In the matter of State Bank of India vs. T Padmavathi,

1. This Application is filed under Section 112 (1) and 114 of the Insolvency & Bankruptcy Code, read with 19 of IBBI (Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Regulations, 2019 and Rule 11 of NCLT Rules, 2016, by the Resolution Professional for Mr. T. Padmavati, Personal Guarantor to Corporate Debtor M/s Chadalavada Infratech Limited, seeking approval of the repayment plan submitted by the Personal Guarantor. 2. To put precisely, this Tribunal vide order dated 26.09.2022 ordered commencement of Insolvency Resolution Process against T. Padmavathi (Personal Guarantor to the Corporate Debtor) to M/s Chadalavada Infratech Ltd and appointed Shri Maligi Madhusudhana Reddy, bearing registration no. IBBI/IРА-001/IP-P00843/2017-18/11427, as Resolution Professional. 3. Consequent to his taking over charge as Resolution Professional, the Applicant herein caused public notice calling for claims in "Nava Telangana" (Telugu), Prajashakti (Telugu) & "Financial Express" (English) on 13.10.2022, calling claims from the Creditors from the creditors by 01.11.2022. The last date for the Resolution Professional to submit his report under section 106 of IBC was 22.11.2022, ा न प ् म मेरा क Comdny Law T

Hyde

4. It is submitted that the Financial Creditor through its claim form, opted to forfeit its right to enforce the Personal Guarantor's security during the period of Repayment Plan. 5. The Personal Guarantor was asked by the Resolution Professional vide e-mail dated 19.10.2022 and 09.03.2023 to prepare a Repayment Plan in consultation with the Resolution Professional. 6. Pursuant to public announcement, the Resolution Professional received only one claim i.e. from State Bank of India amounting to Rs. Rs.278,07,60,753/- 7. The 1st repayment plan submitted by the Personal Guarantor on 31.10.2022 was placed before the 1st meeting of the creditors on 20.12.2022 by the Resolution Professional. After detail deliberations, the revised repayment plan of the Personal Guarantor was approved by the sole creditor SBI. The same was filed before this Tribunal, for approval on 26.12.2022. 8. Later the Resolution Professional, at the instance of the Sole Creditor moved a memo seeking withdrawal of the repayment plan submitted by Personal Guarantor, that has been earlier approved by the sole creditor and which is pending before this Tribunal, on the ground that, it had come to the notice of the creditor during a review meeting that the Vote casted in "favour' of the repayment plan was inadvertent, instead of 'against' it and directed the Resolution Professional to place fresh Repayment Plan of Smt. T. Padmavati in the next meeting along with the plans of other Guarantors so that a collective decision on all the plans can be considered on commercial grounds and keeping in view, the spirit of the Code.

Accordingly, the Tribunal allowed the withdrawal of Application IA(IBC) No. 1585/2022 on 06.02.2023, granting liberty to file a fresh application ifany. 9. It is further submitted that during the process of insolvency of the guarantor, fourth creditor's meetings were conducted by the Resolution Professional and based on the discussions, copy of the repayment plan submitted by the guarantor along with the compliance particulars under the IBC 2016 and its Regulations, was shared with the Creditor by the resolution professional for their consideration. 10. The Resolution Professional has complied the Statement of Affairs in accordance with Regulation 10(1) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Personal Guarantors to the Corporate Debtor) Regulations, 2019. The copy of the statement of affairs is annexed as Annexure -6. 11. The revised improved repayment plan submitted by the Guarantor along with statement of affairs with assets and liabilities was discussed in detail in the 4th meeting of creditors. The Copy of revised Repayment Plan is attached as Annexure-7.

Thereafter, the following resolution with respect to revised repayment plan was placed for e-voting from 6 pm, 3rd April 2023 to 6 pm, 4th April 2023 by the resolution professional for approval.

b “ y R E Mr S. O T L. V P E a D d m T a H va A t T i, t h P e e r R s e o v n i a s l e G d u I a m r p a r n o t v o e r d t o R t e h p e a C y o m r e p n o t r a P t l e a D n e s b u t b o m r i M t / t s e. d Chadalvada Infratech Private Limited for Rs.15,50,00,000/-with the revised payment schedule of: within 30 days of approval by the Hon'ble Adjudicating Authority - Rs.3,87,50,000/- and within 60 days of the approval of Adjudicating Authority - Rs.11,62,50,000/-be and is hereby approved."

However, the sole Creditor has neither approved nor rejected the above resolution and opted to Abstain from voting.

The copy of the voting record where the repayment plan placed for voting and the creditor opted to abstain is annexed and marked Annexure -8.

