NCLAT Grants Interim Relief for BGR Energy Restructuring via Rights Issue

Authority: National Company Law Appellate Tribunal, Chennai Bench (Justice N. Seshasayee - Member Judicial, Jatindranath Swain - Member Technical)

Order Date: 7 October 2026

Case Overview

The appeal was filed by Arjun Govind Raghupathy, suspended director of BGR Energy Systems Ltd., challenging the admission of the corporate debtor to Corporate Insolvency Resolution Process (CIRP) on 17 April 2026. The corporate debtor is an EPC company that was successfully carrying on business despite the CIRP proceedings. On 30 April 2026, the NCLAT had suspended the order admitting the company to CIRP.

The appellant began negotiations with the principal financial creditor holding approximately 97% voting share in the Committee of Creditors. On 5 October 2026, a Master Restructuring Agreement was signed between the petitioning financial creditor (National Asset Reconstruction Company Ltd.) and the corporate debtor. The restructuring strategy involved substantial infusion of funds through equity, requiring an increase in authorized share capital followed by a rights issue. The financial creditor stipulated a strict timeline requiring the process to commence on 9 October 2026 and conclude by 31 December 2026.

The appellant sought specific interim reliefs to enable the corporate restructuring, including permission for the board to convene meetings, increase authorized share capital under Section 61 of Companies Act 2013, undertake rights issue under Section 62(1)(a) and SEBI ICDR Regulations 2018, file statutory forms (SH-7, MGT-14, PAS-3), and restore digital signature access to directors. Both parties' senior counsels (Mr. P.S. Raman for appellant and Mr. Srinath Sridevan for financial creditor) concurred on the restructuring strategy, which would eventually adopt the Section 12A route for CIRP withdrawal.

Final Outcome

The NCLAT granted interim reliefs as prayed in paragraphs (b), (c), (d), and (f) of the application, allowing the board of directors to proceed with the rights issue process, increase authorized share capital, make necessary statutory filings, and directing the Interim Resolution Professional to file the order with Registrar of Companies Vijayawada, intimate IBBI, restore digital signatures to directors, and hand over MCA21 login credentials within 3 days. The appeal was listed for next hearing on 16 November 2026 at 12:00 PM.

Topics: Corporate Restructuring, Insolvency Resolution, Rights Issue