In the matter of KND Engineering Technologies Ltd.

SubrataSarkar …Operational Creditor Versus KNDEngineering Technologies Limited … Corporate Debtor -And- IA(IB) No.633/KB/2021 Applicationundersection 33(3) read with section 74ofInsolvency & Bankruptcy Code,2016 Inthematter of: Indian Bank …Applicant Versus 1. KND Engineering Technologies 2. PNDInfrastructure PrivateLimited 3. Mr. PessiNanbhoy Dadina 4. Mr. KrishnaChakraborty 5. Mr. AshishKumar Manna …Respondents -And- I.A.(IB) No.743/KB/2022 Applicationundersection 60(5) ofInsolvency& Bankruptcy Code, 2016 read with Rue11of theNational CompanyLawTribunal Rules, 2016. Inthematter of: 1. KNDEngineering Technologies Limited

INTHENATIONALCOMPANYLAWTRIBUNAL KOLKATABENCH-COURT-I IA(IB)No.633/KB/2021andI.A.(IB)No.743/KB/2022 InReLiquidationofKNDEngineeringTechnologiesLtd. 2. PNDInfrastructure PrivateLimited …Applicant Versus 1. Indian Bank 2. Mr. Vishal Sharma …Respondents Order pronounced on: 06/12/2023 Coram: Shri RohitKapoor,Member(Judicial) Shri Balraj Joshi,Member (Technical) Appearances (throughhybrid mode): ForResolution Applicant 1. Ms. UrmilaChakrabarty, Advocate 2. Mr. Yash Vardhan Deora, Advocate For IndianBank 1. Mr. Joy Saha, SeniorAdvocate 2. Mr. Debashish Chakrabarti, Advocate 3. Mr. Snehashish Chakraborty, Advocate

COMMON ORDER

Per: BalrajJoshi,Member(Technical) 1. Thiscourt convened viahybrid mode.

2. I.A. (IB) No. 633/KB/2021 and I.A. (IB) No. 743/KB/2022 are being decided through a common order as I.A. (IB) No. 633/KB/2021 is an application filed praying for liquidation of the Corporate Debtor and I.A. (IB) No. 743/KB/2022 has been filed as an objection to I.A. (IB) No. 633/KB/2021.

INTHENATIONALCOMPANYLAWTRIBUNAL KOLKATABENCH-COURT-I IA(IB)No.633/KB/2021andI.A.(IB)No.743/KB/2022 InReLiquidationofKNDEngineeringTechnologiesLtd. Brieffacts 3. This Adjudicating Authority vide its order dated 30 August 2018 directed initiation of the Corporate Insolvency Resolution Process (‘CIRP’) of KND Engineering Technologies Limited (“Corporate Debtor”), on a Petition filed by the Subrata Sarkar (“Operational Creditor”) against KND Engineering Technologies Limited under section 9 of the Insolvency and Bankruptcy Code, 2016 (‘the Code’) and appointed Mr. Ram Ratan Modi as the Interim Resolution Professional (‘IRP’). 4. In terms of section 15 of the Code, public announcement was made and the Committee of Creditors (“CoC”) was formed with viz. Indian Bank (“erstwhile Allahabad Bank”) and Katpadi Commodeal Private Limited.

5. In the CoC meeting held on 26 September 2018, the CoC resolved to appoint Mr. Vishal Sharma as the Resolution Professional. C.A. (IB) 925/KB/2018 was filed praying for replacement of the Interim Resolution Professional, the C.A. was allowed by this Adjudicating Authority on 05 November 2018 and Mr. Vishal Sharma was appointed as the Resolution Professional.

6. The Resolution Plan of PND Infrastructure Private Limited was approved by the CoC in its 16th CoC Meeting held on 21 May 2019. The Resolution Plan was approved by this Adjudicating Authority on 12June2019.

I.A.(IB)No. 633/KB/2021

7. This is an application filed by Indian Bank, one of the members of the Committee of Creditors seeking liquidation of the Corporate Debtor, viz., KND Engineering Technologies Limited, on the ground that the Successful Resolution Applicant has committed a serious breach of the non-derogableterms oftheapproved ResolutionPlan.

