Salil Shashank Kulkarni Vs. Rubique Technologies India Private Limited - it emerges that the primary object of the IB Code, 2016 is value maximization as well as revival/resolution of the financially stressed corporate debtors. . . . . . .Even otherwise, as it has been held in Essar Steel India Ltd v/s Satish Kumar Gupta’s case (supra), the time frames are directory and not mandatory in nature.

NCLT Mumbai-2 (2024.01.24) in Salil Shashank Kulkarni Vs. Rubique Technologies India Private Limited [IA No. 4372 of 2023 in CP (IB) No. 4304 (MB) of 2019] held that;

• What is interesting to note is that the Preamble does not, in any manner, refer to liquidation, which is only availed of as a last resort if there is either no resolution plan or the resolution plans submitted are not up to the mark. Even in liquidation, the liquidator can sell the business of the corporate debtor as a going concern.

• However, on the facts of a given case, if it can be shown to the Adjudicating Authority and/or Appellate Tribunal under the Code that only a short period is left for completion of the insolvency resolution process beyond 330 days, and that it would be in the interest of all stakeholders that the corporate debtor be put back on its feet instead of being sent into liquidation

• Likewise, even under the newly added proviso to Section 12, if by reason of all the aforesaid factors the grace period of 90 days from the date of commencement of the Amending Act of 2019 is exceeded, there again a discretion can be exercised by the Adjudicating Authority and/or Appellate Tribunal to further extend time keeping the aforesaid parameters in mind.

• it emerges that the primary object of the IB Code, 2016 is value maximization as well as revival/resolution of the financially stressed corporate debtors.  . . . . . .Even otherwise, as it has been held in Essar Steel India Ltd v/s Satish Kumar Gupta’s case (supra), the time frames are directory and not mandatory in nature.

Excerpts of the order;

# 1. This is an application filed by the Applicant, who is a Resolution Professional (‘RP’) of the Corporate Debtor, under Section 60(5) of the Insolvency and Bankruptcy Code, 2016 (‘IB Code’) inter-alia seeking extension of the Corporate Insolvency Resolution Process (‘CIRP’) period and withdrawal of liquidation application for the purpose of considering a resolution plan proposed by an individual named Mr. Pravin Kumar Jain. 

# 2. The averments made by the Applicant in his application and as argued by the Learned Counsel for the Applicant are briefly stated as under: 

i. The Corporate Debtor was admitted into CIRP by this Hon’ble Tribunal vide Order dated October 07, 2020 u/s 9 of the IB Code and Mr. Ajay Gupta was appointed as Interim Resolution Professional (‘IRP’) of the Corporate Debtor. 

ii. A Committee of Creditors (‘CoC’) of the Corporate Debtor was duly constituted comprising of Blacksoil Capital Private Limited (‘BCPL’), the sole Financial Creditor of the Corporate Debtor. In the subsequently held CoC Meetings, the erstwhile IRP and CoC held discussions on the matter of inviting expressions of interest (‘EoI’) in Form G of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 from prospective resolution applications. 

iii. However, in the 06th CoC meeting held on April 5, 2021 (being the day on which the CIRP period ended), it was decided by the CoC to commence liquidation proceedings against the Corporate Debtor. In light of the aforesaid, the Applicant filed I.A. No. 1059/2021 on May 14, 2021 before this Tribunal u/s 33 & 34 of the IB Code praying for liquidation of the Corporate Debtor. 

iv. During the pendency of Liquidation Application before this Hon’ble Tribunal, the erstwhile IRP received a letter dated June 02, 2022 from an individual resolution applicant named Mr. Pravin Kumar Jain, who had expressed his interest in acquiring the Corporate Debtor as a going concern. Pursuant to the receipt of aforesaid letter, the erstwhile IRP informed BCPL of the resolution applicant’s expression of interest. In turn, BCPL advised the Applicant herein to invite a proposed resolution plan from the resolution applicant. 

v. Therefore, a meeting was held between the erstwhile IRP and Resolution Applicant, wherein the Resolution Applicant was provided with information/documents to enable it to prepare a proposed resolution plan with respect to the Corporate Debtor. Vide Letter dated 08th June, 2022 addressed by the Resolution Applicant to the erstwhile IRP, the former submitted its proposed resolution plan. BCPL informed the erstwhile IRP that it was willing to consider, negotiate and deliberate upon the proposed resolution plan. 

