NCLT Mumbai Clears Reliance Retail’s ₹171 Crore Revival Plan for Future Supply Chain, Declares All Past Claims Extinguished

NCLT Mumbai Clears Reliance Retail’s ₹171 Crore Revival Plan for Future Supply Chain, Declares All Past Claims Extinguished

Introduction

The Mumbai Bench of the National Company Law Tribunal (NCLT) has approved Reliance Retail Ventures Limited’s (RRVL) ₹171 crore resolution plan for Future Supply Chain Solutions Limited (FSCSL), the logistics arm of the erstwhile Future Group, under Section 31(1) of the Insolvency and Bankruptcy Code, 2016. The Bench comprising Judicial Member Lakshmi Gurung and Technical Member Hariharan Neelakanta Iyer held that the plan met all requirements of the Code and the CIRP Regulations, 2016, and directed the constitution of a monitoring committee to oversee its implementation.

Factual Background

The Corporate Insolvency Resolution Process (CIRP) against FSCSL was initiated on January 5, 2023, based on a Section 9 application filed by DHL Ecommerce (India) Pvt. Ltd. Rajan Rawat was appointed as the Interim Resolution Professional (IRP) and later confirmed as the Resolution Professional (RP). The Committee of Creditors (CoC) included Azim Premji Trust, IDFC First Bank, JC Flowers ARC, State Bank of India, Goraj Automation Pvt. Ltd., and Siemens Factoring Pvt. Ltd. After several extensions, Reliance Retail Ventures Limited (RRVL) submitted a resolution plan offering ₹171.38 crore.

Procedural History

In its 37th CoC meeting held on March 4, 2025, RRVL’s resolution plan was approved with 91.76% votes in favor. The fair value and liquidation value of FSCSL were ₹170.69 crore and ₹133.35 crore respectively, and the plan offered 100.41% of the fair value and 128.52% of the liquidation value. As per Form-H filed by the RP, recoveries under the plan amounted to 19.15% of the total admitted claims, including ₹146.2 crore to financial creditors, ₹5.82 crore to operational creditors (including statutory dues), ₹1.6 crore to employees and workmen, and ₹4 crore to the secured operational creditor (MADC). The CIRP cost of ₹8.91 crore was to be paid on the effective date.

Issues

(i) Whether the resolution plan fulfilled the requirements of Section 30(2) of the IBC and the CIRP Regulations, 2016.

(ii) Whether the conditional clauses in the plan affected its implementation.

(iii) Whether statutory and regulatory exemptions could be granted automatically under the resolution plan.

Contentions of Parties

The RP submitted that the plan complied with all statutory provisions and had been revised to remove conditional clauses, making it unconditional and absolute. Reliance Retail confirmed its readiness to implement the plan. The NCLT had earlier sought clarifications on the payment of employee benefits, the conditional nature of the plan, and the definition of the effective date. The RP, through affidavits, clarified that all payments to creditors, including operational and dissenting financial creditors, as well as CIRP costs, would be made on the effective date.

Reasoning and Analysis

The Tribunal observed that the plan satisfied all requirements under the Code and Regulations, ensuring equitable treatment to all stakeholders. It held that the resolution plan was no longer conditional and that its implementation would not be hindered. The Bench directed that all payments, including CIRP costs and dues to creditors, be made on the effective date. It further clarified that Reliance Retail would be entitled to protection under Section 32A of the IBC, insulating it from liability for offences or non-compliances of the corporate debtor prior to plan approval. However, the Tribunal declined to grant automatic statutory or regulatory exemptions, holding that the resolution applicant must seek necessary approvals from the competent authorities. Referring to Ghanshyam Mishra and Sons Pvt. Ltd. v. Edelweiss ARC, it reiterated that all claims not forming part of the resolution plan stand extinguished upon approval.

Implications

The decision reinforces the principle that successful resolution applicants enjoy protection under Section 32A but must still comply with statutory procedures. It also highlights that a resolution plan must be unconditional and in conformity with the Code and CIRP Regulations to ensure smooth implementation.

Order

The NCLT Mumbai approved Reliance Retail’s ₹171 crore resolution plan for FSCSL under Section 31(1) of the IBC and directed the formation of a monitoring committee consisting of the RP, two nominees of financial creditors, and two nominees of RRVL. The moratorium under Section 14 ceased, and the RP was directed to forward records to the Insolvency and Bankruptcy Board of India (IBBI).

In this case the applicant was represented by Mr. Nausher Kohli with Mr. Dhananjay Sud, Ms. Jyoti Dubey, Advocates and the RP, Mr. Rajan Rawat. Meanwhile the respondent was represented by Mr. Madhav Kanoria, Ms. Surbhi Pareek, Mr. Jayesh Karnawat and Mr. Karthika Sanjay, Advocates.