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

Order Date: 27 October 2026

Case Overview

This interim application (I.A. No. 6838 of 2026) was filed by Mr. Nandkumar Khattumal Harchandani, the appellant and a suspended promoter/director of N. Kumar Housing & Infrastructure Private Limited (Corporate Debtor), in an ongoing appeal [Comp. App. (AT) (Ins) No. 1759 of 2026]. The appeal itself challenges an order dated 07.09.2026 from the NCLT, Mumbai Bench, which was passed on an application filed by the Resolution Professional (RP) under Section 19(2) of the Insolvency and Bankruptcy Code (IBC) concerning the non-cooperation of the suspended directors.

The appellant sought permission to deposit Rs. 89,94,95,437/—the entire amount of the financial creditor's admitted claim—with the NCLAT Registrar. This sum was to be deposited in two parts: an immediate Rs. 75 crore (already held as an FDR with IndusInd Bank) and the balance of Rs. 14,94,95,437 within 15 days. The deposit was offered as security, without prejudice to any party's contentions, and not as a settlement or discharge of debt. The application also sought a direction to maintain status quo in the Corporate Insolvency Resolution Process (CIRP) until a related application (I.A. No. 2962 of 2026) was decided by the NCLT, effectively pausing the invitation of resolution plans.

The financial debt originated from a term loan of Rs. 62 crore sanctioned by Indian Bank (formerly Allahabad Bank) on 23.03.2011 to a principal borrower, for which the Corporate Debtor was a corporate guarantor. The admitted claim in the CIRP, initiated on 24.02.2023, was Rs. 89,94,95,437 as of that date. This debt was subsequently assigned to Omkara Assets Reconstruction Pvt. Ltd., which became the sole financial creditor with a 100% vote share in the Committee of Creditors (CoC). The respondent Omkara contended that the total dues had since ballooned to over Rs. 128 crore as of July 2026 due to accrued interest.

The appellant argued that full payment of the admitted debt would extinguish the default, rendering the CIRP unnecessary. He relied on precedents like Sandeep Gupta v. JM Financial ARC and Achak Kumar Jindal v Sanjay Kumar Bhuwalaka.

The respondent financial creditor (Omkara) and the RP opposed the application vehemently. They argued it was an abuse of process and an attempt to bypass the specific withdrawal mechanism under Section 12A of the IBC, which requires approval from the CoC with a 90% vote share. They highlighted that a similar application (I.A. No. 2962 of 2026) filed by another suspended director was already pending before the NCLT. They further detailed a history of non-cooperation and obstruction by the suspended management, including denying the RP access to the corporate debtor's assets and records, which was the very subject of the underlying appeal.

Final Outcome

The NCLAT Bench dismissed the interim application. It held that the reliefs sought were beyond the scope of the main appeal, which was narrowly concerned with the challenge to the NCLT's order on non-cooperation under Section 19(2). The Tribunal found the application to be an attempt at forum shopping and an abuse of the process of law, noting that an identical plea was already pending before the NCLT. It reaffirmed that a financial creditor cannot be compelled to settle against its will and that the specific procedure under Section 12A of the IBC must be followed for any withdrawal. The CIRP against the corporate debtor continues. The appeal itself was listed for further hearing on 02.11.2026.

Topics: Corporate Insolvency, NCLAT Order, Settlement Offer