In the matter of Vijay Engineering Enterprises Pvt. Ltd.

Per: Prabhat Kumar, Member (Technical)

1. This Application has been filed on 18.07.2020 by the Resolution Professional under Section 30(6) of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as the ‘the Code’) on behalf of the Committee of Creditors seeking approval of the Resolution Plan submitted by the Successful Resolution Applicant and approved by 100% of the voting share of the members of the Committee of Creditors (hereinafter referred to as ‘CoC’) of the Corporate Debtor viz. Vijay Engineering Enterprises Private Limited [CIN: U51503MH2001PTC132334] (hereinafter referred to as ‘Corporate Debtor’).

2. The facts leading to the Application are as under: i. Corporate Insolvency Resolution Process (CIRP) of the Corporate Debtor was initiated vide an order dated 09.08.2019 of this Court in C.P.(IB)-1712(MB)/2019 on an application filed by Vidarbha Diagnostics Pvt. Ltd. (Financial Creditor) under Section 7 of the Insolvency and Bankruptcy Code 2016. Ms. Minita Dhirajlal Raja (Reg. No.: IBBI/IPA- 001/IP-P00635/2017-18/11088 was appointed as Interim Resolution Professional (IRP), who was confirmed as RP in the first CoC meeting held on 09.09.2019. The Applicant made a public announcement in the newspapers in Form-A on 18.08.2019 inviting claims from the creditors, workers/employees of the Corporate Debtor and from government bodies. IRP constituted the Committee of Creditors (CoC) based on the P age 2 | 16

MUMBAI BENCH : C-IV IA-1186(MB)/2020 & IA-1336/2023 in CP(IB)-1712(MB)/2019 claims received by her and the first meeting of the CoC held on 09.09.2019. ii. Form G was issued on 30.12.2019 inviting Expression of Interest for submission of Resolution Plan for which two (2) Expression of Interest (EoI) were received, Information Memorandum was shared to the eligible Resolution Applicant on 29.01.2020, the last date for submission of the resolution plan was 29.02.2020, which was extended to 11.03.2020 in the fifth CoC meeting held on 29.02.2020. The Prospective Resolution Applicant submitted the Resolution Plan on 11.03.2020. However, due to the pandemic situation, the Central Government declared lockdown which halted further progress in the matter. Earliter, the CIRP period was extended by 90 days by the Adjudicating Authority vide order dated 24.02.2020 in MA-21/2020 and the last date of CIRP was 04.05.2020. RP filed one IA-1360/2020 seeking exclusion of period on account of lockdown which was withdrawn on 16.11.2021 stating that fresh IA will be filed for appropriate days of exclusion from the CIRP period. RP filed another IA-1456/2022 seeking exclusion of 77 days from the CIRP period, which was allowed vide order dated 27.06.2022. As 77 days excluded from the CIRP period up to 04.05.2020, the period gets extended to 20.07.2020. iii. Upon request from the RP, the Resolution Applicant submitted revised resolution plan on 06.07.2020, which was considered by the CoC at the meeting held on 10.07.2020 and approved by 100% voting share. The RP submits that the resolution plan submitted by Dr. Sudhir Neral is compliant with the various provisions of the Code and CIRP

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MUMBAI BENCH : C-IV IA-1186(MB)/2020 & IA-1336/2023 in CP(IB)-1712(MB)/2019 regulations. Therefore, RP states that the Resolution Plan approved by the CoC is in compliance with the requirements of Section 30(2) of the Code. vii. As per the RP, the Fair Value and Liquidation Value determined by the registered Valuers are as follows: Fair Value ₹84,09,257.00 (average) Liquidation Value ₹81,47,030.50 (average) viii. In the circumstances mentioned hereinabove, the Applicant has filed Application seeking approval of this Tribunal on the resolution plan, submitted by the Resolution Applicant i.e. Dr. Sudhir Neral, stating that the plan is in accordance with the Section 30(2) and other provisions laid down under the Code.

3. The Resolution Applicant viz. Dr. Sudhir Neral is a Director of Vidarbha Diagnostics Pvt. Ltd., which is a company engaged in the business of providing healthcare diagnostic services, incorporated at Nagpur in November 2014 [CIN: U85110MH2004PTC149647] having office at Gr. Floor, Plot No. 12, Near Land Mark, Wardha Road, Nagpur. The Resolution Applicant confirmed that it is eligible to submit Resolution Plan as per Section 29A of Insolvency and Bankruptcy Code.

