'Other Creditors' Have No Right To Pre‑Approval Disclosure Of Resolution Plan: NCLT Chandigarh

The Chandigarh Bench of the National Company Law Tribunal (NCLT) on 5 June dismissed an application seeking disclosure of a resolution plan before its approval and held that “Other Creditors” cannot access it at the pre-approval stage.

Judicial Member Khetrabasi Biswal and Technical Member Shishir Agarwal heard the application filed by Sandeep Kumar and two others and rejected it. The Bench held:

“In any event, the present Applicants are admittedly 'Other Creditors' and not members of the CoC or statutory participants entitled to circulation of the Resolution Plan.”

The corporate debtor, Chandigarh Overseas Pvt. Ltd., entered the Corporate Insolvency Resolution Process (CIRP) on 27 February 2023.

The applicants asserted a pre-CIRP contractual interest in a land parcel measuring 15 Kanal 16 Marlas based on a sale agreement dated 21 July 2008, supported by an earlier agreement of 2005. They stated that they invested Rs 25 lakh and also filed a civil suit for specific performance, in which the court granted an injunction restraining alienation of the land.

During CIRP, the applicants submitted their claim in Form F under Regulation 9A of the CIRP Regulations, and the Resolution Professional classified them as “Other Creditors.” The Resolution Professional admitted their claim at a notional value of Rs 1 and communicated the same on 31 October 2023.

After the Resolution Professional refused to share the resolution plan filed before the Tribunal, the applicants moved an application under Section 60(5) of the Insolvency and Bankruptcy Code.

The applicants argued that they qualified as stakeholders in the CIRP and therefore had the right to examine the resolution plan to ensure protection of their interests. The Resolution Professional opposed the plea and contended that “Other Creditors” do not fall within the categories of financial or operational creditors and therefore have no statutory right to access the resolution plan before approval.

The Tribunal held that the applicants fell within the residual category of “Other Creditors” and were neither financial nor operational creditors under the Code. It further observed that even operational creditors, unless entitled to participate in Committee of Creditors meetings under Section 24, cannot access the resolution plan at the pre-approval stage.

Further, the Bench held that “Other Creditors” cannot claim any higher right of access and reaffirmed that the resolution plan remains confidential until approved by the NCLT, with access restricted to members of the Committee of Creditors and statutory participants.

Accordingly, the NCLT dismissed the application.