IN THE NATIONAL COMPANY LAW TRIBUNAL,

MUMBAI BENCH, COURT – IV

IA/2047/2024
IA/29/2024
In
C.P.(IB)/1389(MB)2020
(Under Section 30(6) and Section 31 of the Insolvency and Bankruptcy Code, 2016 r/w
Regulation 39(4) of the IBBI (Insolvency Resolution Process for Corporate Persons)
Regulations, 2016.)

IA/2047/2024

In the Application of:

Tejendrakumar Patel & Ors. …Applicants

Versus

Prabhat Jain & Ors.

Resolution Professional of Vikas Procon Private Limited …Respondents

IA/29/2024

Mr. Prabhat Jain ...Resolution Professional of the Vikas Procon Private Limited
In the matter of:
Tejendrakumar Patel …Operational Creditor
Versus
Vikas Procon Private Limited …Corporate Debtor

Order delivered on 05.09.2024

Coram:

Ms. Anu Jagmohan Singh Mr. Kishore Vemulapalli

Hon’ble Member (Technical) Hon’ble Member(Judicial)
 IN THE NATIONAL COMPANY LAW TRIBUNAL,
MUMBAI BENCH, COURT – IV
IA/2047/2024
IA/29/2024
In
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Appearances:

For the Applicant/Resolution Professional :Mr. Amir Arsiwala a/w Mr.

Akshay Petkar and Mr. Pratik
Pandey.

For the Applicant in IA-2047/2024 :Mr. Shyam Kapadia a/w

Ayush and Ashish Verma.

For the Respondents in IA- 2047/2024 :Mr. Amir Arsiwala a/w Mr.
Akshay Petkar and Mr. Pratik
Pandey i/b Adv. Aditya
Sharma, Ld. Counsel for
R1/RP; Mr. Prakhar Tandon
i/b Agam Maloo, Ld. Counsel
for R3; Mr. Shadab S. Jan i/b
Joshua Borges, Ld. Counsel for
R4, R5, R6 & R14; Mr. Aniruth
Purusothaman, Ld. Counsel for
R7,R8,R10,R13,R15 & R19;
Mr. Nausher Kohli i/b Yahya
Batatawala, Ld, Counsel for
R11, R12 & R17; Mr. Malhar
Zatakia i/b Tawar & Co, Ld.
Counsel for R20; Mr.
Prashansa Agarwal i/b Adv.
Sankalp Shrivastav, Ld.
Counsel for R9 & R16.

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 IN THE NATIONAL COMPANY LAW TRIBUNAL,
MUMBAI BENCH, COURT – IV
IA/2047/2024
IA/29/2024
In
C.P.(IB)/1389(MB)2020
_____________________________________________________________________________________
ORDER
IA-2047/2024
1. Before we deal with the Application for approval of Resolution Plan, it
is important to deal with the I.A 2047/2024 filed by Tejendrakumar
Patel & Ors. The reliefs sought in the said Applications are reproduced
herein below:
i. That this Hon'ble Tribunal be pleased to remove the Respondent no.1 as a
resolution professional and appoint an independent resolution professional
from the panel of Resolution Professional's maintained by this Hon'ble
Tribunal;
ii. That this Hon'ble Tribunal be pleased to direct the newly appointed
Resolution Professional to verify the claims of the Respondents herein and
also conduct a forensic audit/report of the accounts of the Corporate Debtor
(CD) & all 16 alleged Promissory Notes and admit only those claims of the
Corporate Debtor, which are found to be genuine and in accordance with
law;
iii. That this Hon'ble Tribunal be pleased to set-aside the admission of claims
(principal+interest) of the Respondent no. 4 to 20, being based on forged
and fabricated promissory notes and remove the Respondent no. 4 to 20
their voting rights in full and shall not be considered Financial Creditors
of the Corporate Debtor;
SUBMISSION ON BEHALF OF THE APPLICANT:

2. The Applicant submits that the Applicant No. 1 is an Operational

Creditor(OC) of the Corporate Debtor(CD) for an admitted amount of
Rs.6,55,71,141/- and the Applicant no.2 and 3 are Financial
Creditors(FC) of the Corporate Debtor for an admitted amount of
Rs.13,00,000/-.

