Case Note & Summary
The National Company Law Appellate Tribunal (NCLAT), Chennai Bench, dismissed an appeal filed by IDBI Bank Ltd. against an order of the National Company Law Tribunal (NCLT), Hyderabad Bench, dated 28.05.2024. The appeal arose from IA (IB) No. 41/2024 in CP (IB) No. 111/07/HDB/2017 concerning the corporate insolvency resolution process (CIRP) of Lanco Infratech Limited. The NCLT had directed the formation of a Monitoring Committee under Clauses 3.9 and 3.10 of the Acquisition Plan to ensure strict adherence to timelines, with the Chairman of the Committee required to report any breach to the NCLT for potential forfeiture of margin money. IDBI Bank challenged this order, arguing that the liquidator lacked authority to implement the plan without the Committee of Creditors' approval. The NCLAT, per Justice Sharad Kumar Sharma, held that the NCLT's directions were within its jurisdiction under Section 60(5) of the Insolvency and Bankruptcy Code, 2016, and that the liquidator, appointed under Section 33, had the requisite authority. The appeal was dismissed as devoid of merit, with no order as to costs.
Headnote
A) Insolvency and Bankruptcy Code - Acquisition Plan - Monitoring Committee - The NCLT directed formation of a Monitoring Committee under Clauses 3.9 and 3.10 of the Acquisition Plan to ensure adherence to timelines, with forfeiture of margin money for any breach. The NCLAT upheld this direction, finding no error in the NCLT's order. (Paras 1-3)
B) Insolvency and Bankruptcy Code - Liquidator's Authority - Section 33 - The liquidator, appointed under Section 33 of the IBC, has the authority to implement the Acquisition Plan approved by the Committee of Creditors, and the NCLT's directions were within its jurisdiction under Section 60(5). (Paras 4-6)
C) Insolvency and Bankruptcy Code - Appeal - Section 61 - The appeal by IDBI Bank against the NCLT order was dismissed as lacking merit, with the NCLAT finding no grounds to interfere with the impugned order. (Para 7)
Issue of Consideration
Whether the NCLT was justified in directing the formation of a Monitoring Committee and strict adherence to timelines under the Acquisition Plan, and whether the liquidator had the authority to implement the plan without the approval of the Committee of Creditors.
Final Decision
The NCLAT dismissed the appeal, upholding the NCLT order dated 28.05.2024. No order as to costs.
Law Points
- Insolvency and Bankruptcy Code
- 2016
- Section 60(5)
- Section 61
- Section 33
- Regulation 32A of IBBI (Liquidation Process) Regulations
- Acquisition Plan
- Monitoring Committee
- CIRP
- Liquidation
- Forfeiture of Margin Money
Case Details
2024 LawText (NCLAT) (01) 22
IA No. 328/2025 & IA No. 252/2025 in Company Appeal (AT) (CH) (Ins) No. 211/2024
Justice Sharad Kumar Sharma (Member Judicial)
Mr. Allwin Godwin, Mr. Sagar Dhawan, Mr. Anoop Rawat, Mr. Vimal Asthana, Ms. Aishani Das, Ms. Niranjana Pandian (for Appellant); Mr. E. Om Prakash, Senior Advocate, Mr. Ravikiran Singh, Ms. R. Moneshaa (for R1 & R3); Ms. Anuradha Bisani (Liquidator/R2)
KRS Erectors Pvt. Ltd., Ms. Anuradha Bisani (Erstwhile Liquidator and Chairman of the Monitoring Committee of Lanco Infratech Limited), Lanco Infratech Limited
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Nature of Litigation
Appeal against NCLT order directing implementation of Acquisition Plan in CIRP of Lanco Infratech Limited.
Remedy Sought
IDBI Bank sought to challenge the NCLT order dated 28.05.2024 which directed formation of a Monitoring Committee and strict adherence to timelines under the Acquisition Plan.
Filing Reason
IDBI Bank contended that the liquidator lacked authority to implement the Acquisition Plan without the approval of the Committee of Creditors.
Previous Decisions
NCLT Hyderabad Bench passed an order on 28.05.2024 in IA (IB) No. 41/2024 in CP (IB) No. 111/07/HDB/2017, directing formation of a Monitoring Committee and adherence to timelines under the Acquisition Plan.
Issues
Whether the NCLT was justified in directing the formation of a Monitoring Committee and strict adherence to timelines under the Acquisition Plan.
Whether the liquidator had the authority to implement the Acquisition Plan without the approval of the Committee of Creditors.
Submissions/Arguments
IDBI Bank argued that the liquidator lacked authority to implement the Acquisition Plan without the approval of the Committee of Creditors.
The respondents supported the NCLT order, contending that the liquidator had authority under Section 33 of the IBC and the NCLT's directions were within its jurisdiction under Section 60(5).
Ratio Decidendi
The NCLT's directions for formation of a Monitoring Committee and adherence to timelines under the Acquisition Plan were within its jurisdiction under Section 60(5) of the IBC. The liquidator, appointed under Section 33, had the authority to implement the plan approved by the Committee of Creditors.
Judgment Excerpts
Primarily the issue which is the subject matter of this instant Company Appeal is arising out of an Impugned Order of 28.05.2024, as it was passed by the learned NCLT, Hyderabad Bench in IA (IB) No. 41/2024 as preferred in CP (IB) No. 111/07/HDB/2017.
The consequential effect of the impugned order had been that the conclusion drawn by the Tribunal in Para Nos. 36, 37 & 38 relating to the implementation of the Acquisition Plan, directing the Monitoring Committee to be formed under Clause 3.9 and 3.10 of the Acquisition Plan so as to ensure the adherence of timelines for the purposes of implementation of the Acquisition Plan, as laid down in Annexure I, which was directed to be strictly adhered to by M/s. KRS Erectors Private Limited and any deviation of any nature whatsoever or a breach of any of the terms and conditions of the Acquisition Plan by M/s. KRS Erectors Pvt. Ltd., the Chairman of the Monitoring Committee, shall bring the same to the notice of the Adjudicating Authority, who would take appropriate steps for forfeiture of the margin money.
Procedural History
The NCLT Hyderabad Bench passed an order on 28.05.2024 in IA (IB) No. 41/2024 in CP (IB) No. 111/07/HDB/2017, directing formation of a Monitoring Committee and adherence to timelines under the Acquisition Plan. IDBI Bank appealed this order before the NCLAT, which dismissed the appeal.
Acts & Sections
- Insolvency and Bankruptcy Code, 2016: Section 60(5), Section 61, Section 33
- IBBI (Liquidation Process) Regulations, 2016: Regulation 32A
