NCLAT Declines to Interfere In RCI Industries' Resolution Plan After SRA Disclaims Rights Over Disputed Assets

The National Company Law Appellate Tribunal (NCLAT) at New Delhi, has refused to interfere with the approval of a resolution plan for RCI Industries and Technologies Ltd., after the successful resolution applicant undertook not to claim any rights over two disputed properties and the plan was approved by the committee of creditors.

A bench comprising Chairperson Justice Ashok Bhushan and Technical Member Barun Mitra said, “Resolution Plan having been approved by the CoC and SRA having offered not to claim any right which has been accepted by Adjudicating Authority, we are of the view that at the instance of the Suspended Directors the said decision cannot be interfered with.”

The appeal arose from an order dated October 9, 2025 passed by the NCLT, New Delhi, approving the resolution plan of RCI Industries and Technologies Ltd. The suspended directors challenged the inclusion of two assets in the information memorandum and the resolution plan: an industrial land and building at Plot No. 108, HPSIDC, Baddi in Himachal Pradesh, and an industrial plot at Village Thantewal in Nalagarh.

They argued that both properties were under dispute and involved in pending litigation and should therefore have been excluded from the resolution process. According to them, the resolution professional ought to have modified the information memorandum by removing these assets.

Opposing the appeal, the resolution professional submitted that both properties stood in the name of RCI Industries and Technologies Ltd. in the revenue records and were therefore rightly reflected in the information memorandum.

It was also pointed out that the information memorandum clearly disclosed that the corporate debtor was not in possession of the assets and that disputes relating to them were pending before various forums.

During the proceedings before the NCLT, the successful resolution applicant filed an affidavit stating that it would not claim any rights over the two properties under the resolution plan.

Upholding the NCLT's order, the appellate tribunal said the inclusion of the assets in the information memorandum could not be faulted when the corporate debtor was shown as the owner in the revenue records.

The bench observed, “When the CD was shown in the revenue record as the owner of the assets, in Information Memorandum had to mention the said assets. The facts that there is litigation regarding assets is also on the record which is the reason for SRA for not claiming any right in the said assets, however, the assets have been dealt with as part of the Resolution Plan where now the Resolution Professional/Monitoring Committee/Financial Creditor to pursue the claim in respect to the said assets. Resolution Plan having been approved by the CoC in its commercial wisdom, we do not find any error in the order, warranting any interference"

It noted that the existence of litigation over the properties was already on record, which explained the resolution applicant's decision to disclaim any rights.

The tribunal also endorsed the direction that the resolution professional, the monitoring committee and the financial creditors would pursue claims relating to the two properties. Any amount or benefit recovered would be distributed to financial creditors in accordance with the waterfall mechanism under Section 53 of the Insolvency and Bankruptcy Code.