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 IN THE NATIONAL COMPANY LAW TRIBUNAL,
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In
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3. The Applicant submits that by an order dated 19.04.2023, the present
Company Petition came to be admitted by this Tribunal and thereafter,
the newspaper publication was published and the Applicant lodged its
claim of Rs.6,61,69,594/- along with the requisite documents before the
erstwhile Interim Resolution Professional (IRP), Mr. Vinod Nair
(Respondent no.2), who was appointed by this Tribunal. The
Committee of Creditors (CoC) was constituted by the IRP on the basis
of the claims received by him.

4. The Applicant submits that the Committee of Creditors, comprised of

the family members and relatives of the suspended management as well
as ex-directors of the Corporate Debtor and consisting of the claimants,
whose claims were based on the fabricated promissory notes which
admittedly came not from the records of the Corporate Debtor but from
the custody and certification of the Respondent no.3 herein, who is the
auditor and also business associate of the Respondent no.4 and who has
apparently submitted manipulated statement of accounts and records of
the Corporate Debtor to the Interim Resolution Professional.

5. The Applicant submitted a list of “Related Party” Claims which were

admitted and assigned voting rights at Committee of Creditor, as
under:-

Related Party name Amount as Amount Relation to Mr.

of Mr. Dipak per books Admitted Dipak Shekalia
Shekalia (ex- of account by IRP/RP Promoter,
director) as In Rs. In Rs. shareholder, ex
challenged in Ex Director of Vikas

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 IN THE NATIONAL COMPANY LAW TRIBUNAL,
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In
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_____________________________________________________________________________________
Director Mr. Praful Procon Private
Bhanderi I.A Limited
Shivam Fashion 14,41,000 80,56,879 Mother
(Prop. Anusuyaben
Madhavjibai
Shekalia)
Shivam Embroidery 13,50,000 81,59,676 Brother
(Prop. Jayesh
Madhavjibhai
Shekalia)
Shivam Tex (Prop. 25,00,000 1,15,43,862 Mother-in-law of
Shardaben the Jayesh M
Devshibhai Shekalia
Dhirubhai 4,00,000 25,50,349 Father-in-law
Anandbhai Viradia
Nikita Sandeepbhai 1,00,000 14,01,416 Daughter-in-law
Bhogra of maternal Aunt
Devshibhai Veljibhai 8,00,000 46,13,732 Father-in-law of
Bhakar the Jayesh M
Shekalia
Equilateral Enterprise 49,00,000 1,64,83,481
Limited
Melul Vinodbhai 12,00,000 48,25,153
Jagani

Related Party name Amount as Amount Relation to Mr.

of Mr. Dipak per books Admitted Dipak Shekalia
Shekalia (ex- Promoter,

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 IN THE NATIONAL COMPANY LAW TRIBUNAL,
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director) as of account by IRP/RP shareholder, ex
challenged in In Rs. In Rs. Director of Vikas
Creditor Mr. Amit Procon Private
Rungta I.A Limited
Vipul Bhatukbhai 4,40,000 17,51,302
Bhuva
Aarti Maheshbhai 8,59,500 33,18,705 Spouse of
Viradiya Brother-in-law
Manish Dhirubhai 8,59,500 33,16,945 Brother-in-law
Viradiya
Rina Vipulbhai Bhuva 8,59,500 33,16,945
Shivam Creation- 8,59,500 33,16,945 Father
Madhavji Shekalia
Naynaben Bharatbhai 11,90,121 49,93,597 Aunty (Father’s
Shekhalia brother’s wife)
Vishal 8,15,092 33,00,832
Ghanshyambhai
Kachhadiya
Vishwas Fashion- 33,42,500 1,29,67,735 Suspended
Bhanubhai Bhutani- Director (Initially
Ex-director Rejected by IRP)

6. The Applicant submits that it has got a valuation of the assets of the
Corporate Debtor at his own costs and the report is as follows:
Fair Market Value: - Rs. 77,00,00,000/-
Liquidation Value: - Rs. 57,75,00,000/-

