The NCLT approved the resolution plan for Shamik Enterprises, extinguishing prior liabilities and transferring control to Vivaa Tradecom.
The National Company Law Tribunal (NCLT), Mumbai Bench, comprising Mr. Kuldip Kumar Kareer (Judicial Member) and Mr. Anil Raj Chellan (Technical Member), approved the resolution plan and observed that once the plan is approved by the CoC with the requisite majority and is compliant with Section 30(2) of the IBC, it becomes binding on all stakeholders, extinguishes prior claims and liabilities, and transfers control to the Successful Resolution Applicant for the timely execution of the plan.
In a recent order, the National Company Law Tribunal (NCLT) approved the resolution plan for Shamik Enterprises Private Limited, submitted by Vivaa Tradecom Private Limited, under Section 30(6) read with Section 31 of the Insolvency and Bankruptcy Code, 2016 (IBC) and Regulation 39(4) of the CIRP Regulations. The CIRP commenced with the NCLT’s admission order dated February 3, 2022, initiated under Section 7 of the IBC by Hindustan Candle Manufacturing Company Private Limited. Mr. Kinjalkumar Madhubhai Chaudhary, initially appointed as Interim Resolution Professional (IRP), was confirmed as the Resolution Professional (RP) by the CoC on March 3, 2022. After multiple reconstitutions of the CoC and an extensive search for resolution applicants, Vivaa Tradecom emerged as the sole bidder, securing approval from the CoC with a 77.21% majority.
The approved resolution plan allocated ₹2.5 crore for fund-based commitments and ₹10.51 crore as non-fund-based commitments by transferring possession of flats to homebuyers. The financial proposal also included ₹44.73 lakh for CIRP costs, ₹2 crore for financial creditors, and nominal payouts to operational creditors. Notably, the SRA was released from liabilities for projects that had not commenced or undergone significant redevelopment. Claims from certain operational creditors, employees, and statutory dues were extinguished under the plan, with homebuyers agreeing to absorb construction-related cost increases beyond a 10% threshold.
The NCLT addressed specific claims, such as ₹1.02 crore owed to allottees of Project Kusum Bharti CHSL, which were classified as unsecured financial creditors. However, the SRA was absolved from executing this project or bearing legacy liabilities. Further, no liabilities were imposed on the SRA for other stalled projects. The tribunal also recognized the performance security of ₹17.50 lakh provided by Vivaa Tradecom and acknowledged its eligibility under Section 29A of the IBC.
The approved plan mandated project completion within 36 months, with quarterly reports submitted to ensure compliance. Additionally, the tribunal declined to exempt the SRA from future statutory obligations or stamp duties. Preferential transactions and recoveries under Sections 43, 45, 50, or 66 would be allocated proportionately among unsecured financial creditors. The order confirmed that the moratorium under Section 14 ceased upon approval and extinguished all claims not incorporated in the plan, transferring complete control to the new management. This resolution underscores the NCLT’s balanced approach, ensuring the Corporate Debtor’s revival while protecting stakeholders’ interests. With the tribunal’s direction to forward the CIRP records to the Insolvency and Bankruptcy Board of India (IBBI) for monitoring, the decision reinforces compliance with IBC mandates and provides a path forward for completing the Corporate Debtor’s pending projects.
Mr. Nausher Kohli, Advocate, a/w Mr. Amey Hadwale and Ms. Geeta Lundwani, Advocates represented the Appellant.
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