# In the matter of Viola Resorts Private Limited

> NCLT judgment dated 2023-11-23. Citation: TCN-2023-NCLT-00587. The case involves an application (IA-4989/2023) filed under Section 60(5) of the Insolvency and…

- **Court:** NCLT
- **Order date:** 23 Nov 2023
- **Citation:** TCN-2023-NCLT-00587
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/viola-resorts-private-limited-a7cb576a

## Summary

### Background

The case involves an application (IA-4989/2023) filed under Section 60(5) of the Insolvency and Bankruptcy Code (IBC), 2016, by the suspended Director of the Corporate Debtor, who is also a Prospective Resolution Applicant (PRA). The applicant seeks relief, arguing that the company is an MSME unit and should not be required to comply with the condition of submitting an Earnest Money Deposit (EMD) for submitting a Resolution Plan. The Committee of Creditors (CoC) declined to consider the applicant's request to waive the EMD/BG.

## Facts

The Corporate Debtor is an MSME unit. The applicant is the promoter and suspended board director. The CIRP commenced on 2023-06-06. The Resolution Professional (RP) has called for Resolution Plans from PRAs with EMD/Bank Guarantee of Rs. 50,00,000. The applicant requested the RP and CoC to waive the EMD/BG. The CoC declined the request. The applicant filed IA-4989/2023 seeking relief from the EMD requirement, citing that the company is an MSME. The applicant relied on the NCLT Amaravati Bench's decision in the case of “M/s. Blue Park Seafoods Private Limited" between Mr. Hemanth Naga Mumar Nerella (Applicant) and Mr. Rajesh Chillale & State Bank of India (Respondents)” (26.07.2023).

## Issues and analysis

### Issue 1: Whether the Corporate Debtor, being an MSME, should be exempt from the requirement of submitting an …

**Ratio:** MSMEs are often granted exemptions from certain requirements under the IBC to facilitate

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**Reasoning:** The Tribunal considered the arguments presented by the applicant, citing previous orders

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**Interpretation:** The interpretation of the IBC, particularly concerning MSMEs, is that they

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**Application:** In this specific case, the Tribunal applied the principle that MSMEs should be

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## Parties

- **Judges:** Anu Jagmoha…; KISHORE VEMULAPALL…
- **Appellants:** Small Industries…
- **Respondents:** Viola Resorts…

## Timeline

- **2023-06-06 — CIRP Commen…**: Corporate Insolvency Resolution Process…
- **2023-11-23 — Hearing…**: Order sheet of the…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 7 — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-7)

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