NCLT Allahabad Clears GSW Enterprises' ₹95 Crore Resolution Plan For Hind Agro Industries

The Allahabad bench of the National Company Law Tribunal (NCLT) has approved the resolution plan submitted by G.S.W. Enterprises Private Limited for Hind Agro Industries Limited.

The plan provides for payment of ₹95 crore towards settlement of stakeholder claims. It also envisages ₹200 crore towards working capital and capital expenditure over a five-year period.

The bench of Judicial Member Praveen Gupta and Technical Member Ashish Verma passed the order. The tribunal observed that once creditors approve a resolution plan with the required majority after assessing its feasibility, viability and value maximisation, its role is limited to examining whether the plan complies with the requirements of the Insolvency and Bankruptcy Code.

The corporate insolvency resolution process (CIRP) against Hind Agro Industries commenced on March 3, 2023. The proceedings were initiated on a petition filed by Dena Bank, now Bank of Baroda.

Paramjeet Singh Bhatia was appointed as Interim Resolution Professional at the commencement of the process. He was later confirmed as Resolution Professional by the Committee of Creditors (CoC).

The CoC comprised Punjab National Bank with a voting share of 37.65%, Bank of Baroda with 28.29%, Indian Bank with 14.94%, IFCI Limited with 12.46% and Central Bank of India with 6.66%.

The resolution process involved multiple rounds of invitations for expressions of interest. Fresh invitations were issued in January 2025 after the tribunal granted further extension and exclusion of time for completion of the CIRP.

Two resolution plans were ultimately received. One was submitted by G.S.W. Enterprises Private Limited and the other by Chemester Food Industry Private Limited.

The CoC examined both proposals and later adopted the Swiss Challenge mechanism. Discussions and negotiations were held with the resolution applicants before revised proposals were placed before creditors for consideration.

Voting on the competing plans concluded on May 29, 2025. G.S.W. Enterprises' resolution plan secured 87.54% of the voting share. IFCI, which held 12.46% voting rights, abstained from voting. The proposal submitted by Chemester Food Industry was not approved.

Under the approved plan, ₹95 crore has been earmarked for settlement of claims of financial creditors, operational creditors, employees and other stakeholders.

The plan also proposes ₹200 crore towards working capital requirements and capital expenditure over five years. Material placed before the tribunal showed that ₹30 crore is proposed for the refurbishment of plant and machinery, revival of operations and enhancement of capacity utilisation.

The remaining ₹170 crore represents projected reinvestment from future profits generated through operation of the company as a going concern. The tribunal recorded this clarification while considering the plan.

The successful resolution applicant furnished a performance bank guarantee of ₹7.5 crore. This was provided after adjustment of the ₹2 crore earnest money deposit submitted during the resolution process.

The tribunal noted that the plan provided for payment of CIRP costs in priority. It also recorded compliance with the requirements of the Insolvency and Bankruptcy Code and the CIRP Regulations.

The tribunal further noted that the plan had been approved by the CoC with the requisite majority. It recorded that the Resolution Professional and the successful resolution applicant had completed the necessary compliances required for implementation of the plan.

Approving the proposal, the tribunal held that it would be binding on Hind Agro Industries, its employees, members, creditors, government authorities, and other stakeholders.

A monitoring committee was constituted to oversee implementation of the resolution plan. The committee comprises a representative of Punjab National Bank, the Resolution Professional and a nominee of the successful resolution applicant.

The tribunal also directed that if the resolution plan is withdrawn or not implemented in accordance with its terms, the CoC would be entitled to forfeit the ₹2 crore earnest money deposit. The ₹7.5 crore performance security furnished by the successful resolution applicant can also be forfeited.