# SVA Family Welfare Trust & Anr. vs. Ujaas Energy Ltd. & Ors.

> NCLAT judgment dated 2023-08-21. Citation: TCN-2023-NCLAT-00263. The appeal was filed against the order dated 06.01.2023 passed by the Adjudicating Authority…

- **Court:** NCLAT
- **Order date:** 21 Aug 2023
- **Citation:** TCN-2023-NCLAT-00263
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/sva-family-welfare-trust-anr-vs-ujaas-energy-ltd-ors-4be9c0e9

## Summary

### Background

The appeal was filed against the order dated 06.01.2023 passed by the Adjudicating Authority (National Company Law Tribunal), Indore Bench, Court No.1, by which order IA/190(MP)2021 filed by the Resolution Professional for approval of the Resolution Plan has been rejected. The Appellant, who was the Successful Resolution Applicant, was aggrieved by the order rejecting his Resolution Plan. The Corporate Insolvency Resolution Process (CIRP) was initiated against Corporate Debtor- 'M/s. Ujaas Energy Limited' vide order dated 17.09.2020. The Appellant submitted its Resolution Plan, which was approved by the CoC with 78.04% vote shares on 30.08.2021. The Adjudicating Authority rejected I.A No.190 of 2021, stating that CoC cannot extinguish the right of a particular

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## Facts

The Corporate Insolvency Resolution Process (CIRP) was initiated against ‘M/s. Ujaas Energy Limited' on 17.09.2020. The Appellant submitted a Resolution Plan, which was approved by the Committee of Creditors (CoC) with a 78.04% vote share on 30.08.2021. The Resolution Plan proposed a payment of INR 74,81,75,744/- against a liquidation value of INR 43,08,09,000/-, with INR 45,00,00,000/- towards the value of the Corporate Debtor and INR 23,81,75,744/- towards the release of personal guarantees. Bank of Baroda, a CoC member with a 5.83% voting share, objected to the Resolution Plan, arguing that it provided for the extinguishment of rights under personal guarantees. The Adjudicating Authority rejected the Resolution Plan on 06.01.2023, stating that the CoC

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## Issues and analysis

### Issue 1: Whether in a Resolution Plan can there be a clause which proposes to extinguish security interest …

**Ratio:** Approval of a resolution plan does not ipso facto discharge a personal guarantor of a

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**Reasoning:** The NCLAT reasoned that the Adjudicating Authority erred in rejecting the Resolution Plan

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**Interpretation:** The interpretation of Section 30(2)(e) of the IBC and its interplay with the

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**Application:** In this specific case, the NCLAT applied the ratio by considering that the CoC

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## Parties

- **Judges:** Ashok Bh…; Barun M…
- **Appellants:** SVA Family…
- **Respondents:** Ujaas Energy…; Ujaas Energy Ltd.…
- **Other parties:** 7th Edition…; dissenting…; +8 more

## Timeline

- **2020-09-17 — CIRP Init…**: Corporate Insolvency Resolution Process (CIRP) was initiated against Corporate Debtor-…
- **2021-08-30 — Resolution Plan…**: Resolution Plan of the Appellant was…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 30(2) — Submission of resolution plan](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-30)

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