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Informist, Monday, Mar. 24, 2025

 

--NCLT junks Univastu India's resolution plan for Setubandhan Infrastructure 

--CONTEXT: In 2022, NCLT admitted SBI's IBC plea against Setubandhan Infra 
 

NEW DELHI – The Mumbai bench of the National Company Law Tribunal on Monday rejected Univastu India Ltd.'s resolution plan for debt-ridden Setubandhan Infrastructure Ltd. The tribunal said that the resolution plan lacked mandatory provisions required under the Insolvency and Bankruptcy Board of India Regulations, 2016, specifically regarding separate payment provisions for non-voting creditors.

 

The tribunal said the resolution plan violates the 2016 regulations by failing to include specific provisions for "feasibility & viability". The resolution plan contains no specific provision for the claim of the Employees Provident Fund Organisation, the same being a statutory due that must be paid on priority, the tribunal said.

 

The resolution professional of Setubandhan Infrastructure has miserably failed to protect, preserve, and collate all the assets of the corporate debtor and has not taken any steps towards maximisation of its assets to the detriment of the financial creditors, thus violating the Insolvency and Bankruptcy Code, 2016, the tribunal said. There is improper bifurcation of creditors belonging to the same class, against the mandate of the 2016 Code, the tribunal added.

 

"In view of these circumstances, this tribunal concludes that the resolution plan submitted by Univastu India Ltd. does not deserve to be approved," the bench of judicial member Reeta Kohli and technical member Madhu Sinha said. The presence of multiple material violations of mandatory provisions, coupled with procedural irregularities, renders the resolution plan legally non-compliant, the bench said.

 

"Sanctioning such a plan would not only contravene the provisions of the Code (2016) but would also compromise the fundamental principles of transparency and fairness that form the cornerstone of the insolvency resolution process," the tribunal added.

 

The tribunal had in 2022 admitted a petition by the State Bank of India to start insolvency proceedings against Setubandhan Infrastructure. The debt-ridden company had admitted claims of INR 1.58 billion from SBI, IL&FS Financial Services Ltd., Kotak Mahindra Prime Ltd. and Union Bank of India. In January 2024, the committee of creditors approved Univastu India's resolution plan with 98.57% votes. 

 

The tribunal said the plan put up by the resolution professional before the committee of creditors contained the plan value of INR 672.1 million. However, the plan value stated in the application filed before the tribunal was INR 275 million and the resolution plan enclosed along with the application stated the total plan value as INR 200 million, the bench said. Therefore, the inconsistencies are so glaring that they cannot be ignored, the tribunal said.

 

On Monday, shares of Univastu India ended 0.3% higher at INR 219.76 on the National Stock Exchange, while shares of Setubandhan Infrastructure closed 5.4% lower at INR 0.53. Shares of State Bank of India ended 3.7% higher at INR 780.80.  End 

 

Reported by Surya Tripathi

Edited by Saji George Titus

 

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