{"id":2545,"date":"2025-04-20T08:39:26","date_gmt":"2025-04-20T08:39:26","guid":{"rendered":"https:\/\/lawsikho.com\/blog\/?p=2545"},"modified":"2025-04-20T08:39:31","modified_gmt":"2025-04-20T08:39:31","slug":"how-to-draft-a-resolution-plan-under-the-ibc","status":"publish","type":"post","link":"https:\/\/lawsikho.com\/blog\/how-to-draft-a-resolution-plan-under-the-ibc\/","title":{"rendered":"How to draft a resolution plan under the IBC"},"content":{"rendered":"\n<p><em>Want to be an insolvency professional? Learn who can be a resolution applicant and who is disqualified from being one. How are resolution plans drafted? If you are a budding insolvency professional or a stakeholder of a company, this guide is for you.&nbsp;<\/em><\/p>\n\n\n\n<div class=\"wp-block-rank-math-toc-block\" id=\"rank-math-toc\"><h2>Table of Contents<\/h2><nav><ul><li><a href=\"#introduction\">Introduction<\/a><\/li><li><a href=\"#what-is-a-resolution-plan\">What is a resolution plan?<\/a><\/li><li><a href=\"#what-is-the-statutory-and-regulatory-framework-for-drafting-a-resolution-plan\">What is the statutory and regulatory framework for drafting a resolution plan?<\/a><\/li><li><a href=\"#how-do-you-draft-a-resolution-plan\">How do you draft a resolution plan?<\/a><ul><li><a href=\"#definitions-and-interpretations\">1. DEFINITIONS AND INTERPRETATIONS<\/a><\/li><li><a href=\"#overview-of-the-corporate-debtor-and-corporate-insolvency-resolution-process\">2. OVERVIEW OF THE CORPORATE DEBTOR AND CORPORATE INSOLVENCY RESOLUTION PROCESS<\/a><ul><li><a href=\"#2-1-general-information-about-the-company\">2.1 General Information about the Company\u00a0<\/a><\/li><li><a href=\"#2-2-details-about-the-past-performance-of-the-company\">2.2 Details about the past performance of the Company:\u00a0<\/a><\/li><li><a href=\"#2-3-brief-background-of-the-cirp-and-timelines\">2.3 Brief background of the CIRP and timelines\u00a0<\/a><\/li><li><a href=\"#2-4-details-of-lis-pendens\">2.4 Details of lis-pendens\u00a0<\/a><\/li><\/ul><\/li><li><a href=\"#project-background\">3. PROJECT BACKGROUND\u00a0<\/a><\/li><li><a href=\"#4-details-of-the-resolution-applicant\">4. DETAILS OF THE RESOLUTION APPLICANT<\/a><\/li><li><a href=\"#5-details-of-the-resolution-plan\">5. DETAILS OF THE RESOLUTION PLAN<\/a><\/li><li><a href=\"#6-eligibility-details-in-relation-of-resolution-applicant\">6. ELIGIBILITY DETAILS IN RELATION OF RESOLUTION APPLICANT\u00a0<\/a><\/li><li><a href=\"#7-details-as-per-regulation-38-of-the-regulations\">7. DETAILS AS PER REGULATION 38 OF THE REGULATIONS<\/a><\/li><li><a href=\"#8-eligibility-norms-as-proposed-in-the-evaluation-matrix\">8. ELIGIBILITY NORMS AS PROPOSED IN THE EVALUATION MATRIX<\/a><\/li><li><a href=\"#9-approvals-waivers-specific-orders-by-from-nclt\">9. APPROVALS\/WAIVERS\/ SPECIFIC ORDERS BY\/FROM NCLT<\/a><\/li><\/ul><\/li><li><a href=\"#other-terms-and-conditions\">Other terms and conditions\u00a0<\/a><\/li><li><a href=\"#final-thoughts\">Final thoughts<\/a><\/li><\/ul><\/nav><\/div>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"introduction\"><strong>Introduction<\/strong><\/h2>\n\n\n\n<p>My friend Ishan called me the other day, fuming\u2014 \u201cthe resolution plan I was working on for the past 15 days? It got rejected. I spent sleepless nights, and they just rejected it\u201d, he said.&nbsp;<\/p>\n\n\n\n<p>I didn\u2019t even ask why. I knew why. I had seen the plan.&nbsp;<\/p>\n\n\n\n<p>Although it was compliant with the legal and statutory framework, it was not commercially attractive.<\/p>\n\n\n\n<p>His job was on the line here.&nbsp;<\/p>\n\n\n\n<p>I asked him a very simple question instead. \u201cDid you hire financial experts to check if your plan was viable or did you just roll with what legal knowledge you had?\u201d.&nbsp;<\/p>\n\n\n\n<p>He hung up on me.&nbsp;<\/p>\n\n\n\n<p>Well, the answer was pretty obvious.&nbsp;<\/p>\n\n\n\n<p>This is a mistake most lawyers\/insolvency professionals commit while dealing with resolution plans. You are dealing with a distressed company and need to sort of save it from liquidation. So, you need financial, legal, and sectoral knowledge to draw up a proper plan.&nbsp;<\/p>\n\n\n\n<p>In this article, I will teach you how to evade the fate and frustration that Ishan faced, and help you draft or simply understand what goes on in a resolution plan.&nbsp;<\/p>\n\n\n\n<p>First things first, let\u2019s get some basics right.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"what-is-a-resolution-plan\"><strong>What is a resolution plan?<\/strong><\/h2>\n\n\n\n<p>Let\u2019s take a step back and understand when a resolution plan comes into play.&nbsp;<\/p>\n\n\n\n<p>Imagine that there is a company Aksim Export Pvt. Ltd., which could not pay up its creditors. FIB Bank Ltd. it&#8217;s a financial creditor, filed an insolvency application under the Insolvency and Bankruptcy Code (\u201cIBC\u201d), and the process began. We will take Aksim\u2019s example to draft our plan.\u00a0<\/p>\n\n\n\n<p>Here is a step chart for you to understand the process up until the resolution professional is appointed:\u00a0<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/lh7-rt.googleusercontent.com\/docsz\/AD_4nXf4s358R1BMSzoAoHrcFmZgmAfNpid2zySja_JFr958iOpN_s6OzLJK1xz1MLekbVC6zoV_TZODzk4lIw8Q3hP49GLo3hiJ_O6NqIxmsMxaRcSWijuw-Xi2UAqwxzi5mf5eBAosQw?key=uiFaSxRRpZJ319xl9OBpQ1NH\" alt=\"\"\/><\/figure>\n\n\n\n<p>Once the resolution professional is appointed, he invites companies, NBFCs, etc., to express interest in revamping such a company. The interested applicants (called Resolution Applicants) respond with the requisite information and documents to the invitation.&nbsp;<\/p>\n\n\n\n<p>Thereafter, a final list consisting of the compliant resolution applicants is prepared, who are required to submit a resolution plan (as per the provisions of the IBC and the regulations therein) which outlines how they intend to resolve the insolvency, including restructuring debts, infusing capital, or managing the company\u2019s operations.<\/p>\n\n\n\n<p>The IBC defines a resolution plan under section<mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-secondary-color\"> <\/mark><a href=\"https:\/\/ibclaw.in\/section-5-definitions-under-part-ii-part-ii-insolvency-resolution-and-liquidation-for-corporate-persons-the-insolvency-and-bankruptcy-code-2016-ibc-sections\/\" target=\"_blank\" rel=\"noreferrer noopener\"><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-secondary-color\">5(26)<\/mark> <\/a>as <em>\u201ca plan proposed by the resolution applicant for insolvency resolution of the corporate debtor as a going concern in accordance with Part II\u201d.<\/em>\u00a0<\/p>\n\n\n\n<p>I will explain what this means as we proceed.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"what-is-the-statutory-and-regulatory-framework-for-drafting-a-resolution-plan\"><strong>What is the statutory and regulatory framework for drafting a resolution plan?<\/strong><\/h2>\n\n\n\n<p>First, let us know who can submit a resolution plan:&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Any person or entity, whether Indian or foreign;<\/li>\n\n\n\n<li>Companies, whether private, public or listed;<\/li>\n\n\n\n<li>Financial institutions could be a bank, an NBFC or an investment firm;\u00a0<\/li>\n\n\n\n<li>Eligible individuals, either promoters or investors;<\/li>\n\n\n\n<li>A consortium that is multiple applicants applying jointly.\u00a0<\/li>\n\n\n\n<li>Asset Reconstruction Companies (ARCs); and\u00a0<\/li>\n\n\n\n<li>Private equity funds, venture capital firms.\u00a0<\/li>\n<\/ul>\n\n\n\n<p>Now, as per section<mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-secondary-color\"> <\/mark><a href=\"https:\/\/www.indiacode.nic.in\/show-data?actid=AC_CEN_2_11_00055_201631_1517807328273&amp;orderno=34\" target=\"_blank\" rel=\"noreferrer noopener\"><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-secondary-color\">29A<\/mark> <\/a>of the IBC, who cannot submit a resolution plan? Or rather, who is not eligible to become a resolution applicant.\u00a0\u00a0<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Undischarged insolvent<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Wilful defaulters<\/li>\n\n\n\n<li>Those with Non-Performing Assets (NPAs) (unless cleared)<\/li>\n\n\n\n<li>Persons convicted of offences stated under the said section\u00a0<\/li>\n\n\n\n<li>Disqualified directors or banned by SEBI<\/li>\n\n\n\n<li>Those connected to fraudulent or undervalued transactions.\u00a0<\/li>\n<\/ul>\n\n\n\n<p><strong>What should a resolution plan include?<\/strong><\/p>\n\n\n\n<p>Section <a href=\"https:\/\/ibclaw.in\/section-30-submission-of-resolution-plan\/\" target=\"_blank\" rel=\"noreferrer noopener\"><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-secondary-color\">30<\/mark><\/a> of the IBC gives an overview of the contents of the resolution plan. The RP must ensure that the resolution plan provides for:\u00a0\u00a0<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Payment of insolvency process costs in priority over other debts;\u00a0<\/li>\n\n\n\n<li>Payment of debt to operational creditors which shall not be less than what they would get in liquidation, or what they would get based on distribution in section <a href=\"https:\/\/www.indiacode.nic.in\/show-data?actid=AC_CEN_2_11_00055_201631_1517807328273&amp;sectionId=832&amp;sectionno=53&amp;orderno=59\" target=\"_blank\" rel=\"noreferrer noopener\"><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-secondary-color\">53<\/mark><\/a>, whichever is higher.<\/li>\n\n\n\n<li>Payment of debts of financial creditors who do not vote in favour of the plan must be at least the amount they would get in liquidation.<\/li>\n\n\n\n<li>Provides for the management of affairs of the corporate debtor once the resolution plan is approved;\u00a0<\/li>\n\n\n\n<li>Provides for ways in which the plan will be implemented and supervised;\u00a0<\/li>\n\n\n\n<li>That it is not in contravention of any law in force.<\/li>\n\n\n\n<li>Meets other requirements specified by the Insolvency and Bankruptcy Board of India (\u201cIBBI\u201d).\u00a0<\/li>\n<\/ul>\n\n\n\n<p>When a resolution plan includes a covenant that normally needs approval from shareholders under the Companies Act or constitutional document or shareholders\u2019 agreement, will still be considered valid and can be put into effect, even if that approval hasn\u2019t actually been taken.&nbsp;<\/p>\n\n\n\n<p>So it is not just the content the king here.&nbsp;<\/p>\n\n\n\n<p>What is the purpose of undertaking such a lengthy exercise? What are the measures which a resolution applicant needs to take for the revival of a corporate debtor? Let us have a look below.&nbsp;<\/p>\n\n\n\n<p>Regulation 37 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulation, 2016 (\u201cthe <a href=\"https:\/\/ibclaw.in\/ibbi-cirp-regulations\/\" target=\"_blank\" rel=\"noreferrer noopener\"><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-secondary-color\">Regulations<\/mark><\/a>\u201d) outlines the measures that a resolution plan may include to facilitate the insolvency resolution of a corporate debtor, aiming for the maximisation of asset value.\u00a0<\/p>\n\n\n\n<p>So while you prepare a resolution plan, keep the following things in mind.&nbsp;<\/p>\n\n\n\n<p>A resolution plan may provide for the following measures. Parts marked in red are examples of each point.&nbsp;<\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li>Transferring or selling all or part of the corporate debtor&#8217;s assets to one or more persons.\u00a0<\/li>\n<\/ol>\n\n\n\n<p><mark style=\"background-color:rgba(0, 0, 0, 0);color:#f40c0c\" class=\"has-inline-color\">For instance, in the case of Bhushan Steel, Tata Steel acquired the entire plant and machinery, while non-core land assets were either sold off separately or retained by the resolution applicant.<\/mark><\/p>\n\n\n\n<ol start=\"2\" class=\"wp-block-list\">\n<li>A resolution applicant may restructure the corporate debtor through merger, amalgamation, or demerger<\/li>\n<\/ol>\n\n\n\n<p><mark style=\"background-color:rgba(0, 0, 0, 0);color:#ff1504\" class=\"has-inline-color\">For example, a resolution applicant may propose merging a sick unit with one of its own subsidiaries to absorb operations, reduce overhead costs and benefit from tax credits.<\/mark><\/p>\n\n\n\n<ol start=\"3\" class=\"wp-block-list\">\n<li>Substantial acquisition of shares or consolidation with one or more persons<\/li>\n<\/ol>\n\n\n\n<p><mark style=\"background-color:rgba(0, 0, 0, 0);color:#ea0707\" class=\"has-inline-color\">So in the case of Electrosteel Steel, Vedanta acquired a majority stake in the company as part of the resolution plan, leading to fresh equity infusion and a change in control.