Arpan Maheshkumar Shah Vs Committee of Creditors Omshri Devprocon Ltd. & Ors. (NCLAT Delhi)
The National Company Law Appellate Tribunal, Delhi (National Company Law Appellate Tribunal) considered an appeal challenging the rejection of a resolution plan by the Adjudicating Authority. The appeal was filed with a delay of nine days, which was condoned after the Tribunal found sufficient cause. The impugned order had rejected the plan approval application after examining the corporate debtor’s financial position, balance sheets, valuation reports, and statutory dues.
The Adjudicating Authority noted that, as per the balance sheet dated 31 March 2022, the corporate debtor’s total assets were over ₹137 crore, with current assets exceeding ₹114 crore, and liabilities increasing from approximately ₹103 crore to ₹137 crore over the same period. Despite the substantial increase in current assets within two years prior to commencement of CIRP, no adequate explanation or details were provided by the Resolution Professional or the Committee of Creditors. The statutory audit report and financial statements also lacked details regarding these significant current assets, and the valuation report treated the entire assets as NIL.
The Adjudicating Authority further observed that the proposed resolution plan value was only ₹74 lakh, while the assets of the successful resolution applicant were about ₹76 lakh. In addition, statutory dues, particularly income-tax dues, were recorded at over ₹83 crore, including a demand of more than ₹64 crore. Considering these aspects, the Adjudicating Authority concluded that the plan was not compliant with applicable provisions and rejected it. Consequent to the rejection, liquidation was ordered and a liquidator appointed.
