Case Overview
This appeal was filed by Basu Deo Yadav and Vikram Bajaj against an order of the Adjudicating Authority (National Company Law Tribunal) that rejected a resolution plan for M/s Arjun Industries Ltd. (Corporate Debtor). The core dispute concerns the ownership and inclusion of two pieces of land (Plot No. SP3-11 (B1) and SP3-11 (B2), admeasuring 80,745.5 sq. meters in Khushkhera, Bhiwadi) in the insolvency estate.
The land was originally allotted to the Corporate Debtor on a 99-year lease by the Rajasthan State Industrial Development and Investment Corporation Ltd. (RIICO) on 16.10.1995 for establishing a cashew and spice processing unit. RIICO cancelled this lease deed on 02.03.2021 for alleged violations of lease terms. The Corporate Debtor challenged this cancellation before the Permanent Lok Adalat (PLA), Alwar, which quashed RIICO's order on 12.01.2022. RIICO then filed a writ petition (S.B. Civil Writ Petition No. 8311/2022) before the Rajasthan High Court, which stayed the PLA's award on 11.07.2022. This writ petition remains pending.
Corporate Insolvency Resolution Process (CIRP) against M/s Arjun Industries Ltd. was initiated on 22.02.2024. A resolution plan submitted by Respondent No. 2 (the Successful Resolution Applicant - SRA) was approved by the Committee of Creditors (CoC) with a 100% voting share on 30.11.2024. The plan, valued at ₹93 Crore, was based on this disputed land. RIICO contended the land's market value was ₹150 Crore and its circle rate value was ₹80 Crore.
The Adjudicating Authority (NCLT) rejected the plan on 11.08.2026, stating it was "totally founded on an asset which is not owned by the CD" and was therefore not implementable. The order excluded the land from the corporate debtor's assets, subject to the outcome of the pending Rajasthan High Court writ petition. It also granted liberty to the CoC to decide on liquidating the company.
The appellants argued before the NCLAT that the Corporate Debtor had been in possession of the land since 1995, had established a factory on it, and that the moratorium under Section 14 of the IBC should protect it. They expressed apprehension that RIICO might change the nature of the property or create third-party rights after the NCLT's order.
Final Outcome
The National Company Law Appellate Tribunal (NCLAT) issued an interim order directing all parties to maintain the status quo as of 09.09.2026 with regard to the subject land. This directive specifically includes an injunction against creating any third-party rights on the property. RIICO was granted three weeks to file a reply to the appeal, and the matter has been listed for the next hearing on 15.10.2026. The interim order preserves the asset pending the final disposal of the appeal.
Topics: Insolvency Resolution, Land Lease Dispute, Interim Relief