ARSS Infrastructure Projects goes into liquidation after NCLT rejects resolution plan

The Cuttack bench of the National Company Law Tribunal, which rejected the resolution plan of Ocean Capital Market Limited (OCML) for ARSS Infrastructure Projects Ltd, has ordered liquidation of the Bhubaneswar-based company.

The resolution plan of Ocean Capital Market was rejected by the NCLT as the tribunal found the plan was not in conformity with the requirements of sub-section (1) of Section 31 of the IBC 2016.

[Sub-section (1) of Section 31: (1) If the Adjudicating Authority is satisfied that the resolution plan as approved by the committee of creditors under sub-section (4) of section 30 meets the requirements as referred to in sub-section (2) of section 30, it shall by order approve the resolution plan which shall be binding on the corporate debtor and its employees, members, creditors, including the Central Government, any State Government or any local authority to whom a debt in respect of the payment of dues arising under any law for the time being in force, such as authorities to whom statutory dues are owed,] guarantors and other stakeholders involved in the resolution plan.

Provided that the Adjudicating Authority shall, before passing an order for approval of resolution plan under this sub-section, satisfy that the resolution plan has provisions for its effective implementation.]

The NCLT noted that that clause 2 (d) & (e) of the resolution plan requiring the financial creditors to assign their debts payable by the corporate debtor inclusive of the personal guarantee, the corporate Guarantee and other security Interests, and surrender the original guarantee deed and all other relevant security documents including title deeds, Hypothecation deeds and pledge Agreements to the Resolution applicant contravene section 128 of Indian Contract Act 1892 and the same is in violation section 30(2)(e) of IBC 2016.

In consequence of rejection of the resolution plan, and the fact that the resolution period and extended period were already expired, and more than sixteen months expired from 30 November 2021 the date on which the corporate debtor was admitted into CIRP, corporate debtor ARSS Infrastructure Projects Limited was ordered to be liquidated under section 33 of IBC 2016.

Payal Agarwal has been appointed as the liquidator for ARSS Infrastructure Projects.

ARSS Infrastructure Projects is an engineering and construction company which carries out civil and infrastructure projects, Railways, Highways, flyovers, Irrigation works etc. The insolvency application against the company was filed by State Bank of India in November 2021 for defaulting on a payment of Rs 2,273 crore. ARSS Infra owes Rs 3,850 crore to different financial creditors.

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