Consortium Of Sakshi Chandna (Lead ... vs Mr. Anil Kumar Mittal Resolution ...

[Arising out of Order dated 05.12.2024 passed by the Adjudicating Authority (National Company Law Tribunal, Kolkata Bench, Kolkata), in I.A. (IB) No./2331/KB/2024 in C.P. (IB) No. 26/(KB)/2023]

IN THE MATTER OF: Consortium of Sakshi Chandna (Lead Member), P.P. Buildwell Private Limited & Kawal Kumar Gangwani Through its Authorised Representative Having its Address at: H. No. 1313, Sector- 4 Rewari, Haryana - 123401. ...Appellant

Versus

1. Mr. Anil Kumar Mittal Resolution Professional of Varutha Developers Private Limited Having its address at: Sector-2, Rajender Nagar, Sahibabad, Distt. Ghaziabad, Uttar Pradesh- 201005,

Also at: Resurgent Resolution Professionals LLP Unitech Business Zone, 7th Floor, Tower -C, The Close South, Sector-50, Gurugram, Haryana 122018. ...Respondent No. 1

2. Committee of Creditors of Varutha Developers Private Limited Through SREI Equipment Finance Limited Having its office at: D-2, 5th Floor, Southern Park, Saket Place, Saket, New Delhi- 110017. ...Respondent No. 2

Present: For Appellant : Mr. P. Nagesh, Sr. Advocate with Mr. Saurabh Kalia, Ms. Tanvi Bansal and Mr. Ravi Datta, Advocates. For Respondents : Mr. Abhijeet Sinha, Sr. Advocate with Mr. Swetank Ginodia, Ms. Malvi Dedhia, Ms. Mini Agarwal and Mr. Saikat Sarkar, Advocates for R- 1.

WITH

Company Appeal (AT) (Insolvency) No. 181 of 2025

[Arising out of Order dated 07.01.2025 passed by the Adjudicating Authority (National Company Law Tribunal, Division Bench, Court II, Kolkata), in I.A. (IB) (Plan) No. 21/KB/2024 in Company Petition (IB) No. 26/KB/2023]

IN THE MATTER OF: Consortium of Sakshi Chandna (Lead Member), P.P. Buildwell Private Limited & Kawal Kumar Gangwani Through its Lead Member Having its Address at: H. No. 1313, Sector- 4 Rewari, Haryana - 123401. ...Appellant

Versus

1. Mr. Anil Kumar Mittal Erstwhile Resolution Professional of Varutha Developers Private Limited Having its address at: Sector-2, Rajender Nagar, Sahibabad, Distt. Ghaziabad, Uttar Pradesh- 201005,

Also at: Resurgent Resolution Professionals LLP Unitech Business Zone, 7th Floor, Tower -C, The Close South, Sector-50, Gurugram, Haryana 122018. ...Respondent No. 1

2. Committee of Creditors of Varutha Developers Private Limited Through SREI Equipment Finance Limited Having its office at: D-2, 5th Floor, Southern Park, Saket Place, Saket, New Delhi- 110017. ...Respondent No. 2

3. Mangalam Multiplex Private Limited Through its Authorised Representative

Comp. App. (AT) (Ins.) No. 107 & 181 of 2025 2 of 28 Having its office at: Cabin-1, LGF, F-22, Sushant Shopping Arcade, Sushant Lok Phase - 1, Gurugram Haryana - 122002. ...Respondent No. 3

Present: For Appellant : Mr. P. Nagesh, Sr. Advocate with Mr. Saurabh Kalia, Ms. Tanvi Bansal and Mr. Ravi Datta, Advocates.

For Respondents : Mr. Abhijeet Sinha, Sr. Advocate with Mr. Swetank Ginodia, Ms. Malvi Dedhia, Ms. Mini Agarwal and Mr. Saikat Sarkar, Advocates for R- 1.

Mr. Arun Kathpalia, Sr. Advocate with Ms. Ruby Singh Ahuja, Ms. Aakriti Vohra, Ms. Roopali Gupta and Ms. Varsha Himatsingka, Advocates for R-3.

Mr. K. Datta, Sr. Advocate with Mr. Aditya Kanodia, Mr. Arjun Aggarwal, Mr. Akhil Nene, Mr. Aditya Kanodia, Mr. Anil Nene, Mr. Arjun Agarwal, Ms. Suparna Sardar, Advocates for R-2.

ORDER

ASHOK BHUSHAN, J.

These two Appeals by an Unsuccessful Resolution Applicant (SRA) has

been filed challenging the Order dated 05.12.2024 passed in I.A. (IB) No.

2331/KB/2024 in C.P. (IB) No. 26/(KB)/2023 and I.A. (IB) Plan No.

21/KB/2024 in C.P. (IB) No. 26/(KB)/2023 respectively. By Order dated

05.12.2024, I.A. No. 2331/KB/2024 has been held to be infructuous in view

of declaration of Respondent No. 3 - Mangalam Multiplex Pvt. Ltd. as SRA.

By Order dated 07.01.2025, Resolution Plan approved by Committee of

Creditors (CoC) has been approved. Appellant aggrieved by the above two

Orders has come up in this Appeal.

