# In the matter of Sainath estates Private Limited IA (IBC)-71-2022 in CP (IB) No. 651-7-HDB-2018

> NCLT judgment dated 2022-07-08. Citation: TCN-2022-NCLT-01817. The case involves an application filed by the Chairman of the Monitoring Committee of Sainath…

- **Court:** NCLT
- **Order date:** 8 Jul 2022
- **Citation:** TCN-2022-NCLT-01817
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/sainath-estates-private-limited-ia-ibc-71-2022-in-cp-ib-no-651-7-hdb-2018-2299c5a1

## Summary

### Background

The case involves an application filed by the Chairman of the Monitoring Committee of Sainath Estates Private Limited under Section 33(3) of the Insolvency and Bankruptcy Code, 2016, seeking permission to forfeit the Performance Bank Guarantee amount due to the Successful Resolution Applicant's (SRA) failure to comply with the approved resolution plan. The Tribunal had previously approved the resolution plan submitted by the Respondent. The Applicant reminded the Respondent about the implementation deadline and requested remittance of plan amounts as per the approved milestones.

## Facts

Sainath Estates Private Limited underwent corporate insolvency resolution process (CIRP). A resolution plan submitted by K. Premsagar Rao (Successful Resolution Applicant) was approved by the NCLT. A monitoring committee was formed. The SRA failed to implement the key milestones of the approved resolution plan, specifically regarding payment of deposits. The Applicant (Chairman of the Monitoring Committee) reminded the SRA about the implementation deadline via email dated 07.01.2020. The SRA had deposited Rs.10.00 crores as performance bank guarantee. The Monitoring Committee filed IA 71/2022 seeking to forfeit the performance bank guarantee. The SRA filed IA No.95/2022 seeking permission to make delayed payments with interest. The Tribunal disposed of IA No.95/2022

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## Issues and analysis

### Issue 1: Whether the existing resolution professional can be replaced as liquidator by another resolution …

**Ratio:** Section 34(1) of the IBC states that the resolution professional appointed for the CIRP

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**Reasoning:** The Tribunal considered Section 34 of the IBC, which governs the replacement of the RP as

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**Interpretation:** Section 34(1) of the IBC stipulates that the RP shall act as the liquidator

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**Application:** In this case, the Tribunal found that the conditions for replacing the RP under

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## Parties

- **Judges:** N. Venkata…; Veera Brahma Rao…
- **Appellants:** Dr.K.V.Sr…
- **Respondents:** Sainath Estates…; K. Premsag…

## Timeline

- **2020-01-07 — Applicant reminds…**: The Applicant vide email dated 07.01.2020, reminded the respondent about the last date of…
- **2021-11-09 — Resolution Plan…**: The Hon'ble Tribunal approved the Resolution plan submitted by Respondent, vide its order…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14 — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

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