Approval of Resolution Plan - Manpreet Estates LLP

MUMBAI BENCH COURT III I.A. 32 of 2024 C.P. No. (IB) 481/MB/C-III/2023 Brief Facts: 2. The Corporate Insolvency Resolution Process (‘CIRP’) of Manpreet Estate Private Limited (Corporate Debtor) was initiated by this Tribunal vide Order dated 24.11.2023 under Section 7 of the Insolvency and Bankruptcy Code, 2016 and Mr. Amit Vijay Karia ie the Applicant was appointed as the Interim Resolution Professional (“IRP’’).

3. Subsequently a Public announcement for submission of claims was made on 28.11.2023 under Regulations 12 of the IBBI Regulations, 2016 which was published in The Free Press Journal-English- Mumbai Editions, Navshakti -Marathi-Mumbai Editions.

4. Pursuant to receipt of claims, the IRP constituted a Committee of Creditors ("COC") comprising of all the financial creditors in accordance with Section 21(1) of the Code in compliance with Regulation 17 and 13(1}(d) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations 2016. Further in the first CoC meeting held on 20.12.2023 the IRP was confirmed as the Resolution Professional (“RP”).

5. The Applicant states that the claims of Financial and Operational Creditors and Employees & Workmen as exist on the date of filing the present application as follows:

I. Claims of Financial Creditors: Sr. Name of the Amount Amount Voting Secured Claimed Admitted Right Financial (%) Creditor

MUMBAI BENCH COURT III I.A. 32 of 2024 C.P. No. (IB) 481/MB/C-III/2023 1. VSJ 282,05,55,873 282,05,55,873 100% Investments Private Limited Total 282,05,55,873 282,05,55,873 100%

II. Claims of Operational Creditors (Government Dues):

Sr. Operational Amount Amount Admitted Creditor Claimed 1. Income Tax 83,01,030 83,01,030 Department Total 83,01,030 83,01,030

III. Claims of Operational Creditors (Employees & Workmen) There are no claims received from the workmen or employees.

6. The Applicant submits that the summary of claims received and admitted from the stakeholders are as under:

Sr. No Category of Amount Amount of Creditors Claimed Claim Admitted 1. Secured 282,05,55,873 282,05,55,873 Financial Creditors 2. Operational 0 0 Creditors

MUMBAI BENCH COURT III I.A. 32 of 2024 C.P. No. (IB) 481/MB/C-III/2023 (Other than Workmen and Employees) 3. Workmen 0 0 Claims 4. Employee 0 0 Claims 5. Government 83,01,030 83,01,030 Dues Grand Total 2 ,82,88,56,903 2,82,88,56, 903

7. The Applicant submits that 7 (Seven) COC meetings have been held during CIRP period, as follows: Particulars Date of CoC Meeting 1st CoC Meeting held on 20 December 2023 2nd CoC Meeting held on 28 December 2023 3rd CoC Meeting held on 14 February 2024 4th CoC Meeting held on 19 March 2024 5th CoC Meeting held on 28 March 2024 6th CoC Meeting held on 24 April 2024 7th CoC Meeting held on 02 May 2024

8. The Applicant submits that, in accordance with Regulation 27 & 35 of IBBI (CIRP), Regulations 2016, below mentioned Registered Valuers have been appointed to determine the Fair Value and Liquidation Value of the Corporate Debtor.

Sr. Category Details of Professional

MUMBAI BENCH COURT III I.A. 32 of 2024 C.P. No. (IB) 481/MB/C-III/2023 1. Registered Valuer Jayesh Kamat (Land and (IBBl/RV/07/2022/115026) Building) 2. Registered Valuer Jayeshkumar Shah (Securities or (IBBI/RV/07/2020/113066) Financial Assets) 3. Registered Valuer RNC Valuecon LLP (Land and (IBBI/RV-E/02/2020/123) Building) AND (Securities or Financial Assets

9. The Applicant submits that the above-mentioned valuers have submitted their Valuation Reports containing Fair Market Value and Liquidation Value to the RP. Accordingly, the fair market value and Liquidation value are as under:

i. The fair and liquidation value of land and building is NIL.