Comp. App. (AT) (Ins.) No. 107 & 181 of 2025 3 of 28

2. Brief background facts necessary to be noticed for deciding these two

Appeals are:

i. By Order dated 20.12.2023, Corporate Insolvency Resolution Process

(CIRP) against the Corporate Debtor - Varutha Developers Pvt. Ltd.

commenced on an Application filed by SREI Equipment Finance Ltd.,

the Financial Creditor.

ii. In response to 'Form-G' published by Resolution Professional (RP),

Expression of Interest (EoI) by several Applicant including the Appellant

and Respondent No. 3 were submitted.

iii. On 16.07.2024, Request for Resolution Plan (RFRP) and Information

Memorandum were shared with the Applicants.

iv. Appellant, Respondent No. 3 and other Applicants submitted their

Resolution Plan. On 01.10.2024, RP opened all the Resolution Plans

including the Appellant's Plan before the CoC.

v. The CoC decided to hold the challenge process for value maximisation.

vi. On 07.11.2024, RP shared the Negotiation Process Document with all

Resolution Applicant including the Appellant. Process of Negotiation

was outlined in the Process Document. On 07.11.2024, an email was

sent by the RP to all the Resolution Applicants requesting all the

Applicants to submit financial proposal as per Appendix 1 on or before

10:00 AM on 11.11.2024 (first bid). Email also informed that RP will

Comp. App. (AT) (Ins.) No. 107 & 181 of 2025 4 of 28 open the Appendix 1 in front of the respective Resolution Applicant,

CoC and other participants invited to attend the CoC on 11.11.2024.

vii. By email sent on 11.11.2024 at 10:19 AM, Applicants were informed

that Appendix 1 along with the Excel Sheet can be submitted by 11 AM

on 11.11.2024.

viii. On 11.11.2024 at 19:14 PM, the RP sent an email to all the Resolution

Applicant that Base Bid Price offered by H-1 Bidder is Rs.251.79 Crores.

ix. All the Applicants were called upon to improve financial proposal over

and above Base Bid Price by at least Rs.10 Crores. Second bid was to

be submitted latest by 12:00 Noon on 12.11.2024.

x. On 12.11.2024 at 11:55 AM, email was sent on behalf of the Appellant

to the RP referring to the email sent by RP requiring the Applicant to

increase bid by Rs.10 Crore. Attention of RP was invited to process of

Negotiation Clause I.

xi. Appellant by the email claimed that Appellant has immunity from

elimination in the next round and it is not necessary to increase the bid

price.

xii. RP replied the above email by email dated 12.11.2024 at 17:43 PM

informing that immunity granted from elimination under Clause I is

designed to apply until specific point in the Negotiation Process. It was

stated that at the current stage, this immunity is no longer operative

Comp. App. (AT) (Ins.) No. 107 & 181 of 2025 5 of 28 and the remaining participants are required to adhere to the specified

bid of Rs.10 Crores.

xiii. On 13.11.2024 at 09:45 AM, the RP informed all Resolution Applicants

that considering maximisation of value for the Stakeholders, CoC has

permitted extension of time for submission of bid 2 in the Negotiation

Process up to end on 14.11.2024.

xiv. On 14.11.2024 at 01:44 PM, RP sent an email to all Applicant informing

that immunity is no longer operative as only 2 Bidders remain in the

Negotiation Process participants are requested to participate in the

second round and submit the Financial Proposal with not less than

specified bid by the end of 14.11.2024. Certain information and

documents were also listed in the e-mail which were required to be

submitted.

xv. RP on 15.11.2024 sent an email to the Appellant asking the Appellant

to remove typographical error and revised Appendix 1 in order to remove

the inconsistency with the NPV calculation Excel Sheet. Reference of

certain documents which were required by email dated 14.11.2024 was

also mentioned. Appellant was asked to submit by 04:00 PM on

15.11.2024, after which evaluation of second bid shall commence.

xvi. The Appellant sent an email forwarding a revised Appendix 1. By

revised Appendix, the Appellants has provided total NPV at Rs.263.18

Crore.

Comp. App. (AT) (Ins.) No. 107 & 181 of 2025 6 of 28 xvii. On 15.11.2024 at 09:31 PM, Appellant wrote to the RP that Appendix 1

for second round has already been shared but RP has not shared the

resolution of the second round as of now.

xviii. On 16.11.2024, RP again wrote to the Appellant asking to submit all

the pending documents no later than 18.11.2024 by 12:00 PM.

xix. On 18.11.2024 at 07:31, RP wrote to the Appellant that following the

second round of Negotiation Process a bid of Rs.265.65 Crore has been

declared the highest bid in the Negotiation Process.

xx. It was informed that Negotiation Process was completed and Appellant

to submit the final Resolution Plan latest by 21.11.2024.

xxi. After receiving the email dated 18.11.2024, the Appellant filed an I.A.

No.2331/2024 before the Adjudicating Authority praying for setting

aside the email dated 18.11.2024 issued by the RP and further seeking

direction to RP to conduct third round of Negotiation.

xxii. Resolution Plan received in the process were discussed and deliberated

by the CoC in 16th CoC Meeting held on 26.11.2024. The CoC by 100%

voting share has approved the Resolution Plan submitted by Mangalam

Multiplex Pvt. Ltd. who was declared as the SRA. Letter of Intent (LoI)

was issued by RP to SRA on 04.12.2024, which was unconditionally

accepted by SRA on 05.12.2024.

xxiii. The I.A. No. 2331/2024 came for consideration before the Adjudicating

Authority on 05.12.2024. Before the Adjudicating Authority, the

Comp. App. (AT) (Ins.) No. 107 & 181 of 2025 7 of 28 communication dated 04.12.2024 issued by the RP to SRA was placed.

Adjudicating Authority noticing the communication dated 04.12.2024

by which SRA was declared and LoI was issued, observed that nothing

survives in the Application. Application was dismissed as infructuous.

