NCLT Approves ₹17.25 Cr Resolution Plan After CoC Endorsement & Regulatory Compliance

Miller Trader Pvt. Ltd. Vs Dunlop Polymers Pvt. Ltd. (NCLT Bengaluru)

The National Company Law Tribunal (NCLT), Bengaluru Bench, considered an application filed by the Resolution Professional under Section 30(6) read with Section 31 of the Insolvency and Bankruptcy Code, 2016, seeking approval of the Resolution Plan submitted by the Successful Resolution Applicant (SRA), Mr. Saikam Sivachaitanya, for the Corporate Debtor. The Resolution Plan had been approved by the Committee of Creditors (CoC) with 97.94% voting share in its meeting held on 11.06.2024.

The Corporate Debtor was admitted into the Corporate Insolvency Resolution Process (CIRP) on 25.06.2019 following a default of ₹48,46,699. During the CIRP, disputes arose regarding the constitution of the CoC, leading to proceedings before the Karnataka High Court and subsequent reconstitution of the CoC by the Tribunal through an order dated 23.01.2024. The reconstituted CoC consisted of Canara Bank with a 97.94% voting share and Swapanli Trade and Commerce Private Limited with a 2.06% voting share.

Registered valuers assessed the Corporate Debtor, arriving at an average fair value of ₹21.61 crore and an average liquidation value of ₹16.16 crore. The Successful Resolution Applicant, who was found eligible under Section 29A of the Code, proposed a Resolution Plan with a total resolution amount of ₹17.25 crore. The funding was proposed through fresh equity of ₹2 crore and quasi-equity of ₹15.25 crore. The SRA also furnished a performance security of ₹3.45 crore in compliance with Regulation 36B(4A).

The Tribunal noted that the Resolution Plan was considered feasible and viable by the CoC. Financial projections submitted under the Plan indicated expected profitability after implementation. The Plan proposed payments of ₹16.75 crore to secured financial creditors, ₹5 lakh to unsecured financial creditors, ₹5 lakh towards operational creditors’ government dues, and ₹40 lakh towards CIRP costs. The total admitted claims amounted to ₹101.94 crore, while the amount proposed under the Resolution Plan was ₹16.85 crore towards stakeholders and ₹17.25 crore including CIRP costs. Existing equity shareholders’ interests were extinguished, with all pre-CIRP equity shares reduced to nil.

The Tribunal examined compliance with Section 30(2) of the Code and the CIRP Regulations. It found that the Plan provided for payment of CIRP costs in priority, addressed operational creditors’ dues, contained provisions for management and supervision of the Corporate Debtor after approval, and did not contravene any law. A Monitoring Committee comprising the Resolution Applicant, the financial creditor with the highest voting share, and the Resolution Professional was proposed to supervise implementation of the Plan.

The Tribunal also recorded that no avoidance transaction applications had been filed, that pending litigation details had been disclosed, and that the Resolution Professional had certified compliance with the Code and Regulations. The Resolution Plan was approved by the CoC with the requisite majority after considering all statutory requirements.

Regarding reliefs and concessions sought by the Resolution Applicant, including exemptions relating to taxes, stamp duty, company law compliances, and other statutory approvals, the Tribunal held that such exemptions would have to be obtained from the respective statutory authorities in accordance with applicable law. Approval of the Resolution Plan would not automatically result in waiver of statutory liabilities, taxes, duties, or other legal obligations.

After examining the Resolution Plan and compliance requirements, the NCLT approved the Resolution Plan submitted by the Successful Resolution Applicant. The Tribunal held that the Plan would be binding on the Corporate Debtor, its employees, members, creditors, government authorities, guarantors, and all other stakeholders. The Resolution Professional was directed to hand over management and records to the Successful Resolution Applicant. The Tribunal further clarified that the order did not grant exemptions from payment of taxes, stamp duty, charges, or statutory compliances. The approved Resolution Plan became effective immediately, the moratorium ceased to operate, and the Monitoring Committee was directed to submit bi-monthly progress reports regarding implementation.

