Approval of Resolution Plan - Perfect Engine Component Private Limited

MUMBAI, BENCH-V I.A. No. 20 of 2024 IN C.P. No.1166 of 2020 ORDER Per: Madhu Sinha Member(Technical) 1. The above captioned Application was filed under Section 30(6) and Section 31, of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as the “Code”) by the Resolution Professional (hereinafter referred as the “Applicant”), seeking approval of the Resolution Plan, submitted by the Resolution Applicant –MAYUR INDUSTRIES PRIVATE LIMITED, which was approved by 100% voting shares of the members of the Committee of Creditors (hereinafter referred to as ‘COC’).

2. The facts leading to the Application are as under: a. A Financial Creditor (i.e. Edelwess Asset Reconsturction Company Limited), filed a Company Petition (IB) No. 1166 of 2020 under Section 7 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as "the Code"). The Corporate Insolvency Resolution Process (CIRP) of the Corporate Debtor was initiated by an order dated 25.04.2023, and ARCK Resolution Professional LLP (Through its designated partner Mr, Anil Kohli) was appointed as the Interim Resolution Professional and later confirmed as Resolution Professional by the COC in its 1st meeting held on 23.05.2023. A public announcement as per Section 15 of the Code, inviting claims from the creditors of the Corporate Debtor. b. The Applicant published a Public Announcement in Form A in accordance with Section 15 of the Code read with Regulation 6 of the CIRP Regulations, on 27.04.2023, inviting submission of proof of claims from the creditors of the Corporate Debtor, on or before 09.05.2023.

MUMBAI, BENCH-V I.A. No. 20 of 2024 IN C.P. No.1166 of 2020 c. The claims received and accepted by the Interim Resolution Professional are as under:

Creditors Claims Received Claims Admitted

Edelweiss Asset 350,79,95,972 350,79,95,972 Reconstruction Company Limited (Secured Financial Creditor)

350,79,95,972 350,79,95,972 Total

Creditors Amount Claimed (in Amount Admitted (in INR) INR) Shrem Investments l5,74,71,65l 15,74,71,651 Private Limited Financial Creditor (Unsecured Creditor)(Related Party) Total l5,74,71,65l 15,74,71,651

Creditors Amount Claimed (in Amount Admitted (in INR) INR) Operational 53,06,349 53,06,349 Creditor(Workmen Employees) Total 53,06,349 53,06,349

Creditors Amount Claimed (in Amount Admitted (in INR) INR) Operational 93,460,473 93,460,473 Creditor(Vendors for Goods & Services) Total 93,460,473 93,460,473

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Creditors Amount Claimed (in Amount Admitted (in INR) INR) Operational 57,90,179 57,90,179 Creditor(Government Authorities/ Statutory Bodies) Total 57,90,179 57,90,179

3. After receiving the claims, the Committee of Creditors was constituted. The constitution of COC is as under: Sr. Name of the Claim Claim Voting Share No. Received admitted (percentage %) 1. Edelweiss Asset 350,79,95,972 100% Reconstruction Company Limited 4. The Resolution Professional accordingly appointed One Registered Valuer namely (i.e. Future value Advisors India (P) Ltd. and Adroit) for conducting valuation across different asset classes, namely Land & Building Plant & Machinery and Securities and Financial Assets to determine its fair value and Liquidation value, as required under the Regulation 27 of the IBBI(IRP for Corporate Person)Regulations,2016. 5. These Registered Valuers submitted their reports. The Liquidation and fair value is stated as under: Fair Value and Liquidation Value :-

Sr Particulars of Asset Avg. Fair value Avg. Liquidation No. Value

1. Land & Building 13,72,69,981 10,60,35,985

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2. Plant & Machinery 4,78,81,000 3,05,94,750

3. Securities or Financial 6,25,21,279 4,70,0l ,403 Assets Total 24,76,84,260 18,36,32,137 The Applicant asserts that Form G, inviting Expression of Interest (EOI) from Prospective Resolution Applicants (PRAs), was first published on June 24, 2023, with a deadline of July 14, 2023. The Resolution Professional received Earnest Money Deposits (EMDs) from three PRAs by the deadline. Subsequently, the Committee of Creditors (CoC) decided to issue a corrigendum to extend the deadline for Form G to attract additional PRAs, leading to the receipt of five EMDs. During the 7th CoC meeting, it was discussed that the plan received from the PRA till the last date of submission of Plans (i.e. Consortium Plan M/s Maharashtra auto Stampings Private Limited) was under liquidation value. The CoC resolved to republish Form G, which resulted in receiving five EMDs from PRAs. Namely: Sr Name of the PRA’s Date of Submission EMD No. of EoI Details 1. Anand Vihar Reality 16.11.2023 RTGS- Private Limited 16.11.2023 2. Mayur Industries Pvt. Ltd. 16.11.2023 DD- 16.11.2023 3. Kanungo Ferromet Private 08.1 1 .2023 RTGS-07.1 Limited 1 .2023 4. United Biotech Pvt. Ltd 17.11.2023 RTGS-17.1 1 .2023 5. Maharashtra auto 24.07.2023 RTGS- Stamping Private Limited 24.07.2023 (in consortium)

