The National Company Law Appellate Tribunal (NCLAT) at Delhi has held that the Successful Resolution Applicant (SRA) and Resolution Professional (RP) cannot be held liable for delay in implementing a resolution plan when its terms permitted payments to creditors and other stakeholders to be deferred during the pendency of appeals against the plan, even in the absence of a stay order.
“Therefore, when mere pendency of an appeal against the plan was sufficient for the SRA not to make any payment to the creditors or any stakeholder, the SRA or the RP cannot be held liable for the delay,” the tribunal observed.
The Bench of Judicial Member Justice Mohd. Faiz Alam Khan and Technical Member Naresh Salecha further held that the NCLT ought to have noticed the discrepancy between the relevant clauses of the resolution plan while approving it. The stakeholders could not be held responsible for acting on the basis of a clause that the NCLT had approved without modification.
The Bench set aside the NCLT's finding that the SRA had violated the resolution plan by delaying its implementation. It also expunged directions referring to the conduct of the erstwhile RP, the SRA, and Saraswat Co-operative Bank to the Insolvency and Bankruptcy Board of India (IBBI).
The appeals were filed by the SRA consortium comprising Admas Industries Pvt. Ltd., Subh Ashish Exim Pvt. Ltd., Amit Jain and Hardcastle Restaurants Pvt. Ltd., and former RP Rajan Deshraj Agarwal.
The dispute arose from the CIRP of Sristi Hospitality Private Limited, admitted into insolvency on February 27, 2023. Saraswat Co-operative Bank was the sole CoC member and approved the consortium's resolution plan on August 5, 2023. The NCLT approved the plan on July 12, 2024. Appeals filed by the suspended director challenging the approval were dismissed by the NCLAT on July 14, 2026.
The plan was required to be implemented by August 27, 2024, but was implemented only on July 30, 2025. The NCLT subsequently questioned the delay and referred the conduct of the SRA, RP and bank to the IBBI.
Before the NCLAT, the SRA argued that Clause 5.7(ii) permitted deferment of payments while appeals were pending. The bank and RP supported this position, arguing that they could not be faulted for following the approved plan.
The NCLAT agreed, holding that the NCLT had approved the relevant clause without modification and should have addressed the inconsistency at that stage. It also noted that the SRA had not been given an opportunity to explain its conduct before adverse remarks were recorded.
The tribunal accordingly allowed both appeals and set aside the adverse findings and IBBI referral.
For Appellants: Senior Advocate Vivek Sibal with Advocates. Anjali Sharma, Ragini Vinaik, Hridyaa Singh
For Respondent: Senior Advocate Sumant Batra with Advocates Akshay Goel, Sarthak Bhandari, Riya Kaur Arora, Aditya Jain, Dhruv Sharma, for RP; Advocates Janender Kumar Chumbak, Radhika for R2