Case Details

Case Name: Company Appeal (AT) (Insolvency) No. 517 of 2024 (I.A. No. 247, 6082, 7158 of 2025)

Parties: Express Resorts and Hotels Limited (Appellant) vs. Amit Jain (Resolution Professional), State Bank of India, Corporation Bank, Asset Reconstruction Company (India) Limited, Oriental Bank of Commerce, Paisalo Digital Limited, IFCI Limited, Syndicate Bank, Bank of India, Saraswat Co Operative Bank Limited, Bhupendra Singh Rajput, HT Media Limited, Ex-Directors of Suspended Board of Management, RARE Asset Reconstruction Limited (Respondents)

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

Date of Judgment: 25 May 2026

Date of Impugned Order: 04 March 2024

Period of Dispute: CIRP initiated on 26 April 2019, resolution plan submitted 17 August 2020

Parties Involved

Petitioner: Express Resorts and Hotels Limited (Successful Resolution Applicant)

Respondents:

  • Amit Jain (Resolution Professional for Neesa Leisure Limited)
  • Financial Creditors: State Bank of India, Corporation Bank, Asset Reconstruction Company (India) Limited, Oriental Bank of Commerce, Paisalo Digital Limited, IFCI Limited, Syndicate Bank, Bank of India, Saraswat Co Operative Bank Limited
  • Other Parties: Bhupendra Singh Rajput, HT Media Limited, Ex-Directors of Suspended Board of Management, RARE Asset Reconstruction Limited

Corporate Debtor: Neesa Leisure Limited

Key Officials: Mr. R.D. Chaudhry (Initial IRP), Mr. Amit Jain (RP), Mr. Sanjay Gupta (Promoter Director)

Issues / Allegations / Violations

The appeal arose from NCLT Ahmedabad's rejection of the resolution plan approved by CoC for Neesa Leisure Limited. The NCLT rejected the plan mainly on grounds that it did not comply with Section 31(1) of IBC, 2016, citing multiple issues:

  • Lack of transparent process in examining resolution applications
  • Non-compliance with RFRP terms regarding NPV analysis of payment schedule
  • Inclusion of disputed properties (Jamdoli and Neemrana) in Information Memorandum despite ongoing litigation
  • Wide variations in valuation reports (from Rs 1245.81 crores to Rs 187.27 crores)
  • NIL distribution to government/statutory operational creditors contrary to Rainbow Papers judgment
  • Treatment of dissenting financial creditors differently from assenting creditors
  • CIRP costs not fully covered
  • Resolution plan approved by "wafer-thin" majority of 67.85%
  • Non-joinder of operational creditors receiving NIL payment in approval application

Findings & Observations

NCLAT made several key findings:

  • The NCLT's rejection was based on subjective observations without identifying specific violations of Section 30(2) of IBC
  • Commercial wisdom of CoC is paramount and not justiciable unless specific IBC violations are established
  • Valuation disputes fall within CoC's commercial wisdom and are not subject to judicial review
  • Inclusion of disputed properties in Information Memorandum is mandatory under Section 29 of IBC
  • Negotiations with resolution applicants to improve plan value is standard practice approved by regulations
  • The resolution plan was compliant with law as it existed when approved (2020), prior to Rainbow Papers judgment (2022)
  • The 67.85% voting share met the statutory threshold of 66% required under Section 30(4)
  • There was no requirement to implead operational creditors receiving NIL payment in approval application
  • Settlement proposals under Section 12A cannot be entertained after CoC approval of resolution plan

Penalties / Settlements / Directions

  • NCLAT set aside the impugned order dated 04 March 2024
  • Approved the resolution plan submitted by Express Resorts and Hotels Limited
  • Directed NCLT to pass consequential orders within 15 days
  • Successful Resolution Applicant undertook to pay additional Rs 2.33 crores to statutory creditors to comply with Rainbow Papers judgment
  • This additional payment would be over and above the plan value of Rs 143.83 crores, preserving the distribution to financial creditors
  • All pending applications disposed of
  • No order as to costs

Corrective Actions & Future Obligations

  • SRA must implement the resolution plan as approved
  • Additional payment of Rs 2.33 crores to be made to statutory creditors covered by Rainbow Papers judgment
  • NCLT to oversee implementation and pass necessary consequential orders
  • Resolution Professional to facilitate handover of corporate debtor to SRA

Final Ruling & Enforcement

NCLAT allowed the appeal and approved the resolution plan with the following key aspects:

  • Total plan value: Rs 143.83 crores with additional Rs 250 crores capex infusion
  • Additional commitment: Rs 2.33 crores for statutory creditors post-Rainbow Papers compliance
  • Payment priority: CIRP costs first, then financial creditors
  • Treatment of disputed properties: Plan on "as is where is" basis, SRA to step into shoes of corporate debtor
  • Binding on all stakeholders including corporate debtor, employees, creditors, guarantors
  • NCLT directed to pass consequential orders within 15 days for implementation

The ruling emphasizes that commercial wisdom of CoC must be respected unless specific IBC violations are established, and subsequent legal developments (like Rainbow Papers) can be addressed through additional undertakings without disturbing the approved plan structure.