Jayesh Sanghrajka vs Shree Naman Developers Private Limited & Anr.

The present Application is filed by Resolution Professional Mr. Jayesh Sanghrajka (“Applicant/Resolution Professional/RP”) Under Section 30 (6) r/w Section 31(1) of the Insolvency and Bankruptcy Code, 2016 (“Code”), r/w. Regulation 39(4) of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 for seeking approval of the Resolution Plan dated 12.03.2026 along with clarification dated 07.05.2026 (“Resolution Plan”) for Gstaad Hotels Private Limited (“Corporate Debtor”) submitted by Shree Naman Developers Private Limited (“Respondent No. 1;/SRA”) which was placed before the members of the Committee of Creditors (“CoC”) in the 16^th Meeting of the CoC held on 08.05.2026 and voted with 99.93% votes on 13.07.2025.

The present Application is being filed by Mr. Jayesh Sanghrajka, the resolution professional of the Corporate Debtor above-named, who is registered as an ‘Insolvency Professional’ with the Insolvency and Bankruptcy of India (“IBBI”) and his Registration No. is IBBI/IPA-001/IP-P00216/2017-18/10416.

The Respondent No. 1, being the successful resolution applicant with respect to the Corporate Debtor ("Resolution Applicant" or "RA") whose resolution plan dated 12.03.2026 along with clarification dated 07.05.2026 ("Resolution Plan") has been approved by the committee of creditors of the Corporate Debtor ("CoC") and Respondent No. 2 is the CoC of the Corporate Debtor.

This Tribunal vide the Order 09.01.2024 (“First Admission Order”) admitted the corporate debtor into CIRP and appointed Mr. Jayesh Sanghrajka as the interim resolution professional of the Corporate Debtor.

It is submitted that, being aggrieved by the order admitting the Corporate Debtor into CIRP, the suspended director of the Corporate Debtor preferred Company Appeal (AT) (Insolvency) No. 165 of 2024 before the Hon'ble NCLAT. By an interim order dated 24.01.2024, the Hon'ble NCLAT stayed the constitution of the CoC pending further orders, pursuant to which the CIRP could not progress during the pendency of the said Appeal.

It is submitted that, by judgment dated 08.01.2025, the Hon'ble NCLAT, while allowing Company Appeal (AT) (Insolvency) No. 165 of 2024, set aside the earlier admission order and remanded the matter to this Tribunal for fresh consideration in accordance with law. Pursuant thereto, this Tribunal, after hearing the parties afresh and considering the observations made by the Hon'ble NCLAT, vide order dated 08.07.2025 (“Second Admission Order”), admitted the Section 7 Petition, commencing the Corporate Insolvency Resolution Process (CIRP) of the Corporate Debtor, and re-appointed Mr. Jayesh Sanghrajka as the Interim Resolution Professional (IRP).

Pursuant to the Second Admission Order, a public announcement was issued on 10.07.2025, calling upon the creditors to submit their claims. The Resolution Professional verified the claims received and constituted the Committee of Creditors in accordance with Section 21 of the Code as on 30.07.2025.

Omkara Assets Reconstruction Private limited was the principal Secured financial creditor holding voting share of 95.76%, Global Hospitality Licensing S.A.R.L. holding voting share of 3.20%, Kanazawa Holdings Private Limited (unsecured) holding 0.91% voting share and Ahuja Finance Company Private Limited (Unsecured) holding 0.13 % voting share.

The 1^st meeting of the Committee of Creditors was was held on 06.08.2025, wherein the CoC, with 100% voting share, confirmed the appointment of the Applicant, who was then functioning as the Interim Resolution Professional (IRP), as the Resolution Professional of the Corporate Debtor. It is further submitted that, with the approval of the CoC, M/s Nangia & Co. LLP was appointed as the Transaction Auditor to examine the transactions of the Corporate Debtor in relation to preferential, undervalued, extortionate credit and fraudulent transactions under Sections 43, 45, 50 and 66 of the Insolvency and Bankruptcy Code, 2016.

It is submitted that the Second Admission Order was challenged by the promoters before the Hon'ble NCLAT in Company Appeal (AT) (Ins.) No. 1040 of 2025, which came to be dismissed vide order dated 19.08.2025. Thereafter, the promoters preferred an appeal before the Hon'ble Supreme Court, which is stated to be pending. However, as no stay has been granted by the Hon'ble Supreme Court on the CIRP proceedings, the Corporate Insolvency Resolution Process continued in the ordinary course, culminating in completion of the resolution process and filing of the present Application.

The 2^nd meeting of the Committee of Creditors (CoC) held on 21.08.2025, the CoC approved the appointment of KKCA Valuers LLP and RNC Valuecon LLP as the Registered Valuers for determination of the fair value and liquidation value of the Corporate Debtor in accordance with the provisions of the Insolvency and Bankruptcy Code, 2016.

The 3^rd meeting of the Committee of Creditors (CoC) held on 29.08.2025, the CoC, with 100% voting share, approved the proposed timelines for issuance of Form G and the eligibility criteria for inviting prospective Resolution Applicants to submit Expressions of Interest (EOIs) to submit the Resolution Plans for the Corporate Debtor. Pursuant thereto, the Resolution Professional published Form G on 30.08.2025, inviting Expressions of Interest (EOIs) from prospective Resolution Applicants. Further, with the approval of the CoC in its 4^th CoC Meeting which was held on 14.09.2025, the last date for submission of EOIs was extended from 15.09.2025 to 25.09.2025, and a clarification to Form G was accordingly published on 16.09.2025.