12. SALIENT FEATURES OF THE REPAYMENT PLAN: The revised improved repayment plan (revised as on 13.03.2023) submitted vide Guarantor's letter dated 13.03.2023 is annexed and marked as Annexure 7 to the Application. The salient features of the Repayment plan along with the concessions and reliefs prayed for, as extracted from the Repayment plan is given below: (i) Brief details about the engagement of debtor with the CD : The debtor Mrs. T. Padmavati, stood as Personal Guarantor to M/s Chadalavada Infratech Ltd the Corporate Debtor in connection with the Company's borrowings from SBI and signed agreements accordingly.

facilities availed by the Corporate Debtor.

arabad

S. Name of Amount Claimed Amount No. the admitted voting right % creditor Security interest if any Claims from Banks 1 SBI 2,78,07,60,753/- 2,78,07,60,753/- Agricultural Land 100% admeasuring Ac 14.06 Guntas (Ac 14.15 cents) in Sy. Nos. 349/A 1, 2, 3, 349/A/1, 349/Vuu/2 and 349/u/3 situated at Velimela Village and Sy. Nos. 348/А, 347/B/1, 349/A/1, 347/E/2, 348/AA/1, 347/B/3, 348/АЛ/2, 349/A, situated at Chanduguda, Velimela Village, RC Puram Mandal, Medak Dist (Telangana State)standing in the name o Sr f i S T a. t D T e. v e P n a d d e m r a. vathi, W/o 2) Land admeasuring Ac 3.00 Cents in Sy. No 189/A situated at Narsing Village, at ORR junction, Rajendranagar Mandal of Rangareddy district(A.P) standing in the name of Smt. T. Padmavathi, T. Pavani, T. Sri Ganesh and T. Yugandhar. (ii) Details of the excluded assets and excluded debts: It is stated in the repayment plan that the debtor does not have any liabilities within the criteria of excluded debts under Section 79 (15) and as such has not proposed to avail the benefit of excluded asset(s) if any. However, it is stated that the debtor wants to exclude Rs. 1,00,000/- within the criteria of excluded assets under Section 79 (14) (iii) Payment to the creditors: The debtor has proposed to make payment of Rs.15,50,00,000/- (Rupees Fifteen Crores fifty lakhs only) to the creditor as under:- S.No. Name of the creditor voting Amount Rs. right % 1 State Bank of India 100 15,50,00,000/- Total 15,50,00,000/- The above amount proposed will be paid in instalmenatss heereunder

Proposed Revised Repayment Plan: S.No. Particulars Amount Rs. A W u i t t h h o r 3 i 0 t y d ( a 2 ys 5 % o ) f the approval of Adjudicating 3,87,50,000/- 2 A W u i t t h h o r 6 i 0 t y d ( a 7 ys 5 % o ) f the approval of Adjudicating 11,62,50,000/- TOTAL 15,50,00,000/- Note: Resolution process costs will be paid separately. (iv) Sources of funding: The source of funding is from sale of the properties and sale of other personal assets. That such payment shall be made in priority over any other creditors. The Guarantor has provided comfort letter obtained from the prospective buyer to confirm the source of funds for payment to creditors as stated in the repayment plan which has been filed. (v) Reliefs as claimed by the Personal Guarantor: (a) The amount that is being paid by the Guarantor is on the distinct understanding that there shall be no more financial obligations towards State Bank of India and the Bank shall return her original guarantee agreement and issue a Discharge Certificate certifying that her liability as a guarantor to the Corporate Debtor, M/s. Chadalavada Infratech Ltd. is totally discharged.

(b) The State Bank of India shall return the Original Registered Documents on the properties mortgaged bearing: a. Agricultural land admeasuring Ac 14.06 Guntas in Sy. No 349/A-1,2,3 349/A/1, 349/vuu/2 and 349/vu/3 Situated at Velimela village and Sy. Nos. 348/A, 347/E/1, 349/A/1, 347/E/2, 348/AA/1, 347/E/3, 348/AA/2 349A, 347/AA/2 situated at Chanduguda, Velimela village, RC Puram Mandal, Medak District (Telangana State) standing in the n 42 a 9 m 4 e / 2 o 0 f 0 S 5 m. t. T Padmavathi, wife of Sr Co j m T p a D n e y yender Vide Doc No- (c) Land admeasuring Ac.0.30 gts (out of 3.00 acers) in Sy. No. 189/A situated at Narsing Village at ORR junction, RajendranagarMandal, Rangareddy District vide Doc No 3474/2002, 261 9/2010, 2618/2010,2617/2010 be released along with peaceful physical possession on said properties. The guarantor further submits that the proposed amount is more than value of the securities offered by me and for personal guarantee executed in favour of creditor." 13. The Resolution Professional confirms that he has complied with Section 112 of the Code that - (1) The resolution professional has prepared report of the meeting of the creditors on repayment plan.

