M/s Fincast Founders and Engineers Pvt. Ltd. Vs Shri Rajat Mukherjee (NCLAT Ahemdabad)
1) The instant application is filed under section 60 (5) of the IB Code r.w. Rule 11 of the NCLT Rules, 2016 seeking appropriate direction in Resolution Plan dated 25.05.2019, with following prayer:
a. to enable the applicant to comply with the implementation of the Resolution Plan approved hy this Hon ‘hle Adjudicating Authority vide order dated 20.11.2019 passed in LA. No. 352/2019 in C.P. (LB.) No. 162/NCLT/AHM/2018.
b. to relax the schedule timeline for the payment.
c. and also to exclude the period of lock down to conclude the Resolution Plan, apart from other prayers
2. The fact of the case is that the Respondent No. 3 in Consortium submitted a Resolution Plan for the revival of the Corporate Debtor, which said plan was approved on 20.11.2019 in IA 352/2019 by this Adjudicating Authority and the Resolution Applicant is required to comply with monthly activities and has to submit cash flow statement and stock audit to the Monitoring Committee duly appointed by this Adjudicating
3) That, till February, 2020, the Resolution Applicant has duly submitted Audit Reports and Cash Flow Statement to Monitoring Committee. Pending full implementation of the approved Resolution Plan, meanwhile, Government of India declared nationwide lockdown from 25.03.2020 due to spread of Novel Corona Virus-19, which is time to time extended till 05.2020 vide various executive order (s).
4) That, due to such sudden lockdown Company had to close its operations for the safety of its workers. Consequent upon which, total work got delayed, however, the Applicant as on 30.04.2020 already made payment of Rs. 6,77,84,150/- and the same has been certified by Chartered Accountant (Copy annexed as Annexure-G Colly). As per Resolution Plan the Applicant is required to pay Rs. 2,25,00,000/- lakh to Financial Creditor by T+180 days i.e. 20.05.2020 from the date of approval.
5) The Applicant further submitted that there was/is lockdown, however, the Applicant is paying all fixed wages, such as, salary to workers, payments of contractors, security etc. apart from power bill, caused adverse impact on Cash Flow, as there is no definite cash flow due to lockdown.
6) That, Applicant on number of occasion, by way of E-mail on 01.04.2020, 04.2020 and 04.05.2020, informed the Respondent about the difficulties faced by the Resolution Applicant in fulfilling its compliances as per Resolution Plan, so approved by the Adjudicating Authority, due to lockdown. The Applicant also requested the Chairman of Monitoring Committee for relaxation in execution of Resolution Plan by way of proposed letter dated 16.05.2020 considering the prevailing situation of COVID- 19 and its consequential effects. The Applicant circulated the letter dated 18.05.2020 among the Members of COC and for calling of meeting on 19.05.2020, however, the said meeting is cancelled.
7) That, the Resolution Applicant vide its proposal letter dated 16.05.2020 proposed the following grounds for relaxation in view of the pandemic COVID-19, which is as follows:
a. The Resolution Applicant has to comply with certain timelines by 20.05.2020. Considering the lockdown and suspension of business from 24.03.2020 till the opening of lockdown in the State till it achieves normalcy, the Resolution Applicant requests to revise the timelines for Four months from the date of opening of lockdown i.e. T+Four Months where T is the opening of Lockdown.
b. The Resolution Applicant has to discharge certain statutory liabilities by 20.05.2020. The Applicant has already implemented the process but considering the present situation, the response of the statutory authority at present is very limited/restricted and will take considerable time to resume its normalcy and thus, requesting from extension of timelines for Four Months from the date of opening of lockdown in the State of Gujarat..
c. As per Resolution Plan, the Resolution Applicant is required to make payment of Rs. 225 laths to Financial Creditors by T+180 days i.e. by 20.05.2020. Thus, considering the current situation, Resolution Applicant is proposing revised timeline as under:
