NCLAT Dismisses Challenge To Rungta Mines' Resolution Plan For NSL Nagapatnam Power

The National Company Law Appellate Tribunal Member Naresh Salecha has backed dismissal of suspended director Mandava Prabhakar Rao's challenge to Rungta Mines' resolution plan for NSL Nagapatnam Power and Infratech Ltd.

He held that Rao's representative was rightly excluded from the 20th Committee of Creditors meeting for lack of written authorisation and a confidentiality undertaking.

Salecha's opinion follows a difference of opinion between the Judicial and Technical Members of the original NCLAT Chennai bench.

As Salecha has concurred with the Judicial Member, his opinion forms part of the majority view. The matter will now go back to the original Division Bench at Chennai for passing the final order dismissing the challenge.

The tribunal held that Rao's representative, Nelluri Bapuji, was rightly excluded from the remaining proceedings of the 20th Committee of Creditors (CoC) meeting for not having written authorisation and a confidentiality undertaking.

“The requirement ensures that participation in such deliberations is confined to persons whose identity and authority to represent a participant are duly established,” Salecha observed.

The appeals arose from an NCLT Hyderabad order concerning the 20th, 21st, and 22nd CoC meetings and approval of Rungta Mines' resolution plan. A difference of opinion had earlier arisen between the Judicial Member and Technical Member of the NCLAT Division Bench at Chennai, leading to a reference to Salecha.

Salecha concurred with the Judicial Member that Bapuji's exclusion from the remaining proceedings of the 20th CoC meeting was justified.

Three resolution plans submitted by OMIPL, Rungta Mines, and Vedanta were considered at the 20th CoC meeting held on July 16, 2024. Rungta Mines' plan was subsequently approved through e-voting, which concluded on August 1, 2024, with 85.35% voting share.

Rao had argued that Bapuji had previously attended CoC meetings and was improperly excluded from the 20th meeting. Salecha, however, noted that the earlier meetings did not involve consideration of competing resolution plans.

The 20th meeting was materially different because three competing resolution plans were being considered for the first time.

Under Section 24 of the Insolvency and Bankruptcy Code, a suspended director can attend CoC meetings but cannot vote. The regulations also require a participant attending through a representative to inform the resolution professional in advance about the identity of the authorised representative.

Salecha held that this requirement was not merely an administrative formality, particularly when the CoC was considering commercially sensitive resolution plans.

He also rejected the argument that Bapuji's previous participation in CoC meetings meant the written authorisation requirement had been waived.

The confidentiality undertaking was furnished on July 25, 2024, after which the resolution plan and connected documents were provided on July 29. The e-voting concluded on August 1.

Salecha noted that the record did not show that any substantive representation or objection made after the documents were supplied was ignored or prevented.

He therefore held that the process did not contravene the Supreme Court's ruling in Vijay Kumar Jain v Standard Chartered Bank.

Salecha also held that the alleged procedural deficiencies did not warrant reopening the resolution process. By then, the resolution plan had been approved by the NCLT on May 27, 2025, and its implementation had been completed.

The NCLT took the closure report on record on February 10, 2026, after the resolution plan had been fully implemented and management and control of the corporate debtor had vested in Rungta Mines.

Salecha said no direction was warranted to reopen the CIRP, set aside the resolution plan or disturb its implementation.

He also reduced the ₹5 lakh costs imposed by the NCLT to ₹2 lakh, agreeing with the Judicial Member that the higher amount was disproportionate.

The tribunal consequently dismissed both appeals and declined to interfere with the NCLT's orders concerning the CoC proceedings and Rungta Mines' resolution plan.