(2) The report under sub-section (1): a. the revised repayment plan was not considered for approval as the creditor opted to abstain after repeated modificationsthereto; b. the lone creditor State Bank of India was present throughout the meetings conducted in physical mode along with the guarantor,and c. the voting record of the creditors for the current meeting has b een i m n a f d or e m a p t a i r o t n o o f f t t h h e e H m o i n n ' u b t l e e s A o d f j u m d e i e c t a i t n i g n g a A n u d t h i o s r i a t t y t; ached for ready 14. The Resolution Professional declares that the "Insolvency Resolution Process for the Personal Guarantor has been conducted in compliance of ( th I e n so I l B v C en c 2 y 0 1 R 6 es o a l n u d t io t n h e P r I o n c s e o s l s v e f n o c r y P a er n s d o n B a a l n k G r u u a p r t a c n y to r B s o a t r o d Co o r f p o I r n a d t i e a Debtors) Regulations, 2019". The statement under Regulation 17 by the resolution professional is annexed and marked as Annexure -9. 15. The Resolution Professional further confirms that he has complied Section 99 and Section 114 and minures o व f ि धि all meetings has been t c r h i e e r q c u m u i e l r e a e t t d i e n d u g n. t d o e r t h S e e ct d i e o b n to r 1 3 (g u a a n r d a n c t o o n r f ) i, r m cr e e d d i b t y or t h a e n r d e s t p o e c t t h i i v s e T m r e i m b b un e a r l s a i s n 16.

t s b R H h e u e e e f b p r o m s e a r o i e l y t t e m t d h e e c e e r d n c e i t c d b s a i p y i s t l e o o r n a t, n i h c s e l o s e t u u a R h l b v a d P e m t i b g t t b e r h t e a e e f p n o d a t s r s e o b e s d l y e e f t d o h m t r i o h e s e w n m i T p t b t r e h h e i r a d s b t r r o u b a n n o y w a a f a l l t l c h g r i f o u e s o f a d r T r i

I r t a i A i o t n s r b t ( u o a I e n r p B a a p r C a l l r ), n i o e d v a N r t a o t l t. a h. h e p

1 e p 5 H s r b 8 o a o e 5 w m v h / e e e e 2 v s d 0 w e t 2 t r a o 2 h, s f e for approval of the said Repayment Plan. This Tribunal vide order dated

17. W R w 0 h e 6 h i p. e l 0 a n 2 e y.

m a 2 i e p t 0 n p 2 w r t 3 a o s v g

P e r l s a d a o n n b t t y e h w d e t h l h i R e e c a P C v h e O f w i w C l i a e t s d o h n I l p A i t l b h a e e N c r o e t s. d y a i t d 5 o b 8 e f r 8 f i e l / o p e 2 r a a 0 e y 2 f m 3 r t e h e n e s s t h e e r m p k e l e i p a m n n a b g. y e m a r e p n p t o ro f p v l a c a l r n e a o di s f t a o t r h n

, e d b a w e b h s h e t e r a s e i t i n n o f f t r h o t e m h e s v o o C t l r i e e n d g c i. r t e D o d u r i r to i f r i n l g e n d e t i h I t e A h e p r e N n o a d p

. e p n r

8 c o

9 y 3 v

/ e o 2 d f 0 2 t n h 3 o i r s t A o r p e p j t l e r i c e c a t a t e t d t i h o a e n n, d C R r o e P p d i t a t e t o d t r ' h t s e o

18. U "a n b d s e t r a i t n h " e s v e o t c e i r i c n u t m h s e t a m n e c e e t s i, ng dated 03.04.2023 be treated as dissent.

m l o t a a h n i w e n. t t c h a r K e i e e n d R e i a e p t b p o i l a r e n. y g t m o i e t n n r v e t a i t p e l w t a h n e t i h a r s e " s a d b a i w s s m t s e e a e, i n a n t r I " e a A s n v o o N n t t o o e. i s n i u c 8 n l c 9 i t h 3 n h / p e e

2 r d 0 m o t 2 v e o 3 i e c s t i o i i s o n n n s g d i i i d m s s e e m t r a h i e s t n h r s t e e e d f r u o e n a r q d s u v e e o n r s t o t t i n h n o

- e g f

19. Here we are reminded of Proviso 106 (1) & (2), wherein it was held as below:

106. (1) s T e h c e t i r o e n s o 1 l 0 u 5 t i a on l o p n r g o f w e i s t s h i o h n i a s l r s e h p a o l r l t s o u n b m s i u t c h t h p e l a r n e p to a y t m h e e n A t d p j l u a d n i c u a n t d i e n r g submission of claims under section 102.

