NCLT Chennai Approves Resolution Plan Of Promoter For Rajeswari Infrastructure; PUFE Application Dismissed

The National Company Law Tribunal, Chennai Bench (Court–I) has approved the resolution plan submitted by Guruswamy Ramamurthy, the suspended director and promoter of Rajeswari Infrastructure Limited, under Sections 30(6) and 31 of the Insolvency and Bankruptcy Code, 2016.

Background

The Corporate Insolvency Resolution Process (CIRP) against Rajeswari Infrastructure Limited was initiated on 10 May 2023 on a petition filed by Intec Capital Limited under Section 7 of the IBC. During the CIRP, the Committee of Creditors (CoC) underwent reconstitution and multiple extensions were granted owing to prolonged negotiations and revisions of the resolution plan. The promoter-resolution applicant submitted a revised resolution plan dated 8 February 2024, followed by an addendum enhancing the payout to financial creditors by ₹2.05 crore. After addressing objections raised by financial creditors, the revised plan along with the addendum was approved by the CoC with 100% voting share in its 25th meeting.

Resolution Plan

The approved plan contemplates a total consideration of ₹12.69 crore, against a liquidation value of approximately ₹12.41 crore. Secured financial creditors, with admitted claims of ₹34.88 crore, are to receive ₹12.10 crore, while operational creditors are to be paid a nominal amount in priority, in compliance with Regulation 38 of the CIRP Regulations. The plan also provides for extinguishment of promoter shareholding, reduction and reconstitution of public share capital, and fresh equity infusion by the resolution applicant. A Monitoring Committee has been constituted to oversee implementation for a period of nine months.

Findings

Relying on the Supreme Court’s rulings in K. Sashidhar v. Indian Overseas Bank and Committee of Creditors of Essar Steel v. Satish Kumar Gupta, the Tribunal reiterated that its jurisdiction is limited to examining compliance with Section 30(2) of the IBC and that commercial wisdom of the CoC is paramount. The Tribunal further held that the application alleging undervalued transactions under Section 45 of the IBC did not survive, as the disputed property had already vested in the corporate debtor under the approved resolution plan.