Case Overview

This proceeding, C.P. (IB)/348(KB)2024, involves an application under Section 7 of the Insolvency and Bankruptcy Code (IBC) filed by Canara Bank against the Corporate Debtor, Juhi Industries Private Limited. The tribunal was reviewing the resolution plan submitted by Netscape Ventures Private Limited in consortium with Mr. Ashish Agarwal and Mr. Gopi Kishan Agarwal. During the hearing, the tribunal identified several material discrepancies and ambiguities in the proposed resolution plan that required immediate clarification from the Successful Resolution Applicant (SRA) and the Resolution Professional (RP), Mr. Anish Agarwal.

The principal issues and observations made by the tribunal are as follows:

1. Asset Definition: The plan's definition of assets on page 706 includes "Appurtenances of the corporate debtor on whatsoever nature and where so ever situated, whether or not mentioned in the Information Memorandum." The tribunal observed that a resolution plan must be based solely on the Information Memorandum (IM) and cannot include assets not part of the IM.

2. Ownership and Eligibility Structure: Significant discrepancies were noted on pages 723, 724, 747, 782, and 793 regarding the "structure of the resolution applicant." The plan mentioned that consortium members could invest directly or indirectly in the Corporate Debtor, an SPV, an associate, or affiliates through intermediate holding companies. The term "associates" was not defined. Crucially, a clause reserved the right to induct any other eligible person or entity as a financial/strategic investor after the plan's approval by the CoC and NCLT. The tribunal questioned how Section 29A eligibility could be established for such post-approval inductions and directed the SRA to provide a statement of the beneficial owner as per IBBI circular No. IBBI/CIRP/90/2025 dated 29th December 2025.

3. Payment Timeline Ambiguity: An ambiguity was observed concerning the payment of CIRP costs. While pages 737, 738, 746, and 749 stated it would be paid within seven days from the record date, page 738 mentioned "in any event no later than 5 (five) days from the date of receipt of the Order of Hon'ble NCLT Approval."

4. Accounting Treatment: On page 800, a clause under "Accounting Treatment" stated that any balancing figure debit or credit would be adjusted in the capital reserve at the company's sole discretion and deemed compliant with accounting standards. The tribunal observed this was not in accordance with the law and could not be a deeming provision to avoid tax implications.

5. Implementation Schedule Conflict: On page 748, it was stated the Corporate Debtor would be reconstituted within 30 days from the record date. However, on page 798 (Item No. 5 of the activity schedule), it stated full payment to stakeholders and complete implementation would occur within seven days from the record date, creating an ambiguity.

6. Monitoring Professional Fee Violation: On page 784, the plan proposed appointing the current RP, Mr. Anish Agarwal, as the Monitoring Professional with a fee of Rs. 3,00,000 per month plus an incentive of 1% of the resolution plan value upon successful completion. The tribunal noted this violates the proviso to Regulation 38(5) of the CIRP Regulations, which caps the monitoring fee for an RP-turned-monitor to not exceed the monthly fee received during the CIRP.

7. Plan Superseding RFRP: A clause on page 805 under the heading "Conflict" stated that the resolution plan would prevail over any other documents or the Request for Resolution Plan (RFRP) in case of repugnancy. The tribunal sought clarification on how the plan could be beyond the RFRP.

8. Missing Documents: The tribunal noted that two documents referred to in the plan were not on record: a net worth certificate for Netscape Ventures and consortium members (page 721) and a copy of a power of attorney dated 03.07.2025 (page 820).

Final Outcome

The NCLT did not approve the resolution plan in its current form. The SRA is directed to provide clarifications on all the observed discrepancies and ambiguities. The Resolution Professional (RP) is directed to place the affidavit of the SRA containing these clarifications as an addendum to the plan before the Committee of Creditors (CoC) in a meeting convened on 17.07.2026. The CoC is to vote on this updated plan. The RP is also directed to seek CoC approval for his own proposed monitoring fee and incentive. The RP must file the minutes of the CoC meeting and the voting results, along with the SRA's affidavit, before the tribunal. The matter has been listed for further consideration on 22.07.2026.

Topics: Resolution Plan Approval, Corporate Insolvency, NCLT Proceedings