(2) The report referred in sub-section (1) shall include that- (a) the repayment plan is in compliance with the provisions of any law for the time being in force; (b) the repayment plan has a reasonable prospect of being approved and implemented; and (c) there is a necessity of summoning a meeting of the creditors, if required, to consider the repayment plan: P m r e o e v t i i d n e g d o f t t h h a e t c w r h e e di r t e o r t s h i e s n r o e t s o r l e u q t u i i o r n e d p r t o o f b e e s s s io u n m a m l on r e e d c, o m r m e e as n o d n s s f t o h r a t t h a e same shall be provided. 20. Therefore, as per Section 106 (1 & (2) it is not always necessary for the RP to convene a meeting for the purpose of seeking approval of the Repayment plan. In other words, the proviso suggests that RP keeping in view the interest of creditor, can submit the repayment plan for approval by this Tribunal. 21. In the above backdrop of the facts, we have heard learned RP and perused the records. At the outset it may be stated that when the RP convened a meeting of the creditor for the purpose of voting of the Repayment plan of the personal guarantor, it was always open for the Creditor to either accept or reject or even suggest modifications in the repayment plan. However, in this case on hand the sole member of creditor chose to abstain. In the circumstances, the Creditor's meeting conveyed no decision on the approval of the Plan.

22. Therefore, keeping in view the provision contained in section 114 (1) we are passing an order on the basis of report prepared by RP under section 106 of the Code which confirms that repayment plan is under compliance with section 112 of IBС, 2016. 23. The Resolution Professional further submits that the Insolvency Resolution Process for the Personal Guarantor has been conducted in compliance of the IBC 2016 and the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Regulations, 2019. 24. We therefore, hereby approve the same with effect from the date of this order, with the following directions:- (a) The Resolution Professional shall supervise the implementation of the Repayment Plan as per the terms and conditions mentioned therein and file his final report soon after the implementation of the plan or upon (b) completion of the timelines mentioned in the plan, whichever is earlier. Upon completion of the Repayment Plan, the Resolution Professional shall comply with the provisions stated in Section 117 of the Code.

(c) The creditors shall withdraw all the legal proceedings before various fora against the debtor within one month of the fulfilment of repayment obligations by the debtor in accordance with the terms of the repayment plan. (d) Any liability arising out of the settlement with creditors shall not be subject to any kind of tax. (e) All outstanding negotiable instruments issued by the Personal Guarantor in favour of the financial creditor including demand promissory notes and कCम्o पm नp ीवa िn ध yl ि अ aधwि Trकरण h o u n a l post-dated cheques shall stand terminated and the liability under such instruments shall stand extinguished. (f) The clauses, if any in the loan agreements/documents executed by personal guarantor with regard to after acquired property or later acquired property/future property of the personal guarantor stipulating will become collateral/prime security for the credit facilities extended either to the personal guarantor or to others extended based on the personal guaranteе executed by personal guarantor shall not be operative and it shall be treated as null and void.

(g) The debtor is permitted to share a certified copy of this repayment plan and order of this Tribunal approving this repayment plan with third parties including statutory/government authorities wherever needed. (h) The approval of the Repayment Plan shall not be construed as waiver of excluded debts as defined u/s 79(14) if any. (i) The Registry is directed to send aa copy of this order to IBBI. (j) The Resolution Professional, the Applicant herein shall forward all the r G e u c a o r r a d n s t o p r e r t t o a i I n B i B n I g. to Insolvency Resolution Process against the Personal राम C ् o प m न pe ी व r ि Ly धa िw अधिक ) 2 ज 0 2 - उ 9 3 0 srab S (Charan Singh) Member(Technical) (Dr. Venkata Ramakrishna Badarinath Nandula) Member (Judicial)

Lemdada प्रमणित प्रति CERTIFIED TRUE COPY Deputy केस संख्या Nationa l R e C g o is m t p r a ar n y / A L s a si w s t T a r n i t b u R n e a g i i, s t H r y at e / Cour? Bench D नि R A र् T ण E य O क E F ी J त U ा C र ी S ( ख EM 1 EW 1 T1 9 3/ 3 99 / 3. 18/20 प्रात तैयार किया था सारी DRPY RIRDE READY GR 27/9/12