In the matter of Prayaas Packagings Private Limited

An application under section 60(5) of the Insolvency and Bankruptcy Code, 2016 readwithRule11oftheNationalCompanyLawTribunalRules,2016;

And Inthematterof: JJ.PlastalloyPrivateLimited ….OperationalCreditor Vs Inthematterof: PrayaasPackagingPrivateLimited …CorporateDebtor And Inthematterof: Anil Kumar Vijay, Suspended director of Prayaas Packaging Private Limited, DIN: 00574294,Flat4B, 64B,BallygungeCircularRoad,KarayaBallygunge,Kolkata700019, inthestateofWestBengal. …Applicant Vs SandipKumarKejriwal,InterimResolutionProfessionalofPrayaasPackagingPrivate Limited;

JJ. Plastalloy Private Limited, a company incorporated under the Companies Act, 1956 having its office at A-2, Badshah Bagh Colony, Maldahiya, Varanasi, UP – 221002. …Respondents AND Inthematterof: JJ.PlastalloyPrivateLimited ….OperationalCreditor

I.A. No. 1220/KB/2020 & I.A. No. 1286/KB/2020 In C.P. (IB) No. 1193/KB/2019

Vs Inthematterof: PrayaasPackagingPrivateLimited …CorporateDebtor And I.A.No.1286/KB/2020 Inthematterof: AnilKumarVijay,SuspendeddirectorofPrayaasPackagingPrivateLimited; …Applicant Vs SandipKumarKejriwal,InterimResolutionProfessionalofPrayaasPackagingPrivate Limited;

Indian Bank, (formerly Allahabad Bank), Member of the Committee of Creditors of Prayaas Packaging Private Limited having its office at 7, Red Cross Place, Kolkata 700001;

JJ.PlastalloyPrivateLimited, …Respondents Orderreservedon: 09/12/2020 Orderpronouncedon: 02/02/2021 Coram: ShriRajasekharV.K. : Member(Judicial) ShriHarishChanderSuri : Member(Technical)

Appearances(throughvideoconferencing): Mr.RatnankoBanerji,Sr.Advocate ] Ms.SristiBarmanRoy,Advocate ] ApplicantinIANos.1220&1286/ Mr.SidharthaSharma,Advocate ] KB/2020 Ms.UjjainiChatterjee,Advocate ]

Mr.SandipKumarKejriwal,RP ] Self Mr.OmnarayanRai,Advocate ] FortheCoC

I.A. No. 1220/KB/2020 & I.A. No. 1286/KB/2020 In C.P. (IB) No. 1193/KB/2019

COMMONORDER (DisposingofI.A.1220/KB/2020andI.A.1286/KB/2020)

PerRajasekharV.K.,Member(J): 1. I.A. No. 1220/KB/2020 is an application filed by Mr. Anil Kumar Vijay, member of the suspended Board of Prayaas Packaging Private Limited (the Corporate Debtor) seekingthefollowingreliefs:- a. Stay of the Corporate Insolvency Resolution Process (CIRP) of the Corporate Debtor and dismissal of the underlying CP (IB) No. 1193 of 2019 in view of the settlement arrived at between the applicant and RespondentNo.2inJune,2020.

2. I.A.(IB)No.1286/KB/2020isanapplicationseekingthefollowingreliefs:- a. To hold that the decision of the Respondent No. 1 taken at the third CoC meeting held on September, 28, 2020 to withdraw its consent to filing of the withdrawal application under section 12A of the Insolvency and Bankruptcy Code, 2016, is incorrect and should be set aside; b. To hold that the recording of failure of settlement at the second CoC meeting held on July 24, 2020 is incorrect and contrary to records and isliabletobesetaside; c. To record that there is a settlement of the claim of the operational creditor/Respondent no. 3 in CP (IB) No. 1193/KB/2019 and consequently the company petition should not be proceeded with further; d. StayallfurtherproceedingsinC.P.(IB)No.1193/KB/2019; e. TheorderdatedMarch13,2020bestayed.” 3. Since the reliefs claimed in the two IAs are more or less overlapping, they are disposedofbywayofthiscommonorder.

I.A. No. 1220/KB/2020 & I.A. No. 1286/KB/2020 In C.P. (IB) No. 1193/KB/2019

4. The Corporate Debtor was admitted to CIRP on 13.03.2020 based on the application made by Respondent No. 2 herein. Respondent No. 2 is the sole constituent of the Committee of Creditors (CoC). Respondent No. 1 is the IRP appointedinrespectoftheCorporateDebtor.

