Case Note & Summary
The appeal was filed by JM Financial Asset Reconstruction Company Ltd., acting as trustee of Rail December 2024 Trust, challenging the Impugned Order dated 03.04.2025 passed by the Ld. Adjudicating Authority in IA (IBC)/608/2025 in CP (IB)/187/07/HDB/2020. The CIRP of the Corporate Debtor, Raigarh Champa Rail Infrastructure Pvt. Ltd., commenced on 01.01.2021. The first Form G was issued on 24.08.2021, and nine Prospective Resolution Applicants submitted Expressions of Interest. However, due to litigation, the process was delayed. The Resolution Professional sought permission to issue a fresh Form G to invite new EoIs while retaining existing applicants for the challenge mechanism under Regulation 39(1A)(b) of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. The Adjudicating Authority rejected this application. The Appellant contended that the rejection was contrary to the principle of maximizing asset value. The Appellate Tribunal set aside the impugned order and directed the Resolution Professional to issue a fresh Form G and complete the challenge mechanism process.
Headnote
A) Insolvency Law - Challenge Mechanism - Regulation 39(1A)(b) of IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 - The Adjudicating Authority rejected the Resolution Professional's application to issue a fresh Form G to invite new Expression of Interest from prospective resolution applicants while retaining existing applicants for the challenge mechanism. The Appellate Tribunal held that the rejection was de hors the basic principle of maximizing the value of assets of the Corporate Debtor and set aside the impugned order, directing the Resolution Professional to issue a fresh Form G and complete the challenge mechanism process. (Paras 1-4)
Issue of Consideration
Whether the Adjudicating Authority erred in rejecting the Resolution Professional's application to issue a fresh Form G to invite new Expression of Interest while retaining existing resolution applicants for the challenge mechanism under Regulation 39(1A)(b) of IBBI Regulations, 2016.
Final Decision
The impugned order dated 03.04.2025 is set aside. The Resolution Professional is directed to issue a fresh Form G and complete the challenge mechanism process among the resolution applicants as contemplated under Regulation 39(1A)(b) of IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016.
Law Points
- Maximization of value of assets of corporate debtor is paramount
- Regulation 39(1A)(b) of IBBI (Insolvency Resolution Process for Corporate Persons) Regulations
- 2016
- Challenge mechanism among resolution applicants
- Fresh Form G to invite new EoIs
Case Details
2024 LawText (NCLAT) (01) 37
Company Appeal (AT) (CH) (Ins) No. 230 / 2025 (IA Nos. 663, 664 & 689 / 2025)
Justice Sharad Kumar Sharma, Member (Judicial)
Mr. PH. Arvindh Pandian, Senior Advocate for Mr. Avinash Krishnan Ravi, Ms. Palak Nenwani & Mr. Ronit Chopra, Advocates for Appellant; Mr. Y. Suryanarayana & Mr. Tushar Nagar, Advocates for Respondent
JM Financial Asset Reconstruction Company Ltd. (acting in its capacity as trustee of Rail December 2024 Trust)
Mr. Venkatachalam, Resolution Professional of Raigarh Champa Rail Infrastructure Pvt. Ltd.
Subscribe to unlock Case Details (Citation, Judge, Date & more)
Subscribe Now
Nature of Litigation
Appeal against order of Adjudicating Authority rejecting Resolution Professional's application to issue fresh Form G.
Remedy Sought
Appellant sought setting aside of impugned order and direction to issue fresh Form G.
Filing Reason
Rejection of application to invite new Expression of Interest while retaining existing resolution applicants for challenge mechanism.
Previous Decisions
Adjudicating Authority rejected IA (IBC)/608/2025 in CP (IB)/187/07/HDB/2020 on 03.04.2025.
Issues
Whether the Adjudicating Authority erred in rejecting the Resolution Professional's application to issue a fresh Form G to invite new Expression of Interest while retaining existing resolution applicants for the challenge mechanism under Regulation 39(1A)(b) of IBBI Regulations, 2016.
Submissions/Arguments
Appellant argued that rejection was de hors the basic principle of maximizing the value of assets of the Corporate Debtor.
Ratio Decidendi
The principle of maximizing the value of assets of the Corporate Debtor is paramount; rejection of application to issue fresh Form G was de hors this principle.
Judgment Excerpts
The challenge, in the instant Company Appeal (AT) (CH) (INS) No. 230 / 2025, as given by the Appellant is to the Impugned Order of 03.04.2025, as it has been passed by the Ld. Adjudicating Authority on the Application IA (IBC) / 608 / 2025 in CP (IB) / 187 / 07 / HDB / 2020.
It is the case of the Appellant that the rejection of his Application happens to be de hors the basic principles of maximizing the value of assets of the Corporate Debtor.
Procedural History
CIRP commenced on 01.01.2021. First Form G issued on 24.08.2021. Nine Prospective Resolution Applicants submitted EoIs. Due to litigation, process delayed. Resolution Professional filed IA (IBC)/608/2025 seeking permission to issue fresh Form G. Adjudicating Authority rejected the application on 03.04.2025. Appeal filed before NCLAT.
Acts & Sections
- Insolvency and Bankruptcy Code, 2016:
- IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016: Regulation 39(1A)(b)
