NCLAT Upholds CoC’s Discretion in Timeline Fixation During Continued CIRP Process Without Fresh Form-G
- REEDLAW
- 3 hours ago
- 3 min read
The NCLAT upheld the Committee of Creditors’ discretion in fixing timelines for submission of resolution plans during a continued CIRP process, holding that a fresh Form-G was not required.
On 02.05.2025, the National Company Law Appellate Tribunal (NCLAT), Principal Bench, comprising Justice Ashok Bhushan (Chairperson) and Technical Members Mr. Barun Mitra and Mr. Arun Baroka, reviewed an appeal along with the connected Interlocutory Application and held that Regulation 36B(3) of the CIRP Regulations, which mandates a 30-day period for submission of resolution plans, does not apply when the Committee of Creditors (CoC) continues an existing process without issuing a fresh Form-G. The Tribunal further held that the CoC’s decision to fix a shorter timeline—within the 60-day limit set by the Adjudicating Authority—falls within its commercial wisdom and is not subject to judicial interference.
The National Company Law Appellate Tribunal (NCLAT) dismissed an appeal filed by the suspended director of M/s JSSI Hydraulics Pvt. Ltd., challenging the order dated 25.02.2025 passed by the Adjudicating Authority in IA No. 856 of 2025. The appeal arose from the rejection of the appellant’s plea seeking extension of time to submit a resolution plan in the ongoing Corporate Insolvency Resolution Process (CIRP). The corporate debtor had originally entered CIRP on 12.07.2022 upon a Section 7 application by the State Bank of India, and a resolution plan was initially approved but later recalled after it was found that the bank guarantee submitted by the Successful Resolution Applicant (SRA), JM Hydraulics Solutions Pvt. Ltd., was forged.
Following the recall of the resolution plan approval on 19.12.2024, the Adjudicating Authority had directed the Committee of Creditors (CoC) to complete a revised resolution process within 60 days. Initially, the corporate debtor (JSSI Hydraulics) was held ineligible to participate in the revised process. However, this error was corrected by an order dated 27.01.2025, making the corporate debtor eligible again. The resolution professional (RP) provided the necessary documents on 29.01.2025 and asked for submission of the resolution plan by 03.02.2025. The appellant sought more time, citing short notice and disparities in the information memorandum,m but failed to submit the plan or the required earnest money deposit (EMD) within the stipulated time.
The NCLAT upheld the Adjudicating Authority’s view that the appellant was not entitled to 30 days for plan submission under Regulation 36B of the CIRP Regulations, as the process did not constitute a fresh issuance of Form-G. The Appellate Tribunal agreed that the CoC acted within its commercial wisdom, bound by a 60-day deadline, and had already extended the same opportunity and deadline to all eligible applicants, including the appellant. Since the appellant neither submitted the plan nor deposited the EMD within time, the denial of a further extension was held valid. The appeal was dismissed, affirming the CoC’s discretion and the Adjudicating Authority’s decision.
Ms. Mrinal Harshwardhan, Ms. Srishti Agrawaal, Ms. Akankrita and Ms. Rituparna, Advocates, represented the Appellant.
Mr. Sumant Batra, Mr. Sarthak Bhnadari and Ms. Nidhi Yadav, Advocates, appeared for the Resolution Professional (RP).
Mr. Abhishek Anand, Advocate, appeared for the Successful Resolution Professional (SRA).
Subscribers can access premium content such as the full text of the case, detailed analysis, ratio decidendi, headnotes, legal research, cited case laws, and the latest updates on statutes, notifications, and more. To subscribe, please click Subscribe.
If you are a subscriber, please explore these resources by clicking the following citation/link.
Comments