This issue of LexCognito, which in Latin means 'awareness about law', seeks to provide you an insight into significant legal and regulatory developments that have taken place very recently in India.

Date: 4 December 2019
Company Court clears Insolvency Resolution Plan framed by Creditors themselves
In the matter of Technology Development Board Vs. Logic Eastern India Private Limited, the National Company Law Tribunal, Principal Bench, Delhi (“NCLT”) has approved a very unique resolution plan which was framed by the Committee of Creditors themselves for the purpose of saving the Corporate Debtor from going into liquidation in the absence of any external resolution applicant.


The Technology Development Board, a statutory body established by the Government of India under the Technology Development Board Act, had filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (“IB Code”) for initiation of the Corporate Insolvency Resolution Process of Logic Eastern India Private Limited (“Corporate Debtor”), which was admitted by the Hon’ble NCLT on 18 July 2018. As a consequence, the corporate insolvency resolution process commenced and moratorium was imposed in terms of Section 14 of the IB Code. During the insolvency process, the Resolution Professional had invited expression of interest from the prospective resolution applicants intending to submit the resolution plan for resolving the insolvency of the Corporate Debtor. However, no external resolution applicant came forward to submit any expression of interest. However, instead of pushing the Corporate Debtor into liquidation, the financial creditors themselves framed a resolution plan for resolving the insolvency of the Corporate Debtor. The said plan was submitted with the Hon’ble NCLT for approval under Section 30(6) of the IB Code.

Resolution Plan

Since no resolution applicant had come forward to revive the Corporate Debtor, the Committee of Creditors unanimously decided not to liquidate the Corporate Debtor as it would have resulted in a complete loss to the creditors as the liquidation value was insufficient and employees would lose their employment. Under the Resolution Plan framed by the Committee of Creditors, besides a complete financial restructuring, a change in top management and a monitoring mechanism was proposed.


While examining the Resolution Plan to ensure compliance with the IB Code, the Hon’ble NCLT stated that there is no rule of law laying down the proposition that an operational creditor is to be treated at par with the financial creditor. While holding so, the Hon’ble NCLT relied upon the case of Swiss Ribbons Private Limited and Anr. Vs. Union of India & Ors., wherein the Supreme Court of India held that preserving the corporate debtor as a going concern, while ensuring maximum recovery for all creditors being the objective of the Code, financial creditors are clearly different from the operational creditors. While ensuring compliance with the IB Code, the Hon’ble NCLT approved the Resolution Plan to revive the Corporate Debtor.

Our Partner Rajan D Gupta acted as Court appointed Resolution Professional of the Corporate Debtor.

Click here to read the order.

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Chambers of Rajan & Indraneel 
T: +91 11 41000224, 41030225| Fax:+91 11 29239074 
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N 103 Greater Kailash - I, New Delhi - 110048, India.
About us
Chambers of Rajan & Indraneel is a premier full service law firm headquartered at New Delhi, India. The Firm represents amalgamation of vast experiences and practices of two eminent lawyers. Indranil Ghosh is highly reputed as a disputes lawyer. He was a senior partner and head of litigation practice in one of the oldest Indian law firm Fox Mandal for several decades before setting up his own practice. Rajan D Gupta is a rank holder Chartered Accountant turned Corporate Lawyer. He is also a licensed Insolvency Resolution Professional. He has been associated with internationally renowned big law firms in past and has held senior level positions in firms like PwC, Fox Mandal, Khaitan & Co. and SRGR Law, etc. before starting the Firm.

We have a team of experienced Lawyers, Chartered Accountants, Company Secretaries and Insolvency Resolution Professionals with access to network of high quality experienced lawyers in all major commercial cities of India.

The Firm offers a wide range of expert legal services in the areas of corporate and commercial laws and specializes in representing major foreign and domestic corporations with diverse business interests in India. The Firm is professionally equipped to handle large sized and complex corporate transactions like Mergers & Acquisitions, Corporate Restructuring, Joint Ventures, Inbound & Outbound Investments, Private Equity and Venture Capital Investment Transactions, Real Estate Transactions, Infrastructure Projects, Project Finance, Power Projects, Non-Conventional Energy Projects, Highways & Road Projects and Corporate Taxation as well as GST, etc. The Firm also offers proven capabilities in litigation and dispute resolution practice areas, especially in handling international and domestic arbitrations as well as litigation in Supreme Court, various High Courts of India and various judicial and quasi-judicial tribunals/forums including at National Client Law Tribunal, Appellate Tribunals, Tax Tribunals, Competition Commission, Electricity Tribunal, Telecom Disputes Tribunal, Designated Authorities and other adjudicatory bodies.

We have set up a Japan Business Desk (JBD) in order to serve our Japanese clients in a better way. The endeavour of the JBD is to act as a bridge between our professionals and clients from Japan so as to ensure that there are no barriers as to linguistic and cultural differences. This will indeed facilitate Japanese corporates doing business in India. 
This newsletter contains general information available in public domain at the time of its preparation. It is intended as a general news update and is not intended to be comprehensive nor to provide specific business, financial, investment, legal, tax or other professional advice or opinion or services. This newsletter is not a substitute for such professional advice or services, and it should not be acted on or relied upon or used as a basis for any decision or action that may affect you or your business. Before making any decision or taking any action that may affect you or your business, you should consult a qualified professional adviser and refer to the source pronouncement/documents on which this business alert is based. It is also expressly clarified that this newsletter is neither a solicitation nor an invitation of any sort whatsoever or a source of advertising from our firm or any of its partners or lawyers or other professionals to create any adviser-client relationship. Whilst every effort has been made to ensure the accuracy of the information contained in this news alert, this cannot be guaranteed, and neither our firm nor any related person/entity shall have any liability to any person or entity that relies on the information contained in this publication. Any such reliance is solely at the user's risk.
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Chambers of Rajan & Indraneel · G-68 LGF, East of Kailash · New Delhi, Delhi 110065 · India

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