# In the matter of Prime Retail India Limited IA (IB)No. 961-KB-2021 in CP (IB) No. 1127-KB-2019

> NCLT judgment dated 2022-04-21. Citation: TCN-2022-NCLT-03130. The Corporate Insolvency Resolution Process (CIRP) of Prime Retail India Limited was initiated…

- **Court:** NCLT
- **Order date:** 21 Apr 2022
- **Citation:** TCN-2022-NCLT-03130
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/prime-retail-india-limited-ia-ibno-961-kb-2021-in-cp-ib-no-1127-kb-2019-f366c187

## Summary

### Background

The Corporate Insolvency Resolution Process (CIRP) of Prime Retail India Limited was initiated following an order of admission on 2019-08-27, based on an application filed by Swatch Group (India) Limited, the Operational Creditor. A resolution plan submitted by BMS Commercial Private Limited was approved by the Committee of Creditors (CoC) with an 89.21% voting share on 2020-02-13. An Implementation & Monitoring Committee (IMC) was formed to oversee the plan's implementation. The Successful Resolution Applicant (SRA) faltered in making payments as per the plan, citing the pandemic and other issues. The IMC recommended liquidation of the corporate debtor due to non-payment. The SRA sought to sell non-business assets of the Corporate Debtor to make payments, but the

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## Facts

Swatch Group (India) Private Limited initiated Corporate Insolvency Resolution Process (CIRP) against Prime Retail India Limited due to unpaid dues, leading to the admission of CP (IB) No.1127/KB/2019 on 2019-08-27. BMS Commercial Private Limited's resolution plan was approved by the CoC with 89.21% voting share on 2020-02-13. An Implementation & Monitoring Committee (IMC) was formed, including Mr. Kamalesh Kumar Singhania as convener. The SRA, BMS Commercial Private Limited, was permitted to dispose of non-business assets to make payments under the resolution plan. The SRA made an upfront payment of ₹5.0 Cr. The IMC extended the payment timeline to 2021-03-11. The SRA requested a No Objection Certificate (NOC) from the financial creditors (State Bank of India and

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## Issues and analysis

### Issue 1: Whether the financial creditors/IMC were justified in delaying the issuance of the NOC for the sale …

**Ratio:** The ratio is based on the principle that all stakeholders must act in good faith to

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**Reasoning:** The court reasoned that the delay in issuing the NOC hindered the SRA's ability to

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**Interpretation:** The interpretation is that financial creditors and the IMC have a duty to

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**Application:** The court applied this ratio to the facts by directing the financial creditors

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## Parties

- **Judges:** Rajasekha…; Balraj…
- **Appellants:** BMS Commercial…
- **Respondents:** Prime Retail…; Kamalesh Kumar…

## Timeline

- **2019-08-27 — CIRP Init…**: Corporate Insolvency Resolution Process (CIRP) initiated against Prime Retail India…
- **2020-02-13 — Resolution Plan…**: Resolution plan submitted by BMS Commercial…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 60(5) — Adjudicating Authority for corporate persons](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-60)

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