7. The Applicant submits that I.A 2924/2023 was filed highlighting the
irregularities and malpractices committed by the Respondents as also
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the falsity of the purported promissory notes which had a huge 24%
interest and that the accounts of the Corporate Debtor had no provision
for the alleged interest claim by the Corporate Debtor. That vide order
dated 17.07.2023, this Tribunal had held that the interest claimed by the
Applicants and admitted by the Resolution Professional is not in
accordance with the books of accounts maintained by the Corporate
Debtor and also directed that the Committee of Creditor be re-
constituted without admission of the alleged interest, for which the issue
would be later determined. The Applicant submits that these interim
directions were never vacated by this Tribunal.

8. The Applicant submits that there was some settlement between the ex-
directors, Resolution Professional as well as the Applicants in all the
three I.A’s, i.e. I.A. 2924 of 2024, I.A. 3292 of 2023 and I.A. 4389 of
2023, where the illegalities committed in the admission of fabricated
claims as well as inflated interests was challenged and the said I.A’s
came to be withdrawn. The Resolution Professional then, admitted the
entire claims of the other Respondents herein, including the interest
portion.

9. The Applicant submits that on October,2023 several creditors/unit

purchasers of the Corporate Debtor also filed complaint with the CID
Gandhinagar against the offenses committed by the management of the
Corporate Debtor.

10. Therefore, the Present Application.

SUBMISSIONS ON BEHALF OF RESPONDENTS:

11. As per material available on record, the Respondent No.
3,4,5,6,7,8,9,10,11,12,13,14,15,16,17,19,20 have filed their affidavit in
reply. The lead reply is filed by Respondent No. 1 who is the Resolution

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In
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Professional of the Corporate Debtor. The Respondents (unsecured
creditors) have filed similar replies on two main aspects, firstly regarding
allegations of Related party (by all Respondents except Respondents
No. i.e. 11,12,13,15 and 17) and secondly regarding claims submitted
by the Respondents to the Resolution Professional. The Respondents
have also enclosed copy of the Promissory Note and their Bank
Accounts statement evidencing the loan. During the course of hearing,
Respondents (except Respondent No. 3) submitted that as their issues
and submissions are similar and as the Resolution Professional has
given a consolidated reply covering their submissions also, the reply of
the Resolution Professional may be considered as the Lead reply. They
also submitted that the documents annexed to their affidavit in reply
regarding the Bank statement and Promissory Note may additionally be
perused by the Bench.

12. The Resolution Professional submits that the Applicants herein have
not alleged the Respondent Nos. 11,12,13,15 and 17 herein, namely
Equilateral Enterprises, Mehul Jagani, Vipul Bhuva, Rina Bhuva and
Vishal Kachadiya, to be related to the Corporate Debtor. With respect
to Respondent Nos. 5,6,7,8,9,10,14,16,18 and 19 herein, the Applicants
have alleged that the said respondents are 'Related Party entities' of the
Corporate Debtor solely by virtue of their relation with one of the former
directors of the Corporate Debtor, more particularly Respondent No.4
herein, Mr. Dipak Shekhalia.

13. It is submitted that Respondent No.4 herein served on the board of the
Corporate Debtor, in capacity of a Director from 21.04.2016 to
03.10.2017, thereafter tendering his resignation from his directorship on
03.10.2017. That post the said resignation from the directorship of

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Corporate Debtor, role of the said Respondent No.4 in the management
and affairs of the Corporate Debtor was non-existent and that he is
merely a shareholder of the Corporate Debtor with a shareholding in
equity of nine percent only, thereby making him a minority shareholder.
It was also submitted that name of the Respondent No. 4 has not been
mentioned in any of the Annual Returns of the Corporate Debtor
pertaining to Financial Years 2016-17 to 2021-22, as the 'Director' of the
Corporate Debtor.