INTHENATIONALCOMPANYLAWTRIBUNAL KOLKATABENCH-COURT-I IA(IB)No.633/KB/2021andI.A.(IB)No.743/KB/2022 InReLiquidationofKNDEngineeringTechnologiesLtd. 8. TheApplicant has sought forthefollowing reliefs: a. An order directing that the Corporate Debtor be sent into liquidation. b. An order appointing Mrs. Mamta Binani (IBBI/IPA-002/IP- N00086/2017-2018/10227)asthe Liquidator. c. An order directing drawing up of appropriate proceedings against the Respondents herein and imposition of appropriate penaltyontheRespondents herein. d. And/or to pass such other order or orders as this Hon’ble Tribunalmay deemfit andproper.

I.A.(IB)No. 743/KB/2022

9. I.A. (IB) No. 743/KB/2022 has been by the Successful Resolution Applicant praying forthefollowing:

a. Direction upon the Respondent No. 1 Bank to produce the valuation reports prepared byNovara Consultancy Pvt.Ltd. and United Surveyors and Valuers;

b. In the alternative, the Respondent No. 2 should be directed to appoint two registered Valuers to conduct fresh valuation of the assets and properties of theCorporateDebtor;

c. An order directing refixation of the liquidation value of the Corporate Debtor as the old liquidation value of Rs.26,54,34,919/- has become unworkable and unviable in viewofthe changed circumstances;

d. The Respondent No.1 Bank should be directed to consider the one-time settlement proposal of Rs.20Crore (including Rs.2.3Crore already paid) given by the Applicants which is well above the current liquidation value of the Corporate Debtor;

INTHENATIONALCOMPANYLAWTRIBUNAL KOLKATABENCH-COURT-I IA(IB)No.633/KB/2021andI.A.(IB)No.743/KB/2022 InReLiquidationofKNDEngineeringTechnologiesLtd. e. Direction upon the Respondent No. 2 to call for and convene CoC meetings and place the OTS proposal made by the Applicants for theconsideration and votingof theCoC;

f. Necessary directions thereby not admitting the Corporate Debtorinto liquidation;

g. An order be passed directing the respondents to cooperate and strivefor therevival of theMSMECorporate Debtor.

Submissionsofthelearned Counsel appearing for Indian Bank

10.The learned Counsel submitted that as per the approved Resolution Plan, the secured Financial Creditor was to receive Rs.30Crore over a period of 24monthsfrom the effectivedate.

11.The Successful Resolution Applicant paid Rs.96Lakh but thereafter failed to make theremaining payments to theBank.

12.It is submitted that by an order dated 08 June 2022, this Adjudicating Authority directed the successful Resolution Applicant to pay the balance amount to the Applicant as agreed in the Resolution Plan withintwo months.

13.The successful Resolution Applicant failed to make the payment as directed by the Adjudicating Authority. The Applicant sent several demand notices tothe Successful ResolutionApplicant butto noavail.

14.The learned Counsel submitted that any contravention and/or modifications in terms of the Resolution Plan is impermissible in the eyes of the law once the Resolution Plan has been submitted and approved by the Adjudicating Authority and it shall lead to liquidation of the Corporate Debtor. Reliance was placed on the judgment of the Hon’ble Supreme Court in Ebix Singapore Private Limited v. Committee of Creditors of Educomp Solutions Limited & Anr., (2002)

INTHENATIONALCOMPANYLAWTRIBUNAL KOLKATABENCH-COURT-I IA(IB)No.633/KB/2021andI.A.(IB)No.743/KB/2022 InReLiquidationofKNDEngineeringTechnologiesLtd. 2 SCC 401 (paras 221 to 223) and Yavar Dhala v. JM Financial Asset Reconstruction Company Limited & Ors., 2019 SCC OnLine NCLAT 666(para 4).

15.Hence, the Applicant has filed an application under section 33(3) read with section 74(3) of the Code, before the Adjudicating Authority for liquidation of the Corporate Debtor on account of the breach in terms oftheresolution plan bythe successful Resolution Applicant.

16.The learned Counsel submitted that the Successful Resolution Applicant has filed I.A. (IB) No. 743/KB/2022 seeking directions upon the Applicant i.e. Indian bank to consider the settlement proposal of Rs.20 Crore given by the Successful Resolution Applicant after the approval of the Resolution Plan. It is submitted that the said I.A. is not sustainableboth in lawandin facts.

