NCLT’s order directing CoC to consider RP of other resolution applicants submitted after CIRP was unsustainable: NCLAT

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  • Last Updated on 9 December, 2022

Resolution Plan

Case Details: Mohammed Enterprises (Tanzania) Ltd. v. Alok Kailash Saxena Resolution Professional Associate Décor Ltd. - [2022] 145 218 (NCLAT-Chennai)

Judiciary and Counsel Details

    • M. Venugopal, Judicial Member & Kanthi Narahari, Technical Member
    • Abhijeet Sinha, Adv. for the Appellant.
    • P.H. Arvindh Pandian, Sr. Adv. for the Respondent.

Facts of the Case

In the instant case, the Corporate Insolvency Resolution Process (CIRP) was initiated against the corporate debtor, and Resolution Professional (RP) was appointed. Later, he published an invitation for Expression of Interest (EoI) for the submission of a resolution plan.

The appellant-successful resolution applicant submitted its resolution plan, and the plan of the appellant was approved by the Committee of Creditors (CoC) with a 100 per cent voting share. The appellant, on being confirmed, also furnished a performance bank guarantee, and RP filed an application before NCLT seeking approval of the resolution plan of the appellant, however, in view of the outbreak of Covid 19 and the restriction on movement imposed, the hearing was not taken up.

Later, the Respondent placed a request before RP to submit a resolution plan, and the same was rejected by the RP on the grounds that the resolution plan of the appellant had already been approved by the CoC and an application for approval of the plan had already been filed by the RP before the Adjudicating Authority.

Consequently, Respondent filed an application before NCLT for approval of the resolution plan and to give directions to RP to place the resolution plan before CoC for its consideration. The NCLT disposed of the application filed by the appellant seeking approval of the resolution plan.

On appeal, the appellant submitted that the NCLT, without approving or rejecting the resolution plan of the appellant, disposed of the application filed by the appellant.

The appellant further submitted that the Respondent earlier submitted an EOI to submit a resolution plan for the corporate debtor, however, they backed out of the process and did not submit any resolution plan within date specified for submission of the resolution plan. The appellant also submitted that the CIRP period had already been concluded and no resolution plan could have been accepted thereafter.


Hon’ble NCLAT observed that the NCLT is not authorized to pass any order which would circumvent and attempt to frustrate the resolution plan pending before it for consideration. Further, NCLAT held that the respondent once backed out from participating in the resolution process, after completion of CIRP period their application could not be considered.

Therefore, the order of the NCLT allowing the application of respondent for consideration of their resolution plan was unsustainable and the same was to be set aside.

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