NCLAT Imposes Rs. 15 Lakh Cost on PRA for Disrupting CIRP Without Locus Standi

Case Details: Astral Agro Ventures vs. Vakati Balasubramanyam Reddy [2025] 180 taxmann.com 604 (NCLAT-New Delhi)

Judiciary and Counsel Details

• N. Seshasayee, Judicial Member & Arun Baroka, Technical Member
• Amey Hadwale, Adv. for the Appellant.
• Abhira Raj & Shivesh Kaushik, Advs. for the Respondent.

Facts of the Case

In the instant case, in CIRP of the corporate debtor, resolution plan submitted by successful resolution applicant (SRA) was approved by the CoC in its meeting, which was subsequently approved by the NCLT. The appellant-PRA filed an instant appeal challenging the order of the NCLT dismissing its application, which it had taken out for rejection of the resolution plan submitted by SRA, inter alia, on the ground that a fair opportunity to participate in the resolution process was not provided.

It also alleged that SRA did not satisfy net-worth value as had been fixed in Form G. It was noted that the appellant, undoubtedly, was one of the shortlisted PRAs by RP, and it had been required to submit its resolution plan.

However, until the SRA plan was opened and approved, the appellant did not make any attempt to submit its plan. Thus, appellant had no locus standi to challenge the decision of CoC to approve only the resolution plan before it. Further, when there was only one resolution applicant on fray, how did it matter to the appellant as to when the meeting was convened or how the CoC had deliberated.

The NCLAT noted that, at any rate, the appellant was not a material infraction that would affect the legality of the resolution process. Secondly, Form G only mentions about effective net worth and not net worth and respondent had established effective net worth as required.

NCLAT Held

The NCLAT held that, whether SRA was disqualified under Section 29A(b) of the IBC read with Section 29A(j), the appellant had no locus standi to even prefer either an application before NCLT or an appeal before the NCLAT, as it had not even submitted its plan, and inasmuch as the issue would fall under the domain of the Adjudicating Authority.

Thus, the instant appeal against the order of NCLT was to be dismissed, and since the appellant had unnecessarily interfered with the resolution process and halted it, a cost of Rs 15 lakhs was to be slapped on it.

List of Cases Reviewed

• Astral Agro Ventures vs. Vakati Balasubramanyam Reddy [2025] 170 taxmann.com 771 (NCLT-Mum.)/[2025] 254 COMP CASE 30 (NCLT-Mum.) (Para 18) affirmed
• Arcelor Mittal (India) (P.) Ltd. v. Satish Kumar Gupta [2018] 98 taxmann.com 99/150 SCL 354 (SC)/(2019)2 SCC 1 (Para 10.1) followed

List of Cases Referred to

• Swiss Ribbons Pvt. Ltd v. Union of India [2019] 101 taxmann.com 389/152 SCL 365 (SC) (para 7)
• Ramesh Kesavan v. CA Jasin Jose [2024] 167 taxmann.com 407 (NCLAT – Chennai) (para 7)
• M.K.Rajagopalan v. S. Rajendran [C.A.(AT)(INS) 58 of 2023] (para 7)
• J.M.Financial Asset Reconstruction Company v. Well-Do Holdings and Exports Pvt. Ltd. [C.A.134 of 2019] (para 7)
• Arcelor Mittal (India) (P.) Ltd. v. Satish Kumar Gupta [2018] 98 taxmann.com 99/150 SCL 354 (SC) (para 10.1)
• Prio SA v. Pravin R. Nandavar [Company Appeal (INS) No. 1650 of 2023] (para 10.2)
• Meir Commodities India Pvt Ltd v. Narayanam Nageswara Rao [C.A.(AT)(CH)(INS) No.206 of 2024] (para 10.2)
• Ganga Construction (Consortium) v. Anil Kumar Mittal [C.A.(AT)(Ins) No:185 of 2025, dated 4-11-2025] (para 10.2)
• Deccan Paper Mills Co. Ltd. v. Regency Mahavir Properties [2021] 4 SCC 786 (para 12.1)
• Booz Allen and Hamilton Inc. v. SBI Home Finance Limited [2011] 5 SCC 532 (para 12.1)
• Viswanathan v. Rukn-ul-Mulk Syed Abdul Wajid AIR 1963 SC 1 (para 12.1)
• Dorni Vinimoy Pvt. Ltd. v. Rachna Anachalia RP of Imperial Tubes Pvt. Ltd. [C.A.411 of 2025, dated 13-10-2025] (para 14).