NCLT Rejects Applicant’s Plea Challenging Approved RP as He Being a Third Party Had No Nexus to CIRP of Corporate Debtor

Case Details: Astral Agro Ventures v. Vakati Balasubramanyam Reddy - [2025] 170 taxmann.com 771 (NCLT-Mum.)

Judiciary and Counsel Details

• Ms Reeta Kohli, Judicial Member & Ms Madhu Sinha, Technical Member
• Madhavi Nallurai, Adv. for the Applicant.
• Akash Menon, Pulkitesh Dutt Tiwari, Advs. & Ankit Pitti, CA for the Respondent.

Facts of the Case

In the instant case, the CIRP of the corporate debtor was initiated and respondent/RP was appointed. The Respondent made public announcements inviting Expressions of Interest (‘EOI’) from interested Prospective Resolution Applicants (‘PRAs’) for corporate debtor.

The applicant/PRA submitted EOI regarding the CIRP. The applicant sought an extension for submitting the resolution plan and the Committee of Creditors (CoC) approved the applicant’s request.

The Resolution Plan submitted by SRA/company ‘A’ was declared as approved by the CoC. Thereafter, the applicant filed an instant application seeking rejection of the resolution plan submitted by the SRA on the ground that one of the directors of SRA, RJ was suspended director of the company ‘ABG’ whose accounts were declared NPA

Accordingly, the applicant alleged that SRA was ineligible as per the provisions of section 29A of the IBC.

It was noted that since the corporate debtor was an MSME, the provision laid down in section 240A of the IBC would be applicable and thus, as per section 240A provisions of section 29A(c) and (h) would not apply.

Further, it was noted that EOI which forms basis of petition was not submitted by applicant, thus, applicant was a third party with no nexus to CIRP of corporate debtor and had no basis or locus for filing instant application.

NCLT Held

The NCLT held that since applicant never submitted a resolution plan nor provided any evidence of EMD payment, instant application was filed with malafide intentions and was designed to cause unwarranted delay in the CIRP of the corporate debtor and was to be dismissed.

List of Cases Reviewed

• MK Rajagopalan v. S. Rajendran [Company Appeal (AT) (CH) (INS) No. 58 of 2023 NCLAT, (Para 5), followed.

List of Cases Referred to

• M.K. Rajagopalan v. Dr. Periasamy Palani Gounder & Anr. [Civil Appeal Nos. 1682-1683 of 2022] (para 18)
• Arikala Narasa Reddy v. Venkataram Reddy Reddygari & Anr. 2014 (5) SCC 312 (para 3).