Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2025 Supreme(Online)(NCLAT) 1478

NATIONAL COMPANY LAW APPELLATE TRIBUNAL
Sharad Kumar Sharma, Member (Judicial), Jatindranath Swain, Member (Technical)
Mandava Prabhakar Rao – Appellant
Versus
Navneet Kumar Gupta – Respondent
Company Appeal (AT) (CH) (Ins) No.258/2025 | Company Appeal (AT) (CH) (Ins) No.259/2025

Advocates:
For the Appellants/Petitioners:Mr. PS Raman, Senior Advocate, Mr. Srinath Sridevan, Senior Advocate, Mr. Srikanth Rati, Advocate, Ms. Prarthana Ramesh, Advocate
For the Respondents:Mr. E Om Prakash, Senior Advocate, Ms. Anjali Soni, Advocate, Mr. Sai Sumed Yasaswi Kondapalli, Advocate, Ms. A. Rithikha, Advocate, Mr. Arvindh Pandian, Senior Advocate, Mr. Niranjan Reddy, Senior Advocate for CoC, Mr. Shravan Kumar, Advocate

The need for valid authorization and transparency in meeting processes is paramount under insolvency regulations, ensuring all stakeholders are adequately informed and heard.

Headnote:(A) Insolvency and Bankruptcy Code, 2016 - Section 61 - Procedural irregularities in Committee of Creditors (CoC) meetings - Appellant challenged the exclusion of his representative from the 20th CoC meeting due to lack of authorization - Court emphasized that mandatory prior authorization is needed for participation as per Regulations 21(2) and 21(3)(iii) - Failure to provide resolution plans and relevant documents violated procedures - Findings acknowledged that the representative's prior participation did not confer legal authority - Appeals allowed with directions to restart the CIRP process from the 20th CoC meeting and provide necessary documents within two weeks. (Paras 1-32)

(B) Fairness and Transparency - The process must ensure all stakeholders are adequately informed and allowed participation in decision-making. (Paras 1-32)

Facts of the case:
The corporate debtor filed for insolvency and appointed Resolution Professionals (RPs) amid procedural disputes regarding participation in CoC meetings. The Appellant contended that his representative was barred from attending due to a lack of proper documentation, even though he had participated in previous meetings without issue.

Findings of Court:
The Court ruled that procedural fairness requires providing adequate notice and access to relevant documents to ensure informed participation in CoC meetings.

Issues: Did the exclusion of the Appellant's representative and the failure to provide relevant documents constitute a breach of procedural fairness in the CIRP process?

Ratio Decidendi: The Court held that allowing participation in prior meetings does not negate the need for valid authorization; procedural compliance is essential for transparency in decision-making.

Result: Appeals allowed; the CIRP process to restart from the 20th CoC meeting with all necessary documentation provided.

Table of Content
1. initial facts outline the nature and context of the appeals. (Para 1 , 2 , 5)
2. court discusses applicable regulations governing coc meetings. (Para 3 , 4 , 13 , 14 , 15 , 16)
3. appellant raises concerns regarding procedural irregularities. (Para 6 , 7 , 8 , 9 , 10)
4. determines the procedural integrity of the meetings discussed. (Para 28 , 29)
5. final judgment dismisses appeals but adjusts costs. (Para 30 , 31 , 32)

ORDER

(Hybrid Mode)

10.11.2025:

Since there is a difference of opinion in these two company appeals, we have given our respective opinions today. The Registry is directed to place the records of the company appeals before the Hon’ble Chairperson, for passing a suitable direction.

JUDGMENT

(Hybrid Mode)

[Per: Justice Sharad Kumar Sharma, Member (Judicial)]

These are two company appeals which has been preferred by invoking the provisions contained under Section 61 of the I & B Code, 2016, wherein,

(i) In Company Appeal (AT) (CH) (Ins) No.258/2025, the Appellant has preferred this company appeal upon being aggrieved against the order passed in IA(IBC)/256/2025, as it was preferred in pending IA No. 1724/2024 in the Principal proceedings of CP(IB) No. 306/10/HDB/2017, wherein, the relief was sought to declare the proceedings of 21^st and 22^nd CoC meeting, as respectively held on 23.09.2024 and 18.12.2024 to be arbitrary and illegal.

(ii) In the Connected Company Appeal, being Company Appeal (AT) (CH) (Ins) No.259/2025, the challenge is given by the Appellant to the impugned order that was passed on IA No. 1724/2024 as preferred in CP(IB) No. 306/10/HDB/2017.

2. Since these two company appeals are interrelated, arising from the same set of facts and circumstances, for the purposes of brevity, they are being decided together. In the Company Appeal (AT) (CH) (Ins) No.259/2025, as a matter of fact the challenge is given to the proceedings of 20^th CoC meeting that was held on 16.07.2024. In order to facilitate an effective adjudication. It would be apt that we deal with Company Appeal (AT) (CH) (Ins) No.259/2025 first, before venturing into Company Appeal (AT) (CH) (Ins) No.258/2025 on merits.

3. Accordingly, Company Appeal (AT) (CH) (Ins) No.259/2025 would be taken as to be the lead appeal. In both these company appeals, there are various interlocutory applications i.e., Exemption Application IA No. 731/2025 and IA No. 734/2025 respectively, seeking an exemption from filing the certified copy of the impugned order, as we are deciding these appeals finally, the exemption would stand granted. Besides that, both the company appeals are accompanied with urgent listing application, being IA No. 732/2025 and IA No. 736/2025 respectively in the two company appeals. As we are hearing the respective counsels for the parties to these appeals, we are deciding the same finally, no specific order is required to be passed in these two urgent listing applications. The same would be treated to have been closed. Besides this, the company appeals are also accompanied with Stay Application being IA No. 733/2025 and IA No. 735/2025, since the company appeals are being considered at an admission stage and are being finally decided, there is no necessity to consider the applications for the purposes of granting of an interim Order.

4. Before we delve into the vitalities of the controversy so far, it relates to the challenge given to the 20^th, 21^st, and 22^nd CoC meeting, certain factual aspects are essentially required to be gone into.

5. According to the Appellant, he happened to be the Suspended Director of the Corporate Debtor, M/s. NSL Nagapatnam Power and Infratech Limited. An issue arose out of the proceedings of the 20^th CoC meeting, which were held on 16.07.2024, and the same was put to challenge by the Appellant by filing an IA(IBC) No. 724/2024 before the Ld. NCLT Hyderabad Bench, contending thereof that, the aforesaid proceedings of 20^th CoC meeting, may be turned down on various procedural lapses and illegalities, which have b

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2025 Supreme(Online)(NCLAT) 1478

NATIONAL COMPANY LAW APPELLATE TRIBUNALSharad Kumar Sharma, Member (Judicial), Jatindranath Swain, Member (Technical)Mandava Prabhakar Rao – AppellantVersusNavneet Kumar Gupta – RespondentCompany Appeal (AT) (CH) (Ins) No.258/2025 | Company Appeal (AT) (CH) (Ins) No.259/2025

The need for valid authorization and transparency in meeting processes is paramount under insolvency regulations, ensuring all stakeholders are adequately informed and heard.

NATIONAL COMPANY LAW APPELLATE TRIBUNAL
Sharad Kumar Sharma, Member (Judicial), Jatindranath Swain, Member (Technical)
Mandava Prabhakar Rao – Appellant
Versus
Navneet Kumar Gupta – Respondent
Company Appeal (AT) (CH) (Ins) No.258/2025 | Company Appeal (AT) (CH) (Ins) No.259/2025