<\/mark><\/p>\n\n\n\n<ol start=\"4\" class=\"wp-block-list\">\n<li>Cancellation or delisting of any shares, if applicable<\/li>\n<\/ol>\n\n\n\n<p><mark style=\"background-color:rgba(0, 0, 0, 0);color:#ee0e0e\" class=\"has-inline-color\">In some cases, especially when public shareholding is negligible or scattered, resolution plans have included delisting from stock exchanges to simplify restructuring.\u00a0<\/mark><\/p>\n\n\n\n<ol start=\"5\" class=\"wp-block-list\">\n<li>Satisfaction or modification of any security interest<\/li>\n<\/ol>\n\n\n\n<p><mark style=\"background-color:rgba(0, 0, 0, 0);color:#f90808\" class=\"has-inline-color\">A secured creditor may agree to release their charge on certain assets in exchange for part payment or may accept modified security (e.g., switching from land to equity).<\/mark><\/p>\n\n\n\n<ol start=\"6\" class=\"wp-block-list\">\n<li>Curing or waiving breaches of debt terms, reducing amounts payable to creditors, extending maturity dates or changing interest rates or other debt terms<\/li>\n<\/ol>\n\n\n\n<p><mark style=\"background-color:rgba(0, 0, 0, 0);color:#f70707\" class=\"has-inline-color\">Instead of repaying loans in full, the resolution plan may propose to reduce the total debt payable (this practice is popularly known as \u201ca haircut\u201d), extend the repayment period from 5 to 10 years or reduce interest from 12% to 6%.\u00a0<\/mark><\/p>\n\n\n\n<ol start=\"7\" class=\"wp-block-list\">\n<li>Amending the corporate debtor&#8217;s constitutional documents<\/li>\n<\/ol>\n\n\n\n<p><mark style=\"background-color:rgba(0, 0, 0, 0);color:#ec0b0b\" class=\"has-inline-color\">For instance, when the resolution plan is approved and is at the stage of implementation, amend the articles of association by bringing in new governance mechanisms, such as appointing an independent monitoring committee or limiting promoter control.\u00a0<\/mark><\/p>\n\n\n\n<ol start=\"8\" class=\"wp-block-list\">\n<li>Issuing securities for cash, property, securities, or in exchange for claims or interests<\/li>\n<\/ol>\n\n\n\n<p><mark style=\"background-color:rgba(0, 0, 0, 0);color:#f00606\" class=\"has-inline-color\">A resolution applicant may issue equity shares or convertible debentures to operational creditors in lieu of part of their claims, which effectively turns debt into equity.<\/mark><\/p>\n\n\n\n<ol start=\"9\" class=\"wp-block-list\">\n<li>Changing the portfolio of goods or services produced or rendered, or changing the technology used<\/li>\n<\/ol>\n\n\n\n<p><mark style=\"background-color:rgba(0, 0, 0, 0);color:#f70404\" class=\"has-inline-color\">For example, a steel company with outdated furnaces might propose a shift to electric arc furnaces, which are also cleaner and more efficient in order to improve long-term viability.<\/mark><\/p>\n\n\n\n<ol start=\"10\" class=\"wp-block-list\">\n<li>Obtaining necessary approvals from the Central and State Governments and other authorities.<\/li>\n<\/ol>\n\n\n\n<p><mark style=\"background-color:rgba(0, 0, 0, 0);color:#f41515\" class=\"has-inline-color\">In cases relating to telecom or mining, resolution plans often require statutory clearances from DoT, MoEF, or SEBI, for license transfers or changes in ownership<\/mark>.<\/p>\n\n\n\n<ol start=\"11\" class=\"wp-block-list\">\n<li>Selling one or more assets to multiple successful resolution applicants and manner of dealing with the remaining assets accordingly.\u00a0<\/li>\n<\/ol>\n\n\n\n<p><mark style=\"background-color:rgba(0, 0, 0, 0);color:#ed0e0e\" class=\"has-inline-color\">In the Videocon group insolvency, different companies expressed interest in acquiring individual business units (e.g., oil, consumer electronics, telecom) instead of acquiring the group as a whole.<\/mark><\/p>\n\n\n\n<p>These provisions ensure that resolution plans are not only fair and just to all stakeholders but also practical and feasible. This, in turn, facilitates the effective revival of corporate insolvency cases.<\/p>\n\n\n\n<p>You know the rules. Now read out the content.&nbsp;<\/p>\n\n\n\n<p>Now, we move on to regulation 38 of the Regulations, which provides a more detailed framework of a resolution plan by providing its mandatory contents. The said regulation ensures that the resolution plan addresses key aspects like payment to stakeholders, management of affairs and compliance with legal requirements.<\/p>\n\n\n\n<p>A resolution plan must include the following:<\/p>\n\n\n\n<p><strong>Priority payment:&nbsp;<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Operational creditors must be paid in priority over the financial creditors;\u00a0<\/li>\n\n\n\n<li>Financial creditors who had the right to vote but did not vote in favour of the resolution plan shall be paid priority over financial creditors who voted in favour of the plan.\u00a0<\/li>\n<\/ul>\n\n\n\n<p><strong>Stakeholder interests<\/strong>:&nbsp;<\/p>\n\n\n\n<p>The plan should include a statement detailing how the interests of all stakeholders, including both financial and operational creditors, are dealt with.&nbsp;<\/p>\n\n\n\n<p><strong>Past implementation failures<\/strong>:&nbsp;<\/p>\n\n\n\n<p>The resolution applicant must include a disclosure statement as to how the resolution applicant or any of its related parties has failed to implement or contribute to the failure of implementation of any other resolution plan approved by the NCLT.&nbsp;<\/p>\n\n\n\n<p><strong>Implementation details<\/strong>:&nbsp;<\/p>\n\n\n\n<p>The plan should provide:<\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li>Terms of the plan and its implementation schedule;\u00a0<\/li>\n\n\n\n<li>Management and control of the corporate debtor&#8217;s business during the term of the plan;<\/li>\n\n\n\n<li>Adequate means for supervising the implementation of the plan;<\/li>\n\n\n\n<li>Provides for the manner in which proceedings related to the avoidance of fraudulent\/wrongful trading, including the distribution of any proceeds from such proceedings.\u00a0<\/li>\n<\/ol>\n\n\n\n<p><strong>Feasibility and viability<\/strong>:\u00a0<\/p>\n\n\n\n<p>The resolution plan must demonstrate:<\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li>The causes of default.<\/li>\n\n\n\n<li>That it is feasible and viable.<\/li>\n\n\n\n<li>It has provisions for its effective implementation.<\/li>\n\n\n\n<li>Outlines approvals and timelines.<\/li>\n\n\n\n<li>The resolution applicant has the capability to implement the plan.<\/li>\n<\/ol>\n\n\n\n<p><strong>Monitoring Committee<\/strong>&nbsp;<\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li>The Committee of Creditors (CoC) may consider establishing a monitoring committee to oversee the implementation of the resolution plan.\u00a0<\/li>\n\n\n\n<li>This committee can include the resolution professional or any other insolvency professional, as well as representatives from the CoC and the resolution applicant. If the resolution professional is part of this committee, their monthly fee should not exceed what they received during the CIRP.\u00a0<\/li>\n\n\n\n<li>The monitoring committee is required to submit quarterly reports to the NCLT on the status of the implementation of the plan.<\/li>\n<\/ol>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"how-do-you-draft-a-resolution-plan\"><strong>How do you draft a resolution plan?<\/strong><\/h2>\n\n\n\n<p>Saksham Export Pvt. Ltd., an eligible resolution applicant approached Mr. T. Shankaran, the resolution professional appointed in this matter with a resolution plan for Aksim Exports Pvt. Ltd. So let us have a look at the proposed plan.&nbsp;<\/p>\n\n\n\n<p>But before we proceed any further, let us get an overview of the resolution plan.&nbsp;<\/p>\n\n\n\n<p><strong>Part 1 <\/strong>consists of the provisions of the IBC and applicable regulations framed thereunder, relating to resolution plans, their preparation, mandatory contents and their approval.&nbsp;&nbsp;<\/p>\n\n\n\n<p><strong>Part 2 <\/strong>contains the landmark and key verdicts of the Hon\u2019ble NCL, NCLAT and the Hon\u2019ble Supreme Court on the key aspects of resolution plans, i.e., what details are to be included, what are the duties of various stakeholders, their approval process, etc.&nbsp;<\/p>\n\n\n\n<p><strong>Part 3 <\/strong>lays down a model resolution plan <em>(for reference only)<\/em>. This draft resolution plan is a product of the perusal of a couple of other approved plans and is not prepared as per any statute or regulations.&nbsp;<\/p>\n\n\n\n<p class=\"has-text-align-center\"><strong>PART 1: COMPLIANCES UNDER IBC<\/strong><\/p>\n\n\n\n<p>In this part, you need to talk about the provisions which exclusively deal with a resolution plan, the meaning of the resolution plan, its eligibility criteria, the duties of the resolution professional, etc.&nbsp;&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><tbody><tr><td><strong>Provisions<\/strong><\/td><td><strong>Scope&nbsp;<\/strong><\/td><td><strong>Explanation<\/strong><\/td><\/tr><tr><td>Section<mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-secondary-color\"> <a href=\"https:\/\/ibclaw.in\/section-5-definitions-under-part-ii-part-ii-insolvency-resolution-and-liquidation-for-corporate-persons-the-insolvency-and-bankruptcy-code-2016-ibc-sections\/\" target=\"_blank\" rel=\"noreferrer noopener\">5(26)<\/a> <\/mark>of IBC<\/td><td>Definition of a resolution plan&nbsp;<\/td><td>When a resolution applicant proposes a plan for insolvency resolution as a going concern, it is called a resolution plan. Such a plan may provide for restructuring of the corporate debtor, including by way of merger, amalgamation and demerger.&nbsp;&nbsp;<\/td><\/tr><tr><td>Proviso to Section <a href=\"https:\/\/ibclaw.in\/section-14-moratorium-chapter-ii-corporate-insolvency-resolution-processcirp-part-ii-insolvency-resolution-and-liquidation-for-corporate-persons-the-insolvency-and-bankruptcy-code-2016-ibc-sec\/\" target=\"_blank\" rel=\"noreferrer noopener\"><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-secondary-color\">14(4)<\/mark><\/a><mark style=\"background-color:rgba(0, 0, 0, 0);color:#f71313\" class=\"has-inline-color\"> <\/mark>of the IBC<\/td><td>Applicability of moratorium<\/td><td>Once the NCLT approves the resolution plan under the relevant provision, the moratorium shall cease to have effect from the date of such approval.&nbsp;&nbsp;<\/td><\/tr><tr><td>Section<mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-secondary-color\"> <\/mark><a href=\"https:\/\/ca2013.com\/section-25-duties-resolution-professional\/\" target=\"_blank\" rel=\"noreferrer noopener\"><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-secondary-color\">25(2)(h)<\/mark><\/a><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-secondary-color\"> <\/mark>of IBC<\/td><td>Duties of the resolution professional&nbsp;<\/td><td>A resolution professional is duty-bound to invite resolution applicants who meet the criteria laid down by him with the approval of COC and such other conditions as may be specified by the Board, to submit a resolution plan.&nbsp;<br>Criteria for submission shall depend upon the complexity and scale of operations of the business of the corporate debtor.&nbsp;&nbsp;<\/td><\/tr><tr><td>Explanation to section <a href=\"https:\/\/ibclaw.in\/section-29-preparation-of-information-memorandum\/\" target=\"_blank\" rel=\"noreferrer noopener\"><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-secondary-color\">29(2)(c)<\/mark><\/a> of the IBC\u00a0\u00a0<\/td><td>Preparation of information memorandum&nbsp;&nbsp;<\/td><td>Relevant information means information to be given to resolution applicants to make a resolution plan.&nbsp;&nbsp;<\/td><\/tr><tr><td>Section <a href=\"https:\/\/www.indiacode.nic.in\/show-data?actid=AC_CEN_2_11_00055_201631_1517807328273&amp;orderno=34\" target=\"_blank\" rel=\"noreferrer noopener\"><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-secondary-color\">29A <\/mark><\/a>of the IBC<\/td><td>Ineligibility to be a resolution applicant&nbsp;&nbsp;<\/td><td>A person shall not be eligible to submit a resolution plan if he is an undischarged insolvent, wilful defaulter, or is convicted of an offence as stated under the IBC, etc.