6. The Applicant further submitted that in 8th meeting of the COC the COC approved the minimum eligibility criteria, Request for Resolution

MUMBAI, BENCH-V I.A. No. 20 of 2024 IN C.P. No.1166 of 2020 Plan (RFRP) along with evaluation matrix and the Information Memorandum to the PRAs on 22.11.2023. 7. On 08.01.2024, 5 (FIVE) Resolution Plans were received for the Corporate Debtor from the following PRAs (“Resolution Applicants”/ “RAs”):

i. Mayur Industries Pvt. Ltd.. ii. Anand Vihar Reality Private Limited iii. United Biotech Pvt. Ltd iv. Maharashtra auto Stamping Private Limited (in consortium) v. Kanungo Ferromet Private Limited 8. The COC, in its 13th meeting held on 08.03.2024, approved Resolution Plan submitted by Mayur Industries Pvt. Ltd.with a voting share of 100%. Thereafter, the Applicant has issued compliance certificate in Form “H”.

9. The Salient Features of the Resolution Plan are as under:

A. Brief Background of the Corporate debtor i. Perfect Engine Components Private Limited (PECPL) formerly known as Sarod Engineering Private Limited (“Corporate Debtor” or “CD”) was incorporated on 13th January 2005 and is registered at Registrar of Companies, Mumbai. Its registered address is 1101 Viraj Towers, Junction of Andheri Kurla Road, Western Express Highway, Andheri (E) Mumbai- 400069. The corporate debtor was engaged in the business in the manufacturing of engine valves, and valve seat inserts for all types of automotive engines, captive powers,

MUMBAI, BENCH-V I.A. No. 20 of 2024 IN C.P. No.1166 of 2020 transport industry, locomotive, and marine engines. The company caters to the automobile and engineering sectors. Its clientele includes Bajaj Auto, Tata Motors, Eicher, Ashok Leyland, Mahindra Rise, and Escorts. Major customers as on date are Bajaj Auto & Tata Motors ii. The Corporate Insolvency Resolution Process (“CIRP”) of Perfect Engine Component Private Limited has been initiated as per the provisions of the Insolvency and Bankruptcy Code (“IBC”) under Section 7. The application was moved before the Hon’ble National Company Law Tribunal, Mumbai Bench (“NCLT”) and was admitted vide its order dated 25.04.2023 (“CIRP Order”). Pursuant to such order, ARCK Resolution Professionals LLP through its designated partner Mr. Anil Kohli appointed as Interim Resolution Professional. B. Background of the Resolution Applicant i. Mayur Industries Private Limited was incorporated in the year 1994. The company has its operations at multiple locations. The company has six manufacturing plants, one each at Gurgaon, Rudrapur (Uttrakhand), Bhiwadi (Rajasthan), Sanand (Gujarat) and two at Pune (Bhosari & Chakan).The company employs a workforce of 2000 workmen at its above manufacturing facilities. ii. The company is engaged in manufacture of automotive components such as Door Trims, Floor carpets, Luggage floor, Air conditioner Ducts and other Interior components and is OE Supplier to almost all major

MUMBAI, BENCH-V I.A. No. 20 of 2024 IN C.P. No.1166 of 2020 automobile manufacturers, such as Maruti Suzuki India Ltd., Mahindra & Mahindra, Tata Motors, Ashok Leyland, Honda Cars, and others. The Resolution Applicant is eligible to act as a Resolution Applicant of the Corporate Debtor and is not ineligible under section 29A of Insolvency and Bankruptcy Code and also satisfies the eligibility criteria as mentioned in clause (h) of sub-section (2) of section 25 of the Code. 10. Summary of Payments under the Resolution Plan The amounts provided for the stakeholders under the Resolution Plan is as under: (Amount in Rs. lakh) Sr. Category of Sub-Category of Amount Amount Amount Amount No. Stakeholder* Stakeholder Claime Admitt Provided Provided d ed under the to the Plan# Amount Claimed (%) (1) (2) (3) (4) (5) (6) (7) 1 Secured (a) Creditors not NA NA NA NA Financial having a right to Creditors vote under sub-section (2) of section 21 (b) Other than (a) above: NA NA NA NA (i) who did not vote in favour of the resolution Plan 35,079. 35,014. 1651.94 4.71 96 96 (ii) who voted in favour of the resolution plan Total[(a) + (b)] 35,079. 35,014. 1651.94 4.71 96 96

MUMBAI, BENCH-V I.A. No. 20 of 2024 IN C.P. No.1166 of 2020 2 Unsecured (a) Creditors not 1,574.7 1,574.7 1 0.06 Financial having a right to 2 2 Creditors vote under sub-section (2) of section 21 (b) Other than (a) NA NA NA NA above: NA NA NA NA (i) who did not vote in favour of the resolution Plan NA NA NA NA (ii) who voted in favour of the resolution plan