Appellant aggrieved by the said Order has filed Comp. App. (AT) (Ins.)

No. 107/2025.

xxiv. The RP filed a Plan approval Application being I.A. (IB) Plan No.

21/(KB)/2024 on 12.12.2024 before the Adjudicating Authority praying

for approval of the Resolution Plan.

xxv. On 16.12.2024, Plan approval Application was listed, which was heard

and Order was reserved.

xxvi. On 07.01.2025, Order was passed by the Adjudicating Authority

approving the Resolution Plan and allowing I.A. (IB) Plan No.

21/(KB)/2024. Aggrieved by the Order dated 07.01.2025, Comp. App.

(AT) (Ins.) No. 181/2025 has been filed.

3. We have heard Learned Sr. Counsel Mr. P. Nagesh appearing for the

Appellant. Learned Sr. Counsel Mr. Abhijeet Sinha has appeared for the RP.

Learned Sr. Counsel Mr. Krishnendu Dutta has appeared for the CoC.

4. Learned Sr. Counsel Mr. P. Nagesh appearing for the Appellant

challenging the Orders passed by the Adjudicating Authority dated

05.12.2024 and 07.01.2025 submits that RP conducted the Negotiation

Process contrary to the Negotiation Process Document. The Appellant's first

bid for an amount of Rs. 251.79 Crore was declared as H-1 Bidder in the first

Comp. App. (AT) (Ins.) No. 107 & 181 of 2025 8 of 28 round of Negotiation. Appellant had immunity from participating in the

second round by virtue of Clause I of the Process Negotiation Document, he

being the highest bidder of the first round. The RP has concluded the

Negotiation Process declaring the Mangalam Multiplex Pvt. Ltd. as highest

bidder of second round without giving an opportunity to the Appellant to

match the highest bid of second round. The entire process conducted by the

RP was in violation of Process Negotiation Document. RP arbitrarily informed

the Appellant by email dated 12.11.2024 the immunity granted to H-1 Bidder

was no longer operative. Had given the opportunity, Appellant could have

increased its bid to match with bid of Mangalam Multiplex Pvt. Ltd. RP kept

on shifting timelines for submission of requisite documents. Appellant has

communicated to the RP that he is looking forward to round 3 and is willing

to increase the Plan value substantially. There is violation of Clause K also

in the Process. Contravention of Process Negotiation Document amounts

contraventions of the provisions of law. By not giving the opportunity to the

Appellant to match the offer of SRA, there is a breach of value maximisation

principle resulting in prejudice to Stakeholders. Adjudicating Authority

rejected I.A. filed by the Appellant being I.A. 2331/KB/2024 as infructuous

whereas all issued were required to be decided in the I.A. Adjudicating

Authority has erroneously observed that final Resolution Plan was received

from only one Resolution Applicant i.e., Mangalam Multiplex Pvt. Ltd.,

whereas Negotiation Process was ongoing until at least 18.11.2024. There

being violation of Clause I & K of the Process Negotiation Document, the entire

Comp. App. (AT) (Ins.) No. 107 & 181 of 2025 9 of 28 process deserves to be set aside including the Order approving the Resolution

Plan of the SRA.

5. Learned Counsel for the RP refuting the submissions of the Appellant

submits that the immunity as claimed by the Appellant as per Clause I of the

Process Negotiation Document was available till only two Bidders are left in

the fray. In the second round of Negotiation there were only two Bidders left

in the fray hence immunity as claimed by the Appellant was not available

which was communicated to the Appellant by the RP. Email was sent on

14.11.2024 by the RP informing that immunity is no longer available. The

Appellant has submitted revised Appendix 1 giving commercial offer of Rs.

263.18 Crores which clearly means that he has given offer to participate in

the Negotiation Process of the second round. The SRA having given offer of

Rs. 265.66 Crore was declared H-1 Bidder of second round which was

communicated to the Appellant by email dated 18.11.2024. CoC with 100%

Vote Shares in its Meeting held on 26.11.2024 has approved the Resolution

Plan of Mangalam Multiplex Private Limited. Thereafter, the RP filed

Application for approval. There is no breach or violation of Process

Negotiation Document as alleged by the Appellant. The CoC in its commercial

wisdom has approved the Plan of SRA. Negotiation Process has rightly been

completed in the second round. There was no occasion to hold third round

as claimed by the Appellant. Only two Bidders were left, who had given their

revised commercial offers. The second round was completed in which H-1

was declared. The RP has conducted the Negotiation Process in accordance

with the Process Document. It was open for the Appellant to give his best

Comp. App. (AT) (Ins.) No. 107 & 181 of 2025 10 of 28 revised offer in second round. The fact that in second round, the revised offer

has been given by the Appellant itself indicates that Appellant was well aware

that no immunity is available to the Appellant in the second round.

6. Learned Sr. Counsel Mr. Krishnendu Dutta appearing for the CoC

supported the Impugned Orders and submits that the Negotiation Process

was conducted in accordance with the Process Negotiation Document. RP has

replied all emails received from Appellant during currency of Negotiation

Process. Appellant was declared highest Bidder of first round conducted on

12.11.2024. For second round of Negotiation Process, Appellant was asked

to revised its offer by Rs.10 Crore, at least, two Bidders having been left in the

fray. Immunity as contemplated in Clause I was not available. Appellant did

submit his revised offer. The CoC in its Meeting held on 26.11.2024

deliberated all aspects of the matter, including the commercial offers of the

SRA and the Appellant and with 100% Vote Shares has approved the

Resolution Plan of Mangalam Multiplex Private Limited. No grounds have

been made out to interfere with the commercial decision of the CoC.