4. The Resolution Applicant has confirmed that - i. its connected persons are not convicted for any offence punishable with imprisonment for two years or more; ii. not disqualified under Companies Act, 2013 to act as a Director. iii. not identified as a willful defaulter by any bank or financial institution P age 4 | 16

MUMBAI BENCH : C-IV IA-1186(MB)/2020 & IA-1336/2023 in CP(IB)-1712(MB)/2019 or consortium thereof in accordance with the guidelines of the Reserve Bank of India. iv. not debarred from accessing to, or trading in securities markets under any order or directions of the Securities and Exchange Board of India. v. Not been a promoter or in the management or control of a corporate debtor in which a preferential transaction, undervalued transaction, extortionate credit transaction or fraudulent transaction has taken place and in respect of which an order has been made by the Adjudicating Authority under this Code.

5. Resolution Plan for the Corporate Debtor:

5.1 Summary of the Financial Proposal

The Resolution Applicant has proposed to take-over the management and ownership control of the Corporate Debtor by acquiring 100% ownership of the Company in the manner specified in the Resolution Plan. The Resolution Applicant proposes a total consideration of ₹1,03,22,417/- (Rupees One Crore Three Lakh Twenty-two Thousand Four hundred Seventeen only) to all the stakeholders to be paid within a period of 15 months from the effective date of this resolution plan.

5.2 The structure of the payment to the stakeholders under the Resolution Plan is as under:

(Amount in Rs. lakh) Sl. Category of Sub-Category of Amount Amount Amount Amount No. Stakeholder* Stakeholder Claimed Admitted Provided Provided to the P age 5 | 16

MUMBAI BENCH : C-IV IA-1186(MB)/2020 & IA-1336/2023 in CP(IB)-1712(MB)/2019 under the Amount Plan# Claimed (%) (1) (2) (3) (4) (5) (6) (7) 1 Secured (a) Creditors not Nil Nil Nil Nil Financial having a right to Creditors vote under sub-section (2) of section 21 (b) Other than (a) Nil Nil Nil Nil above: (i) who did not vote in favour of the resolution Plan (ii) who voted in favour of the resolution plan Total[(a) + (b)] Nil Nil Nil Nil 2 Unsecured (a) Creditors not Financial having a right to Creditors vote under sub- 1,202.45 1,162.32 23.25 1.93% section (2) of section 21 Creditors not - - 4.69 having a right to vote under sub-section (2) of section 21(who have not filed the claims) (b) Other than (a) above: (i) who did not vote in favour of Nil Nil Nil Nil the resolution Plan (ii) who voted in 41.56 41.56 2.08 5% favour of the resolution plan P age 6 | 16

MUMBAI BENCH : C-IV IA-1186(MB)/2020 & IA-1336/2023 in CP(IB)-1712(MB)/2019 Total[(a) + (b)] 1244.01 1203.88 30.02 3 Operational (a) Related Party - - 0.08 Creditors of Corporate Debtor (b) Other than (a) above: (i)Government 3956.87 1148.62 33.86 0.86% (ii)Workmen 0.02 (iii)Employees 0.56 (iv) Other 3948.78 252.22 5.04 0.13% Operational Creditors Other Operational - - 3.64 Creditors (who have not filed claim) Total[(a) + (b)] 7,905.65 1,400.84 43.21 4 Other debts and - - -dues Grand Total 9,149.66 2,604.72 73.22

Timeline for the payment: Payment as Financial Unsecured Operational Salaries Op.Cr- Total Amount per Plan Creditors FC Creditors & Wages Others Within 3 M - - 1,350,631 20,104 129,265 1,500,000 Within 6 M - - 1,350,631 20,104 129,265 1,500,000 Within 9 M 12,390 166,585 1,189,478 17,705 113,841 1,500,000 Within 12M 103,845 1,396,155 - - - 1,500,000 Within 15M 91,551 1,230,866 - - - 1,322,418 Total 207,787 2,793,606 3,890,740 57,914 372,371 7,322,417