&nbsp;<\/td><\/tr><tr><td>Proviso to Section <a href=\"https:\/\/www.indiacode.nic.in\/show-data?actid=AC_CEN_2_11_00055_201631_1517807328273&amp;orderno=34\" target=\"_blank\" rel=\"noreferrer noopener\"><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-secondary-color\">29A (C)<\/mark> <\/a>of the IBC\u00a0<\/td><td>Ineligibility to be a resolution applicant&nbsp;<\/td><td>This section also carves an exception in case of a wilful defaulter, that is, a person may become eligible to submit a resolution plan if such a person makes payment of all overdue amounts with interest thereon and charges relating to nonperforming asset accounts before submission of the resolution plan.&nbsp;<\/td><\/tr><tr><td>Section <a href=\"https:\/\/ibclaw.in\/section-30-submission-of-resolution-plan\/\" target=\"_blank\" rel=\"noreferrer noopener\"><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-secondary-color\">30(1)<\/mark><\/a><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-secondary-color\"> <\/mark>of the IBC<\/td><td>Submission of resolution plan<\/td><td>A resolution applicant may submit a resolution to the resolution professional along with an affidavit of eligibility under section <a href=\"https:\/\/www.indiacode.nic.in\/show-data?actid=AC_CEN_2_11_00055_201631_1517807328273&amp;orderno=34\" target=\"_blank\" rel=\"noreferrer noopener\"><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-secondary-color\">29A<\/mark><\/a>.\u00a0<\/td><\/tr><tr><td>Section<mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-secondary-color\"> <\/mark><a href=\"https:\/\/ibclaw.in\/section-30-submission-of-resolution-plan\/\" target=\"_blank\" rel=\"noreferrer noopener\"><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-secondary-color\">30(2)<\/mark><\/a><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-secondary-color\"> <\/mark>of the IBC<\/td><td>Contents of the resolution plan<\/td><td>We have already covered this in the section <em>\u201cWhat is the legal framework for drafting a resolution plan?\u201d<\/em><\/td><\/tr><tr><td>Section <a href=\"https:\/\/ibclaw.in\/section-30-submission-of-resolution-plan\/\" target=\"_blank\" rel=\"noreferrer noopener\"><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-secondary-color\">30(3)<\/mark><\/a> and <a href=\"https:\/\/ibclaw.in\/section-30-submission-of-resolution-plan\/\" target=\"_blank\" rel=\"noreferrer noopener\"><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-secondary-color\">30(4)<\/mark><\/a> of the IBC<\/td><td>Approval of the plan<\/td><td>Only the resolution plans which adhere to the criteria and conditions shall be presented to the Committee of Creditors (CoC) for its approval.&nbsp;After considering its feasibility and viability and the manner of proposed distribution, the committee of creditors may approve a resolution plan by a vote of not less than 66% of the voting shares of the financial creditors.&nbsp;<\/td><\/tr><tr><td>Section <a href=\"https:\/\/ibclaw.in\/section-30-submission-of-resolution-plan\/\" target=\"_blank\" rel=\"noreferrer noopener\"><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-secondary-color\">30(5)<\/mark><\/a> of the IBC<\/td><td>Meeting of approval<\/td><td>Though the resolution applicant may attend the meeting wherein the resolution plan is considered, he does not have a right to vote on the same except when he is himself a financial creditor.&nbsp;<br>Once approved by the CoC, the resolution professional shall submit the resolution plan to the NCLT.&nbsp;<\/td><\/tr><tr><td>Section <a href=\"https:\/\/ibclaw.in\/section-31-approval-of-resolution-plan\/\" target=\"_blank\" rel=\"noreferrer noopener\"><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-secondary-color\">31<\/mark> <\/a>of the IBC<\/td><td>Approval of the plan<\/td><td>If the NCLT is satisfied that the resolution plan as approved by the committee of creditors as per terms of section<mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-secondary-color\"> <\/mark><a href=\"https:\/\/ibclaw.in\/section-30-submission-of-resolution-plan\/\" target=\"_blank\" rel=\"noreferrer noopener\"><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-secondary-color\">30<\/mark><\/a>, it shall by order approve the resolution plan which shall be binding on the corporate debtor and 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, such as authorities to whom statutory dues are owed, <a href=\"https:\/\/lawsikho.com\/blog\/insolvency-resolution-process-application-ibc\/\" target=\"_blank\" rel=\"noreferrer noopener\"><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-secondary-color\">guarantors<\/mark><\/a> and other stakeholders involved in the resolution plan.\u00a0<\/td><\/tr><tr><td>Proviso to section <a href=\"https:\/\/ibclaw.in\/section-31-approval-of-resolution-plan\/\" target=\"_blank\" rel=\"noreferrer noopener\"><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-secondary-color\">31(4)<\/mark><\/a> of the IBC<\/td><td>Combination in the resolution plan&nbsp;&nbsp;<\/td><td>In case the resolution plan contains a provision for combination as per section <a href=\"https:\/\/www.indiacode.nic.in\/show-data?actid=AC_CEN_22_29_00005_200312_1517807324781&amp;orderno=5\" target=\"_blank\" rel=\"noreferrer noopener\"><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-secondary-color\">5<\/mark><\/a> of the Competition Act 2002, the resolution applicant shall obtain the approval of the Competition Commission of India under that Act even before the approval of such resolution plan by the CoC.\u00a0<\/td><\/tr><tr><td>Section<mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-secondary-color\"> <\/mark><a href=\"https:\/\/ibclaw.in\/section-32-appeal\/\" target=\"_blank\" rel=\"noreferrer noopener\"><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-secondary-color\">32<\/mark><\/a><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-secondary-color\"><a href=\"https:\/\/ibclaw.in\/section-32-appeal\/\" target=\"_blank\" rel=\"noreferrer noopener\"> <\/a><\/mark>of the IBC<\/td><td>Appeal&nbsp;<\/td><td>Any appeal from an order approving the resolution plan shall be in the manner and on the grounds laid down in section <a href=\"https:\/\/ibclaw.in\/section-61-appeals-and-appellate-authority\/\" target=\"_blank\" rel=\"noreferrer noopener\"><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-secondary-color\">61(3)<\/mark><\/a>. Some of the grounds are non-provision for resolution process costs, debts due to the operation debtors, when a resolution plan suffers from material irregularity, etc.\u00a0<\/td><\/tr><tr><td>Section<mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-secondary-color\"> <\/mark><a href=\"https:\/\/www.indiacode.nic.in\/show-data?actid=AC_CEN_2_11_00055_201631_1517807328273&amp;orderno=38\" target=\"_blank\" rel=\"noreferrer noopener\"><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-secondary-color\">32A(2)<\/mark> <\/a>of the IBC\u00a0<\/td><td>Criminal proceedings against the corporate debtor<\/td><td>This provision applies prospectively thus, no action shall be taken against the property of the corporate debtor in relation to an offence committed prior to the commencement of the corporate insolvency resolution process of the corporate debtor.<\/td><\/tr><tr><td>Section <a href=\"https:\/\/www.indiacode.nic.in\/show-data?actid=AC_CEN_2_11_00055_201631_1517807328273&amp;orderno=39\" target=\"_blank\" rel=\"noreferrer noopener\"><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-secondary-color\">33<\/mark> <\/a>of the IBC<\/td><td>Liquidation&nbsp;<\/td><td>Liquidation proceedings may be initiated in case the resolution plan fails to obtain approval.&nbsp;<\/td><\/tr><tr><td>Section<mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-secondary-color\"> <\/mark><a href=\"https:\/\/ibclaw.in\/section-61-appeals-and-appellate-authority\/\" target=\"_blank\" rel=\"noreferrer noopener\"><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-secondary-color\">61(3)<\/mark> <\/a>of the IBC<\/td><td>Grounds of appeal against the resolution plan&nbsp;&nbsp;<\/td><td>(i)The approved resolution plan is against any law for the time being in force;&nbsp;(ii) when the resolution professional has exercised material irregularity during the corporate insolvency resolution period;&nbsp;(iii) the debts owed to operational creditors of the corporate debtor have not been provided for in the resolution plan as specified by the IBBI.&nbsp;(iv) the insolvency resolution process costs have not been provided for repayment in priority to all other debts; or&nbsp;(v) The resolution plan does not comply with any other criteria specified by the IBBI.&nbsp;<\/td><\/tr><tr><td>Section<mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-secondary-color\"> <\/mark><a href=\"https:\/\/ca2013.com\/section-74-punishment-contravention-moratorium-resolution-plan\/\" target=\"_blank\" rel=\"noreferrer noopener\"><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-secondary-color\">74(3)<\/mark><\/a> of the IBC\u00a0<\/td><td>Punishment for contravention of the resolution plan&nbsp;&nbsp;<\/td><td>When the corporate debtor, any of its officers or creditors or any person on whom the approved resolution plan is binding contravenes any terms of the resolution plan, they shall be punishable with imprisonment of less than one month but may extend to one year and a fine of not less than one lakh but may extend to one crore or with both.&nbsp;<\/td><\/tr><tr><td colspan=\"3\">Relevant provisions under the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (\u201c<strong>the Regulation<\/strong>\u201d)<\/td><\/tr><tr><td>Reg. 36A of the Regulation<\/td><td>Invitation for expression of interest&nbsp;<\/td><td>The resolution professional shall publish Form G inviting expressions of interest for interested and eligible prospective resolution applicants to submit resolution plans.&nbsp;&nbsp;<\/td><\/tr><tr><td>Reg. 38B of the Regulation<\/td><td>Request for resolution plan<\/td><td>The resolution professional shall issue the information memorandum, evaluation criteria and a request for resolution plans within five days of the date of issue of the provisional list of prospective resolution applicants.&nbsp;&nbsp;<br>The request for resolution plans shall give details of each step of the process and the manner and purposes of interaction between the resolution professional and the prospective resolution applicant, along with corresponding timelines.&nbsp;<\/td><\/tr><tr><td>Reg. 37 of the Regulations<\/td><td>Resolution plan&nbsp;&nbsp;<\/td><td>Kindly refer to the section on <em>\u201cWhat is the legal framework for drafting a resolution plan?\u201d<\/em><\/td><\/tr><tr><td>Reg. 38 of the Regulations<\/td><td>Mandatory contents of the resolution plan&nbsp;&nbsp;<\/td><td>Kindly refer to the section on <em>\u201cWhat is the legal framework for drafting a resolution plan?\u201d<\/em><\/td><\/tr><tr><td>Reg. 39 of the Regulations<\/td><td>Approval of the resolution plan<\/td><td>All the complaint resolution plan is first put before the CoC for its approval. Once a decision is made on the approval\/rejection, only CoC-approved resolution plans shall be presented before the NCLT for a green signal for its implementation.&nbsp;<\/td><\/tr><tr><td>Reg. 39(3) of the Regulation&nbsp;<\/td><td>Approval of resolution plan by CoC&nbsp;&nbsp;<\/td><td>The committee shall evaluate the resolution plans strictly as per the evaluation matrix to identify the most suitable and viable resolution plan which may be approved with certain necessary modifications.&nbsp;<br><em>\u201cEvaluation matrix\u201d means different elements of resolution plan on the basis of which the CoC evaluates resolution plans. The said matrix is prepared by the resolution professional required to be approved by the CoC prior to its issuance to the proposed resolution applicant.&nbsp;<\/em><\/td><\/tr><tr><td>Reg. 39B of the Regulations<\/td><td>Meeting liquidation cost&nbsp;&nbsp;<\/td><td>While approving a resolution plan, the CoC may in consultation with the resolution professional, make the nearest estimate of the liquidation costs.&nbsp;<\/td><\/tr><tr><td>Reg. 39C of the Regulations<\/td><td>Assessment of sale as a going concern&nbsp;<\/td><td>While approving a resolution plan, the CoC may recommend that the liquidator should ideally explore the option to sell the corporate debtor as a going concern.&nbsp;<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p class=\"has-text-align-center\"><strong><em>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<\/em><\/strong><strong>PART&nbsp; 2:&nbsp; RULINGS\/FINDINGS RELATING TO RESOLUTION PLANS&nbsp;&nbsp;<\/strong><\/p>\n\n\n\n<p><mark style=\"background-color:rgba(0, 0, 0, 0);color:#ee0808\" class=\"has-inline-color\">This table depicts findings\/rulings relating to the resolution plan, which clarifies the settled position of law on various aspects of the resolution plan.