Mr.Puskar Gulati vs Ankur Kumar Resolution Professional Of ...

Comp. App. (AT) (Ins) No. 948 of 2024 & I.A. No. 3455 of 2024

IN THE MATTER OF: Pushkar Gulati ...Appellant Versus Ankur Sharma, RP of General Composites Pvt. Ltd. ...Respondents & Anr. Present: For Appellant : Mr. Mohil Punjabi & Ms. Priyanka Sinha, Advocates.

For Respondents : Mr. Deepak Saxena & Mr. Kaushal Ameta, for R-2.

ORDER

(Hybrid Mode)

[Per : Justice Rakesh Kumar Jain (Oral)]

04.09.2025 This appeal is against the order dated 05.03.2024 by

which the National Company Law Tribunal, Mumbai Bench-I ('Tribunal')

has allowed the application bearing IA. No. 108/2024 filed by the RP and

dismissed the application bearing I.A. No. 5640/2023 filed by the present

Appellant.

2. In brief, petition bearing C.P. (IB) No. 703/MB/2019 was filed by the

Corporation Bank (now Union Bank of India) under Section 7 of the

Insolvency & Bankruptcy Code, 2016 ('Code') against the General

Composites Pvt. Ltd. ('Corporate Debtor') for the resolution of its debt

which was admitted on 03.09.2019.

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3. In the 13th CoC meeting held on 23.07.2021, it rejected the Resolution

Plan submitted by the Suspended Director of the Corporate Debtor on

19.06.2021 and further decided to liquidate the Corporate Debtor in terms

of Section 33 of the Code.

4. This led to the filing of an application bearing I.A. No. 1974 of 2021 for

liquidation on 19.08.2021. While the application for liquidation was

pending, the Suspended Director of the Corporate Debtor filed an

application bearing I.A. No. 2128 of 2021 for staying the initiation of

liquidation proceedings against the Corporate Debtor and further to direct

the CoC to consider the fresh Resolution Plan submitted by the Suspended

Director.

5. The Tribunal vide its order dated 21.10.2021, allowed the Suspended

Director to submit a fresh Resolution Plan and directed the Resolution

Professional and the CoC to consider the fresh Resolution Plan submitted by

the PRA.

6. The Resolution Plan submitted by the Suspended Director was put up

for voting and the CoC approved it on 04.06.2022.

7. The RP filed an application bearing I.A. No. 2293 of 2022 before the

Tribunal for approval of the Resolution Plan which was allowed on

11.08.2023.

8. A Monitoring Committee ('MC') was constituted on the direction of the

Tribunal, in terms of the approved Resolution Plan, for supervising the

Page 2 of 9 implementation of the Resolution Plan of the Corporate Debtor, which was

comprised of Erstwhile Resolution Professional, Authorised Representative

of the Financial Creditors i.e., Union Bank of India and Resolution

Applicant. The Erstwhile Resolution Professional was appointed as the

Chairman of the MC.

9. In the meeting of the MC held on 03.10.2023, the RP in the capacity of

the Chairman of the MC informed the MC that the SRA, vide email dated

26.09.2023 had requested for extension of 60 days time to make the up-

front payment, envisaged in the approved Resolution Plan, to the

Stakeholders of the CD, on the ground that the Resolution Applicant was in

the process of making arrangements to make the up-front payment as per

the Resolution Plan. However, the MC informed that no extension can be

given.

10. It has been noted in Para 2.5 in the Impugned Order that the payment

were to be in terms of the approved Resolution Plan, which is reproduced as

hereunder:-

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11. It has been recorded by the Tribunal in Para 2.6 that the SRA/

Applicant did not even make the up-front payment of Rs. 1,32,93,465/-

which was payable within 60 days of approval of plan i.e., on or before

09.10.2023.

12. The meeting of the MC was held on 17.10.2023 in which the Appellant

informed that he is not in position to raise the funds for payment through

sale of the Company's land, unsecured loan from friends and family etc.,

hence he has approached the stressed asset fund Banks/ financial

institutions to fund the Resolution Plan and to take over the debt owed to

the Secured Financial Creditor i.e., Union Bank of India.

13. It is recorded in the Impugned Order that on the request of the

Appellant, Union Bank of India issued conditional NOC on 09.11.2023 for

repayment of debt.

14. It has also been noticed in the Impugned Order that the Appellant

informed the FC in 4th meeting held on 20.11.2023 that he could not comply

with the terms of the approved Resolution Plan, therefore, the MC advised

the Applicant/ RP/ Chairman of the MC committee of file an application

before Tribunal to seek instruction against the SRA for contravention of the

terms of the approved Resolution Plan. Consequently, IA No. 108 / 2024

was filed in which the following prayers were made :-

"a. Pass an order directing SRA to comply with the terms of the approved resolution plan of the Corporate Debtor;

Page 4 of 9 b. To impose cost on the Respondent under Section 74(3) of the Code for contravention of the Resolution Plan;

c. Pass any other orders as this Hon'ble NCLT may deem fit"

15. The Tribunal while considering the application filed by the RP had

also considered an application bearing IA No. 5640/2023 which was filed by

the SRA on 18.10.2023, invoking Section 60(5) of the Code for extension of

period of 60 days to make the payment of the first instalment. The prayers

made in the said application are also reproduced as under :-

"a. The Tribunal may be pleased to allow this Interlocutory Application and grant further extension of 60 days' time to make payment of first instalment as stated in the Successful Resolution Plan.

b. The Tribunal may be please to not entertain any application for liquidation of corporate Debtor filed under Section 33 of Insolvency and Bankruptcy Code, 2016 for such extended period of 60 days or any other extended period as may be granted by this tribunal."