Pursuant to the issuance of Form G, the Resolution Professional received 43 Expressions of Interest (EOIs) from prospective Resolution Applicants by the extended deadline of 25.09.2025. In compliance with Regulation 36A (10) of the CIRP Regulations, the provisional list of eligible prospective Resolution Applicants was circulated to the CoC and all PRAs on 30.09.2025. Along with the submission of the EOIs, the PRA’s were required to submit refundable Earnest Money Deposit (EMD) of Rs. 5,00,00,000/-.

The 6^th meeting of the CoC held on 23.10.2025, the CoC ratified the revised timelines for the CIRP, including the publication of the final list of Prospective Resolution Applicants (PRAs). Accordingly, the final list of 40 eligible PRAs was published on 27.10.2025, wherein Respondent No. 1 was included. The eligible PRAs executed the requisite confidentiality undertakings, pursuant to which the Resolution Professional provided them access to the Information Memorandum (IM), the Virtual Data Room (VDR) and the Request for Resolution Plan (RFRP).

Pursuant to the issuance of the Request for Resolution Plan (RFRP), the Resolution Professional received 13 Resolution Plans on 27.11.2025. The Resolution Applicants furnished the affidavits and undertakings prescribed under Section 30(1) read with Section 29A and Section 32A of the Insolvency and Bankruptcy Code, 2016, as well as Regulation 39(1) of the CIRP Regulations, confirming their eligibility to submit Resolution Plans for the Corporate Debtor.

Thereafter, The Resolution Plans were circulated to the members of the Committee of Creditors (CoC) and the suspended Board of Directors on 10.12.2025, where after the Resolution Professional, in consultation with the CoC and its advisors, undertook a detailed evaluation of the Resolution Plans through discussions, negotiations and presentations by the Resolution Applicants to ensure compliance with the provisions of the Code, the CIRP Regulations and the RFRP.

In the 9^th CoC Meeting held on 24.12.2025, the CoC, upon considering the queries raised by certain Resolution Applicants regarding a challenge mechanism, noted the material differences in the structure and commercial terms of the Resolution Plans, including treatment of cash balances, continuation of the Marriott arrangement, statutory dues, reliefs sought from Government authorities and the implementation reference date. Accordingly, the CoC decided to proceed with bilateral discussions, clarifications and negotiations with the respective Resolution Applicants instead of conducting a challenge mechanism, considering the same to be commercially appropriate and conducive to value maximisation, particularly as the RFRP vested discretion with the CoC to adopt such mechanism as it deemed appropriate.

In the 16^th meeting of the Committee of Creditors (CoC) held on 08.05.2026, the compliant Resolution Plans submitted by all 13 Resolution Applicants were placed before the CoC for consideration. The CoC evaluated the Resolution Plans on the basis of the approved Evaluation Matrix and examined their feasibility and viability in accordance with Section 30(4) of the Insolvency and Bankruptcy Code, 2016. The CoC approved a tie-breaker mechanism in terms of Regulation 39(3B) of the CIRP Regulations to be applied in the event of equal voting, based on the Evaluation Matrix score, maximum NPV offered to all creditors, and maximum upfront cash payment to the secured financial creditors.

Pursuant to the evaluation of the Resolution Plans, the Committee of Creditors (CoC) conducted e-voting from 10.05.2026 to 11.05.2026 for approval of the Resolution Plan and issuance of the Letter of Intent (LOI) to the Successful Resolution Applicant. Upon conclusion of the e-voting process on 11.05.2026, the CoC, with 98.96% of the voting share, approved the Resolution Plan submitted by Respondent No. 1 as the Successful Resolution Plan. A brief snapshot of voting results on the Resolution Plan of Respondent No. 1 is set out below:

Pursuant to the approval of the Resolution Plan by the Committee of Creditors (CoC), the Resolution Professional issued a Letter of Intent (LOI) dated 11.05.2026 in favour of the Successful Resolution Applicant.

In compliance with the terms of the Request for Resolution Plan (RFRP), the Successful Resolution Applicant (SRA) furnished a Performance Bank Guarantee dated 14.05.2026 for an amount of Rs. 161,10,00,000/-, being 10% of the Resolution Plan value, issued by HDFC Bank Limited, in favour of the Omkara Assets Reconstruction Private Limited, thereby fulfilling the post-approval obligations under the RFRP.

The Resolution Professional placed before the CoC the compliance status, feasibility and viability assessment, and the statutory compliance certificate in Form H. Hence, the present application.

Going Concern: The Resolution Plan envisages continuation of the Corporate Debtor as a going concern, with the proposed redevelopment and refurbishment of its hotel premises into a high-end mixed-use property comprising luxury hospitality, residential and retail/commercial facilities, including fine-dining and premium office spaces. The Resolution Applicant has further proposed strengthening the management and operational capabilities of the Corporate Debtor through appointment of suitable managerial personnel and turnaround experts and infusion of the requisite technical, financial and human resources to revive and scale up its operations.

Capital Expenditure: The Resolution Plan provides for infusion of additional amounts by the Resolution Applicant towards capital expenditure, working capital, contingent and other general corporate expenses, without recourse to the assets of the Corporate Debtor or any obligation on the CoC members. The Resolution Applicant also proposes to undertake necessary capital expenditure, based on the remaining useful life of the existing assets, to ensure continuity and improvement of the business operations.

Manpower: The Resolution Plan provides for strengthening the management and manpower of the Corporate Debtor through appointment of turnaround experts, key managerial personnel and other suitably qualified personnel, including CEO, COO, CFO and personnel in sales, marketing, finance, HR and operations. The Resolution Applicant also proposes to leverage the expertise of its existing management team and recruit additional industry-experienced personnel, together with appropriate incentive and monitoring mechanisms, to facilitate the effective turnaround and operation of the Corporate Debtor.