\u00a0<\/mark><\/p>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><tbody><tr><td><strong>Year of the judgment&nbsp;<\/strong><\/td><td><strong>Case title<\/strong><\/td><td><strong>Ruling<\/strong><\/td><\/tr><tr><td>&nbsp; &nbsp; 2019<\/td><td><strong><em>Essar Steel India Ltd. vs. Satish Kumar Gupta &amp; Ors.<\/em><\/strong><br><strong><em>[2019] 16 S.C.R. 275<\/em><\/strong><\/td><td>This judgment deals with the validity of a resolution plan approved by the CoC and it clarifies that the NCLT cannot overrule the decision of the CoC if the plan is in accordance with the IBC.&nbsp;<\/td><\/tr><tr><td>&nbsp; &nbsp; 2019<\/td><td><strong><em>Swiss Ribbons Pvt. Ltd. v. Union of India &amp; Ors.&nbsp;<\/em><\/strong><br><strong><em>[2019] 3 S.C.R. 535<\/em><\/strong><br><br><strong>&nbsp;<\/strong><\/td><td>The Supreme Court (\u201cthe SC\u201d) upheld the constitutional validity of the IBC, addressing concerns about the process and its impact on various stakeholders, including creditors.\u00a0The Court highlighted that:<br>&#8211; Financial creditors are involved in assessing the viability of the corporate debtor and restructuring the debt, while operational creditors have limited insight into the financial health of the debtor.<br>&#8211; The IBC\u2019s objective is to maximize the value of assets, promote entrepreneurship, and balance the interests of all stakeholders.<br>&#8211; The role of the RP is administrative, ensuring transparency and efficiency in the resolution process.<\/td><\/tr><tr><td>&nbsp; &nbsp; 2019<\/td><td><em><strong>Arcelor Mittal India Pvt. Ltd. vs. Satish Kumar Gupta &amp; Ors.\u00a0<\/strong><br><strong>[(2019) 2 SCC 1]<\/strong><\/em><\/td><td>The SC held that, initially, both ArcelorMittal and Numetal were ineligible under section <a href=\"https:\/\/www.indiacode.nic.in\/show-data?actid=AC_CEN_2_11_00055_201631_1517807328273&amp;orderno=34\" target=\"_blank\" rel=\"noreferrer noopener\"><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-secondary-color\">29A<\/mark><\/a> but were provided with an opportunity to cure their ineligibility. This judgment highlighted the intent of section <a href=\"https:\/\/www.indiacode.nic.in\/show-data?actid=AC_CEN_2_11_00055_201631_1517807328273&amp;orderno=34\" target=\"_blank\" rel=\"noreferrer noopener\"><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-secondary-color\">29A<\/mark> <\/a>to prevent defaulting promoters from regaining control of the company.<\/td><\/tr><tr><td>&nbsp; &nbsp; 2020<\/td><td><em><strong>Jaypee Infratech Ltd. vs. NBCC (India) Ltd. &amp; Ors.<\/strong><br><strong>CIVIL APPEAL NO.\u00a0 3395 OF 2020<\/strong><\/em><\/td><td>While upholding the classification of homebuyers as financial creditors under the IBC, the SC emphasised that the interests of homebuyers should be protected in insolvency proceedings, recognizing their significant financial stakes.<\/td><\/tr><tr><td><\/td><td><em><strong>Klassic Wheels Ltd. and Ors. v. Amit Vijay Karia RP of the Siddhi Raj Housing Projects Pvt. Ltd. and Anr.\u00a0<\/strong><br><strong>(NCLT Mumbai Bench)<\/strong><\/em><\/td><td>This judgment clarified that CIRP Regulation 16A (7) does not automatically vest creditors with the right to enhanced claims, including interest, under the IBC regulations.&nbsp;<\/td><\/tr><tr><td>&nbsp; &nbsp; 2018<\/td><td><strong><em>Binani Cement Ltd. v. Bank of Baroda\u00a0<\/em><\/strong><\/td><td>The SC held that a single financial creditor can also initiate the CIRP&nbsp;<\/td><\/tr><tr><td>&nbsp; &nbsp; 2019<\/td><td><strong><em>SREI Infrastructure Finance Ltd. v. Jaypee Infratech Ltd.\u00a0<\/em><\/strong><br><\/td><td>The SC held that the<strong> <\/strong>creditors cannot be given then the status of financial creditors in a corporate debtor&#8217;s CIRP solely based on third-party securities unless they have directly disbursed funds to the corporate debtor.<\/td><\/tr><tr><td>&nbsp; 2021<\/td><td><em><strong>Kalpraj Dharamshi v. Kotak Investment Advisors Ltd.\u00a0<\/strong><br><strong>(2021) 10 SCC 401<\/strong><\/em><strong><em><br><\/em><\/strong><\/td><td>&#8211; The CoC has the right to set deadlines and evaluation criteria for a resolution plan.\u00a0<br>&#8211; It was further held that late submission of a resolution plan without good reason can be rejected.<\/td><\/tr><tr><td>&nbsp; 2022&nbsp;<\/td><td><em><strong>Kalinga Allied Industries India Pvt. Ltd. v. CoC of Bindals Sponnge Industries Ltd.\u00a0<\/strong><br><strong>(NCLAT- New Delhi)<\/strong><\/em><\/td><td>It was held that once a resolution plan is approved by the CoC and submitted to the NCLT, it becomes binding and irrevocable between the CoC and the successful resolution applicant unless the plan is in contravention to the provisions of section <a href=\"https:\/\/ibclaw.in\/section-30-submission-of-resolution-plan\/\" target=\"_blank\" rel=\"noreferrer noopener\"><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-secondary-color\">30(2)<\/mark><\/a> of the IBC.<\/td><\/tr><tr><td>&nbsp; 2024<\/td><td><em><strong>Nehru Place Hotels and Real Estates Pvt. Ltd. v. Sanjeev Mahajan and Ors.\u00a0<\/strong><br><strong>(NCLAT- Principal Bench, New Delhi)<\/strong><\/em><\/td><td>The NCLAT held that once the CoC has decided to approve the resolution plan and reject the settlement proposal, such a decision shall be construed as final and binding.\u200b<br><br>Thereafter, the NCLT\u2019s role is limited to ensuring compliance with the IBC and does not extend to reconsidering settlement proposals.&nbsp;<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p><mark style=\"background-color:rgba(0, 0, 0, 0);color:#f70505\" class=\"has-inline-color\">Of course, you can add more case laws in this part. However, ensure that the ones that you add are landmark and\/or most recent.\u00a0<\/mark><\/p>\n\n\n\n<p class=\"has-text-align-center\">&nbsp; &nbsp; <strong>PART-3:<\/strong> <strong>DRAFT RESOLUTION PLAN<\/strong><\/p>\n\n\n\n<p><mark style=\"background-color:rgba(0, 0, 0, 0);color:#f10303\" class=\"has-inline-color\">A resolution plan, as you will see ahead, contains a ton of sensitive financial information. Thus, speaking not just from a legal point of view but also from the perspective of the financial market, it is vital to keep a document private and confidential. And so this document begins with a disclaimer followed by the date, name and CIN of the corporate debtor. At the commencement of the resolution plan itself, you need to state that this is as per the IBC.\u00a0<\/mark><\/p>\n\n\n\n<p class=\"has-text-align-center\"><strong>PRIVATE AND CONFIDENTIAL<\/strong><\/p>\n\n\n\n<p class=\"has-text-align-center\">15th April 2023<\/p>\n\n\n\n<p class=\"has-text-align-center\">RESOLUTION PLAN FOR AKSIM EXPORTS PVT. LTD.&nbsp;<\/p>\n\n\n\n<p class=\"has-text-align-center\">CIN: <em>[Insert CIN of the Corporate Debtor]<\/em><\/p>\n\n\n\n<p class=\"has-text-align-center\"><em>(Pursuant to Insolvency and Bankruptcy Code 2016)<\/em><\/p>\n\n\n\n<p><mark style=\"background-color:rgba(0, 0, 0, 0);color:#f40c0c\" class=\"has-inline-color\">After this, you need to give the details of the resolution applicant and resolution professional.\u00a0<\/mark><\/p>\n\n\n\n<p class=\"has-text-align-center\">BY RESOLUTION APPLICANT&nbsp;<\/p>\n\n\n\n<p class=\"has-text-align-center\">&nbsp;&nbsp;&nbsp;&nbsp;Saksham Exports Pvt. Ltd.&nbsp;<\/p>\n\n\n\n<p>Submitted to:&nbsp;<\/p>\n\n\n\n<p>T. Shankaran<\/p>\n\n\n\n<p style=\"margin-top:0;margin-bottom:0\">Resolution Professional<\/p>\n\n\n\n<p style=\"margin-top:0;margin-bottom:0\"><em>[Insert registration number]<\/em><\/p>\n\n\n\n<p class=\"has-text-align-center\"><strong><mark style=\"background-color:rgba(0, 0, 0, 0);color:#f00808\" class=\"has-inline-color\">[Put an index of this plan]<\/mark><\/strong><\/p>\n\n\n\n<p><mark style=\"background-color:rgba(0, 0, 0, 0);color:#f20d0d\" class=\"has-inline-color\">After putting the index, we have now arrived at the body of the resolution plan.\u00a0<\/mark><\/p>\n\n\n\n<p><mark style=\"background-color:rgba(0, 0, 0, 0);color:#e50909\" class=\"has-inline-color\">Like any other document, even a resolution plan begins with definitions and interpretation clauses.\u00a0<\/mark><\/p>\n\n\n\n<h4 class=\"wp-block-heading has-medium-font-size\" id=\"definitions-and-interpretations\">1. <strong>DEFINITIONS AND INTERPRETATIONS<\/strong><\/h4>\n\n\n\n<p><em><mark style=\"background-color:rgba(0, 0, 0, 0);color:#f11616\" class=\"has-inline-color\">(All the definitions and interpretations can given here)<\/mark><\/em><\/p>\n\n\n\n<h4 class=\"wp-block-heading has-medium-font-size\" id=\"overview-of-the-corporate-debtor-and-corporate-insolvency-resolution-process\">2. <strong>OVERVIEW OF THE CORPORATE DEBTOR AND CORPORATE INSOLVENCY RESOLUTION PROCESS<\/strong><\/h4>\n\n\n\n<p><mark style=\"background-color:rgba(0, 0, 0, 0);color:#f00e0e\" class=\"has-inline-color\">Most of you would be familiar with a \u201croot of the title\u201d clause in an agreement. Similarly, even here you need to give a \u201croot of the matter\u201d that you need to chronologically state how an application under section <\/mark><a href=\"https:\/\/ibclaw.in\/section-7-initiation-of-corporate-insolvency-resolution-process-by-financial-creditor-chapter-ii-corporate-insolvency-resolution-processcirp-part-ii-insolvency-resolution-and-liquidation-for-corpor\/#:~:text=Section%207%20of%20IBC%20%E2%80%93%20Insolvency%20and,insolvency%20resolution%20process%20(CIRP)%20by%20financial%20creditor.&amp;text=%E2%80%94For%20the%20purposes%20of%20this%20sub%2Dsection%2C%20a,other%20financial%20creditor%20of%20the%20corporate%20debtorJ2.\" target=\"_blank\" rel=\"noreferrer noopener\"><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-secondary-color\">7<\/mark><\/a><mark style=\"background-color:rgba(0, 0, 0, 0);color:#f00e0e\" class=\"has-inline-color\"> or <\/mark><a href=\"https:\/\/ibclaw.in\/section-9-application-for-initiation-of-corporate-insolvency-resolution-process-by-operational-creditor-chapter-ii-corporate-insolvency-resolution-processcirp-part-ii-insolvency-resolution-and-liqu\/\" target=\"_blank\" rel=\"noreferrer noopener\"><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-secondary-color\">9<\/mark><\/a><mark style=\"background-color:rgba(0, 0, 0, 0);color:#f00e0e\" class=\"has-inline-color\"><a href=\"https:\/\/ibclaw.in\/section-9-application-for-initiation-of-corporate-insolvency-resolution-process-by-operational-creditor-chapter-ii-corporate-insolvency-resolution-processcirp-part-ii-insolvency-resolution-and-liqu\/\" target=\"_blank\" rel=\"noopener\"> <\/a>of the IBC came to be filed, when was it filed, when was it submitted, the appointment of IRP\/RP, etc.\u00a0<\/mark><\/p>\n\n\n\n<ol style=\"list-style-type:lower-alpha\" class=\"wp-block-list\">\n<li>This resolution plan is submitted by the resolution applicant pursuant to the IBC, for the corporate insolvency resolution of the Company.\u00a0<\/li>\n\n\n\n<li>The corporate insolvency process involving the Company was initiated pursuant to a petition under section <a href=\"https:\/\/ibclaw.in\/section-7-initiation-of-corporate-insolvency-resolution-process-by-financial-creditor-chapter-ii-corporate-insolvency-resolution-processcirp-part-ii-insolvency-resolution-and-liquidation-for-corpor\/#:~:text=Section%207%20of%20IBC%20%E2%80%93%20Insolvency%20and,insolvency%20resolution%20process%20(CIRP)%20by%20financial%20creditor.&amp;text=%E2%80%94For%20the%20purposes%20of%20this%20sub%2Dsection%2C%20a,other%20financial%20creditor%20of%20the%20corporate%20debtorJ2.\" target=\"_blank\" rel=\"noreferrer noopener\"><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-secondary-color\">7<\/mark><\/a><a href=\"https:\/\/ibclaw.in\/section-7-initiation-of-corporate-insolvency-resolution-process-by-financial-creditor-chapter-ii-corporate-insolvency-resolution-processcirp-part-ii-insolvency-resolution-and-liquidation-for-corpor\/#:~:text=Section%207%20of%20IBC%20%E2%80%93%20Insolvency%20and,insolvency%20resolution%20process%20(CIRP)%20by%20financial%20creditor.&amp;text=%E2%80%94For%20the%20purposes%20of%20this%20sub%2Dsection%2C%20a,other%20financial%20creditor%20of%20the%20corporate%20debtorJ2.\" target=\"_blank\" rel=\"noopener\"><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-secondary-color\"> <\/mark><\/a>of the IBC\u00a0by FIB Bank Ltd. as one of the financial creditors for initiation of the Corporate Insolvency Resolution process (CIRP) against the Company which was admitted by the Hon\u2019ble National Law Tribunal (Adjudicating Authority), Mumbai Bench vide its order dated 15th March 2023.