NCLT Kolkata Rejects Bengal EMTA Coal Mines Resolution Plan Offering ₹86 Lakh Against ₹299 Crore Claims

The Kolkata Bench of the National Company Law Tribunal (NCLT) has recently refused to approve the resolution plan submitted by successful resolution applicant Sarika Maiwall for Bengal EMTA Coal Mines Limited.

It found that the plan proposed a payout of just ₹86 lakh against admitted claims of nearly ₹299 crore and appeared to extinguish substantial statutory liabilities despite pending proceedings before the Supreme Court.

A coram of Judicial Member Bidisha Banerjee and Technical Member Siddharth Mishra passed the order on an application filed by the Resolution Professional seeking approval of the resolution plan.

The tribunal observed, "In view of the above, it appears that there is a categorical admission that by way of the Resolution Plan, there is a concerted effort to wipe out huge liabilities of the Corporate Debtor against Statutory Authorities, contempt proceedings in regard to non-compliance of which orders is pending before the of Hon'ble Apex Court."

The tribunal noted that the plan proposed to pay only ₹86 lakh against admitted claims of about ₹299 crore. It also noted that the company's books reflected receivables of nearly ₹198 crore, although the actual recoverable amount remained uncertain because the accounts could not be reconciled with West Bengal Power Development Corporation Limited (WBPDCL).

According to the Resolution Professional, the receivables could not be conclusively verified because the records were old. WBPDCL, on the other hand, maintained that Bengal EMTA Coal Mines owed money to it, contrary to what was reflected in the company's books.

The tribunal also considered the company's claim for compensation under the Coal Mines (Special Provisions) Act, 2015. It was informed that the company continued to face a contingent liability of about ₹1,752 crore arising from the additional levy imposed after the Supreme Court cancelled coal block allocations.

Contempt proceedings over non-payment of the levy also remain pending before the Supreme Court.

Referring to these circumstances, the tribunal noted that the proposed payout under the plan was meagre when viewed against the receivables reflected in the company's financial records.

The tribunal also questioned the manner in which the insolvency process had been conducted. It noted that the Resolution Professional and the process adviser had funded the earnest money deposit payable by the successful resolution applicant.

The tribunal described such an arrangement as "unheard of."

It further examined the minutes of the Committee of Creditors' meetings. The tribunal found that creditors had initially considered the financial proposal to be far below their expectations and had even discussed liquidation.

However, a revised proposal circulated the next day was approved without any deliberations on the revised offer being recorded in the minutes.

Holding that these discrepancies "speak volumes about the lack of bona fide in conduct of the entire process leading to the preparation of the Plan," the tribunal dismissed the application for approval of the resolution plan. It directed that the main insolvency proceedings be listed on July 21, 2026.