Fund Infusion: The Resolution Plan provides for realignment of the capital structure of the Corporate Debtor to viable and sustainable levels through infusion of funds by the Resolution Applicant by way of equity, debt, convertible securities, subordinate convertible loans or any other appropriate means. The funds so infused or caused to be infused shall, inter alia, be utilised towards settlement of the claims of the stakeholders in accordance with the terms of the Resolution Plan.

Treatment of Stakeholders: The Resolution Plan provides for an upfront payment of an aggregate amount of Rs. 1,611,00,00,000 towards discharge of all admitted debts and contingent debts, if payable, in accordance with the terms of the Resolution Plan. The Resolution Amount shall be funded by the Resolution Applicant and/or the Implementing Entity through infusion of funds by way of equity, debt, convertible securities, subordinate convertible loans or other appropriate means, from their own funds, group company funds and/or external borrowings from banks or financial institutions.

Unpaid CIRP Cost & Interim Process Cost: The Resolution Plan provides that the Unpaid CIRP Costs shall be paid in priority to all other payments on the Payment Date, in accordance with Section 30(2)(a) of the code. It is further provided that the Interim Process Costs shall be borne by the Resolution Applicant at actuals, over and above the Resolution Plan Amount, and shall be paid after the Unpaid CIRP Costs but before any distribution to other stakeholders.

Operational Creditors: The Resolution Plan provides for payment of 100% of the admitted claims of the Operational Creditors in accordance with Section 30(2)(b) of the Code and Regulation 38(1) of the CIRP Regulations. The admitted claims of the Operational Creditors shall be paid in full and final settlement on the Payment Date, after payment of the CIRP Costs and Interim Process Costs, and in priority to the payments proposed to the Financial Creditors.

Dissenting Financial Creditors: The Resolution Plan provides that the dissenting Financial Creditors shall receive at least the amount payable to them in accordance with Section 53(1) of the Code in the event of liquidation of the Corporate Debtor, and such payment shall be made in priority to the payments to assenting Financial Creditors, in compliance with Section 30(2)(b) of the Code and the applicable provisions of the CIRP Regulations.

Secured Financial Creditors: The Resolution Plan provides for upfront payment to the assenting Secured Financial Creditors from the balance Resolution Amount after making the payments and deductions specified therein, including Unpaid CIRP Costs, payments to other stakeholders, the initial equity subscription amount and any Excess Payment. Upon such payment, the Resolution Applicant reserves the right to acquire or take assignment of the Assigned Debt along with the related rights, subject to the exclusions specified in the Resolution Plan. Any amount remaining after satisfaction of the accrued interest, where applicable, shall be distributed in accordance with Section 53(1) of the Code.

The Resolution Plan provides that the Implementing Entity shall infuse an amount of Rs. 1,00,00,000/- into the Corporate Debtor towards the initial equity subscription. In consideration thereof, the Corporate Debtor shall issue 10,00,000 equity shares of Rs. 10/- each to the Implementing Entity, thereby facilitating implementation of the Resolution Plan and recapitalisation of the Corporate Debtor.

The Resolution Plan further provides that, upon implementation, the entire existing issued, subscribed and paid-up equity share capital (other than the newly issued equity shares subscribed by the Resolution Applicant/Implementing Entity or their nominees) and the preference share capital of the Corporate Debtor shall stand extinguished without payment of any consideration, on the ground that the existing share capital is not represented by the available assets of the Corporate Debtor, thereby enabling restructuring of the capital structure in accordance with the Resolution Plan.

The Applicant submits that Monitoring Committee shall be constituted consisting of;

Source of Funds: The Resolution Applicant proposes to fund the Resolution Amount of INR 1,611 crores from its own sources and/or group company funds and/or through external debt raised from banks and financial institutions. The funds shall be infused into the Corporate Debtor by the Implementing Entity, directly or indirectly, by way of equity, quasi-equity, debt, convertible securities, subordinate convertible loans, or a combination thereof.

Performance Guarantee: The Resolution Professional has submitted Form-H under Regulation 39(4) of the CIRP Regulations to certify that Performance Guarantees of Rs. 161,10,00,000 has been submitted by HDFC Bank Limited in favor of Omkara Assets Reconstruction Private Limited. The performance bank guarantee dated 14.05.2026 and is valid up till 13.05.2027, with an additional claim period of 12 months.

Term and Implementation of Plan: The implementation and term of the Plan shall commence from the Approval Date and continue until the Transfer Date. All payments to stakeholders shall be made on an upfront basis on the Payment Date, which shall be no later than 30 days from the Approval Date. The Transfer Date, by which all implementation steps including capital restructuring and reconstitution of the Board shall be completed, shall be no later than 30 days from the Approval Date.

In compliance of Section 30(2) of IBC, 2016, the Resolution Professional has examined the Resolution plan of the Successful Resolution Applicant and confirms that this Resolution Plan:

It is further confirmed by Applicant that, in compliance of the Section 30(4) of the IBC, 2016, the Resolution Plan is feasible and viable, according to the CoC (b) has been approved by the CoC with 98.96% voting share.

It is further confirmed by Applicant that, in compliance of Regulation 38 of CIRP Regulations, the Resolution Professional confirms that the Resolution plan provides that;

The amount due to the Operational Creditors under Resolution Plan shall be given priority in payment over Financial Creditors.

The Resolution Plan includes a statement as to how it has dealt with the interest of all stakeholders.