14. It is submitted that neither by virtue of shareholding of Respondent

No.4 viz. merely nine percent equity shareholding in the Corporate
Debtor nor by the virtue of his former directorship (which ceased on
03.10.2017) the Respondent No.4 herein reaches the threshold of a
'Related Party', as delineated under Section 5(24) (j) of IBC, 2016. It is
therefore submitted that in the light of the above, the said former
director is not a related party as on the date of Corporate Insolvency
Resolution Professional (CIRP), as defined under section 5(24) of the
Insolvency & Bankruptcy Code, 2016(IBC). Further, assuming without
admitting that the Respondent No.4 was the director of the Corporate
Debtor as on the date of initiation of CIRP, Respondent Nos.
7,8,9,10,14,16,18 and 19 would still not fall within the purview of
Relatives' as is enunciated in Section 5(24)(a) of the IBC, 2016.

15. That with respect to Respondent No.20, it is submitted that the

Respondent is a member of suspended board of Corporate Debtor and
had submitted his claim in Form C in accordance with Regulation 8 of
the IBBI (Resolution Process for Corporate Persons) Regs., 2016 to the
Respondent No.1. It is submitted that Section 21 of the IBC, 2016 does
not put an embargo on admission of claim of a related party but restricts
the representation, participation and voting in the meetings of

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 IN THE NATIONAL COMPANY LAW TRIBUNAL,
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Committee of Creditors of the Corporate Debtor of Related Parties.
That the Respondent No.20 has not been inducted into the committee
of creditors of the Corporate Debtor and consequentially has not been
allocated any right to represent himself, participate or even vote in the
meetings of the Committee of Creditors.

16. It is submitted that the Corporate Debtor herein had issued Promissory
Notes to Respondent Nos. 5 to 20 as against respective debt amounts
disbursed by them in favor of Corporate Debtor herein. That the said
Promissory Notes, issued in favor of Respondents 5 to 20 have been
appropriately attested and signed by the erstwhile directors of the
Corporate Debtor and that the said Promissory Notes carry a
component of Interest @ 24% on the respective principal amounts
disbursed by the Respondents.

17. It is further submitted that the books of the Corporate Debtor pertaining
to FY 2022-23 and bank statements annexed by the Respondents 5 to
20, reflect the said amounts received by the Corporate Debtor, and the
said amounts are recorded under the head of Advances' as the said debts
were raised by the Corporate Debtor for the purpose of their pending
projects.

18. It is submitted that the said Respondents duly submitted their claims in
FORM C, in accordance with Regulation 8 of the CIRP Regulations,
2016 as their respective debts emanated from the disbursal of debt
against which Promissory Notes were issued to them by the suspended
management of Corporate Debtor.

19. It is submitted that therefore the Respondent No. I herein, in lieu of

duties bestowed upon him by Section 18 of the IBC, 2016 admitted the

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claims of the Respondent Nos. 5-20 herein as the books of the Corporate
Debtor and respective bank statements duly recorded the receipt of debt
by the Corporate Debtor. Further, the Auditor of the Corporate Debtor
has classified the sum recorded as 'Interest' accrued on aforesaid
Promissory Notes as Financial Cost, as Contingent Liability in the
Financials Statement as on 31.03.2023.

20. Further, the Respondent nos. 5 to 20, with their respective claim forms
have submitted original and translated copies of Promissory Notes
issued to them by the Corporate Debtor along with Bank Statements
reflecting the transfer of amounts to the Corporate Debtor and it is
reiterated that the receipt of said debts from aforesaid Respondents are
recorded in the books of Corporate Debtor from the date of disbursal.

21. It is further submitted that the Respondent No.1 herein convened the
5th meeting of the Committee of Creditors of Corporate Debtor on
03.08-2023 wherein the members of the said Committee granted their
approval vide requisite majority thereby appointing GTech Valuers Pvt.
Ltd. (IBBI/RV-E/052020/124) and Value Edge Professionals Pvt. Ltd.
(IBBI RV- E/02/2022/159) as the valuer’s in respect of Financials
Assets and Land & Building of Corporate Debtor in accordance with
Regulation 35 of the CIRP Regulations, 2016.

22. It is submitted that the Valuation Report submitted by the Applicants

herein does not warrant any genuineness or authenticity in its valuation
and numerical arrived at. That the said valuation report submitted by
the Applicants herein is devoid of the contours of Regulation 27 and
Regulation 35 of the IBBI (Insolvency Resolution Process-of-Corporate
Persons) Regs., 2016.