Total[(a) + (b)] 1,574.7 1,574.7 1 0.06 2 2 3 Operational (a) Related Party of NA NA NA NA Creditors Corporate Debtor (b) Other than (a) above: (i)Government 57.90 57.90 0.06 0.10 (ii)Workmen NA NA NA NA (iii)Employees 53.06 53.06 53.06 100 (iv) Operational 940.43 934.77 0.93 0.10 Creditors other than Government Dues*

MUMBAI, BENCH-V I.A. No. 20 of 2024 IN C.P. No.1166 of 2020 Total[(a) + (b)] 1,051.4 1,045.7 54.06 5.14 0 4 4 Other debts NA NA NA NA NA and dues Grand Total 37,706. 37,635. 1707.00 4.53 08 41

*Application for condonation of delay in filing of claim of one Operational Creditor under regulation 13 amounting to Rs. 3,60,426/- is filed before Hon’ble NCLT(i.e. IA No.3583 of 2024 was withdrawn and Disposed off vide order dated 12.07.2024 of this Tribunal) # Amount provided over time under the Resolution Plan and includes estimated value of non-cash components. It is not NPV.] The interests of existing shareholders have been altered by the Resolution plan as under: Sl. No Category No. of No. of Voting Voting Share of Share Shares Shares Share (%) (%) held after Holder held before held after held before CIRP CIRP the CIRP CIRP 1 Equity 3,10,000 NIL 100 NIL 2 Preference NIL NIL NIL NIL

11. Sources of Funds During the 12th meeting of the Committee of Creditors (CoC), also stated that the “Resolution Applicant seems to be strong considering the size of the business and that the said RA has relevant experience in the same industry. Further the plan value offered is more than the net worth of the RA. Accordingly, the implementation of the Resolution Plan seems to be feasible and viable”. The Bench has noted that the Resolution Applicant has annexed the Financial Statements for the year 2023, which demonstrate adequate reserves to facilitate the implementation of the Resolution Plan.

MUMBAI, BENCH-V I.A. No. 20 of 2024 IN C.P. No.1166 of 2020 Payments proposals of the various stakeholders under the Resolution Plan: Summary of Payment terms under the Proposed Plan ( Rs. in Crore) Particulars Timelines Instrum Amoun Remarks from ent used t in Cr. Effective for Date Paymen t Total Committed Within 90 Bank 17.07 The RA will deposit the funds by RA, days Transfer committed funds in the (Upfront) Designated account of CD as per payment timelines proposed in this plan. All the payments/ dues payable to respective creditors will be paid from the said designated account as per the timelines proposed in this Resolution Plan. CIRP Cost (as Within 30 Bank - As per details received approved/ratified days Transfer from RP, there is no by COC) outstanding CIRP cost payable. Operational Within 30 Bank 0.541 As per detailed chart in Creditors days Transfer 3.4.1 Value available for Financial Creditors 16.529 Dissenting - - - Edelweiss Asset Financial Reconstruction Creditors Company Limited (EARCL) being only financial creditor, the clause would not apply. Financial Within 90 Bank 16.519 The complete payment Creditors days Transfer would be made within 90 (secured) days Unsecured Within 90 Bank 0.010 The complete payment Financial Creditor days Transfer would be made within 90 days

MUMBAI, BENCH-V I.A. No. 20 of 2024 IN C.P. No.1166 of 2020 The Payment mechanism for each class of Creditor(s)/ Stakeholder is tabled below: (Rs. in Crore) Amount Sr. Category of Admitted provided in Remarks No. Creditor Claims the Plan Though, as per latest information, there is no Insolvency CIRP cost pending. Amount 1 Resolution Actual 0.00 payable, if any, would be Process Cost paid in priority to any other payment within 30 days Workmen 2 and 0.53 Employees Operational Creditors for 3 supply of 9.35 0.541 Within 30 Days Goods/ Services Government 4 /Statutory 0.58 Authorities Dissenting The payment is provided for 5 Financial - Financial Creditors, who Creditors are part of COC and doesn’t 16.519 include any related party, Secured who has provided financial 6 Financial 350.80 debt to the CD. Creditors Unsecured The payment is towards 7 Financial 15.74 0.010 unsecured financial debt of Creditors related party Any Other 8 Operational - - - Creditor Preference 9 Shareholder - - NA s

MUMBAI, BENCH-V I.A. No. 20 of 2024 IN C.P. No.1166 of 2020 Existing Equity share Equity capital shall be written off 10 Shareholder - - fully. No claim has been s filed by existing Shareholders.

a. Insolvency resolution process cost The unpaid CIRP Costs, if any, in terms of Section 5(13) of the Code or Regulation 31 of CIRP Regulations duly approved by the COC will be paid in full and in priority to any other creditors of the company within 30 days from the Effective Date. Since there is nothing mentioned as unpaid CIRP Cost, hence none has been provided. If and when there is any pendency arising on account of CIRP cost left unpaid, the same shall be paid from the total committed funds provided by the RA. Remaining amounts shall be payable to the stakeholders proportionately. b. Payment to Operational Creditors As per the Information Memorandum and Financial Statements for the Year 2023, it seems Liquidation Value of the encumbered assets may not be sufficient to cover the debt of Financial Creditors of the Company in full. In that scenario, the Liquidation Value due to the Operational Creditors or the other creditors or stakeholders, government dues, taxes etc. and other creditors and stakeholders would be NIL and therefore they may not be entitled to receive any payment on that account. However, the Resolution Applicant in order to take care of the interest of all stakeholders proposes to bring in a payment to Operational Creditors. The payment mechanism of respective category are as follows Category Composition Admitted % Amount Claims proposed Payable (INR) to be (INR) paid against