The Resolution Plan provides:

The Resolution Professional has filed an affidavit dated 15.06.2026 stating that, pursuant to the order dated 02.06.2026 passed by this Tribunal in IA (I.B.C)/2098(MB)2026, condoning the delay and directing inclusion of claims aggregating to Rs. 65,48,402/- of certain Operational Creditors and an Employee, the revised List of Creditors was placed before and taken on record by the CoC in its 17^th meeting held on 09.06.2026. Consequently, the Resolution Professional has revised and updated the Form-H filed with the Plan Approval Application and placed the Revised Form-H on record before this Tribunal. The relevant extracts of which are reproduced hereunder:

The details of the CIRP are as under:

The details and documents related to the Successful Resolution Applicant are as under:

The list of financial creditors of the CD being members of the CoC and distribution of voting share among them is as under:

Details of Realisable Amount:

An Application IA (IBC)/2516/2026 is filed by Mr. Deepak B. Raheja and Mrs. Anita D. Raheja (hereinafter collectively referred to as the “Applicants”), in their capacity as members of the Suspended Board of Directors of Gstaad Hotels Private Limited (Corporate Debtor), under Section 60(5) of the Insolvency and Bankruptcy Code, 2016 (“Code”) read with Rule 11 of the National Company Law Tribunal Rules, 2016 (“Rules”), seeking, inter alia, the following major reliefs:

The Applicants, being the Suspended Directors of the Corporate Debtor, have opposed the approval of the Resolution Plan dated 12.03.2026 along with clarification dated 07.05.2026, alleging that the CIRP proceeded on the basis of disputed, unverified and continuously evolving claims and that the Resolution Professional failed to independently verify the claims forming the basis of the constitution and voting share of the CoC, particularly the financial debt claimed by Omkara Assets Reconstruction Private Limited, including penal/default interest and other charges, resulting in material defects in claim admission, creditor classification, voting rights and stakeholder treatment.

The Applicants have raised following issues in their challenge to the resolution plan dated 12.03.2026 along with clarification dated 07.05.2026:

In the present case the objectors are suspended directors and guarantors also, besides being promoters and majority shareholders of the corporate debtor. Further, the objectors being suspended board members had the notice of the CoC meetings, accordingly they could not allege carrying of the CIRP process in the manner contrary to the law at this stage, while they could have raised some of the issues, raised now, earlier before this tribunal in relation thereto. Nonetheless, it is relevant to note that the objectors being the suspended board members were issued notice of COC meetings, therefore they ought to be fully conversant with the manner in which CIRP process leading to the approval of resolution plan was run.

The Applicants have principally questioned the admission and determination of the claim of Omkara Assets Reconstruction Private Limited (“Omkara ARC”), which constituted the substantial majority of the voting share in the CoC. According to the Applicants, the said claim was not subjected to adequate borrower-wise reconciliation and independent verification with respect to the quantification of debt, recoveries, interest, ECLGS facilities, assignment of debt and compliance with the Security Trustee framework and the underlying security arrangements.

The Applicants further contended that, notwithstanding the alleged assignment in favour of Omkara ARC, Piramal continued to exercise control over the borrower accounts, issue instructions to IDBI Trusteeship and receive recoveries. It is therefore submitted that the Resolution Professional ought to have examined the effect of such transactions and the compliance with the Security Trustee Agreement, Deed of Adherence and other requirements relating to transfer and perfection of the security interests before recognising Omkara ARC as the dominant secured financial creditor.

It is further contended that the admission of claims relating to ECLGS-backed facilities, penal/default interest, post-assignment accruals and other interest components was not preceded by adequate reconciliation and independent verification. According to the Applicants, such disputed components materially affected the quantum of admitted financial debt and, consequently, the voting rights of the respective creditors.

The Applicants also challenge the treatment of assets and recoveries under the Resolution Plan, particularly the proposed utilisation of avoidance transaction recoveries, cash balances and additional interest for the benefit of the Secured Financial Creditors. It is contended that such treatment, coupled with extinguishment of the existing shareholding, including that of the shareholders, was not supported by an adequate valuation or stakeholder-balancing exercise.

The Applicants further submit that the creditor universe and liability structure remained unsettled even after approval of the Resolution Plan by the CoC, particularly in view of the order dated 02.06.2026 permitting inclusion of additional claims. According to the Applicants, the subsequent changes demonstrate that the Resolution Plan was approved on the basis of a creditor and debt matrix which had not attained finality.

It is alleged that the Resolution Professional failed to discharge his statutory duties relating to independent claim verification, transparency and preservation of the value of the Corporate Debtor and, further, derived personal benefits from the assets and resources of the Corporate Debtor during the CIRP.

On the basis of the aforesaid alleged irregularities, the Applicants submit that the Resolution Plan dated 12.03.2026, as clarified on 07.05.2026, suffers from material irregularities and non-compliance with the Code and the CIRP Regulations and therefore ought not to be approved in its present form.

In the case of Santosh R. Shetty v. Rajan Deshraj Agarwal and Ors.,

It is trite that this Tribunal has limited jurisdiction to interfere with the commercial wisdom of the CoC while approving the resolution plan. A perusal of section 31(1) of the Code demonstrates that the NCLT is required to examine three things while approving a resolution plan, namely a. whether such a Plan is approved by the COC in terms of section 30(4) of the Code;

b. whether such a Plan is in accordance with section 30(2) of the Code and the regulations made in furtherance thereto and c. whether the Plan has set out a mechanism for its effective implementation.

d. If the aforesaid three conditions are satisfied, then the NCLT "shall" approve the resolution plan. Therefore, the NCLT has no discretion beyond the tenets set out in section 31(1), to reject a resolution plan. In other words, there is only scope for limited judicial review under section 31(1) of the IBC.

