NCLAT Upholds Eligibility of Manglam Multiplex in Varutha Developers Insolvency Case

Ganga Construction's Appeal Dismissed; Tribunal Affirms CoC's Decision Amidst Allegations of Collusion and Ineligibility

In a significant ruling, the National Company Law Appellate Tribunal (NCLAT) has dismissed the appeal filed by Ganga Construction (Consortium) challenging the eligibility of Manglam Multiplex Pvt. Ltd. as the Successful Resolution Applicant in the corporate insolvency resolution process (CIRP) of Varutha Developers Pvt. Ltd. The Principal Bench in New Delhi, led by Justice Ashok Bhushan and Member (Technical) Arun Baroka, delivered the judgment on November 4, 2025, affirming the commercial wisdom of the Committee of Creditors (CoC) and the limited jurisdiction of adjudicating authorities in interfering with approved resolution plans.

The appeal, filed by Ganga Construction, questioned the order dated January 7, 2025, by the National Company Law Tribunal (NCLT), which rejected their application to declare Manglam Multiplex ineligible under Section 29A of the Insolvency and Bankruptcy Code, 2016. Ganga Construction alleged that the entire CIRP process was manipulated by M3M India Pvt. Ltd. and its group companies to acquire Varutha Developers' assets, particularly a prime land parcel in Gurgaon. They argued that Manglam Multiplex was ineligible due to purported control and shareholding arrangements involving M3M and its affiliates.

However, NCLAT found these claims unfounded, emphasizing that no shares were transferred to M3M's group companies, and the Share Purchase Agreement cited by the appellant was never effectuated due to legal and regulatory hurdles, including a provisional attachment by the Enforcement Directorate. The Tribunal noted that the Appellant failed to participate in the Challenge Mechanism and did not submit a final resolution plan, thus lacking the locus standi to question the eligibility of the Successful Resolution Applicant.

The judgment underscored the sanctity of the CoC's commercial decisions, which had approved Manglam Multiplex’s resolution plan with a 100% vote share. NCLAT reiterated the Supreme Court's stance that the adjudicating authority's role is limited to ensuring compliance with Sections 30(2) and 31 of the IBC, and not to second-guess the CoC's commercial wisdom unless non-compliance is evident.

In rejecting the appeal, the Tribunal emphasized that allegations of collusion and ineligibility were speculative and unsupported by concrete evidence. The ruling reinforces the principle that the resolution process must be concluded expeditiously and in accordance with the statutory framework, without unwarranted interference.

Bottom Line:

Insolvency and Bankruptcy Code, 2016 - Unsuccessful Resolution Applicant cannot challenge the resolution process or eligibility of the Successful Resolution Applicant after opting out of the process and failing to submit a final resolution plan.

Statutory provision(s): Insolvency and Bankruptcy Code, 2016 Sections 29A, 30(4), 30(2), 31

Ganga Construction (Consortium) v. Anil Kumar Mittal, (NCLAT)(Principal Bench, New Delhi) : Law Finder Doc Id # 2804801