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

Order Date: 06 November 2026

Case Overview

The NCLAT heard two interconnected appeals (Comp. App. (AT) (Ins) No. 1959 of 2026 and 1978 of 2026) against the order dated 04.09.2026 passed by the NCLT Mumbai Bench-V. The NCLT had recorded adverse findings against Hardcastle Restaurants Pvt. Ltd. (Successful Resolution Applicant of Sristi Hospitality Private Limited), Saraswat Co-operative Bank Ltd. (financial creditor and Monitoring Committee member), and Rajan Deshraj Agarwal (erstwhile Resolution Professional and Monitoring Committee Chairman). The Adjudicating Authority had directed that their conduct be referred to the IBBI for appropriate action, citing inordinate delay in implementing the approved resolution plan.

The Corporate Debtor, Sristi Hospitality Private Limited, was admitted into CIRP on 27.02.2023. The resolution plan submitted by Hardcastle Restaurants was approved by the CoC with 100% voting share on 05.08.2023 and by the NCLT on 12.07.2024. However, suspended directors filed appeals before the NCLAT (Company Appeal (AT)(Ins) Nos. 1378 of 2024 and 1383 of 2024), which were eventually dismissed on 14.07.2026.

The core dispute centered on Clause 5.7(ii) of the approved resolution plan, which stated: "The Total Resolution Amount... will be paid as per the timeline of events for implementation... subject to no appeal pending before the Hon'ble NCLAT or Hon'ble Supreme Court or any stay granted by any competent Court/Tribunal." It further specified that if litigation is instituted, payment would be made within 7 business days from when the plan attains finality.

The NCLT, in its impugned order, found that the plan should have been implemented by 27.08.2024 (46 days after approval) but remained unimplemented until 30.07.2025 - nearly a year later. It held that Clause 5.7(ii) could not override Clause 10.15 (which stated the plan was unconditional except for NCLT approval) and that the NCLAT's order dated 23.07.2024 (which stated "implementation of the Plan may go on") actually obligated implementation.

Final Outcome

The NCLAT allowed both appeals and set aside/expunged all adverse observations and the IBBI referral direction. The Tribunal held that:

1. The delay was justified given the approved Clause 5.7(ii) that made implementation contingent on no pending appeals

2. The NCLT itself approved the plan without modifying this clause, so stakeholders couldn't be penalized for relying on it

3. The SRA implemented the plan promptly (on 30.07.2025) after the NCLT's clarification on 07.07.2025

4. The SRA was not originally a party before the NCLT and was given no opportunity to explain its conduct

5. The NCLAT's order dated 23.07.2024 was permissive ("may go on") not mandatory, and no stay had been granted

The practical consequence is that no disciplinary action will be pursued against Hardcastle Restaurants, Saraswat Bank, or the erstwhile RP through the IBBI referral mechanism.

Topics: Insolvency Resolution, Implementation Delay, IBBI Referral