MUMBAI, BENCH-V I.A. No. 20 of 2024 IN C.P. No.1166 of 2020 admitted claim OC-1 Workmen and 5,306,349 100% 5,306,349 Employees OC-2 Vendors for Goods 93,460,473 0.1% 93,460 and Services OC-3 Government 5,790,179 0.1% 5,790 Authorities/Statu tory Bodies Total 104,557,0 - 54,05,600 01 The payments will be made within 30 days. Post acceptance of these payments, no OC (irrespective of class or category) shall have any right whatsoever for its past dues against the Corporate Debtor. All proceedings shall automatically stand abated from the Effective Date. The claims remaining unverified/unadmitted till the date of submission of plan shall be deemed to have been rejected by the RP and no payments would accrue against them. Any amount otherwise payable to any Operational Creditor from above, but not paid due to any reason (including non-submission of relevant documents, etc.), shall be kept in a separate bank account (to be claimed within next 2 years). The total amount allocated above for the payments to OC’s shall be coordinated by the Resolution Professional in proportion to the total claims so made, or as per applicable provisions, if a different treatment is prescribed. The Resolution Applicant, through an affidavit, has affirmed that the dues owed to the workmen for a period of twenty-four months and to the employees for a period of twelve months, in compliance with Section 30(2)(b) of the Insolvency and Bankruptcy Code, 2016, amount to a total of ₹53,06,349. The Applicant further undertakes that these payments are either provided for or will be made over and above the provisions set out in the Resolution Plan, in compliance with the order of the Hon’ble

MUMBAI, BENCH-V I.A. No. 20 of 2024 IN C.P. No.1166 of 2020 National Company Law Appellate Tribunal (NCLAT). in the Case of M/s Jet Airways India Ltd.; upheld by the Hon ’ble Supreme Court in Civil Appeal No 407 of2023 with Civil Appeal Nos 465-469 of 2023 (i) The workmen and employees are entitled to receive the amount of provident fund and gratuity in full since they are not part of the liquidation estate under Section 36(4)(b)(iii). (ii) The workmen are entitled to receive their dues from the Corporate Debtor for period of 24 months as per provision of Section 53(l)(b) at least to minimum liquidation value envisaged under Section 30(2)(b) read with Section 53(1). The same is not applicable since there are no dues of EPFO

15. Financial Creditors The RA proposes to make the total payment of Rs. 17.07 crores against dues of Financial Creditors. RA would deposit the same, as and when due (as per proposed payment terms) in the designated bank account of CD within specified timelines. As per the proviso to Section 21(2) of the Code, “a related party shall not have any right of representation, participation or voting in a meeting of the committee of creditors.” Accordingly, its pertinent to note here that related parties having a financial debt doesn’t get any right of participation or voting in the COC meeting. Thus, the question of dissent or assent upon a plan wouldn’t arise. In term of IBC, a Resolution Plan is amongst other things, required to pay liquidation value due to the Dissenting Financial Creditors and provide that such payment is made before any recoveries are made to the Financial Creditors, who have voted in favour of the Resolution Plan. The Dissenting Financial Creditors will be entitled to receive an amount as they would have received in the event of Liquidation, in MUMBAI, BENCH-V I.A. No. 20 of 2024 IN C.P.

No.1166 of 2020 priority to the creditors voting in favour of the Resolution Plan within 45 days from Effective Date. As the COC comprises of only one eligible Financial creditor, the situation of having a dissenting financial creditor would not arise. The Resolution Professional will disclose the liquidation value to the monitoring committee to fix the amount of liquidation value due and payable to the dissenting Financial Creditors. The amount is proposed to be paid within 45 days of Effective Date in priority to the creditors voting in favour of the Resolution Plan The Financial Creditors other than Dissenting Financial Creditors i.e. who have voted in favour of the Resolution Plan will get paid within a period of 90 days from the Effective Date. Based on above the payments proposed for Financial Creditors shall be as follows Name of Amount Proposed Remarks Quantum and Financial Admitted in the timelines Creditor plan Edelweiss 3,507,995,9 165,194,4 Secured Within 90 Asset 72 00 days Reconstructi on Company Limited Shrem 157,471,651 100,000 Unsecure Within 90 Investments d related days Private party Limited The Liquidation Value due to the Dissenting Financial Creditors if any will be discussed with the Monitoring Committee and to be paid within 45 days of Effective Date in priority to the creditors voting in favour of the Resolution Plan.