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23. It is submitted that with respect to reliance placed by the Applicants
herein on order dated 17.07.2023 passed by this Tribunal in I.A No.
2924/2023, it is submitted that the said reliance is absolutely misplaced
and has no relevance to matter at hand as the said I.A 2924/2023 stood
withdrawn on 18.01.2023 by the Applicants herein thereby vacating
every interim order/s passed by this Tribunal, and the Applicants in I.A
No. 2924/2023 were distinct entities than Applicants in the captioned
Application.

FINDINGS:

24. We have perused the submissions made by the Learned Counsel for the
Applicant and the Respondents.

25. We observe in this case that the Committee of Creditors constitutes

mainly of Unsecured Financial Creditors, Operational Creditors and
other Creditors. The claim of the Unsecured Financial Creditor is
arising out of Unsecured Loans given by them to the Corporate Debtor
and which are reflected as “other long-term liabilities” (Unsecured
Loans) in the Financials of the Corporate Debtor. We also observe that
such Loans are reflected in the Balance sheet of the Corporate Debtor
since Financial Year 2016-2017. However, no Finance Cost/Interest
has been shown in the Financials statements of the Corporate Debtor
attributable to these Unsecured Loans.

26. The Resolution Professional has submitted that the said claims were
submitted by the creditors in Form C and the same are also evidenced
from the Bank Account of the Corporate Debtor. The Resolution
Professional has also submitted that the Unsecured Creditors have also
handed over which Promissory Note signed by the erstwhile director of

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the Corporate Debtor which reflect interest of 24% therein. Taking these
into account, the Resolution Professional admitted the claim of
Principal Amount and Interest.

27. We also take note of the reply given by Respondent/Unsecured

Creditors wherein they have annexed copies of the Promissory Note
dating between 2015-2017 and also copies of their respective Bank
Statements evidencing that the monies were transferred through
Banking channels.
28. The Applicant in the present I.A has in the pleadings (though this issue
is not part of the prayers of the applicant) taken objection that the
Unsecured Creditors are all Related parties and that the Committee of
Creditors comprises of the Family members and Relatives of the
Suspended Directors. The Applicant has stated that the Unsecured
Creditors have Relation to Mr. Deepak shekalia who was the ex-director
of the Corporate Debtor. He has given a chart detailing the relationship
of some of the Unsecured Creditors with Mr. Shekalia.

28.1 We take note of the reply filed by the Resolution Professional wherein
he has stated that Respondent No.11 ,12,13,15,17 have not been
alleged to be Related Parties of the Corporate Debtor. With reference
to the other Respondents, they have been placed as Related Parties
because of their Relationship with Mr. Deepak Shekalia (Respondent
No. 4) who was on the Board of the Corporate Debtor as Director only
from 21.04.2016 to 03.10.2017. Thereafter, he resigned and is merely
a Shareholder of Nine percent in the Corporate Debtor. The
Resolution Professional has also submitted that his name does not find
mention in any of the annual returns as Directors of the Corporate
Debtor from 2016-2017 to 2021-2022. The Resolution Professional

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therefore, submits that none of these creditors can be defined as
Related Parties in terms of section 5(24) of the IBC.

28.2 We observe that the Statutory Auditor of the Corporate Debtor in his
notes to accounts on the Financials of the Corporate Debtor has not
reflected any Related Party Transactions.

28.3 We have gone through the provisions of sections 5(24) and are inclined
to agree with the submissions of the Resolution Professional that the
parties as listed herein cannot be held to be Related Parties in terms of
the provision of the Insolvency & Bankruptcy Code,2016.

29. Having held that the Unsecured Creditors/Respondent in this I.A do

not fall within the definition of Related Party as per section 5(24) of the
Insolvency & Bankruptcy Code,2016, we now examine the aspect of the
Unsecured Loans. The Resolution Professional has stated that receipt
of these Loans is reflected in the Bank Account of the Corporate Debtor.
We have perused the Financials of the Corporate Debtor and find that
the Balance Sheet of the Corporate Debtor reflects Unsecured Loan
from 2016 onwards (though no breakup or list of creditor is provided in
the Financials). We have also perused the Bank Account Statements of
the Respondents produced by them to show that monies were
transferred to Corporate Debtor through Banking channels. There can
therefore not be any doubt regarding the existence of the Unsecured
Loans. The only issue of contention which remains is the Interest
Component of the said Loans.