5. Mr. Ratnanko Banerji, Ld. Sr. Counsel submitted that the applicant came to know of the initiation of CIRP against the Corporate Debtor on 17.03.2020 vide e-mail sent by R1. However, nothing could be done because the lockdown was announced and he was not able to contact the Operational Creditor to try and arrive at a settlement. On 16.05.2020 the applicant received the proposal for settlement from R2 by e-mail, a copy of which was also shared with Respondent No.1viawhatsappmessage.

6. On 04.06.2020 the applicant e-mailed Respondent No. 2 whereby it was agreed that payment of Rs.5,00,000/- (Rupees Five Lakh Only) would be made by way of post dated cheques to R2. On the same day i.e. 04.06.2020 R2 agreed to the proposal of the applicant and requested the applicant to communicate the draft settlement papers, copies of cheques etc. The applicant all along kept R1/IRP informed of all the developments towards settlement of outstanding dues of R2. On19.06.2020theapplicantinformedR1/IRPthatasettlementwasbeingfinalised. R1/IRP’s fee of Rs.50,000/- was paid in two instalments on 09.06.2020 and 19.06.2020.

7. On 25.06.2020 the first CoC meeting was held. The minutes of the meeting are placedasAnnexure“H” totheapplication. InthefirstCoCmeetingitwas resolved that signed hard copies of the settlement agreement along with Form FA shall be handed over to the IRP on or before the 3rd July, 2020. It was the stand of the applicant that on 04.07.2020 the demand drafts were all kept ready and intimated to the IRP. The draft settlement agreement along with copy of the demand draft

I.A. No. 1220/KB/2020 & I.A. No. 1286/KB/2020 In C.P. (IB) No. 1193/KB/2019 of Rs.4,50,000/- (Rupees four lakh fifty thousand only) which was the whole settlement amount was e-mailed to R1/IRP. However, on 06.07.2020 R1/IRP intimatedtheapplicantthatsinceallthedocumentswerenotsubmittedby3rdJuly, 2020,heproceededtotakeoverthefactoryatUluberiaon07.06.2020.

8. The applicant pointed out that the documents could not reach in time due to the travel restrictions on account of Covid 19 Pandemic and hence no adverse steps maybetaken. Moreover, 50%of the agreedfeeof Rs.1,00,000/- (Rupeesonelakh only) was also paid to Respondent No. 1/IRP. However, R1/IRP through his e-mail of the same date expressed that his fee was Rs.1,50,000/- (Rupees One lakh fifty thousandonly).

9. On 07.07.2020, the applicant preferred an application before this Adjudicating Authority seeking leave to make payment of the settlement amount to R2 and recalling of the order of admission dated 13.03.2020. However, while filing the application the case number was wrongly mentioned as CP(IB) 1472/KV/2018 instead of CP (IB) No. 1193/KB/2019 and therefore the same has not been listed forhearing.

10. On 11.07.2020, the applicant submitted form FA along with a copy of the demand draft of Rs.4,50,000/- to R1/IRP for taking steps for filing the application under section 12A. However, it is the case of the applicant that R1/IRP refused to act on thesaide-mail.

11. On 24.07.2020, the second CoC meeting was conducted, which the applicant could not attend since he was advised home quarantine and this fact was also duly communicated to the IRP vide e-mail dated 23.07.2020. On 27.07.2020 R2 requested the applicant not to send anyone to its Varanasi office since the same was located in containment zone and hence the office was shut. On 10.08.2020, R2 informed the applicant that his office was opened and that the applicant could

I.A. No. 1220/KB/2020 & I.A. No. 1286/KB/2020 In C.P. (IB) No. 1193/KB/2019 get the signed settlement agreement collected from his office on 24.08.2020. The hard copy of the settlement agreement and Form FA was collected and handed over to R1/IRP. However, R1/IRP did not accept the Form FA and the hard copies ofthesettlementagreement.

12. To cut the long story short, on 28.09.2020 when the matter of settlement was placed at the third CoC meeting, the CoC withdrew its consent for filing the withdrawalapplication.

13. Mr.OmnarayanRai,Ld.CounselappearedonbehalfoftheCoCandsubmittedthat nowhere in the CoC meeting it was mentioned that there could be a settlement of the matter and therefore the allegation that the CoC withdrew its consent at the third meeting held on 28.07.2020, was factually incorrect. However, he did not dispute the other factual averments made in the application. The CoC also did not choosetofileareplytothepresentapplication.