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MUMBAI BENCH : C-IV IA-1186(MB)/2020 & IA-1336/2023 in CP(IB)-1712(MB)/2019 5.3 CIRP Costs: It is being paid in full and out of the existing current assets of the Corporate Debtor. However, if any additional sums are required towards the same as per the provisions of the Code and as approved by the Committee of Creditors, the same shall be brought in by the RA. Such CIRP costs will be paid in priority to other creditors. The provision for the CIRP cost in the Plan is ₹30,00,000/-.

a) In accordance with Regulation 38(1)(a) of Insolvency and Bankruptcy Board of India (Insolvency Resolution Process Corporate Persons), it is required to be paid in priority to other creditors and the CIRP Cost will be paid in priority to all other creditors.

b) Payment of CIRP Costs will be ₹30,00,000/- or actuals whichever is higher (as determined by RP) in priority to Payment to Operational Creditors and Secured Financial Creditors and any CIRP costs over and above ₹30,00,000/- will be brought in by RA.

5.2 Effective Date The Effective Date of the Resolution Plan shall be the date when the Resolution Plan is approved by this Tribunal.

5.3 Term of Resolution Plan This Resolution Plan is valid for a term of Fifteen (15) months till all the payments are made to all the stakeholders as per the terms and conditions of the Resolution Plan. The obligations of the Resolution Applicant to implement the Resolution Plan shall become effective only from the Effective Date.

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MUMBAI BENCH : C-IV IA-1186(MB)/2020 & IA-1336/2023 in CP(IB)-1712(MB)/2019 The Resolution Plan shall become binding on the Corporate Debtor and its employees, members, creditors, guarantors, Central Government, any State Government, any local authority and other stakeholders involved in the Resolution Plan on the Effective Date.

5.4 The Resolution Applicant has sought various reliefs and concessions as set out in the Resolution Plan.

5.5 The Applicant has submitted that the Resolution Plan, submitted by Dr. Sudhir Neral and approved with 100% voting of the members of the Committee of Creditors, has been examined and the Resolution Plan - a. provides for payment of Insolvency Resolution Process Costs in a manner specified by the board in priority to the payment of other debts of Corporate Debtor; b. provides for payment of the debts of the Operational Creditors in such manner as specified by Regulation 38(1) of the IBBI (Insolvency Resolution Process for Corporate Persons Regulations) 2016; c. provides for management of the affairs of the Corporate Debtor after the approval of the Resolution Plan; and d. does not contravene any of the provisions of the law for the time being in force.

6. The Applicant/Resolution Professional further submits that -

6.1 The application seeking approval of Plan of the Bench is filed before the expiry of the period of CIRP provided in Section 12 of the Code, as this Bench had granted an extension in the CIRP period vide its order dated P age 9 | 16

MUMBAI BENCH : C-IV IA-1186(MB)/2020 & IA-1336/2023 in CP(IB)-1712(MB)/2019 24.02.2020 and exclusion vide order dated 27.06.2022 thereby the period of CIRP ends on 20.07.2020. Therefore, the Application filed within the valid period of CIRP.

6.2 The Applicant has filed application along with Form ‘H’ prescribed under Regulation 39(4) of Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 and has appended a tabular summary of Applicant's determination of compliance of the Resolution Plan with various provisions and regulations under the Code and CIRP Regulations.

The compliance of the Resolution Plan is as under: Section of the Requirement with respect to Resolution Plan Clause of Complian Code / Resolution ce (Yes / Regulation Plan No) No. 25(2)(h) Whether the Resolution Applicant meets the criteria Clause 1 Yes approved by the CoC having regard to the complexity and scale of operations of business of the CD? Section 29A Whether the Resolution Applicant is eligible to submit NA Yes resolution plan as per final list of Resolution Professional or Order, if any, of the Adjudicating Authority? Section 30(1) Whether the Resolution Applicant has submitted an Annexure4 Yes affidavit stating that it is eligible? Section 30(2) Whether the Resolution Plan- (a) provides for the payment of insolvency resolution 6.1(i) Yes process costs? entire CIRP cost has been met out of the funds of cd till the date of filing of application.