30. The Respondents i.e. Resolution Professional and the Unsecured

Creditors in their Affidavit in reply have relied on Promissory Notes
from the year 2015 till 2017 which records Interest Component @ 24%
p.a. to be calculated on 31st March every year. They have also sought to
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rely on the Financials of the Corporate Debtor for the Financial Year
2022-2023 wherein the Statutory Auditor has shown the interest cost as
a contingent liability in the notes to account.

31. We have perused the Financial statements of the Corporate Debtor from
2016 onwards and observe that Interest on the said Unsecured Loan is
not provisioned for in the Financial statements of the Corporate Debtor.
Section 128(1) of the Companies Act, 2013 mandates “…Every company
shall prepare and keep at its registered office books of account and other relevant
books and papers and financial statement for every financial year which give a
true and fair view of the state of the affairs of the company, including that of its
branch office or offices, if any, and explain the transactions effected both at the
registered office and its branches and such books shall be kept on accrual basis
and according to the double entry system of accounting”. Accordingly, interest
payable, if any should have been reflected in the Financial statements
as per Accounting standards. Since, no Financial Cost with reference to
these Loans was reflected in the Books of Accounts of the Corporate
Debtor it can be inferred that these Unsecured Loans were Interest free
Loans and cannot be claimed as Interest bearing Loans.

32. The reliance by the respondent on Financials of the Corporate Debtor

for Financial Year 2022-2023 does not hold much substance as the
accounts and Financials for the said year were prepared subsequent to
the admission of the Corporate Debtor into CIRP and after the claims
were filed by the said creditors based on Promissory Note which were
not found in the premises of the Corporate Debtor but were given to the
Resolution Professional by the Creditors. Infact, interest on the said
loans is shown as “Contingent Liability” by the Statutory Auditor in
the notes to Accounts with a disclaimer that he was not in knowledge

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of the existence of the said Promissory Notes until production of the
same before him by the claimants of the Corporate Debtor, post the
initiation of CIRP in respect of Corporate Debtor.

33. In this regard we take note of the affidavit in reply filed by the Statutory
Auditor of the Corporate Debtor Respondent No. 3 herein where he has
stated: -
“13. It is submitted that the Deponent herein was not in the knowledge of existence
of the said Promissory Note/s until the same were produced before him for the sole
purpose of translations, of the same, from Gujrati to English, by the claimants of
the Corporate Debtor.
14. It is submitted that the said Promissory Notes were produced before the
Deponent herein, by the claimants of the Corporate Debtor, pursuant to order
dated 19.04.2023 of this Hon’ble Tribunal whereby Corporate Insolvency
Resolution Process (hereinafter referred to as ‘CIRP’) was initiated in respect of
the Corporate Debtor.
15. It is further submitted that the certification by the Deponent herein on the said
Promissory Notes is limited to the purpose of translation of the said Promissory
Notes, from Gujrati to English, and that the same has been emphatically stated
on Promissory Note/s by way of such certification.
16. Therefore, it is reiterated, that the Deponent herein was not in the knowledge
of existence of the said Promissory Notes until production of the same before him
by the claimants of the Corporate Debtor, post the initiation of CIRP in respect of
Corporate Debtor.
17. It is further submitted that on submission of the said Promissory Notes the
Respondent No. 2 herein requested the erstwhile management of the Corporate
Debtor to furnish other relevant document to conduct a review appropriately
however the said documents were never submitted to the Respondent No. 2 herein
for his perusal.