The Resolution Professional to make entire financial commitment within 90 days from the effective date and would accordingly be out of pocket by the entire Resolution plan value by putting the entire amount in the designated bank Account. We propose that the distribution methodology undertaken by the RP/COC is as per the provision of law and all the creditors/stakeholders be paid their net

MUMBAI, BENCH-V I.A. No. 20 of 2024 IN C.P. No.1166 of 2020 dues against their deliverables (including issuing No Dues Certificate, release letter etc., This includes all the process/procedures for the acquisition of the CD (including but not limited to release of all charges)

c. Any Other Creditors or Contingent Liabilities Any claims not received by cut-off date shall be extinguished and will not be payable and shall stand to be extinguished and NIL amount be paid against it. No interest on any claim (both financial and operational) as on CIRP Commencement Date shall be paid by the RA. However, Additional claims from any creditor(s) (which were not part of the Information Memorandum, verified/admitted subsequently by the RP including related to any statutory departments like EPFO, GST etc., if any till Effective date) shall not be taken into consideration and shall deemed to be extinguished.

13. Implementation Schedule: Implementation of the Resolution Plan shall commence from the NCLT Approval Date. Subject to Clause 3.9 The Resolution Plan is effective for a term of 90 days. The Resolution Applicant will undertake the following steps to implement the Resolution Plan in the indicative timeline provided below: Activity Reference Days Term of Plan Receipt of Letter of Intent from - R the CoC and constitution of Caretaker Committee Issuance of Performance pt15 of RFRP R+3 15% of Security – Performance Security payment will be provided within 3 days of proposed issuance of LOI Approval from Adjudicating - T 0 Authority

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Physical possession of the 3.8.2 T 0 assets of the Corporate debtor from the RP Infusion of Equity Capital 3.10.3 T+7 7 First Meeting of Monitoring 3.8.2 T+7 7 Committee Appointment of Board of 3.8.4 T+15 15 Directors Finalisation and signing of 3.8.10 T+30 30 Deeds, Definitive Agreements etc. Payment for CIRP Process Cost 3.3.1 T+30 30 Payment to Operational Creditor 3.4.1 T+30 30 Payment to Dissenting Financial 3.5.4 T+45 45 Creditors Release of Performance Bank 3.5.9 T+90 90 Guarantee Payment to Financial Creditors 3.5.6 T+90 90 voted in favour of Resolution Plan Financial Creditors to release 3.5.8 & T+91 91 Encumbrances (including 3.10.11 making filings with ROC/ sub-registrar of assurances and other governmental agencies for recording such release), execute re-conveyance deeds, issuance of no-dues certificates and redeliver documents in relation to the Resolution Plan and Handover of Documents of the assets of the Corporate debtor The RA would infuse funds in the designated bank account as per the terms of this resolution plan. The amounts shall be distributed as per the terms of this Resolution Plan. The bank will be operated by the erstwhile RP, as per the directions of the MC.

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14. Earnest Money Deposit The Resolution Applicant has submitted Earnest Money Deposit I of INR Rs.10,00,000/- and Earnest Money Deposit II of INR 50,00,0 00(Indian Rupees Fifty Lakhs Only) along with this Resolution Plan. 15. Monitoring Committee The Monitoring Committee shall comprise of 5 (Five) members comprising of the following: a) 1 (One) Nominee/Representative of the Financial Creditor b) 3 (Three) Nominee/Representative of the Resolution Applicant (i.e. one representing the new Shareholders, one of the Directors and one Advisor/Monitoring Agency) and c) The Erstwhile Resolution Professional. The Monitoring Committee shall be constituted within 7 (Seven) Business Days of NCLT Approval Date and pending constitution of the Monitoring Committee, the Resolution Professional shall be authorised to exercise all his powers and shall observe all its duties in accordance with the Code. 16. Avoidance Transactions As per the requirements of Regulation 38(2) (d) of the CIRP Regulations, avoidance transactions application filed by the Resolution Professional, if any, under Chapter III or fraudulent or wrongful trading under Chapter VI of Part II of the Code, will be pursued after the approval of the resolution plan to its logical end by the Chairman of monitoring Committee and the proceeds shall be distributed to the Secured Financial Creditors in the manner approved by the COC while approving this Resolution plan. The Resolution Applicant states in Affidavit and Resolution Plan that the Resolution Plan specifying disbursement of amounts recoverable from PUFE transaction to Creditors: Clause 3.9.8 of the Resolution Plan at Page no. 26 (Page No. 409 of IA. No. 20 of 2024) states as under: “3.9.8: The IM doesn’t have any

