Malharshanti Enterprises vs Naresh Sevantilal Shah & Ors

(Arising against the impugned order dated 30.09.2025 passed by the Hon'ble National Company Law Tribunal, Ahmedabad Bench-I, in IA No. 766/(AHM)/2021 in CP (IB) No. 289(AHM) of 2020.

IN THE MATTER OF:

Malharshanti Enterprises, through its Sole Proprietor Mr. Sunil Pande, having its office at 59A/12, Nagari Niwara Parishad, Gen A.K. Vaidya ...Appellant Marg (Film City Road), Goregaon West, Mumbai - 400053.

Versus

1. Mr. Naresh Sevantilal Shah, residing at Flat No. 103, Thosar House, Hanuman Cross Road No.I, ...Respondent No.1

Near Shiv Leela Hotel, Vile Parle (East), Mumbai -

400057.

2. Mr. Nitin Narang, Resolution Professional of Afcan Impex Private Limited, having office at Building No.19, Vijay Nagar, Kingsway Camp, New Delhi - ...Respondent No.2 110009.

Present:

For Appellant: Mr. Anshuj Dhingra, Ms. Akansha Sharma, Advocates. For Respondents: Ms. Ganga Mitra, Advocate for SRA.

Mr. Gaurav Joshi, Advocate for Monitoring Committee.

Cont'd..../ -2-

J U D G M EN T (20th March, 2026)

INDEVAR PANDEY, MEMBER (T)

The present Appeal has been preferred under Section 61 of the

Insolvency and Bankruptcy Code, 2016 (hereinafter referred to Code) by

Malharshanti Enterprises, (Appellant) through its Sole Proprietor Mr. Sunil

Pande, assailing the order dated 30.09.2025 passed by the National

Company Law Tribunal, Ahmedabad Bench-I (Adjudicating Authority), in IA

No. 766/(AHM)/2021 in CP (IB) No. 289 of 2020 whereby the Resolution

Plan submitted by Mr. Naresh Sevantilal Shah (Respondent No.1), in the

CIRP of Afcan Impex Private Limited (Corporate Debtor) was approved,

despite serious objections regarding his statutory ineligibility under Section

29A of the Code.

2. The Appellant contends that the impugned order has been passed

without proper judicial scrutiny of material facts relating to Respondent

No.1's status as promoter and director of CAN Enterprises Private Limited, a

company already undergoing CIRP before the Hon'ble NCLT, Mumbai Bench,

and whose admission order has attained finality up to the Hon'ble Supreme

Court. The Appeal therefore arises out of alleged suppression of material

facts, misrepresentation before the Adjudicating Authority, and non-

consideration of mandatory statutory disqualifications.

Brief facts of the case

3. The brief facts of the case are as given below:

Company Appeal (AT) (Ins.) No. 2032 of 2025 -3-

i. CIRP against Afcan Impex Private Limited/ Corporate Debtor

commenced pursuant to admission of a Section 7 petition filed by the

Bank of Maharashtra. Ld. NCLT, Ahmedabad Bench (Adjudicating

Authority), vide order dated 17.02.2021 admitted the petition CP (IB)

No. 289/2020 and appointed Mr. Nitin Narang (Respondent No.2) as

IRP, who was later confirmed as RP.

ii. Form G was published on 19.06.2021 inviting Expression of Interest,

pursuant to which five EOIs were received and three were shortlisted

including Respondent No.1.

iii. The CoC, consisting of a sole Financial Creditor /Bank of

Maharashtra, on 06.10.2021 approved the Resolution Plan submitted

by Respondent No.1 with 100% voting share.

iv. The suspended Board of Directors had preferred an appeal against

initiation of CIRP against the CD before this Tribunal, which was

registered as Comp. App. (AT) (Ins.) No. 441 of 2021. The appeal was

dismissed vide an order dated 11.08.2021. Thereafter, the suspended

management challenged the admission order before the Hon'ble

Supreme Court in Civil Appeal No. 5580 of 2021. The Hon'ble Supreme

Court vide its order dated 01.04.2024 dismissed the aforesaid appeal.

During the intervening period when the matter was pending before

Hon'ble Supreme Court, there was not much progress in the CIRP

proceedings before the Adjudicating Authority.

v. In compliance with subsequent orders of Adjudicating Authority dated

01.10.2024 the SRA filed an affidavit on 11.11.2024 under Section 29A

of the IBC, 2016 along with the Resolution Plan submitted by SRA,

Company Appeal (AT) (Ins.) No. 2032 of 2025 -4-

wherein it has been declared that SRA along with all the SRA

connected person are eligible under Section 29A of the IBC. Further,

in the Resolution Plan, SRA has proposed that resolution applicant

and his nominee shall be inducted as Director in the board of corporate

debtor upon approval of Resolution Plan by this Tribunal. The SRA

states that, upon approval of the Resolution Plan by this Tribunal, SRA

shall take steps to induct the following Director in the Board of the

Corporate Debor -

(a) Naresh Sevantilal Shah having DIN No. - 00928887

(b) Aalok Shah S/o Naresh Shah having DIN No. - 10831679

vi. During hearing on 12.11.2024, the Hon'ble NCLT, Ahmedabad

recorded that Respondent No.1 was promoter/director of CAN

Enterprises Private Limited which was undergoing CIRP before NCLT

Mumbai and that he had sought time till December 2024 to "come

clean" from the said CIRP.

vii. An affidavit dated 19.05.2025 was filed by Respondent No.1 before the

NCLT Ahmedabad bringing on record the pendency of IA 1586 of 2025

before NCLT Mumbai and annexing copies of pleadings.

viii. The Adjudicating Authority vide the impugned order dated 30.09.2025

in IA/766/(AHM)/2021, approved the Resolution Plan submitted by

Respondent No.1 while recording that the alleged settlement proposal

had been rejected by the Appellant and that proceedings pending

before NCLT Mumbai had no adverse consequence on approval of the

plan.

Company Appeal (AT) (Ins.) No. 2032 of 2025 -5-

ix. The Appellant asserts that the approval of the Resolution Plan was

granted without independent adjudication of Respondent No.1's

eligibility under Section 29A, without verification of actual status of

CIRP proceedings of CAN Enterprises Private Limited, and despite

pendency of liquidation proceedings therein.

4. The appellant had filed a petition under Section 9 of the Code against

CAN Enterprises Pvt. Ltd. in which Respondent No.1 was one of the

promoter-director of the company. It is relevant to state the facts relating to

this particular case as the appellant has relied on this case to argue that the

Respondent No.1/SRA was ineligible under Section 29A of the Code to

submit the resolution plan in CP (IB) No. 289(AHM) of 2020. The brief details

of the said CIRP proceedings are given below:

i. The Corporate Insolvency Resolution Process (CIRP) against CAN

Enterprises Private Limited was initiated pursuant to admission of a

Section 9 petition filed by the present Appellant, and Ld. NCLT,

Mumbai Bench, vide order dated 27.01.2020 in CP (IB) No. 3753 of

2018, admitted the petition and commenced CIRP, thereby suspending

the powers of the Board of Directors including Respondent No.1, who

was promoter and director of the Corporate Debtor.

ii. The said admission order was challenged by Respondent No.1 before

this Appellate Tribunal in Company Appeal (AT) (Insolvency) No. 415

of 2020. The aforesaid Appeal was dismissed vide order dated

19.01.2021. The consequent civil appeal against the said dismissal by

NCLAT filed before Hon'ble Supreme Court came to be dismissed as

Company Appeal (AT) (Ins.) No. 2032 of 2025 -6-

withdrawn vide order dated 10.03.2021, thereby rendering the

admission of CIRP final.

