# Approval of Resolution Plan - Eastern Silk Industries Pvt. Ltd.

> NCLT judgment dated 2024-01-31. Citation: TCN-2024-NCLT-02841. The case involves a corporate insolvency resolution process (CIRP) initiated against Eastern…

- **Court:** NCLT
- **Order date:** 31 Jan 2024
- **Citation:** TCN-2024-NCLT-02841
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/approval-of-resolution-plan-eastern-silk-industries-pvt-ltd-371df322

## Summary

### Background

The case involves a corporate insolvency resolution process (CIRP) initiated against Eastern Silk Industries Pvt Ltd. Export-Import Bank of India filed an application under Section 7 of the Insolvency and Bankruptcy Code (IBC), which was admitted on June 10, 2022. Several interlocutory applications (IAs) were filed, including one by Metro Infrastructure Development Limited, an unsecured financial creditor, challenging the resolution plan approved by the Committee of Creditors (CoC). The applicant, Metro Infrastructure Development Limited, held a 1.73% voting share in the CoC and dissented against the resolution plan, which allocated NIL payment to unsecured financial creditors while providing payments to operational creditors. The resolution plan submitted by Bauman

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## Facts

Export-Import Bank of India initiated CIRP against Eastern Silk Industries Pvt Ltd under Section 7 of IBC. Metro Infrastructure Development Limited, an unsecured financial creditor with an admitted claim of Rs. 15,69,13,000 and a 1.73% voting share in the CoC, dissented against the resolution plan. The resolution plan submitted by Bauman Dekor Private Limited was approved by the CoC with an 88.30% voting share. The plan allocated NIL payment to unsecured financial creditors while providing payments to operational creditors. Metro Infrastructure Development Limited challenged the resolution plan, arguing it violated Section 30(2)(b) and Section 53 of the IBC. The applicant claimed the resolution plan was discriminatory and did not effectively deal with the interests of

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## Issues and analysis

### Issue 1: Whether an Unsecured Financial Creditor being a dissentient to the Resolution Plan can be provided …

**Ratio:** Section 30(2)(b) of the IBC mandates that the resolution plan must provide for payment of

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**Reasoning:** The NCLT reasoned that allocating NIL amount to a dissenting financial creditor is

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**Interpretation:** Section 30(2)(b) is interpreted as a beneficial provision for operational

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**Application:** In this case, the NCLT applied the ratio by disapproving the allocation of NIL

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## Parties

- **Judges:** BIDISHA BA…; D. Ar…
- **Appellants:** Metro Infrastructu…
- **Respondents:** Eastern Silk…; Anil Kohli…

## Timeline

- **2020-01-01 — C.P. (IB) No.…**: Company Petiti…
- **2022-05-25 — Moratorium…**: Moratorium imposed under…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 7 — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-7)

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