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18. In consequence of the above the Respondent No. 3 herein classified the said
sum recorded as Interest as Financial Cost, which is in nature of contingent
liability to the effect of which the Respondent No. 3 herein has recorded his
qualification appropriately in notes to account in the Balance sheet as on
31.03.2023.”
34. In view of the aforestated affidavit by the Statutory Auditor that he was
unaware of the Promissory Notes and Accounted for the same (interest)
as a “Contingent Liability” only after he was handed over the Promissory
Note by the claimants after the Corporate Debtor went into CIRP and
that the erstwhile management did not provide any documents to him
regarding the same, and the fact that the Financials of the Corporate
Debtor from Financial Year 2016 onwards do not record any Interest
Component on the said Unsecured Loans and the fact that the Law of
Land provides that the Companies are legally mandated under Section
128(1) of the Companies Act,2013 to maintain Accounts on accrual
basis, it can be held that the said Loans did not carry any Component
of Interest on them.

35. The Resolution Professional has submitted that Interest was taken into
account based on Promissory Note produced by the Creditors after
initiation of CIRP. We note that all these Promissory Note are dated
between 2015-2017 and have a mention 24% interest p.a. However,
from the facts of the case it is clear that this aspect of Interest was neither
ever claimed by the Lenders nor was it provided for by the borrower
either per annum or ever in the last 6 to 7 years prior to CIRP. The
interest aspect of the loans was thus never acted upon. The Financials
of the Corporate Debtor as well as the conduct of the Lender and
Borrower clearly reflect that these were Interest Free Loan. In view of
the facts and circumstances of the case, we are of the shared view that

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 IN THE NATIONAL COMPANY LAW TRIBUNAL,
MUMBAI BENCH, COURT – IV
IA/2047/2024
IA/29/2024
In
C.P.(IB)/1389(MB)2020
_____________________________________________________________________________________
there was never any provision of Interest in the said Loans and such
Loans were not Interest bearing. The production of Promissory Note by
the Creditors post the Corporate Debtor going into CIRP and the
Auditor not being aware of such Promissory Note or the Financials not
reflecting Finance cost/interest clearly establishes that this was an
afterthought by the Creditors.

36. The Applicant has also raised the issue of valuation report. The
Resolution Professional has submitted that the valuation of the
Corporate Debtor was done by the valuers appointed from the IBBI
panel and that the Committee of Creditors have approved the valuation
report as submitted by the Registered valuer with the requisite majority
vote. This Bench is not inclined to interfere in this matter as we neither
have the expertise to go into the technicalities of the valuation report
nor are we mandated to interfere in the report submitted by IBBI
approved valuer which has been approved by Committee of Creditor in
their commercial wisdom. The Hon’ble Supreme Court of India in the
matter of Ramkrishna Forging Limited versus Ravindra Loonkar, RP in
ACIL Limited & Anr., has held that the aspect of valuation of assets of
Corporate Debtor by registered valuers and submission of valuation
reports thereby falls within purview of ‘Commercial Wisdom of the
Committee of Creditor of Corporate Debtor’.

37. In view of our findings and observations given supra we are of the
shared view that the claims of the Unsecured Financial Creditor have to
be modified suitably to exclude the ‘interest’ component therein. With
these observations I.A 2047/2024 is partly allowed only to the extent
of claims relating to the “interest” portion allowed to the unsecured
creditors.

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 IN THE NATIONAL COMPANY LAW TRIBUNAL,
MUMBAI BENCH, COURT – IV
IA/2047/2024
IA/29/2024
In
C.P.(IB)/1389(MB)2020
_____________________________________________________________________________________
I.A 29/2024

38. This Application has been filed on 16.04.2024 by the Resolution

Professional under Section 30(6) of the Insolvency and Bankruptcy
Code, 2016 on behalf of the Committee of Creditors seeking approval
of the Resolution Plan submitted by the Successful Resolution
Applicant.

39. In view of our findings in I.A 2047/2024 that the claims of the
Unsecured Creditors have to be reworked by excluding the interest
portion, the Resolution Plan is remanded back to Committee of
Creditors for fresh consideration.

40. The approval of the Resolution Plan in consideration hereto, stands

disposed-of.

Sd/- Sd/-
ANU JAGMOHAN SINGH KISHORE VEMULAPALLI
MEMBER (TECHNICAL) MEMBER (JUDICIAL)

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