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

Order Date: 17-08-2026

Case Overview

This appeal was filed by M/s Micro Turner against the order dated 13.05.2024 passed by the National Company Law Tribunal (NCLT), Chandigarh in IA No.280/2023 in CP(IB)No.155/2018. The matter concerned the Corporate Insolvency Resolution Process (CIRP) of Laxmi Precision Screws Limited, which commenced on 18.07.2018 with Mr. Deepak Thakur as Interim Resolution Professional.

The appellant had submitted a resolution plan on 12.04.2019, which was approved by the Committee of Creditors (CoC) on 10.04.2019. The plan offered Rs 170 crores as full and final payout to all creditors. However, the plan initially provided only 54.42% of dues to workers and claims of PF with interest.

Key proceedings included:

  • On 08.09.2022, NCLT directed the appellant to file an affidavit regarding payment of PF and gratuity dues under the Employees Provident Fund and Miscellaneous Act, 1952 and Payment of Gratuity Act, 1972.
  • On 21.10.2022, the appellant filed an affidavit acknowledging total dues of Rs 36.48 crores (Rs 14.20 crores for PF with interest and Rs 22.28 crores for gratuity) and sought to revise the resolution plan.
  • On 01.12.2022, NCLT referred the resolution plan back to CoC to consider additional statutory claims within 30 days.
  • In the 34th CoC meeting on 20.12.2022, the appellant refused to revise the total plan value and suggested liquidation instead.
  • In the 35th CoC meeting on 28.12.2022, the resolution plan was formally rejected as the appellant failed to increase the plan value.

The appellant argued that the CoC could not reopen the commercial bargain after approval and that the remand was only due to changed legal requirements following judicial precedents requiring 100% payment of statutory employee benefits.

Final Outcome

The NCLAT dismissed the appeal, upholding the NCLT's order. The appellate tribunal held that:

1. The appellant had not challenged the crucial orders dated 08.09.2022 and 01.12.2022, which had attained finality

2. The appellant itself had sought revision of the plan in its affidavit dated 21.10.2022

3. The CoC's commercial wisdom in rejecting the resolution plan is non-justiciable

4. The CoC is empowered to take a decision regarding liquidation even after filing of the resolution plan for approval, before NCLT approval

5. Since there was no approved plan by CoC after 01.12.2022, and the appellant refused to increase the plan value, the CoC's rejection was valid

The NCLAT affirmed the NCLT's direction for liquidation of the corporate debtor, stating that the liquidator should first attempt to sell the corporate debtor as a going concern.

Topics: Corporate Insolvency, Resolution Plan Rejection, Statutory Dues