Unsolicited Higher Bid Cannot Compel Resolution Plan Approval: NCLAT Delhi

Amba Grains Pvt. Ltd. & Ors. Vs Amit Agrawal Resolution Professional of Mastana Foods Pvt. Ltd. & Ors. (NCLAT Delhi)

Summary : The National Company Law Appellate Tribunal, Principal Bench, New Delhi, dismissed five connected appeals challenging approval of the resolution plan for Mastana Foods Private Limited and rejection of objections to that plan. The appeals were filed by Amba Grains Private Limited and others, suspended director and personal guarantor Anil Khurana, and prospective resolution applicant, suspended director and personal guarantor Krishan Mohan Mendiratta. The Bench examined objections concerning an unsolicited higher bid after the e-challenge process, subsequent clarification of the successful applicant’s treatment of secured tax dues, eligibility verification under Section 29A of the Insolvency and Bankruptcy Code, valuation of land and buildings, continuation of the resolution professional after disciplinary suspension, the consortium’s proposed implementation and shareholding structure, and a one-time settlement proposal.

The corporate debtor entered CIRP on 18 September 2019 following State Bank of India’s Section 7 application. SBI constituted the Committee of Creditors with 100% voting share. Earlier invitations and a previously approved bid were followed by further proceedings concerning State tax claims. A fresh Form G was published on 7 December 2024, and eight applicants submitted plans in the ensuing process. After presentations and an initial round of improved financial proposals, the CoC conducted online e-bidding on 15 April 2025. The consortium of HR Commercials Private Limited and Crown Steels emerged as the highest bidder at approximately ₹131.91 crore; Amba’s final e-bid was approximately ₹91.91 crore, and Mendiratta’s was approximately ₹77.91 crore. SBI subsequently approved the successful consortium’s revised plan and addendum with its entire voting share.

Amba incorporated its ₹91.91 crore e-bid in a plan submitted on 21 April 2025 but then unilaterally submitted another plan on 22 April 2025 increasing its offer to ₹133.91 crore. It argued that the enhanced offer deserved consideration, particularly because the successful applicant was subsequently permitted to revise its plan. The resolution professional, SBI and the successful applicant relied on the RFRP, the 8 April 2025 process communication and the applicants’ undertakings. These required revised plans to incorporate the final e-bidding amounts and prohibited unilateral deviation while reserving the CoC’s powers to negotiate. SBI also submitted that, despite Amba’s higher aggregate second offer, the successful applicant’s proposal provided more to secured financial creditors. Anil Khurana disputed the comparative NPV and maintained that lower recovery directly prejudiced him as personal guarantor.

The Tribunal held that extension of the deadline for submitting revised plan documents to 22 April 2025 did not reopen the financial bidding process. Under the accepted process terms, an applicant could not substitute another amount for its final e-bid unless called upon by the CoC or resolution professional. Amba’s enhanced plan and correspondence had, in fact, been placed before the CoC, which consciously approved the successful consortium’s plan. The CoC could assess feasibility, viability and other plan provisions and was not bound to accept a proposal merely because it stated a higher amount. The RFRP also permitted negotiation with the highest e-bidder. The Tribunal treated Amba’s unilateral enhancement as unsolicited and rejected the contention that its non-selection established discrimination.

The appellants separately challenged the additional provision for Haryana VAT/excise dues, alleging that the successful applicant’s original plan did not comply with State Tax Officer Vs Rainbow Papers Limited. The Tribunal found that clarification of the tax department’s treatment had been sought from all applicants. Further queries were sent only to applicants whose replies were vague. Against the department’s admitted claim of ₹12,05,07,027, the successful applicant had initially provided ₹4,06,10,868 and subsequently provided a further ₹3,32,27,872, taking that allocation to ₹7,38,38,740. The Tribunal accepted this compliance-driven clarification and addendum, finding that all applicants had the opportunity to clarify their treatment of the claim and that the successful plan was compliant when considered for approval.