In the case of K. Sashidhar vs. Indian Overseas Bank & Ors., CIVIL APPEAL NO.10673 OF 2018, it is held at Para 37 that:

………... Indubitably, the remedy of appeal including the width of jurisdiction of the appellate authority and the grounds of appeal, is a creature of statute. The provisions investing jurisdiction and authority in the NCLT or NCLAT as noticed earlier, has not made the commercial decision exercised by the CoC of not approving the resolution plan or rejecting the same, justiciable. This position is reinforced from the limited grounds specified for instituting an appeal that too against an order “approving a resolution plan” under Section 31. First, that the approved resolution plan is in contravention of the provisions of any law for the time being in force. Second, there has been material irregularity in exercise of powers “by the resolution professional” during the corporate insolvency resolution period. Third, the debts owed to operational creditors have not been provided for in the resolution plan in the prescribed manner. Fourth, the insolvency resolution plan costs have not been provided for repayment in priority to all other debts. Fifth, the resolution plan does not comply with any other criteria specified by the Board. Significantly, the matters or grounds - be it under Section 30(2) or under Section 61(3) of the I&B Code - are regarding testing the validity of the “approved” resolution plan by the CoC; and not for approving the resolution plan which has been disapproved or deemed to have been rejected by the CoC in exercise of its business decision.

In case of M.K. Rajagopalan v. Dr. Periasamy Palani Gounder & Anr., (2023) ibclaw.in 60 SC, it was explained at Para 47 that “the commercial

In the case of Dharampal Premchand Ltd. v. Jitendra Bhandari and Ors., (2026) ibclaw.in 706 NCLAT, it is held that

Vallal RCK vs. M/S. Siva Industries and Holdings Ltd. and Ors., though in relation to Section 12A of the Code, has reiterated as follows –

Further, there is no quarrel to the decisions in case of Lamba Exports Pvt. Ltd. Vs. Dhir Global Industries Pvt. Ltd., and Others, 2026 SCC OnLine SC 459 and Greater Noida Industrial Development Authority Vs. Prabhjit Sigh Soni and Another, 2024 6 Supreme Court Cases 767 relied by Objectors as these decisions only reiterate that the commercial wisdom the CoC can be challenged on a legally sustainable foundation, such as statutory illegality or jurisdictional infirmity or shortcoming in the resolution plan in terms of the parameters specified in Sub section 2 of Section 30 IBC coupled with Regulations 37 and 38 of the CIRP Regulations 2016.

The reliance of Objector on a Co-ordinate Bench decision in the case of Mr Shailendra Ajmera Vs. Committee of Creditors of Nirmal Lifestyle (Kalyan) Pvt. Ltd. & Ors. {IA-88/MB/2024 in CP(IB)-1337/MB/2020)} is misplaced as the issue in that case was pertaining to grant of several relaxations from the provisions of RFRP to SRA without giving the same benefit to the all the PRAs.

Nonetheless, we consider it appropriate to deal with the issues raised by the objectors in the following paragraphs.

This Tribunal in its Order dt. 08.07.2025 admitting the Corporate Debtor into CIRP had observed in para 6.1 that “The issue in relation to

It is noted that the Hon’ble Supreme Court has not stayed the CIRP process in the proceedings, arising from civil appeal filed by the objectors before the Hon’ble supreme court against the order dated 08.07.2025 passed by this tribunal and again upheld by the Hon’ble NCLAT, accordingly there was no bar in continuing with the CIRP process culminating into approval of the resolution plan by CoC, which is before us for approval under Section 31 of IBC.

As regards alleged failure to verify compliance with the security trustee arrangement and transfer of beneficial interest, and perfection of security interests and compliance with SARFAESI and Companies Act requirements, it is not disputed that the debt was owed by the corporate debtor to the lender and the said debt was secured by the properties of the corporate debtor. The alleged noncompliance with security trustee arrangement or any alleged deficiency in perfection of security interest are not relevant consideration in the present matter, even if there may be one, as all the creditors, whether secured or unsecured, are being paid in full.

It was noted by this tribunal in order dated 08.07.2025 that

Thereafter, this tribunal, in the said order, dealt with the review points raised by the auditors engaged by the objectors in section 7 admission proceedings. It is evident from the second review report of BK Ramadhyani & Co. LLP furnished by the objectors during section 7 proceedings that the report of Mukund M. Chitale & Co. was provided to them and it had relevant and necessary information/details to determine and quantify the outstanding amount of claim of the Omkara. During this proceeding, it was clarified by the Ld. Counsel for the Resolution Professional that the claim of Omkara was admitted on the basis of working provided in Mukund M. Chitale & Co. report. It is noted that the applicant had not pointed out if the said report has misapplied the interest or Rules of Appropriation provided in Clause 29 of Agreement dated 26.12.2017. Further, the other issues flagged by BK Ramadhyani & Co. LLP were dealt with by this tribunal in order dated 08.07.2025. Accordingly, we do not find any merit in allegation of inflated claim being admitted by the Resolution professional or non-provision of facility wise computation.

The objectors have submitted that Ahuja Finance Company Private Limited ("Ahuja") and Kanazawa Holdings Private Limited ("Kanazawa"), though a related party, were classified as unrelated party and included in the CoC. Further, they had also participated in the meetings thereof. It is noted that Section 21 (2) of the Insolvency and Bankruptcy Code, 2016 provides that the CoC shall comprise all financial creditor of the corporate debtor but the related party financial creditor shall not have any right of representation, participation or voting in a meeting of a CoC.

Kanazawa is stated to be a related party creditor by virtue of its association through Royal Investments Limited (“RIL”), which held approximately 10% shareholding the Corporate Debtor. It is noted that one Mr. Ashok Ahwatani was Director in Kanazawa as well as RIL, and RIL admittedly held less than 20% shares in the Corporate Debtor. We could not find any clause in Section 5(24), whereby the Lender Company, having a common Director with the Shareholder holding, less than 20% of Corporate Debtor’s capital, can be classified as related party in relation to the Corporate Debtor. It is not the case of objectors that the Board of Corporate Debtor was accustomed to act on the advice, directions, on instructions of Mr. Ashok Ahwatani or RIL or Kanazawa.