SECURITIES AND FINANCIAL ASSETS- SFA (A) FAIR VALUE Estimate of Fair value Amount (INR) a) Jayeshkumar Shah 46,01,04,000 [IBBI/RV/07/2020/13066] (b) RNC Valuecon LLP 45.44,07.203 [IBBI/RVE/02/2020/123] Average Fair Value of Securities 45,72,55,601 or Financial Assets *As the two estimates are not significantly different, the average of the two values are considered as the “Fair Value”

B) LIQUIDATION VALUE

MUMBAI BENCH COURT III I.A. 32 of 2024 C.P. No. (IB) 481/MB/C-III/2023 Estimate of Liquidation Value Amount (INR) a) Jayeshkumar Shah 34,50,04,000 [IBBI/RV/07/2020/13066] a) Jayeshkumar Shah 38,62,46,603 [IBBI/RV/07/2020/13066] Average Liquidation Value of 36,56,25,301 Securities or Financial Assets *As the two estimates are not significantly different, the average of the two values are considered as the “Liquidation Value”

TOTAL FAIR VALUE AND LIQUIDATION VALUE A) FAIR VALUE Average of the Fair Value of the Amount (INR) 2 value Fair Value of the Land and NIL Building Fair Value of Securities or 45,72,55,601 Financial Assets Total Fair Value of the 45,72,55,601 Corporate Debtor (B)LIQUIDATION VALUE Average of the Fair Value of the Amount (INR) 2 value Liquidation Value of Land and NIL Building Liquidation Value of Securities 36,56,25,301 or Financial Assets Total Liquidation Value of the 36,56,25,301 Corporate Debtor

MUMBAI BENCH COURT III I.A. 32 of 2024 C.P. No. (IB) 481/MB/C-III/2023 10. Further the advertisement for inviting Expression of Interest (“EoI”) in Form G was published on 01.01.2024 wherein the last date for submission of EoI was 16.01.2024 and last date for submission of Resolution Plan was 16.03. 2024.

11. The Applicant submits that after the publication of Form G on 01.01.2024, the Applicant received interest from 1 (One) Prospective Resolution Applicant (“PRA”) i.e. Wadhwa Group Holdings Private Limited. The provisional list of eligible prospective resolution applicants (PRAs) was circulated to the CoC and to the prospective resolution applicant on 24.01.2024.

12. The Applicant submits that during 3rd (Third) CoC Meeting held on 14.02.2024, discussion and deliberation on approval of Evaluation Matrix and Request for Resolution Plan ("RFRP") was held, post which the CoC members approved the RFRP and Evaluation Matrix.

13. The Applicant submits that pursuant to the requirement mentioned in Regulation 36A (1) of the CIRP regulations, 2016 and in line with the Form G, the final list of eligible Prospective Resolution Applicants (PRAs) was required to be published by 10 February 2024. Accordingly, the Applicant has circulated the below mentioned final list of eligible PRAs on 09.02.2024. Sr. Name of the Whether eligible to Prospective Resolution Applicant submit the Resolution Plan? 1. WADHWA GROUP HOLDINGS PRIVATE Yes LIMITED

14. That during 6th CoC meeting held on 24.04.24, the CoC expressly directed the Applicant and passed a resolution, to take steps to sell / dispose of the investment of the corporate debtor in its subsidiary

MUMBAI BENCH COURT III I.A. 32 of 2024 C.P. No. (IB) 481/MB/C-III/2023 'Obedience Infracon Private Limited', being an unencumbered and non-core asset, in accordance with the relevant provisions of the Code and applicable regulations and also requested the sole resolution applicant to share a revised resolution plan, including revised financial proposal, if any, at the earliest.

