NCLAT Allows Appeal, Approves Resolution Plan for Appellant: Held NCLT Overstepped by Interfering in CoC’s Commercial Wisdom [Read Order]

The National Company Law Appellate Tribunal (NCLAT) in a recent case, has overturned the order of the National Company Law Tribunal (NCLT), Chandigarh Bench, which had rejected the resolution plan for Trishul Dream Homes Ltd. The appellate body has now approved the resolution plan submitted by Vashishth Builders and Engineers Ltd. and Vashishth Estates Ltd. (in consortium), directing the NCLT to pass necessary consequential orders within 60 days.

The corporate insolvency resolution process(CIRP) for Trishul Dream Homes Ltd. commenced on June 16, 2023, following an order passed by the NCLT. After due process including multiple rounds of Committee of Creditors constitution, valuation reports, and public announcements, a resolution plan submitted by Vashishth & Vashishth was placed before the CoC. The plan received approval, securing 91.55% of the CoC’s vote share which was well above the required threshold.

Despite this, the NCLT dismissed the plan approval application on April 23, 2025, citing various technical and procedural irregularities, including concerns about asset valuation, statutory liabilities, and non-compliance with Regulation 6A regarding communication to creditors. This gave way for three separate appeals: one by the CoC, one by the Resolution Professional (RP), and another by the Successful Resolution Applicant (SRA).

The NCLAT, in its analysis, found that none of the objections raised by the NCLT constituted a valid ground for rejection of the resolution plan under Section 30(2) of the IBC. The appellate body asserted that once the CoC has exercised its commercial wisdom and approved a resolution plan that complies with legal requirements, the adjudicating authority is not permitted to interfere.

The NCLAT particularly criticized the NCLT for questioning the asset valuation figures, noting that valuations had been conducted by IBBI-registered valuers and were accepted by all stakeholders without objection.

The tribunal observed that no stakeholder raised concerns regarding the valuation process, which was undertaken in accordance with CIRP regulations and held the NCLT’s interference on this ground as unwarranted.

On the issue of compliance with Regulation 6A (regarding notice to creditors), the NCLAT pointed to a compliance affidavit filed by the Resolution Professional showing individual notices had been sent to 174 creditors, with 24 returned undelivered. The affidavit also detailed that belated claims were addressed and included in the resolution plan, demonstrating compliance.

The NCLAT noted that even where communication could not be delivered, the public announcement under Regulation 6 served as communication as per the proviso to Regulation 6A. The NCLT had also objected to the lack of explicit provisions for certain statutory liabilities in its order. The NCLAT in this regard clarified that the SRA had filed an affidavit undertaking to cover all statutory dues post-approval, thereby satisfying the requirement under Section 30(2)(e).

The Tribunal comprising Justice Ashok Bhushan (Chairperson), and Members (Technical) Barun Mitra and Arun Baroka, upheld the clause in the plan that allowed the SRA to retain proceeds from avoidance applications (PUFE claims), citing Regulation 38(2)(d), which empowers applicants to propose how such recoveries are handled.

Citing the Supreme Court’s rulings in Maharashtra Seamless, and Ramkrishna Forgings, the NCLAT asserted that judicial review of a CoC-approved resolution plan is limited to checking compliance with Section 30(2) and not to assess fairness, feasibility, or business logic. It was asserted that in the absence of any violation of Section 30(2), the adjudicating authority cannot substitute its views for that of the CoC. The NCLAT set aside the NCLT’s order, and approved the resolution plan directing the Bench to issue consequential orders within 60 days.

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