(CHE)/2024 in CP(IB)178(CHE)2022 In the matter M/s.EMI Infrastructure Private Limited 23 of 28 cancel all pledge/ lien/ other encumbrances provisions of upon the issued share capital of the Company companies to enable corporate action as envisaged in the act IBC other Resolution Plan. applicable laws 17. Relinquishment of all / any promise to pay towards any obligation including corporate Granted guarantee, pledge on any shares, mortgage or subject to the charge on any specific asset, etc. issued by provisions of Corporate Debtor in favour of or on behalf of companies any of its subsidiaries, associates, group act IBC other companies or any third party. applicable laws 18. Permitting waiver of all liabilities and taxes Appropriate arising out of implementation of the authorities to transactions contemplated in the Resolution consider Plan and instructing the relevant authorities keeping in concerned accordingly. view the object of IBC, 2016 19. All litigations, prosecutions, legal proceedings, suits, claims (including claims for damages), notices, show-cause notices, demand notices, actions, arbitration or administrative, judicial, quasi-judicial, regulatory, government or any enforcement agencies, pending or threatened against the company or whose outcome Appropriate adversely effects the Company (including but authorities to not limited to the proceedings set out in the consider Process Memorandum) arising prior to or after the Effective Date ("Proceedings"), shall be keeping in deemed to have been withdrawn or dismissed view the and will be deemed to have been barred with object of effect from the Effective Date.

Pursuant to the IBC, 2016 order of the Adjudicating Authority approving this Plan, all liabilities, obligations, demands, actions or penalties made or imposed in relation to any proceedings, whether or not claimed, whether or not filed, whether or not assessed, whether or not crystalized, whether or not accrued, whether or not admitted, whether or not notional, whether or not known, whether due or contingent, whether or not disputed, present or future, whether or not

IA(IBC)/07/(CHE)/2024 in CP(IB)178(CHE)2022 In the matter M/s.EMI Infrastructure Private Limited 24 of 28 being adjudicated in any proceedings, whether or not decreed, whether or not reflected in any record, document, statement, statutory or otherwise, arising prior to or after the Effective Date, but pertaining to a period prior to the Effective Date shall be deemed to have been irrecoverably waived and permanently extinguished and written off in full and settled at Nil value with effect from the Effective Date by virtue of the order of the Adjudicating Authority approving this plan. 20. On the date of approval of the Resolution Plan Granted by the Adjudicating Authority, all claims subject to the which are not a part of the resolution plan provisions of shall stand extinguished and no person, companies government body, etc., will be entitled to act IBC other initiate or continue any proceedings in respect applicable to a claim which is not part of the resolution laws plan 21. The approval of the Adjudicating Authority and the CoC shall constitute adequate Appropriate approval for issuance of New Equity Shares in authorities to accordance with Section 42 and Section 62(1)(c) consider of the Companies Act and other Applicable keeping in Law and accordingly, no approval or consent view the shall be necessary from any other object of Person/Government Authority in relation to IBC, 2016 either of these actions under agreement, the and constitution documents of the Company or under any applicable Law. Companies act. 22. Directions from Adjudicating Authority Appropriate allowing Corporate Debtor to use the brought authorities to forward losses for set off against income in consider subsequent years and unabsorbed keeping in depreciation, whether assessed or not, for the view the purpose of the Income Tax Act, 1961. object of IBC, 2016 23. That the concerned Regional Transport or District Transport Office or Regional Transport Not Granted Authority and Ministry of Transport (as found suitable) shall be made Respondent to the application to be filed for approval of the Resolution Plan by the Adjudicating Authority.

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14. The Applicant has filed Form H in accordance with the IBBI (CIRP Regulations, 2016) along with this Application and the same is placed along with the application. Further, it is observed from Form-H that the amount proposed in the plan is much higher than the Liquidation Value of the Corporate Debtor. The fair value and the Liquidation Value as mentioned in Form-H is as hereunder, 1. Fair Value Rs. 2,47,49,901/- 2. Liquidation Value Rs. 2,14,06,556/- 3. Plan Value Rs. 2,60,00,000/-

15. On perusal of Revised form H submitted it is seen that Fraudulent transactions under section 66 is pending Therefore RP is directed to file a memo with regard to who will be pursuing the section 66 application on approval of Resolution Plan. 16. It is seen that the resolution plan has been approved with 67% voting share. As per the CoC, the plan meets the requirement of being viable and feasible for the revival of the Corporate Debtor. By and large, all the compliances have been made by the RP and the Resolution Applicant for making the plan effective after approval by this Authority. On perusal of the documents on record, we are satisfied that the Resolution Plan is in accordance with Section 30 & 31 of the IBC and also in compliance with regulations 38 & 39 of the IBBI (CIRP) Regulations, 2016. 17. In the light of the aforesaid, it is hereby ordered that the payment to the members of the Monitoring Committee shall be made by the Corporate Debtor on such terms and conditions agreed between the IA(IBC)/07/(CHE)/2024 in CP(IB)178(CHE)2022 In the matter M/s.EMI Infrastructure Private Limited 26 of 28 parties for the entire period of implementation as mentioned in this resolution plan.

18. In case of non-compliance/non-implementation/ failure during implementation of this order or withdrawal of the Resolution Plan by the Successful Resolution Applicant, the RP shall forfeit the EMD/Performance Guarantee or any further amount paid as per the terms of the resolution plan without any recourse to this Authority. 19. Subject to the observations made in this Order, the Resolution Plan is hereby APPROVED by this Adjudicating Authority. The Resolution Plan shall form part of this Order. The Resolution Plan is binding on the Corporate Debtor and other stakeholders involved so that the revival of the Debtor Company shall come into force with immediate effect. The Moratorium Imposed under section 14 shall cease to have effect from the date of this Order. 20. The Resolution Professional shall submit the records collected during the commencement of the proceedings to the Insolvency & Bankruptcy Board of India for its record and also return to the Resolution Applicant. The Resolution Professional is further directed to hand over all records/premises/factories/documents to the Resolution Applicant to finalize the further line of action required for starting the operation of the Corporate Debtor under the control of the Resolution Applicant.

21. Certified copy of this Order be issued on demand to the concerned parties, upon due compliance. 22. Liberty is granted for moving any Application if required in connection with the implementation of this Resolution Plan.

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23. A copy of this Order be submitted to the Office of the concerned Registrar of Companies. 24. The Resolution Professional shall stand discharged from his duties with effect from the date of this Order. 25. IA(IBC)/Plan/07/CHE/2024 stands disposed of accordingly. 26. The Registry is directed to send e-mail copies of the order forthwith to all the parties and their Learned Counsel for information and for taking necessary steps. 27. File be consigned to the record room.

-SD- -SD- RAVICHANDRAN RAMASAMY JYOTI KUMAR TRIPATI MEMBER (TECHNICAL) MEMBER (JUDICIAL)

Rannika/LRA

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