17.IA (IB) No. 743/KB/2022 has been filed by the Successful Resolution Applicant principally for consideration of settlement proposal of Rs.20 Crore on 24 July 2022. It is submitted that the Resolution Plan has already been approved on 12 June 2019 wherein the Successful Resolution Applicant agreed to pay a sum of Rs.30Crore to the Secured Financial Creditor. The learned Counsel submitted that whena Resolution Plan has already been approved, it becomes a binding and irrevocable between the CoC and the Successful Resolution Applicant. Hence there can be no changes in the terms of the resolution plan once thesamehas been approved.

18.The Indian Bank being the sole CoC Member has already rejected the settlement proposal of Rs.20 Crore given by the Successful Resolution Applicant and the same has been categorically recorded in the order passed by this Adjudicating Authority on 08 July 2022. Hence, once the OTS has been rejected, the Successful Resolution Applicant cannot vouch for the same cause again by filing a separate application asking

INTHENATIONALCOMPANYLAWTRIBUNAL KOLKATABENCH-COURT-I IA(IB)No.633/KB/2021andI.A.(IB)No.743/KB/2022 InReLiquidationofKNDEngineeringTechnologiesLtd. for consideration of the said settlement proposal which has already been rejected bythebank.

19.Further in the said order dated 08 July 2022, this Adjudicating Authority has also held that "it would have been impermissible for the Applicant to enter into a One Time Settlement as it would have amounted to the modification of the approved resolution plan, which would nothave been permissible".

20.Further, it is now a settled law that no settlement proposal can be entertained by the CoC after the resolution plan has been approved and is in force. The learned Counsel placed reliance on the judgment passed by the Hon'ble NCLAT in Hem Singh Bharana v. Pawan Doot Estate Put Ltd through Darshan Singh & Ors. (2023) SCC Online NCLAT34(Para 22).

21.Hence due to such facts and circumstances and considering the legal provisions and the authorities cited above, liquidation proceedings be initiatedagainst theCorporate Debtor.

22.The Applicant has proposed the name of Mrs. Mamta Binani, having registration no. IBBI/IPA-002/IP-N00086/2017-2018/10227 and Mrs. Mamta Binani given her consent to act as Liquidator, in terms of section 34(1) oftheCode.

Submissions of the learned Senior Counsel appearing for the Successful ResolutionApplicant

23.The learned Counsel submitted that this Adjudicating Authority had approved the Resolution Plan of the Successful Resolution Applicant on12June2019.

INTHENATIONALCOMPANYLAWTRIBUNAL KOLKATABENCH-COURT-I IA(IB)No.633/KB/2021andI.A.(IB)No.743/KB/2022 InReLiquidationofKNDEngineeringTechnologiesLtd. 24.The Corporate Debtor is a MSME and the Successful Resolution Applicant is involved in infrastructural projects and real estate activities with owned/leased properties and real estate activities.

25.It is submitted that the liquidation value was Rs.26,54,34,919/- and the Successful Resolution Applicant had proposed to pay Rs.31,18,90,031/-. According to the repayment schedule, Rs.30,00,00,000/- was to be paid to the secured Financial Creditors withintwo years from thedate ofapproval of theResolutionPlan.

26.As per the approved Resolution Plan, the Successful Resolution Applicant paid thefollowing stakeholders in full:

a. Unsecured Financial Creditors-Rs.5,00,000/- b. Operational Creditors (other than workmen and employees)- Rs.7,11,543/- c. Operational Creditors (workmen and employees)- Rs.49,09,813/- d. PublicShareholders- Rs.12,00,000/-

27.It is further submitted that out of Rs.30Crore to be paid to the secured Financial Creditor, the Successful Resolution Applicant has paid a sum of Rs.2.22 Crore and has also returned Bank Guarantees to Indian Bank after July 2019fora total sumof Rs.70.92Lakh.

28.It is submitted that as per the Resolution Plan, majority of the repayment was on the basis of disposal of the properties that were mortgaged to theBank.