On presentation of allegedly non-compliant plans, the Tribunal considered Sections 30(2) and 30(3), Regulation 39 and the 26 May 2025 amendment to the CIRP Regulations, together with IBBI’s press release dated 30 May 2025. The amended framework required presentation of all received plans, including details of non-compliant plans, to the CoC. It was already in force when the CoC considered the plans in July 2025. The Tribunal distinguished presentation and scrutiny from approval of a compliant plan and found no violation in obtaining clarifications. It also rejected the Section 29A objection: the resolution professional submitted that the due diligence report confirming applicants’ eligibility had been shared with the CoC on 10 April 2025, before e-bidding. The Tribunal found no basis for Amba to use its stated uncertainty over eligibility to justify an enhanced bid after the auction.

The suspended directors and guarantors challenged the valuation of approximately 34.30 acres of land at Kaithal, Haryana, alleging that agricultural circle rates had been used despite conversion to industrial use. They relied on a privately obtained valuation and the Enforcement Directorate’s earlier valuation. The Tribunal recognised that suspended directors who were also personal guarantors could challenge approval under Section 61, but rejected their valuation objections on the record. Two IBBI-registered valuers had assessed the property, considered its industrial use, agricultural planning zone, surrounding land, access and market conditions. Market indications of ₹1.80–₹2.20 crore per acre led to a base rate of ₹2 crore, adjusted to ₹1.40 crore per acre, and a land valuation of approximately ₹48.02 crore. The Tribunal found no glaring illegality, noted that the valuers had not differed significantly, and declined to reopen the accepted valuation merely on competing assertions.

The Tribunal also upheld continuation of the resolution professional. The disciplinary suspension order dated 24 July 2025 itself gave the CoC liberty to decide whether he should continue. Given the advanced stage of CIRP, the CoC consciously retained him, and the Tribunal concurred with the adjudicating authority’s conclusion. On the proposed implementation structure, it interpreted the RFRP’s statement that the consortium “may” identify or incorporate a special purpose company as an option. Incorporation of such a company was therefore not mandatory. However, because HR Commercials and Crown Steels remained responsible for implementing the approved plan within the stipulated 270 days from its effective date, the Tribunal expressly directed the consortium to retain more than 50% shareholding in the corporate debtor until full implementation.

The one-time settlement argument also failed. The Tribunal found no compulsion on SBI to accept the suspended director’s proposal and declined to issue such a direction after approval of the resolution plan. It noted the adjudicating authority’s findings on the proposal, its rejection and the asserted routing of funds. Any dispute over SBI’s retention of an upfront amount before CIRP could be raised before the appropriate forum. Reiterating that statutory review under Sections 30(2), 31, 32 and 61(3) does not permit the adjudicating or appellate authority to substitute its commercial assessment for that of the CoC, the Tribunal dismissed all five appeals, made no order as to costs and disposed of pending applications, subject to its direction requiring the consortium’s majority shareholding until implementation.