MUMBAI, BENCH-V I.A. No. 20 of 2024 IN C.P. No.1166 of 2020 information about any avoidance proceedings. The RA would seek a complete immunity from any proceedings or effects of any avoidance proceedings initiated by erstwhile RP during the CIRP process or any time later. The success of the plan is independent of the results of these proceedings. Any future monetary inflows resulting from these proceedings, if any, will be directly allocated to the members of the Committee of Creditors (COC). Any expenses incurred in relation to these proceedings will not be the responsibility’ of the RA or the monitoring committee. Owing to the lack of pertinent information, the RA will not partake in these proceedings”. Therefore, this bench directs the Secured Financial Creditor (i.e. Edelweiss Asset Reconstruction Company Limited) to ensure effective pursuance of the IA bearing number IA 1642 of 2024, IA 3794 of 2023, IA 2372 of 2023 and 2985 of 2024 mentioned at page no 26 of the Affidavit 17. The compliance of the Resolution Plan is as under: Section of Requirement with respect to Resolution Plan Clause of Complianc the Code / Resolution e (Yes / No) Regulation Plan No. 25(2)(h) Whether the Resolution Applicant meets the YES criteria approved by the CoC having regard to the complexity and scale of operations of business of the CD? Section 29A Whether the Resolution Applicant is eligible to Submitted as YES submit resolution plan as per final list of AnnexureA- Resolution Professional or Order, if any, of the 24 Adjudicating Authority? Section 30(1) Whether the Resolution Applicant has submitted APPENDIX 10 YES an affidavit stating that it is eligible? Section 30(2) Whether the Resolution Plan- (a) provides for the payment of insolvency Pt 3.3, Pg 18 YES resolution process costs? (b) provides for the payment to the operational Pt 3.4.2, Pg 20 creditors?

Pt 3.5.5, Pg 21

MUMBAI, BENCH-V I.A. No. 20 of 2024 IN C.P. No.1166 of 2020 (c) provides for the payment to the financial Pt 3.7, Pg 22 creditors who did not vote in favour of the Pt 3.8, Pg 24 resolution plan? Pt 3.9.7, Pg 26 (d) provides for the management of the affairs of the corporate debtor? (e) provides for the implementation and supervision of the resolution plan? (f) contravenes any of the provisions of the law for the time being in force?] Section 30(4) Whether the Resolution Plan Minutes & E- YES (a) is feasible and viable, according to the CoC? voting result (b) has been approved by the CoC with 66% voting of 12th COC share? Meeting Section 31(1) Whether the Resolution Plan has provisions for its Pt 3.8, Pg 24 YES effective implementation plan, according to the CoC? Regulation38 Whether the amount due to the operational Pt 3.4.2, Pg 20 YES (1) creditors under the resolution plan has been given priority in payment over financial creditors?] Regulation Whether the resolution plan includes a statement Pt 3.9, Pg 25 YES 38(1A) as to how it has dealt with the interests of all & stakeholders? Pt 3.2, Pg 16 Regulation (i) Whether the Resolution Applicant or any of its Pt 3.9.2, Pg 26 NO 38(1B) related parties has failed to implement or contributed to the failure of implementation of any resolution plan approved under the Code. (ii) If so, whether the Resolution Applicant has submitted the statement giving details of such NA non-implementation?] Regulatio(an) Whether the Resolution Plan provides: Pt 3.9.3, Pg YES 38(2) (a) the term of the plan and its implementation 25 schedule? (b) for the management and control of the Pt 3.7, Pg 22 business of the corporate debtor during its term? (c) adequate means for supervising its Pt 3.8, Pg 24 implementation? 38(3) Whether the resolution plan demonstrates that – YES Pt 3.9.5, Pg 26 Pt 3.7.9, Pg 24 & Pg 38

MUMBAI, BENCH-V I.A. No. 20 of 2024 IN C.P. No.1166 of 2020 (a) it addresses the cause of default? Pt 3.8.5, Pg 25 (b) it is feasible and viable? Pg 14, Pg 33 (c) it has provisions for its effective Pg 38 implementation? (d) it has provisions for approvals required and the timeline for the same? (e) the resolution applicant has the capability to implement the resolution plan? 39(2) (b) Whether the RP has filed applications in respect of Pt 9.9, Pg 29 YES transactions observed, found or determined by him? Regulatio(cn) Provide details of performance security received, YES 39(4) as referred to in sub-regulation (4A) of regulation 36B.]

Observation and Findings: 17. On perusal of the Resolution Plan, we find that the Resolution Plan provides for the following i. As per IBC Code 30(2)(a) – A Resolution Plan 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. ii. As per Section 30(2)(b), the Respondent has agreed to pay Operational Creditors an amount which shall not be less than liquidation value or the amount that would have been paid to such creditors if the amount to be distributed under the Resolution Plan is distributed in accordance with priority under Section 53(1), whichever is higher. iii. The Resolution Applicant has also agreed that dissenting financial creditors shall be paid not less than the value they would have been paid in the event of liquidation of the Corporate Debtor.

MUMBAI, BENCH-V I.A. No. 20 of 2024 IN C.P. No.1166 of 2020 iv. The plan provides for the management of the affairs of the Corporate Debtor after approval of the Resolution Plan. Section 30(2)(d). v. The Resolution Plan does not contravene any of the provisions of the law for the time being in force - Resolution Plan provides for the implementation and supervision of the resolution plan as per Section 30(2) (e) vi. The Resolution Applicant has given a declaration that the Resolution Plan does not contravene any provisions of the law for the time being in force as per Section 30(2)(f). vii. The resolution applicant or any of its related parties has not 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. viii. The Resolution Plan is in compliance of the Regulation 38 of the Regulations in terms of Section 30(2)(f) as under: a. The amount due to the operational creditors under a resolution plan shall be given priority in payment over financial creditors. Regulation 38(1). b. The Resolution Plan has all the adequate means of supervising of the implementation of the Plan as required under Regulation 38(2) (c), of the IBBI, Insolvency resolution process for corporate persons, Regulation 2016. c. Provides for the payment of CIRP Costs in priority to the repayment of any other debts of the Company (Regulation 38(1)(a)). d. Provides for the manner of implementation and supervision of the Resolution Plan and adequate means for implementation and supervision of the Resolution Plan.

