Pradeep Kumar Kabra RP For Cengres Tiles Ltd Vs COC of Cengres Tiles Ltd & Ors (NCLT Ahmedabad)
The National Company Law Tribunal (NCLT), Ahmedabad, in a recent judgment dated March 20, 2023, made a significant decision regarding the insolvency proceedings of M/s Cengres Tiles Limited. The application was filed under Section 30(6) of the Insolvency & Bankruptcy Code, 2016, by Pradeep Kumar Kabra, the Resolution Professional (RP) of Cengres Tiles Limited, seeking approval for the Resolution Plan submitted by Third-eye Tradelink Private Limited in consortium with Turba International LLP, Baluram Lahoti, and Radheshyam Nuwal.
Detailed Analysis
i. Background: The corporate debtor, Cengres Tiles Limited, entered Corporate Insolvency Resolution Process (CIRP) on April 27, 2022. Mr. Navin Kanjwani was initially appointed as the Interim Resolution Professional (IRP). However, the Committee of Creditors (CoC) decided to replace the IRP and appointed Pradeep Kumar Kabra as the RP. This decision was later approved by the Adjudicating Authority.
ii. Resolution Plan: The CoC instructed the RP to invite prospective resolution applicants to submit Expression of Interest (EoI) and Resolution Plans. In response, six resolution plans were received, with Third-eye Tradelink Private Limited’s plan gaining approval with 99.86% votes from the CoC.
iii. Extensions Granted: Due to various factors and discussions in CoC meetings, the Corporate Insolvency Resolution Process (CIRP) period was extended by 120 days. This extension was crucial in allowing time for the resolution plan to be thoroughly examined and approved.
iv. Compliance Check: The RP conducted a comprehensive examination of the Resolution Plan’s compliance with various sections of the Insolvency & Bankruptcy Code, 2016, and relevant regulations. The plan addressed the complexities and operational scale of Cengres Tiles Limited’s business.
v. Payment Terms: The Resolution Plan proposed a payment of Rs. 45,20,00,000 to stakeholders, including secured financial creditors, unsecured financial creditors, operational creditors, workers, employees, statutory dues, and other debts and dues.
vi. Provisions for Implementation: The Resolution Plan outlined provisions for the payment of insolvency resolution process costs, repayment to operational creditors, management of the corporate debtor’s affairs, supervision of the resolution plan’s implementation, and other requirements specified by the regulatory board.
vii. Reliefs and Concessions: The resolution applicant sought certain reliefs and concessions, including the waiver of stamp duty, registration charges, and taxes, among others. The approval of the resolution plan was not conditional on the grant of these reliefs, and the resolution applicant was directed to approach the relevant statutory authorities for such concessions.
viii. Unpaid Liabilities: The NCLT clarified that all unpaid liabilities and claims not filed before the approval of the resolution plan, and those not included in the plan, would be extinguished, in accordance with the Insolvency & Bankruptcy Code.
ix. Effective Implementation: Before approving the resolution plan, the NCLT ensured that it contained provisions for its effective implementation, in line with Section 31 of the Insolvency & Bankruptcy Code.
Conclusion
The National Company Law Tribunal’s approval of the Resolution Plan for Cengres Tiles Limited marks a significant milestone in the corporate insolvency resolution process. This decision ensures the effective implementation of the plan submitted by Third-eye Tradelink Private Limited in consortium with Turba International LLP, Baluram Lahoti, and Radheshyam Nuwal. The judgment emphasizes compliance with legal requirements, the fair treatment of creditors, and the need for resolution applicants to seek appropriate reliefs through statutory authorities. This case demonstrates the importance of a thorough and compliant resolution process in India’s insolvency framework.
FULL TEXT OF THE NCLT JUDGMENT/ORDER
1. This application is filed on 20.03.2023 under Section 30(6) of Insol-vency & Bankruptcy Code, 2016 by Pradeep Kumar Kabra Resolution Professional (RP) of the corporate debtor-M/s Cengres Tiles Limited for approval of the Resolution Plan submitted by Third-eye Tradelink Private Limited (in consortium with Turba International LLP, Baluram Lahoti, Ra-dheshyam Nuwal).
2. The averments made by the applicant/ resolution professional in the present application and as argued by the learned counsel are summarized as under:
(i) The corporate debtor was admitted in Corporate Insolvency Resolution Process (CIRP) on 27.04.2022. Mr. Navin Kanjwani was appointed as Interim Resolution Professional (IRP). On 30.04.2022 the IRP made a public announcement of the CIRP of the corporate debtor thereby calling upon its creditors to submit their claim with requisite proof. The Committee of Creditors (CoC) was constituted with the following financial creditors having voting percentages based on their debt value as follows:
