Insolvency and Bankruptcy Moot 2017

SUMMARY OF PARAGRAPHS
Sl. No. Date Events Parties
Involved
1. 2015 Raised an amount of 10 crore issuing Masala Bonds which PEG
matures on July, 2018 -Largest amount owed to PEG Developers
Developers Ltd, London (Infrastructure Company) and New Age

2. 2014 Office space in Hyderabad was taken on lease for three years- New Age and
Rent 12 Lakhs. Mr. R.S Reddy
3. 06.1.2011 New Age House, Jaipur leased to Peoples bank, Jaipur- lease New Age and
rental Rs 15,06,900/- per month. Peoples bank.
4. 2015-2018 Promoters diversified in to hotel and real estate New Age and
business- set up a company RHPL( Radha Hospitality RHPL
Pvt. Ltd.) -bought an operational 5 star hotel in
Jaipur-Seven Point as Managing Agent to the Hotel-
J.V agreement between New Age and RHPL to
develop a hotel and tower on Raipur Land.
RHPL will construct by contributing 50% cost- New
Age will pay the rest cash( 65 Crore) 90% amount
paid- rest on completion of project- and Kind( to
transfer a piece of land to the JV)
New Age will receive from commercial tower and
RHPL from Hotel.
5. 2008 Financial assistance from a consortium bank to set up Gujarat New Age and
plant Bank.
2011 2195 crore borrowed from three banks- Indo Bank, New Age-
RST Bank, Peoples Bank- to set up Karnataka Plant- Indo Bank,
Working Capital assistance obtained from Bank of RST Bank,
North India for Rs 2195 Crore Peoples Bank,
Loan lenders have first charge on land and Bank of
building and second on plant and machinery. North India.
Working Capital lender has first charge on plant
and machinery and second on land and building.
6. 2016 Promoters-Diversified into hospitality and real estate New Age and
business- acquired THSPL(Ten Hospitality Pvt. Ltd.)- THSPL(acquir
owns a singapore 5 star hotel- The Davisson ed by THSPL)
Continental.

7. 2017 THSPL raised capital through private equity fund- New Age and
LAVCA for its redevelopment and expansion needs THSPL(acquir
to the tune of USD 50 Million- Investment came ed by THSPL)
partly as loan and cash.
Loan against LAVCAs sister company FB Investment
Pte, Mauritius- First charge on equitable mortgage on
immovable properties of Davisson
To repay the entire fund within a period of 3 years by
30.07.19
8. 15.09.2016 Morris( one of the clients) filed a chapter 11 Morris, TPI
proceedings under US code social unrest- due to and New Age
stress assets caused in two plants in Muhaba North
 Africa
TPI (Texas power, another client) faced a major legal
action from US govt. bribing govt. officials in South
East Asian countries- set up power plant there- Many
of the contracts in that country were under scrutiny.
9. 18.09.2016 Morris asked New Age to put some of its order on Morris, TPI
hold- conveyed inability to pay next tranche due on and New Age
15.10.16- did not cancel the order on hope of
chapter 11 proceedings.
TPI conveyed inability to take delivery payment
was made.
10. 4.11.2016 New Age paid the balance amount of 10% to RHPL New Age and
for completion of construction works no cash for RHPL
instalment of 31.12.16 which was 35 Lakhs-
11. 4.12.2016 BOD passed the resolution to sell the Mumbai House New Age and
to MD for Rs 5 crore- An advance of Rs 55 lakhs MD
received- Market Value speculated much higher.
12. 16.12.2016 Karnataka High Court rejected the appeal against the Custom Dept.
concealment order passed by Custom Dept. for ,KAR HC and
concealing real value of plant imported from france in New Age
2011- to avoid payment duty of Rs. 45 Lakhs- With
penalty it amounted to Rs 95 Lakhs-
H.C ordered to attach the 55 lakh amount lying in
New Age bank account in Mumbai. It had only 14
lakh but 32 lakh in another account.
New Age decided to default loans.
13. 04.03.2017 RST bank filed an application before NCLT under RST Bank
IBC,2016 and proposed S. Mahesh as IRP. ( ISSUE and New Age
1 i.e., maintainability of petition )
14. 17.03.2017 Corporate Debtor raised objections to the RST Bank
maintainability of the Application- and New Age
15. 05.04.2017 Admitted for hearing declared moratorium and RST Bank
referred the appointment of an IRP- IBBI and New Age
recommends Mr. Amit Thakur as IRP.
Amit visited to take possession of the assets not
allowed because of agitation New Age workers and
local political leaders.
Took under control and appointed XYL Security
Services for preserving units of New Age.
(ISSUE 3- was he justified taking action or were
they justified in for obstruction?)