15. During the 7th (Seventh) CoC meeting held on 02.05.2024, the revised resolution plan received from the sole Resolution Applicant i.e. WadhwaGroup Holdings Private Limited on 30.04.2024 was put to vote for approval of CoC. The Revised Resolution Plan submitted on 30.04.2024 by WadhwaGroup Holdings Private Limited stood approved by the Sole CoC Member with 100% votes in favour. Also, the revised resolution plan submitted on 30.04.2024 by WadhwaGroup Holdings Private Limited was also unanimous approved.

16. Further a Letter of Intent dated 02.05.2024 has been issued to the Successful Resolution Applicant calling upon them to furnish an unconditional and irrevocable Performance Guarantee or Direct Deposit of Rs. 2 crores (after adjusting the amount paid for EMD of Rs.3 Crores.

17. The Applicant provides a timeline of the Corporate Insolvency and Resolution Process:

Sr. No Timeline of CIRP No. of days Date 1. Insolvency 0 24.11.2023 commencement date and 24 November appointment of IRP

MUMBAI BENCH COURT III I.A. 32 of 2024 C.P. No. (IB) 481/MB/C-III/2023 2. Original 180th Day of 180 days 22.05.2024 Corporate Insolvency and Resolution Process

CIRP Cost: 18. The Applicant has annexed details of CIRP Cost ratified from 24 11.2023 (Insolvency Commencement Date) till 10.05.2024. On perusal of the same We note that, the total CIRP Cost payable is 20,82,963/-

19. The Wadhwa Group i.e. the (“SRA”) is one of Mumbai’s leading real estate companies and is currently developing residential, commercial, and township projects spread across approximately 4.21 Million sq. developed, ongoing & future (45 million square feet). The SRA has 50 + years’ experience in the industry of the Corporate Debtor. The past experience of the SRA in acquisition/ turnaround of stressed assets comprises of 1 project of approximately 10L sq. ft.

20. Sources of Fund:

20.1 The Upfront Cash and any subsequent working capital infusion shall be brought in by the Resolution Applicant / Nominees and shall be contributed to the Corporate Debtor as a mix of Capital Contribution and loans by the Resolution Applicant / Nominees / and/or Its Affiliates who are eligible under section 29A of the Insolvency and Bankruptcy Code, 2016, in its sole discretion.

20.2 It is submitted that the Resolution Applicant has sufficient liquid funds to honour its commitment for the Capital Contribution as part of the Upfront Cash set out in the Resolution Plan.

MUMBAI BENCH COURT III I.A. 32 of 2024 C.P. No. (IB) 481/MB/C-III/2023 20.3 Further the Resolution Applicant shall be entitled to raise monies from banks and / or financial institutions as it may deem fit from time to time to meet the requirement of funds for the payments to stakeholders or for raising working capital or meet the capex requirements of the Corporate Debtor, as set out in the Resolution Plan without creating the charge on any of the assets of the Corporate Debtor until the Upfront Cash is paid in full in accordance with the approved Resolution Plan.

21. Upfront Cash: The Resolution Plan contemplates a total resolution Plan amount of Rs.35,02,00,000 (Rupees Thirty-Five Crore Two Lakh Only) (“Upfront Cash”) which shall be paid by the Resolution Applicant on the “Trigger date” the trigger date as defined in the Resolution Plan shall mean within 30 days from the NCLT approval date, subject to the terms of the Plan. The Upfront cash will be distributed in following order:

Sr. No Use of Upfront Cash Amount (in Rs.) 1. Payment of Outstanding CIRP Cost At Actuals The Outstanding CIRP Cost shall be paid by the Resolution Applicant from the upfront Cash. The Upfront cash shall be utilised for the payment of the Outstanding CIRP Cost in priority to the payment of MUMBAI BENCH COURT III I.A. 32 of 2024 C.P. No. (IB) 481/MB/C-III/2023 other debts of the Corporate Debtor. 2. Payment to the Workmen towards NIL discharge of the Workmen dues in full and final settlement thereof. This amount shall be distributed among the Workmen in proportion to their Claims 3. Payment to the Employees towards NIL discharge of the Employees dues in full and final settlement thereof. This amount shall be distributed among the Employees in proportion to their Claims 4. Payment to the Other Operational NIL Creditors towards discharge of the Operational debt in full and final settlement thereof. This amount shall be distributed among the Operational Creditors in proportion to their Claims 5. Payments towards discharge of the Higher of the Statutory Dues to the Statutory following Dues Creditors in full and final a) Rs.2,00,000/-settlement thereof. b) the amount to be paid to such creditors in the event of a liquidation of the Corporate Debtor under

