KSK Mahanadi Power Company Ltd. vs Paradeep Customs Division, Office of Deputy Commissioner and Ors. - There can be no dispute that a bank guarantee is ordinarily an independent instrument between the issuing bank and the beneficiary. There can also be no dispute that, in an appropriate case, Section 14(3)(b) of the Code may exclude such guarantees from the rigour of moratorium during CIRP. However, those principles cannot be applied in isolation from the binding effect of an approved resolution plan under Section 31 of the Code.

  NCLT Hyd. (2026.07.01) in KSK Mahanadi Power Company Ltd. vs Paradeep Customs Division, Office of Deputy Commissioner and Ors. [(2026) ibclaw.in 2490 NCLT, “IA (IBC) No. 1290 of 2025 in CP (IB) No. 492/7/HDB/2019” ] held that;

• There can be no dispute that a bank guarantee is ordinarily an independent instrument between the issuing bank and the beneficiary. There can also be no dispute that, in an appropriate case, Section 14(3)(b) of the Code may exclude such guarantees from the rigour of moratorium during CIRP. However, those principles cannot be applied in isolation from the binding effect of an approved resolution plan under Section 31 of the Code.

• This is particularly so where the beneficiary of the instruments had submitted its claim in CIRP, the claim was collated and dealt with under the Approved Resolution Plan, and payment was received by the beneficiary in terms of the Plan, though the beneficiary continues to assert that the admitted claim has not been paid in full.

•  In respect of the instruments which form part of, or secure, Respondent No.1’s admitted claim of Rs. 719,98,48,660, the Respondents shall not invoke or encash such instruments for recovery of the extinguished pre-CIRP/CIRP-period customs dues. The Respondents shall take necessary steps for release/return of such instruments in accordance with law.

Blogger’s Comments; Bank Guarantees are akin to Corporate Guarantees or Personal Guarantees to secure dues of third parties from CD. Hon’ble Supreme Court (2021.05.21)  in the matter of Lalit Kumar Jain Vs, Union of India & Ors. [Transferred Case  (CIVIL) NO. 245/2020] ruled as under;

• The object of the Code is not to allow such guarantors to escape from an independent and coextensive liability to pay off the entire outstanding debt, which is why Section 14 is not applied to them.

• it is held that approval of a resolution plan does not ipso facto discharge a personal guarantor (of a corporate debtor) of her or his liabilities under the contract of guarantee. As held by this court, the release or discharge of a principal borrower from the debt owed by it to its creditor, by an involuntary process, i.e. by operation of law, or due to liquidation or insolvency proceeding, does not absolve the surety/guarantor of his or her liability, which arises out of an independent contract.

• It is also held that approval of a resolution plan relating to a corporate debtor does not operate so as to discharge the liabilities of personal guarantors (to corporate debtors).

• it is difficult to accept Shri Rohatgi's argument that that part of the resolution plan which states that the claims of the guarantor on account of subrogation shall be extinguished, cannot be applied to the guarantees furnished by the erstwhile Directors of the corporate debtor. 

Excerpts of the Order; 

# 1. The present Application has been filed by JSW Mahanadi Power Company Limited, formerly KSK Mahanadi Power Company Limited, under Section 60(5) of IBC1 read with Rule 11 of the NCLT Rules2.

The Application

# 2. The Applicant seeks directions against Paradeep Customs Division, Kolkata Customs Division and Visakhapatnam Customs Division in respect of certain bank guarantees and letters of credit furnished in favour of the Respondents, collectively referred to by the Applicant as “NFB Instruments”3.

# 3. The principal prayer is for a direction to the Respondents to forthwith and unconditionally return to the Applicant all bank guarantees and letters of credit listed in Annexure A to the Application, in original, free from any endorsement, lien or encumbrance of any nature whatsoever. The Applicant has also sought a restraint against the Respondents, their officers, agents and representatives from invoking, encashing, assigning or otherwise dealing with the said NFB Instruments in any manner whatsoever, and a direction to cooperate with the Applicant for effective implementation of the resolution plan dated 29.11.2024 submitted by JSW Energy Limited.

# 4. The Corporate Debtor was admitted into CIRP by order dated 03.10.2019 in C.P. (IB) No. 492/7/HDB/2019. The resolution plan dated 29.11.2024 submitted by JSW Energy Limited was approved by the Committee of Creditors with 100% voting share and was thereafter approved by this Adjudicating Authority by order dated 13.02.2025 in IA(IBC)(Plan)/02/2025. The resolution plan was implemented on 06.03.2025, described as the Closing Date.

# 5. The NFB Instruments in question were furnished during the period 2011-2018 in favour of the Respondents against port import registration for availing the benefit of exemption/ concession of customs duty under the Project Import Regulations, 1986 and the relevant customs notifications. According to the Applicant, the total value of the NFB Instruments is INR 6,99,03,33,715.

# 6. The Applicant’s case is that Respondent No.1 filed a claim during CIRP by letter dated 04.11.2019 for INR 719,98,48,660 in respect of dues owed by the Corporate Debtor for the period prior to initiation of CIRP; that this claim included claims covered by the NFB Instruments; and that the same was collated by the Resolution Professional as an operational debt. Respondent Nos. 2 and 3, admittedly, did not file claims during CIRP.

# 7. The Applicant relies mainly upon Clauses 3.3.3(c), 3.3.12(b) and 3.3.12(f) of the Approved Resolution Plan, which are extracted as below:

• “3.3.3

• …

• (c) With effect from the Closing Date, all Claims of Operational Creditors as on the Plan Approval Date shall stand discharged, settled, extinguished in full and reduced to NIL. In light of such extinguishment of liabilities, all Operational Creditors that are beneficiaries of any NFB Instruments shall return to the Corporate Debtor all such NFB Instruments. “

• “3.3.12

• …

• (b)… On and from the Closing Date and to the extent permissible under applicable Law, all Claims, Debt, and liabilities including contingent liabilities (whether reduced to judgment or not) of the Corporate Debtor towards each and every Operational Creditor (including Workmen and Employees, and further including the Employees Provident Fund Organisation), including (but not limited) in relation to or arising out of or pertaining to …(d) any claims, demands, or dues, whether claimed or unclaimed, whether admitted or unadmitted, whether crystallized or uncrystallised payable to any custom authority, and other Governmental Authorities, in relation to any period until and including the Plan Approval Date, shall stand reduced to NIL and permanently discharged, extinguished and settled and no amounts shall be payable to any Operational Creditors whether or not set out in the Information Memorandum, Virtual Data Room/ VDR, balance sheets or the profit and loss account statements of the Corporate Debtor…”.

• “3.3.12

• …

• (f) The Corporate Debtor is in receipt of claims or has contingent liabilities for the period prior to the Plan Approval Date from/towards various governmental authorities whose continued cooperation is necessary for the going concern nature of the Corporate Debtor including the customs authorities, Water Resources Department, electricity department, PGCIL (now CTUIL). The liabilities have either been admitted or disputed by the Resolution Professional. Notwithstanding the treatment attributed [sic] the Resolution Professional to such liabilities, any Claim, Debt, liabilities of Operational Creditors, including any amount payable on account of any past obligations, past non-compliances, in appropriate or partial compliance, non-payment of applicable duties, taxes etc, on goods / services procured/ imported, in relation to any period until and including the Plan Approval Date, (including those which are under dispute or is a subject matter of any proceeding) shall stand reduced to NIL and permanently settled, discharged, and extinguished in full.”

According to the Applicant, these clauses provide that claim of operational creditors, including claims of customs authorities and contingent claims, stood discharged, settled, extinguished in full and reduced to NIL from the Closing Date, and that operational creditors who are beneficiaries of any NFB Instruments are required to return such instruments to the Corporate Debtor.

# 8. The Applicant also relies upon the Plan Approval Order dated 13.02.2025, under which the resolution plan was made binding on the Corporate Debtor, its employees, members, creditors, including the Central Government, State Government and local authorities to whom statutory dues are owed, guarantors and other stakeholders. It is contended that all crystallised and unclaimed liabilities of the Corporate Debtor stood extinguished on approval of the plan and that no creditor can claim anything other than the liabilities referred to in the resolution plan.

Respondent No.1 Counter Reply

# 9. Respondent No.1 has filed its counter affidavit stating, in substance, that the Applicant was requested to share the complete Approved Resolution Plan to enable the Department to ascertain the facts and circumstances approved therein, but the same was not furnished on the ground of confidentiality. Respondent No.1 further states that against its admitted claim of INR 719,98,48,660, only INR 111,76,21,846.99 has been received in seven instalments, and that the balance amount remains due. Respondent No.1 states that it is ready to return the bank guarantees as per the Approved Resolution Plan, but has sought payment of the remaining admitted claim and also a reconciliation statement of bank guarantees with individual bills of entry.

Respondent No.2/3 Counter Reply

# 10. Respondent No.2, Kolkata Customs Division, has filed a counter stating that 17 bills of entry were provisionally assessed and released under bond and bank guarantees on the basis of release advices issued for project contracts registered at Paradeep Customs. Respondent No.2 states that it has not received communication from Paradeep Customs for finalisation of the said bills of entry or release of bank guarantees. It also states that it has sought clarification from Respondent No.1 as to whether the documents required for finalisation were submitted and whether Respondent No.1’s claim of INR 719.98 crore covers the bills of entry cleared at Kolkata Customs.

# 11. Respondent No.2 further contends that the bank guarantees issued in relation to imports made under the Project Import Scheme by availing concessional/nil rate of duty do not form part of the assets of the Corporate Debtor. It is submitted that these are not performance bank guarantees but instruments furnished in lieu of customs duty payable upon finalisation of assessment, and that the Corporate Debtor has no right over the same. Respondent No.2 relies on U.P. Cooperative Federation Ltd. v. Singh Consultants and Engineers Pvt. Ltd4, Bharat Aluminium Co. Ltd. v. J.P. Engineers Pvt. Ltd5, Haryana Telecom Ltd. v. Aluminium Industries Ltd.6 and the order of this Tribunal in IA No. 412 of 2023 in the matter of Lanco Amarkantak Power Limited7 to contend that bank guarantees may be invoked even during moratorium and are not assets of the Corporate Debtor.

# 12. Respondent No.3, Visakhapatnam Customs Division, states that the Corporate Debtor had registered project import contracts at Paradeep Customs for setting up the thermal power plant and had cleared import consignments through Visakhapatnam Customs on release advices issued by Paradeep Customs. Respondent No.3 states that, in respect of Project Contract No. 01/PROJ.CONTRACT REGN/PDP/2010, 98 bills of entry filed at Visakhapatnam were finally assessed and the exemption benefit under the Project Import Regulations, 1986 was extended.

# 13. However, in respect of Project Contract Nos. 04/Proj.Contract Reg./2011 and 05/Proj.Contract Reg./2011, Respondent No.3 states that 53 bills of entry were filed at Visakhapatnam, but the Corporate Debtor failed to submit final documents such as reconciliation statement and Chartered Engineer certificate regarding installation of machinery, as required under Regulation 7 of the Project Import Regulations, 1986. Respondent No.3 states that the Corporate Debtor thereby violated the conditions of Notification No. 21/2002-Cus and that the differential duty in respect of the said 53 bills of entry is INR 175.41 crore. Accordingly, Respondent No.3 contends that the bank guarantees associated with those bills of entry are liable to be encashed.

# 14. Respondent No.3 also submits that the liability to duty arose when the Corporate Debtor filed the bills of entry and failed to fulfil the conditions of the exemption notification. According to Respondent No.3, the bank guarantees were furnished as security for such customs duty and are not assets or properties of the Corporate Debtor. Respondent No.3 also relies on Section 14(3)(b) of the Code, the order in Lanco Amarkantak Power Limited, Bharat Aluminium and other authorities to contend that the Applicant cannot seek return of the instruments.

Applicant’s Rejoinder

# 15. The Applicant, in its rejoinder to Respondent No.1, submits that the claim of Respondent No.1 was admitted and treated under the Approved Resolution Plan, and that Respondent No.1 never challenged such treatment during CIRP or before the appellate forum. The Applicant further states that the communications issued to Respondent No.1 referred to the relevant plan clauses and called upon it to return the NFB Instruments. According to the Applicant, Respondent No.1 cannot insist upon full payment of its admitted claim or reconciliation details as a condition for returning the NFB Instruments, since its claims stood discharged, settled and extinguished under the Approved Resolution Plan.

# 16. In its rejoinder to Respondent No.3, the Applicant submits that Respondent No.3 itself proceeds on the basis that it cleared consignments pursuant to release advices issued by Respondent No.1, which was the port of registration. The Applicant also relies upon a letter dated 19.08.2025 by Respondent No.3 to Respondent No.1, wherein Respondent No.3 sought confirmation whether the NFB Instruments could be returned to the Applicant. The Applicant contends that once Respondent No.1, being the port of registration, has accepted that the instruments may be returned as per the Approved Resolution Plan, Respondent No.3 cannot take a contradictory stand.

# 17. The Applicant further submits that Section 14(3)(b) operates only during CIRP and not after approval and implementation of a resolution plan. According to the Applicant, the issue is not whether the NFB Instruments are assets of the Corporate Debtor, but whether Respondent No.3 can take action which may result in additional liability on the resolved Corporate Debtor for pre-CIRP/CIRP-period dues which stood extinguished under the Approved Resolution Plan. The Applicant also relies upon the clean-slate principle, Section 31(1), Section 238, and the earlier order dated 16.10.2025 in IA Nos. 1043 and 1044 of 2025 concerning release of cargo at Paradip Port.

Findings & Analysis

# 18. We have heard the parties and reviewed the records placed before us. The real question in the present case is whether the Respondents can continue to retain or invoke the bank guarantees and letters of credit for recovery of the very same customs dues which stood dealt with and extinguished under the Approved Resolution Plan. This question arises in circumstances where Respondent No.1 had filed its claim in CIRP for Rs. 719,98,48,660, such claim had been treated under the Plan, and Respondent No.1 had received payment in terms thereof. The answer must reconcile the settled law governing bank guarantees and letters of credit with the statutory consequences flowing from approval of a resolution plan.

# 19. There can be no dispute that a bank guarantee is ordinarily an independent instrument between the issuing bank and the beneficiary. There can also be no dispute that, in an appropriate case, Section 14(3)(b) of the Code may exclude such guarantees from the rigour of moratorium during CIRP. However, those principles cannot be applied in isolation from the binding effect of an approved resolution plan under Section 31 of the Code. This is particularly so where the beneficiary of the instruments had submitted its claim in CIRP, the claim was collated and dealt with under the Approved Resolution Plan, and payment was received by the beneficiary in terms of the Plan, though the beneficiary continues to assert that the admitted claim has not been paid in full.

# 20. The customs-dues claim of Respondent No.1 was not kept outside the CIRP. Respondent No.1 submitted a claim of Rs. 719,98,48,660, which, according to the Applicant, included the claim covered by the NFB Instruments, namely the bank guarantees and letters of credit furnished in favour of the Respondents. The said claim was collated as an operational debt, and Respondent No.1 received Rs. 111,76,21,846.99 in seven instalments in terms of the Approved Resolution Plan8. Respondent No.1 did not challenge the collation or treatment of its claim during the CIRP or the Plan Approval Order. It cannot, therefore, insist upon payment of the unpaid portion of its admitted claim from the resolved Corporate Debtor as a condition for return or release of the NFB Instruments, if such instruments secure the very same customs dues which stood dealt with under the Approved Resolution Plan.

# 21. The position of Respondent Nos. 2 and 3 also cannot be viewed dehors the CIRP and the Approved Resolution Plan. Admittedly, they did not file independent claims in the CIRP. To the extent the bank guarantees and letters of credit held by them secured pre-CIRP customs dues or liabilities arising out of the same project import registrations, such dues would also have to be examined in the context of the Approved Resolution Plan. If those dues formed part of, or were covered by, the customs claim which stood dealt with and extinguished under the Approved Resolution Plan, the related instruments cannot be retained or invoked as a means of recovering such extinguished liabilities.

# 22. The Respondents have contended that the bank guarantees could have been invoked even during moratorium and that such instruments are not assets of the Corporate Debtor. We accept the broad proposition that a resolution plan cannot, merely by incorporating a clause, extinguish independent rights under instruments which are not assets of the Corporate Debtor. However, that proposition cannot be applied mechanically where the very demand secured by such instruments has been subjected to the CIRP and dealt with under an approved resolution plan. The present case is not an ordinary commercial dispute between a beneficiary and an issuing bank. The beneficiaries here are statutory authorities, and the underlying customs dues are dues which stood dealt with, and to the extent not provided for, extinguished under the Approved Resolution Plan. Invocation of the NFB Instruments for recovery of the very same dues would, in substance, permit recovery of an extinguished claim outside the plan.

# 23. The reliance placed by the Respondents on the earlier order of this Tribunal in IA No. 412 of 2023 requires to be considered in its proper context. In that matter, the Tribunal was dealing with invocation of customs bank guarantees during the pendency of CIRP, at a stage when the resolution plan had not yet been approved or implemented. It was in that context that the Tribunal held that the customs authorities could not be faulted for invoking the bank guarantees upon withdrawal of the customs duty exemption, and that such guarantees were not protected by the moratorium in view of Section 14(3)(b) of the Code.

# 24. The present case stands on a different footing. Here, the customs claim had either been lodged in CIRP or was required to be lodged in CIRP, the claim stood dealt with under the Approved Resolution Plan, and the plan has been approved and implemented. Therefore, the principle of autonomy of bank guarantees, as applied in IA No. 412 of 2023, cannot be used to permit recovery of the very same pre-CIRP customs dues after their treatment and extinguishment under the Approved Resolution Plan. The independence of such instruments protects the beneficiary from ordinary disputes in the underlying transaction; it does not authorise a statutory creditor, after approval of a resolution plan, to enforce the same pre-CIRP demand which stood dealt with and extinguished under the plan.

# 25. At the same time, we are not inclined to issue an omnibus declaration that every instrument listed in Annexure A of the present IA stands automatically discharged merely because it is described as an NFB Instrument. The instruments may relate to different bills of entry, different project contracts, different ports, different stages of assessment/finalisation, and different factual positions. The Respondents have also raised issues regarding reconciliation, finalisation of bills of entry, release advices and documents required under the Project Import Regulations. These issues require instrument-wise verification.

# 26. Accordingly, we are neither inclined to dismiss the Application outright, nor to direct unconditional return of all instruments without verification. The appropriate course is to require an instrument-wise reconciliation. The Respondents shall, in consultation with the Applicant and the issuing banks, undertake reconciliation of all bank guarantees and letters of credit listed in Annexure A. Such reconciliation shall identify whether each instrument secures customs dues forming part of Respondent No.1’s admitted claim of Rs. 719,98,48,660 and whether such dues stood dealt with and extinguished under the Approved Resolution Plan.

# 27. In respect of the instruments which form part of, or secure, Respondent No.1’s admitted claim of Rs. 719,98,48,660, the Respondents shall not invoke or encash such instruments for recovery of the extinguished pre-CIRP/CIRP-period customs dues. The Respondents shall take necessary steps for release/return of such instruments in accordance with law. In respect of any other instrument sought to be retained by them, the concerned Respondent shall issue a reasoned, instrument-wise communication to the Applicant, specifying the basis on which such instrument is stated to fall outside the extinguishment under the Approved Resolution Plan.

# 28. The reconciliation shall also indicate, instrument-wise, whether the concerned bank guarantee or letter of credit is subsisting, has expired, has been renewed, or stands discharged in accordance with its own terms. In respect of any instrument which has expired or otherwise stands discharged, the concerned Respondent shall not retain the same as security for any claim and shall take necessary steps for return/release thereof in accordance with law.

# 29. Until such reconciliation is completed and the reasoned instrument-wise communication is issued, the Respondents shall not invoke or encash the NFB Instruments for recovery of the unpaid portion of Respondent No.1’s admitted claim. They shall also not invoke or encash such instruments for recovery of any pre-CIRP/CIRP-period customs dues which stood dealt with or extinguished under the Approved Resolution Plan.

# 30. Before parting, we consider it appropriate to comment upon the manner in which the Customs Department dealt with the issue of bank guarantees aggregating to approximately Rs. 822.13 crore9 furnished by the Corporate Debtor. It is not in dispute that the Corporate Debtor was admitted into the Corporate Insolvency Resolution Process by order dated 03.10.2019. Respondent No.1, being the port of registration, lodged its claim before the Resolution Professional on 04.11.2019 for a sum of Rs. 719,98,48,660. Respondent Nos. 2 and 3, however, did not lodge any independent claims during the CIRP, notwithstanding the fact that certain bank guarantees and bills of entry forming the subject matter of the present proceedings pertain to their respective jurisdictions. Respondent No.1 has stated that against its admitted claim of Rs. 719,98,48,660, it received Rs. 111,76,21,846.99 in seven instalments under the Approved Resolution Plan.

# 31. The scheme of the Insolvency and Bankruptcy Code, 2016 proceeds on the premise that all stakeholders are required to submit their claims within the prescribed period so that a prospective resolution applicant is placed in possession of the complete financial position of the Corporate Debtor. As observed by the Hon’ble Supreme Court in Jaypee Kensington10, a resolution applicant cannot reasonably be expected to make provision for creditors who fail to submit their claims within the time prescribed under Regulation 12 of the CIRP Regulations. Likewise, in Essar Steel11, the Hon’ble Supreme Court held that a successful resolution applicant cannot be burdened with undecided or belated claims after approval of the resolution plan. The principle was authoritatively reaffirmed in Ghanshyam Mishra12, wherein it was held that all claims not forming part of the approved resolution plan stand extinguished and no person is thereafter entitled to initiate or continue proceedings in respect of such claims.

# 32. It is also an admitted position that the Customs Department was aware of the commencement of the CIRP as well as of the existence of the bank guarantees furnished by the Corporate Debtor. Nevertheless, no steps appear to have been taken for invocation of the bank guarantees during the pendency of the CIRP. The issue of invocation or retention of the bank guarantees arose only after approval of the Resolution Plan on 13.02.2025.

# 33. The legal position regarding the autonomous nature of bank guarantees and the exclusion contained in Section 14(3)(b) of the Code has long been settled. If the Customs Department considered the bank guarantees to be independently enforceable, it was open to it to invoke the same in accordance with law during the subsistence of the CIRP, since invocation of bank guarantees is not interdicted by the moratorium under Section 14 by virtue of the express exclusion contained in Section 14(3)(b). Indeed, the Respondents themselves have relied upon the settled legal position, including the authorities referred to in paragraph 11 above and the earlier order of this Tribunal in IA No. 412 of 2023. The statutory remedy, therefore, was available throughout the CIRP. Having not exercised such remedy during the relevant period and having allowed the resolution process to culminate in the approval of the Resolution Plan, it would not be consistent with the scheme and finality contemplated under the Code to permit invocation or retention of the very same bank guarantees thereafter for recovery of pre-CIRP liabilities which already stand dealt with under the Approved Resolution Plan.

# 34. If the Customs Department was of the view that the assessed demand was secured by subsisting bank guarantees capable of invocation notwithstanding the moratorium, it was expected to take appropriate steps in accordance with law at the relevant stage. Equally, while lodging its claim before the Resolution Professional, the Department ought to have clearly disclosed the existence and status of the bank guarantees securing the demand, so that the claim could be examined and treated with full particulars.

# 35. Having regard to the facts emerging in the present proceedings, we consider it appropriate, in the larger institutional interest, to direct that a copy of this order be forwarded to the Central Board of Indirect Taxes and Customs (CBIC) for examination at the administrative level. CBIC may examine whether any procedural lapse occurred in the manner in which the customs claim and the related bank guarantees were dealt with during CIRP, and take such action as may be considered appropriate in accordance with law. CBIC may also consider issuing appropriate internal guidelines or a Standard Operating Procedure for cases where customs dues are secured by bank guarantees or similar instruments and the importer/corporate debtor is undergoing CIRP, so that similar issues do not recur.

The Application is accordingly disposed of with the above directions.

---------------------------------------------------------

Teena Saraswat Pandey (RP) Vs. Kishore Associates AOP - Whether the SRA’s failure to meet the payment schedule amounts to a “wilful” failure to implement the approved resolution plan attracting penal action under Section 74(3) this is answered in negative.

  NCLT Indore (2026.06.05) in Teena Saraswat Pandey (RP) Vs. Kishore Associates AOP [(2026) ibclaw.in 1976 NCLT, I.A. 502 of 2025 and I.A. 503 of 2025 in T.P. No. 123 of 2019] held that;

• Whether the SRA’s failure to meet the payment schedule amounts to a “wilful” failure to implement the approved resolution plan attracting penal action under Section 74(3) this is answered in negative.

• In light of the judgment cited above, it becomes clear that under the facts and circumstances of the case, an extension granted in the payment timelines envisaged under the Resolution Plan does not amount to modification in the resolution plan. Hence, the second question is answered in negative.

• Therefore the present petition for commencement of liquidation is premature. There is a real possibility that limited additional time and supervision may permit implementation, preserving going‑concern value that liquidation may destroy. Thus Whether the present Application for commencement of liquidation ought to be allowed at this stage the answer is in negative.

• Thus this Tribunal recognized the possibility of revival of the corporate debtor based on the resolution plan and grant 45 days additional time to enable implementation of the resolution plan, consistent with the IBC’s object to promote revival and maximize value.

Excerpts of the Order; 

Interlocutory Applications No. 502, 503, and 542 (hereinafter collectively referred to as ‘the three IAs’) are interconnected and arise out of the same set of facts in the present matter. The issues raised in all three IAs are common/substantially the same. In view of the common questions of fact and law, it is therefore appropriate and in the interests of justice that the three IAs be taken up and decided jointly. Accordingly, all the three IAs are being decided simultaneously by this order.

# 1. The present Application has been filed by Ms. Teena Saraswat Pandey, Resolution Professional of M/s. Indison Agro Foods Ltd. (“Corporate Debtor” or “CD”) under Section 33 (3) & (4) of the Insolvency & Bankruptcy Code, 2016 (“IBC”) seeking liquidation of Corporate Debtor on account of failure of M/s. Kishore Associates AOP (“Successful Resolution Applicant” or “SRA”) to implement the resolution plan, which was approved by this Hon’ble Tribunal vide Order dated 18.06.2025. seeking following prayers:

• a. to pass appropriate order holding the Respondent / SRA guilty of ‘knowingly’ and ‘willingly’ contravened with the implementation of the Resolution Plan approved by this Hon’ble Tribunal vide its Order dated 18.06.2025;

• b. to pass appropriate order directing the initiation of penal proceeding under Section 74(3), IBC against the Respondent/ SRA for its failure to make the payment of resolution amount as per the approved Resolution Plan, as such for contravention to implement the resolution plan therein.

• c. allow the present Application and pass an Order directing the commencement of liquidation proceedings of the Corporate Debtor i.e., M/s. Indison Agro Foods Ltd;

• d. pass consequent order appointing the Applicant herein i.e., Smt. Teena Saraswat Pandey, Insolvency Professional as the Liquidator of the Corporate Debtor;

• e. pass any further order(s)/direction(s) as may deem fit to this Hon’ble Tribunal.

# 2. The averments made by the Applicant in its application are as follows:

# 3. The Tribunal ordered CIRP to begin on 03.03.2023 based on an Indian Bank (formerly Allahabad Bank) Section 7 application. Ms. Teena Saraswat Pandey was appointed as Interim Resolution Professional and later confirmed as Resolution Professional.

# 4. The IRP received the CIRP order on 03.03.2023 and published the statutory Form A public notice on 05.03.2023 in Free Press and Raj Express (Indore) and Indian Express and Dainik Navjyoti (Jodhpur), inviting creditors to submit claims. The IRP also informed the relevant statutory authorities in Indore and Jodhpur about commencement of the CIRP.

# 5. The IRP received claims after the public notice and formed a three-member Committee of Creditors (CoC) under Section 21(1) and relevant CIRP Regulations. The CoC was formally constituted on 25.03.2023 and held its first meeting on 01.04.2023. The three financial creditors and their voting percentages are listed in the application as follows:

i) State Bank of India: 52.71%

ii) Indian Bank: 36.30%

iii) ICICI Bank.: 10.99%

# 6. The Applicant appointed IBBI-registered valuers on 15.04.2023 (under the Code and Regulation 27) to determine the Corporate Debtor’s fair value and liquidation value for plant & machinery, land & buildings, and securities & financial assets.

Meetings of CoC

# 7. In the 2nd CoC meeting (24.04.2023) the Applicant published Form G (04.05.2023) under Regulation 36A(1) to invite EOIs, with 19.05.2023 as deadline. Several parties showed interest, but three prospective resolution applicants (PRAs) submitted formal EOIs with the required Rs.25 lakh EMD. The list of PRAs was circulated on 29.05.2023 to PRAs and CoC members for objections by 03.06.2023.The list of PRAs is as follow:

• a. JICS Logistics Ltd.;

• b. M/s. Kishore Associates AOP;

• c. Kalyan Toll Infrastructure Ltd.

The final PRA list was circulated on 13.06.2023, with resolution plans due by 18.07.2023. Two plans were submitted on time from M/s. Kishore Associates AOP and M/s. Kalyan Toll Infrastructure Ltd. each accompanied by a refundable deposit of Rs.50 lakh.

# 8. At the 5th CoC meeting on 24.07.2023, the Applicant, having vetted both resolution plans and found them compliant with the Code and related rules/regulations, circulated them to CoC members upon receipt of required confidentiality undertakings and then presented the plans for CoC discussion and deliberation.

# 9. At the 6th CoC meeting on 14.08.2023, members unanimously (100%) approved a 90‑day CIRP extension. The Applicant filed under IA No. 249 (MP)/2023 under Section 12(2), and the Tribunal allowed the extension on 31.08.2023, extending CIRP to 27.11.2023.

# 10. At the 7th CoC meeting on 22.08.2023 the resolution plans were re‑presented, discussed in detail, and put to vote with voting lines arranged per CoC members’ request. The minutes of that meeting are annexed as ANNEXURE‑A/1.

# 11. At the 9th CoC meeting on 21.11.2023 the CoC approved seeking exclusion of 70 days (15.09.2023–23.11.2023) because of pending litigation with State Bank of India, to extend the CIRP (which was due to expire on 27.11.2023). The Applicant filed IA No. 364 (MP)/2023 for this relief, but the Tribunal dismissed it as infructuous on 10.05.2024.

The Tribunal’s 05.01.2024 order disposed of two applications: IA 166 (MP)/2023 (seeking replacement of the RP) was dismissed, and IA 251 (MP)/2023 (seeking reconsideration of a claim) was disposed of directing the Applicant to reconsider State Bank of India’s claim in accordance with the Tribunal’s observations in paragraph 10 of the order.

# 12. At the 10th CoC meeting on 24.01.2024 the Applicant reported that as per the Tribunal’s 05.01.2024 order, it had recomputed the three financial creditors’ claims (adjusting chargeable and penal interest) and reallocated their voting shares. The CoC discussed statutory agendas under Regulations 39B–39D (estimated liquidation cost, sale as a going concern, liquidator’s fees) and unanimously (100%) approved seeking exclusion of 100 days (15.09.2023–06.03.2024).

# 13. At the 11th CoC meeting on 02.03.2024 the CoC discussed sale/liquidation of the Corporate Debtor and put the approval of resolution plans from M/s. Kishore Associates AOP and M/s. Kalyan Toll Infrastructure Pvt. Ltd., and the agenda for liquidation, to e‑vote. Minutes are annexed as ANNEXURE–A/3.

# 14. M/s. Kishore Associates’ plan received 47.29% votes and was rejected with (52.71% voting). M/s. Kalyan Toll Infrastructure’s plan was unanimously rejected (100% against). The liquidation resolution was passed by 52.71% votes. With no plan achieving the required 66% and the extended CIRP expiring on 06.03.2024, the Applicant filed IA(Liq.) No.1(MP)/2024 under Section 33(1)(a) to commence liquidation. Kishore Associates then filed IA/1(MP)/2024 seeking leave to submit a revised/financially improved plan. The Tribunal’s 02.09.2024 order allowed any revised plan to be placed before the CoC for final decision (order annexed as ANNEXURE‑A/4).

# 15. At the 14th CoC meeting on 25.09.2024, held in compliance with the Tribunal’s 02.09.2024 order, the Applicant presented the revised resolution plans submitted by the PRAs, which were discussed and clarifications sought. Minutes are annexed as ANNEXURE‑A/5.

# 16. The Applicant received a final revised plan from M/s. Kishore Associates AOP and held the 16th CoC meeting on 04.11.2024 to decide. Kishore’s representative attended, the plan was discussed for the final time, and the CoC agreed to put the resolution‑plan approval and liquidation agendas to e‑voting. Minutes are annexed as ANNEXURE‑A/7.

# 17. The CoC, after considering the SRA’s representations and assurances, approved the resolution plan by 100% via e‑voting (concluded 22.11.2024), rejected liquidation, and declared M/s Kishore Associates AOP the Successful Resolution Applicant to acquire the Corporate Debtor as a going concern.

# 18. The Applicant filed IA (Plan) No.3(MP)/2024 for approval of the SRA’s resolution plan. The Tribunal found the plan compliant with the IBC and related rules and approved it by order dated 18.06.2025. A copy of the approval order is annexed as ANNEXURE‑A/8.

# 19. The approved Resolution Plan required the SRA to pay Rs. 23,50,06,108/- in two tranches, plus any additional/excess CIRP costs, within 90 days of the Tribunal’s approval (18.06.2025).

# 20. The SRA had to pay the first tranche of Rs. 7,05,01,832 by 02.08.2025 (45 days from 18.06.2025). Instead, invoking Clause 16.3, the SRA emailed on 31.07.2025 requesting a 15‑day cure period to regularize that payment, citing “unforeseen logistical constraints.” A copy of the email is annexed as ANNEXURE‑A/9.

# 21. The Applicant (Chairman) convened the 2nd Monitoring Committee meeting on 01.08.2025 with the SRA and financial creditor representatives. The Committee unanimously granted a 15‑day cure period, requiring the SRA to pay Rs. 7,05,01,832 by 17.08.2025 and warned that no further extensions for the remaining resolution amount would be allowed. Minutes are annexed as ANNEXURE‑A/10.

# 22. The SRA missed the 17.08.2025 payment deadline despite an extension from the Monitoring Committee. On 17.08.2025, SRA representative Mr. Rajiv Goyal requested an additional 60-day extension, citing his mother’s death (she owned 10% of the SRA consortium with net worth Rs. 23,50,88,304) and resultant delays in executing documents and arranging funds, for payment of Rs. 7,05,01,832/-. The SRA said it had applied to State Bank of India on 11.08.2025 for a new term loan and reiterated its commitment to implement the plan. The email of 17.08.2025 is attached as Annexure A/11.

# 23. The Applicant called the Monitoring Committee’s 3rd meeting on 21.08.2025 after receiving the SRA’s 17.08.2025 email. The Committee considered and unanimously rejected SRA’s request for 60-day extension to pay the resolution amount, stating it lacked authority to grant such an extension. The meeting minutes were circulated to all members, including the SRA. The minutes are attached as Annexure A/12

# 24. The Applicant requested a legal opinion (per Monitoring Committee members) after the SRA failed to implement the Resolution Plan. The opinion was received and circulated on 09.09.2025. The Committee met again on 11.09.2025 to review the opinion and possible legal steps against the SRA. After deliberation, the Committee decided to include, among other items, a ballot vote on filing a liquidation commencement application as follows:

• 1. Monitoring Committee to approve the forfeiture of EMD and Performance Bank Guarantee submitted by SRA (entire amount deposited)

• 2. Monitoring committee to approve payment of outstanding Insolvency Process cost out of the amount so forfeited including Security expense, Professional fees including fees of Resolution Professional / Chairperson incurred from date of approval of Resolution plan, outstanding CIRP cost, reimbursement of CIRP Costs Contribution by COC members.

• 3. Monitoring Committee to approve filing of Interlocutory Application before NCLT, Indore Bench for initiation of liquidation of Corporate Debtor i.e., M/s. Indison Agro Foods Ltd. under Section 33, IB Code.

• 4. Monitoring Committee to approve the filling of an Application before NCLT, Indore Bench against SRA seeking directions to IBBI to initiate appropriate penal proceedings under Section 74(3), IB Code, 2016.

# 25. The Financial Creditor/members of the Monitoring Committee unanimously approved the proposed agendas, including filing an application to commence liquidation proceedings against the Corporate Debtor, by ballot vote. The minutes of the 4th meeting and the voting results are attached as Annexure A/13.

# 26. The SRA emailed the Applicant on 18.09.2025 asking the Monitoring Committee/Financial Creditors to reconsider their refusal to grant an extension for paying the resolution amount. The Applicant replied the same day, confirming the Committee could not grant any extension. The SRA’s 18.09.2025 email is attached as Annexure A/14.

# 27. Respondent No.2 was obliged to meet the payment schedule in its own Resolution Plan. When it submitted the Plan, the SRA claimed strong financial capacity to pay the approved amount and revive the corporate debtor. To demonstrate funding sources, the SRA presented two “in principle” sanction letters—one from Kotak Mahindra Bank dated 13.07.2023 and one from HDFC Bank dated 04.11.2024, each for Rs. 20 crore—indicating it could obtain term loans if needed to implement the Plan.

# 28. There was a long gap between COC approval of the resolution plan (22.11.2024) and NCLT approval (18.06.2025), giving the SRA ample time to arrange funds for the remaining payments it had proposed. Once the COC approves a plan, the SRA is reasonably expected to have arranged financing to implement the plan and pay creditors on time, unless funding depends on ongoing litigation or other proceedings.

# 29. Mrs. Goyal’s death was not disclosed to the COC, the RP, or the Tribunal during plan consideration, and the SRA did not explain how her death would materially affect plan implementation. She held only 10% of the AOP; the other members (90%) remain able to perform but have not done so. The SRA’s stated reason “difficulties in executing necessary documents” is vague and does not explain how it prevents arranging funds or meeting payment obligations. The Plan also pledged, under Clause 11.2, that working-capital infusion would fund creditor liabilities and CIRP costs per Schedule B is as follows :

# 30. The SRA’s excuse for missing the payment timeline lacks a reasonable connection to implementing the resolution plan and fails to inspire confidence. The AOP members (Rajiv Kumar Goyal, Anand Prakash Goyal, Shivani Goyal, Mirabai Goyal now deceased and Nisha Goyal) had originally submitted an undertaking to the Applicant that they had sufficient net worth to pay the entire resolution plan amount. A true copy of that undertaking is annexed as ANNEXURE‑A/11.

# 31. The Monitoring Committee seeks penal action under Section 74(3) IBC against the SRA for knowingly and willfully failing to implement the Resolution Plan (approved 18.06.2025), requests the Tribunal to initiate liquidation of the Corporate Debtor and appoint the Applicant as Liquidator (with Smt. Teena Saraswat Pandey having already consented and been nominated), citing the CoC’s prior decision to liquidate.

REPLY ON THE BEHALF OF THE RESPONDENT:

# 32. The deponent states that they are duly authorized to file this reply, are familiar with the case facts, and competent to swear the affidavit on behalf of the Respondent. They oppose the Application, deny all its contents unless specifically admitted, and contend the Application is false, misleading (suppressio veri and suggestio falsi), and an abuse of the legal process.

# 33. Respondent says there was no breach: SRA has resumed the implementation schedule by bringing in an investor. The payment delay was not deliberate or wilful but caused by circumstances beyond SRA’s control specifically the sudden death of Ms. Mira Bai Goyal (10% interest holder) on 30.10.2024, which disrupted execution of documents and finalising lender funding (State Bank of India, Kotak Mahindra Bank) required by the Resolution Plan. The death and related funding difficulties are presented as bona fide grounds for an extension; death certificate and her net worth are annexed as Annexure‑A.

# 34. The Applicant acted in good faith, having already paid Rs. 4.10 Crores (EMD and PBG), and seeks a time extension to arrange the remaining funds arguing this is a procedural adjustment, not a modification of the approved Resolution Plan, and does not change its substance or creditors’ rights.

# 35. Respondent has filed IA 542/2025 seeking a 60‑day extension to implement the resolution plan, arguing extensions are legally permissible and not a modification of the plan, and relies on precedents including NCLAT decisions in Ashok Dattatray Atre v. SBI, Cosmos Cooperative Bank v. Edelweiss, and an NCLT Chandigarh order in Deepinder Singh v. Sanyam Goel.

# 36. The Respondent says the Monitoring Committee wrongly rejected its extension request despite a supporting legal opinion (Annexure‑B) and instead moved to forfeit and liquidate; this refusal was arbitrary, ignored precedents, and undermines the CIRP’s objective of reviving the Corporate Debtor.

# 37. Unless a 60‑day extension is granted, the Resolution Plan cannot be implemented and the corporate debtor’s revival will be frustrated; a short extension would allow the Respondent to infuse remaining funds, complete implementation, and better serve the IBC’s objective of resolution and value maximization for all stakeholders.

# 38. The Respondent paid Rs. 5,00,000 (proof at Annexure‑C) in good faith while seeking the extension, and proposed an addendum to the Resolution Plan to bring in Kalyan Halol Shamlaji Tollway Limited as a new investor/shareholder to implement the plan (email and addendum at Annexure‑D).

# 39. The Respondent’s addendum to bring in Kalyan Halol Shamlaji Tollway Ltd. was placed before the CoC on 09.01.2026 the CoC said the matter is sub‑judice and they would await the NCLT’s decision (Annexure‑E), and at the 21st CoC meeting on 09.02.2026 the CoC recorded its willingness to liquidate the Corporate Debtor without permitting any modification to the Resolution Plan (Annexure‑F).

# 40. The Respondent says the CoC’s position is inconsistent calling the matter sub‑judice while refusing any modification and therefore the CoC should be made a party before the Tribunal; the Respondent has proposed a substitute investor and asks the Tribunal to allow induction of the new investor to revive the Corporate Debtor in line with the IBC’s objective.

# 41. The deponent argues the Applicant’s petition is not maintainable and should be dismissed with costs, claiming the Applicant filed prematurely and carelessly without verifying facts or disclosing subsequent developments.

Analysis and Observation:

# 42. We have heard the learned counsel appearing on behalf of the Applicant and the respondent and have perused the relevant materials available on record. It is noted that:1. The present Application has been filed by Ms. Teena Saraswat Pandey, the Resolution Professional (“Applicant”/”RP”) of M/s Indison Agro Foods Ltd. (“Corporate Debtor”/”CD”) under Sections 33(3) and 33(4) of the Insolvency and Bankruptcy Code, 2016 (“the Code”) seeking

-(i) a declaration that M/s Kishore Associates AOP (“Respondent”/”SRA”) knowingly and wilfully contravened the implementation of the Resolution Plan approved by this Tribunal on 18.06.2025;

(ii) initiation of penal proceedings under Section 74(3) of the Code against the SRA;

(iii) commencement of liquidation of the Corporate Debtor under Section 33(1) read with Section 33(3) and appointment of the Applicant as Liquidator; and

(iv) other consequential reliefs.

The SRA has filed a reply opposing liquidation and seeking a short extension/induction of an investor to implement the approved Resolution Plan.

2. CIRP of the Corporate Debtor commenced on 03.03.2023. The Applicant was appointed IRP and later confirmed as RP.

3. CoC formation, valuation, and invitation for EOIs and submission of resolution plans were done as per the record. The CoC considered plans and, after appropriate meetings and e‑voting, approved the Resolution Plan of M/s Kishore Associates AOP by 100% on 22.11.2024. This Tribunal approved that plan on 18.06.2025.

4. The approved Resolution Plan required payment of Rs. 23,50,06,108 in two tranches, with the first tranche of Rs. 7,05,01,832 to be paid within 45 days of approval, i.e. by 02.08.2025.

5. The SRA sought a 15‑day cure period by an email dated 31.07.2025 (invoking clause 16.3) and later sought a further 60‑day extension on 17.08.2025 citing the death of a 10% AOP member and consequent funding/document execution issues. The Monitoring Committee allowed a 15‑day cure period but rejected the 60‑day extension request as not within its authority.

6. The SRA did not pay the first tranche by the extended date and has not completed implementation as per the approved plan. The CoC/Monitoring Committee approved steps including forfeiture of EMD/PBG and filing for liquidation and for initiating penal action under Section 74(3) IBC. The RP has filed the present application accordingly.

7. The Respondent contends that the delay was bona fide, caused by the death of Ms. Mirabai/Mira Bai Goyal (10% AOP member) and consequent lender/funding issues; it has sought judicial permission for a 60‑day extension and proposed induction of a new investor (Kalyan Halol Shamlaji Tollway Ltd.) and has placed on record certain payments and an addendum proposing funds.

8. Issues for determination:

(a) Whether the SRA’s failure to meet the payment schedule amounts to a “wilful” failure to implement the approved resolution plan attracting penal action under Section 74(3).

(b)Whether such extension amounts to modification of the Resolution plan?

(c) Whether the present Application for commencement of liquidation ought to be allowed at this stage.

(d) Whether limited additional time should be granted to enable implementation of the resolution plan, consistent with the IBC’s object to promote revival and maximize value.

# 9. Findings and Reasons:

9.1 Whether the SRA’s failure to meet the payment schedule amounts to a “wilful” failure to implement the approved resolution plan attracting penal action under Section 74(3): The IBC’s objective is to maximize value and revive corporate debtors, and once a resolution plan is approved under Section 31 it is binding on the debtor, members, creditors and guarantors; non‑implementation can lead to remedies under Section 33 (including liquidation) and penal action under Section 74(3) only where contravention is “knowingly and wilfully” committed, so facts and intent must be closely examined before terminating a Tribunal‑sanctioned plan. Here, the CoC and Tribunal approved the plan on 18.06.2025, creating finality that should not be disturbed lightly when there are credible, bona fide implementation efforts: the SRA repeatedly represented funding availability, produced sanction letters, paid deposits and proposed an investor, sought extensions citing logistical/funding problems and the death of an AOP member, and filed an application and evidence of lender communications; the Monitoring Committee granted a short cure period but later moved to forfeit guarantees and seek liquidation after rejecting a longer extension. Taken together, these facts indicate prima facie bona fide difficulty rather than clear wilful default, and the record is insufficient to show the culpable intent required to start penal proceedings under Section 74(3).

In Deepinder Singh and Ors. v. Sanyam Goel and Anr., the NCLT recognized that delays caused by pending appellate proceedings and bona fide efforts by the SRA, including deposit of the entire plan amount and extension of the Performance Bank Guarantee, did not amount to wilful default. The Tribunal granted a limited extension to implement the plan, emphasizing that pendency of litigation is not an absolute bar to extension if the delay is not due to willful default or lack of bona fide intent.

Deepinder Singh and Ors. v. Sanyam Goel and Anr. 1443 NCLT 24.

viii) “We draw strength from the decisions of the Hon’ble NCLAT and the Hon’ble Supreme Court in cases like Cosmos Cooperative Bank Ltd. vs. Vaibhav Shah & Ors., Appeal (AT) (Insolvency) No. 363 of 2019 and State Bank of India Stressed Asset Resolution Group vs. MBL Infrastructure Limited and Another [Company Appeal (AT) (Ins.) No. 539 of 2022], where extensions were granted in certain circumstances, including those involving litigation, to facilitate the successful implementation of a Resolution Plan. These cases underscore that the Adjudicating Authority has the discretion to grant extensions when it is in the interest of maximizing the value of the Corporate Debtor and ensuring the success of the resolution process, provided the delay is not a result of willful default or a lack of bona fide intent.”

Thus the first issue, Whether the SRA’s failure to meet the payment schedule amounts to a “wilful” failure to implement the approved resolution plan attracting penal action under Section 74(3) this is answered in negative.

9.2 Whether such extension amounts to modification of the Resolution plan?

Mere extension of the timeline for implementation, especially a short one granted under exceptional circumstances and without altering the core terms of the plan (such as the payout amount or the nature of the resolution) do not constitute a “modification” in the sense that would require a full re-approval process. It is viewed as a procedural adjustment necessary to overcome unforeseen delays caused by external factors like litigation.

Referring to the case in Deepinder Singh and Ors. v. Sanyam Goel and Anr., 1443 NCLT

v. While the Code does not explicitly define “modification” of a Resolution Plan, judicial interpretation has generally held that any change that alters the fundamental terms of the plan, affects the rights of stakeholders, or changes the value proposition requires a formal modification process, including potential re-submission to the CoC and the Adjudicating Authority.

vi. However, a distinction can be drawn between a material modification that changes the substance of the plan and a procedural adjustment, such as a short extension of time for implementation, necessitated by unforeseen circumstances and not impacting the core economic terms or the rights of stakeholders.

vii. In the present case, the requested extension of 78 days is solely for the purpose of regularizing the implementation timeline. It does not alter the amount to be paid under the Resolution Plan, the manner of payment, the treatment of creditors, or any other substantive term. The entire Resolution Plan amount has already been deposited by the SRA. The extension is a pragmatic step to ensure the successful culmination of the approved plan, which has faced temporary hurdles due to the appellate process.

viii. We are guided by the principle that the Adjudicating Authority, in exercise of its powers under Section 60(5) of the Code and Rule 15 of the NCLT Rules, has the inherent power to issue directions and make adjustments of a procedural nature to facilitate the effective implementation of an approved Resolution Plan, provided such adjustments do not amount to a material modification of the plan or prejudice the rights of any stakeholder.

ix. Considering that the extension sought is minimal, the entire plan amount is infused, and the core terms of the Resolution Plan remain unchanged, we conclude that granting a 78-day extension for implementation in this case does not constitute a material modification of the Resolution Plan that would necessitate a full re-approval process. It is a necessary procedural adjustment to ensure the successful outcome of the insolvency resolution.”

In light of the judgment cited above, it becomes clear that under the facts and circumstances of the case, an extension granted in the payment timelines envisaged under the Resolution Plan does not amount to modification in the resolution plan. Hence, the second question is answered in negative.

9.3 Whether the present Application for commencement of liquidation ought to be allowed at this stage: Section 33 contemplates commencement of liquidation where the resolution professional reports failure to secure implementation of the plan or the CoC passes resolution for liquidation and the Tribunal is convinced the plan cannot be implemented. Where credible steps to implement the plan continue and the SRA seeks limited time, the Tribunal should balance the interest of creditors with the IBC’s objective of revival given

i) The CoC originally and decisively approved the plan;

ii) The SRA’s ongoing communications and steps to bring in alternate investor/funding;

iii) Absence of conclusive evidence of deliberate default or futile prospects of implementation;

Talking about the commercial wisdom of the CoC having placed heavy reliance on the doctrine of commercial wisdom this Tribunal does not dispute the centrality of that doctrine to the IBC framework. However, as authoritatively held by the Hon’ble Supreme Court in K. Sashidhar v. Indian Overseas Bank and Committee of Creditors of Essar Steel India Ltd. v. Satish Kumar Gupta, the deference accorded to commercial wisdom is premised on the CoC having exercised its wisdom fairly, in possession of complete information, and in conformity with the objectives of the Code. Where any of these conditions is absent, the decision cannot claim the protection of the commercial wisdom doctrine; accordingly, even where the CoC has approved liquidation, the court (or tribunal) retains jurisdiction to intervene to uphold justice and ensure compliance with the statutory safeguards and the Code’s purpose.

The Tribunal finds great persuasive force in the judgment of the Hon’ble NCLAT dated 06.02.2026 in Company Appeal (AT) (Ins.) Nos. 2330 & 2331 of 2024 (Pragiti Construction v. Committee of Creditors of the Corporate Debtor) The Appellate Tribunal held that the supremacy of commercial wisdom cannot be extended to shield a process that is fundamentally flawed on account of conflict of interest. It was authoritatively held that although the commercial wisdom of the CoC is paramount, such wisdom must be exercised in furtherance of the objectives of the IBC, particularly the maximization of the value of the assets of the Corporate Debtor. The Appellate Tribunal further observed that sectoral incompatibility by itself cannot override the statutory objective of value maximization without a proper assessment of feasibility and viability. It was also held that delay cannot be cited as a ground when the consideration of the plan itself had been directed by the Adjudicating Authority

Also Referring to the judgement of Pradeep Kumar Goenka RP, (2022) ibclaw.in 141 NCLT

32. We find that the CoC /FC has lost the sight of the prime objectives of the IBC. It does not show the Doctrine of Prudence to advance argument for Liquidation instead of Resolution of the Stressed Assets that it is a Commercial Wisdom/Commercial Decision to reject the amount offered to them in terms of the Resolution Plan is more than the twenty times of the Liquidation Value. Issues like a Suit filed by the CD, a Writ pending before the Hon’ble High Court, FIR filed with an Investigating Agency, report submitted to the RBI for declaring the CD, Suspended Directors as Wilful Defaulters are apparently not related matter at this stage to be considered for rejection of the the Resolution Plan and rescue of the Stressed Assets with its employees from the Liquidation. The objectives of the IBC are very clear and liquidation of a MSME Unit is the last resort.

The Hon’ble Supreme Court of India in Civil Appeal No. 1792 of 2021- K.N Rajakumar vs. V. Nagarajan & Ors with Civil Appeal No. 2901 OF 2021 has held that

“It could thus be seen that one of the principal objects of the IBC is providing for revival of the Corporate Debtor and to make it a going concern. Every attempt has to be first made to revive the concern and make it a going concern, liquidation being the last resort.”

33. In our considered opinion, it is neither Commercial Wisdom nor a Commercial Decision of the CoC /FC to reject a Resolution Plan which offer to them an amount of Twenty times more than the Liquidation Value. In view of this the prayer made by the Applicant for liquidation of the CD needs to be rejected in achieving the Objectives of the IBC and the interest of all Stakeholders including the sole FC and the stalled MSME Unit.

34. Hence this IA No. 10/2021 in CP (IB) No. 37/GB/2021 filed for Liquidation is hereby rejected with the observations mentioned above and the Directions given below for Compliance.

Therefore the present petition for commencement of liquidation is premature. There is a real possibility that limited additional time and supervision may permit implementation, preserving going‑concern value that liquidation may destroy. Thus Whether the present Application for commencement of liquidation ought to be allowed at this stage the answer is in negative.

9.4 Whether limited additional time should be granted to enable implementation of the resolution plan, consistent with the IBC’s object to promote revival and maximize value:

Limited additional time may be granted to implement the resolution plan consistent with the IBC’s objectives, provided there is no willful contravention by the resolution applicant and liquidation has been rejected. The extension must be balanced against the need for timely resolution to prevent value erosion and protect stakeholders’ interests.

In State Bank of India and Ors. v. The Consortium of Mr. Murari Lal Jalan and Mr. Florian Fritsch and Anr., (2024) 290 SC, the Supreme Court emphasized that the Successful Resolution Applicant (SRA) has a profound responsibility to implement the resolution plan fully and in good faith, reflecting a commitment to the corporate debtor’s revival. The Court also noted that lenders and creditors must cooperate constructively to facilitate implementation, avoiding unnecessary obstruction. While the IBC prioritizes speed to prevent value erosion, the Court recognized that extensions of time may be warranted to ensure successful revival, but such extensions must be granted judiciously and not mechanically, weighing the consequences on the resolution plan’s implementation

Also Referring to the case in Pranav J. Damania the national company law tribunal Mumbai Bench IA No. 4372 of 2023 in Company Petition (IB) No. 4304 (MB) of 201

8. The Hon’ble Supreme Court in ―Essar Steel India Ltd. through Authorised Signatory v. Satish Kumar Gupta & Ors. (Civil Appeal No. 8766-67/2019) dated 15.11.2019” had observed at Para 79 of the Judgment as under:

“The effect of this declaration is that ordinarily the time taken in relation to the corporate resolution process of the corporate debtor must be completed within the outer limit of 330 days from the insolvency commencement date, including extensions and the time taken in legal proceedings. However, on the facts of a given case, if it can be shown to the Adjudicating Authority and/or Appellate Tribunal under the Code that only a short period is left for completion of the insolvency resolution process beyond 330 days, and that it would be in the interest of all stakeholders that the corporate debtor be put back on its feet instead of being sent into liquidation and that the time taken in legal proceedings is largely due to factors owing to which the fault cannot be ascribed to the litigants before the Adjudicating Authority and/or Appellate Tribunal, the delay or a large part thereof being attributable to the tardy process of the Adjudicating Authority and/or the Appellate Tribunal itself, it may be open in such cases for the Adjudicating Authority and/or Appellate Tribunal to extend time beyond 330 days. Likewise, even under the newly added proviso to Section 12, if by reason of all the aforesaid factors the grace period of 90 days from the date of commencement of the Amending Act of 2019 is exceeded, there again a discretion can be exercised by the Adjudicating Authority and/or Appellate Tribunal to further extend time keeping the aforesaid parameters in mind. It is only in such exceptional cases that time can be extended, the general rule being that 330 days is the outer limit within which resolution of the stressed assets of the corporate debtor must take place beyond which the corporate debtor is to be driven into liquidation.”

9. Keeping in view the law laid down in the above cited cases, it emerges that the primary object of the IB Code, 2016 is value maximization as well as revival/resolution of the financially stressed corporate debtors. Keeping that in mind, we are of the considered view that since one resolution plan has been received by the CoC during the pendency of liquidation application which the CoC intends to consider to save the Corporate Debtor from liquidation, it would be just and proper to give another chance which may help revive/resolve the Corporate Debtor. No doubt considerable time has already elapsed. However, in our considered view, despite that, a last-ditch effort can be afforded to the CoC keeping in view the overall interests of all the stakeholders involved. Even otherwise, as it has been held in Essar Steel India Ltd v/s Satish Kumar Gupta’s case (supra), the time frames are directory and not mandatory in nature. As a result of the following, we allow the present application is allowed.

Thus this Tribunal recognized the possibility of revival of the corporate debtor based on the resolution plan and grant 45 days additional time to enable implementation of the resolution plan, consistent with the IBC’s object to promote revival and maximize value.

ORDER

10.1. The Interlocutory Application No. 502(MP) 2025 under Section 33(3) & (4) seeking commencement of liquidation of M/s. Indison Agro Foods Ltd. is dismissed at this stage as it is premature. No order is passed for liquidation.

10.2. The Interlocutory Application No. 503(MP) 2025 seeking Penal proceedings under Section 74(3) against the Respondent (SRA) are not initiated at this stage for lack of satisfaction of “knowing and wilful” contravention on the present record. Therefore IA No. 503(MP) 2025 is dismissed.

10.3. Interlocutory Application No. 542(MP) 2025 is partly allowed. The Tribunal grants the Respondent a final, limited opportunity to implement the approved resolution plan within 45 days from the date of this order and take all necessary steps to implement the Resolution Plan in full.

10.4. Accordingly, the IAs i.e. IA/503(MP)2025 & IA/502(MP)2025 are dismissed and disposed of as the facts and grounds are same of both the IAs. In relation to the IA/542(MP)2025, the extension sought by the SRA is given only 45 days and the same is partly allowed & disposed of.

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