Case Details

Case Name: Manohar Lal Vij & Meghdoot Leisure LLP vs. Khushvinder Singhal & Ors.

Court/Authority: National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi

Case Numbers: Company Appeal (AT) (Insolvency) Nos. 512 & 513 of 2026

Date of Judgment: 27th May, 2026

Date of Impugned Order: 12th March, 2026 (passed by NCLT, Ahmedabad)

Underlying Case: C.P.(IB)/61 (AHM)2025

Period of Dispute: CIRP initiated on 06.05.2025, Resolution Plan approved by CoC on 12.11.2025

Parties Involved

Appellants:

  • Manohar Lal Vij (Resolution Professional)
  • Meghdoot Leisure LLP (Successful Resolution Applicant)

Respondents:

  • Khushvinder Singhal & Others
  • IDBI Bank Ltd. (Financial Creditor, 100% CoC member)
  • Claro Energy Ltd. (Unsuccessful Resolution Applicant)
  • State Tax Department (Operational Creditor)
  • Income Tax Department (Creditor)

Corporate Debtor: Aldiam Motors Pvt. Ltd. (formerly Hyundai car dealership)

Legal Representatives:

  • For Appellants: Mr. Krishnendu Datta, Sr. Advocate; Mr. Abhijeet Sinha, Sr. Advocate
  • For Respondents: Mr. Anand Varma; Mr. Sandeep Bajaj

Bench: Justice Ashok Bhushan (Chairperson), Barun Mitra (Member Technical)

Issues / Allegations / Violations

Primary Issues Before NCLAT:

1. Whether CIRP was conducted fairly and transparently in accordance with IBC and CIRP Regulations

2. Whether allegations of association between Meghdoot Leisure LLP and Aster Motors raised eligibility issues under Section 29A

3. Whether Resolution Professional was justified in treating Claro Energy's plan as non-compliant

4. Whether Resolution Plan approved by 100% CoC satisfies Section 30(2) requirements

NCLT's Findings (Impugned Order):

  • Found material irregularities in CIRP process regarding asset possession and valuation
  • Noted informational asymmetry among bidders regarding Plot No. 986/31 and 986/32
  • Held valuation conducted without physical inspection of Plot No. 986/31 created uncertainty
  • Concluded CIRP affected by material irregularity bearing on fairness and integrity
  • Rejected resolution plan despite 100% CoC approval

Findings & Observations

NCLAT's Key Legal Reasoning:

  • Commercial wisdom of CoC is paramount and cannot be interfered with unless Resolution Plan is non-compliant with Section 30(2)
  • Information Memorandum contained complete details of asset situation (Plot mismatch between 986/31 and 986/32)
  • All Resolution Applicants had access to virtual data room and same information
  • RFRP clearly stated assets would be transferred on 'as is where is' basis
  • IDBI Bank (100% CoC) had security interest in both plots and was fully aware of possession issues
  • No stakeholder except unsuccessful bidder Claro Energy raised objections
  • Unsuccessful Resolution Applicants cannot challenge commercial decisions of CoC

On Specific Issues:

  • Section 29A Eligibility: Adjudicating Authority had already found Meghdoot Leisure LLP not ineligible under Section 29A
  • Claro Energy's Plan: Adjudicating Authority upheld CoC's decision that Claro Energy's plan was non-compliant
  • Asset Possession: IDBI Bank had handed over possession of Plot No. 986/32 to RP during CIRP
  • Valuation: Valuers visited and valued Plot No. 986/32 with plant & machinery; Plot No. 986/31 was with Aster Motors after OTS settlement

Penalties / Settlements / Directions

NCLAT's Final Directions:

  • Both appeals allowed
  • NCLT's order dated 12.03.2026 set aside
  • IA(Plan)19(AHM)2025 (Plan approval application) revived before NCLT
  • NCLT directed to approve Resolution Plan keeping in view NCLAT's observations
  • Applications filed by Claro Energy (IA/1451/(AHM)2025 and IA/62(AHM)2026) stand closed
  • NCLT to pass order on plan approval within three months from receipt of this order
  • No order as to costs

Financial Implications:

  • Resolution Plan value: Rs. 13.34 crores approved by 100% CoC
  • IDBI Bank's claimed dues: Rs. 30,46,11,634.42 (Rs. 19,06,29,908 principal + interest)
  • Performance security deposited by Successful Resolution Applicant

Corrective Actions & Future Obligations

For NCLT:

  • Must approve Resolution Plan following NCLAT's directions
  • Complete approval process within 3 months

For Successful Resolution Applicant:

  • Plan implementation to proceed upon NCLT approval

For Corporate Debtor:

  • Resolution process to conclude through approved plan

Final Ruling & Enforcement

NCLAT Decision:

  • Allowed both appeals
  • Set aside NCLT order rejecting resolution plan
  • Directed NCLT to approve Meghdoot Leisure LLP's resolution plan
  • Upheld commercial wisdom of CoC (100% IDBI Bank)
  • Confirmed that unsuccessful resolution applicant cannot challenge CoC decisions
  • Emphasized time-bound nature of insolvency resolution process

Legal Precedents Cited:

  • Torrent Power Ltd. vs. Ashish Arjunkumar Rathi & Ors. (Civil Appeal Nos.11746-11747 of 2024)
  • K. Sashidhar vs. Indian Overseas Bank (2019) 12 SCC 150
  • Essar Steel India Limited case
  • Pratap Technocrats Private Ltd. vs. Monitoring Committee of Reliance Infratel Limited (2021) 10 SCC 623

Impact on Financial Strategy:

  • Restoration of commercially approved resolution plan
  • Avoids recommencement of CIRP process
  • Preserves value maximization for stakeholders
  • Maintains certainty in insolvency resolution process