# In the matter of Ramsarup Industries Limited CA(IB) No.37,343,349,352,424,440,460,4691,462,497,511,522,523,527,636,637,685,921 & 1026-KB-2019 in CP (IB) No. 352-KB-2019

> NCLT judgment dated 2019-09-04. Citation: TCN-2019-NCLT-01579. The case involves an application for approval of a resolution plan for Ramsarup Industries…

- **Court:** NCLT
- **Order date:** 4 Sept 2019
- **Citation:** TCN-2019-NCLT-01579
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/ramsarup-industries-limited-caib-no373433493524244404604691462497511522523527636-91a3c54e

## Summary

### Background

The case involves an application for approval of a resolution plan for Ramsarup Industries Limited, a corporate debtor undergoing Corporate Insolvency Resolution Process (CIRP). The CIRP was initiated following the company's inability to pay its debts. The resolution plan, approved by the Committee of Creditors (CoC) with a 74.41% voting share, faced numerous objections from various stakeholders, including operational creditors, financial creditors, unsuccessful bidders, and the promoter director of the suspended board of directors. These objections primarily concerned the distribution methodology, priority of payments, eligibility of the resolution applicant, and alleged manipulation of the CIRP process.

## Facts

Ramsarup Industries Limited underwent CIRP due to its inability to pay debts, initiated via CP(IB) No. 349/KB/2017. The CoC approved a resolution plan with 74.41% vote share. Numerous applications were filed objecting to the plan by Operational Creditors (OCs), Financial Creditors (FCs), unsuccessful bidders, and the promoter director. OCs claimed priority over FCs and discrimination in bid amount distribution. FCs challenged the distribution methodology based on security interest. The promoter director alleged undervaluation, CIRP manipulation, and ineligibility of the resolution applicant. The resolution plan proposed a haircut of 94% for FCs, resulting in 5.8% recovery of their admitted claims of Rs. 5853.00 crores. OCs were to receive Rs. 10.50 Crores out of

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## Issues and analysis

### Issue 1: Whether the resolution plan should be approved despite objections from operational creditors …

**Ratio:** Regulation 38(1) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution

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**Reasoning:** The NCLT found that the resolution plan did not discriminate against operational

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**Interpretation:** The interpretation of Regulation 38(1) and the principle of differential

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**Application:** The NCLT applied the ratio by examining the specific provisions of the

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## Parties

- **Judges:** Jinan…; Harish Chander…
- **Appellants:** M/S. VINAR…
- **Respondents:** Ramsarup Industrie…; Ramsarup Industrie…

## Timeline

- **2017-01-01 — CP(IB) No. 349/KB/2017…**: Corporate Applicant/ M/s. Ramsarup Industries Limited filed the CP(IB) No. 349/KB/2017…
- **2019-01-08 — Application A…**: The Application was admitted vide Order dated 08-01-2019 by appointing Mr. Nilesh Sharma…

## 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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