NCLAT Allows CIRP Withdrawal After Lenders Agree to Govt-Backed Revival Plan [Read Order]
The NCLAT stayed CIRP against the corporate debtor after lenders agreed to withdraw the insolvency case, supported by a government backed restructuring plan
NCLAT Allows CIRP Withdrawal After Lenders Agree to Govt-Backed Revival Plan
NCLAT Allows CIRP Withdrawal After Lenders Agree to Govt-Backed Revival Plan
The National Company Law Appellate Tribunal (NCLAT), Principal Bench, has allowed the withdrawal of insolvency proceedings initiated against SE Transstadia Pvt. Ltd., after the lead lender Bank of Baroda, along with other financial creditors, consented to a revival plan supported by the Government of Gujarat.
The matter arose from two appeals filed by Udit Harish Seth, a suspended director of SE Transstadia, challenging the admission of a Section 7 application by the National Company Law Tribunal (NCLT) on April 8, 2024. The NCLT had allowed the initiation of Corporate Insolvency Resolution Process (CIRP) based on a plea filed by Bank of Baroda.
The main issue in the appellant's case was the contention that the company had already submitted a One-Time Settlement (OTS) proposal worth ₹108 crore to the lenders and that the Gujarat government had agreed in principle to infuse funds to support the company's revival. On April 12, 2024, the NCLAT had granted an interim stay on the CIRP order, giving both sides time to explore a settlement.
Over the following months, multiple meetings were held between the lenders, SE Transstadia representatives, and government officials. Minutes of Joint Lenders' Meetings (JLMs) submitted during the proceedings showed that while some concerns remained, such as interest payment structures and pending disbursals from the Gujarat Tourism Corporation (TCGL), a general consensus had been reached to pursue restructuring instead of insolvency.
In a JLM dated April 2, 2025, it was recorded that Bank of Baroda, Union Bank of India, and Bank of India were in-principle agreeable to withdraw the CIRP proceedings, provided the restructuring is formalized within six months. The lenders had also issued No Objection Certificates (NOCs) allowing SE Transstadia to create a charge over shares and assets to secure the proposed government-backed funding.
SE Transstadia claimed that its bookings and revenue had suffered significantly following the NCLT admission, as clients hesitated to engage with a company under insolvency. With major events like Navratri and Ganesh Utsav approaching, and even the potential hosting of 2036 Olympic events at the company’s stadium being discussed, the company expressed urgency in finalizing the restructuring plan.
Taking note of these developments, and affidavits filed by both the appellant and Bank of Baroda confirming consent terms dated July 5, 2025, the NCLAT found that no useful purpose shall be served in keeping the appeal pending. The Tribunal granted liberty to Bank of Baroda to file an application under Section 12A of the Insolvency and Bankruptcy Code, 2016, seeking formal withdrawal of the CIRP before the Adjudicating Authority.
It was held that the stay on the April 8, 2024 order will continue, and the Interim Resolution Professional (IRP) has been directed to assist with the withdrawal process upon receiving Form FA from the lead bank.
The Tribunal’s bench comprising Justice Ashok Bhushan (Chairperson) and Barun Mitra (Technical Member) disposed of both appeals as a result.
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