MUMBAI BENCH COURT III I.A. 32 of 2024 C.P. No. (IB) 481/MB/C-III/2023 Section 53 of the IBC, or c) the amount that would have been paid to such creditors, if the amount to be distributed under this Resolution Plan has been distributed in accordance with the order of priority in sub-section (1) of Section 53 of IBC.

6. Payment towards Unsecured NIL Financial Creditors 7. Payment towards Related Party NIL Creditors in full and Final Settlement thereof 8. Payment to the Secured Financial The balance of the Creditors in full and final Upfront Rs.35 settlement thereof. Crores i.e. after payment of amounts as contemplated above on pari passu basis to the Secured

MUMBAI BENCH COURT III I.A. 32 of 2024 C.P. No. (IB) 481/MB/C-III/2023 Financial Creditors in proportion to their admitted debt Total Rs.35,02,00,000/- (Rupees Thirty- Five Crore two lakhs only)

22. EMD: 22.1 At the stage of submission of the Expression of Interest for the Corporate Debtor the Resolution Applicant has submitted an amount of Rupees 2,00,00,000/- two crore only as deposit. Pursuant to clarification received from the Resolution Professional on 13.03.2024 the said amount of Rs. 2,00,00,000/ - is being adjusted against the earnest money deposit of Rs. 3,00,00,000 (Rupees Three crore only) (EMD") payable at the time of submission of this Resolution Plan. Accordingly, the Resolution Applicant has deposited the Incremental amount of Rs. 1,00,00,000/- (Rupees One Crore only) towards the Earnest Money Deposit. The EMD submitted by the Resolution Applicant, if declared successful, shall be adjusted towards the Performance Security to be provided by the Resolution Applicant.

23. Performance Security: 23.1 As per the RFRP, the Resolution Applicant is required to provide the Performance Security of Rs. 5,00,00,000/- (Rupees five crore only) in favour of Corporate Debtor. In accordance with the terms of this Resolution Plan, the EMD of Rs. 3,00,00,000/- (Rupees Three crore only) shall be adjusted towards the performance security and the Resolution Applicant shall provide the remaining amount of Rs. 2,00,00,000/-(Rupees two crore only) within 30 (thirty) days of issuance of Letter of Intent

MUMBAI BENCH COURT III I.A. 32 of 2024 C.P. No. (IB) 481/MB/C-III/2023 dated 02.05.2024 by the RP, or such other extended date as may be notified by the RP.

24. Additional Affidavit filed by the Applicant: The Applicant filed an additional affidavit dated 29.06.2024 stating as follows:

24.1 In view of the above the SRA has submitted the Demand Draft (DD.No 351391) dated 27.05.2024 amounting to 2 crores after adjusting the amount paid for EMD of Rs.3 crores towards performance guarantee as required to be paid by SRA.

24.2 The Demand Draft dated 27.05.2024 received from the SRA has already been encashed by the Applicant and deposited into the CIRP account of the Corporate Debtor. The Applicant has also created the fixed Deposit with regards to amount received from SRA towards the Performance Guarantee.

25. Treatment of the Existing Partners and Capital Contribution of the Resolution Applicant.

25.1 With the Capital Contribution by the Resolution Applicant and its Affiliates / Nominees, the entire Capital Contribution by the Existing Partners shall stand fully extinguished as a part of this Resolution Plan ("Standalone Capital Reduction'"). No amounts shall be payable towards the extinguishment of the Capital Contribution of such Existing Partners. As an integral part of the Resolution Plan, the Capital Contribution by the Existing Partners shall stand written off and extinguished in entirety without payment of any amount to the Existing Partners.

