# Approval of Resolution Plan - Propel Valves Private Limited

> NCLT judgment dated 2018-03-19. Citation: TCN-2018-NCLT-01687. The case pertains to the approval of a resolution plan submitted under Section 30(b) of the…

- **Court:** NCLT
- **Order date:** 19 Mar 2018
- **Citation:** TCN-2018-NCLT-01687
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/approval-of-resolution-plan-propel-valves-private-limited-49dca130

## Summary

### Background

The case pertains to the approval of a resolution plan submitted under Section 30(b) of the Insolvency and Bankruptcy Code (IBC), 2016. The insolvency proceedings were initiated based on a petition filed by an operational creditor, M/s. Mechano Engineering Works, due to a default of Rs. 12,45,907 by the corporate debtor, M/s. Propel Valves Private Limited. The Committee of Creditors (CoC) had only one member, SBI, holding 100% of the voting power. The financial creditor confirmed that the corporate debt is considered a standard asset and the corporate debtor is a going concern as a SME and has not defaulted on payments to its creditors as and when due.

## Facts

M/s. Mechano Engineering Works initiated insolvency proceedings against M/s. Propel Valves Private Limited due to a default of Rs. 12,45,907. SBI, the sole member of the CoC, held 100% voting power. The corporate debt was considered a standard asset, and the corporate debtor was a going concern. The financial creditor waived the duty of the RP under Section 25 to invite resolution plans from the general public. The promoter Directors of the Corporate Debtor submitted a resolution plan, which was approved by the CoC. The resolution plan proposed that additional funds brought in as a loan would be subject to a repayment holiday of three years and carry an interest rate of 10.95% p.a. The resolution plan did not envisage any haircut for creditors.

## Issues and analysis

### Issue 1: Whether the resolution plan submitted by the promoter Directors of the Corporate Debtor should be …

**Ratio:** The Tribunal has the power to approve a resolution plan if it meets the requirements of

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**Reasoning:** The Tribunal noted that the resolution plan did not envisage any haircut for either the

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**Interpretation:** Section 31 of the IBC allows the adjudicating authority (NCLT) to approve a

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**Application:** The Tribunal applied the ratio to the facts of the case, considering the

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## Parties

- **Judges:** K. Anantha…; S. VIJAYARA…
- **Appellants:** M/s. MECHANO…
- **Respondents:** M/s. PROPEL…
- **Advocates:** S. Raja…

## Timeline

- **2017-03-19 — Order Del…**: Order delivered on…
- **2017-12-27 — Resolution…**: Resolution Applicants have brought in funds and have already paid all the resolution…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 30(6) — Submission of resolution plan](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-30)

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