iii. In the first CoC meeting held on 18.03.2020, the Interim Resolution

Professional duly verified and admitted the claim of the Appellant as

an Operational Creditor. Subsequently, M/s Paton Construction

Private Limited emerged as the sole Financial Creditor with a claim of

Rs. 1,00,000/- and consequently constituted the entire CoC holding

100% voting share, thereby exercising exclusive control over decisions

in the CIRP. The said CoC resolved to replace the IRP and pursuant

thereto Mr. Manish Jaju was appointed as Resolution Professional vide

order dated 09.06.2020 passed by the Hon'ble NCLT, Mumbai Bench.

iv. The Resolution Professional thereafter rejected the duly admitted claim

of the Appellant through an email dated 02.12.2020, which prompted

the Appellant to file I.A. No. 47 of 2021 challenging such rejection. The

Hon'ble NCLT, Mumbai Bench, vide detailed order dated 16.02.2023,

allowed the said application and categorically held that the RP had

acted illegally and exceeded his jurisdiction while rejecting the

Appellant's claim.

v. Appeals preferred by Respondent No.1, the Resolution Professional

and the CoC member against the order dated 16.02.2023 were

dismissed by the NCLAT vide order dated 17.09.2024, wherein the

conduct of the RP was termed deplorable and costs of Rs. 1,00,000/-

were imposed.

vi. The Hon'ble Supreme Court, vide order dated 02.01.2025, dismissed

the Civil Appeal filed against the NCLAT judgment, thereby affirming

Company Appeal (AT) (Ins.) No. 2032 of 2025 -7-

the validity of the Appellant's claim and exposing the attempt to

introduce a nominal financial creditor.

vii. Pursuant to the Apex Court order, the Resolution Professional restored

the claim of the Appellant vide email dated 06.01.2025. Respondent

No.1 thereafter addressed a letter dated 05.03.2025 to the RP offering

settlement of the entire claim, which proposal was rejected by the

Appellant vide email dated 10.03.2025.

viii. An application being IA No. 1586 of 2025 was thereafter filed by

Respondent No.1 before the Hon'ble NCLT, Mumbai Bench seeking

directions to record settlement and stay CIRP, which application

remains pending.

ix. In view of abnormal delay in the CIRP, the Appellant filed an

application under Section 33 of the Code seeking liquidation of CAN

Enterprises Private Limited, which application is also pending before

the Hon'ble NCLT, Mumbai Bench.

5. The appellant submits that the Respondent No.1 was, at all relevant

times, promoter and director of CAN Enterprises Private Limited undergoing

CIRP since 27.01.2020. The present Appeal therefore arises from the alleged

failure of the Adjudicating Authority to examine statutory ineligibility,

suppression of material developments, and exercise of jurisdiction in

conformity with Sections 29A, 30 and 31 of the Insolvency and Bankruptcy

Code, 2016.

Company Appeal (AT) (Ins.) No. 2032 of 2025 -8-

Submissions of the Appellant

6. Ld. Counsel for the Appellant submits that the approval of the

Resolution Plan by the Hon'ble NCLT, Ahmedabad Bench is ex facie perverse

and contrary to the statutory mandate of the Insolvency and Bankruptcy

Code, 2016. It is submitted that Respondent No. 1 is admittedly a

director/promoter of CAN Enterprises Pvt. Ltd., a company which has been

undergoing CIRP since 2020 before the Ld. NCLT, Mumbai. In view of the

admitted position that CAN Enterprises Pvt. Ltd. has been under CIRP and

Respondent No. 1 continues to be associated with its management,

Respondent No. 1 stands disqualified under Section 164 of the Companies

Act, 2013 and is squarely hit by Section 29A(e) of the IBC, 2016.

Consequently, he is ineligible to submit, implement, or derive any benefit

under a Resolution Plan. The approval of the plan submitted by such an

ineligible person vitiates the entire process.

7. Ld. Counsel further submits that Respondent No. 1, with a calculated

and deliberate objective of securing approval of his Resolution Plan and

unlawfully retaining the status of Successful Resolution Applicant,

suppressed and misrepresented material facts before the NCLT, Ahmedabad.

It is submitted that the satisfaction recorded by the Adjudicating Authority

under Sections 30(2) and 31 of the Code is founded upon misleading

disclosures. The statutory satisfaction contemplated under the Code must

be based on full and true disclosure; any suppression strikes at the root of

the jurisdiction exercised.

Company Appeal (AT) (Ins.) No. 2032 of 2025 -9-

8. He submits that in November 2024, Respondent No. 1 filed an affidavit

before the Hon'ble NCLT, Ahmedabad. The Ld. Bench recorded in its order

dated 12.11.2024 that one of the companies where the SRA, i.e., Respondent

No. 1, is a director was undergoing CIRP and that the matter was under

challenge before the Hon'ble Supreme Court. The Bench further recorded the

statement of Respondent No. 1 that he was attempting a settlement and

sought time till the end of December 2024 to come clean from the CIRP of

CAN Enterprises Pvt. Ltd. Ld. Counsel submits that this statement was made

to create an impression of imminent settlement and compliance.

9. It is the submission of Appellant that the aforesaid representation was

wholly contrary to the consistent conduct of Respondent No.1. From the

inception of the Section 9 petition filed by the Appellant against CAN

Enterprises Pvt. Ltd., Respondent No. 1 has persistently adopted every

conceivable tactic to obstruct and derail the CIRP. It is submitted that

Respondent No. 1 initially challenged the admission order before this

Appellate Tribunal, which was dismissed by an order dated 19.01.2021.

Thereafter, he approached the Hon'ble Supreme Court, however, there also

the proceedings were dismissed as withdrawn on 10.03.2021. This

constituted the first round of challenge and demonstrates his consistent

attempt to frustrate the CIRP.

10. Ld. Counsel submits that upon failing to obtain relief through judicial

scrutiny, Respondent No. 1 fraudulently inducted M/s. Paton Construction

as a Financial Creditor in the CIRP of CAN Enterprises Pvt. Ltd. Acting in

collusion with the said Financial Creditor, voting rights were arbitrarily

Company Appeal (AT) (Ins.) No. 2032 of 2025 -10-

exercised to appoint a new Resolution Professional. Thereafter, in clear

connivance with the newly appointed Resolution Professional, the

Appellant's claim as an Operational Creditor, the very foundation upon

which CIRP was admitted, was illegally rejected.

11. It is further submitted that the illegal rejection of the Appellant's claim

was set aside by the Ld. NCLT, Mumbai Bench by order dated 16.02.2023

with adverse observations against the Resolution Professional. It is

submitted that Respondent No. 1, in collusion with the Resolution

Professional and the Financial Creditor, preferred three separate appeals

against the said order. This Appellate Tribunal, by order dated 17.09.2024,

dismissed all three appeals and imposed costs upon the Resolution

Professional, thereby affirming the illegality and mala fides underlying their

conduct. Even thereafter, Respondent No. 1 preferred a Civil Appeal before

the Hon'ble Supreme Court challenging the order dated 17.09.2024, which

came to be dismissed on 02.01.2025. This constituted the second round of

challenge. Ld. Counsel submits that for more than five years, Respondent

No. 1 has continuously sought to frustrate the CIRP with the sole objective

of defeating the Appellant's legitimate claim.

12. Ld. Counsel submits that the statement made before the Ld. NCLT,

Ahmedabad regarding settlement was merely a ploy to buy time until

disposal of the Civil Appeal before the Hon'ble Apex Court on 02.01.2025.

Thereafter, a camouflage of settlement was engineered with active

involvement of the Resolution Professional of CAN Enterprises Pvt. Ltd. It is

submitted that after five years of litigation, the Appellant's claim was

Company Appeal (AT) (Ins.) No. 2032 of 2025 -11-

restored, and a settlement proposal dated 05.03.2025 was sent by

Respondent No. 1, which was rejected by the Appellant on 10.03.2025.

Subsequently, I.A. No. 1586/2025 was pressed into service before the

Hon'ble NCLT, Mumbai dehors the provisions of the IBC to create an

impression of settlement, and notice was issued on 04.04.2025. Ld. Counsel

submits that even the Hon'ble Supreme Court recorded that the facts were

startling and indicated an attempt to set up a financial creditor.

