Non‑submission of final Resolution Plan bars challenge: NCLAT upholds CIRP and approved plan [Read Order]

The National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi, has upheld the approval of the resolution plan , rejecting the challenge mounted by the appellant.

The appeal arose from the order of the National Company Law Tribunal (NCLT), which had dismissed the consortium’s application questioning the Letter of Intent issued in favour of the respondent and seeking its disqualification under Section 29A of the Insolvency and Bankruptcy Code, 2016.

The case traces back to Varutha Developers Pvt. Ltd., which had purchased land measuring 9.2625 acres in Sector 62, Gurgaon, financed by a ₹300 crore loan from SREI Equipment Finance Ltd. Following defaults, SREI initiated CIRP proceedings in December 2023.

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The Resolution Professional invited expressions of interest, and eight prospective resolution applicants (PRAs), including Ganga Construction Consortium and Manglam Multiplex, submitted preliminary plans.

During the challenge mechanism, the Resolution Professional required financial bids of at least ₹250 crore. While Manglam Multiplex and other applicants complied, Ganga Construction Consortium failed to submit a final resolution plan despite being given opportunities.

Consequently, the consortium was eliminated from the process. The CoC, comprising SREI Equipment Finance Ltd. with 100% voting share, approved Manglam Multiplex’s plan unanimously in November 2024, and a Letter of Intent was issued on December 4, 2024.

Aggrieved, Ganga Construction Consortium approached the NCLT alleging collusion between Manglam Multiplex, M3M India Pvt. Ltd., and its group companies New Era Propcon and Swastik Infrasolutions, and claimed that Manglam was ineligible under Section 29A(c), (h), (i), and (j).

The NCLT rejected these arguments, noting that the consortium had opted out of the process and lacked locus to challenge the eligibility of the successful resolution applicant.

On appeal, the NCLAT concurred with the NCLT’s findings. Ashok Bhushan(Chairperson) and Arun Baroka (Technical Member) , delivering the judgment, emphasised that non‑submission of a final resolution plan bars an applicant from questioning the CIRP outcome.

The Tribunal observed that the consortium neither participated in the challenge mechanism nor submitted a compliant plan, and therefore could not later allege irregularities.

The NCLAT also examined the allegations of ineligibility under Section 29A. It held that the Share Purchase Agreement of 2019 between Varutha’s shareholders and M3M group entities never fructified, as the Enforcement Directorate had attached the land and shares were never transferred.

Consequently, no de facto or de jure control was acquired by M3M or its affiliates. The Collaboration Agreement of 2020 similarly did not confer management rights. The Tribunal concluded that Manglam Multiplex was not disqualified under Section 29A, and the appellant’s claims were misconceived.

Importantly, the NCLAT referred to its earlier decision in appeals filed by another PRA, the Consortium of Sakshi Chandana, where the entire CIRP process had been upheld.

Reinforcing the Supreme Court’s ruling in K. Sashidhar v. Indian Overseas Bank (2019), the Tribunal reiterated that judicial interference in resolution plan approval is limited to verifying compliance with Section 30(2) and Section 31 of the IBC, and cannot extend to questioning the CoC’s commercial wisdom. The tribunal dismissed the appeals

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