NCLAT Sets Aside NCLT Order, Grants 90-Day Extension for CIRP Completion Citing Changed Circumstances and CoC Reconstitution

The National Company Law Appellate Tribunal (NCLAT) set aside the NCLT’s order and granted a 90-day extension for completion of the Corporate Insolvency Resolution Process (CIRP), citing changed circumstances and the need for reconstitution of the Committee of Creditors (CoC).

The National Company Law Appellate Tribunal (NCLAT), Principal Bench comprising Justice Ashok Bhushan (Chairperson) and Technical Members Mr. Barun Mitra and Mr. Arun Baroka, while hearing an appeal, held that the Adjudicating Authority’s refusal to grant an extension for completing the CIRP was set aside due to subsequent developments—including the conclusion of related litigation and the insolvency of a key project purchaser—which justified the reconstitution of the Committee of Creditors (CoC) and warranted a 90-day extension to complete the resolution process.

The National Company Law Appellate Tribunal (NCLAT) heard an appeal filed by the Resolution Professional (RP) against the order dated 2 November 2021 passed by the Adjudicating Authority, which had rejected the RP’s application seeking a 90-day extension for concluding the Corporate Insolvency Resolution Process (CIRP). The RP, aggrieved by the denial of additional time, contended that earlier litigation had impeded the resolution process, but now that the litigation had concluded, further time was necessary to explore resolution possibilities for the corporate debtor.

At the initial hearing on 20 December 2021, the NCLAT had issued notice and recorded the submission of the RP that a resolution plan could not materialise due to pending litigation, and at least 60 days should be granted. Directions for filing replies and rejoinders were issued, and the matter was scheduled for final disposal on 7 January 2022. However, before that date, it was brought to the Tribunal’s attention that the Hon’ble Supreme Court had passed an order of status quo on 6 January 2022 in a related civil appeal filed by a resolution applicant. Consequently, the appeal before the NCLAT was adjourned repeatedly.

On 17 October 2024, the Supreme Court dismissed Civil Appeal No. 7556/2021 (Arun Anand v. Jalesh Kumar Grover), thereby removing the obstacle of the status quo. Subsequently, the RP brought on record further developments, including the insolvency of Grandstar Realty Pvt. Ltd., the purchaser of the AKME RAGA project, by virtue of the NCLT’s order dated 26 September 2023. It was submitted that these developments necessitated the reconstitution of the Committee of Creditors (CoC).

Counsel for both the RP and the CoC concurred that, in light of these developments, an extension of 90 days was essential to complete the CIRP. The Tribunal, after considering the additional affidavit filed by the appellant dated 18 January 2025 and the consent of both parties, held that the appeal deserved to be allowed.

Accordingly, the NCLAT set aside the impugned order and allowed IA No. 3675/2021, thereby granting an extension of 90 days from the date of the order. The appeal was disposed of on these terms.

Mr. Abhishek Anand, Mr. Karan Kohli and Ms. Palak Kalra, Advocates, represented the Appellant.

Ms. Nika Tiwari and Mr. Anupam Singh, Advocates J.C. Flowers, appeared for the Respondent No. 1.

Ms. Varsha Banerjee, Advocate, appeared for the Respondent No. 3.

Mr. Swapnil Gupta and Mr. Harshit Gupta, Advocates, represented the Respondent No. 5 (AR).

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