\u00a0<\/li>\n\n\n\n<li>The Hon\u2019ble NCLT appointed\u00a0T. Shankaran, Insolvency professional, Registration Number: [insert registration number] as the interim resolution professional and subsequently appointed and confirmed as the Resolution professional in the first meeting of CoC held on 25th March 2023.\u00a0<\/li>\n\n\n\n<li>The Resolution professional made available the Information memorandum to the Resolution applicant.\u00a0<\/li>\n<\/ol>\n\n\n\n<h5 class=\"wp-block-heading\" id=\"2-1-general-information-about-the-company\"><strong>2.1<\/strong> <strong>General Information about the Company&nbsp;<\/strong><\/h5>\n\n\n\n<p><mark style=\"background-color:rgba(0, 0, 0, 0);color:#ec0909\" class=\"has-inline-color\">Now here you need to give a run-through of the company by putting in relevant details about the company such as its CIN, registered office, date of incorporation, date of initiation of CIRP, directors, business activity of the company, etc.\u00a0<\/mark><\/p>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><tbody><tr><td><strong>Sr. No.<\/strong><\/td><td><strong>Item<\/strong><\/td><td><strong>Particulars<\/strong><\/td><\/tr><tr><td>1.<\/td><td>Name of the Company<\/td><td>Aksim Exports Pvt. Ltd.&nbsp;<\/td><\/tr><tr><td>&nbsp; &nbsp; 2.<\/td><td>Registered office of the Company&nbsp;<\/td><td><em>Insert a full and functional registered office address<\/em><\/td><\/tr><tr><td>&nbsp; &nbsp; 3.<\/td><td>Date of incorporation&nbsp;<\/td><td>18\/09\/1989<\/td><\/tr><tr><td>&nbsp; &nbsp; 4.<\/td><td>Website<\/td><td><em>Insert a link to a functional website&nbsp;<\/em><\/td><\/tr><tr><td>&nbsp; &nbsp; 5.<\/td><td>Date of initiation of CIRP<\/td><td><em>Give a date on which the application was filed by the financial creditor<\/em><\/td><\/tr><tr><td>&nbsp; &nbsp; 6.<\/td><td>Name and contact details of resolution professional&nbsp;<\/td><td>Mr. T. Shankaran, Insolvency Resolution Professional<em>[Give his phone number, business email ID and office address]<\/em><\/td><\/tr><tr><td>&nbsp; &nbsp; 7.<\/td><td>Date of submission of resolution plan to the resolution professional<\/td><td>15th April 2023<\/td><\/tr><tr><td>&nbsp; &nbsp; 8.<\/td><td>Directors<\/td><td><em>Give the latest names of directors of the corporate debtor from the MCA website<\/em><\/td><\/tr><tr><td>&nbsp; &nbsp; 9.<\/td><td>Shareholding&nbsp;<\/td><td>Bifurcate authorised, paid up and give top 5 shareholders of the corporate debtor<\/td><\/tr><tr><td>&nbsp; 10.<\/td><td>Industry Segment&nbsp;<\/td><td><mark style=\"background-color:rgba(0, 0, 0, 0);color:#ea1010\" class=\"has-inline-color\">In which category does the business of corporate debtor fall? Say it here.\u00a0<\/mark><br>Export and import of goods.\u00a0<\/td><\/tr><tr><td>&nbsp; 11.&nbsp;<\/td><td>Business activity of the company&nbsp;<\/td><td><mark style=\"background-color:rgba(0, 0, 0, 0);color:#fa1010\" class=\"has-inline-color\">Preferably put this information from the company\u2019s constitutional documents as that would properly cover all ascpects of the business.\u00a0<\/mark><\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h5 class=\"wp-block-heading\" id=\"2-2-details-about-the-past-performance-of-the-company\"><strong>2.2<\/strong><strong> <\/strong><strong>Details about the past performance of the Company:&nbsp;<\/strong><\/h5>\n\n\n\n<p><mark style=\"background-color:rgba(0, 0, 0, 0);color:#f60404\" class=\"has-inline-color\">To determine creditworthiness and financial capability, give here an overview of the financial performance of the last 3 years of the corporate debtor. You can obtain this information from the balance sheet, profit and loss account and cash flow statement.\u00a0<\/mark><\/p>\n\n\n\n<p><mark style=\"background-color:rgba(0, 0, 0, 0);color:#f20f0f\" class=\"has-inline-color\">If case there are any remarks, a resolution application may state that here.\u00a0<\/mark><\/p>\n\n\n\n<h5 class=\"wp-block-heading\" id=\"2-3-brief-background-of-the-cirp-and-timelines\"><strong>2.3<\/strong><strong> <\/strong><strong>Brief background of the CIRP and timelines&nbsp;<\/strong><\/h5>\n\n\n\n<p><mark style=\"background-color:rgba(0, 0, 0, 0);color:#f01515\" class=\"has-inline-color\">You need to briefly state details of an application filed with the NCLT for insolvency resolution process, creditors and corresponding amount, etc.\u00a0<\/mark><\/p>\n\n\n\n<h5 class=\"wp-block-heading\" id=\"2-4-details-of-lis-pendens\"><strong>2.4 Details of <em>lis-pendens<\/em>\u00a0<\/strong><\/h5>\n\n\n\n<p><mark style=\"background-color:rgba(0, 0, 0, 0);color:#fa1010\" class=\"has-inline-color\">Give details of all the litigations<strong> <\/strong>filed<strong> <\/strong>by or against the corporate debtor with respect to payment of debts.\u00a0<\/mark><\/p>\n\n\n\n<p><mark style=\"background-color:rgba(0, 0, 0, 0);color:#f10f0f\" class=\"has-inline-color\">For instance, an arbitration proceeding filed by the corporate debtor is pending adjudication before the tribunal. You can disclose it as below:\u00a0<\/mark><\/p>\n\n\n\n<p><em><mark style=\"background-color:rgba(0, 0, 0, 0);color:#f40f0f\" class=\"has-inline-color\">\u201cIn the year 2020, an arbitration proceeding was instituted by Aksim Exports Pvt. Ltd. against XYZ EPC Contractor Pvt. Ltd. to claim damages for deficiency of services due to which the corporate debtor incurred huge financial loss. The matter is at the state of the evidence. The award is likely to be passed in less than 3 months\u201d.\u00a0<\/mark><\/em><\/p>\n\n\n\n<p><mark style=\"background-color:rgba(0, 0, 0, 0);color:#e61515\" class=\"has-inline-color\">In some cases, if the judgment is passed in favour of the corporate debtor but it is yet to receive the amount, you also need to say when you are expected to receive the full amount.\u00a0<\/mark><\/p>\n\n\n\n<h4 class=\"wp-block-heading has-medium-font-size\" id=\"project-background\">3. <strong>PROJECT BACKGROUND\u00a0<\/strong><\/h4>\n\n\n\n<p><mark style=\"background-color:rgba(0, 0, 0, 0);color:#ea0c0c\" class=\"has-inline-color\">Give details in a tabular form about the project including the number of people employed. This is mainly to understand the reasons behind corporate debtor\u2019s financial instability.\u00a0<\/mark><\/p>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><tbody><tr><td><strong>Sr. No.&nbsp;<\/strong><\/td><td><strong>Item<\/strong><\/td><td><strong>Particulars&nbsp;<\/strong><\/td><\/tr><tr><td>1. <\/td><td>Details about the project<\/td><td><mark style=\"background-color:rgba(0, 0, 0, 0);color:#f70f0f\" class=\"has-inline-color\">Briefly describe why the project was set up, estimated expected revenue projection, etc.\u00a0<\/mark><\/td><\/tr><tr><td>\u00a02.<\/td><td>Manufacturing facilities and infrastructure available with the company\u00a0<\/td><td><mark style=\"background-color:rgba(0, 0, 0, 0);color:#f40c0c\" class=\"has-inline-color\">Give details about the plant and machinery at the site<\/mark><\/td><\/tr><tr><td>3.<\/td><td>Number of employees&nbsp;<\/td><td><mark style=\"background-color:rgba(0, 0, 0, 0);color:#f40505\" class=\"has-inline-color\">Include employees even on a contract basis<\/mark><\/td><\/tr><tr><td>4.<\/td><td>Plausible reasons for the insolvency of the company&nbsp;<\/td><td><mark style=\"background-color:rgba(0, 0, 0, 0);color:#ee0808\" class=\"has-inline-color\">Some of the possible reasons could be heavy debt burden, default in making loan repayment, outdated and poor conduct of operation, etc.\u00a0<\/mark><\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h4 class=\"wp-block-heading has-medium-font-size\" id=\"4-details-of-the-resolution-applicant\">4. DETAILS OF THE RESOLUTION APPLICANT<\/h4>\n\n\n\n<p><mark style=\"background-color:rgba(0, 0, 0, 0);color:#fb1212\" class=\"has-inline-color\">Just like how we gave the details of the corporate debtor\/company in the foregoing section, we also need to provide similar details of the resolution applicant<\/mark><\/p>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><tbody><tr><td><strong>Sr. No.<\/strong><\/td><td colspan=\"4\"><strong>Item<\/strong><\/td><td><strong>Particulars&nbsp;<\/strong><\/td><\/tr><tr><td>1.<\/td><td>Name of the resolution Applicant<\/td><td><\/td><td><\/td><td>&nbsp;<\/td><td rowspan=\"9\">\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0<mark style=\"background-color:rgba(0, 0, 0, 0);color:#f30909\" class=\"has-inline-color\">\u00a0General key information which needs to be mandatorily and correctly stated. It is prudent to such information from the MCA website as it has the record of most recent filings of a company. \u00a0<\/mark><\/td><\/tr><tr><td>2.<\/td><td colspan=\"4\">Constitution of the resolution applicant<\/td><\/tr><tr><td>3.<\/td><td colspan=\"4\">Address for correspondence of the resolution applicant<\/td><\/tr><tr><td>4.<\/td><td colspan=\"4\">PAN No.&nbsp;<\/td><\/tr><tr><td>5.<\/td><td colspan=\"4\">Email ID<\/td><\/tr><tr><td>6.<\/td><td colspan=\"4\">Phone No.&nbsp;<\/td><\/tr><tr><td>7.<\/td><td colspan=\"4\">Date of incorporation<\/td><\/tr><tr><td>8.<\/td><td colspan=\"4\">Name of Directors &amp; KMPs<\/td><\/tr><tr><td>9.<\/td><td colspan=\"4\">Name of the person (s) who is authorized by the company to submit Resolution Plan and their designation, contact no.<\/td><\/tr><tr><td>10.<\/td><td colspan=\"4\">Shareholding<\/td><td><mark style=\"background-color:rgba(0, 0, 0, 0);color:#f70c0c\" class=\"has-inline-color\">Specifically state the amount of authorised and paid up share capital and top 5 shareholders of the resolution applicant.\u00a0<\/mark><\/td><\/tr><tr><td>11.<\/td><td colspan=\"4\">Details of the subsidiaries and associate companies&nbsp;<\/td><td><\/td><\/tr><tr><td>12.<\/td><td colspan=\"4\">Main business activies and products dealt with&nbsp;<\/td><td><mark style=\"background-color:rgba(0, 0, 0, 0);color:#f10d0d\" class=\"has-inline-color\">Take this information from the articles of association of the company<\/mark><\/td><\/tr><tr><td>13.<\/td><td colspan=\"4\">List of major customers and suppliers&nbsp;<\/td><td><\/td><\/tr><tr><td>14.<\/td><td colspan=\"4\">Details of manufacturing facility&nbsp;<\/td><td><\/td><\/tr><tr><td>15.<\/td><td colspan=\"4\">Past performance and financials as per last three audited years<\/td><td><mark style=\"background-color:rgba(0, 0, 0, 0);color:#f30d0d\" class=\"has-inline-color\">Annexe financial documents here\u00a0\u00a0<\/mark><\/td><\/tr><tr><td>16.<\/td><td colspan=\"4\">Relationship if any with the corporate debtor<\/td><td><mark style=\"background-color:rgba(0, 0, 0, 0);color:#e90d0d\" class=\"has-inline-color\">This has to be disclosed categorically if any.\u00a0<\/mark><\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h4 class=\"wp-block-heading has-medium-font-size\" id=\"5-details-of-the-resolution-plan\"><strong>5.<\/strong> <strong>DETAILS OF THE RESOLUTION PLAN<\/strong><\/h4>\n\n\n\n<p><mark style=\"background-color:rgba(0, 0, 0, 0);color:#fa0606\" class=\"has-inline-color\">From here on your resolution plan commences. You need to state the most suitable strategy for the revival of the corporate debtor, infusion of funds, asset monetisation, business continuity plan, etc.\u00a0<\/mark><\/p>\n\n\n\n<p>On the basis of information memorandum, documents available in the public domain and additional information provided by the resolution professional, I\/we hereby submit the following resolution plan:<\/p>\n\n\n\n<p>The resolution plan, as detailed in the following table envisages the following:<\/p>\n\n\n\n<ol style=\"list-style-type:lower-alpha\" class=\"wp-block-list\">\n<li>The cut-off date is the date up to which the liabilities of the corporate debtor are considered for the purpose of the resolution plan.\u00a0<\/li>\n<\/ol>\n\n\n\n<ol start=\"2\" style=\"list-style-type:lower-alpha\" class=\"wp-block-list\">\n<li>The effective date for the implementation of this plan means the date on which the resolution plan is approved by the Adjudicating Authority.<\/li>\n<\/ol>\n\n\n\n<p>A resolution applicant usually considers certain assumptions while framing the resolution plan, so state the key ones.&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><tbody><tr><td>Sr.&nbsp; No.&nbsp;<\/td><td>Items&nbsp;<\/td><td>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; Particulars&nbsp;<\/td><\/tr><tr><td><\/td><td>Key strategy proposed in the Resolution Plan<br><\/td><td><mark style=\"background-color:rgba(0, 0, 0, 0);color:#f20c0c\" class=\"has-inline-color\">Here you need to state whether you wish to adopt a takeover, merger or sale of assets as a revival mechanism.\u00a0<br>In case any change is proposed in the operation of the corporate debtor, you need to state changes in technology, product mix etc.