Authority: National Company Law Appellate Tribunal Principal Bench, New Delhi
Order Date: 17 July 2026
Case Overview
The National Company Law Appellate Tribunal (NCLAT) heard an application (I.A. No. 4724 of 2026) filed by Mehul Sedani, the Successful Resolution Applicant (SRA) for Libra Fabric Designs Private Limited. The application sought a stay on all further steps related to the E-Auction Sale Notice dated 10 June 2026 and to defer the e-auction scheduled for 10 July 2026.
The dispute arose after the Adjudicating Authority ordered liquidation of the Corporate Debtor (Libra Fabric Designs Private Limited) when Mr. Sedani failed to make the required upfront payment of Rs. 96 lakhs under his accepted resolution plan of approximately Rs. 9 crore. Mr. Sedani attributed this failure to medical reasons. The liquidator had initiated bids with a reserved price of Rs. 1.57 crore for immovable assets and Rs. 40,050 for securities.
Mr. Sedani, through his senior counsel Mr. Abhijeet Sinha, submitted that he remains willing to pay the entire resolution plan amount of Rs. 9 crore and is prepared to discuss a payment timeframe with the Committee of Creditors (CoC). He sought deferment of the e-auction proceedings until the next hearing date.
Final Outcome
The NCLAT bench comprising Justice Yogesh Khanna (Officiating Chairperson) and Barun Mitra (Member Technical) directed that:
1. The appellant (Mehul Sedani) shall deposit Rs. 96 lakhs within 7 days before the tribunal without prejudice to parties' rights
2. The appellant shall take instructions regarding depositing an additional Rs. 2 crore upfront as indicated by respondents' counsel
3. All further e-auction proceedings shall remain in abeyance until the next hearing date of 6 August 2026
4. The stay is subject to the appellant filing a compliance affidavit regarding the deposit
The matter is listed for next hearing on 6 August 2026.
Topics: Insolvency Resolution, Legal Proceedings