29.The learned Senior Counsel further submitted that one of the Directors of the Successful Resolution Applicant fell ill and succumbed to her illness on 15 December 2019 which affected the work of the INTHENATIONALCOMPANYLAWTRIBUNAL KOLKATABENCH-COURT-I IA(IB)No.633/KB/2021andI.A.(IB)No.743/KB/2022 InReLiquidationofKNDEngineeringTechnologiesLtd. Successful Resolution Applicant and the Corporate Debtor as the deceased played a huge role in the functions of the Successful ResolutionApplicant.

30.Thereafter due to the Covid-19 pandemic and the notion-wide lockdown, the properties listed in the approved Resolution Plan dropped drastically, especially the commercial properties which were tobe sold andnobuyers could befound at theprice fortheproperties.

31.The Corporate Debtor has issued a letter dated 21 May 2021 with a proposal for settlement of the cash credit amount with the Indian Bank and also deposited an amount of Rs.1.50Crore vide Demand Draft No. 002646dated 21May 2021.

32.The Successful Resolution Applicant has approached the Bank for settlement on several occasions and also submitted an OTS proposal which was rejected by the Bank on the ground that there is commonality among the Directors of the Successful Resolution Applicant and the Corporate Debtor and hence is ineligible in terms of section 29A of the Code. The learned Counsel submitted that the Corporate Debtor is a MSME and hence the promoters of the Corporate Debtorcan proposea ResolutionPlan.

33.The Respondents filed a Supplementary affidavit affirmed on 17 February 2022 stating that a settlement proposal for Rs.20Crore to be paid within 120 days on 02 February 2022. It is further submitted by the Respondents that the Regional Office of the Bank has recommended theoffer to its higherauthority.

AnalysisandFindings

34.We have considered the submission made by the learned Senior Counsel on behalf of the Applicant and the learned Senior Counsel

INTHENATIONALCOMPANYLAWTRIBUNAL KOLKATABENCH-COURT-I IA(IB)No.633/KB/2021andI.A.(IB)No.743/KB/2022 InReLiquidationofKNDEngineeringTechnologiesLtd. appearing on behalf of the Successful Resolution Applicant and perused therecord.

35.The Resolution Plan was approved in June 2019 by this Adjudicating Authority, approximately four years have elapsed since then. The Successful Resolution Applicant admittedly is in violation of the terms of the Resolution Plan, it has defaulted in payment of the proposed amount tothe Financial Creditor.

36.The Financial Creditor has been prejudiced due to the actions of the Successful Resolution Applicant and has made an application before this Adjudicating Authority, hence I.A. (IB) No. 633/KB/2021 is maintainable.

37.From the above submissions, there is no doubt that the Successful Resolution Applicant has made part payments but has defaulted to pay thetotal amount for the past four years. There has been no prayer made for modification of the Resolution Plan before this Adjudicating Authority and once the Resolution Plan is approved, the terms of the Resolution Plan cannot be modified by the creditors or the Monitoring Committeeofthe Corporate Debtor.

38.We seek to place reliance on the judgment of the Hon’ble Supreme Court in Kridhan Infrastructure Private Limited v. Venkatesan Sankaranarayan & Ors.1, wherein the Hon’ble Supreme Court upheld the decision of the NCLT and ordered liquidation of the Corporate Debtordue to failureinimplementation ofthe ResolutionPlan.

39.The Successful Resolution Applicant had proposed deferred payment of Rs.30Crore to the Financial Creditor within a period of two years but defaulted to pay the total amount. This action by the Resolution Applicant would constitute a flagrant violation of the Resolution Plan

