'Other Creditor' Status Does Not Confer Unrestricted Right To Challenge Resolution Plan: NCLT Chandigarh

The Chandigarh Bench of the National Company Law Tribunal (NCLT) has held that merely being classified as an “Other Creditor” does not confer on such creditor an unrestricted right to challenge a resolution plan, particularly where the challenge does not arise from the creditor's own admitted claim or any legally enforceable right under the Insolvency and Bankruptcy Code (IBC).

Judicial Member Khetrabasi Biswal and Technical Member Shishir Agarwal made the observation while dismissing an application filed by Pradeep Kumar Goel under Section 60(5) of the IBC read with Rule 11 of the NCLT Rules, seeking rejection of the resolution plan submitted for Chandigarh Overseas Pvt. Ltd. The Bench observed:

“Although the Applicant herein is categorized as an "Other Creditor", the underlying principle remains the same. The Code does not contemplate permitting an individual stakeholder, who was not part of the Committee of Creditors, to reopen the entire resolution process by raising objections to the commercial decision of the Committee. The statutory scheme of the Code envisages distinct rights and remedies for different categories of stakeholders, and an "Other Creditor" cannot, in the absence of a specific statutory entitlement, maintain an application seeking reconsideration of the Resolution Plan on grounds extending beyond the protection of his own legally enforceable right.”

Goel had earlier sought recognition as a Financial Creditor, but the Tribunal classified him as an “Other Creditor” by its order dated 17 April 2026. Although he challenged the classification before the National Company Law Appellate Tribunal (NCLAT), he contended that he continued to remain a creditor and stakeholder and was therefore entitled to question the legality of the resolution plan.

He argued that an “Other Creditor” has no authorised representative under the IBC and consequently lacks an alternative statutory mechanism to raise objections to the resolution plan. He relied on decisions including Jet Aircraft Maintenance Engineers Welfare Association v. Jet Airways (India) Ltd., Real Estate Regulatory Authority v. D.B. Corp Ltd. and GLAS Trust Company LLC v. Byju Raveendran.

The Tribunal, however, held that the classification, by itself, does not confer an unrestricted right to challenge a resolution plan. It observed that the right to maintain such proceedings must flow from the provisions of the IBC.

It noted that in the present case, Goel was not seeking adjudication of any right arising from his own claim. Instead, he sought to challenge third-party claims, the constitution of the Committee of Creditors (CoC), the Resolution Applicant's eligibility under Section 29A of the IBC, the conduct of the Resolution Professional and the resolution plan itself.

The Bench also noted that the CoC had approved the resolution plan with a 99.21% voting share and that Goel was never a member of the CoC. It relied on K. Sashidhar v. Indian Overseas Bank to reiterate that the CoC's commercial wisdom is non-justiciable and cannot be reopened by an individual stakeholder who was not part of the CoC.

It also clarified that Goel could pursue any other remedy available before the competent forum. However, it held that permitting the present challenge would amount to a collateral attack on the Corporate Insolvency Resolution Process outside the statutory framework of the IBC.

Accordingly, the NCLT held the application was not maintainable and dismissed it.