26. Appointment of New Partners:

MUMBAI BENCH COURT III I.A. 32 of 2024 C.P. No. (IB) 481/MB/C-III/2023 26.1 On the Trigger Date immediately upon payment of the Upfront Cash to the designated account the Resolution Applicant shall appoint new partners of the Corporate Debtor (“New Partners”). The Monitoring Committee shall cease to exist immediately once the New Partners are appointed.

26.2 Immediately after the appointment of New Partners the Corporate Debtor shall be managed by the New Partners.

27. Compliance Certificate in Form – H 27.1 Pursuant to Regulation 39(4) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, the Successful Resolution Applicant has prepared a Compliance Certificate dated 10.05.2024 in Form H which is annexed to the Application.

27.2 Compliance of mandatory requirements under the Insolvency & Bankruptcy Code, 2016: Sr. Particulars Compliance No. 1 Section 25: Yes. Whether the Resolution Applicant meets the criteria approved by the CoC having regard to the complexity and scale of operations of business of the Corporate Debtor? 2 Section 29A: Yes. Whether Resolution Applicant is eligible to submit resolution plan as per final list of Resolution Professional or Order, if any, of the Adjudicating Authority? 3 Section 30:

MUMBAI BENCH COURT III I.A. 32 of 2024 C.P. No. (IB) 481/MB/C-III/2023 (1) Whether the Resolution Yes. The Resolution Applicant has submitted an Applicant has submitted an affidavit stating that it is eligible? affidavit separately along with other documents under section 29A of IBC, 2016 confirming his eligibility for submission of Resolution Plan. (2)(a) Whether the Resolution Page 19 of the Plan, Clause Plan provides for payment of 3.2 of the Plan read with insolvency resolution process Annexure 1 (Pg.No.65-66) costs? (2)(b) Whether the Resolution Yes. Plan provides for the payment of Pages 19 & 20 of the Plan the debts of operational creditors? Clause 3.3.1 read with Annexure 1 of the Plan. (2)(b) Whether the Resolution Yes. Plan provides for the payment to Page 22 of the Plan Clause the financial creditors who did not 3.8.1 vote in favor of the resolution plan? 2(c) Whether the Resolution Plan Yes. provides for the management of Clause 5.2,5.3,5.4,5.5,and the affairs of the Corporate 5.6 (Pages 29 to 31) of the Debtor? Plan. 2(d) Whether the Resolution Plan Yes. Provides for implementation and Clause 6 (Pages 31-35) of supervision of the resolution the Plan. plan? (2)(e) Whether the resolution plan No. contravenes any of the provisions Clause 7.6.1 (Page 38) of the of the law for the time being in Resolution Plan read with force? Affidavit provided by the RA separately. (4)(a) Whether the Resolution Yes. Plan is feasible and viable, The Resolution plan is according to the CoC? feasible and viable according to the CoC. (4)(b) Whether the Resolution Yes. The Resolution Plan Plan has been approved by the has been approved with CoC with 66% voting share? 100% voting.

MUMBAI BENCH COURT III I.A. 32 of 2024 C.P. No. (IB) 481/MB/C-III/2023 4 Section 31(1): Yes. Whether the Resolution Plan has Clause 7.6.3 (c) provisions for its effective (Page 38) of the plan implementation Plan, according Clause 7.6.3(c) read with to CoC Clause 6 of the Plan 5 Section 35A: Whether the resolution No transactions covered professional made a under Sections 43,45,50 or determination if the corporate 66. debtor has been subjected to any transaction of the nature covered under sections 43, 45, 50, or 66, before the one hundred and fifteenth day of the insolvency commencement date, under intimation to the Board?