16. 06.03.2017 Electricity supplier GSES issued demand notice for GSES and
Rs 85 Lakhs for dues of 9 months to pay within 10 New Age
days.
17. 08.03.2017 Suppliers of New Age, JSEW Ltd- refused to supply JSEW LTD
EVA film- and New Age
18. 09.04.2017 IRP wrote to peoples bank to deposit lease rentals in Peoples Bank
terms of lease from April 2015- Feb. 2017 amounting , IRP and
Rs 79, 41,026/- bank refused to pay and it is adjusting New Age
for its dues. (ISSUE 4- Justification of denial of
lease rental details?)
19. Xx/xx/xxxx IRP received from all other lenders (Indo Bank, RST IRP, Banks,
 Bank, Peoples Bank-Lenders) Operational Depositories,
Creditors, Customs, Public depositors. Creditors,
It observed Marvel Organics could not substantiate customs
its claim of Rs 136 crore and had submitted
documents which mentions tune of Rs 20 Crore.
Added the claim to list and invited COC.
(ISSUE 5- Addition to the list valid or not)
20. 08.04.2017 IRP appointed M/s. KGB Valuers and M/s AKP IRP, KGB
valuers to determine liquidation of New Age- In Valuers and
valuation it was found M/s AKP valuers to be a AKP valuers
related party to New Age.
21. 22.03.17 IRP, Public
In 2012, New Age had for its working capital invited depositories,
public depositories- due to financial crunch could not
service the interest- they filed claim before IRP- IRP
rejected as they did not fell under the purview of
operational creditor.
23. Xx/xx/xxx RST Bank challenged the claim filed by peoples bank RST bank,
and Marvel on the ground that claim filed by peoples Peoples bank
bank is inflated. and Marvel
IRP wrote to Director for taking possession of the
flat in Mumbai- no response- IRP filed an application IRP and
before NCLT Director.
(ISSUE 7- non cooperating with the IRP and
inflation of both the financial creditors)
24. Xx/xx/xxxx Xi Mao, Largest supplier of raw material refused to Xi Mao and
supply -till the times past dues of 10 crore are cleared New Age
and future payments are regularised.
25. 22/03/2017 IRP constituted a COC RHPL not a part of COC- IRP,
RHPL objected its exclusion. COC,RHPL,
( ISSUE 8- Can RHPL claim the right as COC? ) NCLT
26. 29/03/2017 First meeting of COC scheduled- IRP proposed to be COC, RP,
continued as RP- COC appointed Mr. Dhivesh Peoples Bank,
Sharma as RP. MD
Peoples Bank raised concern on sale of Mumbai Flat
to MD in December, 2016 and sale proceedings
siphoned off.
(ISSUE 9- validity of sale of Mumbai flat and
appointment of RP )
27. 07/04/2017 COC filed application for appointing Mr. Dhivesh COC, RP ,
Sharma as RP- NCLT ordered him to be IP NCLT
28. 31/03/2017 RP received a notice from lessor wrt. guest house of RP, NCLT,
New Age lease coming to end- terms of lease could Reddys , New
be done subject to 30% increment- IRP did not Age
renew and terminated- New Age filed an application
before NCLT.
(Issue 10- does New age has locus to file and was
the termination of lease valid? )
29. Xx/xx/xxxx RP received a letter from Mr. Chew John- AFB had RP, AFB,
initiated insolvency proceedings against THSPL in THSPL
Singapore- on default of debt by THSPL- letter
requests to consider this to be the centre of main
interest as it is subsidiary company. RP denied to
give higher recognition- Mr. Chew John filed an
 application before NCLT.
(Issue 11- maintainability of application and
recognition value- UNCITRAL MODEL OF
CROSS BORDER INSOLVENCY- Priority of
debts)
30. Xx/xx/xxx RP collected information and prepared the IM RP, New Age,
(Information Memorandum) invited expression of Blue Plaza,
interest for the resolution plan. JKL Pvt. Ltd.
Upon request, RP refused to provide a copy of IM to
JKL Pvt. Ltd and provided the copy of IM to
promoters and Blue plaza.
JKL filed an application before NCLT to seek a copy
of IM.
(Issue 12- Maintainability of the application,
whether entitled to a copy or not?
Two plans came up, one by New Plan submitted
by New Age
(a) Sale of New Age House property in Jaipur
(b) Proposal to lenders for reduction in amount
payable by 45 % with 10 years repayment
schedule.
(c) Payment to Operational Creditors within
three years.
(d) Payment of 60% CIRP Cost.
(e) Sale a part of share of New Age in Seven
Points at Raipur.
Another by Blue Plaza:
Blue Plaza will purchase the Jaipur, Raipur and
Singapore hotel for 125 Million USD.
(Issue 13- Validity of the Plan)
31. 20/07/2017 RP received a claim from PEG Developers for a tune RP, PEG,
of Rs 15 crore. New Age
32. 01/08/2017 COC Meeting- certain objections raised on reduction COC
in amount payable to creditors.
33. 28/09/2017 Plan was approved with modifications and COC,NCLT
accordingly, RP filed the plan with NCLT.