Page 11 - IBBI-JUNE-SEPTEMBER 2022

+RPH EX\HUV ÀOed application seeking to initiate the CIRP against the CD
for its failure to honour its commitment. The AA noted that promoter of
the CD was appointed as a director on the board of marketing agency and
that the CD and marketing agency were being managed either directly or
indirectly by the same person. Further, the home buyers are not privy to the
agreement between the CD and its marketing agency and that they cannot
be punished for the misdeeds of the marketing agency. It was observed that
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to ensure that the principle of distinct corporate personality is not misused.
The AA lifted the corporate veil of the CD and admitted the application. The
‘doctrine of distinct legal entity’ plea as claimed by the CD and its marketing
agency with respect to non-refund of the money deposited by the home
buyers could not be accepted.
Notes:
State Bank of India Vs. Krishidhan Seeds Pvt Ltd [TP 82 of 2019 These CIRPs are in respect of 5721 CDs.
This excludes 1 CD which has moved directly from BIFR to resolution.
[CP(IB) 500 of 2018]
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M/s. Krishidhan Seeds Pvt. Ltd. committed default of ` 89.42 crore and
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against the CD on September 19, 2018. The AA vide order dated September
16, 2020, rejected the application holding that the claim of the FC is barred
by time. The AA’s order was challenged before the NCLAT, which dismissed
the appeal. The SC by its order dated April 18, 2022 set aside both the
orders directing AA to adjudicate afresh. FC contended that CIRP is being
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deposited ` FURUHV LQ 276 RI RQH RI WKH FUHGLWRUV LV QRW VXIÀFLHQW WR KROG
that the company started reviving back.
The AA noted that the CD had paid a debt of ` 2 crore to ICICI Bank and
has also deposited a sum of ` 6 crore in the loan account of creditor towards
the part payment of the settlement. The AA further observed that there are
thousands of employees and workmen working with the CD and the CD has
generated revenue of ` 175 crore in the last year. Placing reliance on the SC
judgement in the Vidarbha Industries case and taking into consideration the
submissions made by the CD that its management is trying hard to take the
company out of the debt trap, the AA has kept the proceeding in abeyance
for six months. The AA further observed that if the CD fails to settle the
debts, it will pass further orders and directed it not to sale the mortgaged
assets without consent of the FC.
IBBI
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the IBBI disposed of 25 show cause notices issued to the IPs/RVOs for
contravention of the provisions of law by passing suitable orders.
Corporate Processes
The data provided in this section regarding corporate processes is
provisional, as it is getting revised on a continuous basis depending on the
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respect of process changes. For example, a process may ultimately yield an
order for liquidation even after approval of resolution plan or may ultimately
yield resolution plan even after an order for liquidation.

Insolvency Resolution
The provisions relating to CIRP came into force on December 1, 2016.
A total of 5893 CIRPs have commenced by the end of September, 2022
as presented in Figure 1. Of these, 3946 have been closed. Of the CIRPs
closed, the CD was rescued in 2139 cases, of which 846 have been closed on
appeal or review or settled; 740 have been withdrawn; and 553 cases have
ended in approval of resolution plans; while 1807 have ended in orders for
liquidation (Figure 2). Sectoral distribution of CDs under CIRP is presented
in Figures 3-6.

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IBBI newsletter.indd 11
IBBI newsletter.indd 11 11/15/2022 12:24:48 PM