NCLAT Upholds Voting Window Extended Within Unijules CIRP Timeline, Says No Material Irregularity

The National Company Law Appellate Tribunal (NCLAT) at Delhi has upheld the extension of the voting window in the insolvency resolution process of Unijules Life Sciences Ltd., holding that continuation of e-voting beyond the initially fixed date did not amount to a material irregularity as it remained within the overall CIRP timeline.

Dismissing a batch of appeals filed by unsuccessful resolution applicants and dissenting financial creditor Satsai Finlease Pvt Ltd, the appellate tribunal affirmed the order of the National Company Law Tribunal, Mumbai, approving the resolution plan submitted by S S Fabricators and Manufacturers Pvt Ltd, which had secured 98.54 percent votes of the committee of creditors.

The bench of Justice Ashok Bhushan and Barun Mitra noted that while the NCLT had directed that voting be completed by May 20, 2025, it had also fixed May 31, 2025 as the outer limit for completion of the CIRP.

The voting, which concluded on May 23, 2025, therefore did not breach the overarching timeline.

“It is also an uncontroverted fact that all the PRAs were aware that the voting window on the plan was extended up to 23.05.2025. Neither the DFCSatsai nor any other PRA at any point of time had raised any objection against extension of voting time-line. Having participated in the voting process and thereafter questioning the extension of voting window, and that too, after the voting had concluded and the plan of the SRA had emerged successful is clearly an act of approbation and reprobation which therefore cannot be accepted. Extended time-line cannot be seen to have materially affected the fairness and transparency of the e-voting process since this was not a case where participation by any PRAs was supressed in any manner or where PRAs or CoC members were kept in the dark regarding the extensions being allowed.”

The tribunal added that the extension did not affect the fairness or transparency of the process since no participant was kept in the dark or excluded.

Rejecting the challenge to the extension of the voting timeline, the tribunal held that the extension was granted at the request of members of the committee of creditors, who were cautioned about the consequences.

On the demand for a Swiss Challenge mechanism, the tribunal held that the committee of creditors had completed negotiations and consciously decided to proceed with voting, a decision falling within its commercial wisdom.

The tribunal made it clear that once the final deadline of March 4, 2025 had passed, resolution plans could no longer be altered. Any attempt to improve the bid after that stage would effectively amount to modifying the plan after submission, which is not permitted under the CIRP framework.

It also underlined that resolution applicants do not have a right to enhance their bids once the window for submitting revised plans has closed.