\u00a0<\/mark><\/td><\/tr><tr><td>2. <\/td><td>Proposed governance structure including Board of directors, key management, Promoters and members.&nbsp;Adequacy regarding licences, permissions, manpower etc. to operate at the projected level may also be specified<\/td><td><mark style=\"background-color:rgba(0, 0, 0, 0);color:#f60101\" class=\"has-inline-color\">You need to give names of the proposed KMPs and the representatives of the resolution applicant who shall be constitute new management.\u00a0<br>State which statutory licenses and permits shall be retained and which needs to be reapplied.\u00a0\u00a0\u00a0<\/mark><\/td><\/tr><tr><td>&nbsp; &nbsp; 3.<\/td><td>Cost of Resolution Plan and Means of Finance\u00a0Sources of funds that will be used to pay the cost of CIRP, dues to operational creditors&amp; dissenting financial creditors as per provisions of section <a href=\"https:\/\/ibclaw.in\/section-30-submission-of-resolution-plan\/\" target=\"_blank\" rel=\"noreferrer noopener\"><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-secondary-color\">30(2)(b)<\/mark><\/a> of the IBC, may be provided.<\/td><td><mark style=\"background-color:rgba(0, 0, 0, 0);color:#f20909\" class=\"has-inline-color\">Give a crystallised amount that includes CIRP cost, payment to creditors and working capital needs.\u00a0<\/mark><\/td><\/tr><tr><td>&nbsp; &nbsp; 4.<\/td><td>Specify the procedure for payment of dues towards resolution process costs\/ financial creditors\/ operational creditors\/ government dues\/disputed claims\/dissenting financial creditors etc. along with the details of payment made in relation to actual debts including the sources of funds that will be used to pay the dues.<\/td><td><mark style=\"background-color:rgba(0, 0, 0, 0);color:#f40505\" class=\"has-inline-color\">Basically, here you need to give a set timeline of each event.\u00a0<br>For instance, operation creditors shall be paid within 30 days from the date of approval or say government dues to be paid in priority over the waterfall mechanism, etc.\u00a0<\/mark><\/td><\/tr><tr><td>&nbsp; &nbsp; 5.&nbsp;<\/td><td>Restructuringa) &nbsp; &nbsp; Details of the creditors along with details of such debt and amount of debt.b) &nbsp; &nbsp; The structure and method of payment to each of the creditors.c) &nbsp; &nbsp; Transfer of shares\/merger, amalgamation, delisting or other corporate restructuring plansDetails&nbsp; on satisfaction\/modification of security interestSale\/disposal of assets, if any<\/td><td><mark style=\"background-color:rgba(0, 0, 0, 0);color:#f00e0e\" class=\"has-inline-color\">List out financial creditors and corresponding outstanding debt along with the tranches and within the period of time the amount will be paid to him. In the case of a haircut, state that as well. \u00a0<\/mark><\/td><\/tr><tr><td>&nbsp; &nbsp; 6.&nbsp;<\/td><td>Proposal for operating restructuringoperating restructuring\/turnaround strategy that may be adopted by the Company (changes in technology etc.).The benefits of adopting such a strategy for various stakeholders<\/td><td><mark style=\"background-color:rgba(0, 0, 0, 0);color:#ec0707\" class=\"has-inline-color\">In case any changes are proposed to be made in operations such as technological upgradation, revamp in production line for better quality control, new products launch, etc.\u00a0<\/mark><\/td><\/tr><tr><td>&nbsp; 7.<\/td><td>Financial Projections<\/td><td><mark style=\"background-color:rgba(0, 0, 0, 0);color:#f70808\" class=\"has-inline-color\">State the sales projections in the next 3-5 years, improvement in EBIDTA Margins, etc.\u00a0<\/mark><\/td><\/tr><tr><td>&nbsp; &nbsp; 8.&nbsp;<\/td><td>If the resolution plan has any tax implications,&nbsp; the&nbsp; same&nbsp; may&nbsp; beIndicated<\/td><td><mark style=\"background-color:rgba(0, 0, 0, 0);color:#f10c0c\" class=\"has-inline-color\">This is one of the most critical aspects.\u00a0Adopt a tax-saving model and state it here.\u00a0<\/mark><\/td><\/tr><tr><td>&nbsp; &nbsp; 9.<\/td><td>Details of parties that will infuse the capital<\/td><td><mark style=\"background-color:rgba(0, 0, 0, 0);color:#f00d0d\" class=\"has-inline-color\">You need to state the amount of capital infused, the time within which the capital will be raised, source and end-use of such capital.\u00a0<\/mark><\/td><\/tr><tr><td>&nbsp; 10.&nbsp;<\/td><td>Term of the resolution plan and its implementation schedule<\/td><td><mark style=\"background-color:rgba(0, 0, 0, 0);color:#fa0c0c\" class=\"has-inline-color\">Give a stipulated timeline along with the milestone. For example-\u00a0<br>Day 0: Plan approval<br>Day 15: Capital infusion<br>Month 1: Creditor repayment starts<br>Month 3\u20136: Operational restructuring in full swing<br>Year 2: Financial stabilization<\/mark><\/td><\/tr><tr><td>&nbsp; 11.<\/td><td>Proposal relating to adequate means for supervising its implementation<\/td><td><mark style=\"background-color:rgba(0, 0, 0, 0);color:#f40606\" class=\"has-inline-color\">Talk about an independent monitoring committee that shall be responsible for supervising and giving quarterly reports to the NCLT.\u00a0<\/mark><\/td><\/tr><tr><td>&nbsp; 12.&nbsp;<\/td><td>Strategy to deal with transactions covered under section <a href=\"https:\/\/www.indiacode.nic.in\/show-data?actid=AC_CEN_2_11_00055_201631_1517807328273&amp;orderno=49\" target=\"_blank\" rel=\"noreferrer noopener\"><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-secondary-color\">43<\/mark><\/a>, section <a href=\"https:\/\/ca2013.com\/section-45-avoidance-undervalued-transactions\/\" target=\"_blank\" rel=\"noreferrer noopener\"><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-secondary-color\">45<\/mark><\/a>, section <a href=\"https:\/\/ca2013.com\/section-50-extortionate-credit-transactions\/\" target=\"_blank\" rel=\"noreferrer noopener\"><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-secondary-color\">50<\/mark><\/a>, section<mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-secondary-color\"> <a href=\"https:\/\/ca2013.com\/section-66-fraudulent-trading-wrongful-trading\/\" target=\"_blank\" rel=\"noreferrer noopener\">66<\/a><\/mark>, etc.<\/td><td><mark style=\"background-color:rgba(0, 0, 0, 0);color:#e10909\" class=\"has-inline-color\">Here, talk about the forensic audit, \u00a0 continuation of avoidance by application from resolution professional or CoC, etc.<\/mark>\u00a0<\/td><\/tr><tr><td>&nbsp; 13.<\/td><td>The ability of resolution applicant to turn around distressed companies<\/td><td><mark style=\"background-color:rgba(0, 0, 0, 0);color:#e41212\" class=\"has-inline-color\">Talk about the managerial competence and technical abilities, track record in implementing revival plans, etc.\u00a0<\/mark><\/td><\/tr><tr><td>&nbsp; &nbsp; 14.&nbsp;<\/td><td>The standing&nbsp; of&nbsp; Resolution Applicant<\/td><td><mark style=\"background-color:rgba(0, 0, 0, 0);color:#ec0505\" class=\"has-inline-color\">State the experience in the sector, external rating, adherence to financial discipline, record of regulatory compliance, whether NPA, including group companies.\u00a0<\/mark><\/td><\/tr><tr><td>&nbsp; &nbsp; 15.<\/td><td>Details of dealing with the interest of all stakeholders, including financial creditors and operational creditors, of the Corporate Debtor.<\/td><td><mark style=\"background-color:rgba(0, 0, 0, 0);color:#e70c0c\" class=\"has-inline-color\">Here state the recovery ratio of the financial creditors and operation creditors, employees and government.<\/mark><\/td><\/tr><tr><td>&nbsp; &nbsp; 16.<\/td><td>Details whether a resolution Applicant or any of its related parties has failed to implement or contribute to the failure of implementation of any other resolution plan approved by the NCLT at any time in the past.<\/td><td><mark style=\"background-color:rgba(0, 0, 0, 0);color:#e60707\" class=\"has-inline-color\">You can mention \u201cN.A\u201d or give details of previous fiascos, if any.\u00a0\u00a0\u00a0<\/mark><\/td><\/tr><tr><td>&nbsp; &nbsp; 17.<\/td><td>Specify recovery indicators of the resolution plan, assessment techniques and milestones<\/td><td><mark style=\"background-color:rgba(0, 0, 0, 0);color:#f30e0e\" class=\"has-inline-color\">Here specify recovery indicators such as<strong> <\/strong>IRR-Internal Rate of Return, NPV-Net Present Value of future cash flows, Debt-to-equity and DSCR- Debt Service Coverage Ratio over 3 years.\u00a0<\/mark><br><mark style=\"background-color:rgba(0, 0, 0, 0);color:#f30e0e\" class=\"has-inline-color\"><br>You may also give milestones such as break-even in the 2nd year, debt coverage at 1.5x by 3rd year and Net positive EBITDA within 12 months.<\/mark><\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h4 class=\"wp-block-heading has-medium-font-size\" id=\"6-eligibility-details-in-relation-of-resolution-applicant\"><strong>6.<\/strong><strong> <\/strong><strong>ELIGIBILITY DETAILS IN RELATION OF RESOLUTION APPLICANT&nbsp;<\/strong><\/h4>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><tbody><tr><td><strong>&nbsp; Section&nbsp;<\/strong><\/td><td><strong>Item<\/strong><\/td><td><strong>Particulars&nbsp;<\/strong><\/td><\/tr><tr><td><a href=\"https:\/\/www.indiacode.nic.in\/show-data?actid=AC_CEN_2_11_00055_201631_1517807328273&amp;orderno=34\" target=\"_blank\" rel=\"noreferrer noopener\"><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-secondary-color\">29(A)(a)<\/mark><\/a><\/td><td>is an undischarged insolvent<\/td><td rowspan=\"10\"><mark style=\"background-color:rgba(0, 0, 0, 0);color:#f01010\" class=\"has-inline-color\">Say \u201cNo\u201d here or give details if you have done a positive act to remedy such a defect.\u00a0<br>Do not miss out on annexing an affidavit deposing the fact of eligibility \u00a0\u00a0\u00a0<\/mark>\u00a0<\/td><\/tr><tr><td><a href=\"https:\/\/www.indiacode.nic.in\/show-data?actid=AC_CEN_2_11_00055_201631_1517807328273&amp;orderno=34\" target=\"_blank\" rel=\"noreferrer noopener\"><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-secondary-color\">29(A)(b)<\/mark><\/a><\/td><td>is a willful defaulter in accordance with the guidelines of the Reserve Bank of India issued under the Banking Regulation Act,&nbsp; 1949<\/td><\/tr><tr><td><a href=\"https:\/\/www.indiacode.nic.in\/show-data?actid=AC_CEN_2_11_00055_201631_1517807328273&amp;orderno=34\" target=\"_blank\" rel=\"noreferrer noopener\"><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-secondary-color\">29(A)(c)<\/mark><\/a><\/td><td>at the time of submission of the resolution plan has an account, or an account of a corporate debtor under the management or control of such person or of whom such person is a promoter, classified as non-performing asset in accordance with the guidelines of the Reserve Bank of India issued under the Banking Regulation Act, 1949 or the guidelines of a financial sector regulator issued under any other law for the time being in force, and at least a period of one year has elapsed from the date of such classification till the date of commencement of the corporate insolvency resolution process of the corporate debtor:<br><br>Provided that the person shall be eligible to submit a resolution plan if such person makes payment of all overdue amounts with interest thereon and charges relating to nonperforming asset accounts before submission of the resolution plan.\u00a0<br><br>Provided further that nothing in this clause shall apply to a resolution applicant where such applicant is a financial entity and is not a related party to the corporate debtor.