IN THE NATIONAL COMPANY LAW TRIBUNAL

MUMBAI BENCH COURT III

I.A. 5643/2023
In
C.P. No. (IB) 851/MB/C-III/2022
Under Section 30(6) and Section 31 of the Insolvency and Bankruptcy Code,
2016 read with Regulation 39(4) of the Insolvency and Bankruptcy Board of
India (Insolvency Resolution Process for Corporate Persons) Regulations,
2016

Mr. Arun Kishanlal Bagaria )

(Resolution Professional of )
M/s. Cyperus Multitrade Pvt Ltd) )
Having office at: )
701, Stanford Bldg, Junction of SV )
Road, Above Mahindra Showroom, ) … Resolution Professional /
Andheri (West), Mumbai – 400058 ) Applicant

IN THE MATTER OF
Rohit Motilal Agarwal
… Financial Creditor

Vs

Cyperus Multitrade Private Limited … Corporate Debtor

Order pronounced on: 02.05.2024

Coram:
Hon’ble Ms. Lakshmi Gurung, Member (Judicial)
Hon’ble Sh. Charanjeet Singh Gulati (Technical)

Appearances:
For the Applicant/RP : Adv. Shadab Jan a/w. Adv. Umang Mehta, Adv.
Aamir Attari, Aalisha Sharma i/b. Dhruve
Liladhar & Co.

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I.A. 5643/2023 In C.P. No. (IB) 851/MB/C-III/2022

Per: Shri. Charanjeet Singh Gulati, Member (Technical)

ORDER

1. The above I.A. is filed by Mr. Arun Kishanlal Bagaria, Resolution

Professional of Cyperus Multitrade Pvt Ltd (Corporate Debtor) under
Section 30(6) of the Insolvency and Bankruptcy Code, 2016 (Code) read
with Regulation 39(4) of the IBBI (Insolvency Resolution Process of
Corporate Debtors) Regulations, 2016 (Regulations, 2016) seeking
approval of the Resolution Plan submitted by M/s. Rishab Enterprises
(Successful Resolution Applicant) which was approved by the
Committee of Creditors (CoC) by 100% voting at its 4th Meeting held on
25.10.2023.

Facts of the Case, in brief:

2. The Corporate Insolvency Resolution Process (‘CIRP’) of Cyperus
Multitrade Private Limited (Corporate Debtor) was initiated by this
Tribunal vide Order dated 16.06.2023 under Section 7 of the Insolvency
and Bankruptcy Code, 2016 (‘the Code’) and Mr. Arun Kishanlal
Bagaria (Applicant) was appointed as the Interim Resolution
Professional (‘IRP’).

3. The Committee of Creditors (CoC) was constituted with Mr. Rohit

Motilal Agarwal (Financial Creditor) being the sole member. The entire
claim amount of Rs. 1,53,18,849/- of the sole financial creditor was
admitted by the IRP. The 1st CoC Meeting was held on 22.07.2023 and
the Applicant was confirmed as the Resolution Professional (RP).

4. The RP/Applicant, in accordance with Regulation 35 of the CIRP

Regulations, 2016 appointed two Registered Valuers, namely, Mr.
Dinesh Kumar Deora and Mr. Piyush Karmakar, for determining the
Fair Value and Liquidation Value of the Corporate Debtor. The

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Liquidation and Fair Value of the Corporate Debtor as determined by

Registered Valuers are as follows:
Valuer Fair Value Liquidation Average Average
Value Category Category
wise Fair wise
Value Liquidation
Value
Mr. Dinesh Rs. Rs. 9,39,784 Rs. 9,39,784 Rs. 8,30,859
Kumar 9,39,784
Deora
Mr. Piyush Rs. Rs. 7,21,934
Karmakar 9,39,784

Issue of Expression of Interest

5. In terms of Section 25(2)(h) of the I&B Code, the RP published the 1st
public notice in Form – G on 12.08.2023 inviting Expression of Interest
(EoI) to submit Resolution Plan for the Corporate Debtor. The first EoI
was published in 2 newspapers, namely, Nagpur Post – English
Edition and Mahasagar Nagpur – Marathi Edition.

Request for Resolution Plan (RFRP)

6. In furtherance of the EoI issued by the RP, only 1 Prospective Resolution
Applicant (PRA) i.e. M/s Rishab Enterprises, had shown interest.
Thereafter, on 05.09.2023, the RP shared the RFRP, Information
Memorandum and other relevant documents to the sole PRA, in
consultation with the CoC.

