Case Law Details
Capriso Finance Limited & Ors. Vs Trishul Dream Homes Limited (NCLT Chandigarh)
The application was filed by Mr. Jalesh Kumar Grover, Resolution Professional (RP) of Trishul Dream Homes Limited under Section 30(6) of the Insolvency and Bankruptcy Code, 2016 (IBC), seeking approval of the resolution plan submitted by Vashisth Builders and Engineers Limited and Vashisth Estates Limited (the Successful Resolution Applicant – SRA). The plan, dated 19 February 2024 with an addendum dated 26 February 2024, was approved by the Committee of Creditors (CoC) with a 91.55% voting share in the 10th CoC meeting held on 23 February 2024.
The Corporate Insolvency Resolution Process (CIRP) had been initiated following a petition under Section 7 of the IBC by Capriso Finance Limited and Siri In Fin Lease Private Limited, which was allowed on 16 June 2023. The RP issued an Expression of Interest (EoI) in Form G. In the 5th CoC meeting held on 18 October 2023, the RP reported that four EoIs were received—two from corporate entities, one from an individual, and one from a consortium. At the 6th CoC meeting on 1 December 2023, the plan submitted by the consortium of Vashisth Builders and Engineers Limited and Vashisth Estates Limited was presented. The CoC approved the plan in its 10th meeting on 23 February 2024 with 91.55% votes. The fair value, liquidation value, and plan value were ₹68.42 crore, ₹61.50 crore, and ₹85.92 crore respectively.
The NCLT reserved its order on 22 August 2024, sought clarifications on 18 September 2024, and reserved it again on 16 December 2024. Subsequently, the plan was rejected on 23 April 2025. The Tribunal found that the resolution plan failed to comply with the mandatory requirements of Section 30(2) of the IBC despite CoC approval. It held that the plan did not provide fair treatment to all stakeholders and violated Section 30(2)(b), as operational creditors were not assured of receiving at least the liquidation value. It further cited non-compliance with Sections 30(2)(a) and (e), undervaluation of assets—particularly land values compared to the balance sheet—and failure to adhere to applicable laws and CIRP Regulations.
The NCLT observed that Regulation 6A was violated as individual notices were not issued to all creditors, which breached due process principles. It also noted that the treatment of CIRP costs was irrational, placing the burden of any cost increase on unsecured creditors. Furthermore, assigning the entire benefit of avoidance transaction recoveries to the SRA contradicted the equitable distribution principles under the Code. Based on these deficiencies, the NCLT held that the plan lacked fairness, transparency, and statutory compliance, leading to its rejection.
This decision was appealed before the National Company Law Appellate Tribunal (NCLAT) through Company Appeals (AT) (Insolvency) Nos. 732, 680, and 681 of 2025. The NCLAT reviewed the NCLT’s findings and held that the reasons for rejecting the plan did not amount to violations of Section 30(2) of the IBC. It examined the issues in detail (Paras 8–27 of its order) and observed that the plan had been duly approved by the CoC with 91.55% voting, and no stakeholders had raised objections regarding valuation or compliance.
NCLAT emphasized that the valuation was carried out by IBBI-registered valuers in accordance with CIRP Regulations and that the Adjudicating Authority should not interfere unless there was a clear statutory breach. It noted that the SRA had submitted a compliance affidavit covering statutory dues, CIRP costs, and other aspects flagged by the NCLT. The treatment of PUFE recoveries and CIRP cost allocation were deemed within the CoC’s commercial wisdom. On Regulation 6A, the NCLAT held that notices to creditors and public announcements satisfied the regulatory intent. It reaffirmed that judicial scrutiny cannot override commercial decisions absent specific violations of the Code. Accordingly, the NCLAT approved the resolution plan and remanded the matter for consequential orders.
Pursuant to the NCLAT order dated 20 May 2025, the NCLT Chandigarh approved the resolution plan dated 19 February 2024 and its addendum, declaring that it would be binding on all stakeholders under Section 31 of the IBC. The NCLT also approved the appointment of the monitoring agency as proposed in the plan and directed the RP and SRA to comply with all applicable company and statutory laws. Reliefs and concessions sought in the plan could be pursued through separate applications. Consequently, IA (IBC) (PLAN) No. 5 of 2024 was allowed.
FULL TEXT OF THE NCLT JUDGMENT/ORDER
1. The present application has been filed by Mr. Jalesh Kumar Grover, Resolution Professional of Trishul Dream Homes Limited (hereinafter referred to as the “Applicant” or “RP”) under Sections 30(6) of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as the “Code” or “IBC”), read with Rule 11 of The National Company Law Tribunal Rules, 2016 and the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (hereinafter referred to as the “CIRP Regulations”), seeking approval of the resolution plan of Vashisth Builders and Engineers Limited & Vashisth Estates Limited (hereinafter referred to as the “Successful Resolution Applicant” or “SRA” or “RA”), dated 19.02.2024 along with the Addendum dated 26.02.2024 in respect of Trishul Dream Homes Limited (hereinafter referred to as the “Corporate Debtor”) which was approved with a 91.55% voting share of the Committee of Creditors (hereinafter referred to as the “CoC”) in its 10th CoC meeting on 23.02.2024.