13. He submits that to further impress upon the Ld. NCLT, Ahmedabad,

statements regarding I.A. No. 1586/2025 and its listing before the Hon'ble

NCLT, Mumbai were recorded in proceedings dated 07.05.2025, and copies

of orders were placed on record. It is submitted that these steps were taken

to create a narrative of bonafide settlement.

14. Ld. Counsel submits that the Hon'ble NCLT, Ahmedabad, while

passing the impugned order, relied solely upon the misleading averments

made by Respondent No. 1 and, without independent verification of the

proceedings pending before the Hon'ble NCLT, Mumbai, approved the

Resolution Plan. The Adjudicating Authority recorded that the RA had

already made a proposal for payment of the entire claim of the Appellant and

that the Appellant rejected it with mala fide intention. Ld. Counsel submits

that this finding is contrary to the record. The alleged settlement application

remains pending adjudication before the Hon'ble NCLT, Mumbai. The

Appellant cannot be saddled with adverse findings rendered in proceedings

to which it was not a party.

Company Appeal (AT) (Ins.) No. 2032 of 2025 -12-

15. It is further submitted that Respondent No. 1, despite being

disqualified under Section 164(2)(a) of the Companies Act, 2013 read with

Section 29A(e) of the IBC, has persistently indulged in calculated and mala

fide misrepresentation before judicial forums. Such conduct constitutes a

gross abuse of the process of law and vitiates the entire approval of the

Resolution Plan.

16. Ld. Counsel submits that although the Appellant was not a formal

party before the Ld. NCLT, Ahmedabad, it is a settled position of law that the

expression "person aggrieved" under Sections 61 and 62 of the IBC is of wide

import and cannot be narrowly construed. The right of appeal is conferred

upon a "person aggrieved" and not merely upon a party to the proceedings.

The determinative test is whether the impugned order adversely affects the

legal rights and interests of such person. Ld. Counsel relies upon the

judgments in Southern Power Distribution Company of Telangana Ltd. v.

Kalvakolanu Murali Krishna Prasad, Trimex Industries Pvt. Ltd. v. Bhuvan

Madan (RP), Bar Council of Maharashtra v. M.V. Dabholkar, Samir Agrawal v.

Competition Commission of India, and Vishnu Vardhan v. State of Uttar

Pradesh, as cited in the written submissions.

17. Ld. Counsel further submits that the impugned order has caused

direct and imminent prejudice to the Appellant in the pending I.A. No.

1586/2025 before the Hon'ble NCLT, Mumbai. The said application seeks

acceptance of a purported settlement and closure of the CIRP of CAN

Enterprises Pvt. Ltd., wherein the Appellant is the Operational Creditor. The

adverse judicial observation that the Appellant rejected settlement with mala

Company Appeal (AT) (Ins.) No. 2032 of 2025 -13-

fide intent, recorded without hearing the Appellant, is capable of materially

affecting adjudication of the pending application. The prejudice is immediate

and real. It is settled law that civil consequences extend to adverse findings

capable of affecting a party's position in pending proceedings. The Appellant

has therefore sustained a clear legal injury and squarely falls within the

meaning of "person aggrieved" under Section 61 of the IBC.

18. It is submitted that this Hon'ble Tribunal has already issued notice in

the connected appeals filed by the suspended board of Afcan Impex (P) Ltd.,

which inter alia raise similar issues, and the matter is listed for further

proceedings on 19.03.2026. A copy of the order dated 29.01.2026 has been

annexed on record.

19. The appellant has made the following specific prayers in the appeal:

'Therefore, in the light of the facts enumerated above, the Appellant hereinmost respectfully states and submits that this Hon'ble Tribunal may be graciously pleased to pass necessary directions:

(a.) Setting aside the Order dated 30.09.2025 passed by the Ld. NCLT, Ahmedabad in IA No. 766 (AHM) 2021 on the facts and the grounds mentioned above;

(b.) Directing the Ld. NCLT to declare the Respondent No. 1 Mr. Naresh Sevantilal Shah as ineligible for propounding any resolution plan for the Corporate Debtor Afcan Impex (P) Limited.'

Company Appeal (AT) (Ins.) No. 2032 of 2025 -14-

Submissions of Respondent No.1 (Mr. Naresh Sevantilal Shah/ SRA)

20. In his initial submissions, Ld. Counsel for R1 states that the Appellant

is admittedly not a creditor of Afcan Impex Pvt. Ltd. It is an Operational

Creditor of CAN Enterprises Pvt. Ltd. which is a completely separate

corporate debtor undergoing CIRP before NCLT Mumbai. The Appellant has

no admitted claim, no financial stake, and no status in the Afcan Impex CIRP

proceedings. Section 61 of the IBC permits appeal only by a "person

aggrieved" meaning a person with direct legal interest in the impugned order.

A creditor in one CIRP cannot challenge resolution plans in unrelated CIRPs

on speculative grounds. The IBC is a self-contained code, creditors in one

proceeding cannot interfere in another proceeding, where they have no stake.

The Appellant's claimed grievance is entirely collateral.

21. Ld. Counsel states that Being Promoter/Related Party of Company

Under CIRP is Not Per Se a ground of ineligibility. The Section 29A(c) of the

Code requires that the person have an account classified as NPA in

accordance with RBI guidelines. Mere pendency of CIRP proceedings against

a related company does not automatically disqualify a resolution applicant.

The Appellant has not shown that any account of Respondent No. 1 or CAN

Enterprises is classified as NPA. The Resolution Professional conducted due

diligence and certified the SRA as eligible under Section 29A.

22. Ld. Counsel further states that for Director disqualification Under

Section 164, the declaration of Registrar Of Companies (ROC)would be

required. The Hon'ble Supreme Court in M. K. Rajagopalan v. Dr. Periasamy

Palani Gounder (2024) has categorically held that there is no concept of

Company Appeal (AT) (Ins.) No. 2032 of 2025 -15-

"deemed disqualification" under Section 164(2)(b) of the Companies Act,

2013. A resolution applicant cannot be rendered ineligible based on an

assumed disqualification under Section 164. The disqualification must be

formally declared by the competent authority i.e. ROC/Ministry of Corporate

Affairs, it cannot be inferred by this Tribunal. There is no ROC or MCA order

declaring Respondent No. 1 disqualified as a director has been placed on

record. The Section 29A(e) ground therefore fails entirely.

23. He submits that the Appellant admittedly did not appear before or

participate in the NCLT Ahmedabad proceedings. The grounds it now raises

(Section 29A ineligibility) were never put before the Adjudicating Authority.

It is a settled principle that new grounds cannot be raised for the first time

in appellate proceedings. The Appellant had ample opportunity to intervene

if genuinely aggrieved, but it chose not to, despite CIRP proceeding of Afcan

continuing for five years i.e. from 2021 to 2025. It cannot now take advantage

of appellate jurisdiction to raise issues it never brought before the

Adjudicating Authority.

24. Ld. Counsel states that The Appellant's real purpose is to exert

pressure on Respondent No. 1 in the parallel CAN Enterprises CIRP before

NCLT Mumbai and not to vindicate any genuine right in the Afcan Impex

CIRP. The Appellant has zero financial stake in Afcan Impex, yet it has

challenged a resolution plan, where every creditor with an admitted claim

has been paid in full. This is a textbook case of abuse of process. An appeal

filed not to enforce a legal right, but as a weapon of pressure in unrelated

proceedings must be dismissed with exemplary costs. The present Appeal is

Company Appeal (AT) (Ins.) No. 2032 of 2025 -16-

a transparent attempt to use these proceedings as leverage in the CAN

Enterprises CIRP, where Respondent No. I has made repeated bona fide

settlement offers.