7. We have considered the submissions of the Counsel for the Parties and

perused the records.

8. The main submission advanced by the Appellant is regarding breach of

Process Negotiation Document. We need to first notice certain clauses of the

Process Negotiation Document which has been referred to and relied by the

Appellant. There is no dispute between the Parties that Applicants were

informed that first bid shall not be less than Rs.250 Crores (on NPV basis)

Comp. App. (AT) (Ins.) No. 107 & 181 of 2025 11 of 28 which was treated to be held to be Base Bid Price. The process of round two,

following is provided:

"Round 2:

(B) Before the commencement of the Negotiation Process, the Resolution Professional shall disclose only the highest amount received as the Base Price (defined hereunder), without disclosing the name of the Resolution Applicant ("H1 Bidder"), based on the Financial Proposal submitted by the Resolution Applicants in Appendix 1 on the 1st Bid on or before _________2024. For abundant clarity:

• "Base Bid Price" shall mean the highest net present value ("NPV") amongst all the Financial Proposals (as per Appendix 1) submitted by the Resolution Applicants on 2024, under respective round of Negotiation, calculated in accordance with the provisions of the RFRP/or this Process Note for Negotiation.

• "Total Resolution Plan Amount" shall mean the total amount payable to all stakeholders (including unpaid CIRP cost) under the resolution plan submitted by the Resolution Applicants. • "Final Resolution Plan" shall mean the Resolution Plan last submitted by a Resolution Applicant, the clarifications/further documents submitted by it after submitting the Resolution Plan which was opened on Oct 1, 2024, in conjunction with the financial offer last submitted in the Negotiation Process, whether or not the concerned Resolution Applicant submits the Resolution Plan after incorporating such changes.

• "Initial Resolution Plan"- shall mean the Resolution Plan submitted by the Resolution Applicant and opened in the presence of CoC and the respective Resolution Applicants, on Oct 1, 2024.

9. With regard to subsequent rounds, Clause I & K, on which the reliance

has been placed, are as follows:

"(I) The Base Bidder in the First round and Highest bidder(s) ("H1 Bidder") of each subsequent round

Comp. App. (AT) (Ins.) No. 107 & 181 of 2025

12 of 28 ("H2/H3/... Bidder"} will have immunity from elimination in the next round even if it does not increase its bid by specified amount, till only two bidders are left in the fray. For abundant clarity, if more than one bidder is Highest Bidder in a particular round of Negotiation Process, then all such bidders will get such immunity, till there are only two bidders left in the fray, unless all the RAs have equal Bid amount, in such an event no Bidder shall get any immunity from elimination.

(K) The aforementioned process shall be followed for each bidding round until all the Resolution Applicants express their inability, in writing, to improve their commercial revised proposal i.e. if no improved financial proposal is received from any of the Resolution Applicants, then the Negotiation Process will come to a closure. Such bidding process if required will continue for further period, till the closure is achieved. Such closure will be intimated to all the Resolution Applicants over their respective emails. It may be noted that if such Negotiation Process continues beyond reasonable hours (in the sale opinion of the CoC) оп ___________2024, the same will be resumed on the immediately succeeding business day

(s) or as may be informed by the Resolution Professional."

10. Along with the Process Negotiation Document in Appendix 1, format of

commercial offer was also provided in which Applicants have to give their

commercial offers. The email after sharing the Process Negotiation Document

intimated to all Resolution Applicant that Negotiation Process will be held on

11.11.2024, starting 12:00 noon and all Applicants were requested to submit

their financial proposals as per Appendix 1. It is undisputed that in round

one, the bid submitted by Appellant of Rs.251.79 Crores was declared as

highest bidder and which was declared as H-1 Bidder and Base Price. On

11.11.2024 at 19:14 PM, the RP issued email to all Resolution Applicants,

which is as follows:

Comp. App. (AT) (Ins.) No. 107 & 181 of 2025 13 of 28 "From: Varutha cirp.varutha@gmail.com Sent: 11 November 2024 19:14 Subject: Process for Negotiation- Round 2 | Varutha Developers Private Limited Dear RA, This is to inform you that the Base Bid Price offered by the H1 Bidder is INR 251.79 Crores (NPV Factoring the payment to the Creditors).

You are hereby called upon to improve your financial proposal over and above the Base Bid Price by at least INR 10 Crores (NPV Factoring towards the payment to the Creditors) and submit your 2nd Bid latest by 12:00 Noon IST on 12.11.2024 as per Appendix 1 alongwith the NPV Calculation Excel Sheet.

Kindly note, the terms and conditions as mentioned in the Process for Negotiation Documents shall remain applicable and unchanged for all the subsequent Bid Rounds. Thanks & Regards Anil Kumar Mittal IBBI/IPA-002/IP-N00742/2018-2019/12263 Resolution Professional Varutha Developers Private Limited (In CIRP) IBBI Reg Add: 5/99, Sector-2, Rajender Nagar, Sahibabad, Distt. Ghaziabad, Uttar Pradesh-201005 Correspondence Add: C/o Resurgent Resolution Professionals LLP Unitech Business Zone, 7th Floor, Tower -C, The Close South, Sector-50, Gurugram, Haryana 122018 E-Mail Id: mittalanil.ubi@gmail.com | cirp.varutha@gmail.com AFA No.: AA2/12263/02/311225/203459 | Valid upto 31.12.2025"

11. On 12.11.2024 at 11:55 AM, an email was sent on behalf of the

Appellant to the RP informing that Appellant has immunity from elimination

Comp. App. (AT) (Ins.) No. 107 & 181 of 2025 14 of 28 in the next round and it is not necessary for the Appellant to increase the bid.

