# In the matter of Mandhana Industries Limited IA No. 734-MB-2021 in C.P. (IB) No. 1399-MB-2017

> NCLT judgment dated 2021-05-19. Citation: TCN-2021-NCLT-02119. Formation Textiles LLC (FTL), the former successful resolution applicant for Mandhana…

- **Court:** NCLT
- **Order date:** 19 May 2021
- **Citation:** TCN-2021-NCLT-02119
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/mandhana-industries-limited-ia-no-734-mb-2021-in-cp-ib-no-1399-mb-2017-c074b2f0

## Summary

### Background

Formation Textiles LLC (FTL), the former successful resolution applicant for Mandhana Industries Limited (now GB Global Limited), filed an application (IA No. 734/MB/2021) seeking to restrain the Resolution Professional (RP) and Committee of Creditors (CoC) from handing over the management of the Corporate Debtor to the new resolution applicant, Dev Land and Housing Private Limited (DLH). FTL also sought to prevent the tribunal from approving the resolution plan of the new applicant, alleging ineligibility and fraudulent transactions. The application arises from FTL's inability to implement its resolution plan, which was previously approved but later withdrawn.

## Facts

Formation Textiles LLC (FTL), the original successful resolution applicant for Mandhana Industries Limited (now GB Global Limited), was unable to implement its resolution plan. The resolution plan submitted by FTL was approved by the CoC with 80.92% of the voting share and was approved by the Adjudicating Authority by order dated 30.11.2018. FTL took over the control and management of the Corporate Debtor, w.e.f. 30.01.2019. FTL infused ₹. 93.80 Crores as per the Resolution Plan. The CoC failed to refund *. 93.80 Crores infused by the Applicant as per the Resolution Plan. Dev Land and Housing Private Limited (DLH) submitted a new Resolution Plan before the CoC, which was approved. FTL alleged that DLH is ineligible under Section 29A of the IBC due to a land transaction

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## Issues and analysis

### Issue 1: Whether the new Resolution Applicant (DLH) is ineligible under Section 29A of the Insolvency and …

**Ratio:** Section 29A of the IBC disqualifies individuals or entities involved in preferential,

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**Reasoning:** The NCLT reasoned that the alleged transactions did not fall under the provisions of the

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**Interpretation:** Section 29A is interpreted strictly, requiring clear evidence of disqualifying

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**Application:** The NCLT found that the Applicant failed to provide sufficient evidence to

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## Parties

- **Judges:** Janab Mohammed…; V. Nallasen…
- **Appellants:** Formation…
- **Respondents:** Mandhana Industrie…; Bank of B…

## Timeline

- **2008-06-23 — Lease cum sale…**: Corporate Debtor entered into a lease cum sale…
- **2010-01-25 — MoU with…**: MoU to sell the land was entered into between the Corporate Debtor and BRFL for ₹. 2.25…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 43 — Preferential transactions and relevant time](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-43)

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