FULL TEXT OF THE NCLT JUDGMENT/ORDER

1. Heard Ld. Counsel for RP.

2. Resolution Plan is approved vide separate order.

3. List the case on 07.2026 for reporting on implementation by monitoring committee.

1. Mr. M.V. Sudarshan (Resolution Professional of the Corporate Debtor’) has filed this application on 09.07.2024 under Section 30(6) read with Section 31 of the Insolvency and Bankruptcy Code, 2016 and Regulation 39(4) of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 seeking approval of the Resolution Plan of the Corporate Debtor submitted by Mr. Saikam Sivachaitanya (Successful Resolution Applicant/SRA) and approved by the Committee of Creditors in its 6^th meeting held on 11.06.2024 with 97.94% voting share.

2. ABOUT THE CORPORATE DEBTOR

Dunlop Polymers Private Limited, the Corporate Debtor, was admitted into Corporate Insolvency Resolution Process vide order dated 25.06.2019 under Section 7 of the IBC, 2016, for default in repayment of debt amounting to ₹48,46,699/–. Mr. Tuhin Kumar Chatterjee was appointed as the IRP.

A dispute arose between Canara Bank, a secured financial creditor and the erstwhile IRP regarding the constitution of the Committee of Creditors. The Bank, therefore, approached Hon’ble High Court of Karnataka by filing W.P. No. 42878/2019 challenging the proceedings. The High Court stayed the proceedings vide order dated 19.09.2019. Subsequently, the writ petition was disposed of vide order dated 13.09.2022, reserving liberty to the Applicant to pursue remedies in accordance with law. Thereafter, Canara Bank filed I.A. No. 575/2022 under Section 60(5) of the IBC, 2016 read with Rule 11 of the NCLT Rules, seeking reconstitution of the CoC. This Tribunal, vide order dated 23.01.2024, allowed the application and also appointed the Applicant, Mr. M.V. Sudarshan as Resolution Professional.

The Applicant has relied upon the claims received by the erstwhile IRP and after examination in light of order dated 23.01.2024 reconstituted the CoC of following members:

The key dates and events during the Corporate Insolvency Resolution Process period are tabulated hereunder:

3. APPOINTMENT OF REGISTERED VALUERS:

Registered Valuers for Corporate Debtor were appointed on 28.02.2024, copy of valuation reports are Annexure C to memo dated 04.04.26, and their summary is as follows:

4. DETAILS OF THE SUCCESSFUL RESOLUTION APPLICANT:

This Resolution Plan has been proposed by Mr. Saikam Sivachaitanya. The SRA has a background in Engineering and Business Administration, he delved into urban development and infrastructure, culminating in the successful completion of numerous projects. He is also involved in following businesses:

• Director – Saikam Estates & Projects Pvt. Ltd, Bangalore.
• Director – Saikam Dream Acres Pvt. Ltd., Bangalore.
• Managing Partner – VishwaVeer Homes
• Managing Partner – Saikam Developers

The Successful Resolution Applicant has a net-worth of INR 81,53,88,158/- as on 31.01.2026 and meets the criteria provided by the CoC and is also eligible under Section 29A of the Code, affidavit to that effect is at Annexure B in the main Petition along with the due diligence report under Regulation 36A(8) at Annexure A1 to memo dated 23.01.25.

5. FEASIBILITY AND VIABILITY OF THE PLAN:

Clause 4.5.2 of the Resolution Plan deals with its feasibility and viability. The Successful Resolution Applicant has submitted detailed financial projections, annexed as Schedule 9 to the Plan, which indicate that the Corporate Debtor is expected to achieve a net profit in the first full year of operations post-implementation, with profitability projected to increase in subsequent years. The Plan is premised on the revival potential of the Corporate Debtor, which had viable operations prior to the disruptions caused by the COVID-19 pandemic. The SRA, having experience across multiple business verticals, possesses the requisite managerial capability to efficiently run the Corporate Debtor and proposes to appoint qualified professionals and technical experts to strengthen operations. Further, the SRA has demonstrated adequate financial capability through existing investments and access to funds, ensuring its ability to implement the Plan and meet all financial commitments.

6. SOURCE OF FUNDS AND PERFORMANCE BANK GUARANTEE:

• Source of Funds: The Resolution Applicant is an entrepreneur and Director in Saikam Estates & Projects Ltd and Saikam Dream Acres Pvt. Ltd. The source of funds for the implementation of the plan is as follows:

Along with the plan, the Resolution Applicant has submitted his net worth certificate and on conducting due diligence, it is found that the RA has sufficient funds to fulfil the requirements of the plan

• Performance Bank Guarantee: In compliance with Regulation 36B(4A) of the CIRP Regulations, the Successful Resolution Applicant has deposited an amount of INR 3,45,00,000 with Canara Bank, which renews periodically and is valid up to 05.10.2026. The Fixed Deposit Receipt evidencing the same is annexed as Annexure A to the memo dated 04.04.2026.

7. AVOIDANCE TRANSACTIONS, PENDING LITIGATION & IBBI FEE:

• Avoidance Transactions- As per Clause 15 of the Form H, it can be seen that no application in respect of PUFE transactions has been filed by the Resolution Professional against the promoters of Corporate Debtor or others.
• Pending Litigation- Vide order dated 25.09.2024, Pending Litigation details were directed to be filed. In compliance whereof SRA has filed affidavit dated 04.11.2024, with the list of Pending Litigations, attached as Annexure A4 to memo dated 05.11.2024.
• IBBI Fee- As envisaged under 31A (1) A regulatory fee calculated at the rate of 0.25 per cent of the realizable value to creditors under the resolution plan approved under section 31, shall be payable to the Board, where such realizable value is more than the liquidation value and it shall be applicable where resolution plan is approved under section 31 on or after 01.10.2022. This Fee has been provided as part of CIRP cost and the same will be paid on the approval of the resolution plan.

8. Heard Sh. Hemanth Rao, Advocate, learned counsel for the RP/Applicant and carefully perused the pleadings on record.

SALIENT FEATURES OF THE RESOLUTION PLAN:

9. Post commencement of CIRP, CoC was constituted by the RP. The details of the creditors, the distribution of voting share among them and the position of voting for the Resolution Plan is as under (Para 5 of Form H):

10. The details of stakeholders and the amounts provided for them under the Resolution Plan is given in Para 7 of Form H, given below:

(Amount in Rs. Lakh)

11. The interest of existing shareholders in the Corporate Debtor has been altered by Resolution Plan as under, as per Para 8 of Form H:

12. The compliance of the Resolution Plan as per Para 9 of Form H is hereunder:

13. At this juncture it is necessary to refer to Section 30(2) of IBC which is as follows:

“30. Submission of Resolution Plan:

(2) The resolution professional shall examine each Resolution Plan received by him to confirm that each Resolution Plan-

(a) provides for the payment of insolvency resolution process costs in a manner specified by the Board in priority to the 3[payment] of other debts of the corporate debtor;

(b) provides for the payment of debts of operational creditors in such manner as may be specified by the Board which shall not be less than the:

i. amount to be paid to such creditors in the event of liquidation of the corporate debtor under section 53; or

ii. the amount that would have been paid to such creditors, if the amount to be distributed under the Resolution Plan had been distributed in accordance with the order of priority in sub-section (1) of Section 53, whichever is higher, and provides for the payment of debts of financial creditors, who do not vote in favour of the Resolution Plan, in such manner as may be specified by the Board, which shall not be less than the amount to be paid to such creditors in accordance with sub-section (1) of section 53 in the event of a liquidation of the Corporate Debtor.

Explanation 1. – For removal of doubts, it is hereby clarified that a distribution in accordance with the provisions of this clause shall be fair and equitable to such creditors.

Explanation 2. – For the purpose of this clause, it is hereby declared that on and from the date of commencement of the Insolvency and Bankruptcy Code (Amendment) Act, 2019, the provisions of this clause shall also apply to the corporate insolvency resolution process of a corporate debtor-

i. where a Resolution Plan has not been approved or rejected by the Adjudicating Authority;

ii. where an appeal has been preferred under section 61 or section 62 or such an appeal is not time barred under any provision of law for the time being in force; or

iii. where a legal proceeding has been initiated in any court against the decision of the Adjudicating Authority in respect of a Resolution Plan;

(c) provides for the management of the affairs of the Corporate Debtor after approval of the Resolution Plan;

(d) The implementation and supervision of the Resolution Plan;

(e) does not contravene any of the provisions of the law for the time being in force.

(f) conforms to such other requirements as may be specified by the Board.”

14. REGULATORY COMPLIANCES:

The compliance of Section 30(2) of the Code is given in Annexure to Form-H (supra). The same is being further examined as under:

a) Section 30(2)(a): The Resolution Applicant undertakes to pay an amount of ₹40 lakh towards CIRP costs, which shall be paid in priority to all other stakeholders in accordance with the provisions of the Code. As the exact CIRP cost has not been communicated by the Resolution Professional, the aforesaid amount is being earmarked for this purpose. In the event the actual CIRP costs exceed INR 40 Lakh, such excess amount shall be adjusted against the payments proposed to be made to the Secured Financial Creditors, so as to ensure that the overall financial outlay of the Resolution Applicant under the Resolution Plan remains unchanged.

b) Section 30(2)(b): The Successful Resolution Applicant has proposed a sum of ₹5.00 lakhs towards statutory dues of Operational Creditors. It is further noted that no claims have been submitted by workmen or employees; accordingly, no amount is proposed towards such claims. In the Resolution Applicant’s assessment, the Liquidation Value is insufficient to even satisfy the claims of the Secured Financial Creditors in full and therefore, the Liquidation Value accruing to the Operational Creditors would be NIL. Accordingly, all dues of the Operational Creditors being paid in compliance to Section 30(2)(b).

c) Section 30(2)(c): Clause 3.2.5.4(b) talks about payment to dissenting financial creditors and states that they shall be paid minimum liquidation value as per the provision of Section 30(2) of the Code. As the Unsecured Financial Creditor has abstained from voting, the SRA has allocated an amount of INR 5.00 Lacs against their total admitted claims of Rs. 82.78 Lacs in compliance to Section 30(2)(c).

d) Section 30(2)(d): Clause 4.2 of the Resolution Plan provides that upon its approval (‘Effective Date’), all existing directors of the Corporate Debtor shall be deemed to have resigned and the Board shall be reconstituted by the Successful Resolution Applicant in accordance with applicable law. The SRA proposes to manage the affairs of the Corporate Debtor through a professionally structured management framework comprising of:

• • Reconstituted Board of Directors,
  • Key Managerial Personnel including a Chief Executive Officer and departmental heads,
  • Monitoring and Audit Committees supported by functional heads.

e) Section 30(2)(e): Upon approval of the Resolution Plan, the reconstituted Board of Directors, along with the financial and technical teams already in place or to be inducted, shall manage the day-to-day affairs of the Corporate Debtor from the Appointed Date until the Effective Date. From the Effective Date, the Successful Resolution Applicant shall assume full control of the Corporate Debtor and undertake necessary appointments of employees and key personnel, while retaining or restructuring the existing workforce as deemed appropriate.

For the period commencing from the date of approval of the Resolution Plan by the Adjudicating Authority until full implementation and payment in terms of the Plan, a Monitoring Committee shall be constituted to supervise and ensure effective implementation of the Resolution Plan in a time-bound manner. The Monitoring Committee shall comprise the following:

• • Resolution Applicant
  • Financial Creditor having the highest voting share in the CoC
  • Resolution Professional

f) Section 30(2)(f): The Resolution Applicant in Clause 4 (i) of Form H, confirms that the Resolution Plan is not in contravention of any of the provisions of the applicable laws for the time being in force.

g) Regulation 36B (4A): In compliance with Regulation 36B(4A) of the CIRP Regulations, the Successful Resolution Applicant has deposited an amount of INR 3,45,00,000 with Canara Bank, which renews periodically and is valid up to 05.10.2026. The Fixed Deposit Receipt evidencing the same is annexed as Annexure A to the memo dated 04.04.2026.

h) It is submitted that the Resolution Plan complied with Regulation 38 of the Insolvency and Bankruptcy Board of India (Insolvency process for Corporate Persons) Regulations, 2016 which are as follows:

1) Regulation 38(1): The amount offered to Operational Creditor under the Plan has been laid down below:

2) Regulation 38(1A): The Resolution Applicant has considered the interest of all the stakeholders and has accordingly proposed to make payment to the stakeholders in the following manner:

Further infusion of fund after payment to all the stakeholders proposed by the SRA is as follows:

3) Regulation 38(1B): The SRA has stated in Clause 4.7 of the Resolution Plan that as mandated under Regulation 38(1B) of the CIRP Regulations, he or any of his related parties has not failed to implement or contributed to the failure of implementation of any Resolution Plan approved under the code.

4) Regulation 38(3)(a): Clause 4.5.1 of the Plan states that the financial distress of the Corporate Debtor arose primarily due to adverse government policies, increased tax burden, and heightened competition from peer companies, which collectively impacted its profitability and cash flows. As a result, the Corporate Debtor faced constraints in managing its working capital cycle, leading to liquidity stress and operational disruptions. Owing to these factors, the Corporate Debtor was unable to sustain its operations profitably, which ultimately resulted in defaults in meeting its financial obligations and led to the initiation of the Corporate Insolvency Resolution Process.

5) Regulation 38(3)(b): Clause 4.5.2 of the Resolution Plan deals with its feasibility and viability. The Successful Resolution Applicant has submitted detailed financial projections, annexed as Schedule 9 to the Plan, which indicate that the Corporate Debtor is expected to achieve a net profit in the first full year of operations post-implementation, with profitability projected to increase in subsequent years. The Plan is premised on the revival potential of the Corporate Debtor, which had viable operations prior to the disruptions caused by the COVID-19 pandemic. The SRA, having experience across multiple business verticals, possesses the requisite managerial capability to efficiently run the Corporate Debtor and proposes to appoint qualified professionals and technical experts to strengthen operations. Further, the SRA has demonstrated adequate financial capability through existing investments and access to funds, ensuring its ability to implement the Plan and meet all financial commitments.

6) Regulation 38(3)(c) & Regulation 38(3)(d): Schedule 2 of the Resolution Plan details the implementation. Further, the indicative timeline for implementation of Resolution Plan is as follows:

7) Regulation 38(3)(e): The SRA has a strong financial standing, as evidenced by net-worth of INR 81,53,88,158 as on 31.01.2026 thereby establishing its capacity to undertake the acquisition and turnaround of the Corporate Debtor. It is further submitted that the SRA has a proven track record of financial stability and operational management, demonstrating both the capability and commitment to fulfil its obligations under the Plan. The Successful Resolution Applicant meets the criteria provided by the CoC and is also eligible under Section 29A of the Code, affidavit regarding the same is annexed as Annexure B in the main Petition along with the due diligence report under Regulation 36A(8) has been submitted as Annexure A1 to memo dated 23.01.25, confirming the eligibility of the SRA.

i) The Resolution Professional has certified that the Resolution Plan is not subject to any contingency in Clause 12 of Form-H. Further, in Clause 4 it is certified that the Resolution Plan complies with all the provisions of Insolvency and Bankruptcy Code, 2016 and the Regulations thereunder and also does not contravene any of the provisions of the law for the time being in force. Further, the SRA has submitted an affidavit under section 30(1) of the Code confirming its eligibility under Section 29A of the Code to submit the Resolution Plan. It is further certified that the Resolution Plan has been approved by the CoC in accordance with the provisions of the Code and the CIRP Regulations made thereunder. The Resolution Plan has been approved with 97.94% voting share after considering all the requirements specified by the CIRP Regulations.

j) Reliefs and Concessions: In Schedule 5 of the Plan, the Resolution Applicant has urged for exemption of compliances in relation to Companies Act, 2013, Taxes (Direct & Indirect) & Stamp Duty as well as Specific Laws, other Government Approvals as applicable to the Corporate Debtor.

The Prayer has been examined and it is observed that for such reliefs and exemptions, the Resolution Applicant will have to approach the respective statutory authorities for being accorded and decided as per the provisions of concerned existing laws and landmark judgements. Further, the approval of the Resolution Plan shall not in itself be construed as waiver of any statutory obligations/liabilities/Taxes/duties etc. and any waiver sought in the Resolution Plan, shall be subject to approval by the Authorities concerned in light of the Judgment of Supreme Court in Ghanshyam Mishra and Sons Private Limited v/s. Edelweiss Asset Reconstruction Company Limited (Civil Appeal no. 8129 of 2019).

15. DECISION OF THE ADJUDICATING AUTHORITY:

In the circumstances and for the aforesaid reasons, the application bearing I.A. (Plan) No. 10 of 2024 is allowed and accordingly:

i. The Resolution Plan marked as Annexure B, submitted by Mr. Saikam Sivachaitanya, in respect of the Corporate Debtor, is hereby approved. The realisable amount under the Plan is INR 17.25 crores including INR 40 Lacs as CIRP cost. Additionally, the SRA will infuse Rs.3,00,00,000/- as working capital and Rs.6,00,00,000/- as investment for operations to achieve breakthrough in very first full year on becoming functional post implementation.

ii. The Resolution Plan hereby approved shall be binding on the Corporate Debtor, its employees, members, creditors, including the Central Government, State 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 such as authorities to whom statutory dues are owed, guarantors and other stakeholders involved in the Resolution Plan.

iii. Further, the Resolution Professional is directed to handover the management, control and all the assets, documents/records in physical and/or digital form to the Successful Resolution Applicant against proper receipt immediately and the Resolution Professional will stand discharged of his responsibilities of such position.

iv. It is clarified that this order shall not be construed as an order granting exemption from payment of stamp duty, taxes or charges, if any, payment due or required in accordance with law or in respect to any permission/compliance with or anything specifically required under any law to be done/performed etc. for the time being in force.

v. The approved Resolution Plan is effective forthwith. The Monitoring Committee shall submit bi-monthly progress report to this Authority. The members be paid remuneration as may be decided by the parties in the light of IBBI Regulations.

vi. In case of non-compliance/non-implementation/failure in implementation of this order or withdrawal of the Resolution Plan by the Successful Resolution Applicant, the RP shall forfeit the EMD/Performance Guarantee or any further amount paid as per the terms of the resolution plan without any recourse to this Authority. The Resolution Applicant shall also be liable to further compensate by way of interest or otherwise for the delay, deprivation and diminished prospects of CD in that event, as may be determined by this Authority.

vii. Under the provisions of section 31(3) of the Code, we also direct as under:

a. The moratorium imposed vide order dated 25.06.2019 in the main Company Petition ceases to operate from the date of this order.

b. The resolution professional shall forward all records of conducting CIRP and the Resolution Plan to the Board to be recorded/uploaded on its database