1(2021)ibclaw.in36SC

INTHENATIONALCOMPANYLAWTRIBUNAL KOLKATABENCH-COURT-I IA(IB)No.633/KB/2021andI.A.(IB)No.743/KB/2022 InReLiquidationofKNDEngineeringTechnologiesLtd. and would subject the Resolution Applicant to the penalties outlined in section 74oftheCode. 40.Section 33(3) of the Code enjoins the Adjudicating Authority to pass an order for liquidation of the Corporate Debtor when there is a contravention oftheapproved ResolutionPlan. 41.Now coming to the prayers made by the Successful Resolution Applicant, we are of the view that the Successful Resolution Applicant should have approached this Bench when it was unable toadhere to the timeline as proposed in the Resolution Plan. It has done so only after the Financial Creditor filed an application before us, praying for liquidation. 42.We note that Successful Resolution Applicant did give proposals for payments but neither the Financial Creditor nor the Monitoring Committee had any power to renegotiate the terms of the Resolution Plan after it is approved by this Adjudicating Authority, hence, once the Successful Resolution Applicant defaulted in payment and desired to change the terms of the Resolution Plan, it should have approached the Bench for the same. Be that as it may, the Successful Resolution Applicant was given ampletime and opportunity to make the payments. But nopayment was made bytheSuccessful Resolution Applicant. 43.Hence, we do not find any merit in the prayers made in I.A. (IB) No. 743/KB/2023, and deem it fit to order liquidation of the Corporate Debtor. Further, the payments made by the Successful Resolution Applicant in terms ofthe Resolution Plan shall beforfeited. 44.ThisBench, therefore, hereby orders as follows: - a. Prayers as sought for in I.A. (IB) No. 633/KB/2021 filed by Indian Bank,the solememberof theCoC, is allowed and KND Engineering Technologies Limited, the Corporate Debtor herein, is ordered to be liquidated in terms of section 33(3) of theCoderead with sub-section (1) thereof;

INTHENATIONALCOMPANYLAWTRIBUNAL KOLKATABENCH-COURT-I IA(IB)No.633/KB/2021andI.A.(IB)No.743/KB/2022 InReLiquidationofKNDEngineeringTechnologiesLtd. b. Mrs. Mamta Binani, having registration no. IBBI/IPA-002/IP- N00086/2017-2018/10227], is hereby appointed as Liquidator is hereby appointed as Liquidator as provided under section 34(1) of the Code subject to a valid Authorisation for Assignment (AFA) issued by the Insolvency Professional Agency (IPA)of which she isaprofessional member, c. The Liquidator shall initiate liquidation process as envisaged under Chapter-III of the Code and the Insolvency & Bankruptcy Board of India (Liquidation Process) Regulations, 2016. d. Public Notice shall be issued in the newspapers stating that the Corporate Debtoris in liquidation. e. Allthe powers oftheBoard ofDirectors, andof keymanagerial persons, shall cease to exist in accordance with section 34(2) of the Code. All these powers shall henceforth vest in the Liquidator. f. The personnel of the Corporate Debtor are directed to extend all assistance and co-operation to the Liquidator as required by him in managing the liquidation process of the Corporate Debtor. g. On initiation of the liquidation process but subject to section 52 of the Code, no suit or other legal proceeding shall be instituted by or against the Corporate Debtor save and except the liberty to the liquidator to institute suit or other legal proceeding on behalf of the Corporate Debtor with prior approval of this Adjudicating Authority, as provided in section 33(5) of the Coderead with itsproviso. h. In accordance with section 33(7) of the Code, this liquidation order shall be deemed to be a notice of discharge to the officers, employees and workmen of the Corporate Debtor except to the INTHENATIONALCOMPANYLAWTRIBUNAL KOLKATABENCH-COURT-I IA(IB)No.633/KB/2021andI.A.(IB)No.743/KB/2022 InReLiquidationofKNDEngineeringTechnologiesLtd. extent of the business of the Corporate Debtor continued during theliquidationprocess bytheLiquidator. i. In terms of section 33(1)(b)(iii), the Liquidator shall file a copy of this Order with the Registrar of Companies, West Bengal, within whose jurisdiction the Corporate Applicant is registered.

Additionally, the Registry shall also forward a copy of this Order to theRegistrar ofCompanies, Bihar. 45.The application bearing IA (IB) No. 633/KB/2021 shall stand disposed of in accordance with the above directions. I.A. (IB) No. 743/KB/2022 is herebyrejected. 46.List the main CP (IB) No. 455/KB/2018 for reporting progress on 15.01.2024 47.The Registry is directed to send e-mail copies of the order forthwith to all the parties and their Ld. Counsel for information and for taking necessary steps. 48.Certified copy of this order may be issued, if applied for, upon compliance ofall requisiteformalities.

BalrajJoshi RohitKapoor Member[Technical] Member [Judicial]

Orderpronounced on the6th dayof December, 2023 GGRB[LRA]