Ahuja is stated to be a related party as its Director Mr. Anil Ahuja is a brother of the Director of the Corporate Debtor Mr. Sunil Ahuja. It is submitted by the Resolution Professional that Ahuja was considered as the related party in the financial statements because Section 2(76)(iv) of the Companies Act, 2013 includes ‘a private company in which a director or manager or his relative is a member or director’ in the term Related party, however, Section 5(24)(d) of the IBC includes a Private Company in which the Director of the Corporate Debtor is a Director and holds along with relatives more than 2% of its paid-up capital. Since, Sunil Ahuja is the brother of Anil Ahuja and also a director of the Corporate Debtor, but, Sunil Ahuja is not a Director of Ahuja Finance Pvt. Ltd. Accordingly, while Ahuja Finance is a related party under the Companies Act, since, Anil Ahuja, the brother of Sunil Ahuja is a Director of Ahuja Finance, but, it is not a related party under Section 5(24) since, the Sunil Ahuja, the Director of the Corporate Debtor is not the Director of the Ahuja Finance.

In the case of Phoenix ARC Private Limited vs. Spade Financial Services Limited & Ors. (2021) 3 Supreme Court Cases 475, it is held that the relationship is to be examined strictly in terms of section 5(24) of IBC only. The relevant part of the decision is reproduced below -

Further, in the case of EPC Constructions India Limited vs. Matix Fertilisers and Chemicals Limited (2026) 2 Supreme Court Cases 272, it is held that the treatment in the accounts due to prescription of accounting standards will not be determinative of the nature of relationship between the parties. Accordingly, the allegation of objectors in relation to defective constitution of CoC and unresolved related party issues has no substance.

It was observed during the course of proceedings by this tribunal that the proposed resolution plan contemplates exclusion of all related party creditors claim and shareholders while the application of the resolution money before us demonstrated that there shall be surplus available after settlement of the admitted claims of the unrelated creditors. During the course of proceedings, it was submitted by Resolution Professional that an appropriate addendum has to be place on record so as to include related party creditors claim in the proposed settlement and they shall be paid 100% of their admitted claims.

It is noted that the resolution plan contemplates payment of interest to the creditors till the date, the payment of claim amount is made to them pursuant to the said resolution plan, as the proposed resolution money is in excess of total admitted claims of the creditors. The objectors have stated that the said stipulation results into payment of amounts to the secured financial creditor in excess of admitted claims without proposing any payment to the shareholders, which they ought to be entitled to in terms of section 53 of IBC. The Ld. Counsel for the objectors relied upon the decision of the case of Sandeep Gupta v. JM Financial Asset Reconstruction Company Ltd. & Anr., (2024) ibclaw.in 16 NCLAT, wherein it was held that “34. All creditors including the Financial Creditors under the scheme of IBC are only entitled to receive 100% of their admitted debt. The proposal which has now been submitted after receipt of email from Resolution Professional giving details of admitted claim and CIRP dues clearly indicate that entire dues are offered to be deposited by the Appellant. As noted above, on 10.10.2023, time was given to deposit, however, within three days voting was held in which proposal was dissented, which clearly shows anxiety of the CoC to somehow reject the proposal.” It is noted that the said decision was rendered in the context of 12A proposal, however, there is no quarrel now that all creditors including related party are being paid 100% of their admitted debt.

In the case of Mr. Arun Kumar Vs. Ms. Sripriya Kumar and Others (2023) ibclaw.in 503 NCLAT, it is held that :

Further, in the case of Rosario D’Souza v. Union Bank of India and Anr., (2024) ibclaw.in 122 NCLAT, the Hon’ble NCLAT dealt with the issue regarding payment of Rs. 1 Crore over and above the admitted claims of the Respondent No. 2 which allegedly was done at the cost of the Shareholders of the Corporate Debtor i.e., Promoters, and held that

Further in the case of Manav Investments and Trading Co. Ltd. Vs. Pratim Bayal and Others, 2024 SC OnLine NCLAT 42, Hon’ble NCLAT rejected the objection, filed by related party Creditors on the ground that distribution not in accordance with vote share violates Section 53 read with Section 30(2)(b) of IBC, holding that the Appellant therein being related party is not entitled for any distribution.

It is noted that, in the present case, there was a surplus after settlement of unrelated creditors dues, including interest on admitted claims till the date of payment thereof, accordingly the RP had submitted that the CoC and SRA are aggregable to settle the dues of related party creditors in view of Section 53 of the IBC. Hence, there can be no question of discrimination in so far as related party creditors are concerned.

Further, this tribunal had inquired whether the resolution plan meets the requirement of section 30(4) in so far as it requires CoC to consider the proposed manner of distribution after taking into account the order of priority of creditors as laid down in section 53(1) of IBC.

In the case of Committee of Creditors of Essar Steel India Limited Vs. Satish Kumar Gupta & Others, 2020 8 Supreme Court Cases 531, it is held that “128. ……… Ms Madhavi Divan is also correct in stating that the order of priority of payment of creditors mentioned in Section 53 is not engrafted in sub-section (2)(b) as amended. Section 53 is only referred to in order that a certain minimum figure be paid to different classes of operational and financial creditors. It is only for this purpose that Section 53(1) is to be looked at as it is clear that it is the commercial wisdom of the Committee of Creditors that is free to determine what amounts be paid to different classes and sub-classes of creditors in accordance with the provisions of the Code and the Regulations made thereunder.”

