Tribunal Cannot Expand Asset Base After Approval of Resolution Plan Under Section 31: NCLT Guwahati

The Guwahati Bench of the National Company Law Tribunal (NCLT) on 12 June held that once a resolution plan is approved under Section 31 of the Insolvency and Bankruptcy Code, it cannot be used to rewrite, modify or expand the asset base contemplated under the plan.

Judicial Member Rammurti Kushawaha and Technical Member Yogendra Kumar Singh made the observation while rejecting a plea by the successful resolution applicant of Virgo Cements Limited seeking inclusion of additional land and adjoining mining areas within the approved resolution plan. The Bench held:

“Having participated in the CIRP with full knowledge of the disclosures contained in the Information Memorandum and having obtained approval of its Resolution Plan on that basis, the Applicant cannot subsequently seek enlargement of the assets of the Corporate Debtor by contending that additional land is required for implementation of the Plan.”

Virgo Cements was admitted into CIRP in December 2023. PRAG India emerged as the successful resolution applicant, and its resolution plan was approved in March 2025.

Thereafter, PRAG India sought rectification of the approved plan, claiming that the corporate debtor's land had been wrongly described as 20 bighas. It contended that a later physical verification showed the plant's operational footprint extended to about 24 acres, along with adjoining sand mines of around 26 acres, and that the 20 bighas figure was a bona fide error based on banking security documents.

The Monitoring Committee opposed the plea, submitting that the Information Memorandum and Committee of Creditors records consistently reflected ownership of only 20 bighas, and that PRAG India had conducted due diligence and proceeded with full knowledge of the asset position.

On examining the record, the Tribunal noted that the extent of land had been clearly disclosed in the Information Memorandum and that the applicant had raised no objection at the stage of submitting its plan. It observed:

“…despite having complete knowledge of the factual position, the Applicant proceeded to submit its Resolution Plan and participated in the CIRP process without raising any objection regarding the extent of land owned by the Corporate Debtor.”

The Bench also noted that PRAG India failed to produce any title deed, allotment order, revenue record, patta, lease deed or other legally recognised document establishing ownership of the additional land claimed. Rejecting the plea as a rectification exercise, it held:

“Such a relief goes far beyond the scope of rectification and would result in material alteration of the asset base considered during the resolution process.”

It further held that issues relating to access rights, easementary rights or adjacent land arrangements must be pursued before the competent authorities. The Tribunal added:

“once a Resolution Plan stands approved under Section 31 of the Insolvency and Bankruptcy Code, 2016, the jurisdiction of the Adjudicating Authority is limited. This Tribunal cannot rewrite, modify or expand the assets forming part of an approved Resolution Plan, particularly when such modification may affect rights of third parties who are not before this Tribunal.”

Accordingly, the NCLT dismissed the application.

For Petitioner: Advocate Arani Guha

For Respondent: Advocates R Banerjee and Zeba Khan