Cases Discussed

• Santosh R. Shetty Vs Rajan Deshraj Agarwal; Company Appeal (AT) (Ins) No. 1378 of 2024 (NCLAT Delhi) — Quoted on registered valuation, competing private valuations and the limited grounds for reopening an approved plan.
• Express Resorts and Hotels Limited Vs Amit Jain; 2026 SCC OnLine NCLAT 649 (NCLAT) — Cited by the resolution professional in support of the plan-evaluation and negotiation process.
• Vedanta Limited Vs Bhuvan Madan, Resolution Professional of Jaiprakash Associates Limited & Ors.; Company Appeal (AT) (Ins) Nos. 552–553 of 2026; 04/05/2026 (NCLAT) — Cited on unsolicited post-challenge modifications; distinguished because the successful applicant here responded to a compliance query. The governing process distinguished solicited compliance clarification from unilateral revision.
• Torrent Power Limited Vs Ashish Arjunkumar Rathi & Ors.; Civil Appeal Nos. 11746–11747 of 2024 and connected appeals, decided 27/02/2026; (2026) ibclaw.in 109 SC (Supreme Court) — Relied on for primacy of the CoC’s commercial decision and the economic consequences of excessive judicial review.
• Praful Satra Vs Vaishali Patrikar; Civil Appeal No. 12613 of 2025; order dated 07/11/2025 (Supreme Court) — Mentioned within the quotation from Santosh R. Shetty as upholding the NCLAT decision.
• Kalyani Transco Vs Bhushan Power & Steel Limited; 2025 SCC OnLine SC 2093; (2025) ibclaw.in 388 SC (Supreme Court) — Relied upon in paragraph 167 on the limited statutory grounds for reviewing CoC commercial decisions.
• Prafful Satara Vs Vaishali Patrikar; Company Appeal (AT) (Ins) No. 1627 of 2024 (NCLAT) — Reproduced on valuation by registered valuers after commencement of CIRP and rejection of competing historical valuations.
• Kalyani Transco Vs Bhushan Power and Steel Limited; 2025 SCC OnLine SC 1010 (Supreme Court) — Cited in the parties’ submissions; the source also refers to (2026) 6 SCC 431 when discussing the standing of suspended directors and personal guarantors.
• Independent Sugar Corporation Limited Vs Girish Sriram Juneja & Ors.; (2025) 5 SCC 209 (Supreme Court) — Cited concerning the ability of an aggrieved suspended director, personal guarantor or unsuccessful applicant to challenge approval.
• State Bank of India Vs Consortium of Murari Lal Jalan and Florian Fritsch; (2025) 4 SCC 354 (Supreme Court) — Invoked by the appellants for the binding character of RFRP obligations.
• Noida Special Economic Zone Authority Vs Manish Agarwal & Ors.; (2025) 1 SCC 415 (Supreme Court) — Appears in a reproduced precedent on valuation as a factual matter and deference to a compliant valuation process.
• Swan Energy Limited Vs Chandan Prakash Jain & Ors.; Company Appeal (AT) (Ins) No. 313 of 2024 (NCLAT) — Distinguished: that case concerned substitution of the resolution applicant after approval.
• Madhukar Shetty Vs Bank of Baroda & Ors.; Company Appeal (AT) (Ins) Nos. 739–740 of 2024 (NCLAT) — Cited directly and in reproduced passages on the irrelevance of pre-CIRP valuations; a reproduced passage prints the appeal range as 739–749.
• Deccan Value Investors L.P. & Anr. Vs Dinkar Venkatasubramanian & Anr.; Civil Appeal No. 2801 of 2020 with connected appeals, decided 06/03/2024 (Supreme Court) — Paragraph 165 refers to Metalyst Forgings Ltd. (Resolution Professional), with (2026) 6 SCC 624, while reproducing the discussion of expert due diligence and post-approval objections.
• Committee of Creditors Vs Resolution Professional of Horizon Buildcon Private Limited; Company Appeal (AT) (Ins) No. 1633 of 2023 (NCLAT) — Quoted on valuation conducted under the Regulations and the absence of a ground for fresh valuation after plan approval.
• Excise and Taxation Officer of State Tax Vs Ashok Kumar Juneja; Civil Appeal Nos. 7514–7515 of 2022; final order dated 22/01/2024 (Supreme Court) — Earlier litigation in the corporate debtor’s CIRP that led to reconsideration of the State tax creditor’s treatment and a fresh resolution process.
• Jindal Power Limited Vs Dhiren Shantilal Shah & Ors.; 2024 SCC OnLine NCLAT 46 (NCLAT) — Discussed on unsolicited plans. The Tribunal extended its reasoning to an unrequested revision by an applicant already on the final list.
• Jubilee Metal Private Limited Vs Surendra Raj Gang, Resolution Professional of Metenere Limited & Anr.; Company Appeal (AT) (Ins) No. 1550 of 2023 (NCLAT) — Distinguished because that case involved a change in constitution and directorship contrary to express undertakings without required creditor approval.
