The NCLAT set aside the NCLT’s order for prematurely accepting the Resolution Professional’s report without first considering the extension request.
On 20 February 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 a set of two appeals and held that the Adjudicating Authority must first consider an application for an extension of time to submit a revised repayment plan before accepting the Resolution Professional’s report under Section 112 of the IBC. Dismissing such an application as infructuous without due consideration is procedurally improper, warranting its reversal and providing a fresh opportunity for submission and evaluation by the CoC.
These two appeals were filed by Personal Guarantors challenging the order dated February 4, 2025, passed by the National Company Law Tribunal (NCLT), Jaipur Bench. Since both appeals involved identical facts and events, the Tribunal considered Company Appeal (AT) (Insolvency) No. 317 of 2025 as the basis for deciding both matters. The appeal challenged the order whereby the Adjudicating Authority had accepted the Resolution Professional’s report under Section 112 of the Insolvency and Bankruptcy Code (IBC) and, consequently, dismissed the appellant’s interlocutory application as infructuous.
The appellant, as a Personal Guarantor, was required to submit a repayment plan, which was duly submitted before the Resolution Professional and subsequently placed before the Committee of Creditors (CoC). However, the Secured Financial Creditor rejected the plan via an email dated December 16, 2024, advising the appellant to substantially revise the proposal while considering the value of the security. Following this, the appellant claimed to have submitted a revised proposal and filed an application seeking an extension of time for submission. However, the NCLT dismissed this application as infructuous after accepting the Resolution Professional’s report under Section 112.
The appellant contended that the Adjudicating Authority should have first considered the extension application before accepting the Resolution Professional’s report. The Resolution Professional, however, stated that there was no objection to granting the appellant limited time to submit a revised repayment plan for CoC’s consideration. Upon examining the matter, the NCLAT found that the NCLT had erred in dismissing the extension application as infructuous without addressing its merits. The Tribunal observed that the Adjudicating Authority should have first decided on the extension request before accepting the Resolution Professional’s report.
In the interest of justice, the NCLAT set aside the NCLT’s order dated February 4, 2025, and granted the appellant two weeks to submit a revised repayment plan. It directed the Resolution Professional to take appropriate steps, present the plan before the CoC, and complete the process within 60 days. The Resolution Professional was further instructed to submit a fresh report before the Adjudicating Authority for necessary orders. The NCLAT clarified that it had not expressed any opinion on the merits of the case and left it to the Adjudicating Authority to decide the matter in accordance with the law.
Mr. Nitesh Shrivastava, Advocate represented the Appellant.
Mr. Rachit Sharma, Advocate appeared for the Respondent.
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