# In the matter of Y.R. Traders Private Limited

> NCLT judgment dated 2024-02-28. Citation: TCN-2024-NCLT-02322. The case involves an application filed by Anand Vihar Reality Private Limited against the…

- **Court:** NCLT
- **Order date:** 28 Feb 2024
- **Citation:** TCN-2024-NCLT-02322
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/yr-traders-private-limited-7267ad66

## Summary

### Background

The case involves an application filed by Anand Vihar Reality Private Limited against the Resolution Professional of Y.R. Traders Private Limited, seeking several reliefs, including declarations regarding the illegality of certain clauses in the Request for Resolution Plan (RFRP) and challenging the decision of the Committee of Creditors (CoC) to forfeit the Earnest Money Deposit (EMD) submitted by the applicant. The Corporate Debtor, Y.R. Traders Private Limited, is undergoing corporate insolvency resolution process (CIRP) initiated by the Adjudicating Authority on June 7, 2022. The applicant submitted a resolution plan along with an EMD, which was later found deficient. The applicant proposed revised terms but did not submit a revised plan. The CoC proceeded to vote

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## Facts

1. On June 7, 2022, the Adjudicating Authority initiated the CIRP of Y. R. Traders Private Limited.
2. The Resolution Professional published a notice inviting expressions of interest from prospective resolution applicants.
3. Anand Vihar Reality Private Limited submitted an Expression of Interest (EOI) along with a refundable deposit and was shortlisted as a Prospective Resolution Applicant (PRA).
4. The Resolution Professional provided a Request for Resolution Plan (RFRP) to the applicant, which stated that the EMD accompanying any plan would be subject to forfeiture on specific grounds.
5. The applicant submitted a Resolution Plan along with an EMD of Rs. 10,00,000/-
6. The CoC found deficiencies in the Resolution Plan and requested the applicant to submit a revised

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## Issues and analysis

### Issue 1: Whether the CoC was justified in forfeiting the Earnest Money Deposit (EMD) submitted by the …

**Ratio:** The forfeiture of EMD is permissible only under specific circumstances as outlined in the

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**Reasoning:** The Adjudicating Authority reasoned that the resolution plan was never approved by the

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**Interpretation:** The RFRP and the IBC regulations should be interpreted strictly, and the CoC

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**Application:** In this case, the Adjudicating Authority found that the CoC was not justified

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## Parties

- **Judges:** BIDISHA BA…; Balraj…
- **Appellants:** Anand Vihar…
- **Respondents:** Y.R. Traders…; Sushanta Kumar…

## Timeline

- **2022-06-07 — CIRP Init…**: Adjudicating Authority passed an Order initiating the corporate insolvency resolution…
- **2022-06-09 — Public Annou…**: Resolution Professional caused publication of public announcement in Form A inviting…

## 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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