Supreme Court Flags Delay In Resolution Plan Approvals By NCLT, Seeks Data From Principal Bench, IBBI
Flagging delays in approval of resolution plans, the Supreme Court on Thursday sought details from the National Company Law Tribunal's Principal Bench in New Delhi and nationwide data from the Insolvency and Bankruptcy Board of India (IBBI).
A Bench of Justice J.B. Pardiwala and Justice K.V. Viswanathan directed the NCLT's Principal Bench to provide the following details:
“(i) How many applications for approval of resolution plans are pending?
(ii) For how long are such applications pending?
(iii) Reasons, why the approval applications have not been adjudicated upon till date.”
The court also directed the IBBI to place on record figures and statistics across the country on the same issue.
The directions came during the hearing of appeals in the insolvency proceedings of AVJ Developers (India) Pvt. Ltd., where a resolution plan approved by the Committee of Creditors on July 4, 2024, and filed on July 12, 2024, is still awaiting approval.
“It is very unfortunate that there is no adjudication on the approval past approximately two years,” the bench observed, noting that several such applications are pending before the NCLT Principal Bench as well as other benches.
The court impleaded the IBBI as a party and sought reports within two weeks. It also requested Senior Advocates Gopal Jain and Navin Pahwa to assist as amicus curiae before deciding the further course of action.
Background
The case arises from two appeals, one by the AVJ Heights Apartment Owners Association and another by a suspended director, challenging a 2023 order of the NCLAT which upheld the admission of India Infoline Finance Ltd's claim in the insolvency process.
The Resolution Professional had initially rejected the claim in January 2020 for lack of supporting records, but the NCLT allowed it, and the NCLAT upheld that decision. The top court also took note of an arbitral award relating to the Rs 85 crore claim, which is currently under challenge before the Delhi High Court.
For Appellant: AORs Udita Singh, Zeeshan Diwan with Advocate Shashank Agarwal
For Respondent: Senior Advocates Neeraj Kishan Kaul, Nakul Dewan with Advocates Nikhil Mehndiratta, Toyesh Tewari, Agastya Sen, Nidhisha Chokshi, Danya Krishnan, Dhanya Krishnan, Mani Gupta, Dua Associates, AOR