It is useful to extract the said email, which is as follows:

"On Tue, Nov 12, 2024 at 11:55AM Manish chandna manish.chandna@mcaadvisor.com wrote: Dear Anil Mittal Ji, Please refer to trail mail below, wherein I have been declared as H-1 bidder.

As per your mail, I am required to increase my BID for sum of Rs. 10.00 Crore.

In this regard your attention is required "Process for Negotiation" which was forwarded to me by dated 07/11/2024.

As per "paragraph I on Page No. 9 it has mentioned that "The Base Bidder in the First round and Highest bidder(s) ("H1 Bidder") of each subsequent round ("H2/H3/... Bidder") will have immunity from elimination in the next round even if it does not increase its bid by specified amount, till only two bidders are left in the fray. For abundant clarity, if more than one bidder is Highest Bidder in a particular round of Negotiation Process, then all such bidders will get such immunity, till there are only two bidders left in the fray, unless all the RAs have equal Bid amount, in such an event no Bidder shall get any Immunity from elimination".

In view of above, we have immunity from elimination in the next round and it is not necessary to increase the BID Price at this stage.

Kindly confirm that our understanding of reading of above paragraph.

We are waiting for your reply.

Screenshot of Process for Negotiation is attached. (1) The Base Bidder in the First round and Highest bidder(s) ("H1 Bidder") of each subsequent round ("H2/H3/... Bidder") will have immunity from elimination in the next round even if it does not increase its bid by specified amount, till only two bidders are left in the fray. For abundant clarity, if

Comp. App. (AT) (Ins.) No. 107 & 181 of 2025 15 of 28 more than one bidder is Highest Bidder in a particular round of Negotiation Process, then all such bidders will get such immunity, till there are only two bidders left in the fray, unless all the RAs have equal Bid amount, in such an event no Bidder shall get any immunity from elimination."

12. With respect to the email sent by the Appellant to the RP, RP sent a

reply on 12.11.2024, 17:43 PM that the immunity is no longer available at

this stage and the Appellant may give enhanced bid. The reply sent on

12.11.2024 by the RP, is as follows:

"From: Varutha cirp.varutha@gmail.com Sent: 12 November 2024 17:43 To: Manish chandna manish.chandna@mcaadvisor.com Subject: Re: Process for Negotiation-Round 2 | Varutha Developers Private Limited Dear Resolution Applicant, With reference to your previous email, we hereby clarify the applicability of the Immunity clause for the H1 bidder in subsequent rounds of the bidding process.

As per the provisions outlined in Clause I on Page 9, immunity from elimination in the next round is granted to the Base Bidder in the first round and the Highest Bidder(s) ("H1 Bidder") in each subsequent round, provided that multiple bidders remain active in the process. Specifically, the clause states:

"(1) The Base Bidder in the First round and Highest bidder(s) ("H1 Bidder") of each subsequent round ("H2/H3/... Bidder") will have immunity from elimination in the next round even if it does not increase its bid by a specified amount, till only two bidders are left in the fray. For abundant clarity, if more than one bidder is the Highest Bidder in a particular round of the Negotiation Process, then all such bidders will receive this immunity, until only two bidders remain in the fray, unless all RAs have equal bid amounts, in which case no bidder shall receive immunity from elimination.

Comp. App. (AT) (Ins.) No. 107 & 181 of 2025 16 of 28 In accordance with the clause, the immunity from elimination granted to the Highest Bidder(s) under this clause is designed to apply up until a specific point in the negotiation process. At the current stage, this immunity is no longer operative, and the remaining participants are required to adhere to the specified bid increase of Rs. 10.00 Crore, as communicated previously.

Should the Resolution Applicant choose not to submit an enhanced bid, the latest submitted financial proposal will be considered as the final offer and evaluated accordingly.

This clarification is provided for your reference and consideration.

Thanks & Regards Anil Kumar Mittal IBBI/IPA-002/IP-N00742/2018-2019/12263 Resolution Professional Varutha Developers Private Limited (In CIRP) IBBI Reg Add: 5/99, Sector-2, Rajender Nagar, Sahibabad, Distt. Ghaziabad, Uttar Pradesh-201005 Correspondence Add: C/o Resurgent Resolution Professionals LLP Unitech Business Zone, 7th Floor, Tower -C, The Close South, Sector-50, Gurugram, Haryana 122018 E-Mail Id: mittalanil.ubi@gmail.com | cirp.varutha@gmail.com AFA No.: AA2/12263/02/311225/203459 | Valid upto 31.12.2025"

13. All Resolution Applicants were informed by the RP on 13.11.2024, that

CoC has permitted extension of time for submission of bid 2 in the Negotiation

Process up to end of 14.11.2024. On 14.11.2024, RP has sent an email to all

Resolution Applicants, which is as follows:

"From: Varutha cirp.varutha@gmail.com

Comp. App. (AT) (Ins.) No. 107 & 181 of 2025

17 of 28 Sent: Thursday November 14, 2024 1:44:55 PM To: PMO_OFFICE/Srei pmooffice@srel.com; Shamik Roy /CEO_office/Srei shamik.roy@srei.com Cc: Anil Mittal mittalanil.ubi@gmail.com; Tanya Anand tanya.anand@resurgentrp.com; Sunil Gupta sunil.gupta@resurgentrp.com Subject: Re: Extension of time for second round in Process of Negotiation Dear Resolution Applicants, As we advance to the second round of the negotiation process, we hereby invite your active participation in this stage.

