2026 Supreme(Online)(NCLAT) 627

NATIONAL COMPANY LAW APPELLATE TRIBUNAL
Ashok Bhushan (Chairperson) , Mr. Indevar Pandey (Member (Technical)) ,
M/s. Sumeet Industries Limited through its Resolution Professional Satyendra Prasad Khorania – Appellant
Versus
Dakshin Gujarat Vij Company Limited – Respondent
915/ND/2026 IA

The court upheld the adjustment of a security deposit by an electricity company before CIRP commencement and dismissed an appeal to reopen a concluded Resolution Plan under the IBC.

Headnote:(A) Insolvency and Bankruptcy Code, 2016 - Sections 14, 18, 25, 30(2), 31(1), 60(5)(c), 61(1) and 238 - Electricity Act, 2003 - Section 56 - Security deposit - Adjustment of security deposit during CIRP - Moratorium - Propriety of adjustment of security deposit by electricity company under the Electricity Act after commencement of corporate insolvency resolution process (CIRP) - Validity of post-CIRP adjustment of CIRP-period payments towards pre-CIRP dues - Principle of finality of approved Resolution Plan.

(B) Insolvency and Bankruptcy Code, 2016 - Section 14 - Moratorium - Section 14(1)(c) - Prohibition on action to foreclose, recover or enforce any security interest - Appropriation of security deposit by operational creditor against pre-CIRP dues after commencement of CIRP constitutes violation of moratorium. (Para 8)

(C) Insolvency and Bankruptcy Code, 2016 - Resolution Plan - Finality - Once a Resolution Plan is approved by the Committee of Creditors (CoC) and the Adjudicating Authority, the same cannot be reopened or modified except within the limited framework permissible under the IBC, particularly in light of the principles of finality emphasized in Ebix Singapore Pvt. Ltd. v. Committee of Creditors of Educomp Solutions Ltd. (Paras 73-76)

(D) Insolvency and Bankruptcy Code, 2016 - Resolution Professional - Locus standi - Application to challenge adjustment of security deposit - Maintainability even after approval of Resolution Plan - Jurisdiction under Section 60(5)(c) continues - However, the applicant must establish illegality in the respondent's actions. (Paras 66-67) (E) Electricity Act, 2003 - Section 56 - Disconnection Notice - Issuance of a notice for disconnection does not preclude the concurrent decision to adjust a security deposit, which is a commercial decision based on the past payment behavior of the consumer and is not linked to the statutory notice for disconnection. (Para 58)

Facts of the case:
The Appellant, the Corporate Debtor under CIRP, and its Resolution Professional filed an application before the Adjudicating Authority seeking directions against the Respondent No.1 (an electricity distribution company) for restoration of a security deposit amounting to Rs.8,30,25,606/-, which was allegedly adjusted after the commencement of the CIRP, and for refund of an amount of Rs.3,78,78,845.48/-, allegedly appropriated from post-CIRP payments towards pre-CIRP dues. The Adjudicating Authority dismissed the application, and this Appeal was filed against that order.

Findings of Court:
The court found that the Respondent No.1 had taken a decision to adjust the security deposit on 14.12.2022, which was prior to the commencement of CIRP on 20.12.2022, based on an internal Office Note. The court held that the Resolution Professional, the CoC, and the Successful Resolution Applicant were fully aware of the adjusted claim during the CIRP and the Resolution Plan was approved based on this understanding. Therefore, the Appellant failed to establish that the adjustment was made in violation of the moratorium. The court also held that the present proceedings, in effect, seek to reopen a concluded and approved Resolution Plan, which is impermissible under the IBC.

Issues: The main issues were whether the adjustment of the security deposit by the electricity company was made before or after the commencement of CIRP, thereby determining its validity under Section 14 of the IBC, and whether the approved Resolution Plan could be reopened for this purpose.

Ratio Decidendi: The court ruled that the previous decision to adjust the security deposit, made before the CIRP commenced, was valid. The court further held that once a Resolution Plan is approved, its commercial terms attain finality and cannot be re-opened, especially when the concerned parties were aware of the facts during the CIRP process. Result : Appeal dismissed. No order as to costs. (Para 78) Note: The arguments regarding alleged forum shopping and the locus of the Resolution Professional were also addressed, but the core findings were based on the finality of the Resolution Plan and the timing of the security deposit adjustment. Key Points: - The case involved a dispute over the adjustment of a security deposit by an electricity company against pre-CIRP dues of a corporate debtor undergoing CIRP. - The Adjudicating Authority's order was upheld by the Appellate Tribunal. - The judgment reinforces the sanctity and finality of an approved Resolution Plan under the IBC. - The court distinguished the present case from precedents where post-CIRP adjustments had been held invalid, based on the factual finding in this case that the decision to adjust was made before CIRP commencement. - The judgment emphasizes that an internal decision by the competent authority before the CIRP commencement date crystallizes the appropriation, even if its accounting reflection occurs later. - The court also held that an RP's application to challenge pre-CIRP adjustments may be maintainable after plan approval, but the merits of the challenge must be established. **Disclaimer: The court’s observation regarding the validity of the security deposit adjustment was based on the specific facts of the case and the interpretation of the Office Note dated 14.12.2022.** **Important Note: The headnote above is a summary of the judgment and does not constitute legal advice. For specific legal advice, please consult a qualified legal professional.** **Disclaimer: This summary is for informational purposes only and may not reflect the complete or most current legal position. The complete judgment text should be consulted for authoritative guidance.** *** This headnote was generated by an AI and should not be considered a substitute for reading the full judgment. Please be aware that AI can make mistakes, and while efforts have been made to ensure accuracy, the original judgment text should always be the primary source for any legal analysis. The user is advised to independently verify all information presented in this summary.