25. He submits that Respondent No. 1, in complete good faith and with

genuine intent to settle all dues in the CAN Enterprises CIRP, offered to pay

100% of the Appellant's entire admitted claim of Rs. 1.97 Crores plus all

CIRP costs. as evidenced by:

(a) Letter dated 05.03.2025 addressed to the Resolution Professional

of CAN Emerprises Pvt. Ltd. offering settlement of the claim in its

entirety;

(b) I.A No. 1586/2025 filed before NCLT Mumbai formalizing the

settlement proposal and seeking directions to accept payment and

close CIRP proceedings;

(c) NCLT Mumbai Order dated 10.12.2025 which records that

Corporate Debtor reiterated willingness to pay Rs. 1.97 Crores to

Malharshanti + CIRP Costs + Rs. 1 lakh to Financial Creditor.

26. Ld. Counsel states that despite being offered full 100% payment, the

Appellant vide email dated 10.03.2025 rejected the settlement without any

justifiable reason whatsoever. The Hon'ble NCLT Ahmedabad itself

specifically recorded in Para 20 of the impugned order that the Appellant

rejected Respondent No. 1's proposal with "mala fide intentions".

Company Appeal (AT) (Ins.) No. 2032 of 2025 -17-

27. It is the submission of Ld. Counsel that the question therefore which

would fall for consideration is that: Whether a creditor which refuse 100% of

its admitted claim and then file an appeal in an unrelated proceeding? The

answer is self-evident-the purpose is not recovery of dues but harassment

and arm-twisting.

28. He further submits that The Appellant has also filed

IA(IBC)(LIQ.)/89/2025 on 04.11.2025 before NCLT Mumbai seeking

liquidation of CAN Enterprises Pvt. Ltd. under Section 33 of the IBC i.e.

immediately after approval of Resolution Plan by NLCT Ahmedabad, this

despite having been offered 100% settlement of its admitted claim. This

application itself demonstrates the Appellant's mala fide intent and misuse

of legal proceedings. An individual Operational Creditor has no independent

locus to file a liquidation application. He invites attention to Section 33 of

the IBC in this regard.

29. Ld. Counsel for R1 further states that the liquidation application filed

in CAN Enterprises CIRP proceedings, when a 100% payment offer is pending

and when the Resolution Plan for Afcan Impex (approved on 30.09.2025) has

been fully implemented reveals the sincerity of the respondent and true

motive of the Appellant, which is not recovery of dues but destruction of the

company to prevent Respondent No. 1 from completing his obligations and

coming clean.

30. He further submits that the Resolution Professional in the NCLT

Mumbai proceedings reported receipt of Form-318 under Rule 48 of the

Maharashtra Value Added Tax Act, a demand of Rs. 1.48 Crores against

Company Appeal (AT) (Ins.) No. 2032 of 2025 -18-

Malharshanti Enterprises itself for VAT dues (NCLT Mumbai Order dated

10.12.2025), further casting serious doubt on the Appellant's bona fides and

financial standing.

31. Ld. Counsel states that the Resolution Plan was approved vide order

dated 30.09.2025 and has been completely implemented within the

stipulated period of 30 days. All payments totalling 6,51,19,488.68 have

been made to all creditors; Management has been taken over by SRA; new

Board has been constituted; and assets handed over to SRA. The law is

settled that an implemented Resolution Plan cannot be unscrambled.

32. Ld. Counsel for R1 further states that in light of the above

submissions, it is most respectfully prayed that this Hon'ble Tribunal may

be pleased to:

(a) Dismiss the Appeal being wholly devoid of merit, filed without locus

standi, and constituting an abuse of process;

(b) Impose heavy costs on the Appellant for filing a frivolous and

vexatious appeal with ulterior motives and for misusing the legal

process to arm-twist Respondent No. 1 after rejecting a 100%

settlement offer in a separate proceeding

Submissions of Respondent No.2/ Resolution Professional

33. In his preliminary submissions, Ld. Counsel for R2 states that the

Appellant is not a shareholder or creditor or any stakeholder of Afcan Impex

Pvt. Ltd. It is an Operational Creditor of CAN Enterprises Pvt. Ltd. a

Company Appeal (AT) (Ins.) No. 2032 of 2025 -19-

completely separate entity. Section 61 of the IBC confers right of appeal only

on a "person aggrieved" by an order of the Adjudicating Authority. The

concept of "person aggrieved" requires direct and legal aggrievement, not

remote or speculative injury. The Appellant has no admitted claim in the

Afcan Impex CIRP. Its grievance is collateral-arising from the alleged

involvement of the SRA in a separate CIRP. The IBC is a self-contained code;

creditors in one CIRP cannot interfere in another CIRP on speculative

grounds.

34. Ld. Counsel states that being Promoter/Related Party of Company

Under CIRP is not per se a ground of ineligibility. Section 29A(c) of the Code

requires that the person have an account classified as NPA in accordance

with RBI guidelines. Mere pendency of CIRP proceedings against a related

company does not automatically disqualify a resolution applicant. The

Appellant has not shown from the records that any account of Respondent

No. 1 or CAN Enterprises is classified as NPA. The Resolution Professional

conducted due diligence and certified the SRA as eligible under Section 29A.

35. Ld. Counsel further states that for disqualification as Director Under

Section 164 of the Companies Act, 2013, the Declaration of ROC is required.

The Hon'ble Supreme Court in M.K. Rajagopalan v. Dr. Periasamy Palani

Gounder CIVIL APPEAL NOS. 1682-1683 OF 2022 (2024) has categorically held that

a resolution applicant cannot be deemed ineligible solely based on assumed

disqualification under Section 164(2)(b) of the Companies Act, 2013. There

is no concept of "deemed disqualification" in the Companies Act, 2013, which

requires a specific order from the Registrar of Companies/MCA. In the

Company Appeal (AT) (Ins.) No. 2032 of 2025 -20-

present case, there is no ROC order declaring Respondent No. 1 disqualified

as a director. The Appellant seeks to have this Tribunal presume a

disqualification that has not been formally declared by any competent

authority, which is impermissible in law.

36. He states that the Appellant admittedly did not appear before or

participate in the NCLT Ahmedabad proceedings. The grounds it now raises

(Section 29A ineligibility) were never put before the Adjudicating Authority.

It is a settled principle that new grounds cannot be raised for the first time

in appellate proceedings. In this regard he cites the judgment of this

Appellate Tribunal in 'Anish Lawrence v. Renahan Vamakesan' (NCLAT

Chennai) CA AT (CH) (INS) No. 377 OF 2023.

37. It is stated that the Resolution Plan was approved vide order dated

30.09.2025 and has been completely implemented within the stipulated

period of 30 days. All payments totalling Rs.6,51,19,488.68 have been made

to all creditors as follows

38. Ld. Counsel further states that the identical impugned order dated

30.09.2025 was challenged by the State Tax Officer in Company Appeal (AT)

(Ins) Nos. 1804 & 1805 of 2025. This Hon'ble Tribunal vide judgment dated

07.01.2026 dismissed both appeals and expressly upheld the Resolution

Plan, holding it to be in full compliance with Section 30(2) of IBC. The

Appellant's challenge would amount to unsettling an order already confirmed

by this Tribunal.

Company Appeal (AT) (Ins.) No. 2032 of 2025 -21-

39. He states that the Appellant is a "wait-and-watch" litigant seeking to

derail a successfully implemented resolution. Having failed to participate

before the Adjudicating Authority, they cannot now challenge a Plan that has

already received the seal of approval from both the CoC and this Hon'ble

Appellate Tribunal.

40. In light of the above, R2 prays that this Tribunal may be pleased to

dismiss the present Appeal with exemplary costs.

Analysis and findings

41. We have heard learned counsel for the parties at length and carefully

perused the record. The issues that arise for determination in this case are:

(i) Whether the appellant has locus to maintain the present Appeal

challenging the order dated 30.09.2025 approving the Resolution

Plan of Afcan Impex Pvt. Ltd., and

(ii) whether the impugned order suffers from any illegality on account of

the alleged ineligibility of Respondent No.1 under Section 29A of the

Insolvency and Bankruptcy Code, 2016 or alleged suppression of

material facts.