vi. However, despite addressing several emails, the erstwhile IRP neither convened the meeting nor responded to the email. In the foregoing circumstances, BCPL filed an Interim Application No. 2470/2023 on June 09, 2023, inter-alia, praying for extension of CIRP period and appointment of the Applicant herein as the IRP of the Corporate Debtor. Vide Order dated 31.07.2023, the Hon’ble Tribunal was pleased to partially allow the said application by appointment of the Applicant as IRP and dismissed all other prayers as not pressed. vii. Thereafter, upon the appointment of the Applicant as IRP, the Applicant received an email dated August 11, 2023 from the BCPL, the only CoC member, requesting to convene a meeting in furtherance of BCPL’s request for withdrawing the liquidation application and extending CIRP period with a view to consider the proposed resolution plan by an individual resolution applicant. The Applicant submits that there is a possibility of revival of the Corporate Debtor in view of the proposed resolution plan and the willingness of CoC to deliberate upon it. However, the 180-day period from the insolvency commencement date ended on April 05, 2021 subsequent to which a liquidation application was filed. Despite BCPL’s repeated requests as the sole member of CoC, the erstwhile IRP did not file an application for withdrawal of liquidation application and for extension of CIRP period. viii. In view of the aforesaid developments, the Applicant herein has filed this application before the Hon’ble Tribunal seeking appropriate directions for (a) dismissal of the Liquidation Application; (ii) revival/extension of the CIRP period by 90 days u/s 12 of the IB Code; and (iii) exclusion of the period commencing from April 05, 2021 to the date on which the Hon’ble Tribunal passes an order for revival of CIRP period. Hence this Application. 

FINDINGS 

# 3. We have heard the learned Counsel for the Applicant and perused the records. 

# 4. This is an application filed by the Applicant, who is a Resolution Professional (‘RP’) of the Corporate Debtor, under Section 60(5) of the Insolvency and Bankruptcy Code, 2016 (‘IB Code’) inter-alia seeking extension of the Corporate Insolvency Resolution Process (‘CIRP’) period and withdrawal of liquidation application for the purpose of considering a resolution plan proposed by an individual named Mr. Pravin Kumar Jain. 

# 5. On perusal of records, we find that the statutory CIRP period of 180 days in respect of the Corporate Debtor came to an end on 05.04.2021. Therefore, the CoC in its 06th Meeting held as on that date had resolved to liquidate the Corporate Debtor. Accordingly, the erstwhile IRP Mr. Ajay Gupta filed an Interlocutory Application No. 1059/2021 u/s 33 of the IB Code for liquidation of Corporate Debtor. On 02nd June 2022, during the pendency of liquidation application, an individual resolution applicant named Mr. Pravin Kumar Jain has expressed his interest to the erstwhile IRP in acquiring the Corporate Debtor as a going concern. The CoC comprising of sole financial creditor Blacksoil Capital Private Limited (‘BCPL’) called upon the erstwhile IRP to convene a meeting for consideration of the proposed resolution plan, but the erstwhile IRP failed to convene a meeting. BCPL finally addressed an email dated May 30, 2023 to the erstwhile IRP, in exercise of its right under Regulation 18(2) of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 and requisitioning a CoC meeting within 48 hours to consider replacement of IRP/RP u/s 27 of the IB Code and extension of the CIRP period for the purpose of considering the proposed resolution plan for revival and rehabilitation of the Corporate Debtor. 

# 6. However, the erstwhile IRP neither convened a meeting nor responded to the email dated 30.05.2023. Therefore, BCPL had an I.A. No. 2470/2023 on June 09, 2023, inter-alia, for replacement of the erstwhile IRP with the Applicant herein. The I.A came to be partly-allowed by this Tribunal vide Order dated 31.07.2023 with the directions to replace the erstwhile IRP with the Applicant herein and all other prayers were rejected as not pressed. After the appointment of the Applicant as IRP of the Corporate Debtor, the Applicant had received an email dated August 11, 2023 from the Advocates of BCPL requesting to convene a meeting for the purpose of the withdrawing the liquidation application and extension of CIRP period for the sake of considering the proposed resolution plan for revival and rehabilitation of the Corporate Debtor. It is in the backdrop of these facts, that the present application has been filed by the Applicant on 19.09.2023 for extension of CIRP period. Thus, there seems to be no delay on the part of the Applicant in approaching this Tribunal for extension of CIRP. 