The Base Bid Price for the 2nd Round is established at INR 251.79 Crores (Net Present Value (NPV), factoring payment to the creditors).

Please note that, as per Clause (1) on Page 9 of the Process Note for Negotiation, the immunity from elimination previously granted to the Highest Bidder(s) applies only until a specific stage in the negotiation process. At this current stage, this immunity is no longer operative, as only two bidders remain in the negotiation process. Thus, the participants are requested to participate in the second round and submit the financial proposal with not less than the specified bid threshold by today end of the day (23:59 Hours, 14.11.2024), In case the Resolution Applicant submits a financial proposal (as prescribed in the Process Document) below the specified threshold or chooses not to submit a financial proposal, in the second round, the most recent financial proposal submitted will be considered final and evaluated on that basis as per Clause (J) on Page 9 of Note for Negotiation Process, Additionally, request all Resolution Applicants to submit the following information and documentation- either alongside their second bid or with their mail for non-participation. This will enable us to assess each applicant's financial readiness and commitment to the resolution process.

1. Statement of Available Funds: A detailed statement outfining the current free cash and bank

Comp. App. (AT) (Ins.) No. 107 & 181 of 2025 18 of 28 balance or cash equivalents that can be deployed towards the overall resolution plan commitments.

2. Fund Commitment Documentation: In the event of a defferred payment structure, please include details of the financial security arrangements you propose to secure these obligations. This should include commitment letters or other binding documentation evidencing your financial tie-ups with banks, NBFCs, Flis, or other funding sources, affirming the adequacy and certainty of funding for the proposed resolution.

3. Security to Financial Creditors in Case of Deferred Payments: Details of the security you intend to offer to the financial creditors in the event of any deferred payment structure.

4. Financial capability of the bidder-CA certified Net-worth statement of the bidder(s) as on 31 March 2024 оr later.

5. Authorizations to participate in the process- Board resolutions or authorizations to the authorized representative of the bidder.

These documents are essential for us to thoroughly evaluate your financial proposal in the Negotiation Process.

We look forward to your timely submission.

Thanks & Regards Anil Kumar Mittal"

14. The Appellant was again on 15.11.2024 informed by the RP asking

certain documents required. The Appellant has submitted its revised

commercial offer and sent the revised Appendix 1 offering total NPV of

Rs.263.18 Crores. RP on 18.11.2024, informed the Appellant that in the

second round of Negotiation Process, bid of 265.65 Crores has been held to

be H-1 Bidder which has been declared by the CoC. Resolution Plan was

asked to submit by 21.11.2024. Email dated 18.11.2024 was subject to

Comp. App. (AT) (Ins.) No. 107 & 181 of 2025 19 of 28 challenge by the Appellant in I.A.2331/2024. It is useful to extract the entire

email sent by the RP, which is as follows:

"From: Varutha cirp.varutha@gmail.com Sent: Monday, November 18, 2024 7:31:59 PM To: Manish chandna manish.chandna@mcaadvisor.com; PMO_OFFICE/Sreipmooffice@srei.com: Shamik Roy /CEO_office /Srei shamik.roy@srei.com CC: Anil Mittal mittalanil.ubi@gmail.com; Sunil Gupta sunil.gupta@resurgentrp.com; Tanya Anand tanya.anand@resurgentrp.com Subject: End of Negotiation Process i Submission of Final Resolution Plan I Varutha Developers Private Limited Dear RA, We write to inform you that following the second round of the Negotiation Process, a bid of INR 265.65 Crores on a Net Present Value basis factoring payments to the Creditors (with a total resolution plan amount of INR 310 Crores for Creditors) submitted by another RA, has been declared as the highest bid in the Negotiation Process.

This is to inform you that the negotiation process as per the RFRP and the Process Note for Negotiation is completed and H1 Bidder has been declared by the CoC.

The value of your last bid, on Net Present Value basis factoring payments to the Creditors, was found to be lower than the abovementioned highest bid. Further, the RP in consultation with the CoC has requested you via multiple e-mails to submit documentary evidence in respect of your ability to make payment of the incremental bid value. However, you have failed to submit the necessary documentary evidence to the satisfaction of the CoC.

We request you to submit the Final Resolution Plan latest by 21 November 2024, 5:00 PM IST after incorporating: (1) the clarifications submitted by you on

Comp. App. (AT) (Ins.) No. 107 & 181 of 2025 20 of 28 19.10.2024 and (ii) the last financial proposal submitted by you in the Negotiation Process. Please note that in case any Resolution Applicant fails to adhere to the timelines set out above, the COC shall have the right and discretion to proceed without considering the clarifications and revised offer of the Resolution Applicant.