14. We have considered the submissions made by the Sr. Counsel Mr. Ratnanko Banerji for the applicant, Mr. Sandip Kumar Kejriwal, R1/IRP appearing in person andMr.OmnarayanRai,Ld.CounselappearingonbehalfofR2/CoC.

15. From the documents placed on record, we find that there was a meeting of minds as regards settlement if made on or before 3rd of July, 2020. Since the minutes of thefirstCoCmeetingheldon25.06.2020recordsthefollowing:- “The erstwhile directors of the Corporate Debtor are trying to settle with Operational Creditor since last one month, but could not be settled by some reasons. However, assured in the meeting that it will be settled within 03.07.2020. Financial Creditor and IRP agreed to give time to erstwhile directors to settle within the given time with the following terms and conditions:- Within 03.07.2020, Erstwhile Directors/Operational Creditor will give to IRP original copy of Settlement Agreement, duly signed by both the parties i.e. CorporateDebtorandOperationalCreditor.

I.A. No. 1220/KB/2020 & I.A. No. 1286/KB/2020 In C.P. (IB) No. 1193/KB/2019

Within 03.07.2020, Operational Creditor will give to IRP Original copy of Form FA along with Affidavit for withdrawal of case (as required in Section 12A of IBC for withdrawal of case). Form FA also states that either IRP received full amount (IRP fee and other expenses incurred by IRP upto the date of signing form FA on account of CIRP) at the date of FA or a Bank Guaranteewillbegivenforthedueamount.” (sic) 16. From the above, it is clear to our minds that the Operational Creditor was willing to go for settlement provided the formalities were completed by 03.07.2020. While it is not disputed that there was a delay of one day in communicating the bank draft details, we find from the application that there was just and sufficient cause which prevented the applicant from communicating the details on or before 3rd July, 2020. In any case one day’s delay cannot be fatal to the settlement agreement itself. The further delay in not being able to handover the physical copy of the demand draft and collecting the settlement agreement physically from the office of R2 at Varanasi has also been sufficiently explained, as the office was locatedinacontainmentzoneduetoCovid19Pandemicandhencewasshut.

17. We feel that respondents should have duly considered these facts and circumstances. The object of the Code is to enable a resolution of the Corporate Debtor rather than getting bogged down in minor procedural details and failing to see the wood for the trees. If only the IRP had appreciated this, there would not havebeenanyneedforthepresentapplication.

18. Blind adherence to the letter of the law without appreciating the spirit of it will only be a case of “operation successful, patient dead.” Such an approach should befrownedupon. 19. Inviewoftheabove,weherebyorderasfollows:- (a) The settlement agreement is taken on record and full satisfaction thereof is recorded; (b) The CIRP initiated against the Corporate Debtor vide an order dated 13.03.2020 is closed and the Corporate Debtor is released from the rigours of theCode;

I.A. No. 1220/KB/2020 & I.A. No. 1286/KB/2020 In C.P. (IB) No. 1193/KB/2019 (c) The Board of Directors of the Corporate Debtor is restored to its original position; (d) R1/IRP is discharged of his responsibility. He is directed to hand over the possession of the Corporate Debtor and all books and documents of the CorporateDebtortotheBoardofDirectorsoftheCorporateDebtor; (e) TheIRP fee for the assignment isfixedat Rs.1,00,000/- (RupeesOne Lakh Only) which shall be paid by the Corporate Debtor within a period of 15 days from today, if not already done, failing which this order shall be a nullity and of no legalconsequence. (f) The IRP shall intimate the jurisdictional ROC regarding closure of the Corporate InsolvencyResolutionProcess(CIRP) (g) I.A. (IB) No.1220/KB/2020 and 1286/KB/2020 in C.P. (IB) No. 1193/KB/2019 are disposed of with the above directions. Consequently, CP (IB) No. 1193/KB/2019shallalsostanddisposedof,aswithdrawn.

20. The Registry is directed to send e-mail copies of the order forthwith to all the partiesandtheirLd.Counselforinformationandfortakingnecessarysteps.

21. CertifiedCopyofthisorderbeissued,ifappliedfor,uponcomplianceofallrequisite formalities.

(IB)No.836/KB/2018forrepor ting S HarishChanderSuri RajasekharV.K. Member(Technical) Member(Judicial)

Ordersignedon 02 February,2021. vc