Authority: National Company Law Tribunal, Mumbai Bench, Court-IV

Order Date: 14.07.2026

Case Overview

This application was filed by Hinganghat Infrastructure Private Limited (Applicant) under Section 60(5) of the Insolvency and Bankruptcy Code, 2016, against the Resolution Professional (Mr. Jagdish Kumar) and the Committee of Creditors (CoC) of Deegee Orchards Private Limited (Corporate Debtor). The Corporate Insolvency Resolution Process (CIRP) for Deegee Orchards was initiated on 03.03.2023 on a petition filed by UCO Bank.

The Applicant, a Prospective Resolution Applicant (PRA) in the CIRP, had deposited a Participation Money Deposit (PMD) of Rs 5 Lakh on 12.10.2023 and an Earnest Money Deposit (EMD) of Rs 25 Lakh on 26.11.2023. Its Resolution Plan was not approved. The core dispute arose when the CoC, in its 15th meeting on 15.05.2024, resolved with 92.88% approval to forfeit these amounts due to the Applicant's alleged "deceitful and mala fide conduct." The Respondent No. 1 (RP) subsequently filed IA No. 4996/2024 seeking directions for this forfeiture, which was disposed of by the NCLT on 21.10.2024, stating it would not interfere with the CoC's commercial decision. The forfeited sum was later distributed amongst CoC members.

The Applicant sought a refund of the Rs 30 lakh, alleging the RP acted unfairly by opening its physically submitted resolution plan without its password and in violation of the Request for Resolution Plan (RFRP) procedure. It also argued that Regulation 36B(4) of the CIRP Regulations prohibits non-refundable deposits, mandating a refund for non-successful applicants.

The Respondents contended that the Applicant, through its authorized representative Mr. Alok Goenka, had suppressed material facts. It was revealed that the Applicant's management (the Goenka family) were related to the ex-management of the Corporate Debtor and had been tenants in the Corporate Debtor's property at a subsidized rate since May 2014. The Respondents argued this non-disclosure constituted a "fraudulent practice" as defined in Clause 18 of the RFRP, which empowers the CoC/RP to forfeit the EMD. They further alleged the Applicant acted at the behest of the ex-management to obstruct the CIRP and force liquidation, leading to increased litigation costs.

Final Outcome

The Tribunal dismissed the application. It found that the procedure followed by the RP in requesting and opening the physical resolution plan was in strict compliance with Clause 4 of the RFRP. It noted that the issue of the plan's opening had already been adjudicated by the NCLAT (order dated 22.02.2024), which found no mandate for the RP to open plans in the presence of the CoC and PRAs, and thus the matter was res judicata.

On the forfeiture, the Tribunal concurred with the Respondents. It held that the deliberate non-disclosure of the Applicant's relationship with the Corporate Debtor's ex-management amounted to a "fraudulent practice" (suppression of facts to influence the CIRP) as defined in Clause 30 of the RFRP. Consequently, the forfeiture was justified under Clause 18 of the RFRP and represented a valid exercise of the CoC's commercial wisdom. The Tribunal distinguished the cases cited by the Applicant, noting they did not involve such proven misconduct. It also noted that the CIRP had concluded, the approved resolution plan was implemented on 14.11.2024, the RP was functus officio, and the funds had already been distributed to the CoC.

  • Topics: Insolvency Process, Forfeiture of Deposit, CoC Commercial Wisdom