# In the matter of Committee of Ceditors of Metalyst Forging Ltd. Through State Bank of India Vs. Deccan Value Investors LP and Ors

> NCLAT judgment dated 2020-02-07. Citation: TCN-2020-NCLAT-00434. The case involves a challenge to an order by the Adjudicating Authority (NCLT, Mumbai Bench)…

- **Court:** NCLAT
- **Order date:** 7 Feb 2020
- **Citation:** TCN-2020-NCLAT-00434
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/committee-of-ceditors-of-metalyst-forging-ltd-through-state-bank-of-india-vs-dec-9f555ac0

## Summary

### Background

The case involves a challenge to an order by the Adjudicating Authority (NCLT, Mumbai Bench) refusing to approve the resolution plan of Deccan Value Investors LLP and DVI PE (Mauritius) Limited for Metalyst Forgings Ltd. The Resolution Professional had placed the resolution plan before the Adjudicating Authority for approval under Section 31 of the Insolvency and Bankruptcy Code (I&B Code). The Resolution Professional requested a performance guarantee from Deccan, which Deccan responded to by withdrawing the Resolution Plan. The Resolution Professional filed an application for approval of the plan, and Deccan filed an application for withdrawal of the plan.

## Facts

Metalyst Forgings Ltd. underwent a Corporate Insolvency Resolution Process (CIRP). Deccan Value Investors LLP and DVI PE (Mauritius) Limited submitted a resolution plan that was approved by the Committee of Creditors (CoC). The Resolution Professional (RP) placed the resolution plan before the Adjudicating Authority (NCLT, Mumbai Bench) for approval. The RP requested a performance guarantee from Deccan. Deccan then sought to withdraw its resolution plan, citing discrepancies in the information provided, particularly regarding the production capacity of Metalyst Forgings. Deccan claimed that the information in the Virtual Data Room (VDR) was inaccurate, specifically the 2016 MM Report, which showed a much higher production capacity than the actual capacity. Deccan also

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## Issues and analysis

### Issue 1: Whether the Adjudicating Authority erred in refusing to approve the resolution plan submitted by …

**Ratio:** The Adjudicating Authority has the power to reject a resolution plan if it does not meet

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**Reasoning:** The Adjudicating Authority found that the financial and technical documents provided to

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**Interpretation:** Section 30(2) of the I&B Code outlines the requirements that a resolution

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**Application:** The Adjudicating Authority applied the provisions of Section 30(2) to the facts

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## Parties

- **Judges:** S.J. Mukhop…; Bansi Lal…; +1 more
- **Appellants:** Deccan Value…
- **Respondents:** Metalyst Forgings…; DinkarVenkatasubra…

## Timeline

- **2018-04-13 — Resolution Plan…**: Resolution Plan submitted by 'Deccan Value Investors LLP' and ‘DVI PE (Mauritius)…
- **2018-08-28 — CoC Appr…**: Resolution Plan approved by…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 31 — Approval of resolution plan](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-31)

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