42. The Appellant herein has challenged the approval of the Resolution

Plan submitted by Respondent No.1 in the Corporate Insolvency Resolution

Process of Afcan Impex Pvt. Ltd. The Appellant seeks setting aside of the

impugned order on the ground that Respondent No.1 was allegedly ineligible

to submit the Resolution Plan under Section 29A of the Insolvency and

Bankruptcy Code, 2016, on account of his position as promoter/director of

Company Appeal (AT) (Ins.) No. 2032 of 2025 -22-

another company, namely CAN Enterprises Pvt. Ltd., which has been

undergoing CIRP before the NCLT Mumbai since the year 2020.

43. Learned counsel for the Appellant submits that the impugned order

approving the Resolution Plan is vitiated in law because Respondent No.1

was ineligible to submit the Resolution Plan under Section 29A of the Code.

It is submitted that Respondent No.1 is admittedly the promoter and director

of CAN Enterprises Pvt. Ltd., a corporate debtor whose CIRP was initiated by

an order dated 27.01.2020 passed by the NCLT Mumbai. The admission

order was challenged up to the Hon'ble Supreme Court and has attained

finality.

44. It is contended that Respondent No.1 deliberately suppressed these

facts before the Adjudicating Authority and sought to create an impression

that a settlement was imminent in the CIRP proceedings of CAN Enterprises

Pvt. Ltd. According to the Appellant, no settlement under Section 12A of the

Code was ever approved, and the CIRP of CAN Enterprises Pvt. Ltd. continues

even today. The Appellant submits that the Adjudicating Authority accepted

the Resolution Plan solely on the basis of the submissions made by

Respondent No.1 without undertaking an independent examination of his

eligibility under Section 29A of the Code. It is further submitted that the

impugned order contains adverse observations regarding the conduct of the

Appellant in rejecting the settlement proposal, which are likely to prejudice

the Appellant in proceedings pending before NCLT Mumbai. On these

grounds, the Appellant submits that the approval of the Resolution Plan is

legally unsustainable and liable to be set aside.

Company Appeal (AT) (Ins.) No. 2032 of 2025 -23-

45. Per contra, learned counsel appearing for the Respondents submits

that the present Appeal is not maintainable at the instance of the Appellant

as the Appellant was not a stakeholder in the CIRP of Afcan Impex Pvt. Ltd.

It is submitted that the Appellant is an Operational Creditor only in the CIRP

proceedings of CAN Enterprises Pvt. Ltd., which are entirely separate

proceedings involving a different corporate debtor.

46. The Respondents further submit that the Resolution Plan submitted

by Respondent No.1 was duly considered and approved by the Committee of

Creditors with 100% voting share after evaluating its feasibility and viability.

It is contended that the Adjudicating Authority, while approving the

Resolution Plan, examined the relevant material on record and was satisfied

that the plan met the requirements prescribed under Section 30(2) of the

Code. According to the Respondents, the mere pendency of CIRP proceedings

against another company where Respondent No.1 was a promoter does not

automatically attract disqualification under Section 29A of the Code. It is

further submitted that Respondent No.1 had indeed made a settlement

proposal dated 05.03.2025 offering payment of the entire claim of the

Appellant, which the Appellant rejected on 10.03.2025. The letter dated

05.03.2025 of the Respondent No.1 is extracted below:

Company Appeal (AT) (Ins.) No. 2032 of 2025 -24-

Company Appeal (AT) (Ins.) No. 2032 of 2025 -25-

Company Appeal (AT) (Ins.) No. 2032 of 2025 -26-

Company Appeal (AT) (Ins.) No. 2032 of 2025 -27-

47. It is their submission that the issues related to another company

under CIRP are being brought to these proceedings by a party which has not

taken part in the proceedings before the Adjudicating Authority. The

appellant is not a stakeholder in these proceedings in any capacity. He is not

a Financial or Operational Creditor, Prospective Resolution Applicant,

Resolution Professional or any other person/ entity affected by the approval

of the resolution plan. At the threshold the appellant has no locus to

maintain this appeal.

48. At the first instant it is necessary to determine whether the Appellant

possesses the locus standi to maintain the present Appeal under Section 61

of the Code. The question of maintainability is of fundamental importance

because the appellate jurisdiction of this Tribunal can be invoked only by a

"person aggrieved" by the impugned order.

49. Section 61 of the Code deals with the 'persons who can prefer an

appeal before this Appellate Tribunal, the grounds for challenge to

Resolution Plan which are relevant in this matter are provided in Sub-

sections 1 and 3 of Section 61, and the same are extracted below:

"Section 61: Appeals and Appellate Authority.

*61. (1) Notwithstanding anything to the contrary contained under the Companies Act 2013, any person aggrieved by the order of the Adjudicating Authority under this part may prefer an appeal to the National Company Law Appellate Tribunal.

(2) - - -

Company Appeal (AT) (Ins.) No. 2032 of 2025 -28-

(3) An appeal against an order approving a resolution plan under section 31 may be filed on the following grounds, namely:--

(i) the approved resolution plan is in contravention of the provisions of any law for the time being in force;

(ii) there has been material irregularity in exercise of the powers by the resolution professional during the corporate insolvency resolution period;

(iii) the debts owed to operational creditors of the corporate debtor have not been provided for in the resolution plan in the manner specified by the Board;

(iv) the insolvency resolution process costs have not been provided for repayment in priority to all other debts; or

(v) the resolution plan does not comply with any other criteria specified by the Board."

50. The right to prefer an appeal under Section 61 of the Insolvency and

Bankruptcy Code is conferred upon a "person aggrieved" by the order of

the Adjudicating Authority. The expression "person aggrieved" necessarily

implies that the impugned order must directly affect the legal rights or

interests of the person invoking the appellate jurisdiction.

51. The matter relating to who can be person aggrieved in a CIRP

proceeding was examined by Hon'ble Supreme Court in a bench headed by

Hon'ble CJI in [Civil Appeal No. 9986 of 2024] GLAS Trust Company LLC

Versus BYJU Raveendran & Ors. [2024 INSC 811]. The relevant Paras 73, 74

and 75 of the Judgment are extracted below:

"73. The counsel for the respondents sought to argue that the appellant does not have the locus to maintain the

Company Appeal (AT) (Ins.) No. 2032 of 2025 -29-

present proceedings before this Court. They contend that in a case for settlement between the Corporate Debtor and the second respondent, there is no scope for hearing any other creditors, such as the appellant. We do not find merit in this submission

74. Section 62 of the IBC governs statutory appeals to the Supreme Court from the orders of the NCLAT. The provision reads as follows:

"62. Appeal to Supreme Court - (1) Any person aggrieved by an order of the National Company Law Appellate Tribunal may file an appeal to the Supreme Court on a question of law arising out of such order under this Code within forty- five days from the date of receipt of such order.

(2) The Supreme Court may, if it is satisfied that a person was prevented by sufficient cause from filing an appeal within forty-five days, allow the appeal to be filed within a further period not exceeding fifteen days.

75. The provision stipulates that "any person" who is aggrieved by the order of the NCLAT may file an appeal before the Supreme Court within the prescribed limitation period. Similar language is used in Section 61 of the IBC, which provides for appeals to NCLAT from orders of the NCLT. The use of the phrase "any person aggrieved"

indicates that there is no rigid locus requirement to institute an appeal challenging an order of the NCLT, before the NCLAT or an order of the NCLAT, before this Court. Any person who is aggrieved by the order may institute an appeal, and nothing in the provision restricts the phrase to only the applicant creditor and the corporate debtor. As noted above, once the CIRP is initiated, the proceedings are no longer restricted to the individual applicant creditor and the corporate debtor but rather become collective proceedings (in rem), where all creditors, such as the appellant, are necessary stakeholders. The appellant is not an unrelated party to the CIRP, but is

Company Appeal (AT) (Ins.) No. 2032 of 2025 -30-

in fact, an entity whose claims had been verified by the IRP vide letter 19 August 2024. The appellant who claims to be a Financial Creditor, has expressed reasonable apprehensions about the prejudice it would face if there were roundtripping of the funds, and the prioritization of the debts of the second respondent, an operational creditor."

