Value of Liquidation Value more than Resolution Plan: NCLT directs SRA to Match Liquidation Value [Read Order]
NCLT directed SRA to match the liquidation value as the value of liquidation was more than the Resolution Plan
NCLT – SRA – Liquidation value – Resolution plan – Successful resolution applicant – NCLT Allahabad – taxscan
NCLT – SRA – Liquidation value – Resolution plan – Successful resolution applicant – NCLT Allahabad – taxscan
The Allahabad Bench of the National Company Law Tribunal ( NCLT ) directed the Successful Resolution Applicant ( SRA ) to match the liquidation value as the value of liquidation was more than the Resolution Plan.
The present application was filed under Section 30(6) of the IBC for approval of the Resolution Plan, based upon the Resolution passed by the CoC. The matter was reserved on 19.01.2024. However, on perusal of the record it was found that the amount of Resolution plan comprises of CIRP Cost, Unsecured Financial Creditors, Unsecured Operational Debt, Operational Debt of Contingent Claims (Towards Government Dues only including by the EPFO/ESI, Gratuity Authority etc.) which amounts to Rs. 6.70 cr. This sum is less than the liquidation value which is to the tune of Rs. 7.69 cr. The Liquidation Assets comprises of Plant, Machinery, Land and Building.
A Two-Member Bench comprising Ashish Verma, Technical Member and Praveen Gupta, Judicial Member observed that “Further, considering the fact that CoC is solely formed by the Unsecured Financial Creditor, who is also the Successful Resolution Applicant, this tribunal deems it appropriate to direct the SRA to match the plan value which however is currently not at par with liquidation value of Rs. 7.69 cr. However, if SRA does not find it viable, such reasons may also be brought on record.”
“However, in the peculiar circumstances of the case where the financial creditor who is member of CoC itself is the SRA as well, we therefore, find it justifiable in passing such directions to the SRA to consider matching the total plan value at par with the liquidation value with corresponding pro-rata rise in the amount of disbursement. SRA is at liberty to move an appropriate application, accordingly for consideration of the revised resolution plan by this Adjudicating Authority” the Tribunal noted.
To Read the full text of the Order CLICK HERE
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