This is without prejudice to all rights of the RP and the CoC, which are expressly reserved. Regards Thanks & Regards Anil Kumar Mittal IBBI/IPA-002/IP-N00742/2018-2019/12263 Resolution Professional Varutha Developers Private Limited (In CIRP) IBBI Reg Add: 5/99, Sector-2, Rajender Nagar, Sahibabad, Distt, Ghaziabad, Uttar Pradesh-201005 Correspondence Add: C/o Resurgent Resolution Professionals LLP Unitech Business Zone, 7th Floor, Tower -C, The Close South, Sector-50, Gurugram, Haryana 122018 E-Mail Id: mittalanil.ubi@gmail.com | cirp.varutha@gmail.com AFA No.: AA2/12263/02/311225/203459 | Valid upto 31.12.2025"

15. It was subsequent to the said email dated 18.11.2024 the IA was filed.

In the I.A. which was filed by the Appellant, following prayers were made:

"1. Kindly set aside the Email dated 18.11.2023 issued by the Resolution Professional titled End of Negotiation Process issued contrary to the Negotiation Process Document;

2. Direct the Resolution Professional Respondent No. 1 to conduct the 3rd Round of Negotiations in terms of the Negotiation Process Document shared vide Email dated 07.11.2004;

3. Direct the Resolution Professional to allow the Applicant herein to further negotiate with the CoC and submit a Revised Financial Proposal in terms of the Negotiation Process Document;

Comp. App. (AT) (Ins.) No. 107 & 181 of 2025 21 of 28

4. During the pendency of the present application, grant ex-parte ad-interim restrain against the Respondents from taking any steps or action pursuant to the impugned email dated 18.11.2024 and/or restrain the Respondents to not to take any further steps for approval of any resolution plan;"

16. Now we come to Clause I & K as extracted above, violation of which is

claimed to have been committed by the RP as per submissions advanced by

the Appellant. First sentence of Clause I reads "the base Bidder in the first

round and the highest Bidder (H-1 Bidder) of each subsequent round (H-2 and

H-3/Bidder) will have immunity from elimination in the next round, even if does

not increase its bid by specified amount, till only two Bidders are left in the

fray". The above Clause clearly indicates that immunity is from elimination

as where till only two Bidders are left in the fray. It is an admitted fact

that Appellant was declared the highest Bidder in first round after having

given highest bid of Rs.251.79 Crores. For the second round, email was sent

by RP to all Applicant to submit their commercial offer. At 11:55 AM on

12.11.2024 email was sent by Appellant, raising the issue that he being

highest bidder of first round has immunity to participate in the second round.

The said email was immediately answered by the RP on the same day,

informing that at the current stage, immunity is no longer operative and

remaining participants are required to adhere to the specified bid of Rs.10

Crores. Appellant was asked to increase his bid. Appellant, thus on

12.11.2024 itself which was beginning of the second round was intimated that

immunity is no longer available. The timeline for submitting the bid in second

round of Negotiation was extended till the end of day of 14.11.2024 and

14.11.2024, RP has informed that only two Bidders are remained in the

Comp. App. (AT) (Ins.) No. 107 & 181 of 2025 22 of 28 Negotiation Process hence, participants are required to participate in second

round and submit a financial proposal with not less than specified threshold

by today end, which email we have already extracted above. The Appellant

has submitted the revised Appendix 1, containing an offer of total NPV of

Rs.263.18 Crores. It was on 18.11.2024, the RP has sent emails to Appellant

for asking certain documents. On 18.11.2024, the RP has informed the

Appellant that in second round of Negotiation Process bid of Rs.265.65 Crores

was declared as highest bid. All the Applicants were asked to submit final

Resolution Plan by 21.11.2024.

17. The submission of the Appellant that he has immunity to participate in

the second round by virtue of Clause I, does not commend us. The fact

remains that only two Bidders were left in fray i.e., Appellant and Respondent

No.3, the SRA and RP on 12.11.2024 itself has intimated to the Appellant that

the immunity is not available to the Appellant from not participating in the

second round, when only two Bidders were left in the fray the immunity does

not continue, which is contemplated by Clause I itself. Further, the fact

remains that Appellant has submitted his revised offer for second round,

which is matter of record.

18. Present is not a case where Appellant has not submitted his revised

commercial offer. Appellant being well aware that there is no immunity for

the Appellant from not participating in the second round has submitted its

commercial offer Rs.263.18 Crores. The Process as noticed above are not

Process of simultaneous bidding, rather Applicant were requested to submit

the best commercial offer in Appendix 1 for the second round, by increasing

Comp. App. (AT) (Ins.) No. 107 & 181 of 2025 23 of 28 it by not less than Rs.10 Crores. It was open for all Resolution Applicants to

submit their best offers in the second round. Appellant has submitted its

offer Rs.263.18 Crores, whereas SRA has submitted its offer of Rs.265.66

Crores. We, thus, do not find any error in declaration of SRA as H-1 Bidder

of the second round. The Appellant submission that RP arbitrarily declared

completion of second round on 15.11.2024, whereas Appellant ought to have

been given opportunity to participate in the third round. We are of the view

that only two Resolution Applicants being in fray and both having given

commercial revised offer, there was no occasion for conducting any third

round, and since there was no immunity to the Appellant from participating

in the second round, there was no occasion of conduct of third round as

contended by the Appellant. The closure of round was achieved in the second

round itself, both the Applicants have submitted their revised commercial

offer. It is true that in event the Appellant had immunity from elimination for

second round, it could have insisted for conduct of third round, but since only

two Bidders were left, there was no immunity in second round for the

Appellant which was communicated to it during the process itself.

19. The CoC in its CoC Meeting held on 26.11.2024, having approved the

Resolution Plan of the SRA and the RP immediately issued a LoI dated

04.12.2024 to the SRA, which was brought into the notice of the Court when

I.A. filed by the Appellant came for consideration. Adjudicating Authority has

extracted the entire LoI dated 04.12.2024 in its Order and noticing the LoI

has observed that nothing survives for consideration.