# 7. We observe that the object of IBC, 2016 is to maximize the value of assets for the benefit of stakeholders. The Hon’ble Supreme Court in the matter of Swiss Ribbons Pvt Ltd & Anr. v/s Union of India (2019 INSC 95) has observed at Para 11 as follows: 

• “11. As is discernible, the Preamble gives an insight into what is sought to be achieved by the Code. The Code is first and foremost, a Code for reorganization and insolvency resolution of corporate debtors. Unless such reorganization is effected in a time-bound manner, the value of the assets of such persons will deplete. Therefore, maximization of value of the assets of such persons so that they are efficiently run as going concerns is another very important objective of the Code. This, in turn, will promote entrepreneurship as the persons in management of the corporate debtor are removed and replaced by entrepreneurs. When, therefore, a resolution plan takes off and the corporate debtor is brought back into the economic mainstream, it is able to repay its debts, which, in turn, enhances the viability of credit in the hands of banks and financial institutions. Above all, ultimately, the interests of all stakeholders are looked after as the corporate debtor itself becomes a beneficiary of the resolution scheme – workers are paid, the creditors in the long run will be repaid in full, and shareholders/investors are able to maximize their investment. Timely resolution of a corporate debtor who is in the red, by an effective legal framework, would go a long way to support the development of credit markets. Since more investment can be made with funds that have come back into the economy, business then eases up, which leads, overall, to higher economic growth and development of the Indian economy. What is interesting to note is that the Preamble does not, in any manner, refer to liquidation, which is only availed of as a last resort if there is either no resolution plan or the resolution plans submitted are not up to the mark. Even in liquidation, the liquidator can sell the business of the corporate debtor as a going concern.” 

# 8. The Hon’ble Supreme Court in Essar Steel India Ltd. through Authorised Signatory v. Satish Kumar Gupta & Ors. (Civil Appeal No. 8766-67/2019) dated 15.11.2019” had observed at Para 79 of the Judgment as under: 

• “The effect of this declaration is that ordinarily the time taken in relation to the corporate resolution process of the corporate debtor must be completed within the outer limit of 330 days from the insolvency commencement date, including extensions and the time taken in legal proceedings. However, on the facts of a given case, if it can be shown to the Adjudicating Authority and/or Appellate Tribunal under the Code that only a short period is left for completion of the insolvency resolution process beyond 330 days, and that it would be in the interest of all stakeholders that the corporate debtor be put back on its feet instead of being sent into liquidation and that the time taken in legal proceedings is largely due to factors owing to which the fault cannot be ascribed to the litigants before the Adjudicating Authority and/or Appellate Tribunal, the delay or a large part thereof being attributable to the tardy process of the Adjudicating Authority and/or the Appellate Tribunal itself, it may be open in such cases for the Adjudicating Authority and/or Appellate Tribunal to extend time beyond 330 days. Likewise, even under the newly added proviso to Section 12, if by reason of all the aforesaid factors the grace period of 90 days from the date of commencement of the Amending Act of 2019 is exceeded, there again a discretion can be exercised by the Adjudicating Authority and/or Appellate Tribunal to further extend time keeping the aforesaid parameters in mind. It is only in such exceptional cases that time can be extended, the general rule being that 330 days is the outer limit within which resolution of 9 the stressed assets of the corporate debtor must take place beyond which the corporate debtor is to be driven into liquidation.” (Emphasis Supplied) 

# 9. Keeping in view the law laid down in the above cited cases, it emerges that the primary object of the IB Code, 2016 is value maximization as well as revival/resolution of the financially stressed corporate debtors. Keeping that in mind, we are of the considered view that since one resolution plan has been received by the CoC during the pendency of liquidation application which the CoC intends to consider to save the Corporate Debtor from liquidation, it would be just and proper to give another chance which may help revive/resolve the Corporate Debtor. No doubt considerable time has already elapsed. However, in our considered view, despite that, a last-ditch effort can be afforded to the CoC keeping in view the overall interests of all the stakeholders involved. Even otherwise, as it has been held in Essar Steel India Ltd v/s Satish Kumar Gupta’s case (supra), the time frames are directory and not mandatory in nature. As a result of the following, we allow the present application in following terms: 

ORDER 

• i. The Liquidation Application vide I.A. No. 1059/2021 is hereby dismissed as withdrawn with liberty to the CoC to consider the resolution plan submitted by Mr. Pravin Kumar Jain; 

• ii. The period from April 05, 2021 to the date of this Order shall stand excluded from the CIRP period and the CIRP period of the Corporate Debtor shall stand extended by 60 days from the date of the Order; 

• iii. Accordingly, the I.A No. 4372 of 2023 stands allowed and disposed of in aforesaid terms. 