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MUMBAI BENCH : C-IV IA-1186(MB)/2020 & IA-1336/2023 in CP(IB)-1712(MB)/2019 (b) provides for the payment to the operational Also an creditors? email Yes undertaking has been received by RP from RA to pay 100% of Provision for dues for wages, the same would be paid over & above the liquidation value. (b) provides for the payment to the financial creditors N.A Yes / NA who did not vote in favour of the resolution plan? Yes (c) provides for the management of the affairs of the Chapter 3 & 7 corporate debtor? Chapter Yes (d) provides for the implementation and supervision of 7 the resolution plan? Annex. 3B No, save (e) contravenes any of the provisions of the law for the and time being in force? except and as detailed in NOTE TO CLAUSE 11 Section 30(4) Whether the Resolution Plan Yes (a) is feasible and viable, according to the CoC? Yes (b) has been approved by the CoC with 66% voting share? Section 31(1) Whether the Resolution Plan has provisions for its Yes Chapter Yes effective implementation plan, according to the CoC? 7 Regulation Where the resolution profesional made a determination Yes, filed on Yes 35A if the corporate debtor has been subjected to any 9th July, transaction of the nature covered under sections 43, 45, 2020 but 50 or 66,before the one hundred and fifteenth day of could not be the insolvency commencement date, under intimation filed within to the Board? the timeline

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MUMBAI BENCH : C-IV IA-1186(MB)/2020 & IA-1336/2023 in CP(IB)-1712(MB)/2019 Regulation38 Whether the amount due to the operational creditors 6.1(v)Also Yes (1) under the resolution plan has been given priority in Ra Has payment over financial creditors? provided Email to that Effect Regulation Whether the resolution plan includes a statement as to 7.5 Yes 38(1A) how it has dealt with the interests of all stakeholders? Regulation (i) Whether the Resolution Applicant or any of its Mention in Yes 38(1B) related parties has failed to implement or contributed Resolution to the failure of implementation of any resolution plan plan & also approved under the Code. undertaking received (ii) If so, whether the Resolution Applicant has annexure3b submitted the statement giving details of such non-implementation? Regulatio(1n) Whether the Resolution Plan provides: Yes 38(2) (a) the term of the plan and its implementation Chapter schedule? (b) for the management and control of the business of 3 & 7 the corporate debtor during its term? (c) adequate means for supervising its implementation? 38(3) Whether the resolution plan demonstrates that – Yes (a) it addresses the cause of default? (b) it is feasible and viable? (c) it has provisions for its effective implementation? 1, 2 & 3 (d) it has provisions for approvals required and the timeline for the same? (e) the resolution applicant has the capability to implement the resolution plan? 39(2) (2) Whether the RP has filed applications in respect of Yes Yes transactions observed, found or determined by him? Regulatio(3n) Provide details of performance security received, as Rs 39(4) referred to in sub-regulation (4A) of regulation 36B. 1500000/- Received as Performance Security. Copy of Bank Statement Attached as Annexure 1 to form H

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MUMBAI BENCH : C-IV IA-1186(MB)/2020 & IA-1336/2023 in CP(IB)-1712(MB)/2019 7. During the course of hearing, Ld. Counsel for the Resolution Applicant submitted that during the pendency of this Application, the CIRP cost had gone up exorbitantly, which is estimated to create additional liability of ₹52,91,510/- and as per Resolution Plan, the RA is under obligation to pay such costs in actuals. The Resolution Professional apprised this Bench that since filing of this Application, there have been certain recoveries and restitution of land parcel, which is outside the Resolution Plan. The total value such asset is stated to be ₹39,09,520/-. Accordingly, the Resolution Professional was directed to seek approval of CoC if additional CIRP cost can be appropriated from such recoveries. Pursuant to the directions sought from CoC, the Resolution Professional filed an IA-1336/2023 confirming the approval of CoC for such appropriation and prayed in this IA for utilizing a sum of ₹14,51,520/- lying in the escrow account with the RP towards payment of unpaid CIRP cost amounting to ₹17,65,128.20 and utilization of balance amount of ₹3,13,608.20 lying in escrow account and amount of such CIRP cost already funded by financial creditor amounting to ₹24,85,441/-from the proceeds of land recovered vide order dated 19.05.2021. This bench feels that amount recovered pursuant to order of Adjudicating Authority confirming avoidance transaction goes to financial creditors in case their claim is not settled in full. The Financial Creditor has consented to such appropriation. In view of the same, this Bench allows this IA-1336/2023.

