M.K. Rajagopalan Vs S. Rajendran (NCLAT Chennai)
The National Company Law Appellate Tribunal (NCLAT) Chennai addressed an application (IA No. 215 of 2023) by M.K. Rajagopalan seeking permission to appeal (Comp. App (AT) (CH) (INS.) No. 58 of 2023) against the National Company Law Tribunal (NCLT) Chennai’s order dated February 3, 2023. The NCLT had approved the resolution plan submitted by S. Rajendran, the second respondent, for Vasan Health Care Private Ltd. Rajagopalan, claiming to be a prospective resolution applicant who suffered due to the resolution process and whose objection to the plan was earlier dismissed by the NCLT, argued for his vested interest in the appeal. He cited previous NCLAT judgments to support his plea for leave to appeal, emphasizing his prior objection to the resolution plan.
The first respondent countered, asserting that as an unsuccessful resolution applicant, Rajagopalan lacked the legal standing (locus standi) to challenge the approved resolution plan and was not a stakeholder under the Insolvency and Bankruptcy Code (I&B Code), 2016. They highlighted that the resolution plan was already implemented, with funds infused and the management of Vasan Health Care transferred to S. Rajendran. Furthermore, they argued that Rajagopalan failed to include the corporate debtor as a necessary party in the appeal. The second respondent echoed these arguments, emphasizing that Rajagopalan voluntarily participated in the revised resolution plan process without protest and thus could not later contest its fairness or the selection outcome. They contended that Rajagopalan had no substantial defense against the plan’s implementation and sought dismissal of his application with costs. The NCLAT cited Supreme Court and its own precedents to support the argument that an unsuccessful resolution applicant typically lacks the standing to challenge an approved plan.
