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NCLT Approves Orissa Metaliks' Resolution Plan for Metenere Limited, Upholding CoC's Authority and Ensuring Compliance with IBC Regulations

The NCLT approved Orissa Metaliks' resolution plan for Metenere Limited, upholding the CoC's authority and ensuring compliance with IBC regulations.


The National Company Law Tribunal (NCLT), Principal Bench, comprising Chief Justice (Retd.) Ramalingam Sudhakar (President) and Technical Member Mr. Avinash K. Srivastava, approved the Resolution Plan submitted by Orissa Metaliks Private Limited, having met the statutory requirements under Sections 30 and 31 of the IBC and CIRP Regulations. The approval made the plan binding on all stakeholders, with the moratorium under Section 14 ceasing and implementation to be overseen by a Monitoring Committee. The tribunal also upheld the CoC’s authority in determining eligibility under Section 29A, ensuring compliance with judicial precedents on operational creditor payments while allowing statutory approvals to be obtained post-approval.


The present interlocutory application, IA No. 37 (PB) 2024, was filed by Mr. Surender Raj Gang, the Resolution Professional (RP) of Metenere Limited, under Sections 30(6) and 31(1) of the Insolvency and Bankruptcy Code, 2016 (IBC), read with Regulation 39(4) of the CIRP Regulations, seeking approval of the Resolution Plan submitted by Orissa Metaliks Private Limited. Metenere Limited was admitted into the Corporate Insolvency Resolution Process (CIRP) on 25.09.2020 following the initiation of CP (IB) No. 639(PB)2018 by the State Bank of India under Section 7 of the IBC. Mr. Surender Raj Gang was appointed as the Interim Resolution Professional (IRP) on 15.10.2020 and was later confirmed as the RP.


Metenere Limited, a public company engaged in the manufacturing of non-ferrous products, owned six manufacturing units with significant fixed assets in Damtal (Himachal Pradesh), Gandhidham (Gujarat), and Dadri (Noida, UP). Initially, a resolution plan submitted by Jubilee Metal Private Limited was approved by 92.45% of the Committee of Creditors (CoC). However, due to changes in Jubilee’s constitution, the RP sought and obtained permission from the Adjudicating Authority to withdraw the application for approval of the plan. The CIRP period from 05.02.2021 to 21.11.2023 was excluded, a decision affirmed by the NCLAT and the Supreme Court. The RP subsequently invited fresh resolution plans, leading to 19 Expressions of Interest (EoIs), out of which 14 applicants were found eligible. Hampton Sky Realty Limited and Findoc Finvest Private Limited were later deemed ineligible under Section 29A of the IBC and challenged their exclusion before the Adjudicating Authority. Meanwhile, the State Bank of India, Bank of Baroda, and Punjab National Bank assigned their debt to the National Asset Reconstruction Company Limited (NARCL), which then held a 95.39% voting share in the CoC.


During the 35th CoC meeting held on 11.07.2024, resolution plans submitted by Findoc and Orissa Metaliks were considered, and Hampton was disqualified due to non-payment of earnest money deposit and non-compliance with Section 29A. The final voting, conducted between 16.07.2024 and 24.07.2024, resulted in the approval of Orissa Metaliks’ Resolution Plan by 98.94% of the CoC. The Successful Resolution Applicant (SRA) deposited a performance security of ₹25 crores on 26.07.2024 in favor of NARCL Trust-0011. The RP submitted a Compliance Certificate in Form-H, demonstrating adherence to statutory requirements under the Code.


The Resolution Plan provided for full and prioritized payment of CIRP costs, ensured compliance with Section 53 of the IBC in repayment to operational creditors, and allocated a separate account for disputed claims by vendors, employees, and service providers. The management of the Corporate Debtor (CD) post-approval was entrusted to a Monitoring Committee comprising representatives from secured assenting financial creditors, the Resolution Applicant, and the RP. The plan also ensured compliance with the IBBI regulations and included detailed provisions on implementation, supervision, and the feasibility of the restructuring. Furthermore, the SRA submitted an affidavit confirming its eligibility under Section 29A of the IBC, which was independently verified.


The approved Resolution Plan allocated ₹295.14 crores for creditor payments and an additional ₹300 crores for operational, working capital, and capital expenditure needs totalling ₹595.14 crores. It prioritized secured operational debt repayment in line with judgments in State Tax Officer (1) v. Rainbow Papers Limited, REEDLAW 2022 SC 09519 and Commissioner of State Tax Department v. Ramchandra Dallaram Chaudhary Liquidator of M/s Anil Limited, REEDLAW 2024 NCLAT Del 05559. The State Tax Department, Gujarat, was allotted ₹5.62 crores out of its secured operational debt of ₹62.64 crores, reducing allocations to assenting financial creditors proportionately. Indian Bank, a dissenting financial creditor with a 1.06% voting share, was allocated ₹2.63 crores. The SRA also proposed an equity infusion of ₹1 crore through the subscription of 10 lakh fresh equity shares of the CD, aligning with the financial restructuring framework.


The National Company Law Tribunal (NCLT) found the Resolution Plan to be compliant with Sections 30 and 31 of the IBC and the CIRP Regulations. The tribunal permitted the SRA one year, or as per statutory provisions, to fulfil regulatory obligations and obtain governmental approvals. In case of non-compliance or withdrawal of the Resolution Plan, the CoC was entitled to forfeit the performance security. The plan was deemed binding on all stakeholders, and the moratorium under Section 14 of the IBC ceased. The RP was directed to hand over all relevant records and premises to the Resolution Applicant for implementation. The tribunal also granted liberty to file further applications concerning its execution, and the order was communicated to the IBBI and all relevant parties.


Mr. Sunil Fernandes, Senior Advocate, Mr. Vaijayant Paliwal, Mr. Akash Dikshit and Ms. Diksha Dadu, Advocates represented the Appellant.


Mr. Rahul Gupta, Advocate appeared for the Successful Resolution Applicant.


Mr. Niranjan Reddy, Sr. Advocate with Mr. Ankur Mittal, Ms. Yashika Sharma, Ms. Preety Choudhary and Mr. Saaketh Kasibhatlia, Advocates appeared for the NARCL.

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