Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2025 Supreme(Online)(NCLT) 7978

NATIONAL COMPANY LAW TRIBUNAL
MR. LABH SINGH, J, MS. REKHA KANTILAL SHAH, T
CFM ASSET RECONSTRUCTION PVT. LTD. – Appellant
Versus
MACHINE WORKS (INTERNATIONAL) LTD. – Respondent
IA (IBC)(Plan)/30/2025 | IA No. 746/KB/2025 | CP (IB) No.200/2022

Advocates:
For the Appellants/Petitioners: Mr. Shaunak Mitra, Ms. Sannoyee Chakraborty, Ms. Manavii Gupta
For the Respondents: Mr. Santanu Brahma, Mr. Anirban Basu, Mr. Siddhartha Chatterjee, Mr. Abir Lal Ghosh, Mr. Pradeep Sancheti, Mr. Jatan Monga

The approval of a resolution plan under the Insolvency and Bankruptcy Code requires strict adherence to statutory procedures and protections for financial creditors.

Headnote:(A) Insolvency and Bankruptcy Code, 2016 - Sections 30(6) and 31 - Corporate Insolvency Resolution Process (CIRP) - Approval of Resolution Plan - The application filed for the approval of a Resolution Plan by the Resolution Professional was considered by the Committee of Creditors and approved with 100% voting rights. The Adjudicating Authority reviewed the legality and compliance of the process undertaken during CIRP and acknowledged the proposal made by the successful resolution applicant. (Paras 1-11, 15)

(B) Compliance - Standards for Resolution Plan - The Court emphasized that the Resolution Plan must adhere to all statutory requirements and undergo scrutiny as per the Insolvency and Bankruptcy Code and its regulations to ensure fidelity to the due process. (Paras 2-4, 6, 11)

(C) Judicial Authority - Role of NCLT - The Tribunal’s authority extends to approving resolutions that align with commercial wisdom, emphasizing that no alternative commercial decisions could be ventured by the Tribunal beyond regulatory confines. (Paras 9.14, 11.13)

Facts of the case:
The application sought the Adjudicating Authority's sanction for a Resolution Plan following the Corporate Debtor's admission to insolvency processes initiated by a financial creditor based on its non-payment status. The resolution plan was approved unanimously by the Committee of Creditors, presenting a structured repayment schedule.

Findings of Court:
The Tribunal endorsed the resolution plan, marking it binding on all stakeholders and noted that the moratorium imposed would cease to be effective immediately post-approval, balancing creditor interests with the corporate debtor's revival.

Issues: The primary issues included ensuring the CIRP was completed within statutory timelines and the adequacy of compliance with the IBC provisions in the approval of the plan.

Ratio Decidendi: The Tribunal reaffirmed that for a resolution plan to be valid, it must strictly comply with the IBC provisions and regulations, ensuring no unexpected liabilities arise post-approval.

Result: The Resolution Plan submitted by Jaik Leasing and Commercial Investment Limited is approved and the application stands disposed of.

ORDER

(Heard Through Hybrid Mode)

PER: LABH SINGH, JUDICIAL MEMBER

1. The present interlocutory application bearing IA (IBC) (Plan) No. 30/KB/2025 was filed on 24.9.2025 by CA Shantanu Brahma Resolution Professional ( for short ‘RP’) of Machine Works (International) Limited, the Corporate Debtor (CD) under the provisions of Sections 30 (6) and section 31 of the Insolvency & Bankruptcy Code, 2016 for short ‘IBC Code) read with Regulation 39(4) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (for short ‘CIRP Regulations’) for approval of the Resolution Plan submitted by Jaik Leasing and Commercial Investment Ltd, the Successful Resolution Applicant (SRA), as approved by the Committee of Creditors (CoC) with 100% vote.

2. Brief facts about Corporate Debtor and CIRP:

2.1 The underlying Company Petition in CP (IB) No. 200/KB/2022 was filed by CFM Asset Reconstruction Pvt Limited against Machine Works (International) Pvt Ltd., the Corporate Debtor, under Section 7 of the Insolvency and Bankruptcy Code 2016 and the Corporate Debtor was admitted in Corporate Insolvency Resolution Process (for short ‘CIRP process’) by this Tribunal vide order dated 08.01.2025.

2.2 Initially, Mr. Arun Kumar Gupta was appointed as the Interim Resolution Professional. This Tribunal, lateron, appointed the applicant, CA Shantanu Brahma, as Resolution Professional of the Corporate Debtor vide order dated 21.02.2025 replacing erstwhile Interim Resolution Professional Mr. Arun Kumar Gupta.

3. Collation of Claims, Constitution of CoC, and Valuation

3.1 The erstwhile IRP made public announcement on 10.01.2025 in “Business Standard (English) and “Ekdin” (Bengali) newspapers both Kolkata Edition regarding initiation of CIRP process and called proof of claims from the financial and operational creditors, workers and employees of the Company in the specified forms till 22^nd January 2025.

3.2 The CoC was constituted on 06.02.2025 with sole Member, CFM Asset Reconstruction Pvt Ltd being the Secured Financial Creditor with 100% voting right in the CoC.

3.3 The applicant states that a total of twelve (12) meetings have been held during CIRP period, as follows:

3.4 Registered Valuers, namely Mr. Pritam Nag was appointed as valuer for valuation of land and building and Mr. Bhavin R. Patel & Associate was appointed as valuer for both land and building and SFA and Mr. Pijus Karmkar was appointed valuer for SFA, as resolved on 06.08.2025. It has been submitted that the COC has considered the Resolution Plan, keeping in view the Valuation Reports submitted by the Registered Valuers, named above. The summary of the Fair Value and Liquidation Value of the Corporate Debtor are as under:

Copy of the Valuation Reports has been annexed with the Application for approval of the Resolution Plan as Annexure “A-21”, “A-22”, “A-23”, and “A-24”

3.5 Valuation of the Corporate Debtor, as further provided in Form H, is as follows:

4. Invitation for Resolution Plan, Evaluation and Voting:

4.1. The Applicant submits that in terms of the provisions of section 25(2)(h) of the Code read with regulation 36A (1) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, invitations in Form ‘G’ for Expressions of Interest (“EoI”) from potential resolution applicants were issued. Form ‘G’ was published on 07.04.2025 for submission of resolution plans for the Corporate Debtor. The last date for receipt of EoIs was 22.04.2025. This was published in “Business Standard” (English) and “Ekdin” (Bengali) newspapers both Kolkata Edition. The notice was also published on the website of the Insolvency and Bankruptcy Board of India (hereinafter referred to as ‘IBBI’).

4.2. The Applicant submits that in response to the invitation for “EoI”, upto the last date, i.e 22.04.2025, two “EoIs” were received from Jaik Leasing and Commercial Investment Limited and Agravanshi Private Limited.

4.3. The fina