27.3 Compliance under mandatory requirements under IBBI (Insolvency Resolution Process of Corporate Debtors) Regulations, 2016

Regulation 38 1 Whether the amount due to the Yes. operational creditors under the Clause 3.3.2. resolution plan has been given (Page 19) of the Plan priority in payment over financial creditors? 1A Whether the resolution plan Yes. includes a statement as to how it Clause 7.1 (Page 35) has dealt with the interest of all Clause 3 (Pages 18-27) stakeholders? Read with Annexure 1 at Pages 65-66) of the Plan

Refer to Clause 7.1 read with Clause 3 and Annexure 1 of the Plan. 1B i) Whether the Resolution Yes. Applicant or any of its Clause 7.6.2 related parties has filed to (Page 38) of the Plan implement or contribute to MUMBAI BENCH COURT III I.A. 32 of 2024 C.P. No. (IB) 481/MB/C-III/2023 the failure of implementation of any resolution plan approved under the Code? ii) If so, whether Resolution Applicant has submitted the statement giving details of such non-implementation? 2(a) Whether the Resolution Plan Yes. provides the term of the plan and Clause 6 (Page 31) read its implementation schedule? with Schedule I (Pages 59- 60) of the Plan.

2(b) Whether the Resolution Plan Yes. provides for the management and Clause 5 (Page 29-31) of the control of the business of the Plan. corporate debtor during its term? 2(c) Whether the Resolution Plan Yes. provides adequate means for Clause 6 (Page 31-35) of the supervising its implementation? plan. 3 Whether the Resolution Plan demonstrates that - (a) It addresses the cause of default? Yes. (a)Clause 7.6.3 (a) (Page 38) read with Clauses 5 & 5 of the Plan. (b) It is feasible and viable? Yes. Clause 7.6.3 (b) (Page 38) of the Plan (c) It has provisions for its effective Yes. implementation? Clause 7.6.3 (b) (Page 38) of the Plan (d) It has provisions for approvals Yes. required and the time for the Clause 7.6.3 (b) (Page 38) of same? the plan read with timelines set out under Schedule I of the Plan. (e) The Resolution Applicant has the Yes. capacity to implement the Requisites Details/ Resolution Plan? Information/Documents

MUMBAI BENCH COURT III I.A. 32 of 2024 C.P. No. (IB) 481/MB/C-III/2023 pertaining to eligibility/capability of the Resolution Applicant has been provided by the Resolution Applicant as part of the Resolution Plan/expression of interest and/ expression of interest and/or as part of the supporting documents with the Resolution Plan/expression of interest. Regulation 39 2 Whether the RP has filed No. applications in respect of transactions observed, found or determined by him? 4 Provide details of performance Yes. security received as referred to in As per the terms of the sub-regulation (4A) of Regulation RFRP, Performance 36. Security of INR 5 crores, after adjustment of the EMD already paid at the time of submission of plan shall be provided within 30 days of the issue of Letter of Intent by the RP.

27.4 The CIRP has been conducted as per the timeline indicated as under: Section/ Description of Latest Dates Actual Regulatio Activity Timeline according Date n No. under to Regulatio Regulatio n 40A n 40A Section Commencemen T 24 16(1) t of CIRP and November 24 Appointment of 2023 November IRP 2023

MUMBAI BENCH COURT III I.A. 32 of 2024 C.P. No. (IB) 481/MB/C-III/2023 Regulation Publication of T+3 27 6(1) Public November 28 Announcement 2023 November 2023-within 1 day of receipt of admission order copy) Section Submission of T+14 08 11 15(1)(c)/ Claims December December Regulation 2023 2023 12(1) Regulation Verification of T+21 15 12 13(1) Claims December December 2023 2023 Section Application for T+23 17 - 26(6A)/ Appointment of December Regulation Authorized 2023 15A Representative, if necessary Regulation Filing of Report T+23 17 12 17(1) certifying December December Constitution of 2023 2023 CoC Section First Meeting of T+30 24 20 22(1) and CoC December December Regulation 2023 2023 17(2) Regulation Determination T+115 18 March No 35A of fraudulent 2024 Fraudulent and other Transactio transactions n Regulation Appointment of T+47 10 23 27 two registered January December Valuers 2023 Regulation Submission of T+95 27 21 36(1) Information February February Memorandum 2024 2024 to CoC

