# In the matter of Sri Venkat Ram Spinners Pvt. Ltd. IA(I.B.C)-985(CHE)2022 in IBA-216-2019

> NCLT judgment dated 2023-01-24. Citation: TCN-2023-NCLT-04924. The case involves a corporate insolvency resolution process (CIRP) initiated against Sri…

- **Court:** NCLT
- **Order date:** 24 Jan 2023
- **Citation:** TCN-2023-NCLT-04924
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/sri-venkat-ram-spinners-pvt-ltd-iaibc-985che2022-in-iba-216-2019-0849d178

## Summary

### Background

The case involves a corporate insolvency resolution process (CIRP) initiated against Sri Venkatram Spinners Pvt. The CIRP was initiated on 2018-08-19. A resolution plan was approved by the Committee of Creditors (COC) on 2020-12-10 and by the Tribunal on 2022-02-17. The 1st Respondent, the Successful Resolution Applicant, failed to adhere to the payment schedule outlined in the resolution plan, having paid only Rs. 8.80 Crore out of the total Rs. 22.03 Crore. The applicant issued a notice for termination of the Resolution Plan and Forfeiture of the plan.

## Facts

The Corporate Debtor, Sri Venkatram Spinners Pvt, underwent CIRP initiated on 2018-08-19. A resolution plan was approved by the COC on 2020-12-10 and by the Tribunal on 2022-02-17. The 1st Respondent was the Successful Resolution Applicant. The total resolution plan amount was Rs. 22.03 Crore. The 1st Respondent paid only Rs. 8.80 Crore. The payment schedule included tranches with specific due dates. The final tranche due date was 2022-07-17. The Applicant issued a notice for termination of the Resolution Plan on 2022-08-06. The 1st Respondent sought an extension of time, citing a pending appeal before NCLAT and non-disbursement of a loan by Punjab National Bank. The IMC declared the plan implementation as failed and forfeited the amount paid. The applicant sought

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## Issues and analysis

### Issue 1: Whether the 1st Respondent breached the Resolution Plan by failing to adhere to the stipulated …

**Ratio:** The Resolution Plan approval order mandates adherence to the stipulated payment

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**Reasoning:** The Tribunal observed that the 1st Respondent admittedly failed to pay the balance 60% of

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**Interpretation:** The Resolution Plan is a binding agreement, and failure to comply with its

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**Application:** The 1st Respondent's failure to pay the balance amount within the stipulated

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## Parties

- **Judges:** Ramalingam…; SAMEER…
- **Respondents:** Venkatram…
- **Advocates:** M.S. SHANMUGA…; A.C. Sattayanasaya…; +1 more

## Timeline

- **2018-08-19 — CIRP Init…**: CIRP initiated against Sri…
- **2020-12-10 — COC Appr…**: Resolution plan approved by the…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 33 — Initiation of liquidation](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-33)

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