Santosh R. Shetty Vs Rajan Deshraj Agarwal (NCLAT Delhi)
Summary: The National Company Law Appellate Tribunal, Principal Bench, New Delhi considered two appeals filed by Santosh R. Shetty, suspended Director and promoter of Sristi Hospitality Private Limited, under Section 61 of the Insolvency and Bankruptcy Code, 2016 against orders of NCLT Mumbai Bench-V. The first appeal challenged dismissal of an application seeking fresh valuation and declaration that the CIRP was void; the second challenged approval of the resolution plan. The Corporate Debtor, an MSME engaged in hospitality, owned Liberty Lodge at Vile Parle West, Mumbai. Saraswat Co-operative Bank Ltd. had extended secured facilities aggregating Rs.21.50 crore in 2017. After defaults and SARFAESI action, the Bank filed a Section 7 application claiming Rs.28,30,42,444.42, which was admitted on 27.02.2023.
The Appellant alleged serious procedural irregularities, including short notice for CoC meetings, denial of minutes and the resolution plan, inflated creditor claims, collusion between the Resolution Professional and Successful Resolution Applicant, and substantial undervaluation of Liberty Lodge. He relied on earlier valuations of Rs.57.65 crore in 2017 and Rs.76.72 crore in 2020 and argued that the approved plan consideration was far below the property’s actual value. He further contended that, as promoter of an MSME and personal guarantor, he had a direct stake in the CIRP and was ready to offer a superior proposal.
