Approval of Resolution Plan - Technicolour Dream Pants Private Limited

ORDER PER: BENCH 1. The present Application has been filed by Mr. Rakesh Kumar Jain, Resolution Professional (RP) of Technicolour Dream Pants Private Limited (‘Corporate Debtor’) under the provisions of Section 30(6) read with Section 31(1) of the Insolvency & Bankruptcy Code, 2016 (‘the Code’) read with Regulation 39(4) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (‘Regulations’) seeking approval of the Resolution Plan dated 14.01.2025 submitted by Ms. Darshna Rani (“Successful Resolution Applicant/SRA”) and as approved unanimously by the Committee of Creditors in its 9th CoC meeting convened on 20.02.2025. 2. DETAILS OF THE CIRP: i. This Adjudicating Authority vide order dated 13.08.2024 admitted C.P. IB NO. 193 (ND) OF 2024 filed under Section 10 and appointed the Applicant as the Interim Resolution Professional who was later confirmed as RP on 30.09.2024.

I.A. (PLAN) 10 (ND) 2025 IN C.P. IB 193 (ND) OF 2024 ii. Thereafter, the Applicant issued a Public Announcement in Jansatta, Hindi Newspaper in Hindi Language & Financial Express, English newspapers in English language which was published on 15.08.2024. iii. The Applicant intimated initiation of CIRP and invited claims from various Statutory Authorities like Income Tax, GST, EPFO. The GST Department filed their claim of Rs. 78,50,325/- However, Income Tax and EPFO did not file their claim. Intimation was also sent to the Registrar of Companies, New Delhi. Later INC-28 was also filed with the Registrar of Companies. iv. The Applicant prepared a list of Creditors after verification of claim received pursuant to the Public Announcement within 7 days of from the last date of receipt of the claims and made the list of creditors available for inspection and filed the List of creditors vide IA/ 4520/ND/2024 with this Hon'ble Bench on 18.09.2024. The IRP filed report certifying constitution of the Committee of Creditors with this Bench on 18.09.2024. Updated list of Creditors and Reconstitution of CoC was filed 19.11.2024. v. The Applicant got valuation reports on Assets in S& F category from two IBBI registered valuers Mr. Rajan Sahdev (IBBI/RV/02/2020/13217 & Mr, TVS Siva Prasad (IBBI/RV/04/2022/14767. The Valuers Mr. Sanjeev Kumar Gupta (IBBI/RV/02/2021/13750 and Mr. Daleep Kumar (IBBI/RV/05/2019/12662) in Plant & Machinery were also appointed. The Suspended Directors did not give possession of Fixed Assets and IRP filed an Application (IA/4562/ND/2024) under Section 19(2) of the Code. CoC at its meeting held on 04.11.2024 directed RP to get valuation done when the assets are handed over to RP. vi. Up to the date of filing of this Application a total number of 9 (Nine) Meetings of COC have been conducted detailed as under: a. First COC Meeting dated 11.09.2024 b. Second COC Meeting dated 04.10.2024

I.A. (PLAN) 10 (ND) 2025 IN C.P. IB 193 (ND) OF 2024 c. Third COC Meeting dated 04.11.2024 d. Fourth COC Meeting dated 02.12.2024 e. Fifth COC Meeting dated 24.12.2024 f. Sixth COC Meeting dated 07.01.2025 g. Seventh COC Meeting dated 10.01.2025 h. Eighth CoC Meeting dated 21 .01.2025 i. Ninth CoC Meeting dated 20.02.2025 vii. The RP published Form G in Financial Express and Jansatta newspapers on 08.10.2024 for inviting Expression of Interest (“EOI”) from prospective Resolution Applicants. viii. The Applicant received response from PRA's. RP declared a provisional list of 13 Prospective Resolution Applicants (PRA's) on 30.10.2024 and informed the same to CoC members and all PRA's. ix. The Applicant issued Final list of Prospective Resolution Applicants on 12.11.2024 and issued Information Memorandum, Evaluation Matrix, and request for Resolution Plan on 09.11.2024. Last date for receipt of Resolution Plan was 23.12.2024. x. Out of 13 Prospective Resolution Applicants, 9 Resolution Plans were received by RP. The details of the PRAs are as under: a. AKB Ventures Private Limited b. BSC Advisors Private Limited c. Ms. Sonal Sumit Mehta (Sonal Yogeshbhai Shah) d. Mr. Amrit Kumar Agarwal e. Ms. Darshana Rani f. Himgiri Garments Private Limited g. One City Infrastructure Private Limited h. Sabrimala Industries Private Limited i. Right Advisors Private Limited

