| Application No | IA 1651 of 2020 In CP (IB) 1765/MB/C-II/2018 |
| Applicant | Resolution Professional |
| Respondent | Union Bank of India & Ors. |
| Subject | Under Section 60 (5) of the Insolvency and Bankruptcy Code, 2016, r/w Rule 11 of the National Company Law Tribunal Rules, 2016. |
| Order Date | 24.12.2021 |
Case Summary :
An application was filed by the Resolution Professional of Lavasa Corporation Ltd. before the Hon’ble NCLT seeking directions to be issued to specified CoC members to make contributions to the corpus fund as approved by them to meet and support the Resolution Professional to keep the Corporate Debtor as a going concern, protect and preserve the value of assets and to meet the expenses during the CIRP of the Corporate Debtor.
Facts of the Case :
1. The Resolution Professional of Lavasa Corporation Ltd. in his application stated that in absence of adequate funds it is difficult for him to meet the day-to-day Operational requirements to keep the Corporate Debtor Company as a going concern.
2. The Resolution Professional stated that the Corporate Debtor is principally engaged in the business of “Comprehensive Development and management” of the Lavasa hill Station township project. He further stated that due to pending approvals/renewals of the environmental clearances for the project, the construction activity of the project was hampered.
3. The Resolution Professional stated that the Residents of Lavasa city defaulted in discharging these payments/contributions, despite being in receipt of bills and invoices. He further stated that the revenue is affected due to non-payment, the capability of the Corporate Debtor to provide the services also was adversely affected due to non-availability of sufficient funds.
4. The Resolution Professional key expenses forming part of the CIRP of the Corporate Debtor have remained pending for a significant amount of time.
5. The Resolution Professional sought assistance of the members of CoC, other than Financial Creditors in class A, being Home Buyers, to fund the CIRP costs to carry the CIRP of the Corporate Debtor in a smooth and efficient manner.
6. After deliberations, it was agreed that the corpus would initially be met for the CIRP costs and expenses for six months, further the contributions will be made by each member of the CoC on a pro rata basis equivalent to their apportioned voting share after excluding the share of the Financial Creditors of Class A.
7. Certain members of the CoC made payments towards their contribution, still contributions were awaited from certain other members of the CoC.
8. The Resolution Professional stated that he is facing number of difficulties in operating the Corporate Debtor as a going concern due to acute shortage of funds on account of the Respondents not making contributions towards the corpus.
Observation :
The Hon’ble NCLT is of the view that the corpus was created and unanimously approved in the meetings of the CoC held on various dates and it was created to keep the Corporate Debtor Company as a going concern, to protect and preserve the assets and to meet the costs and expenses incurred in the CIRP.
Judgement :
The Hon’ble NCLT had directed those specified CoC to make payments towards their respective share of pending contributions to the corpus as approved by the CoC, within 15 days from receiving the Certified copy of the Order.
Rishi M
Article Assistant