Authority: National Company Law Appellate Tribunal, Principal Bench, New Delhi

Order Date: August 7, 2026

Case Overview

The National Company Law Appellate Tribunal (NCLAT) is hearing Company Appeal (AT) (Insolvency) No. 1108 of 2026 along with I.A. Nos. 4106, 4335, and 4724 of 2026. The appeal has been filed by Mehul Sedani, the Successful Resolution Applicant (SRA) for Libra Fabric Designs Private Limited, against the Resolution Professional (Truvisory Insolvency Professional Pvt. Ltd.) and other respondents.

The dispute arose when the Committee of Creditors (CoC) initially approved Mr. Sedani's resolution plan in their 10th meeting. However, due to the appellant's failure to provide the performance bank guarantee within the stipulated time, the CoC deemed the plan financially unviable. Consequently, the CoC opted for liquidation of Libra Fabric Designs Private Limited, which received approval from the Adjudicating Authority.

The appellant is primarily seeking an extension of time to comply with the terms and conditions of the resolution plan. During proceedings on July 17, 2026, the tribunal noted the appellant's submission that he remains willing to pay the entire resolution amount of Rs. 9 crores as per the approved plan.

Final Outcome

The NCLAT has continued the interim order protecting the appellant's position and listed the appeal for further hearing on August 11, 2026. The appellant has been directed to present a concrete proposal on the next hearing date, including a statement about his ability to make the entire payment of Rs. 9.6 crores within 30-45 days from sources identified in the resolution plan or other disclosed sources. This direction is without prejudice to the rights and contentions of the respondent/CoC, whose submissions will be considered on the next hearing date.

The tribunal acknowledged the significant disparity between the liquidation value (approximately Rs. 2 crores) and the appellant's offer (Rs. 9.6 crores), as well as the appellant's intention to continue the corporate debtor as a going concern.

Topics: Insolvency Proceedings, Resolution Plan Dispute