Table of Content
1. case background and initiation of insolvency proceedings. (Para 1 , 2)
2. appellant argues illegal post-cirp adjustment of security deposit and payments. (Para 3 , 4 , 5 , 6 , 7 , 8 , 9 , 10 , 11 , 12 , 13 , 14)
3. respondent argues pre-cirp adjustment and finality of approved resolution plan. (Para 15 , 16 , 17 , 18 , 19 , 20 , 21 , 22 , 23 , 24 , 25 , 26 , 27 , 28 , 29 , 30 , 31 , 32 , 33 , 34)
4. sra supports appeal, argues approval plan preserves right to recovery. (Para 35 , 36 , 37 , 38 , 39 , 40 , 41 , 42 , 43 , 44 , 45 , 46)
5. court finds adjustment decision taken before cirp, not violative of section 14. (Para 47 , 48 , 49 , 50 , 51 , 52 , 54 , 55 , 56 , 57 , 58 , 59 , 60 , 61 , 62 , 63 , 64 , 65 , 66 , 67 , 69 , 70 , 71 , 72 , 73 , 74)
6. appeal dismissed; approved resolution plan cannot be reopened. (Para 75 , 76 , 77 , 78)

NATIONAL COMPANY LAW APPELLATE TRIBUNAL PRINCIPAL BENCH, NEW DELHI Company Appeal (AT) (Insolvency) No. 251 of 2026 (Arising against the impugned order dated 27.11.2025 passed by the National Company Law Tribunal, Ahmedabad Bench in I.A. No. 47(AHM)/

2024 in Company Petition (IB) No. 38 of 2020].

IN THE MATTER OF:

SUMEET INDUSTRIES LIMITED Through its Resolution Professional, Mr. Satyendra Prasad Khorania, having registered office at 402, OK Plus, DP Metro Pillar No. 94, New Sanganer Road, Jaipur-302019 …Appellant Versus

1. DAKSHIN GUJARAT VIJ COMPANY LIMITED Through its Managing Director Having registered office at:

Urja Sadan, Nana Varachha Road, Kapodara Char Rasta, Surat-395006

2. Eagle Group Through Authorised Signatory …Respondent No.1 Mr. Radheshyam B. Jaju Office Address at:

201, Orleans, Sosyo Circle, Udhna Mangdalla Road, Surat, Gujarat- 395002 …Respondent No.2 Present:

For Appellant: Mr. Ajit Kumar Sinha, Sr. Advocate with Mr. Srijan Sinha, Mr. Himanshu Chaubey, Mr. Siddharth Garg, Ms. Lihzu Shiney Konyak, Ms. Nitya Prabhakar and Mr. Rishi Chouksey, Advocates.

For Respondent: Ms. Srishti Khindaria, Advocate for R1.

Adv. Saumitra Chaturvedi, Advocate for R2/SRA.

J U D G M E N T

(25th May, 2026)

INDEVAR PANDEY, MEMBER (T)

The present Appeal has arisen out of the order dated 27.11.2025 passed by the National Company Law Tribunal, Ahmedabad Bench (Adjudicating Authority) in I.A. No. 47/2024 in CP(IB) No. 38/2020, whereby the application filed by Appellant-Sumeet Industries Limited (Corporate Debtor) through its Resolution Professional Mr. Satyendra Prasad Khorania, came to be dismissed. Through the said application, the Appellant had sought directions against Dakshin Gujarat Vij Company Limited (DGVCL)/ Respondent No.1 herein, for restoration of the Security Deposit amounting to Rs.8,30,25,606/, which according to the Appellant had been illegally adjusted by the Respondent No.1 after commencement of the Corporate Insolvency Resolution Process (“CIRP”), and further sought re-credit/refund of an amount of Rs.3,78,78,845.48/- , which had allegedly been appropriated by the Respondent No.1 towards pre-CIRP electricity dues in violation of the moratorium imposed under Section 14 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as ‘Code’). The Eagle Group which is the Successful Resolution Applicant (SRA) in the aforesaid CIRP has been Arrayed as Respondent No.2. Aggrieved by dismissal of its application by the Adjudicating Authority, Sumeet Industries Limited/ Corporate Debtor has filed this appeal through the Resolution Professional before this Appellate Tribunal.

Brief Facts of the Case

2. The facts relevant for deciding this matter are as given below: i. Proceedings against the Corporate Debtor were originally initiated by IDBI Bank through an application filed under Section 7 of the Insolvency and Bankruptcy Code, 2016, which came to be registered as CP (IB) No. 38/NCLT/AHM/2020 before the Ld. Adjudicating Authority.

ii. The CD was drawing electricity from the Respondent No.1. For the month of November 2022, the Energy Bill dated 02.12.2022 was issued by the Respondent No.1

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