<\/td><\/tr><tr><td><a href=\"https:\/\/www.indiacode.nic.in\/show-data?actid=AC_CEN_2_11_00055_201631_1517807328273&amp;orderno=34\" target=\"_blank\" rel=\"noreferrer noopener\"><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-secondary-color\">29(A)(d)<\/mark><\/a><\/td><td>d) has been convicted for any offence punishable with imprisonment:\u00a0<br><br>(i) for two years or more under any Act specified under the Twelfth Schedule; or<br><br>(ii) for seven years or more under any other law for the time being in force:<br><br>Provided that this clause shall not apply to a person after the expiry of a period of two years from the date of his release from imprisonment:<br><br>Provided further that this clause shall not apply in relation to a connected person referred to in clause (iii) of Explanation I<\/td><\/tr><tr><td><a href=\"https:\/\/www.indiacode.nic.in\/show-data?actid=AC_CEN_2_11_00055_201631_1517807328273&amp;orderno=34\" target=\"_blank\" rel=\"noreferrer noopener\"><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-secondary-color\">29A(e)<\/mark><\/a><\/td><td>Is disqualified to act as a director under the Companies Act, 2013<\/td><\/tr><tr><td><a href=\"https:\/\/www.indiacode.nic.in\/show-data?actid=AC_CEN_2_11_00055_201631_1517807328273&amp;orderno=34\" target=\"_blank\" rel=\"noreferrer noopener\"><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-secondary-color\">29A(f)<\/mark><\/a><\/td><td>is prohibited by the Securities and Exchange Board of India from trading in securities or accessing the securities markets<\/td><\/tr><tr><td><a href=\"https:\/\/www.indiacode.nic.in\/show-data?actid=AC_CEN_2_11_00055_201631_1517807328273&amp;orderno=34\" target=\"_blank\" rel=\"noreferrer noopener\"><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-secondary-color\">29A(g)<\/mark><\/a><\/td><td>has been a promoter or in the management or control of a corporate debtor in which a preferential transaction, undervalued transaction, extortionate credit transaction or fraudulent transaction has taken place and in respect of which an order has been made by the Adjudicating Authority under this IBC;<br><br>Provided that this clause shall not apply if a preferential transaction, undervalued transaction, extortionate credit transaction or fraudulent transaction has taken place prior to the acquisition of the corporate debtor by the resolution applicant pursuant to a resolution plan approved under this IBC or pursuant to a scheme or plan approved by a financial sector regulator or a court, and such resolution applicant has not otherwise contributed to the preferential transaction, undervalued transaction, extortionate credit transaction or fraudulent transaction;<\/td><\/tr><tr><td><a href=\"https:\/\/www.indiacode.nic.in\/show-data?actid=AC_CEN_2_11_00055_201631_1517807328273&amp;orderno=34\" target=\"_blank\" rel=\"noreferrer noopener\"><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-secondary-color\">29A(h)<\/mark><\/a><\/td><td>has executed a guarantee in favour of a creditor in respect of a corporate debtor against which an application for insolvency resolution made by such creditor has been admitted under this IBC and such guarantee has been invoked by the creditor and remains unpaid in full or part<\/td><\/tr><tr><td><a href=\"https:\/\/www.indiacode.nic.in\/show-data?actid=AC_CEN_2_11_00055_201631_1517807328273&amp;orderno=34\" target=\"_blank\" rel=\"noreferrer noopener\"><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-secondary-color\">29A(i)<\/mark><\/a><\/td><td>is subject to any disability, corresponding to clauses (a) to (h), under any law in a jurisdiction outside of India<\/td><\/tr><tr><td><a href=\"https:\/\/www.indiacode.nic.in\/show-data?actid=AC_CEN_2_11_00055_201631_1517807328273&amp;orderno=34\" target=\"_blank\" rel=\"noreferrer noopener\"><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-secondary-color\">29A(j)<\/mark><\/a><\/td><td>has a connected person not eligible under clauses (a) to (i)<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p>Now, who are the connected persons?&nbsp;<\/p>\n\n\n\n<p><em>a)<\/em>&nbsp; &nbsp; <em>Persons who are promoters or in the management or control of the resolution applicant;<\/em><\/p>\n\n\n\n<p><em>b)<\/em>&nbsp; &nbsp; <em>The persons who will be promoters or in management or control of the business of the company during the implementation of the resolution plan;<\/em><\/p>\n\n\n\n<p><em>c)<\/em>&nbsp; &nbsp; <em>Holding company, subsidiary company, associate company and related party of the persons referred to it in terms (a) and (b).<\/em><\/p>\n\n\n\n<h4 class=\"wp-block-heading has-medium-font-size\" id=\"7-details-as-per-regulation-38-of-the-regulations\"><strong>7.<\/strong><strong> <\/strong><strong>DETAILS AS PER REGULATION 38 OF THE REGULATIONS<\/strong><\/h4>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><tbody><tr><td><strong>Sr. No.&nbsp;<\/strong><\/td><td><strong>ITEM<\/strong><\/td><td><strong>REFERENCES<\/strong><\/td><\/tr><tr><td>a)<\/td><td>It addresses the cause of default<\/td><td><mark style=\"background-color:rgba(0, 0, 0, 0);color:#f70808\" class=\"has-inline-color\">State reasons for default, including limitations on working capital, outdated operational processes, and poor financial management.\u00a0<\/mark><\/td><\/tr><tr><td>b)<\/td><td>It is feasible and viable<\/td><td><mark style=\"background-color:rgba(0, 0, 0, 0);color:#e50808\" class=\"has-inline-color\">Give detailed financial projections that is prepared on the basis of industry benchmarks and the viability is assessed through forecasted sales, EBIDTA, etc.\u00a0<\/mark><\/td><\/tr><tr><td>c)<\/td><td>It has provisions for its effective implementation<\/td><td><mark style=\"background-color:rgba(0, 0, 0, 0);color:#fa0808\" class=\"has-inline-color\">The resolution plan provides a an implementation schedule with well-defined milestones, and responsibilities.\u00a0<\/mark><\/td><\/tr><tr><td>d)<\/td><td>It has provisions for approvals required and the timeline for the same<\/td><td><mark style=\"background-color:rgba(0, 0, 0, 0);color:#ee0f0f\" class=\"has-inline-color\">State all the required statutory approvals, including environmental, industrial and sector-specific licenses and permits.\u00a0<\/mark><\/td><\/tr><tr><td>e)<\/td><td>The resolution applicant has the capability to implement the resolution plan<\/td><td><mark style=\"background-color:rgba(0, 0, 0, 0);color:#f40c0c\" class=\"has-inline-color\">Demonstate financial capability, industry experience, and managerial competence of the resolution applicant. You may also mention past experience and instances where a stressed entity was successfully revived.<\/mark>\u00a0<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h4 class=\"wp-block-heading has-medium-font-size\" id=\"8-eligibility-norms-as-proposed-in-the-evaluation-matrix\"><strong>8. <\/strong><strong><\/strong><strong>ELIGIBILITY NORMS AS PROPOSED IN THE EVALUATION MATRIX<\/strong><\/h4>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><tbody><tr><td><strong>&nbsp; &nbsp; Sr. No.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<\/strong><\/td><td><strong>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; ITEM<\/strong><\/td><td><strong>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; PARTICULARS<\/strong><\/td><\/tr><tr><td>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.<\/td><td>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; Condition No. 1&nbsp;<\/td><td><mark style=\"background-color:rgba(0, 0, 0, 0);color:#f20505\" class=\"has-inline-color\">It is usually on the lines that the resolution applicant must have a minimum net worth of say Rs. 80 crore as on the most recent audited financial statement. This gives assurance of financial strength and ability to infuse capital for revival.\u00a0<\/mark><\/td><\/tr><tr><td>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.<\/td><td><br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Condition No. 2<\/td><td><mark style=\"background-color:rgba(0, 0, 0, 0);color:#f90c0c\" class=\"has-inline-color\">The resolution applicant should have prior experience of at least say 20 years in the export services.\u00a0<\/mark><\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"9-approvals-waivers-specific-orders-by-from-nclt\"><strong>9.<\/strong><strong> <\/strong><strong>APPROVALS\/WAIVERS\/ SPECIFIC ORDERS BY\/FROM NCLT<\/strong><\/h4>\n\n\n\n<p>The resolution applicant seeks for the following approvals\/waivers\/specific orders from the Hon\u2019ble NCLT:<\/p>\n\n\n\n<ol style=\"list-style-type:lower-alpha\" class=\"wp-block-list\">\n<li>Request approval from NCLT for: <mark style=\"background-color:rgba(0, 0, 0, 0);color:#ec0f0f\" class=\"has-inline-color\">You may approach the NCLT for the following approvals transfer of management and control of the corporate debtor, approval for allotment and issuance of shares, any restructuring, amalgamation, etc.\u00a0<\/mark><\/li>\n\n\n\n<li>Request waiver of liabilities from NCLT: <mark style=\"background-color:rgba(0, 0, 0, 0);color:#f10606\" class=\"has-inline-color\">You may approach the NCLT to waive or extinguish all past liabilities, claims, demands, penalties, etc.\u00a0<\/mark><\/li>\n\n\n\n<li>Request for specific relief\/protection from Hon\u2019ble NCLT: <mark style=\"background-color:rgba(0, 0, 0, 0);color:#ee0808\" class=\"has-inline-color\">You may seek protection from any action under existing contracts, agreements, obligations, etc arising before the insolvency commencement date, for recognising implementation of the resolution plan and grant approvals, licenses, etc.\u00a0<\/mark><\/li>\n<\/ol>\n\n\n\n<p><strong>INDICATIVE&nbsp; TIMELINE OF&nbsp; EVENTS&nbsp; FOR IMPLEMENTATION&nbsp; OF PROPOSED RESOLUTION PLAN:<\/strong><\/p>\n\n\n\n<p><mark style=\"background-color:rgba(0, 0, 0, 0);color:#f61212\" class=\"has-inline-color\">Here you need to lay out key action points of the resolution plan along with implementing the schedule and milestones that may be highlighted in the resolution plan. For instance you may give a table as mentioned below:\u00a0<\/mark><\/p>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><tbody><tr><td><strong>Sr. No.<\/strong><\/td><td><strong>Activity \/ Milestone<\/strong><\/td><td><strong>Timeline (from the date of approval by NCLT)&nbsp;<\/strong><\/td><\/tr><tr><td>1. <\/td><td>Approval of Resolution Plan<\/td><td>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; 0<\/td><\/tr><tr><td>2. <\/td><td>Constitution of the Monitoring and Implementation Committee<\/td><td>&nbsp; &nbsp; &nbsp; &nbsp; 0 + 7 days<\/td><\/tr><tr><td>3. <\/td><td>Execution of key agreements such as share purchase and business transfer agreements, etc.&nbsp;<\/td><td>&nbsp; &nbsp; &nbsp; T + 15 days<\/td><\/tr><tr><td>4.<br><\/td><td>Infusion of upfront capital\/equity contribution by the resolution applicant<\/td><td>T + 20 days<\/td><\/tr><tr><td>5.<\/td><td>Repayment of dues to the operational creditors&nbsp;<\/td><td>T + 30 days<\/td><\/tr><tr><td>6.<\/td><td>Repayment\/restructuring of financial creditor dues as per the plan terms<\/td><td>T + 30\u201360 days<\/td><\/tr><tr><td>7.<\/td><td>Transfer of management and control of the corporate debtor to the resolution applicant<\/td><td>T + 30 days<\/td><\/tr><tr><td>8.<\/td><td>Revival of export orders and renegotiation with the buyers<\/td><td>T + 45 days<\/td><\/tr><tr><td>9.<\/td><td>Re-establishing trade credit lines and LCs with banks<\/td><td>T + 45\u201360 days<\/td><\/tr><tr><td>10.<\/td><td>Renewal\/reactivation of statutory licenses (RCMC, IEC, DGFT, etc.)<\/td><td>T + 15\u201345 days<\/td><\/tr><tr><td>11.<\/td><td>Vendor re-engagement and restarting of manufacturing\/sourcing for export<\/td><td>T + 60 days<\/td><\/tr><tr><td>12.<\/td><td>Restoration of logistics tie-ups, port and customs arrangements<\/td><td>T + 75 days<\/td><\/tr><tr><td>13.<\/td><td>Application for and receipt of regulatory approvals&nbsp;<\/td><td>T + 90 days<\/td><\/tr><tr><td>14.<\/td><td>Full operational ramp-up for export activities<\/td><td>T + 120\u2013150 days<\/td><\/tr><tr><td>15.<\/td><td>Completion of all statutory and operational restructuring<\/td><td>T + 180 days<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p><strong>PERFORMANCE SECURITY&nbsp;<\/strong><\/p>\n\n\n\n<p><mark style=\"background-color:rgba(0, 0, 0, 0);color:#e50c0c\" class=\"has-inline-color\">What if the resolution applicant fails to commit delay in implementation of the plan? Or, in the worst-case scenario, a resolution applicant backs out after approval? Or the applicant a frivolous one? Sounds like a financial creditor\u2019s nightmare, right?<\/mark><\/p>\n\n\n\n<p><mark style=\"background-color:rgba(0, 0, 0, 0);color:#f40e0e\" class=\"has-inline-color\">How can you deter such a practice or misdemeanour? Let us have a look below.\u00a0<\/mark><\/p>\n\n\n\n<p>\u201c<strong>Performance Security<\/strong>\u201d means the security of such nature, value, duration and source, as may be specified in the request for resolution plans with the approval of the committee, having regard to the nature of the resolution plan and business of the corporate debtor.<\/p>\n\n\n\n<p>The resolution applicant is required to provide a performance security within the time specified therein in case its resolution plan is approved and such performance security shall stand forfeited if the resolution applicant fails to implement or contributes to the failure of implementation of that plan in accordance with the terms of the plan and its implementation schedule.<\/p>\n\n\n\n<p>Accordingly, the resolution plan should specify a performance security as specified with the approval of Coc, time within which it shall be provided.