NCLAT Overturns NCLT's Rejection of Univastu's Plan for Setubandhan

In a significant legal overturn, the National Company Law Appellate Tribunal (NCLAT) has set aside a decision by the National Company Law Tribunal (NCLT) that had previously rejected a resolution plan from Univastu India Ltd for Setubandhan Infrastructure Ltd. The appellate tribunal has mandated reconsideration of the plan after appeals by the Resolution Professional and Univastu India Ltd, the Successful Resolution Applicant.

The NCLAT, led by Justice Ashok Bhushan and members Barun Mitra and Arun Baroka, criticized the NCLT for exceeding its authority by questioning the commercial decisions endorsed by the Committee of Creditors (CoC), which overwhelmingly approved with 98.57% support. The NCLAT clarified that procedural concerns and issues about plan value raised by the NCLT were addressed under the Insolvency and Bankruptcy Code (IBC) or resolved during proceedings.

The appellate body confirmed that the plan met legal stipulations and was well-presented to the CoC. The NCLAT underscored the autonomy of the CoC's commercial decisions unless a clear legal misstep is evident. It extended the CIRP period by 90 days and instructed reconsideration by the CoC, removing prior doubts about the conduct of the Resolution Professional. The tribunal found no justification for further investigation by the Insolvency and Bankruptcy Board of India.

(With inputs from agencies.)