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CA Kannan Tiruvengadam, Vs. M/s. Indo Unique Flame Ltd. & Ors. - It is the Monitoring Committee’s duty to ensure that the interests of the stakeholders are safeguarded. In fact, the Chairman of the Monitoring Committee is in the best possible position to determine whether there has been a contravention of the approved Resolution Plan.

 NCLT Kolkata (20.04.2022) in CA Kannan Tiruvengadam, Vs. M/s. Indo Unique Flame Ltd. & Ors. [IA (IB) No.1275/KB/2020 in CP (IB) No.1237/KB/2018 ] held that;

• It is the Monitoring Committee’s duty to ensure that the interests of the stakeholders are safeguarded. In fact, the Chairman of the Monitoring Committee is in the best possible position to determine whether there has been a contravention of the approved Resolution Plan. 

• Therefore, the Chairman of the Monitoring Committee has locus to maintain the present application, with or without a resolution to this effect being passed by the Monitoring Committee.

• The entire process begs the question as to how the CoC assessed the viability and feasibility of the Resolution Plan submitted by the SRA. It also raises a question as to how the CoC approved the Resolution Plan without insisting on an unconditional PBG, which is envisaged in terms of regulation 36B(4A) of the CIRP Regulations, immediately after the CoC approved the Plan.

• The RP presented the Resolution Plan for the Adjudicating Authority’s approval without taking an unconditional PBG. This is a violation of the law.

• Since the Corporate Debtor has been kept as a going concern by the Chairman of the Monitoring Committee, every effort should be made to give one more chance at resolution before we order liquidation as a last resort.

Excerpts of the order;

# 5. Issues involved

5.1. On this conspectus of facts, the following issues emerge for determination:

• (a) Can the Adjudicating Authority entertain an application filed by the Chairman of the Monitoring Committee to give a fresh lease of life to the CIRP; and

• (b) Can the Adjudicating Authority pass the directions sought for in IA (IB) No.1275/KB/2020, if the SRA fails to implement the Plan?

6. Analysis

6.1. We’ve heard the Ld. Sr. Counsel appearing on behalf of the parties and perused the record.

Issue No.1: On locus of the Chairman of the Monitoring Committee to maintain IA (IB) No.1275/KB/2020 for abrogation of the approved Resolution Plan

6.2. The primary issue that needs to be delved into is whether the Applicant, i.e., the Chairman of the Monitoring Committee, has any locus standi to file the IA.

6.3. The legislative framework in which this question must be decided, is given in section 33(3) of the Code. This provision speaks of contravention of the approved Resolution Plan. It stipulates that in the event of contravention of such approved Resolution Plan, any person other than the Corporate Debtor, whose interests are prejudicially affected by such contravention, may make an application to the Adjudicating Authority for a liquidation order. The use of the phrase, ‘any person other than the Corporate Debtor’ clearly indicates the will of the legislature that except the Corporate Debtor itself, any person whose interests are being prejudicially affected from the breach of the Resolution Plan could file the application for liquidation.

6.4. When a Resolution Plan is approved, the CoC stands dissolved and a new committee, i.e., the Monitoring Committee is formed for implementation of the approved Resolution Plan. In a scenario where the SRA has failed to implement the Resolution Plan within a stipulated time, it is the Monitoring Committee’s duty to ensure that the interests of the stakeholders are safeguarded. In fact, the Chairman of the Monitoring Committee is in the best possible position to determine whether there has been a contravention of the approved Resolution Plan. Therefore, the Chairman of the Monitoring Committee has locus to maintain the present application, with or without a resolution to this effect being passed by the Monitoring Committee.

