Delayed Bid Rejected: NCLAT Upholds Timeline Compliance in CIRP Challenge Process
- REEDLAW
- 2 days ago
- 3 min read
The NCLAT upheld the rejection of a delayed bid in the CIRP challenge process, holding that strict adherence to prescribed timelines is essential and binding on all resolution applicants.
On 28 July 2025, the National Company Law Appellate Tribunal (NCLAT), Principal Bench comprising Justice Ashok Bhushan (Chairperson) and Mr. Barun Mitra (Technical Member), while adjudicating a batch of two Company Appeals, held that when a resolution applicant fails to submit a revised bid within the prescribed timeline of the challenge process, no enforceable right arises to demand its consideration. However, the Committee of Creditors (CoC) retains full discretion to evaluate the resolution plan submitted in the valid first-round bid, along with other compliant plans, in accordance with the IBC framework.
The National Company Law Appellate Tribunal (NCLAT), Principal Bench, dismissed a resolution applicant’s appeal challenging the rejection of its revised third bid in the challenge process. The Appellant had filed IA No. 5883 of 2024 seeking directions to the Resolution Professional and the Committee of Creditors (CoC) to consider its third bid of ₹92.97 Crores, which was submitted three minutes after the timeline stipulated in the challenge mechanism. The Adjudicating Authority had rejected the application, holding that strict adherence to the bidding timeline was crucial and that the CoC, having followed a consensus-driven process, rightly did not accept the delayed bid.
In appeal, the Appellant argued that its first-round bid of ₹91.37 Crores was the highest (H1), and it was therefore entitled to participate in later rounds. It contended that the CoC should have accepted the third bid despite the delay. However, the NCLAT held that the bidding process was governed by fixed timelines and the Appellant, having missed the deadline, could not claim a right to have its revised bid considered. The Tribunal noted that even though the Appellant was H1 in the first round and had submitted a resolution plan, the CoC was not bound to approve any specific plan and retained discretion under the RFRP to evaluate all eligible resolution plans, including the Appellant’s earlier bid.
The NCLAT found no error in the Adjudicating Authority’s decision to uphold the sanctity of the challenge process timeline. However, it clarified that the CoC could still consider the Appellant’s resolution plan submitted pursuant to the first bid, provided all necessary compliances were met. Consequently, Company Appeal (AT) (Ins.) No. 1101 of 2025 was disposed of with the above observation, and the connected Company Appeal (AT) (Ins.) No. 1103 of 2025, filed by the Resolution Professional against a status quo direction, was dismissed as infructuous.
Mr. Navin Pahwa, Sr. Advocate with Mr. Mahesh Agarwal, Mr. Rishi Agrawal, Ms. Shivani Shukla, Mr. Kaustubh Singh and Ms. Shubhi Agarwal, Advocates, represented the Appellant.
Mr. Krishnendu Datta, Sr. Advocate and Mr. N. Venkataraman, Sr. Advocate with Mr. Karan Malhotra, Ms. Nandita Bajpai and Mr. Anant Shankar Tripathi, Advocates, appeared for the Respondent No. 1.
Mr. Mohit Chadha and Ms. Payal Golimar, Advocates, appeared for the Respondent No. 2.
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