It is noted that explanation 1 to section 30(2) of IBC makes it clear that the distribution in accordance with the provisions of clause (b) thereof shall be fair and equitable to such creditors. In the case of Committee of Creditors of Essar Steel India Limited (supra), it is held that “129. As has been held in this judgment, it is clear that Explanation 1 has only been inserted in order that the Adjudicating Authority and the Appellate Tribunal cannot enter into the merits of a business decision of the requisite majority of the Committee of Creditors. As has also been held in this judgment, there is no residual equity jurisdiction in the Adjudicating Authority or the Appellate Tribunal to interfere in the merits of a business decision taken by the requisite majority of the Committee of Creditors, provided that it is otherwise in conformity with the provisions of the Code and the Regulations, as has been laid down by this judgment.”.

Further in the case of India Resurgence ARC Private Limited Vs. Amit Metaliks Limited and Anr., 2021 19 Supreme Court Cases 672, it is held at para 15 that “…..The NCLAT was, therefore, right in observing that such amendment to sub-section (4) of Section 30 only amplified the considerations for the Committee of Creditors while exercising its commercial wisdom so as to take an informed decision in regard to the viability and feasibility of resolution plan, with fairness of distribution amongst similarly situated creditors; and the business decision taken in exercise of the commercial wisdom of CoC does not call for interference unless the creditors belonging to a class being similarly situated are denied fair and equitable treatment.”

Accordingly, it can be said that the settlement of admitted claims of the creditors as on insolvency commencement date, including the interest accrued on the admitted claims of the creditors subsequent to the insolvency commencement date, shall be compliant with section 30(4) of IBC if the CoC so decides. However, it is clarified the residual resolution money, if any, after settlement of the creditors claim in the aforesaid manner has to accrue to the shareholders in view of full settlement of claims of creditors including the interest thereon till the date of payment.

It is noted that the admission of claims submitted after issuance of the RFRP has been objected by the objectors. However, it is noted that Regulation 13(1B) of CIRP regulation permits admissions of the claims received after seven days before the date of creditors for voting on the resolution plan, and those claims were admitted after condonation of delay by this tribunal in terms of Regulation 13(1C).

It is noted that the CIRP cost were notified to the CoC members in the CoC meetings for their consideration and the CIRP cost falling under regulation 31(e) are required to be approved by the CoC apart form the resolution professional cost which are to be fixed in terms of regulation

In case there is any unverified or disputed element of CIRP cost and the same is not approved by the CoC, the same shall have to be excluded from the consideration thereof under the resolution plan. Nonetheless, this aspect does not merit consideration in the present case as the unapproved CIRP cost falls outside the consideration of the resolution plan and also does not constitute a material irregularity.

The evaluation matrix and tie breaker criteria were approved by the CoC in its commercial wisdom, accordingly this tribunal can not interfere in that decision. Since the creditors are being fully paid in the present case, unadjudicated avoidance recoveries can not be allocated to them. Accordingly, those recoveries will accrue to the shareholders. In accordance with the settled law, the shareholders equity stands extinguished in terms of the approved resolution plan, even if such Extinguishment extends to non-promoter shareholding.

On perusal of the Resolution Plan, we find that the Resolution Plan provides for the following:

a. Payment of CIRP Cost as specified u/s 30(2)(a) of the Code.

b. Repayment of Debts of Operational Creditors as specified u/s 30(2)(b) of the Code.

c. For management of the affairs of the Corporate Debtor, after the approval of Resolution Plan, as specified u/s 30(2)(c) of the Code.

d. The implementation and supervision of Resolution Plan by the RP and the CoC as specified u/s 30(2)(d) of the Code.

It is pertinent to note that the Application for approval of Resolution Plan was not filed within 180 days of the initiation, and 134 days were taken beyond 180 days for the same. The Resolution Professional has explained that the delay occurred on account of the receipt of a large number of EOI’s and multiple Resolution Plans from eligible PRA’s, requiring detailed evaluation, negotiations, compliance verification, and consideration of revised Resolution Plans by the Resolution Professional and the Committee of Creditors to ensure maximisation of value and compliance with the provisions of the Insolvency and Bankruptcy Code, 2016.

Upon consideration of the Resolution Plan, the submissions of the Resolution Professional, and the Compliance Certificate in Form H, this Tribunal finds that the Resolution Plan satisfies all the mandatory requirements of Section 30(2) of the Code and Regulations 37 and 38 of the CIRP Regulations. The Form H Compliance Certificate clearly demonstrates that the Plan provides for payment of CIRP costs in priority, ensures minimum statutory protection to operational creditors, makes adequate provision for dissenting financial creditors, and does not contravene any provision of law for the time being in force. The Resolution Plan submitted by Shree Naman Developers Private Limited provides for a total resolution consideration of Rs. 16,11,00,00,000 (Rupees One Thousand Six Hundred and Eleven Crores only) The Resolution Plan Value of Rs. 1,611 Crores substantially exceeds the average liquidation value of Rs. 1028.33 Crores, as determined by the two Registered Valuers, namely RNC Valuecon LLP (Rs. 1047.65 Crores) and KKCA Valuers LLP (Rs. 1009.01 Crores), thereby demonstrating that the approved Resolution Plan maximises value for the stakeholders of the Corporate Debtor and is commercially more beneficial than liquidation.

This Tribunal further finds that the Plan contains a viable and feasible framework for revival of the Corporate Debtor, with clearly identified sources of funds, defined implementation timelines, and a robust mechanism for management and supervision post-approval. The commercial terms of the Plan, having been approved unanimously by the Committee of Creditors with 98.96% voting share, fall squarely within the domain of the commercial wisdom of the CoC and do not warrant judicial interference in the absence of any material irregularity or illegality.