MUMBAI BENCH COURT III I.A. 32 of 2024 C.P. No. (IB) 481/MB/C-III/2023 Regulation Invitation of EoI T+75 07 01 January 36A February 2024 2024 Publication of T+75 07 01 January Form G February 2024 2024 Provisional list T+100 03 March 26 January of Resolution 2024 2024 Applicants Final list of T+115 18 March 09 Resolution 2024 February Applicants 2024 Regulation Issue of RFRP T+105 08 March 15 36B including 2024 February Evaluation 2024 Matrix, etc Section Submission of T+165 07 May 11 May 30(6)/ CoC approved 2024 2024 Regulation Resolution Plan 39(4)

28. On perusal of Form-H, it is seen that the Resolution Plan is in compliance with the mandatory compliances as stipulated under Section 30(2) of the Code. The Resolution Plan also meets the requirements of Regulations 37, 38, 38(1A) and 39 (4) of the IBBI Regulations, 2016. The SRA has submitted an Affidavit dated 14.03.2024 stating that Resolution Applicant nor any other person who is a connected person (as defined under the IBC) are ineligible under Section 29 A of the IBC. The Resolution Plan is not in contravention of any of the provisions of Section 29A of the Code and is in accordance with law.

29. Supervision of the Resolution Plan from the NCLT Approval date: 29.1 A Monitoring Committee shall be appointed for the Corporate Debtor. The Monitoring Committee shall comprise of the Resolution Professional, one representative of the CoC and one member nominated by the Resolution Applicant.

MUMBAI BENCH COURT III I.A. 32 of 2024 C.P. No. (IB) 481/MB/C-III/2023

30. We also note that Clause 7.17 of the Resolution Plan i.e. No actions by Persons also states that the Creditors may continue with any Proceedings initiated against the Existing Guarantors including Personal Guarantors, however, they shall file necessary applications for removing the Corporate Debtor as a party to such Proceedings.

31. In K Sashidhar v. Indian Overseas Bank & Others (2019) 12 SCC 150, the Hon’ble Apex Court held that if the CoC had approved the Resolution Plan by requisite percent of voting share, then as per section 30(6) of the Code, it is imperative for the Resolution Professional to submit the same to the Adjudicating Authority (NCLT). On receipt of such a proposal, the Adjudicating Authority is required to satisfy itself that the Resolution Plan, as approved by CoC, meets the requirements specified in Section 30(2). The Hon’ble Apex Court further observed that the role of the NCLT is ‘no more and no less’. The Hon’ble Apex Court further held that the discretion of the Adjudicating Authority is circumscribed by Section 31 and is limited to scrutiny of the Resolution Plan “as approved” by the requisite percent 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.

32. In Committee of Creditors of Essar Steel India Limited through Authorised Signatory Vs. Satish Kumar Gupta & Ors (2020) 8 SCC 531, the Hon’ble Apex Court clearly laid down that the Adjudicating Authority would not have power to modify the Resolution Plan which the CoC in their commercial wisdom has approved.

33. In view of the law laid down by Hon’ble Supreme Court, the commercial wisdom of the COC is to be given paramount importance

MUMBAI BENCH COURT III I.A. 32 of 2024 C.P. No. (IB) 481/MB/C-III/2023 for approval / rejection of the resolution plan. As the Resolution Plan meets the requirements of the I & B Code and the IBBI Regulations, the same needs to be approved. Accordingly, the Resolution Plan is approved with the following directions:

i. The Resolution Plan submitted by M/s Wadhwa Group Holdings Private Limited is hereby approved. It shall become effective from this date and shall form part of this order. It shall be binding on the Corporate Debtor, its employees, members, creditors, including the Central Government, any State Government or any local authority to whom a debt in respect of the payment of dues arising under any law for the time being in force is due, guarantors and other stakeholders involved in the Resolution Plan.

ii. No person will be entitled to initiate or continue any proceedings in respect to a claim prior to CIRP which a part of the Resolution Plan is not.

iii. The Monitoring Committee shall supervise the implementation of the Resolution Plan and shall review operational performance of the Corporate Debtor.

iv. The Resolution Professional is further directed to handover all records, premises / documents to Resolution Applicant to finalise further line of action required for starting of the operation as contemplated under the Resolution Plan. The Resolution Applicant shall have access to all the records premises / documents through Resolution Professional to finalise further line of action required for starting of the operations.

MUMBAI BENCH COURT III I.A. 32 of 2024 C.P. No. (IB) 481/MB/C-III/2023 v. As per the Resolution Plan, extinguishment of existing shares of the Corporate Debtor, allotment of shares to the Resolution Applicant and to New Investor and reduction of share capital do not require the consent of shareholders as required under the Companies Act or any other authority for implementation of the Resolution Plan.

i) Reliefs and Concessions: a) Approval of the Resolution Plan shall not be a ground for termination of any existing consents, approvals, licenses, concessions, authorizations, permits or the like that has been granted to the Corporate debtor or for which the Corporate Debtor has made an application for renewal, grant permissions, sanctions, consents, approvals, allowances, exemptions etc.

b) Any exemption as sought for in relation to the payment of registration charges, stamp duty, taxes and fees arising out of the implementation of the Resolution Plan is not granted but the Resolution Applicant is at liberty to approach Competent Authorities for the exemptions if permitted under the law.

c) For past non-compliances of the Corporate debtor under applicable laws the Resolution Applicant shall not be liable for any liabilities and offences committed prior to the commencement of CIRP and as stipulated under Section 32A of IBC, 2016.

d) It is hereby clarified that in terms of the Judgement of Hon’ble Supreme Court in the matter of Ghanshyam Mishra and Sons Private Limited Vs. Edelweiss Asset

MUMBAI BENCH COURT III I.A. 32 of 2024 C.P. No. (IB) 481/MB/C-III/2023 Reconstruction Company Limited, on the date of approval of the Resolution Plan by the Adjudicating Authority, all such claims which are not a part of Resolution Plan, shall stand extinguished and no person will be entitled to initiate or continue any proceedings in respect of a claim which is not a part of the Resolution Plan.

e) With regard to other concessions and reliefs, most of them are subsumed in the reliefs granted above. The relief which is not expressly granted above, shall not be construed as granted. The exemptions if any sought in violation of any law in force, it is hereby clarified that such exemptions shall be construed as not granted.

ii) Any amount out of the action taken against other persons for Preferential/ Fraudulent Transactions u/s. 43 and 66 of the IBC, 2016 as found in the Audit Report and also Unauthorized Transaction post CIRP order, shall be appropriated towards the unsatisfied claims of Secured Financial Creditors.

iii) The Memorandum of Association (MoA) and Articles of Association (AoA) shall accordingly be amended and filed with the concerned Registrar of Companies (RoC), for information and record. The Resolution Applicant, for effective implementation of the Plan, shall obtain all necessary approvals, under any law for the time being in force, within such period as may be prescribed.

iv) The moratorium under Section 14 of the Code shall cease to have effect from this date.

MUMBAI BENCH COURT III I.A. 32 of 2024 C.P. No. (IB) 481/MB/C-III/2023 v) The Applicant shall forward all records relating to the conduct of the CIRP and the Resolution Plan to the IBBI along with copy of this Order for information.

vi) The Applicant shall forthwith send a certified copy of this Order to the CoC and the Resolution Applicant, respectively for necessary compliance.

34. Accordingly, the Resolution Plan in IA.32 of 2024 is hereby allowed and approved.

SD/- SD/- Charanjeet Singh Gulati Lakshmi Gurung Member (Technical) Member (Judicial) Apurva LRA