# In the matter of Viola Resorts Private Limited

> NCLT judgment dated 2023-11-23. Citation: TCN-2023-NCLT-00605. 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-00605
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/viola-resorts-private-limited-fb32c102

## 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 submit an Earnest Money Deposit (EMD) for submitting a Resolution Plan. The Corporate Debtor is an MSME unit, and the applicant is the promoter and suspended board director. The CIRP commenced on 06.06.2023. 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, but the CoC declined to consider the request.

## Facts

The Corporate Debtor is an MSME unit. The applicant is the promoter and suspended board director of the Corporate Debtor. The Corporate Insolvency Resolution Process (CIRP) commenced on 06.06.2023. The Resolution Professional (RP) has called for Resolution Plans from Prospective Resolution Applicants (PRAs) with an Earnest Money Deposit (EMD) or Bank Guarantee of Rs. 50,00,000/-. The applicant, being the erstwhile Director of the Corporate Debtor, requested the RP and Committee of Creditors (CoC) to waive the EMD/BG. The CoC declined to consider the request in its sixth meeting. The applicant then approached the Tribunal seeking relief, relying on previous orders of NCLAT and NCLT, including the 'Blue Park Seafoods Private Limited' case, which emphasized the rationale

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## 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 exempted from certain requirements under the IBC to encourage promoters

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**Reasoning:** The Tribunal considered the previous orders of NCLAT and NCLT, particularly the 'Blue

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**Interpretation:** The interpretation of Section 60(5) of the IBC, along with the precedents set

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**Application:** In this specific case, the Corporate Debtor is an MSME, and the applicant is

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## Parties

- **Judges:** Anu Jagmoha…; KISHORE VEMULAPALL…
- **Appellants:** Amir Ars…
- **Respondents:** Viola Resorts…; Chaitanya B…

## Timeline

- **2023-06-06 — CIRP Commen…**: The 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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This is a preview. The full structured summary, issues, precedents and source judgment are available on CaseEase - Legal Intelligence Simplified: https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/viola-resorts-private-limited-fb32c102