NCLT Delhi Questions Indian Bank's Belated RP Removal Bid, Cites Lack Of Basis For 'Loss Of Trust'

The New Delhi National Company Law Tribunal (NCLT) on 7 July questioned Indian Bank's attempt to replace the Resolution Professional (RP) of Nimitiya Hotel and Resorts Limited more than two and a half years after approving the resolution plan, observing that the bank failed to provide any factual basis beyond citing “loss of trust”.

Judicial Member Jyotsna Sharma and Technical Member Reena Sinha Puri directed that copies of its orders dated 20 March 2026, 15 April 2026, and 20 May 2026 be forwarded to the Chairman of Indian Bank for examination and necessary action.

The Bench observed that the bank's Deputy General Manager Sanjeev Kumar “could utter only a few words, stating 'loss of trust'. Beyond those few words he could not state any fact which would explain the purported loss of trust.”

The matter arose from the insolvency proceedings of Nimitiya Hotel and Resorts Limited. After approval of the resolution plan, the suspended directors and the sole CoC member filed multiple applications before the Tribunal seeking various reliefs, including settlement proposals, dismissal of the plan approval, reconsideration of the resolution plan, removal of the RP, and appointment of auditors.

Earlier, the Principal Bench of the NCLT had rejected an application filed by suspended director Sanjeev Mahajan seeking transfer of the company's insolvency proceedings from the Special Bench to another Bench.

The application was dismissed with costs. In another application, the Tribunal had imposed costs of Rs. 50,000 on suspended director Brij Mohan Mahajan for deliberately failing to disclose that a similar application had already been dismissed on merits.

Subsequently, Indian Bank filed an application seeking replacement of the RP on the ground of “loss of trust”. During the hearing, the bank's Deputy General Manager, Sanjeev Kumar, could not provide any specific facts supporting the claim despite repeated queries from the Bench.

The Bench noted that the Deputy General Manager appeared unaware of the facts leading to the application and was seeking assistance from his associates. It also asked him whether the alleged loss of trust occurred before or after approval of the resolution plan. The Deputy General Manager stated that CoC meetings held after approval of the plan had resulted in the loss of trust.

The Tribunal held that Sanjeev Kumar “looked ignorant of the real reason or the facts which have led the bank to act and conduct itself in the manner as is in this case before us or he had no good reason to state before us.”

The Bench emphasised that public sector banks, as custodians of public faith, must act with clarity and responsibility. It observed that the Tribunal also had a duty towards all stakeholders to uphold the trust placed in the adjudicatory process.

Accordingly, the NCLT directed that copies of its orders be forwarded to the Chairman of Indian Bank for examination and necessary action.

For Petitioners: Senior Advocate Sanjiv Sen, with Advocates Anant Gautam, Prahalad Balaji, Jharna Singh, Aman Gahlot, Rishi Chauhan for Indian Bank

For Respondents: Senior Advocate Abhinav Mukerji with Advocates Manoranjan Nayak, Archita Nigam, Nachiket Kaul, Kumar Anurag Singh, Nakul Mohit, Sanat Garg, Deepak Khosala, Hitesh Nagar, Zain. A. Khan