NCLAT Affirms CoC’s Power to Reject Resolution Plans & Annul CIRP: Analysis of Goldendreams Buildcon Private Limited Vs Snehal Arvind Kamdar

The National Company Law Appellate Tribunal (NCLAT), Delhi, in Goldendreams Buildcon Private Limited Vs Snehal Arvind Kamdar, has once again underlined that the commercial wisdom of the Committee of Creditors (CoC) is paramount in the Corporate Insolvency Resolution Process (CIRP). The appeal under Section 61 of the Insolvency and Bankruptcy Code, 2016 (IBC) arose from an order of the NCLT, Mumbai Bench-IV, which had rejected the challenge to CoC’s decision to reject all resolution plans and to annul the process.

This judgment reiterates key principles:

  • An unsuccessful resolution applicant has no vested right to have its plan approved or even necessarily considered beyond the parameters laid down in the IBC and the CIRP Regulations.
  • Where the Request for Resolution Plan (RFRP) expressly allows the CoC to reject any or all plans and even annul the bid process without assigning reasons, such clauses will be given full effect.
  • Judicial review over CoC decisions remains narrow and confined to Section 30(2) of the IBC.

Below is a structured analysis of the decision and its implications.

Background of CIRP and Parties Involved

Commencement of CIRP

  • The corporate debtor, Somerset Construction Pvt. Ltd., entered CIRP on 25.07.2023.
  • A single-member CoC was constituted, and the Resolution Professional (RP) issued Form-G inviting Expression of Interest (EoI) from Prospective Resolution Applicants (PRAs).

Participation of Resolution Applicants

  • Four PRAs, including the appellant Goldendreams Buildcon Pvt. Ltd., submitted resolution plans.
  • The appellant filed its initial resolution plan on 01.03.2024 with the Earnest Money Deposit (EMD).
  • At the behest of the RP and CoC, the appellant revised and enhanced its plan on five further occasions:
    • 03.06.2024
    • 17.06.2024
    • 03.07.2024
    • 29.08.2024
    • 07.09.2024

These multiple revisions evidenced ongoing negotiations and engagement between the CoC and PRAs.

Assignment of Debt

  • During the pendency of CIRP, on 29.03.2025, Respondent No.3, Unity Small Finance Bank Ltd., assigned its debt to CFM Asset Reconstruction Pvt. Ltd. (Respondent No.2) through an Assignment Agreement, thereby altering the composition of the financial creditor.

First Round of Litigation Before NCLT

Application Seeking Direction to CoC to Decide Plans

Due to delay in consideration of the resolution plans, the appellant filed IA No. 1800 of 2025 before the NCLT on 19.04.2025. The prayer was for directions to the CoC to take a decision on the pending resolution plans.

  • On 25.04.2025, the NCLT recorded the RP’s statement that the CoC would consider all resolution plans within 10 days.

CoC’s Rejection of Plans

  • By e-mail dated 14.05.2025, the RP informed the appellant that the CoC had not approved its resolution plan and had rejected the same.
  • Subsequently, the voting results of the 14th CoC meeting (where voting on resolution plans took place) were placed on record before the NCLT on 27.05.2025.

Challenge to CoC Voting and Rejection

The appellant then filed IA No. 2767 of 2025 under Section 60(5) of the IBC, alleging:

  • Non-compliance with:
    • Section 30(4) of the IBC
    • Regulation 39(1A)(a) & (b) and Regulation 39(3)(a) & (b) of the CIRP Regulations
    • Terms of the RFRP
  • Lack of:
    • Proper evaluation of its plan as per the evaluation matrix
    • Challenge mechanism
    • Adequate deliberation on feasibility and viability
    • Supply of complete voting results and CoC minutes

The appellant also contended that rejection was conveyed via a cryptic email, devoid of reasons and without sharing the CoC deliberations.

Meanwhile:

  • The RP filed IA No. 3091 of 2025 on 09.06.2025, seeking extension and continuation of CIRP.
  • The CoC filed IA No. 3054 of 2025 on 30.06.2025, seeking permission to re-issue Form-G and restart the resolution process.

On 01.12.2025, the NCLT dismissed IA No. 2767 of 2025, upholding the CoC’s decision. This led to the present appeal under Section 61 to the NCLAT.

Appellant’s Arguments Before NCLAT

Alleged Violation of IBC and CIRP Regulations

The appellant advanced the following core contentions:

  1. Breach of statutory framework

    • The CoC allegedly disregarded Section 30(4) of the IBC and Regulation 39(1A) and Regulation 39(3) of the CIRP Regulations by:
      • Not undertaking a structured evaluation of plans.
      • Not holding the prescribed deliberations on feasibility and viability.
      • Proceeding to vote and reject without following the sequential process.

  2. Non-compliance with RFRP

    The appellant argued that the RFRP (in line with Regulation 39(1A)(a) & (b)) mandated:

    • Evaluation as per the evaluation matrix
    • Shortlisting of PRAs
    • Discussions and negotiations with PRAs
    • Conduct of a challenge mechanism to identify the highest value plan
    • Only after completion of challenge mechanism, the highest value plan should be put to vote

    According to the appellant, these steps were skipped, and its plan was rejected mechanically.