# Approval of Resolution Plan - Vardhman Industries Limited

> NCLT judgment dated 2018-11-19. Citation: TCN-2018-NCLT-00310. The case involves three applications related to the Corporate Insolvency Resolution Process…

- **Court:** NCLT
- **Order date:** 19 Nov 2018
- **Citation:** TCN-2018-NCLT-00310
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/approval-of-resolution-plan-vardhman-industries-limited-63647bed

## Summary

### Background

The case involves three applications related to the Corporate Insolvency Resolution Process (CIRP) of Vardhman Industries Limited. The first application, C.A. 205/(ND)/2018, was filed by the Resolution Professional (RP) seeking approval of the resolution plan submitted by JSW Steel Ltd. The second application, C.A. 268/(ND)/2018, was filed by the Committee of Creditors (CoC) seeking clarification that personal guarantees given for securing the debt of the Corporate Debtor (CD) should not be extinguished. The third application, C.A. 276/(ND)/2018, was filed by Punjab National Bank (PNB) against the rejection/non-acceptance of its claim. The CIRP was initiated under Section 10 of the Insolvency and Bankruptcy Code, 2016, following an application by the CD. The Tribunal

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## Facts

Vardhman Industries Limited (CD) underwent Corporate Insolvency Resolution Process (CIRP) initiated under Section 10 of the Insolvency and Bankruptcy Code, 2016. JSW Steel Ltd. submitted a resolution plan for the CD. The CD is involved in manufacturing and marketing coated flat products. The reasons for the drastic drop in the sales of the CD includes dumping of steel by China into India at extremely low and competitive prices, low pricing by domestic steel manufacturers in India, loss of sales in Jammu and Kashmir where the CD had major market share, due to insurgency and natural calamities and withdrawal of quantity discounts by suppliers. The CoC approved the resolution plan submitted by JSW by a 100% vote on 10.08.2018. Punjab National Bank (PNB) filed a claim in

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## Issues and analysis

### Issue 1: Whether the resolution plan submitted by …

**Ratio:** The resolution plan must comply with the mandatory requirements under the Code and CIRP

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**Reasoning:** The Tribunal found that the resolution plan submitted by JSW Steel Ltd. was in place and

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**Interpretation:** Section 30 of the Insolvency and Bankruptcy Code outlines the requirements for

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**Application:** The Tribunal reviewed the resolution plan to ensure compliance with Section 30

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## Parties

- **Judges:** R. VARADH…; V.K. SUB…
- **Appellants:** JITENDER SINGH…
- **Respondents:** VARDHMAN INDUSTRIE…; Punjab National…

## Timeline

- **2017-11-16 — CIRP Init…**: Order initiating the CIRP of the Corporate Debtor, imposing moratorium and appointing Mr.…
- **2018-01-17 — Appointment…**: Mr. Ashok Gulla was appointed as the resolution professional by the Tribunal, on the…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 5(8) — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-5)

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