NCLAT held that the extension of EoI and Resolution Plan submission timelines with CoC approval does not require a fresh Form G and cannot be challenged after participation in the process.
The National Company Law Appellate Tribunal (NCLAT), Principal Bench, headed by Justice Ashok Bhushan (Chairperson) and comprising Technical Members Mr. Barun Mitra and Mr. Arun Baroka, reviewed two appeals on 18-02-2025 and held that an extension of the timeline for submission of Expressions of Interest (EoIs) and Resolution Plans if contemplated in the original invitation and approved by the Committee of Creditors (CoC), does not necessitate a fresh Form G under Regulation 36A(4A). The Tribunal further held that an appellant who has participated in the extended process without objection cannot later challenge its validity under Section 61(3)(ii) of the IBC. The Tribunal reaffirmed that commercial decisions of the CoC, taken in due compliance with statutory provisions, should not be interfered with unless a material irregularity is established.
The National Company Law Appellate Tribunal (NCLAT) adjudicated two appeals challenging orders of the National Company Law Tribunal (NCLT), Kolkata Bench. The first order approved the Resolution Plan submitted by Pinax Paper Mills Private Limited (SRA), while the second dismissed objections raised by the appellant, an unsuccessful resolution applicant. The Corporate Insolvency Resolution Process (CIRP) against Indian Pulp and Paper Private Limited commenced on 22.07.2022, with the Resolution Professional (RP) inviting Expressions of Interest (EoI) on 23.10.2022, setting a submission deadline of 08.11.2022. While the appellant submitted its EoI in consortium with Bhagwati Vintrade Private Limited, Pinax Paper Mills Limited was not initially listed among the Prospective Resolution Applicants (PRAs). However, following multiple extensions approved by the Committee of Creditors (CoC), the final list of PRAs issued on 28.02.2023 included Pinax Paper Mills Limited.
The appellant challenged the process, citing alleged violations of CIRP Regulations, particularly Regulations 36A(4A) and 39(1B), arguing that the RP failed to issue a fresh Form G before accepting Pinax Paper Mills Limited's EoI. The appellant relied on Ashdan Properties Private Limited v. Mamta Binani, RP of Rolta India Limited and Others, REEDLAW 2024 NCLAT Del 03554, asserting that no new applicant could participate without a fresh Form G. In contrast, the respondents argued that the CoC had the authority to extend timelines and that the appellant itself had benefitted from these extensions, submitting a revised Resolution Plan. The CoC approved the Resolution Plan of Pinax Paper Mills Private Limited with a 96.05% majority, and the NCLT upheld this decision, leading to the appeal before the NCLAT.
The NCLAT examined whether the CIRP complied with statutory provisions and whether material irregularities warranted interference. The RP had published the list of PRAs on 23.02.2023, inviting objections within five days. Since no objections were raised, the final list of PRAs on 28.02.2023 included Pinax Paper Mills Pvt. Ltd. The appellant had also revised its Resolution Plan after the timeline extension. The CoC, in its 20th meeting on 11.07.2023, deliberated on the submitted plans and put three to vote: (i) Pinax Paper Mills Pvt. Ltd. in consortium with Pinax Steel Industries Pvt. Ltd., (ii) Brand Steel & Power Limited in consortium with Bhagwati Vintrade Private Limited, and (iii) RKG Fund-1A. The plan of Pinax Paper Mills Pvt. Ltd. was approved with a 96.05% voting share.
The CoC had decided to extend the timeline for submission of EoIs and Resolution Plans in its meeting on 09.02.2023, with the Invitation for EoIs explicitly allowing such extensions. The appellant contended that Regulation 36A(4A), inserted on 30.09.2021, required the publication of a fresh Form G for such extensions. However, the Tribunal held that as the extension was contemplated in the original EoI without modifying criteria, a fresh Form G was not necessary. Moreover, the appellant, having participated and submitted a revised plan post-extension, had not objected at the relevant stage.
The appellant also relied on Regulation 39(1B), arguing that the SRA was ineligible as its name did not appear in the final list of PRAs. However, the Tribunal noted that the final list published on 28.02.2023 included Pinax Paper Mills Pvt. Ltd., confirming compliance with the regulations. Distinguishing this case from Ashdan Properties Private Limited v. Mamta Binani, RP of Rolta India Limited and Others, REEDLAW 2024 NCLAT Del 03554, the Tribunal noted that the final list of PRAs in this case included the successful applicant, rendering the appellant's challenge unsustainable.
The NCLAT also referred to the Hon’ble Supreme Court’s ruling that under Section 61(3)(ii) of the IBC, a resolution plan could be interfered with only in cases of material irregularity in the RP’s exercise of power. It held that all actions of the RP had CoC approval, including the acceptance of the resolution plan beyond the initial deadline. The CoC had consciously approved the acceptance of the plan, which received an overwhelming majority. The Tribunal found no material irregularity warranting annulment of the CIRP, considering: (i) the extension of the EoI submission deadline was in accordance with Form G and CoC approval, (ii) the appellant availed of the extended timeline, (iii) no objections were raised regarding the inclusion of Pinax Paper Mills as a resolution applicant, (iv) the appellant objected only after the voting process had commenced, and (v) the RP acted under CoC’s direction and approval. Given the limited scope of appellate intervention under Section 61(3), the Tribunal dismissed the appeal.
Mr. Rishav Banerjee, Mr. Arijit Mazumdar, Ms. Madhuja Burman, Mr. Shambo Nandy and Ms. Anoushka Dey, Advocates represented the Appellant.
Mr. Krishnendu Dutta, Sr. Advocate with Mr. Sailedndra Tiwari, Mr. Inranil Ghosh, Mr. Palzer Moktan, Mr. Rahul Gupta, Mr. Harsh Tandon and Ms. Mehar Bedi, Advocates appeared for Respondent No. 2 and Respondent No. 3.
Mr. Abhijeet Sinha, Sr. Advocate with Mr. Saikat Sarkar and Mr. Saurav Jain, Advocates appeared for Respondent No. 4 and Respondent No. 5.
Ms. Swati Dalmia, Ms. Neha Sinha and Ms. Safura Ahmed, Advocates appeared for Respondent No.1/Resolution Professional.
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