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"other-terms-and-conditions\"><strong>Other terms and conditions&nbsp;<\/strong><\/h2>\n\n\n\n<p><mark style=\"background-color:rgba(0, 0, 0, 0);color:#ee0606\" class=\"has-inline-color\">These clauses may be called \u201cancillary\u201d; however, they constitute a backbone of your resolution plan.\u00a0<\/mark><\/p>\n\n\n\n<p><strong>Governing Law<\/strong><\/p>\n\n\n\n<p>The Company and the new management shall abide and be governed by the laws of India, giving effect to the Adjudicating Authority order approving the resolution plan and any agreements, documents and instruments executed in connection with the resolution plan.<\/p>\n\n\n\n<p><mark style=\"background-color:rgba(0, 0, 0, 0);color:#f11313\" class=\"has-inline-color\">This clause lays down a list of stakeholders who shall be bound and also makes a declaration to the effect that the resolution plan is not in contravention of any law.\u00a0\u00a0\u00a0<\/mark><\/p>\n\n\n\n<p><strong>Binding effect<\/strong><\/p>\n\n\n\n<p>This resolution plan once approved by the CoC and then by the NCLT, along with such conditions as may be stipulated by the NCLT, shall be binding on the company, all holders of claims, creditors, members, promoter and all other parties in interest and each of their respective successors and assigns in accordance with sections <a href=\"https:\/\/ibclaw.in\/section-31-approval-of-resolution-plan\/\" target=\"_blank\" rel=\"noreferrer noopener\"><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-secondary-color\">31(1)<\/mark> <\/a>and <a href=\"https:\/\/ibclaw.in\/section-238-provisions-of-this-code-to-override-other-laws\/\" target=\"_blank\" rel=\"noreferrer noopener\"><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-secondary-color\">238<\/mark> <\/a>of the IBC. The resolution plan does not contravene any of the provisions of the law for the time being in force. All requisite approvals and requirements of law required to give effect to the resolution plan shall be undertaken by the resolution applicant.<\/p>\n\n\n\n<p><mark style=\"background-color:rgba(0, 0, 0, 0);color:#eb0505\" class=\"has-inline-color\">So, for instance, in case there is an amendment to a law which renders a particular provision\/clause of the resolution plan ineffective or redundant or unlawful. Does this render the entire resolution plan ineffective?<\/mark><\/p>\n\n\n\n<p><mark style=\"background-color:rgba(0, 0, 0, 0);color:#f00202\" class=\"has-inline-color\">Let us see below how the aforesaid query is addressed.\u00a0<\/mark><\/p>\n\n\n\n<p><strong>Severability and right to modify<\/strong><\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li>In the event it is determined that any provisions of the resolution plan is unenforceable either on its face or as applied to any claims or transactions and\/or in the event any provision of the resolution plan becomes invalid for reasons other than by breach of any party, the new management of the Company may apply to Adjudicating Authority for appropriate modifications of such provisions of the resolution plan, to satisfaction of the Adjudicating Authority, and such invalidity and\/or unenforceability of the provision of the resolution plan shall not render the whole resolution plan ineffective, unless otherwise directed by the Adjudicating Authority by order.<\/li>\n<\/ol>\n\n\n\n<ol start=\"2\" class=\"wp-block-list\">\n<li>In case any such modification is required in the resolution plan after the receipt of Adjudicating authority approval, to comply with any laws currently in force or to apply for certain approvals as required under the resolution plan or for any requirements, not jeopardising the rights of the creditors under the current plan, the new management of the company can do so only after approval of National Company law Appellate Tribunal (NCLAT).<\/li>\n<\/ol>\n\n\n\n<p><mark style=\"background-color:rgba(0, 0, 0, 0);color:#f20909\" class=\"has-inline-color\">Another question that may arise is whether the rights of a creditor can be assigned under a resolution plan. Then it is a yes, just like every other agreement. \u00a0<\/mark>\u00a0<\/p>\n\n\n\n<p><strong>Assignment of Interest<\/strong>&nbsp;<\/p>\n\n\n\n<p>Any creditor may assign its rights under this resolution plan, subject to the transferee unconditionally agreeing to the bound by the terms of this resolution plan.<\/p>\n\n\n\n<p><mark style=\"background-color:rgba(0, 0, 0, 0);color:#fb0f0f\" class=\"has-inline-color\">During my stint as a transaction and litigation lawyer, something I kept constantly listening to was, \u201csee the exit clause\u201d or \u201ccheck for termination clause\u201d. In my humble opinion, I think even in the case of a resolution plan, it is equally important.\u00a0<\/mark><\/p>\n\n\n\n<p>Let us see what happens when the resolution plan falls flat.&nbsp;<\/p>\n\n\n\n<p><strong>Consequences of revocation<\/strong><\/p>\n\n\n\n<p>In the event the resolution plan fails, the existing facilities of the creditors, the rights and remedies of the creditors under their respective existing financing documents including all securities and guarantees shall continue as if they had not been waived, amended, modified, released, superseded or replaced by the resolution plan and the creditors shall be entitled to enforce such rights and remedies under the existing financing documents, as if the same had not been waived and\/or modified pursuant to this resolution plan and the other relevant documents executed thereof. In the event of failure of resolution plan any amount paid to the financial creditor will be adjusted towards the outstanding dues of the company. <\/p>\n\n\n\n<p>Provided, however, that the obligations of the company under the resolution plan shall continue to be binding on the company and its co-obligators and the creditors shall be entitled to exercise all the rights and remedies conferred on them pursuant to this resolution plan.<\/p>\n\n\n\n<p><mark style=\"background-color:rgba(0, 0, 0, 0);color:#ec0808\" class=\"has-inline-color\">For the sake of confirming understanding and intent, demonstrating compliance, and protecting confidentiality, it is crucial to give a declaration.\u00a0<\/mark><\/p>\n\n\n\n<p><strong>Declaration<\/strong><\/p>\n\n\n\n<p>We hereby declare that we have read and understood all terms and conditions relating to the formulation of the resolution plan and hereby express our interest in the submission of the resolution plan for the said company. We further declare that the resolution plan is not in contravention of provisions of the Applicable Law and conforms to other requirements as may be specified by the IBBI.<\/p>\n\n\n\n<p>We also hereby declare that any confidential information of the Company that has come to our knowledge or might come to our knowledge during the insolvency resolution process shall not be disclosed.<\/p>\n\n\n\n<p>We hereby agree to invest the funds as proposed in the resolution plan. We understand that the resolution professional and\/or the CoC have the further right to renegotiate the terms of this resolution plan and the decision of the resolution professional and\/or the CoC in the selection of the successful resolution applicant shall be final and binding on us. We acknowledge that the resolution plan submitted is irrevocable and once the resolution plan is received and accepted, it shall not be transferable\/ assignable.<\/p>\n\n\n\n<p>We undertake to provide the resolution professional, the CoC and the CoC\u2019s advisor with any further information as may be requested by them.<\/p>\n\n\n\n<p>In case any of the provisions of this resolution plan are in contradiction to the request for the resolution plan and evaluation matrix issued by the Resolution Professional, then the terms of this resolution plan shall prevail.<\/p>\n\n\n\n<p>Yours faithfully<\/p>\n\n\n\n<p style=\"margin-top:0;margin-bottom:0\">Saksham Exports Pvt. Ltd.<\/p>\n\n\n\n<p style=\"margin-top:0;margin-bottom:0\">Place: Mumbai<\/p>\n\n\n\n<p style=\"margin-top:0;margin-bottom:0\">Date: 15th April 2023&nbsp;&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"final-thoughts\"><strong>Final thoughts<\/strong><\/h2>\n\n\n\n<p>When you commence drafting a resolution plan, you will realise that it requires a harmony of financial expertise, strategic thinking, and stakeholder awareness. Here are some key takeaways to bear in mind:<\/p>\n\n\n\n<p><strong>Always do your due diligence comprehensively: <\/strong>Your plan must be built on accurate information about the company&#8217;s financial and market position, and operational challenges. This is a significant step because a well-done due diligence establishes credibility and provides the foundation for realistic revival strategies.<\/p>\n\n\n\n<p><strong>Your focus should be viability, not merely debt restructuring<\/strong>: A successful resolution plan demonstrates how the business will become operationally sustainable, besides addressing financial distress.&nbsp;<\/p>\n\n\n\n<p><strong>At the end of the day, this is more financial than legal, so quantify and justify every proposal<\/strong> by supporting it with financial projections and market analysis.&nbsp;<\/p>\n\n\n\n<p><strong>Be thoughtful towards all stakeholders&#8217; interests<\/strong>: So while financial creditors have voting power, a plan must address the interests of all operational creditors, employees, and other stakeholders.&nbsp;<\/p>\n\n\n\n<p><strong>Acknowledge potential challenges and risks<\/strong>, and present contingency measures which exhibit thoroughness and build confidence in your plan.<\/p>\n\n\n\n<p><strong>Give clear timelines.&nbsp;<\/strong><\/p>\n\n\n\n<p><strong>Ensure that the plan is statutorily and regulatory compliant <\/strong>because<strong> <\/strong>non-compliance can lead to rejection regardless of economic merit.<\/p>\n\n\n\n<p>Remember that an approved plan is a binding document,<strong> <\/strong>so <strong>write with clarity and precision,<\/strong> leaving no room for misinterpretation about obligations, timelines, or outcomes.&nbsp;<\/p>\n\n\n\n<p>The most effective resolution plans, while satisfying all the requirements, tell a compelling story of business transformation. When drafting your application for approval, focus not just on meeting minimum standards but on crafting a document that inspires confidence in the proposed path forward.<\/p>\n\n\n\n<p><em>As you may have gathered that this article has given a whole lot of information about a resolution plan. What is pending here is the topic of inviting the expression of interest for the resolution plan, its approval and FAQs, which will be covered in the upcoming article, so stay tuned.&nbsp;<\/em><\/p>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Want to be an insolvency professional? Learn who can be a resolution applicant and who is disqualified from being one. How are resolution plans drafted? If you are a budding insolvency professional or a stakeholder of a company, this guide is for you.\u00a0<\/p>\n","protected":false},"author":21,"featured_media":2547,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[196,29,10,297],"tags":[388,340,231,389,390],"class_list":["post-2545","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-insolvency-and-bankruptcy-code-2016","category-drafting","category-lawsikho-featured","category-nclt","tag-how-to-draft-a-resolution-plan-under-ibc","tag-section-14-ibc","tag-section-25-ibc","tag-section-29-ibc","tag-section-30-ibc"],"_links":{"self":[{"href":"https:\/\/lawsikho.com\/blog\/wp-json\/wp\/v2\/posts\/2545","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/lawsikho.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/lawsikho.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/lawsikho.com\/blog\/wp-json\/wp\/v2\/users\/21"}],"replies":[{"embeddable":true,"href":"https:\/\/lawsikho.com\/blog\/wp-json\/wp\/v2\/comments?post=2545"}],"version-history":[{"count":2,"href":"https:\/\/lawsikho.com\/blog\/wp-json\/wp\/v2\/posts\/2545\/revisions"}],"predecessor-version":[{"id":2550,"href":"https:\/\/lawsikho.com\/blog\/wp-json\/wp\/v2\/posts\/2545\/revisions\/2550"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/lawsikho.com\/blog\/wp-json\/wp\/v2\/media\/2547"}],"wp:attachment":[{"href":"https:\/\/lawsikho.com\/blog\/wp-json\/wp\/v2\/media?parent=2545"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/lawsikho.com\/blog\/wp-json\/wp\/v2\/categories?post=2545"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/lawsikho.com\/blog\/wp-json\/wp\/v2\/tags?post=2545"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}