Comp. App. (AT) (Ins.) No. 107 & 181 of 2025 24 of 28

20. The Adjudicating Authority while approving the Resolution Plan has

noticed the process of Negotiation. As noted above the process of challenge

process, it has noticed that all 6 Plans were placed before the CoC for voting

and voting was conducted on 04.12.2024 when the Plan of SRA was approved

with. In Paragraphs 42 to 45, Adjudicating Authority made following

observations:

"42. Round 1 of the Negotiation Process was concluded on 11th November 2024. Subsequently, round 2 of the Negotiation Process was concluded on 15th November 2024 wherein Mangalam was declared as the H1 bidder. After the conclusion of the Negotiation Process, all the RAs were communicated to submit their final Resolution Plans till 21st November, 2024. However, the Final Resolution Plan was received from only one RA i.e., Mangalam.

43. Accordingly, all six (6) Plans were placed before the CoC for voting and the voting on the Final Resolution Plans was concluded on 04.12.2024. The voting took place and/or was conducted as per Regulation 25(5) read with Regulation 26 of the CIRP Regulations.

44. Since, Mangalam Multiplex Private Limited obtained the highest affirmative vote of the CoC, its resolution plan dated 21st November 2024 and revised on 26th November 2024 was duly approved by the CoC under Section 30(4) of the Code read with Regulation 39(3B) of the CIRP Regulations. Mangalam was declared as the Successful Resolution Applicant and the Letter of Intent dated 4th December 2024 was accordingly issued to Mangalam.

45. Thereafter, Mangalam submitted unconditionally accepted Letter of Intent on 5th December 2024 along with the Performance Security Deposit in the form of a Bank Guarantee amounting to Rs. 62,20,00,000/- in accordance with regulation 36B(4A) of the CIRP Regulations."

21. The CoC having approved Resolution Plan submitted by SRA it being

found compliant with provisions, Adjudicating Authority has also relied and

Comp. App. (AT) (Ins.) No. 107 & 181 of 2025 25 of 28 referred to the Judgement of the Hon'ble Supreme Court in the matter of 'K.

Sashidhar' Vs. 'Indian Overseas Bank & Ors.' reported in (2019) 12 SCC

150. Hon'ble Supreme Court in Paragraph 35 has made following

observations:

"35. The stage at which the dispute concerning the respective corporate debtors (KS&PIPL and IIL) had reached the adjudicating authority (NCLT) is ascribable to Section 30(4) of the I&B Code, which, at the relevant time in October 2017, read thus:

"30. (4) The Committee of Creditors may approve a resolution plan by a vote of not less than seventy-five per cent of voting share of the financial creditors."

If CoC had approved the resolution plan by requisite per cent of voting share, then as per Section 30(6) of the I&B 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 (NCLT) is required to satisfy itself that the resolution plan as approved by CoC meets the requirements specified in Section 30(2). No more and no less. This is explicitly spelt out in Section 31 of the I&B Code, which read thus (as in October 2017):

"31. Approval of resolution plan.--(1) If the adjudicating authority is satisfied that the resolution plan as approved by the Committee of Creditors under sub-section (4) of Section 30 meets the requirements as referred to in sub- section (2) of Section 30, it shall by order approve the resolution plan which shall be binding on the corporate debtor and its employees, members, creditors, guarantors and other stakeholders involved in the resolution plan.

(2) Where the adjudicating authority is satisfied that the resolution plan does not conform to the requirements referred to in sub-section (1), it may, by an order, reject the resolution plan.

Comp. App. (AT) (Ins.) No. 107 & 181 of 2025 26 of 28 (3) After the order of approval under sub-section (1)--

(a) the moratorium order passed by the adjudicating authority under Section 14 shall cease to have effect; and

(b) the resolution professional shall forward all records relating to the conduct of the corporate insolvency resolution process and the resolution plan to the Board to be recorded on its database."

22. It is now settled law that Adjudicating Authority has very limited

jurisdiction in matter of the approval of Resolution Plan. The interference

with the commercial wisdom of the CoC is permissible only when the

Resolution Plan is not in compliance of Section 30(2) and Section 31 of the

IBC. Present is not a case, where any submission is made that Resolution

Plan submitted by the SRA is non-compliant of Section 30(2). We having

looked into the Process Negotiation Document and the process which was

followed for Negotiation in first and second round and having looked into the

email exchanged between the Appellant and the RP are satisfied that RP did

not commit any error in conduct of the second round of the Negotiation

Process. There was no immunity to the Appellant to participate in the second

round since only two Bidders were left in the fray which was communicated

to the Appellant on 12.11.2024. Further, Appellant has also submitted its

revised commercial offer of Rs.263.18 Crores, both offers were looked into

while declaring H-1 of the second round the Mangalam Multiplex Pvt Ltd was

declared H-1 of second round who had given offer of Rs.265.66 Crores.

23. We, thus do not find any violation of the Negotiation Process done by

the RP, second round of Negotiation Process was done in accordance with the

Comp. App. (AT) (Ins.) No. 107 & 181 of 2025 27 of 28 process negotiation document. The Committee of Creditors had evaluated all

Resolution Plan including the Appellant and having approved the Resolution

Plan of the Mangalam Multiplex Private Limited with 100% vote shares. We

do not find any error in the Order of the Adjudicating Authority approving the

Resolution Plan on the submissions which has been advanced by the

Appellant.

24. In view of the foregoing discussions, we do not find any good ground to

interfere with the Orders of the Adjudicating Authority dated 05.12.2024 and

07.01.2025 challenged in these two Appeals. In result, both the Appeals are

dismissed.

[Justice Ashok Bhushan] Chairperson

[Barun Mitra] Member (Technical)

[Arun Baroka] Member (Technical)

NEW DELHI

11th February, 2025

himanshu

Comp. App. (AT) (Ins.) No. 107 & 181 of 2025 28 of 28