Shareholders Simpliciter Cannot Appeal Approval of Resolution Plan: NCLAT Principal Bench

The National Company Law Appellate Tribunal dismissed appeals by minority shareholders of Gstaad Hotels against a ₹1,611 crore resolution plan, holding that they are not persons aggrieved under Section 61.

The National Company Law Appellate Tribunal (NCLAT) has held that shareholders, acting only in that role, have no locus standi to appeal under Section 61 of the Insolvency and Bankruptcy Code, 2016 (IBC) against the approval of a resolution plan, even where the plan provides them a residual amount [NKAY Investment v. Jayesh Sanghrajka & Ors., 2026-juristway.com-3395-NCLAT(New Delhi-[PB])-IBC].

Justice Mohammad Faiz Alam Khan, Member (Judicial), wrote the order for a Bench with Naresh Salecha, Member (Technical). Shareholders claiming about 20% and 10% of Gstaad Hotels Private Limited challenged an order of the National Company Law Tribunal, Mumbai dated 3 Sep 2026 approving the plan of Shree Naman Developers Private Limited, which extinguished the existing equity.

They argued that the resolution amount of ₹1,611 crore exceeded both fair value and liquidation value, so a surplus was due to them under Section 53(1)(h); that a secured creditor’s claim was never verified; and that, after Independent Sugar Corporation Ltd. v. Girish Sriram Juneja (2025), the expression “person aggrieved” must be read widely.

The NCLAT reviewed its rulings, including the Larger Bench decision in Park Energy Private Limited v. State Bank of India (2025), which held that a shareholder or promoter is not a person aggrieved, and Prateek Jain v. Anurag Nirbhaya (Company Appeal (AT) (Ins.) No. 1496 of 2024). It noted its disagreement with how Prateek Jain treated a three‑member ruling in Balkishan Shrikisan Baldawa v. Agri‑Tech (India) Ltd. (2025), but left that question for an appropriate case, finding no element of fraud here.

The Bench held that receipt of a residual amount, which is purely consequential on the distribution decided by the committee of creditors, does not enlarge a shareholder’s standing. A grievance that the residue might have been higher does not make a shareholder a person aggrieved. Maintainability is a threshold issue, and once it fails, the merits of the plan cannot be examined at the shareholder’s instance.

Both appeals were dismissed as not maintainable.

2026-juristway.com-3395-NCLAT(New Delhi-[PB])-IBC