Hadirah Steels Pvt. Ltd. Vs Rana Heavy Engineering Ltd. (NCLT Allahabad)
In a recent application filed under Section 30(6) of the Insolvency and Bankruptcy Code (IBC) for approval of the Resolution Plan, based on the resolution passed by the Committee of Creditors (CoC), the National Company Law Tribunal (NCLT) Allahabad made a significant observation.
Upon review, it was noted that the amount of the Resolution Plan, totaling Rs. 6.70 crore, fell short of the liquidation value of Rs. 7.69 crore. The Liquidation Assets include Plant, Machinery, Land, and Building.
Considering that the CoC consists solely of the Unsecured Financial Creditor, who is also the Successful Resolution Applicant (SRA), the tribunal deemed it appropriate to direct the SRA to match the plan value with the liquidation value. However, the SRA was given the liberty to bring forth reasons if they found it unfeasible to do so.
While acknowledging the commercial wisdom of the CoC in approving resolution plans, the tribunal noted the unique circumstances where the financial creditor, who is a member of the CoC, also serves as the SRA. Thus, it found it justifiable to issue such directions.
IA No.668/2023 was disposed of accordingly.
This decision by NCLT Allahabad underscores the importance of aligning the resolution plan value with the liquidation value, ensuring fair treatment of creditors and maximizing the value of assets during insolvency proceedings.