52. Hon'ble SC vide the above judgment had held that once the CIRP is

initiated, the proceedings are no longer restricted to the individual applicant

creditor and the corporate debtor, but rather become collective proceedings

(in rem) where all creditors, such as appellant, are necessary stakeholders.

The Hon'ble Court, thereby, expanded the scope of who all can be person

aggrieved. More importantly, the Court's findings indicate that a person

aggrieved has to be a stakeholder in the CIRP process. A stakeholder cannot

be denied locus to maintain appeal against the orders of the Adjudicating

Authority. In the Byju's case, the appellant claimed to be the Financial

Creditor of the CD.

53. In the factual matrix of the present case, the impugned order arises

from the CIRP of Afcan Impex Pvt. Ltd., in which the Appellant admittedly

had no role and he did not participate in the CIRP proceedings at any stage,

before the Adjudicating Authority. The Appellant has not demonstrated that

it was a Financial or Operational creditor; Probable Resolution Applicant

(PRA); Resolution Professional (RP); or any other participant in the CIRP

process, who could be classified as stakeholder in the CIRP process of Afcan

Impex Pvt. Ltd.

Company Appeal (AT) (Ins.) No. 2032 of 2025 -31-

54. The appellant is admittedly an Operational Creditor in the CIRP of CAN

Enterprises Pvt. Ltd., which is a separate corporate debtor undergoing

independent insolvency proceedings before NCLT Mumbai. The grievance

raised by the Appellant essentially relates to the conduct of Respondent No.1

in the CIRP proceedings of CAN Enterprises Pvt. Ltd., including disputes

relating to settlement proposals and pending applications before NCLT

Mumbai.

55. In view of the above factual matrix, we see that the appellant has not

been able to establish any relation with the CIRP proceedings of Afcan Impex

and is not a stakeholder in any capacity in these proceedings. Therefore, he

cannot be considered as a 'person aggrieved' in accordance with Section 61

of the Code.

56. Appellant has relied upon several judgments to contend that the

expression "person aggrieved" under Section 61 of the Code should be

interpreted broadly so as to permit the present Appeal. We have examined

their applicability to the facts of the present case hereinafter:

(i) The Appellant has relied upon the judgment of this Appellate Tribunal

in 'Southern Power Distribution Company of Telangana Ltd. v.

Kalvakolanu Murali Krishna Prasad, RP for Vaksh Steels Pvt. Ltd.'

(MANU/NL/0713/2024) to contend that the expression "person

aggrieved" should be interpreted broadly. However, the said decision

was rendered in a completely different factual context. As noted in that

judgment Para 1 itself, the appeal arose in peculiar circumstances and

primarily concerned the limited question of determination of limitation

Company Appeal (AT) (Ins.) No. 2032 of 2025 -32-

for filing an appeal under the Code. The observations regarding the

expression "person aggrieved" were made in the context of examining

whether the appellant therein could pursue an appeal in relation to

the limitation issue. In the present case, the issue before us is not one

relating to limitation but concerns the maintainability of the appeal

itself in the absence of any direct legal grievance arising from the CIRP

of Afcan Impex Pvt. Ltd. Unlike the appellant in the cited case, the

present Appellant has no participation, claim, or legal stake in the

CIRP proceedings of Afcan Impex Pvt. Ltd., and the impugned order

does not directly affect its rights. The reliance placed on the said

judgment is therefore misplaced, as the observations made therein

arose in a different factual setting and do not apply to the

circumstances of the present case.

(ii) The Appellant has relied upon the decision of this Appellate Tribunal

in 'Trimex Industries Pvt. Ltd. v. Bhuvan Madan (RP) and Anr.' [(2023

ibclaw.in 351 NCLAT] to contend that any "person aggrieved" can file

an appeal under Section 61 of the Code. The Judgment in Trimex

Industries is based on entirely different context. Relevant paras 1 and

13 of the Judgment are extracted below:

"1. The reference has been made for answering following two questions:-

I. Whether in appeal filed under Section 61 of the I&B Code, by a third party who was not party to the proceedings before the Adjudicating Authority, an application seeking leave to prefer the appeal is necessary to be filed and decided before entertaining the Appeal?

Company Appeal (AT) (Ins.) No. 2032 of 2025 -33-

II. Whether the Two Member Bench judgement of Chennai Bench dated 24.05.2023 in Company Appeal (AT) (CHY) (INS) No.130 of 2023 in IA Nos 439, 440 and 441/2023, Trimex Industries Pvt Ltd Vs Bhuvan Madan, RP of Sathavahana Ispat Ltd & Anr holding that there is no requirement for filing an application for leave to appeal lays down current law?

13. At the very outset we may clarify that since reference has been made only to answer aforesaid two questions, it would not be appropriate for us to record anything on the point as to whether appellant in the present appeal is aggrieved person or not. Such questions are always open to be examined by the concerned Bench. Of course, Mr PH Arvindh Pandian, learned senior counsel besides arguing that there is no need for asking a third party to file leave application to file appeal, he tried to persuade that the appellant is aggrieved person, we are not in a position to record any observation on this issue in view of terms of reference to this Bench."

It can be seen from the para 1 of the Judgment Trimex supra that

it arose in a different context. The reference before the Tribunal was

made only to answer two specific questions, namely: (i) whether a third

party who was not a party before the Adjudicating Authority is required

to file an application seeking leave to prefer an appeal under Section

61 of the Code, and (ii) whether the earlier judgment of the Chennai

Bench holding that such leave was not required laid down the correct

law. Further, the Tribunal itself clarified in paragraph 13 of the

judgment that since the reference was limited to answering the above

questions, it would not be appropriate to record any finding on whether

the appellant in that case was in fact a "person aggrieved". The

Tribunal expressly observed that such question would remain open for

Company Appeal (AT) (Ins.) No. 2032 of 2025 -34-

examination by the concerned Bench. Thus, the judgment does not

decide the substantive issue of whether a particular appellant qualifies

as a "person aggrieved".

In the present case, the issue before us is precisely whether the

Appellant can be regarded as a "person aggrieved" when it has no claim

or participation in the CIRP of Afcan Impex Pvt. Ltd. Since the Trimex

judgment itself refrained from deciding that question, the reliance

placed by the Appellant on the said decision does not assist its case.

(iii) The Appellant has further relied upon the decision of the Hon'ble

Supreme Court in 'Bar Council of Maharashtra v. M.V. Dabholkar and

Ors.' [MANU/SC/0003/1975] to contend that the expression "person

aggrieved" should be interpreted broadly. However, the said judgment

arose in a different statutory context. As recorded in paragraph 1 of

the judgment, the question before the Hon'ble Supreme Court was

whether the Bar Council of a State could be regarded as a "person

aggrieved" for the purpose of maintaining an appeal under Section 38

of the Advocates Act, 1961. In para 27 of the Judgment Hon'ble

Supreme Court observed as follows:

"27. Where a right of appeal to Courts against an administrative or judicial decision is created by statute the right is invariably con fined to a person aggrieved or a per son who claims to be aggrieved. The meaning of the words "a person aggrieved" may vary according to the context of the statute. One of the meanings is that a person will be held to be aggrieved by a decision if that decision is materially adverse to him. Normally, one is required to

Company Appeal (AT) (Ins.) No. 2032 of 2025 -35-

establish that one has been denied or deprived of something to which one is legally entitled in order to make one "a person aggrieved." Again a person is aggrieved if a legal burden is imposed on him. The meaning of the words "a person aggrieved" is sometimes given a restricted meaning in certain statutes which provide remedies for the protection of private legal rights. The restricted meaning requires denial or deprivation of legal rights. A more liberal approach is required in the back ground of statutes which do not deal with property rights but deal with professional conduct and morality. The role of the Bar Council under the Advocates Act is comparable to the role of a guardian in professional ethics. The words "persons aggrieved" in Sections 37 and 38 of the Act are of wide import and should not be subjected to a restricted interpretation of possession or denial of legal rights or burdens or financial interests. The test is whether the words "person aggrieved" include "a person who has a genuine grievance because an order has been made which pre judicially affects his interests." It has, therefore, to be found out whether the Bar Council has a grievance in respect of an order or decision affecting the professional conduct and etiquette."