2. The brief facts of the case are as follows:
i. An application bearing CP (IB) No. 132/CHD/HRY/2022 was filed under Section 7 of the Code by the Capriso Finance Limited and Siri In Fin Lease Private Limited for the initiation of CIRP of the Corporate Debtor, which was allowed by this Adjudicating Authority vide its Order dated 16.06.2023. The Applicant published an Invitation of Expression of Interest (hereinafter referred to as the “EoI”) in Form ‘G’.
ii. In the 5th CoC meeting on 18.10.2023, the Applicant apprised the CoC that he has received 4 EoIs comprising 2 from corporate entities, 1 from an Individual and 1 from a group of individuals (consortium).
iii. In the 6th CoC meeting held on 01.12.2023, plan by sole eligible PRA i.e. Vashisth Builders and Engineers Limited & Vashisth Estates Limited (in ‘Consortium’) (hereinafter referred to as the “Vashisth & Vashisth”) was placed before the CoC.
iv. The plan was approved in the 10th CoC meeting on 23.02.2024 with 91.55% voting rights in favour of such resolution. The fair value, the liquidation value and plan value are Rs 68.42 crores, Rs. 61.50 crores and Rs. 85.92 crores respectively.
v. The order in this matter was reserved on 22.08.2024. The matter was relisted for seeking clarification on various issues on 18.09.2024 and reserved again vide order dated 16.12.2024. The Resolution plan was rejected vide order dated April 23, 2025 vide reasons detailed in Para 18 of the order.
3. The Claims admitted by the RP and proposal of the Resolution Applicant, payment schedule, term of the Resolution plan, Constitution of Monitoring Committee, compliances of requisite sections of the code and Regulations of CIRP Regulations, the reliefs, concessions and waivers have been discussed in detail in the said order dated 23.04.2025.
4. It was held that despite receiving 91.55% CoC approval, the plan did not meet the mandatory requirements under Section 30(2) of the Insolvency and Bankruptcy Code, 2016. Specifically, the Adjudicating Authority found that the plan failed to provide fair treatment to all stakeholders and was non-compliant with Section 30(2)(b), which mandates payment to operational creditors not less than the amount they would receive in liquidation. It also raised concerns under Section 30(2)(a) and (e), citing undervaluation of assets—especially land—when compared to the balance sheet, and failure to comply with applicable laws like CIRP Regulations. The Adjudicating Authority noted that Regulation 6A was not followed as individual notices were not issued to all creditors, violating principles of due process. Additionally, the CIRP cost treatment was found irrational, with any cost increase unfairly burdening unsecured creditors, and the assignment of avoidance transaction recoveries entirely to the resolution applicant was contrary to the equitable distribution principles underlying the Code. These deficiencies led the Adjudicating Authority to conclude that the resolution plan lacked fairness, transparency, and statutory compliance, justifying its rejection.
5. Thereafter, Company Appeal (AT) (Insolvency) No. 732, 680 and 681 of 2025 were filed in NCLAT challenging the same order. The Hon’ble NCLAT held that the grounds on which the NCLT rejected the plan did not amount to a violation Section 30(2) of the Insolvency and Bankruptcy Code.
6. The Hon’ble NCLAT has examined and addressed in detail in Paras 8-27 the concerns pointed out in the impugned order of NCLT. It observed that the plan had been duly approved by the CoC with a 91.55% majority, and no objections were raised by any stakeholders regarding the valuation of assets or compliance issues. NCLAT emphasized that the valuation was conducted by IBBI-registered valuers per CIRP Regulations and that the Adjudicating Authority should not interfere unless there is a breach of statutory provisions. The Hon’ble NCLAT found that SRA had submitted a compliance affidavit addressing statutory dues, CIRP costs, and other concerns raised by the NCLT. It also clarified that the treatment of PUFE recoveries and increase in CIRP costs were within the commercial wisdom of CoC. On Regulation 6A, NCLAT held that due notice was given to creditors, and even if some communications failed, the public announcement served regulatory purpose. It reaffirmed that judicial scrutiny cannot override commercial decisions unless specific violations of the Code are proven. Accordingly, resolution plan was approved, and the matter remanded for consequential orders.
7. The relevant para of order of Hon’ble NCLAT are reproduced below:
8. As the Hon’ble NCLAT has already allowed the interlocutory application and thereby approved the Resolution Plan, there cannot be further adjudication of merits of the interlocutory application in question except to pass the consequential order as per prayer and law. Therefore, this order is passed in compliance with the Hon’ble NCLAT order mentioned supra.
9. In the result, the Interlocutory application bearing IA (IBC) (PLAN) No. 5 of 2024 is hereby allowed with the following consequential directions:
i. The Resolution Plan dated 19.02.2024 along with the addendum dated 26.02.2024 submitted by Vashisth Builders and Engineers Limited (Holding Company) & Vashisth Estates Limited (Subsidiary Company) in consortium as approved by 91.55% voting share of the Committee of Creditors in its 10th CoC meeting convened on 23.02.2024 is hereby approved.
ii. We hereby declare that the provisions of the Resolution Plan shall be binding on the company, its creditors, guarantors, members, employees, Statutory Authorities and other stakeholders in accordance with Section 31of the code and shall be given effect to and implemented pursuant to the order of this Adjudicating Authority;
iii. We hereby approve the appointment of monitoring agency as stipulated in the approved Resolution Plan which was approved by the Committee of Creditors;
iv. The Applicant is directed to follow all extant provisions of Company Law and other laws, while implementing the Resolution plan;
v. For Reliefs and Concessions, as sought in the Resolution Plan, the Applicant and/or SRA is at liberty to file an appropriate application for the consideration/approval of the Adjudicating Authority.
10. As a result, the application in IA (IBC) (PLAN) No. 5 of 2024 stands allowed in terms of this order read with the NCLAT order dated 20.05.2025
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