# Approval of Resolution Plan - Ujaas Energy Limited

> NCLT judgment dated 2023-10-13. Citation: TCN-2023-NCLT-01216. The case pertains to the approval of a resolution plan for Ujaas Energy Limited, a corporate…

- **Court:** NCLT
- **Order date:** 13 Oct 2023
- **Citation:** TCN-2023-NCLT-01216
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/approval-of-resolution-plan-ujaas-energy-limited-583cba3a

## Summary

### Background

The case pertains to the approval of a resolution plan for Ujaas Energy Limited, a corporate debtor undergoing the Corporate Insolvency Resolution Process (CIRP). The CIRP was initiated on 17.09.2020, and Mr. Naveen Khandelwal was appointed as the Interim Resolution Professional (IRP), later replaced by Mr. Naveen Kumar Sood as the Resolution Professional (RP). The resolution plan was submitted by a consortium of SVA Family Welfare Trust and M&B Switchgears. The Adjudicating Authority initially rejected the plan on 06.01.2023, but the NCLAT overturned this decision on 21.08.2023, directing the Adjudicating Authority to reconsider the plan. The core issue revolved around the treatment of personal guarantees and the commercial wisdom of the Committee of Creditors (CoC).

## Facts

Ujaas Energy Limited underwent Corporate Insolvency Resolution Process (CIRP) initiated on 17.09.2020. Mr. Navin Khandelwal was initially appointed as the Interim Resolution Professional (IRP), later replaced by Mr. Naveen Kumar Sood as the Resolution Professional (RP). A resolution plan was submitted by a consortium of SVA Family Welfare Trust and M&B Switchgears. The Adjudicating Authority initially rejected the plan on 06.01.2023, primarily due to concerns regarding the extinguishment of personal guarantees and the CoC's decision-making power. Bank of Baroda objected to the release of personal guarantees. The NCLAT overturned this decision on 21.08.2023, emphasizing the commercial wisdom of the CoC. The CoC approved the resolution plan with 78.04% voting share.

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## Issues and analysis

### Issue 1: Whether the Adjudicating Authority erred in rejecting the resolution plan based on concerns …

**Ratio:** The NCLAT emphasized that the commercial wisdom of the CoC should be given due weightage.

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**Reasoning:** The NCLAT overturned the Adjudicating Authority's initial rejection, stating that the

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**Interpretation:** The interpretation of the IBC emphasizes the importance of the CoC's commercial

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**Application:** In this case, the CoC approved the resolution plan with a 78.04% voting share,

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## Parties

- **Judges:** P. Moha…; KAUSHALENDRA…
- **Appellants:** Naveen Kuma…
- **Respondents:** Ujaas Energy…

## Timeline

- **2020-09-17 — CIRP Init…**: Corporate Debtor was admitted into Corporate…
- **2020-09-21 — Public Annou…**: IRP made public announcement of…

## 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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