Approval of Resolution Plan by CoC

7. On 05.10.2023, the PRA submitted its Resolution Plan which was
placed before the CoC during the 3rd CoC Meeting held on 14.10.2023.
On the 4th CoC Meeting held on 25.10.2023, the said Resolution Plan
was discussed and deliberated upon in detail and was placed for voting
and was subsequently approved by 100% voting. The Resolution
Professional issued the Letter of Intent dated 28.10.2023 to Mr. Rishab
Dinesh Halwai, the sole proprietor of M/s Rishab Enterprises
(Successful Resolution Applicant/ SRA).
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8. Brief background of the Successful Resolution Applicant:

8.1 The Successful Resolution Applicant, M/s Rishab Enterprises, is
engaged in the business of wholesale & trading of electronic items and
has more than 12 years experience in the concerned field.

8.2 It is submitted that the SRA is looking for expansion of business horizon
utilizing the available resources of the Corporate Debtor to further
increase the overall customer base with ready setup and available
networks.

8.3 It is submitted that the Successful Resolution Applicant is not barred

by Section 29A of the Code and an affidavit in this regard was also
submitted by the Successful Resolution Applicant along with the
Resolution Plan.

9. Salient Features of Resolution Plan:

9.1 As per Regulation 36B(4A) of the CIRP Regulations, the SRA has paid
performance bank guarantee of Rs. 5,00,000/-. The Resolution Plan
value is Rs. 20,00,000/-.

9.2 It is submitted that the SRA shall carry on the business of the Corporate
Debtor on a going concern basis.

9.3 It is noted that the Resolution Applicant proposes to fund the

Resolution Plan by infusing capital of Rs. 20,00,000 in the Corporate
Debtor within 3 months from the Effective Date.

9.4 The Resolution Plan proposes that the equity shares held by the
promoters and the shareholders other than the promoters of the
Corporate Debtor shall stand cancelled for nil consideration. The
suspended Board members will stand resigned on approval of the Plan
by this Tribunal and the SRA shall nominate new directors on the Board

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of Directors of the Corporate Debtor. The SRA, on approval of the Plan,

would be allotted 10,000 fresh equity shares of Rs. 10/- each.

9.5 In accordance with Regulation 38(1-A) of the IBBI Rules, 2016, the
statement showing the treatment given to the stakeholders is given
below:
Sr. Particulars Amount Settlement Terms of Settlement
No. Admitted Value Payment %
(in Rs.) Offered (in
Rs.)
1 CIRP Costs 6,06,564 6,06,564 To be paid 100%
in full
within 3
months
from the
Effective
date
2 Secured -- -- -- --
Financial
Creditors
3 Unsecured 1,53,18,849 13,89,254 To be paid 9.07%
Financial within 3
Creditors months
from the
Effective
date

4 Operational Creditors
a Employees -- -- -- --
and
Workmen
b Government -- -- -- --
Authority
Dues
c Other -- -- -- --
Operational
Creditors
5 IBBI 4182 To be paid
within 3
months
from the

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Effective
date
Grand Total 1,59,25,413 20,00,000

9.6 The Resolution Plan states that the estimated CIRP cost is Rs. 10.07
lakhs approx. However, the CIRP cost provided by RP is Rs. 6,06,564.
The SRA undertakes that in the event if the CIRP costs exceeds Rs.
6,06,564 then the same shall be paid by reducing the payment to
Financial Creditor to that extent. Further, if CIRP reduces below the
amount allocated, then the balance shall be paid to the Financial
Creditor.

9.7 It is further stated in the Resolution Plan that the cash balance of Rs.
68,384/- in the books of the Corporate Debtor shall be considered as
upfront cash recovery for resolution plan. The said cash balance may
be offered additionally to the creditors.

9.8 Under the Resolution Plan, Rs. 4182/- has been proposed to be paid to
the Insolvency & Bankruptcy Board of India (IBBI) as regulatory fee in
accordance with Regulation 31A (1) of the IBBI (CIRP) Regulations, 2016
which states as follows:
“31A. Regulatory Fee.
(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:
Provided that this sub-regulation shall be applicable where
resolution plan is approved under section 31, on or after 1st October
2022.”