Accordingly, this Tribunal is satisfied that the Resolution Plan is compliant with the provisions of the Code and the CIRP Regulations, is fair and equitable to all stakeholders, and meets the objective of maximisation of value and revival of the Corporate Debtor as a going concern. The Plan therefore merits approval under Section 31 of the Insolvency and Bankruptcy Code, 2016.

The reliefs & concessions set out in the Resolution Plan as “Reliefs concessions and waivers” under Appendix VI or any other section of the Resolution Plan shall be in accordance with the principle laid down by Hon’ble Supreme Court in case of Ghanshyam Mishra and Sons Private Limited v/s. Edelweiss Asset Reconstruction Company Limited {[2021] 13 S.C.R. 737} and Municipal Corporation of Greater Mumbai vs. Abhilash Lal and Ors. (2019) ibclaw.in 480 NCLAT subject to the observations or limitations in the following paras.

a. The Applicant shall file necessary forms and pay prescribed fees, if any, in terms of provisions of the Companies Act, 2013 in relation to reduction in capital and issuance of fresh capital, however, the Registrar of Companies shall waive the additional fees, if any, payable on such filing.

b. Any increase in the authorized capital shall be subject to payment of prescribed fee, if any applicable, and filing of prescribed forms with the Registrar of Companies. The Income Tax Department shall be at liberty to examine the tax implications arising from accounting treatment, if any, proposed in the Plan in terms of Section 2(24), Section 28 and Section 56 of the Income Tax Act, 1961 read with GAAR provisions thereunder.

c. The SRA may approach prescribed authorities for waiver/reduction in fees, charges, stamp duty, and registration fees, if any arising from actions contemplated under the Resolution Plan and such request shall be dealt with subject to the relevant law/statute and adherence to the procedure prescribed thereunder.

d. The SRA may file appropriate application, if required, for renewal of all Business Permits, rights, entitlements, benefits, subsidies and privileges whether under applicable Law, contract, lease or license granted in favor of the Corporate Debtor or to which the Corporate Debtor is entitled to or accustomed to, which have expired on the Effective Date, and follow the dues procedure prescribed for the purpose upon payment of prescribed fees. It is clarified that continuance of approvals shall not be refused on account of extinguishment of any dues under IBC and extension or renewal thereof shall not be denied on account of past insolvency of the Corporate Debtor. No action shall lie against the Corporate Debtor for any non-compliances arising prior to the date of approval of Resolution Plan, however, such non-compliances shall be cured, if necessitated to keep the approval in force, after acquisition by the Corporate Debtor within period stipulated in the Resolution Plan.

e. The contract with third parties shall be subject to consent of such parties.

f. No orders levying any tax, demand or penalty from the Corporate Debtor in relation to period up to approval of the Resolution Plan shall be passed by any authority and such demand, if created, shall not enforceable as having extinguished in terms of approved Resolution Plan.

g. The carry forward of losses and unabsorbed depreciation shall be available in accordance with the provisions of Income Tax Act or Rules made thereunder, and the Income Tax Department shall be at liberty to examine the same. Further, applicability of Section 115 JB or other provisions of Income Tax Act shall be subject to and in accordance with the provisions of Income Tax Act or Rules made thereunder. Further, the concerned tax authorities shall be at liberty to examine the carry forward of input tax credit available under Indirect Tax for its further carry forward.

h. An application for compounding/condoning shall be filed in accordance with the procedure specified in respective law or concerned authority, however, no fine or penalty shall be imposed for non-compliances till the date of approval of this Plan or such further period as is permitted in terms of this Order.

j. The Compliances under the applicable law for all the statutory appointments by the Corporate Debtor shall be completed within 12 months or such further period as is stipulated in the plan, where after, the necessary consequence under respective law shall follow.

k. It is clarified that any relief, concession or waiver prayed in the Resolution Plan but not specifically dealt with in Para 98 (a) to (j) above, save as otherwise permissible in terms of Ghanshyam Mishra and Sons Private Limited (supra) or specific provisions of the Code read with the Regulations, shall be deemed to be denied or rejected.

In K Sashidhar v. Indian Overseas Bank & Others (in Civil Appeal No.10673/2018 decided on 05.02.2019) the Hon’ble Apex Court held that if the CoC had approved the Resolution Plan by requisite percent of voting share, then as per section 30(6) of the Code, it is imperative for the Resolution Professional to submit the same to the Adjudicating Authority (NCLT). On receipt of such a proposal, the Adjudicating Authority is required to satisfy itself that the Resolution Plan as approved by CoC meets the requirements specified in Section 30(2). The Hon’ble Apex Court further observed that the role of the NCLT is ‘no more and no less’. The Hon’ble Apex Court further held that the discretion of the Adjudicating Authority is circumscribed by Section 31 and is limited to scrutiny of the Resolution Plan “as approved” by the requisite percent of voting share of financial creditors. Even in that enquiry, the grounds on which the Adjudicating Authority can reject the Resolution Plan is in reference to matters specified in Section 30(2) when the Resolution Plan does not conform to the stated requirements.

In view of the discussions and the law thus settled, the instant Resolution Plan meets the requirements of Section 30(2) of the Code and Regulations 37, 38, 38 (1A) and 39 (4) of the Regulations. The Resolution Plan is not in contravention of any of the provisions of Section 29A of the Code and is in accordance with law. The same needs to be approved. Hence, ordered.

The Resolution Plan is hereby approved. The applicant shall file updated FORM H along with an affidavit from SRA and ratification of CoC to the effect to incorporate the changes in the financial proposal arising from admission of claims of the creditors/related parties and allocation of residual resolution money to the shareholders subsequent to approval of resolution plan by CoC. The IA (IBC)/2516/2026 objecting the approval of the resolution plan is hereby dismissed. It shall become effective from this date and shall form part of this order with the following directions: