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Judgment
ORDER
Per: Smt. Bidisha Banerjee, Member (Judicial)
This Court congregated through a hybrid mode.
Heard the Learned Counsels for both parties.
The instant application being I.A. (IB) No. 1726/KB/2025, has been preferred by a Suspended Board of M/s. Sarita Steel & Power Limited, through Mr. Vipul Mehra under Section 60(5) of the Insolvency and Bankruptcy Code, 2016, for brevity “I&B Code” against the respondent Mr. Sanjeev Kumar Jalan & Ors. seeking the following reliefs:
A. An order be made directing substantive consolidation of the CIRPs of the Ankita Metal and Power Limited and Sarita Steel and Power Ltd. into a single proceeding solely for the purposes of CIRP in accordance with the provisions of the Code, including but not limited to the acceptance, confirmation and all other actions with respect to the resolution plan for the Corporate debtors and any and all amendments or modifications thereto, in such consolidated proceedings;
B. Order and direct that solely for the purpose of consolidating CIRP proceedings, all assets and liabilities of Ankit Metal and Power Limited and Sarita Steel and Power Ltd. be merged and deemed to be the assets and liabilities of all the Corporate Debtors on a consolidated basis;
C. Order and direct that each and every claim filed in the individual proceedings of any of the Corporate Debtors in the consolidated proceedings;
D. Order and direct that a common CoC may be constituted for the Corporate Debtors so that the decision-making process in relation to the CIRP may be done in an efficient manner and to diminish the scope of any conflicting decision;
E. Order and direct that both the Corporate debtors based on relevant factors including but not limited to commonality of business may be formulated and approved by the CoC and placed before this Hon’ble Tribunal for its approval in accordance with the provisions of the Code and grant such other or further reliefs as this Hon’ble Adjudicating Authority deems fit in the facts and circumstances of the case.
F. An order be made to stay the CIRP of both Ankit Metals and Sarita Steel and Power Ltd., the Corporate Debtor herein, pending the disposal of the instant application.
G. Ad interim orders in terms of the prayers above;
H. Pass such further or order or order and/or direction or directions be given as this Hon’ble Tribunal may deem fit and proper.
4. FACTS OF THE CASE
Sarita Steel & Power Limited is a corporate guarantor of Ankit Metal & Power Limited in respect of credit facilities extended by UCO Bank. Sarita Steel owns 10.49 acres of land which was leased to Ankit Metal for a period of 50 years by a registered deed dated 19.09.2011 and a part of the factory of Ankit Metal is constructed over the said land.
While Ankit Metal was admitted into CIRP by order dated 03.05.2024, Sarita Steel was admitted into CIRP on 19.12.2024. It is claimed that both the Corporate Debtors belong to the same group, having common promoters, common directors, common lenders and interlinked assets and liabilities.
By way of an earlier order dated 09.04.2025, this Tribunal directed a land survey and left the question of consolidation of CIRPs to the commercial wisdom of the Committee of Creditors. The land survey is complete.
The survey report suggests that the factory of Ankit Metal is situated over a total land area of about 141.264 acres, including 10.49 acres of land owned by Sarita Steel and about 35 acres of private third-party land. It is claimed that no physical demarcation exists between these parcels.
After the survey, disputes regarding demarcation of land still remained unresolved.
The present application I.A. 1726/KB/2025 has been filed seeking consolidation of the CIRP of both companies and stay on both processes to achieve value maximisation. In support the decisions of Videocon and Radico Khaiten have been cited.
5. SUBMISSIONS ON BEHALF OF THE COMMITTEE OF CREDITORS (RESPONDENT NO. 2)
It is submitted that the Applicant, being a suspended director of Sarita Steel , has no locus standi to seek consolidation. It is contended that upon admission into CIRP, the management vests with the Resolution Professional and the suspended board has no vested right to interfere in commercial decisions.
It is claimed that the Applicant is neither a financial creditor nor an operational creditor and has no stake in the CIRP. It is further submitted that the Applicant has failed to cooperate with the Resolution Professional, compelling the RP to file an application under Section 19(2) of the IBC.
It is contended that the present application is barred by res judicata in light of the order dated 09.04.2025 passed in I.A. 504/KB/2025, wherein this Tribunal expressly left the decision of consolidation to the commercial wisdom of the CoC.
It is submitted that Sarita Steel owns only reversionary interest in the leased land and that there is no confusion regarding ownership. It is further contended that consolidation is being sought only to delay the CIRP.
It is submitted that the CIRP of Sarita Steel is at a nascent stage, whereas the CIRP of Ankit Metal is at an advanced stage with resolution plans already received. It is claimed that consolidation at this stage would derail a near-completion resolution process.
It is further submitted that Videocon and Radico Khaitan judgments do not support the Applicant as in those cases consolidation was sought by lenders, whereas in the present case it is sought by a suspended director without locus.
It is claimed that the CoC in its 9th meeting dated 14.10.2025 deliberated upon consolidation and rejected the same by majority decision. It is contended that the commercial wisdom of the CoC is paramount and beyond judicial interference.
6. SUBMISSIONS ON BEHALF OF THE APPLICANT
It is submitted that both companies belong to the same group having common promoters, common control, common lenders and overlapping assets.
It is claimed that the plant of Ankit Metal is situated partly over the land owned by Sarita Steel and there is no physical demarcation, making independent resolution impossible.
It is contended that the same RP is handling both CIRPs and the CoC of both companies consists of the same lenders.
It is further submitted that Sarita Steel has no assets except the land leased to Ankit Metal and its value is inextricably tied to the functioning of the Ankit Metal plant.
It is claimed that consolidation alone would lead to maximization of value and ensure meaningful resolution of both Corporate Debtors as a single economic unit.
It is contended that the decision dated 09.04.2025 left the issue open and that the CoC of Ankit Metal failed to apply the Radico and Videocon parameters while considering consolidation.
It is claimed that refusal to consolidate would severely prejudice value maximization and frustrate the object of the Code.
7. ANALYSIS AND FINDINGS
This Tribunal has carefully examined the pleadings, documents, submissions and judicial precedents relied upon by both parties.
It is not in dispute that Sarita Steel and Ankit Metal are group entities having common promoters, common lenders and interlinked liabilities. The land of Sarita Steel leased to Ankit Metal forms part of the operational footprint of the Ankit Metal plant and is subject matter of both the CIRPs.
In the present case, the assets are interconnected, but the CIRP of Ankit Metal has reached an advanced stage with multiple resolution plans already evaluated. The CIRP of Sarita Steel is yet to progress much, or maybe it is getting deliberately delayed. It is also a fact that one of the participating Resolution Applicant in Ankit metal has also sought for consolidation of both the CIRPs and inclusion of Sarita’s land.
However, any consolidation at this advanced stage which may delay of the resolution process of Ankit Metal.
The earlier order dated 09.04.2025 clearly left the decision of consolidation to the CoC. The CoC has deliberated and taken a decision against consolidation as the ground that the bidding in Ankit Metal matter has fetched a value of more than Rs. 550 Crores and any consolidation would affect the bidding process of Ankit Metal. The same cannot now be reopened through repetitive litigation.
Hence, this Tribunal, therefore, finds no reason to direct consolidation of CIRPs of Ankit Metal and Sarita Steel.
In view of the aforesaid facts, submissions and findings, this Adjudicating Authority rejects the present application seeking consolidation of CIRPs of Sarita Steel & Power Limited and Ankit Metal & Power Limited.
a. I.A. (IB) No. 1726/KB/2025 is thus dismissed.
b. There shall be no stay on either CIRP, both processes shall continue independently in accordance with law.
c. The Applicant is directed to extend full cooperation to the Resolution Professional in both CIRPs, failing which appropriate action may be taken under the Insolvency and Bankruptcy Code, 2016.
d. No order as to costs.
Accordingly, I.A. No. 1726/KB/2025 stands dismissed.
Certified copies of this order, if applied for with the Registry of this Adjudicating Authority, be supplied to the parties upon compliance with all requisite formalities.