MUMBAI, BENCH-V I.A. No. 20 of 2024 IN C.P. No.1166 of 2020 e. The Resolution Applicant confirms that to the best of the knowledge of the Resolution Applicant, the Resolution Plan is not in contravention of the provisions of Applicable Law and is in compliance with the Code and the CIRP Regulations. f. The Resolution Applicant confirms that the Resolution Applicant and its connected persons are not disqualified from submitting a resolution plan under Section 29A of the Code and other provisions of the Code and any other Applicable Law. g. The plan provides for the management and control of the business of the Corporate Debtor during its term. h. All the above factors demonstrate that the plan address as the cause of default and the Resolution Applicant has the capacity to implement the Resolution Plan. i. That the Resolution Applicant or any of its related parties has never 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. This is in compliance of Regulation 38(1)(b) of the Regulations. j. The interests of all stakeholders (including Financial Creditors, Operational Creditors and other creditors, guarantors, members, employees and other stakeholders of the Company, keeping in view the objectives of the Code (Regulation 38(1A)).

18. The Resolution Plan has been approved in the 7th COC meeting held on 05.08.2023 with 100% voting in accordance with the provisions of the Code.

MUMBAI, BENCH-V I.A. No. 20 of 2024 IN C.P. No.1166 of 2020 19. Regarding the issue of the source of funds, this Bench places reliance on the judgment of the Hon’ble Supreme Court in the case of Vallal RCK v. M/s Siva Industries and Holdings Limited and Others, Civil Appeal Nos. 1811-1812 of 2022, wherein it was held that “This Court has consistently held that the commercial wisdom of the CoC has been given paramount status without any judicial intervention for ensuring completion of the stated processes within the timelines prescribed by the IBC. It has been held that there is an intrinsic assumption, that financial creditors are fully informed about the viability of the corporate debtor and feasibility of the proposed resolution plan. They act on the basis of thorough examination of the proposed resolution plan and assessment made by their team of experts. A reference in this respect could be made to the judgments of this Court in the cases of K. Sashidhar v.Indian Overseas Bank and Others, Committee of Creditors of Essar Steel India Limited through Authorised Signatory v. Satish Kumar Gupta and Others3, Maharashtra Seamless Limited v. Padmanabhan Venkatesh and Others4, Kalpraj Dharamshi and Another v. Kotak Investment Advisors Limited and Another5, and Jaypee Kensington Boulevard Apartments Welfare Association and Others v. NBCC(India) Limited and Others6 20. In K. Sashidhar v. Indian Overseas Bank & Others: 2019 SCC Online SC 257 (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 MUMBAI, BENCH-V I.A. No. 20 of 2024 IN C.P. No.1166 of 2020 the Resolution Plan as approved by CoC meets the requirements specified in Section 30(2). The Hon’ble Court observed that the role of the NCLT is ‘no more and no less’. The Hon’ble 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”.

21. In India Resurgence Arc Private Limited vs. Amit Metaliks Limited and Ors. (2021) the Hon’ble Apex Court held that “the process of consideration and approval of resolution plan is essentially within the commercial wisdom of Committee of Creditors (CoC). The scope of judicial review remains limited under Section 30(2) of the Insolvency and Bankruptcy Code (IBC), 2016 by which the court would examine that the resolution plan does not contravene any statutory provisions and it conforms to such other requirements as may be specified by the Board. The court held that the process of judicial review cannot be stretched if all the above-mentioned requirements have been duly complied with and that dissenting financial creditor, expressing dissent over the value of security interest held by it, cannot seek to challenge an approved Resolution Plan. Lastly, it was held that Section 30 of the IBC, 2016 only amplified the considerations for the CoC while exercising its commercial wisdom so as to take an informed decision in regard to the viability and feasibility of resolution plan, with fairness of distribution amongst similarly situated creditors; and that the business decision taken in exercise of the commercial wisdom of CoC does not call for MUMBAI, BENCH-V I.A. No. 20 of 2024 IN C.P. No.1166 of 2020 interference unless creditors belonging to a class being similarly situated are denied fair and equitable treatment.

22. The Hon’ble Apex Court at para 42 in Committee of Creditors of Essar Steel India Limited Vs. Satish Kumar Gupta & Ors.: (2019) SCC Online, has clearly laid down that the Adjudicating Authority would not have power to modify the Resolution Plan which the CoC in their commercial wisdom have approved. “Para 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).”