6.5. In this view of the matter, the arguments of the SRA in this regard that the Chairman could not maintain the present application for liquidation in the absence of any resolution passed by the Monitoring Committee, is not sustainable, and is rejected as a non-starter. 

Issue No.2: Whether the prayers sought for in IA (IB) No.1275/KB/2020 for abrogation of the approved Resolution Plan should be granted

6.6. The last date for payments to be made under the approved Resolution Plan was sixty days from the date of approval of the Resolution Plan. The CoC approved the Resolution Plan on 02 October 2019. The Adjudicating Authority approved the Resolution Plan on 21 October 2019. Therefore, the last date  for making full payment of ₹568 crore in terms of the Resolution Plan was 20 December 2019 (and not 21 December 2019 as stated in the application).

6.7. As against this, the SRA made a total payment of ₹30 crore on 08 January 2021 towards Earnest Money Deposit and Performance Bank Guarantee. Even this was after the present application in IA (IB) No.1275/KB/2020 was filed by the Chairman of the Monitoring Committee. Of this, except for the EMD, no payment has actually come from the SRA. The remaining part was due to invocation of the PBGs, and not any positive act of ‘payment’ on the part of the SRA.

6.8. One of the excuses taken by the SRA for non-implementation is the Covid-19 pandemic. However, this is noticed only to be rejected, since the entire payment was to be made at least three months before the pandemic hit globally. Para 5.328 of the Resolution Plan gives the financial highlights of the SRA. It is stated to have Assets Under Management to the tune of ₹115,14,15,064/- (Rupees one hundred and fifteen crore fourteen lakh fifteen thousand and sixtyfour only), during the period from 16 April 2018 to 15 April 2019. The said paragraph also records that the SRA and its holding company, Almas Capital Limited, have not availed any loans from any bank.

6.9. Para 11 of the Resolution Plan indicates sources of funds and manner of infusion into the corporate debtor. It records that the SRA holds sound financial position and shall infuse the resolution amount in the form of equity. It further records that financial institutions and banks are also willing to extend financial  assistance to the resolution applicant for raising funds. Para 12.1 categorically provides that the implementation of the Resolution Plan will begin once the Resolution Plan is approved by the CoC and the Adjudicating Authority. Para 14 reflects the Term of the Resolution Plan and Implementation Process thereof.

6.10. The Legal Entity Identifier (‘LEI’) in respect of the SRA indicates the basic information as follows:

Legal Name:	ALMAS GLOBAL OPPORTUNITY FUND SPC
Changes brought about:	New Value	Old Value
Registered At:	RA000087	RA000086
Registered As:	1882414	AC-322800
LEI Code:	549300P6S7KWNOMKMU42
Entity Status:	Active	Lapsed on 28 Feb 2020
Legal Address:	Amicorp Cayman Fiduciary Ltd, 2nd Floor, Regatta Office Park, Leeward 2 West Bay Road Grand Cayman, KY1-1006, KY	Amicorp Cayman Fiduciary Ltd, 1st Floor, The Grand Pavilion Commercial Centre, Grand Cayman, KYI-10
Headquarters Address:	Amicorp Cayman Fiduciary Ltd, 2nd Floor, Regatta Office Park, Leeward 2 West Bay Road Grand Cayman, KY1-1006, KY	Amicorp Cayman Fiduciary Ltd, 1st Floor, The Grand Pavilion Commercial Centre, Grand Cayman, KYI-10
Registration Date:	2019-03-06; 21:03.00 (+5.30)
Last Update Date:	2021-12-31; 03:00:00 (+5.30)
Registration Status:	Issued
Next Renewal Date:	2022-12-29; 18:29:00 (+5.30)
LEI Issuer:	EVK05KS7XY1DEII3R011

6.11. The change in registration information, as well as in its headquarters address, does not appear to have been communicated to the Monitoring Committee.

6.12. The payment of a sum of ₹30 crore on 08 Jan 2021 was after the filing of the present application by the Chairman of the Monitoring Committee. In fact, not a single paisa has been brought in by the SRA after 08 January 2021. Multiple opportunities were granted to the SRA to file affidavits to affirm as to how it proposes to bring in funds. This was in addition to the Monitoring Committee’s own long rope to the SRA to fulfil its commitments as per the Plan.

6.13. The averments in the reply of the SRA and the affirmations in the additional affidavits which were allowed to be filed in this regard, tell a story of their own, a litany of broken promises and commitments. These are extracted below:

Reply affidavit:

“In view of the above facts and circumstances, it is submitted that it is just, proper and necessary that the respondent be granted an opportunity to fulfil its obligations in a time bound manner by June 30, 2021. With the approval and release of Covid-19 vaccine globally and the same being gradually made available across the world the respondent is confident that it shall be able to honour its commitments by June 30, 2021.

(b) condonation of the delay caused in transferring the Upfront Amount till date;

(e) the respondent be allowed time till June 30, 2021 to transfer the balance of ₹538 crore of the Upfront Amount, to the bank account of the erstwhile Corporate Debtor as per the Resolution Plan.

Unnotarised affidavit of Mr Amardeep Sharma dated 12 March 2021:

“10. I have explored ways and means to make some payments in pursuance to the approved Resolution Plan prior to 30th June, 2021. However, in view of what has been stated hereinbefore, I most humbly submit that it will not be possible to make any such payments. However, I undertake that the entire payment will be made on or before 30th June, 2021.”

Further affidavit of Mr Amardeep Sharma affirmed in Dubai:

(9) However, the Successful Resolution Applicant is taking all positive steps to arrange for necessary documentation and arranging its affairs so that the final commitment to make the payment of the balance upfront amount by October 31st, 2021, as an outer limit can be fulfilled. The successful resolution applicant remains wholly committed to make the balance payment as prayed for in this affidavit.”

6.14. It has been noticed in the order dated 27 January 2022 passed by this Adjudicating Authority that the affidavits do not inspire any confidence. Besides, there is no explanation proffered by the SRA as to why the commitments made to this Adjudicating Authority could not be met. Therefore, another opportunity was given to file an affidavit on or before 15 February 2022 giving a detailed roadmap of how the SRA intends to discharge its commitments under the approved Resolution Plan.

6.15. That affidavit was even more impudent. It seems to assume that the judicial authorities in India cannot understand anything beyond the limited territorial jurisdiction of India. It cocked a snook even at the very Code itself, the processes envisaged thereunder and the authority of court. It is so brazen that it is almost laughable, if not for the solemnity of these proceedings.

Confidential information and law relating to its disclosure in the Cayman Islands

6.16. Another alibi taken by the SRA is the Confidentiality law of the Cayman Islands, under which it is asserted that the SRA cannot reveal commercial information ostensibly related to funding of the Resolution Plan. In this context it is to be noted that the Confidentiality Relationships (Preservation) Law, 1976 (CRPL) enacted in 1976 was repealed, and the Confidential Information Disclosure Law (CIDL), 2016 enacted in the Legislature of the Cayman Islands on 22 July 2016 (Law 23 of 2016).

6.17. Section 3(1)(a) of CIDL recognises that where a person owes a duty of confidence, the disclosure by that person of confidential information in compliance with the directions of a court pursuant to section 4 ibid shall not constitute a breach of such duty of confidence and shall not be actionable at the suit of any such person. Section 4 of CIDL provides the mechanism by which such confidential information may be disclosed if required to do so by any court, tribunal or other authority, in a situation where the person has not been provided with the express consent of the principal for disclosure. The person who intends to or is required to disclose such information either in evidence or in proceedings, whether in the Cayman Islands or elsewhere, was required to make an application to the Grand Court, which is in session throughout the year.

6.18. It is apparent that the SRA has intentionally delayed the whole process and failed to make the upfront payment within sixty days from the days of approval of the Resolution Plan by the Adjudicating Authority, i.e., 21 October 2019 (‘Effective Date’). Worse, the SRA kept on delaying the payment on frivolous grounds even after explicit directions from the Hon’ble NCLAT vide its order dated 16 March 2020.

6.19. The two main planks of the defence of the SRA to non-payment under the approved resolution plan are – (1) Covid-19 pandemic and the restrictions; (2) the non-issue of in principle NoC on the part of the secured Financial Creditors. Both defences are hollow, as we shall presently see from the documents produced by the SRA.

6.20. The SRA has so offhandedly stated Covid-19 as one of the reasons for delay in the implementation of the Resolution Plan, but the same does not hold water at all, because the upfront payment was to be made within sixty days from the Effective Date of the Plan, i.e., 21 October 2019, while the pandemic hit India in March 2020. The SRA’s authorised representative was based in Dubai. Dubai imposed a two-week lockdown for the first time on 05 April 2020 (Saturday), which was three months later than the date of payment of the upfront amount (20 December 2019). As such the SRA was not constrained by the pandemic.

6.21. The other prime argument that the security interest holders delayed issue of NoCs is also absolutely unacceptable, considering the following clauses:

Relevant clause of the Resolution Plan	Commitment under the clause
Clause (f) at internal page 29 of the Resolution Plan	Upon upfront payment of Financial Creditors, the Financial Creditors shall severally and/or jointly release the Security Interest in favour of Corporate Debtor, specific to the assets of the Corporate Debtor, as per Schedule 2. Financial Creditors shall continue their charge and rights on securities owned by third parties, personal and corporate guarantees.
Clause (f)(iv) at page 30 of the Resolution Plan	All security interest, specific to the assets owned by Corporate Debtor, created in favour of the financial creditors will stand released back to Corporate Debtor with the approval of the resolution plan by the Adjudicating Authority and receipt of the upfront consideration. The Financial Creditors shall execute and/or cause to execute agreement/deed/document as may be required in respect thereof and to provide clear title for securities to Corporate Debtor/ Resolution Applicant.
Clause (f)(v) at page 30 of the Resolution Plan	The security interest holders shall forthwith on receiving upfront consideration in terms of the Resolution Plan issue No Due Certificates and file Relevant clause of the Resolution Plan Commitment under the clause duly filled Charge Satisfaction Forms with the Ministry of Corporate Affairs (MCA) for release of charge on the assets of the Corporate Debtor. The Corporate Debtor will also file duly filled charge satisfaction Forms with the MCA for release of charge on its assets.
Clause (f)(v) at page 30 of the Resolution Plan	The Security interest holders shall file necessary release of security interest documents with any information utility with which any of its security interest is noted forthwith on receiving their upfront consideration under this Resolution Plan including security interest noted with CERSAI.

As can be seen from the above table, drawn from the Resolution plan itself, making upfront payment by the SRA was a pre-requisite for release of the security interest and not vice-versa.

6.22. All the three bank accounts of the SRA, as given in para 5.344 of the Resolution Plan, are in Mauritius. However, in the affidavits filed in compliance with directions issued by the Adjudicating Authority, the stand taken has been that due to lockdown in the United Kingdom, the SRA’s authorised representative has been unable to travel to that country, and therefore, could not adhere to the time schedule committed by him. This still does not explain why the SRA did not make the payment on or before 20 December 2019 as per the approved Resolution Plan.

6.23. There was really no need for the SRA once again to insist that NoCs in principle be issued by the secured creditors prior to making upfront payment. This was a pre-condition that was sought to be introduced by the SRA just to cover up its own failure to move the funds to the Corporate Debtor as envisaged under the Resolution Plan. The SRA’s justification to this is that appeals came to be filed before the Hon'ble NCLAT. This reflects an absolutely lack of confidence in the sanctity of the judicial process of this country.

6.24. From the conduct of the SRA, it is apparent that the SRA has not only frustrated the whole object of the Code but also disrespected the orders of the Appellate Authority and this Adjudicating Authority. The affidavit filed by the SRA pursuant to the order dated 27 January 2022 of this Adjudicating Authority, which directed the SRA to show how it intends to discharge its obligations, is neither here nor there.

6.25. The entire process begs the question as to how the CoC assessed the viability and feasibility of the Resolution Plan submitted by the SRA. It also raises a question as to how the CoC approved the Resolution Plan without insisting on an unconditional PBG, which is envisaged in terms of regulation 36B(4A) of the CIRP Regulations, immediately after the CoC approved the Plan. This subregulation (4A) was inserted into regulation 36B of the CIRP Regulations vide amendment No.IBBI/2019-20/GN/REG040 dated 24 January 2019. The RP presented the Resolution Plan for the Adjudicating Authority’s approval without taking an unconditional PBG. This is a violation of the law. It is just a happy coincidence that the PBG came in after the present IA (IB) No.1275/KB/2020 was filed by the Chairman of the Monitoring Committee and before the first hearing of the matter took place on 04 January 2021.