• Ramkrishna Forgings Limited Vs Ravindra Loonkar, Resolution Professional of ACIL Limited & Anr.; Civil Appeal No. 1527 of 2022; 21/11/2023; MANU/SC/1250/2023 (Supreme Court) — Cited within reproduced NCLAT decisions against casual revaluation and substitution of judicial assessment for CoC commercial judgment.
• M.K. Rajagopalan Vs Dr. Periasamy Palani Gounder & Anr.; (2024) 1 SCC 42 (Supreme Court) — Invoked against irregular approval and uninformed commercial decisions; distinguished because the revised plan there had bypassed CoC approval.
• Vistra ITCL (India) Limited Vs Torrent Investments Private Limited & Ors.; 2023 SCC OnLine NCLAT 110 (NCLAT) — Cited in submissions for the CoC’s power to negotiate further after a challenge mechanism.
• State Tax Officer Vs Rainbow Papers Limited; Civil Appeal Nos. 1661 and 2568 of 2020; 06/09/2022; (2023) 9 SCC 545 (Supreme Court) — Central to the clarification of the Haryana VAT/excise creditor’s treatment and the additional allocation made through the successful applicant’s addendum.
• Vallal RCK Vs Siva Industries and Holdings Limited & Ors.; (2022) 9 SCC 803 (Supreme Court) — Discussed on commercial wisdom in a Section 12A withdrawal context and the narrow grounds for interference.
• Ajay Gupta Vs Pramod Kumar Sharma; (2022) 6 SCC 86 (Supreme Court) — Distinguished on equal opportunity: here the resolution professional’s compliance communication was sent to all applicants.
• Canara Bank Vs Ms. Mamta Binani; 2022 SCC OnLine NCLAT 3 (NCLAT) — Paragraphs 32–36 were reproduced on scrutiny of plans and Section 29A compliance; no violation was found on the present facts.
• Ngaitlang Dhar Vs Panna Pragati Infrastructure (P) Limited & Ors.; Civil Appeal Nos. 3665–3666 and 3742–3743 of 2020; 17/12/2021 (Supreme Court) — Cited by the successful applicant against reopening a concluded bid process merely to permit an improved offer.
• Uflex Limited Vs Government of Tamil Nadu & Ors.; (2022) 1 SCC 165 (Supreme Court) — Cited in submissions on interpretation of process documents and the absence of a vested right in an unsuccessful participant.
• Pratap Technocrats Private Limited Vs Monitoring Committee of Reliance Infratel Limited; (2021) 10 SCC 623; (2021) ibclaw.in 148 SC (Supreme Court) — Quoted on the statutorily confined jurisdiction under Sections 30 and 31 and the absence of residual equity jurisdiction.
• Next Orbit Ventures Fund Vs Print House (India) Private Limited & Ors.; Company Appeal (AT) (Ins) No. 417 of 2020 (NCLAT) — Cited by the resolution professional concerning the contention that a successful applicant must conduct the same business as the corporate debtor.
• Ghanashyam Mishra and Sons Private Limited Vs Edelweiss Asset Reconstruction Company Limited; 2021 SCC OnLine SC 313 (Supreme Court) — Quoted on commercial wisdom, the binding effect of an approved plan and protection against surprise claims.
• Kalpraj Dharamshi Vs Kotak Investment Advisors Limited; 2021 SCC OnLine SC 204 (Supreme Court) — Quoted extensively on the primacy of CoC commercial wisdom and limited judicial review.
• Karad Urban Cooperative Bank Limited Vs Swwapnil Bhingardevay; (2020) 9 SCC 729 (Supreme Court) — Relied on for leaving commercial feasibility and viability to the CoC.
• Maharashtra Seamless Limited Vs Padmanabhan Venkatesh; (2020) 11 SCC 467 (Supreme Court) — Reproduced on the absence of a requirement that a bid match liquidation value and the limits of plan-approval review.
• Committee of Creditors of Essar Steel India Limited Vs Satish Kumar Gupta & Ors.; (2020) 8 SCC 531 (Supreme Court) — Referred to directly and within reproduced judgments on commercial wisdom and the statutory boundaries of judicial review.
• K. Sashidhar Vs Indian Overseas Bank & Ors.; (2019) 12 SCC 150 (Supreme Court) — A principal authority on the financial creditors’ commercial decision and the limited grounds for appellate intervention.
• Binani Industries Limited Vs Bank of Baroda & Anr.; 2018 SCC OnLine NCLAT 521 (NCLAT) — Invoked by the appellants; the Tribunal found its factual matrix different.
• ArcelorMittal India Private Limited Vs Satish Kumar Gupta & Ors.; (2019) 2 SCC 1 (Supreme Court) — Referred to in the discussion of Supreme Court authority governing resolution-plan review.