# Approval of Resolution Plan - Shreebhav Polyweaves Private Limited

> NCLT judgment dated 2023-09-27. Citation: TCN-2023-NCLT-01452. The case pertains to an application filed under Section 30(6) of the Insolvency & Bankruptcy…

- **Court:** NCLT
- **Order date:** 27 Sept 2023
- **Citation:** TCN-2023-NCLT-01452
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/approval-of-resolution-plan-shreebhav-polyweaves-private-limited-984f2cf9

## Summary

### Background

The case pertains to an application filed under Section 30(6) of the Insolvency & Bankruptcy Code, 2016, for the approval of a resolution plan for Shreebhav Polyweaves Private Limited. The Corporate Insolvency Resolution Process (CIRP) was initiated on 31.08.2021. Initially, Mr. Nirav Tarkas was appointed as the Insolvency Resolution Professional (IRP), later replaced by Mr. Vikash Gautamchand Jain. The Committee of Creditors (CoC) initially consisted of State Bank of India as the sole financial creditor, later reconstituted with Raj Radhe Finance Limited as the sole financial creditor after SBI transferred its exposure. The resolution applicant, GMSRA Infracon Private Limited, submitted a resolution plan that was approved by the CoC with 100% voting share. The

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## Facts

Shreebhav Polyweaves Private Limited underwent Corporate Insolvency Resolution Process (CIRP) starting 2021-08-31. Nirav Tarkas was initially appointed as IRP, later replaced by Vikash Gautamchand Jain. The Committee of Creditors (CoC) initially comprised State Bank of India, which later transferred its exposure to Raj Radhe Finance Limited, making them the sole financial creditor. GMSRA Infracon Private Limited submitted a resolution plan proposing to infuse Rs. 9,37,00,000. The plan allocated Rs. 8,00,00,000 to secured financial creditors, Rs. 5,000 to operational creditors, and Rs. 26,00,000 for CIRP costs. The fair value of the corporate debtor's assets was Rs. 8,20,87,026, while the liquidation value was Rs. 5,93,68,874. The Income Tax Department raised concerns

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## Issues and analysis

### Issue 1: Whether the Resolution Plan provides for the …

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

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**Reasoning:** The resolution plan provides for the payment of CIRP costs to the extent of Rs. 26,00,000

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**Interpretation:** This ensures that the costs incurred during the CIRP are recovered before any

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**Application:** The resolution plan complies with Section 30(2)(a) as it provides for the

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## Parties

- **Judges:** SHAMMI…; KAUSHALENDRA…
- **Appellants:** Vikash Gautamchand…
- **Respondents:** Shreebhav…; GMSRA Infracon…

## Timeline

- **2021-08-31 — CIRP Init…**: Corporate Insolvency Resolution Process (CIRP) was initiated for Shreebhav Polyweaves…
- **2021-08-31 — Moratorium…**: Order of moratorium passed by the Adjudicating Authority under Section 14 of I&B Code,…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 79(2) — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-79)

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