7. The findings

7.1. Mr Amardeep Sharma, the authorised representative of the SRA, tried to mislead the court by stating that the SRA would have met its obligations but for the travel restrictions imposed in the wake of the Covid-19 pandemic. However, that does not commend itself to us, considering that the SRA was not about to give ₹568 crore in hard currency, but was only required to transfer the same from its bank accounts. The time for such transfer was about four months prior to the pandemic. In any case, physical travel was not called for at all for transfer of funds, which could have been done by banking channels. There is no justification for this, even after repeated opportunities were granted first by the Monitoring Committee and thereafter by this Adjudicating Authority.

7.2. The SRA has not exhibited any intention by taking some concrete steps that can instil some degree of confidence in the earnestness of the SRA. It is plain for anyone willing to see that the SRA is not likely to part with the funds in the foreseeable future. The SRA has taken the entire process for a ride, and nothing can really excuse this audacity. The attitude of the SRA really will tick every parameter that can be applied to satisfy the “knowing and wilful contravention” test laid down in section 74(3)46 of the Code on a reasonable construction.

7.3. The SRA has been pussyfooting around with regard to the payments to be made under the approved Resolution Plan, for more than one-and-a-quarter years. It is futile to wait indefinitely for the SRA to fulfil its commitments. The repeated exhortations made during the course of hearings to the SRA through its learned senior counsel to make at least some payments in order to show its bona fides, & earnestness have gone completely unheeded. There is no point in chasing the chimera of the SRA fulfilling its commitments under the Resolution Plan.

7.4. We will now have to accept the hard reality that stares us in the face: that the SRA has simply hedged its bets by not meeting its obligations, probably because it is earning better returns on income from its existing investments.

7.5. What has really spared the blushes in the present case is the efficiency with which the Chairman of the Monitoring Committee has been running the Corporate Debtor. But this cannot go on for ever. A strong message needs to go to the SRA that the majesty of law needs to be respected at all costs, and that Indian judicial processes cannot be taken for a ride like this. The SRA seems to think that other suitors will not come in to hold the hand of the Corporate Debtor and pull it out of insolvency. Therefore, we fully intend to call the bluff of the SRA that non-extension of time will put the Corporate Debtor and its stakeholders in serious jeopardy.

7.6. Since the Corporate Debtor has been kept as a going concern by the Chairman of the Monitoring Committee, every effort should be made to give one more chance at resolution before we order liquidation as a last resort.

8. Orders

8.1. In these circumstances, the following orders are passed:

(i) The entire Performance Bank Guarantee of ₹30 crore submitted by the SRA on 08 January 2021, which was invoked by the Applicant/Chairman of the Monitoring Committee, on 13 November 2020 shall stand forfeited in favour of the Corporate Debtor immediately, since there is knowing and wilful contravention of the approved Resolution Plan.

(ii) Additionally, the SRA and its officers responsible be proceeded against for contravention of the approved resolution plan in terms of section 74(3) read with section 236 of the Insolvency & Bankruptcy Code, 2016. To facilitate this, a copy of this order shall be sent to the Insolvency & Bankruptcy Board of India (IBBI) and the Secretary, Ministry of Corporate Affairs, who are the agencies authorised in terms of section 236(2) ibid to initiate appropriate complaint before the Special Court as envisaged under section 236(1) ibid.

(iii) The Corporate Debtor is a viable going concern with about 400 employees and workmen. There is every chance of a successful resolution of the Corporate Debtor. Therefore, to facilitate this, the entire period consumed in the CIRP commencing from the first date of issue of Form G inviting  Expressions of Interest till the date of passing of orders in this application is excluded. This will grant sufficient time for a limited reboot of the CIRP from the stage of issue of Form G.

(iv) The Chairman of the Monitoring Committee shall discharge the functions of Resolution Professional of the Corporate Debtor with immediate effect and until further orders are passed by this Adjudicating Authority.

8.2. IA (IB) No.1275/KB/2020 shall stand disposed of with the above directions. Consequently, CP (IB) No.1237/KB/2018 shall stand restored to file, and the CP shall stand posted to 22 August 2022 for reporting progress.

8.3. Copies of this order be circulated immediately to the Ld Counsel on record for each of the parties.

8.4. A certified copy of this order may be issued, if applied for, upon compliance with all requisite formalities.

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