I.A. (PLAN) 10 (ND) 2025 IN C.P. IB 193 (ND) OF 2024 xi. Pursuant to the provisions of Section 5(14) of the Code, 180 days of Insolvency Resolution Process Period Commenced on 13.08.2024 and the same was set to expire on 09.02.2025. This Adjudicating Authority had extended the period by 11.03.2025 under Section 12(2) of Code. xii. This Adjudicating Authority vide order dated 18.12.2024 allowed the application filed by the RP under Section 60(5) of the Code read with Regulation 13(1C)(b)(ii) of IBC, 2016 of IBBI (Insolvency Resolution Process for Corporate Persons) 2016 and Rule 11 of NCLT Rules, 2016 and condoned the delay in filing the claims by some claimants. xiii. Thereafter, on 11.02.2025, RP reconstituted the Committee of Creditors which consisted of the following operational creditors:

I.A. (PLAN) 10 (ND) 2025 IN C.P. IB 193 (ND) OF 2024 xiv. In pursuance to Form G for Invitation for Expression of Interest for Technicolour Dream Pants Private Limited which was published on 8th October, 2024 in Financial Express and Jansatta Hindi Edition, the RP received 9 Resolution Plans from which Ms. Darshana Rani & M/s Right Advisors Private Limited (which were found viable and feasible and also the most commercially prudent) were negotiated and deliberated by CoC in its sixth to ninth Meetings. xv. At the seventh meeting of the CoC held on 10.01.2025, the representatives of the following PRA's met the CoC in person: a. Amrit Kumar Agarwal b. Darshna Rani c. Himgiri Garments Private Limited d. AKB Ventures Private Limited e. Right Advisors Private Limited f. One City Infrastructure Private Limited xvi. The representatives of the following PRAs met the CoC through Audio Video Conferencing: a. Sabrimala Industries India Limited b. BSC Advisors Private Limited xvii. The Revised Resolution Plans received by RP were discussed at the 9th CoC Meeting held on 20.02.2025 and the Revised Resolution Plan dated 14.01.2025 of Ms. Darshna Rani was considered to be most viable and feasible and the same was approved with 84.94% vote share.

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3. DETAILS OF THE RESOLUTION APPLICANT AND PAYMENT SCHEDULE: i. The details of the SRA are as follows:

ii. The total Plan value is Rs. 86,00,000/- (Rs. Eighty-Six Lakhs only). iii. The total Realisable amount as per the revised Form H is as follows:

I.A. (PLAN) 10 (ND) 2025 IN C.P. IB 193 (ND) OF 2024 iv. The Resolution Applicant has proposed to pay and settle various claims as a part of the Resolution Plan, in the following manner:

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4. CIRP COSTS: i. The Resolution Plan has provided the following with regards to the CIRP costs:

5. SOURCE OF FUNDS:

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6. DETAILS OF TERM, MANAGEMENT, IMPLEMENTATION AND SUPERVISION OF THE RESOLUTION PLAN:

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7. The Resolution Plan provides that the Monitoring Committee shall consist of members nominated by SRA on one part and RP or any other member nominated by CoC on the other part, who shall act as chairman of the monitoring committee. The chairman shall be paid fee of Rs. 1,00,000/-per month during implementation period. 8. Steps to be taken by the concerned parties post approval of resolution plan by the Adjudicating Authority:

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9. NECESSARY COMPLIANCES AS PER THE CODE AND REGULATIONS THEREUNDER:

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10. PUFE (PREFERENTIAL, UNDERVALUED, FRAUDULENT AND EXTORTIONATE) TRANSACTIONS:

11. The RP has received a due diligence report on Section 29A of IBC from Advocate, Mr. Manoj Kumar Garg and has relied on the aforesaid Report and the declaration given by the Resolution Applicant and also verified Section 29A eligibility from his own sources. 12. RELIEFS, CONCESSIONS AND WAIVERS: i. As to all the waivers sought by the SRA as provided in the Resolution Plan, it is pertinent to refer to the decision of the Hon'ble Supreme Court in the matter of Embassy Property Development Private Limited v. State of Karnataka & Ors. in Civil Appeal No. 9170 of 2019. The relevant part of the judgement is reproduced herein below: "39. Another important aspect is that under Section 25 (2) (b) of IBC, 2016, the resolution professional is obliged to represent and act on behalf of the corporate debtor with third parties and exercise rights for the I.A. (PLAN) 10 (ND) 2025 IN C.P. IB 193 (ND) OF 2024 benefit of the corporate debtor in judicial, quasi-judicial and arbitration proceedings. Section 25(1) and 25(2)(b) reads as follows: 25. Duties of resolution professional (1) It shall be the duty of the resolution professional to preserve and protect the assets of the corporate debtor, including the continued business operations of the corporate debtor.

(2) For the purposes of sub-section (1), the resolution professional shall undertake the following actions: - (a) (b) Represent and act on behalf of the corporate debtor with third parties, exercise rights for the benefit of the corporate debtor in judicial, quasi-judicial and arbitration proceedings. This shows that wherever the corporate debtor has to exercise rights in judicial, quasi-judicial proceedings, the resolution professional cannot short-circuit the same and bring a claim before NCLT taking advantage of section 60(5). 40. Therefore, in the light of the statutory scheme as culled out from various provisions of the IBC, 2016 it is clear that wherever the corporate debtor has to exercise a right that falls outside the purview of the IBC, 2016 especially in the realm of the public law, they cannot, through the resolution professional, take a bypass and go before NCLT for the enforcement of such a right." ii. In the light of the decision of the Hon'ble Supreme Court in the Embassy Property Development Private Limited (Supra), as to the waiver, relief and concessions sought in the Resolution Plan, it is clarified that this Adjudicating Authority is not inclined towards granting any such relief prayed for except for what is provided in the Code itself.

However, the Successful Resolution Applicant may approach and file the necessary application before the I.A. (PLAN) 10 (ND) 2025 IN C.P. IB 193 (ND) OF 2024 necessary forum/authority in order to avail the necessary relief and concessions, in accordance with respective laws. 13. ANALYSIS AND FINDINGS: i. There is nothing on record, which suggests that the Resolution Plan dated 14.01.2025 as submitted by Ms. Darshna Rani and as approved by the Committee of Creditors in its 9th CoC meeting convened on 20.02.2025, contravenes any provision of law. ii. We do not find anything, which suggests any hurdle in the implementation of the Resolution Plan. iii. In so far as the approval of the Resolution Plan is concerned, this Adjudicating Authority is duty bound to follow the judgment of the Hon'ble Supreme Court in the matter of K. Sashidhar v. Indian Overseas Bank (2019) 12 SCC 150, wherein the scope and interference of the Adjudicating Authority in the process of the approval of the Resolution Plan is elaborated as follows: - “35. 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 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. 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

I.A. (PLAN) 10 (ND) 2025 IN C.P. IB 193 (ND) OF 2024 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.” iv. Also, the Hon'ble Supreme Court of India in the matter of Committee of Creditors of Essar Steel India Limited vs. Satish Kumar Gupta & Ors., Civil Appeal No. 8766-67 of 2019, vide its judgement dated 15.11.2019 has observed as follows: "38. This Regulation fleshes out Section 30(4) of the Code, making it clear that ultimately it is the commercial wisdom of the Committee of Creditors which operates to approve what is deemed by a majority of such creditors to be the best resolution plan, which is finally accepted after negotiation of its terms by such Committee with prospective resolution applicants."