Compliance Certificate in Form – H

10. Pursuant to Regulation 39(4) of the Insolvency and Bankruptcy Board
of India (Insolvency Resolution Process for Corporate Persons)
Regulations, 2016, the Resolution Professional has prepared a

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Compliance Certificate dated 01.11.2023 in Form H which is annexed

to the Application.

11. Compliance of mandatory requirements under the Insolvency &

Bankruptcy Code, 2016:
Sr. Particulars Compliance
No.
1 Section 25:
Whether the Resolution Applicant Yes.
meets the criteria approved by the
CoC having regard to the
complexity and scale of operations
of business of the Corporate
Debtor?
2 Section 29A:
Whether Resolution Applicant is Yes.
eligible to submit resolution plan as
per final list of Resolution
Professional or Order, if any, of the
Adjudicating Authority?
3 Section 30:
(1) Whether the Resolution
Yes. The Resolution
Applicant has submitted an
Applicant has submitted an
affidavit stating that it is eligible?
affidavit under section 29A of
IBC, 2016 confirming his
eligibility for submission of
Resolution Plan.
(2)(a) Whether the Resolution Plan Yes. Section VI (I) (vii)
provides for payment of insolvency
resolution process costs?
(2)(b) Whether the Resolution Plan Not Applicable. Section VI (I)
provides for the payment of the (xi)
debts of operational creditors?
(2)(b) Whether the Resolution Plan Not Applicable.
provides for the payment to the
financial creditors who did not vote
in favour of the resolution plan?
2(c) Whether the Resolution Plan Yes. Section VIII (xv)
provides for the management of the
affairs of the Corporate Debtor?

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2(d) Whether the Resolution Plan Yes. Section VIII (xvii)

Provides for implementation and
supervision of the resolution plan?
(2)(e) Whether the resolution plan No.
contravenes any of the provisions of
the law for the time being in force?
(4)(a) Whether the Resolution Plan Yes.
is feasible and viable, according to
the CoC?
(4)(b) Whether the Resolution Plan Yes. The Resolution Plan has
has been approved by the CoC with been approved with 100%
66% voting share? voting.
4 Section 31(1):
Whether the Resolution Plan has Yes.
provisions for its effective
implementation Plan, according to
CoC
5 Section 35A:
Whether the resolution Not Applicable.
professional made a determination
if the corporate debtor has been
subjected to any transaction of the
nature covered under sections 43,
45, 50, or 66, before the one
hundred and fifteenth day of the
insolvency commencement date,
under intimation to the Board?

12. Compliance under mandatory requirements under IBBI (Insolvency

Resolution Process of Corporate Debtors) Regulations, 2016
Regulation 38
1 Whether the amount due to the Not Applicable.
operational creditors under the
resolution plan has been given
priority in payment over financial
creditors?
1A Whether the resolution plan Yes. Section X (xxi)(2)
includes a statement as to how it
has dealt with the interest of all
stakeholders?
1B i) Whether the Resolution No. Section X (xxi)(3)
Applicant or any of its related

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parties has filed to

implement or contribute to
the failure of implementation
of any resolution plan
approved under the Code?
ii) If so, whether Resolution
Applicant has submitted the
statement giving details of
such non-implementation?
2(a) Whether the Resolution Plan Yes. Section VIII
provides the term of the plan and its
implementation schedule?
2(b) Whether the Resolution Plan Yes.
provides for the management and
control of the business of the
corporate debtor during its term?
2(c) Whether the Resolution Plan Yes.
provides adequate means for
supervising its implementation?
3 Whether the Resolution Plan
demonstrates that -
(a) It addresses the cause of default? Yes.
(b) It is feasible and viable? Yes.
(c) It has provisions for its effective Yes. The Resolution Plan
implementation? covers all the provisions as
required for the effective
implementation of the Plan.
(d) It has provisions for approvals Yes.
required and the time for the same?
(e) The Resolution Applicant has the Yes.
capacity to implement the
Resolution Plan?
Regulation 39
2 Whether the RP has filed No.
applications in respect of
transactions observed, found or
determined by him?
4 Provide details of performance Rs. 5,00,000 paid as
security received as referred to in performance guarantee
sub-regulation (4A) of Regulation
36.

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13. The CIRP has been conducted as per the timeline indicated as under:
Section/ Description of Latest Date as Actual Date
Regulation Activity Timeline per
No. under timeline
Regulation
40A
Section Commencement T 16.06.2023 16.06.2023
16(1) of CIRP and (order
Appointment of received on
IRP 22.06.2023)
Regulation Publication of T+3 19.06.2023 24.06.2023
6(1) Public
Announcement
Section Submission of T+14 30.06.2023 05.07.2023
15(1)(c)/ Claims
Regulation
12(1)
Regulation Verification of T+21 07.07.2023 11.07.2023
13(1) Claims
Section Application for T+23 09.07.2023 -
26(6A)/ Appointment of
Regulation Authorized
15A Representative,
if necessary
Regulation Filing of Report T+23 09.07.2023 14.07.2023
17(1) certifying
Constitution of
CoC
Section First Meeting of T+30 16.07.2023 22.07.2023
22(1) and CoC
Regulation
17(2)
Regulation Determination T+115 09.10.2023 --
35A of fraudulent
and other
transactions
Regulation Appointment of T+47 02.08.2023 28.07.2023
27 two registered
Valuers
Regulation Submission of T+54 09.08.2023 10.08.2023
36(1) Information
Memorandum
to CoC

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Regulation Invitation of EoI T+75 30.08.2023 12.08.2023

36A Publication of T+75 30.08.2023 12.08.2023
Form G
Provisional list T+100 24.09.2023 30.08.2023
of Resolution
Applicants
Final list of T+115 09.10.2023 05.09.2023
Resolution
Applicants
Regulation Issue of RFRP T+105 29.09.2023 05.09.2023
36B including
Evaluation
Matrix, etc
Section Submission of T+165 28.11.2023 20.10.2023
30(6)/ CoC approved
Regulation Resolution Plan
39(4)
Section Approval of T=180 13.12.2023
31(1) Resolution Plan

14. Clause xvi of Section VIII of the Resolution Plan provides for Monitoring
Committee for the implementation of the Resolution Plan. Clause xvi is
reproduced below:
“xvi. RESOLUTION PLAN MONITORING SYSTEM
For proper and adequate monitoring of the implementation of the
approved Resolution Plan, the new board of directors of the Corporate
Debtor shall take over immediate charge of the affairs of the Corporate
Debtor from the resolution professional and form a
Management/Supervision Committee (MC/SC), which shall
immediately undertake the monitoring of implementation of the
resolution plan in its entirety, in compliance with the provisions of
Regulation 38(2)(c) of CIRP Regulations, 2016.
The Management/Supervision Committee would comprise of the
Resolution Professional or his representative, Representatives of the
CoC and representative of the Resolution Applicant.
The RP, who shall function as the member of the MC, shall be
remunerated in the manner as that will be agreed between the RP and
RA at a later stage.
It is hereby clarified that Management/Supervision Committee shall
dissolve once the implementation period expires or RA makes complete
payment to the Creditors as per the Resolution Plan, whichever is
earlier.”

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15. On perusal of Form-H, it is seen that the Resolution Plan is in

compliance with the mandatory compliances as stipulated under
Section 30(2) of the Code. The Resolution Plan also meets the
requirements of Regulations 37, 38, 38(1A) and 39 (4) of the IBBI
Regulations, 2016. The Resolution Plan is not in contravention of any
of the provisions of Section 29A of the Code and is in accordance with
law. It is also observed that the Plan amount is more than the
Liquidation amount as well as the Fair Value.

16. In K Sashidhar v. Indian Overseas Bank & Others (2019) 12 SCC

150, the Hon’ble Apex Court held that if the CoC had approved the
Resolution Plan by requisite percent of voting share, then as per section
30(6) of the Code, it is imperative for the Resolution Professional to
submit the same to the Adjudicating Authority (NCLT). On receipt of
such a proposal, the Adjudicating Authority is required to satisfy itself
that the Resolution Plan, as approved by CoC, meets the requirements
specified in Section 30(2). The Hon’ble Apex Court further observed that
the role of the NCLT is ‘no more and no less’. The Hon’ble Apex Court
further held that the discretion of the Adjudicating Authority is
circumscribed by Section 31 and is limited to scrutiny of the Resolution
Plan “as approved” by the requisite percent of voting share of financial
creditors. Even in that enquiry, the grounds on which the Adjudicating
Authority can reject the Resolution Plan is in reference to matters
specified in Section 30(2) when the Resolution Plan does not conform
to the stated requirements.

17. In Committee of Creditors of Essar Steel India Limited through

Authorised Signatory Vs. Satish Kumar Gupta & Ors (2020) 8 SCC
531, the Hon’ble Apex Court clearly laid down that the Adjudicating
Authority would not have power to modify the Resolution Plan which
the CoC in their commercial wisdom has approved.

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18. In view of the law laid down by Hon’ble Supreme Court, the commercial
wisdom of the COC is to be given paramount importance for approval /
rejection of the resolution plan. As the Resolution Plan meets the
requirements of the I & B Code and the IBBI Regulations, the same
needs to be approved. Accordingly, the Resolution Plan is approved
with the following directions:

i) The Resolution Plan submitted by M/s Rishab Enterprises is

hereby approved. It shall become effective from this date and
shall form part of this order. It shall be binding on the
Corporate Debtor, its employees, members, creditors, including
the Central Government, any 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 is due,
guarantors and other stakeholders involved in the Resolution
Plan.

ii) No person will be entitled to initiate or continue any

proceedings in respect to a claim prior to CIRP which is not a
part of the Resolution Plan.

iii) The Monitoring Committee shall supervise the implementation

of the Resolution Plan and shall review operational
performance of the Corporate Debtor.

iv) The Resolution Professional is further directed to handover all

records, premises / documents to Resolution Applicant to
finalise further line of action required for starting of the
operation as contemplated under the Resolution Plan. The
Resolution Applicant shall have access to all the records
premises / documents through Resolution Professional to

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finalise further line of action required for starting of the

operations.

v) As per the Resolution Plan, extinguishment of existing shares

of the Corporate Debtor, allotment of shares to the Resolution
Applicant and to New Investor and reduction of share capital
do not require the consent of shareholders as required under
the Companies Act or any other authority for implementation
of the Resolution Plan.

vi) Reliefs and Concessions:

a) Approval of the Resolution Plan shall not be a ground for
termination of any existing consents, approvals, licenses,
concessions, authorizations, permits or the like that has
been granted to the Corporate debtor or for which the
Corporate Debtor has made an application for renewal,
grant permissions, sanctions, consents, approvals,
allowances, exemptions etc.

b) Any Exemption as sought for in relation to the payment

of registration charges, stamp duty, taxes and fees
arising out of the implementation of the Resolution Plan
is not granted but the Resolution Applicant is at liberty
to approach Competent Authorities for the exemptions if
permitted under the law.

c) For past non-compliances of the Corporate debtor under

applicable laws the Resolution Applicant shall not be
liable for any liabilities and offences committed prior to
the commencement of CIRP and as stipulated under
Section 32A of IBC, 2016.

d) It is hereby clarified that in terms of the Judgement of

Hon’ble Supreme Court in the matter of Ghanshyam

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Mishra and Sons Private Limited Vs. Edelweiss Asset

Reconstruction Company Limited, on the date of
approval of the Resolution Plan by the Adjudicating
Authority, all such claims which are not a part of
Resolution Plan, shall stand extinguished and no person
will be entitled to initiate or continue any proceedings in
respect of a claim which is not a part of the Resolution
Plan.

e) With regard to other concessions and reliefs, most of

them are subsumed in the reliefs granted above. The
relief which is not expressly granted above, shall not be
construed as granted. The exemptions if any sought in
violation of any law in force, it is hereby clarified that
such exemptions shall be construed as not granted.

vii) The Memorandum of Association (MoA) and Articles of

Association (AoA) shall accordingly be amended and filed with
the concerned Registrar of Companies (RoC), for information
and record. The Resolution Applicant, for effective
implementation of the Plan, shall obtain all necessary
approvals, under any law for the time being in force, within
such period as may be prescribed.

viii) The moratorium under Section 14 of the Code shall cease to

have effect from this date.

ix) The Applicant shall forward all records relating to the conduct
of the CIRP and the Resolution Plan to the IBBI along with copy
of this Order for information.

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x) The Applicant shall forthwith send a certified copy of this Order

to the CoC and the Resolution Applicant, respectively for
necessary compliance.

19. Accordingly, the Resolution Plan in IA/5643/2023 is hereby allowed

and approved.

Sd/- Sd/-
Charanjeet Singh Gulati Lakshmi Gurung
Member (Technical) Member (Judicial)
Uma, LRA

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