NCLAT New Delhi Restores Resolution Plan Approval Process For Aldiam Motors, Quashes NCLT Order

The New Delhi Bench of the National Company Law Appellate Tribunal (NCLAT) on 27 May set aside an order of the National Company Law Tribunal (NCLT), Ahmedabad Bench, which had rejected the resolution plan submitted by Meghdoot Leisure LLP for Aldiam Motors Pvt. Ltd.

Chairperson Justice Ashok Bhushan and Technical Member Barun Mitra held that the Corporate Insolvency Resolution Process (CIRP) was conducted in accordance with the directions of the Committee of Creditors (CoC) and found no material irregularity on the part of the Resolution Professional (RP). The Bench observed:

“In the present case, the entire CIRP was conducted under the CoC, which was 100% of IDBI Bank, the sole secured Financial Creditor. The RP has conducted the CIRP as per the decision of the CoC. There is no material irregularity to come to the conclusion that RP has not conducted the CIRP as per the decision of the CoC.”

Two appeals were filed before the NCLAT: one by Resolution Professional Manohar Lal Vij and the other by Meghdoot Leisure LLP, the Successful Resolution Applicant (SRA).

Aldiam Motors Pvt. Ltd., a Hyundai dealership and service operator, had defaulted on loans from IDBI Bank Ltd. in January 2020. The account was declared a non-performing asset, following which SARFAESI proceedings were initiated. With dues exceeding Rs 30.46 crore, IDBI Bank filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, which was admitted in May 2025. Manohar Lal Vij was appointed as Interim Resolution Professional (IRP) and later confirmed as Resolution Professional (RP).

IDBI Bank, holding 100% voting share in the CoC, was the sole secured financial creditor. The RP invited resolution plans and received four compliant bids. In November 2025, the CoC unanimously approved the Meghdoot Leisure LLP plan, valued at Rs 13.34 crore, which ranked highest under the evaluation matrix.

Despite CoC approval, the NCLT rejected the plan in March 2026, holding that the CIRP suffered from “material irregularities” affecting fairness, transparency, value maximisation, and the objective of resolution of the corporate debtor.

The RP submitted that the CIRP was conducted strictly under CoC directions, with full disclosures made through the Information Memorandum and virtual data room. It was further argued that IDBI Bank, as the sole creditor, was fully aware of the asset position and had approved the plan on an “as is where is” basis. The RP also contended that Claro Energy's bid was non-compliant and rightly rejected, and that its objections were untenable.

Meghdoot Leisure LLP denied being a related party to Aldiam Motors or its sister concern Aster Motors. It was argued that all resolution applicants had equal access to information, no bidder had any undue advantage, and the CoC approval, backed by a 100% vote, ought not to have been disturbed.

IDBI Bank supported both the RP and the SRA, stating that the CIRP was conducted in a fair and transparent manner. Claro Energy Ltd., however, alleged lack of transparency and failure on the part of the RP to take possession of a plot. It also contended that Meghdoot Leisure LLP was linked to Aster Motors and was therefore a related party.

The NCLAT held that all relevant information had been duly captured in the Information Memorandum and shared with resolution applicants. It also noted that possession of the plot had been handed over to the RP by IDBI Bank and that valuation had been conducted accordingly.

Reiterating the limited scope of judicial review, the Tribunal emphasised that the Adjudicating Authority cannot interfere with the commercial wisdom of the CoC except within the bounds of Section 30(2) of the IBC. The Bench observed:

“We are of the view that observations and grounds on the basis of which Adjudicating Authority has rejected the application for Plan approval, are not covered within the limited jurisdictional review, which is conferred to the Adjudicating Authority to interfere with the commercial wisdom of the CoC.

.. No stakeholder of the CD has raised any objection with regard to conduct of the CIRP or the approval of Resolution Plan by the CoC, except Claro Energy, a unsuccessful Resolution Applicant. We in the facts of the present case are satisfied that order of the Adjudicating Authority rejecting the Plan approval application, cannot be sustained.”

Accordingly, the NCLAT allowed both appeals, revived the plan approval application and directed the NCLT to pass appropriate orders expeditiously, preferably within three months.