I.A. (PLAN) 10 (ND) 2025 IN C.P. IB 193 (ND) OF 2024 v. Further, the Hon'ble Supreme Court in the matter of Jaypee Kensington Boulevard Apartments Welfare Association v. NBCC (India) Limited, (2022) 1 SCC 401 has held as under: “273.1. The adjudicating authority has limited jurisdiction in the matter of approval of a resolution plan, which is well-defined and circumscribed by Sections 38(2) and 31 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 Committee of Creditors. If, within its limited jurisdiction, the adjudicating authority finds 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 resubmission after satisfying the parameters delineated by the Code and exposited by this Court.' (emphasis supplied).” vi. The above view of the Hon'ble Supreme Court in Jaypee Kensington Boulevard Apartments Welfare Association v NBCC (India) Limited (Supra) is reaffirmed by the Hon'ble Supreme Court in its recent decision dated 21.11.2023 in the case of Ramkrishna Forgings Limited Vs Ravindra Loonkar, Resolution Professional of ACIL Limited & Anr., Civil Appeal No. 1527/2022. vii. Thus, from the judgments cited and the statutory framework of the Insolvency and Bankruptcy Code, 2016, it is evident that the scope of judicial review available to this Adjudicating Authority under Section 30(2) read with Section 31 is limited to assessing the compliance of the Resolution Plan with the prescribed legal requirements. This Authority is neither empowered nor obligated to delve into or evaluate the commercial wisdom of the Committee of Creditors (CoC), which is paramount and binding, provided it aligns with the provisions of the Code. Upon satisfaction that the proposed Resolution Plan

I.A. (PLAN) 10 (ND) 2025 IN C.P. IB 193 (ND) OF 2024 adheres to the statutory mandates, including equitable treatment of stakeholders and compliance with applicable laws, this Bench finds no impediment in granting its approval. 14. ORDER: i. Subject to the observations made in this order, the Resolution Plan dated 14.01.2025 submitted by Ms. Darshna Rani and as approved by the Committee of Creditors in its 9th CoC meeting convened on 20.02.2025 for a total plan value of 86,00,000/- (Rs. Eighty Six Lakhs only) along with affidavit and other documents connected to the Resolution Plan that have been filed by the SRA from time to time, is hereby approved. The Resolution Plan shall form part of this order. ii. The approved Resolution Plan as annexed shall be binding on all the stakeholders of the Corporate Debtor and become effective from the date of passing of this Order, and shall be implemented strictly as per the term of the plan and implementation schedule given therein. The Resolution Plan shall form part of the order. iii. The Monitoring Committee, as provided in the Resolution Plan shall be set up by the Applicant within 02 days of passing of this order, which shall take all necessary steps for expeditious implementation of the Resolution Plan as per approval. iv. The Moratorium imposed under section 14 of the Code shall cease to have effect from the date of this order. v. The Resolution Professional shall submit the records collected during the commencement of the proceedings to the Insolvency & Bankruptcy Board of India for their record. vi. The MoA and AoA of the Corporate Debtor shall be amended and filed with the RoC for information and record as prescribed. While approving the Resolution Plan as mentioned above, it is clarified that the Successful Resolution

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Applicant shall pursuant to the Resolution Plan approved under section 31(1) of the Code, 2016, obtain all the necessary approvals as may be required under any law for the time being in force within the period as provided for such in law. vii. A copy of this Order shall be filed by the Resolution Professional with the Registrar of Companies, NCT of Delhi & Haryana. viii. 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. ix. The Resolution Professional is further directed to hand over all records, licences, plans, approvals of premises/factories/documents and all other relevant records relating to the Corporate Debtor, available with it to the SRA to finalize and co-operate on the further line of action required for starting the operation and implementation of this Plan. The Resolution Applicant shall have access to all the records, documents and the premises through the Resolution Professional to finalize the further course of action required for starting and running the operations of the Corporate Debtor on a clean slate basis. x. The Registry is directed to send copies of the order forthwith to IBBI, all the parties and their Ld. Counsel for information and for taking necessary steps. xi. Certified copy of this order may be issued, if applied for, upon compliance with all requisite formalities.

-SD/- -SD/- ATUL CHATURVEDI MAHENDRA KHANDELWAL MEMBER (TECHNICAL) MEMBER (JUDICIAL)

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