8. The Resolution Plan submitted by Dr. Sudhir Neral is hereby approved. The Resolution Plan shall become effective from this date and shall form part of this order. It shall be binding on the Corporate Debtor, its employees, members, creditors, including the Central Government, any State P age 13 | 16

MUMBAI BENCH : C-IV IA-1186(MB)/2020 & IA-1336/2023 in CP(IB)-1712(MB)/2019 Government or any local authority to whom a debt in respect of the payment of dues arising under any law for the time being in force is due, guarantors and other stakeholders involved in the Resolution Plan.

8.1 The Memorandum of Association (MoA) and Articles of Association (AoA) shall accordingly be amended and filed with the Registrar of Companies (RoC), concerned for information and record. The Resolution Applicant, for effective implementation of the Plan, shall obtain all necessary approvals, under any law for the time being in force, within such period as may be prescribed.

8.2 The moratorium under Section 14 of the Code shall cease to have effect from this date.

8.3 The Applicant and the Monitoring Committee shall supervise the implementation of the Resolution Plan and the Applicant shall file status of its implementation before this Authority from time to time, preferably in every quarter.

8.4 The approval of the Resolution Plan shall not be construed as waiver of any statutory obligations of the Corporate Debtor and shall be dealt by the appropriate Authorities in accordance with law. Any waiver sought in the Resolution Plan, shall be subject to approval by the Authorities concerned. Further, any application for renewal or extension or restoration of any license or approval or connection from any authority shall be subject to payment of prescribed fee and/or deposit(s) and adherence to the procedure stipulated by such authority, however such authority shall not refuse/deny

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MUMBAI BENCH : C-IV IA-1186(MB)/2020 & IA-1336/2023 in CP(IB)-1712(MB)/2019 approval/extension/restoration merely on ground of previous defaults/non-compliance of the Corporate Debtor.

8.5 In terms of the judgement of Hon’ble Supreme Court in the matter of “Ghanshyam Mishra and Sons Private Limited v. Edelweiss Asset Reconstruction Company Limited“, on the date of approval of the Resolution Plan by the Adjudicating Authority, all such claims, which are not a part of resolution plan, shall stand extinguished and no person will be entitled to initiate or continue any proceedings in, respect to a claim, which is not part of the resolution plan.”

“95. (i) Once a resolution plan is duly approved by the adjudicating authority under sub-section (1) of Section 31, the claims as provided in the resolution plan shall stand frozen and will be binding on the corporate debtor and its employees, members, creditors, including the Central Government, any State Government or any local authority, guarantors and other stakeholders. On the date of approval of resolution plan by the adjudicating authority, all such claims, which are not a part of the resolution plan shall stand extinguished and no person will be entitled to initiate or continue any proceedings in respect to a claim, which is not part of the resolution plan;

(ii) 2019 Amendment to Section 31 of the I&B Code is clarificatory and declaratory in nature and therefore will be effective from the date on which the Code has come into effect;

(iii) consequently, all the dues including the statutory dues owed to the Central Government, any State Government or any local authority, if not part of the resolution plan, shall stand extinguished and no proceedings in respect of such dues for the period prior to the date on which the P age 15 | 16

MUMBAI BENCH : C-IV IA-1186(MB)/2020 & IA-1336/2023 in CP(IB)-1712(MB)/2019 adjudicating authority grants its approval under Section 31 could be continued.”

8.6 In view of the above judgement, the applicant is entitled to waivers/ concessions/reliefs as expressly provided under the Code and under any other law for the time being in force.

8.7 The Applicant shall forward all records relating to the conduct of the CIRP and the Resolution Plan to the IBBI along with copy of this Order for information.

8.8 The Applicant shall forthwith send a copy of this Order to the CoC and the Resolution Applicant for necessary compliance.

10. With the above directions, the Resolution Plan of the Applicant is approved by this Bench and accordingly IA-1186/2020 is allowed. IA-1336/2023 is also disposed of, accordingly.

Sd/- Sd/- PRABHAT KUMAR KISHORE VEMULAPALLI MEMBER (TECHNICAL) MEMBER (JUDICIAL) 02.05.2023 / pvs

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