16. The Tribunal after considering the pleadings in both the applications

and the evidence brought on record, recorded its finding in para 4 of the

Impugned Order, in which para 4.1.1, 4.1.3, 4.2.2 requires to be specifically

mentioned which are reproduced as under :-

"4.1.1. It is clear that NOC, as requested by SRA to raise further finance to pay the Resolution money, was provided to him and in terms of the provision of said

Page 5 of 9 NOC, the SRA was to provide the sanction for funding of the resolution plan on or before 10th November, 2023 and the same has not been provided even till date. 4.1.3. From the perusal of the proceedings of the meeting, it is clear that SRA was still exploring the options and had no firm proposal in his hand as regard funding of the Resolution Money he was obligated to deposit. It is not in dispute that he has not brought any document evidencing the arrangement of funds for payment of resolution money, even though the timeline for payment of second instalment has also expired on 8.12.2023 and the third instalment is due for payment in August, 2024. It is also clear from these conversations that SRA has no means to fund Resolution except either out of proceeds of disposal of the lands owned by the Corporate Debtor or proceeds of fresh borrowings. In view of these findings, we are of considered opinion that SRA has not independent means to pay the Resolution money as proposed in the approved resolution plan and his commitment to pay are contingent on disposal of the lands owned by the Corporate Debtor or fresh borrowings. It is trite law that a contingent plan cannot stand and it has to give way to consequential proceedings. Accordingly, we have no hesitation to hold that the SRA has failed to implement the resolution plan. Hence, in terms of provisions of section 33(4) of the Code, it is incumbent on this Tribunal to pass orders for liquidation of the Corporate Debtor.

4.2.2. Therefore, looking through the glasses of the drafter of the statute, the term "corporate debtor" under Section 3(8) of IBC encompasses within its definition two different entities. At the beginning of the insolvency

Page 6 of 9 proceedings, the original promoters and the key managerial personnel of the corporate debtor are the ones who owe debt to the creditors. Once the Resolution Plan gets approved, it is the successful resolution applicant who now owes a debt to other creditors and undertakes to pay them. Thus, the successful resolution applicant becomes the new corporate debtor to the creditors and the Resolution Plan becomes binding on the new corporate debtor as per Section 31(1). Hence, a contravention of the terms of the Resolution Plan would constitute an offence under Section 74(3), and the Applicant states and submits that reliance can also be placed upon the order dated 16 August 2019 passed by the Hon'ble NCLAT in Company Appeal (AT) (Insolvency) No. 442 of 2019, Liberty House Group Pte Ltd. Vs. Mr. Dinkar T. Venkatasubramanian & Ors., and rightly held that the non-implementation of the Resolution Plan constitutes an offence under Section 74 of the Insolvency Bankruptcy Code, 2016."

17. Ultimately, the Tribunal allowed the application bearing IA No. 108/

2024 and dismissed the application bearing IA No. 5640/2023 and passed

the order of liquidation by appointing Devang Sampat as the Liquidator.

18. Counsel for the Appellant has though vehemently argued that the

Impugned Order is patently illegal but he could not deny the fact that so

far, the Appellant who was the Suspended Debtor, has not paid a single

penny towards the payment of the approved Resolution Plan much less

comply with the timelines provided therein.

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19. It is also pertinent to mention that at one point of time the CoC had

decided to liquidate the CD after rejecting the Resolution Plan submitted by

the Suspended Director on 19.06.2021 and IA No. 1974 of 2021 was also

filed by the RP on 19.08.2021 yet on the application filed by the Appellant

bearing IA No. 2128 of 2021 for stay of initiation on liquidation and to

provide in one more chance to file his fresh Resolution Plan, the Tribunal

allowed the present appellant to submit the fresh Resolution Plan which

was approved by the CoC with 100% voting in its meeting held on

04.06.2022.

20. It is also important to note that the Appellant was not having the

money even to pay the upfront fee for which he had made a request for the

extension of period of 60days.

21. This fact has been duly noticed by the Learned Tribunal in Para 2.6

of the Impugned Order besides noticing the timeline in which the Appellant

was to make the payment of the entire dues/ amount of the Resolution

Plan.

22. Thus, from the perusal of the Impugned Order as well as the fact that

the Appellant has been given time twice for filing the Resolution Plan but

still the Appellant has failed to make the payment of a single penny

23. In such circumstances, we hardly find any reason to interfere in the

well reasoned order passed by the Learned Tribunal. Hence, the present

Page 8 of 9 appeal devoided of any merits is hereby dismissed. No Cost. I.A., if any,

pending are hereby closed.

[Justice Rakesh Kumar Jain] Member (Judicial)

[Justice Mohammad Faiz Alam Khan] Member (Judicial)

[Mr. Naresh Salecha] Member (Technical) Sim/RR

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