We can see from para 27 that the Hon'ble SC has clarified that

meaning of the expression "person aggrieved" varies according to the

context of the statute. The Court observed that while a broader

interpretation may be adopted in statutes dealing with professional

conduct and ethics, such as the Advocates Act where the Bar Council

acts as a guardian of professional standards, in statutes dealing with

protection of private legal rights, a more restricted meaning is applied

which requires denial or deprivation of a legal right.

Company Appeal (AT) (Ins.) No. 2032 of 2025 -36-

In the present case, the proceedings arise under the Insolvency and

Bankruptcy Code, which governs the resolution process of a specific

corporate debtor and primarily concerns the rights of its creditors and

stakeholders. The Appellant has not demonstrated that the impugned

order approving the Resolution Plan of Afcan Impex Pvt. Ltd. has denied

or deprived it of any legal right in that CIRP. Therefore, even applying

the test laid down in the said judgment, the Appellant cannot be

regarded as a "person aggrieved" in the present case.

(iv) The Appellant has relied upon the judgment of the Hon'ble Supreme

Court in 'Samir Agrawal v. Competition Commission of India and Ors.'

[MANU/SC/0940/2020] to contend that the expression "person

aggrieved" should be interpreted widely. However, the said judgment

was rendered in the context of the Competition Act, 2002. As observed

in the judgment itself, the Competition Commission of India exercises

powers in matters affecting competition in the market and consumer

interest, and therefore the proceedings under the Act operate in rem

and in public interest.

In that context, the Hon'ble Supreme Court held that the

expression "person aggrieved" under the Competition Act should be

construed broadly, particularly since Sections 53B and 53T of the Act

use the expression "any person", thereby allowing even informants who

provide information regarding anti-competitive conduct to challenge an

adverse order of the Commission.

Company Appeal (AT) (Ins.) No. 2032 of 2025 -37-

The statutory framework of the Insolvency and Bankruptcy Code

is materially different. The CIRP process concerns the resolution of a

specific corporate debtor and the rights of its identified stakeholders

such as creditors and participants in the resolution process. In the

present case, the Appellant has not demonstrated any direct

participation or legal stake in the CIRP of Afcan Impex Pvt. Ltd.

Therefore, the broader interpretation adopted in the context of the

Competition Act cannot be applied to the present proceedings under the

Insolvency and Bankruptcy Code.

(v) Lastly, the Appellant has relied upon the observations of the Hon'ble

Supreme Court in 'Vishnu Vardhan v. State of Uttar Pradesh and Ors.'

[MANU/SC/0967/2025] to contend that procedural rules should be

interpreted in a manner that promotes justice. However, the said

judgment arose in a different context involving issues relating to the

doctrine of merger, allegations of fraud, and disputes concerning land

acquisition compensation.

The Hon'ble Supreme Court interfered in view of the peculiar

circumstances of that case and the potential prejudice arising from

strict application of procedural doctrines. The present case does not

involve any such exceptional circumstances. The Appellant has not

demonstrated any fraud in the resolution process of Afcan Impex Pvt.

Ltd. or any issue of public importance. Therefore, the observations

made in the said judgment do not apply to the facts of the present

case.

Company Appeal (AT) (Ins.) No. 2032 of 2025 -38-

57. Based on the factual matrix of the case and judicial pronouncements

in this regard, we are of the view that the grievance sought to be raised in

the present Appeal is not a direct grievance arising from the CIRP of Afcan

Impex Pvt. Ltd., but rather a collateral objection arising from the alleged

involvement of Respondent No.1 in another CIRP. The approval of the

Resolution Plan in this CIRP proceedings has not resulted in any direct legal

injury to the Appellant. Such remote or indirect grievance cannot confer

locus standi to invoke the appellate jurisdiction under Section 61 of the

Code.

58. We now consider the appeal on Merits also. The Appellant seeks to

argue that Respondent No.1 was disqualified under Section 29A merely

because he was a promoter or related party of a company undergoing CIRP.

"Section 29A: Persons not eligible to be resolution applicant.

1[29A. A person shall not be eligible1A to submit a resolution plan,

if such person, or any other person acting jointly J1 or in concertJ1 with such person--

(a) is an undischarged insolvent;

(b) is a wilful defaulter in accordance with the guidelines of the Reserve Bank of India issued under the Banking Regulation Act, 1949;

(c) 2[at the time of submission of the resolution plan has an account,] or an account of a corporate debtor under the management or control of such person or of whom such person is a promoter, classified as non-performing asset in accordance with the guidelines of the Reserve Bank of India issued under the Banking Regulation Act, 1949 3[or the guidelines of a financial sector regulator issued under any other law for the time being in force,] and at least a period of one year has lapsed from the date of such classification till the date of commencement of the corporate insolvency resolution process of the corporate debtor:

Provided that the person shall be eligible to submit a resolution plan if such person makes payment of all overdue amounts with

Company Appeal (AT) (Ins.) No. 2032 of 2025 -39-

interest thereon and charges relating to non-performing asset accounts before submission of resolution plan;

3[Provided further that nothing in this clause shall apply to a resolution applicant where such applicant is a financial entity and is not a related party to the corporate debtor.

(e) is disqualified to act as a director under the Companies Act, 2013;

3[Provided that this clause shall not apply in relation to a connected person referred to in clause (iii) of Explanation I;]"

59. The appellant has relied upon Section 29A (c) and Section 29A (e) of

the Code to argue that the Respondent No.1/SRA is covered by these two

sub-sections of Section 29A and is therefore barred from submitting the

resolution plan.

60. A plain reading of Section 29A does not support such a proposition.

The provision enumerates specific disqualifications which must be satisfied

before a person can be rendered ineligible to submit a resolution plan. In

particular, Section 29A(c) requires that the person concerned must have an

account classified as a Non-Performing Asset in accordance with the

guidelines of the Reserve Bank of India, and that such default must remain

unpaid for the prescribed period. The language of the provision clearly links

ineligibility to the existence of a financial default leading to NPA

classification.

61. The provision does not state that mere association with another

corporate debtor undergoing CIRP would automatically render a person

ineligible. The Appellant has not placed any material to show that any

account of Respondent No.1 or of CAN Enterprises Pvt. Ltd. was classified as

Company Appeal (AT) (Ins.) No. 2032 of 2025 -40-

an NPA in terms of RBI guidelines. As the account of CAN Enterprises was

not qualified as NPA, the disqualification contemplated under Section 29A(c)

cannot be attracted merely on the basis of the pendency of CIRP against

another entity.

62. The Appellant has also attempted to invoke Section 29A(e) by

contending that Respondent No.1 stood disqualified as a director under

Section 164 of the Companies Act, 2013. The Section 164 of Companies Act

is extracted below:

"Section 164: Disqualifications for appointment of director.

*164. (1) A person shall not be eligible for appointment as a director of a company, if --

(a) he is of unsound mind and stands so declared by a competent court;

(b) he is an undischarged insolvent;

(c) he has applied to be adjudicated as an insolvent and his application is pending;

(d) he has been convicted by a court of any offence, whether involving moral turpitude or otherwise, and sentenced in respect thereof to imprisonment for not less than six months and a period of five years has not elapsed from the date of expiry of the sentence:

Provided that if a person has been convicted of any offence and sentenced in respect thereof to imprisonment for a period of seven years or more, he shall not be eligible to be appointed as a director in any company;

(e) an order disqualifying him for appointment as a director has been passed by a court or Tribunal and the order is in force;

(f) he has not paid any calls in respect of any shares of the company held by him, whether alone or jointly with others, and six months have elapsed from the last day fixed for the payment of the call;

(g) he has been convicted of the offence dealing with related party transactions under section 188 at any time during the last preceding five years; or

Company Appeal (AT) (Ins.) No. 2032 of 2025 -41-

(h) he has not complied with sub-section (3) of section 152.

1[(i) he has not complied with the provisions of sub-section (1) of section 165.]

(2) No person who is or has been a director of a company which--

(a) has not filed financial statements or annual returns for any continuous period of three financial years; or

(b) has failed to repay the deposits accepted by it or pay interest thereon or to redeem any debentures on the due date or pay interest due thereon or pay any dividend declared and such failure to pay or redeem continues for one year or more,

shall be eligible to be re-appointed as a director of that company or appointed in other company for a period of five years from the date on which the said company fails to do so.

[Provided that where a person is appointed as a director of a company which is in default of clause (a) or clause (b), he shall not incur the disqualification for a period of six months from the date of his appointment.]

(3) A private company may by its articles provide for any disqualifications for appointment as a director in addition to those specified in sub-sections (1) and (2):

[Provided that the disqualifications referred to in clauses (d), (e) and (g) of sub-section (1) shall continue to apply even if the appeal or petition has been filed against the order of conviction or disqualification.]"

63. The appellant has relied upon Section 164 (2) (a) and 164 (2) (b) of the

Companies Act, 2013 to argue that in accordance with these provisions the

Respondent No.1 is disqualified to act as Director of company and therefore

ineligible to submit the resolution plan in accordance with Section 29A (e).

However, this argument also does not withstand scrutiny, as Section 29A(e)

specifically refers to a person who "is disqualified to act as a director under

the Companies Act, 2013." The language of the provision indicates that the

disqualification must already exist in law; it cannot be presumed or inferred.

Company Appeal (AT) (Ins.) No. 2032 of 2025 -42-

64. In other words, for Section 29A(e) to apply, there must be a formal and

operative disqualification under Section 164 of the Companies Act. Such

disqualification is determined and declared by the competent statutory

authority, namely the Registrar of Companies (RoC) or the Ministry of

Corporate Affairs.

65. The Hon'ble Supreme Court in 'M.K. Rajagopalan v. Dr. Periasamy

Palani Gounder' CIVIL APPEAL NOS. 1682-1683 OF 2022 (2024) had held that

there is no concept of "deemed disqualification" under Section 164(2) of the

Companies Act, 2013, and that such disqualification cannot be presumed.

The Hon'ble Supreme Court clarified that disqualification of a director must

be formally declared by the competent authority such as the Registrar of

Companies or the Ministry of Corporate Affairs, and cannot be inferred by a

tribunal. In the present case, no material has been placed on record to show

that Respondent No.1 has been formally declared disqualified under Section

164 by the competent authority. In the absence of such declaration, the

ineligibility under Section 29A(e) of the Code cannot be presumed.

Accordingly, the reliance placed by the Respondents on the said judgment

supports their contention.

66. In the present case, no material has been placed on record to show

that Respondent No.1 has been declared disqualified by the Registrar of

Companies or any other competent authority under Section 164 of the

Companies Act. The Appellant is essentially inviting this Tribunal to assume

a disqualification which has not been formally declared. Such an assumption

would be contrary to the statutory scheme of both Section 164 of the

Companies Act and Section 29A(e) of the Insolvency and Bankruptcy Code.

Company Appeal (AT) (Ins.) No. 2032 of 2025 -43-

We also note that the Resolution Professional has also placed on record that

due diligence was carried out and the eligibility of Respondent No.1 as a

Resolution Applicant under Section 29A was duly verified before the plan

was placed before the Committee of Creditors. Therefore, the contention of

ineligibility under Section 29A cannot be sustained.

67. Another aspect which needs to be examined is the conduct of the

Appellant in the proceedings before the Adjudicating Authority. We now

consider whether the Appellant, having not participated before the NCLT

Ahmedabad, can raise these grounds for the first time in the present Appeal.

The Appellant admittedly did not appear or participate in the proceedings

relating to approval of the Resolution Plan. The objections now sought to be

raised in the present Appeal, particularly the allegation of ineligibility under

Section 29A, were never raised before the Adjudicating Authority. It is a

settled principle that new grounds cannot be permitted to be raised for the

first time in appellate proceedings.

68. The Chennai Bench of this Appellate Tribunal in 'Anish Lawrence v.

Renahan Vamakesan (NCLAT Chennai)' [CA AT (CH) (INS) No. 377 OF 2023].

held that new grounds cannot be raised for the first time in appellate

proceedings, if they were not urged before the Adjudicating Authority. In the

present case, the Appellant did not raise any objection before the

Adjudicating Authority in the CIRP proceedings of Afcan Impex Pvt. Ltd.,

which continued from 2021 to 2025. Despite having sufficient opportunity,

the Appellant chose not to intervene in those proceedings. Therefore, the

Appellant cannot now seek to raise fresh issues for the first time before this

Appellate Tribunal.

Company Appeal (AT) (Ins.) No. 2032 of 2025 -44-

69. It is also necessary to consider the stage at which the present challenge

has been brought and the status of the implementation of the Resolution

Plan. It is relevant to note that the Resolution Plan was approved by order

dated 30.09.2025 and was implemented within the stipulated period. The

payments under the plan amounting to Rs. 6,51,19,488.68 have already been

made to all stakeholders, including secured financial creditors, operational

creditors, statutory authorities and CIRP costs. The management of the

Corporate Debtor has been taken over by the Successful Resolution

Applicant, the new board has been constituted and the assets of the

Corporate Debtor have already been handed over. Once a resolution plan has

been fully implemented and the management of the corporate debtor has

changed hands, the settled position of law is that such a plan cannot

ordinarily be unsettled or unscrambled at a belated stage.

70. A further circumstance which weighs with us is that the very same

impugned order dated 30.09.2025 approving the Resolution Plan has already

been challenged before this Appellate Tribunal in other proceedings. The

State Tax Officer had challenged the same order in Company Appeal (AT)

(Ins) Nos. 1804 and 1805 of 2025. This Tribunal, by judgment dated

07.01.2026, dismissed those appeals and upheld the Resolution Plan,

holding that the plan was in compliance with the requirements of Section

30(2) of the Insolvency and Bankruptcy Code. The challenge raised in the

present Appeal would therefore amount to reopening and unsettling a

resolution plan which has already been upheld by this Appellate Tribunal

and implemented in its entirety.

Company Appeal (AT) (Ins.) No. 2032 of 2025 -45-

71. Seen in this background, the conduct of the Appellant appears to be

that of a "wait and watch" litigant, who did not participate before the

Adjudicating Authority and now seeks to challenge a resolution process

which has already been successfully concluded. The Insolvency and

Bankruptcy Code is designed to ensure certainty and finality in the

resolution process. Permitting such belated challenges by persons, who are

not stakeholders in the CIRP would undermine the insolvency framework

and defeat the very objective of timely resolution contemplated under the

Code.

72. In view of the above discussion, we are of the considered view that the

Appellant has failed to establish that it is a 'person aggrieved' within the

meaning of Section 61 of the Code in relation to the impugned order

approving the Resolution Plan of Afcan Impex Pvt. Ltd. Even on merits the

Appellant has failed to demonstrate that Respondent No.1 was ineligible

under Section 29A of the Code or that the impugned order suffers from any

legal infirmity.

73. Accordingly, the present Appeal is not maintainable and is dismissed.

Pending I.As, if any, are closed. There would be no order as to costs.

[Justice Ashok Bhushan) Chairperson

[Mr. Indevar Pandey] Member (Technical)

SA/Pragya (LRA)

Company Appeal (AT) (Ins.) No. 2032 of 2025