23. This Bench noted that the Resolution Plan value is under liquidation value this Bench relies on the Hon’ble Supreme Court in the matter of Committee of Creditors of Essar Steel India Limited Vs. Satish Kumar Gupta & Ors.: (2019) SCC Online, and in the matter of Maharashtra Seamless Limited vs Padmanabhan Venkatesh and Ors held that: “there is no provision in the Regulations or Code which provides that the bid of any Resolution Applicant has to match the liquidation value. It further articulated that the object behind prescribing such a valuation process is to assist the CoC to take decisions on a resolution plan properly. Once, a resolution plan is approved by the CoC, the statutory mandate on the Adjudicating Authority under Section 31(1) of the Code is just to test the Resolution Plan with reference to provisions of Section 30(2) of the Code.”

MUMBAI, BENCH-V I.A. No. 20 of 2024 IN C.P. No.1166 of 2020 24. The Hon’ble Supreme Court in Ghanashyam Mishra and Sons (P) Ltd. v. Edelweiss Asset Reconstruction Co. Ltd. has clearly established that the once a Resolution Plan is approved by the Adjudicating Authority (AA), the same, irrespective of whether or not they participated in the CIRP, binds all creditors and any claims not forming part of the approved Resolution Plan shall stand extinguished. “with respect to any statutory dues owed/claims raised in relation to the period prior to the 2019 Amendment, the resolution plan shall still be binding on the statutory creditors concerned, and the statutory dues owed to them, which were not included in the resolution plan, and such claims shall stand extinguished.” 25. Regarding to the Relief and Concessions the Resolution Applicant will approach all the consent Authorities for reliefs and concessions, if any hindrance faced by the Resolution Applicant from any Authority at latter stage, the Resolution Applicant may approach the Tribunal after the sanction of the Plan. The carry forward loses if any are permitted under Section 79 of the Income Tax Act 1961. The law has been well settled by the Hon'ble Supreme Court in the case of Ghanashyam Mishra and Sons Private Limited Vs. Edelweiss Asset Reconstruction Company Limited and Ors. in the following words: I. "The legislative intent behind this is, to freeze all the claims so that the resolution applicant starts on a clean slate and is not flung with any surprise claims. If that is permitted, the very calculations on the basis of which the resolution applicant submits its plan would go haywire and the plan would be unworkable.

MUMBAI, BENCH-V I.A. No. 20 of 2024 IN C.P. No.1166 of 2020 II. 87. We have no hesitation to that the word "other stakeholders" would squarely cover the Central Government any State Government or any local authorities. The legislature, noticing that on account of obvious omission certain tax authorities were not abiding by the mandate of I&B Code and continuing with the proceedings, has brought out the 2019 amendment so as to cure the said mischief… III. In view of the above we hold that the Resolution Applicant cannot be saddled with any previous claim against the Corporate Debtor prior to initiation of its CIRP..." IV. Consequently, all the dues including the statutory dues owed to the Central Government, any State Government or any local authority, if not part of the resolution plan, shall stand extinguished and no proceedings in respect of such dues for the period prior to the date on which the adjudicating authority grants its approval under Section 31 could be continued.” 26. In view of the above cited case law, the legislature has given paramount importance to the commercial wisdom of committee of creditors (CoC) and the scope of judicial review by the Adjudicating Authority (AA) is limited to the extent of scrutiny provided under section 31 of Code and the direction of the Appellate Authority is limited to the extent provided under sub-section (3) of section 61 of the Code. 27. In view of the discussions, this Bench is of the considered view that the instant Resolution Plan meets the requirements of Section 30(2)

MUMBAI, BENCH-V I.A. No. 20 of 2024 IN C.P. No.1166 of 2020 of the Code and Regulations 37, 38, 38(1A) and 39(4) of the Regulations. The Resolution Plan is not in contravention of any of the provisions of Section 29A of the Code and is in accordance with law. The Resolution Plan is feasible and viable and has been duly approved by the CoC in their Commercial Wisdom and under the requisite proceedings of ‘Code’. The Resolution Plan balances the interest of all the stakeholders and thus it deserves to be approved as follows: a) The Interlocutory Application No. 20 of 2024 is allowed. The Resolution Plan submitted by MAYUR INDUSTRIES 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 payment of dues arising under any law for the time being in force is due. b) The Memorandum of Association (MoA) Articles of Association (AoA) shall accordingly be amended and filed with the Registrar of Companies (ROC), concerned 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. c) The moratorium under Section 14 of the Code shall cease to have effect from this date. d) The Monitoring Committee shall supervise the implementation of the Resolution Plan and shall file status of its implementation before this Authority from time to time, preferably every quarter. e) 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.

MUMBAI, BENCH-V I.A. No. 20 of 2024 IN C.P. No.1166 of 2020 f) The Applicant shall forthwith send a copy of this Order to the CoC and the Resolution Applicant for necessary compliance. g) The Resolution Professional shall submit the records collected during the commencement of the proceedings to the Insolvency & Bankruptcy Board of India for their record. h) The Resolution Professional shall stand discharged from his duties with effect from the date of this Order, save and except those duties that are enjoined upon him for implementation of the approved Resolution Plan. i) The Registry is directed to send copies of the order forthwith to all the parties and their Ld. Counsel for information and for taking necessary steps. j) The Interlocutory Application No. 20 of 2024 is accordingly Allowed.

Sd/- Sd/- Madhu Sinha Reeta Kohli Member (Technical) Member (Judicial) /priyanka/