NCLAT Sets Aside NCLT Direction On HNG's Resolution Professional

NCLAT Sets Aside NCLT Direction On HNG's Resolution Professional

Introduction

The National Company Law Appellate Tribunal (NCLAT) has set aside the National Company Law Tribunal's (NCLT) direction to change the resolution professional of debt-ridden Hindusthan National Glass Industries (HNG). The appellate tribunal has asked the NCLT to take a decision on the bids as per the Supreme Court's directions.

Factual Background

The corporate insolvency resolution process (CIRP) against Hindusthan National Glass Industries (HNG) commenced on October 10, 2021. The resolution professional (RP) was appointed and issued an expression of interest (EoI) inviting resolution plans. AGI Greenpac's bid was approved by the CoC with 98% vote shares on October 27, 2022. However, the approval process was challenged by several parties, including Soneko Marketing, an operational creditor, and Independent Sugar Corporation Ltd, another resolution applicant.

Procedural Background

The NCLT approved the resolution plan of AGI Greenpac on April 28, 2023, which was challenged before the NCLAT. The NCLAT dismissed the petitions on September 18, 2023. However, the Supreme Court set aside the NCLT and NCLAT orders approving AGI Greenpac's bid on January 29, 2025, due to lack of prior approval from the fair trade regulator CCI. The apex court directed the CoC to reconsider the bid of Independent Sugar Corporation or any other resolution plans with the requisite CCI approval.

Supreme Court Directions

The Supreme Court, in its judgment on May 16, 2025, directed the lenders' body, the CoC, to consider for approval of the resolution plan of Independent Sugar Corporation Ltd within two weeks. The apex court also directed the NCLT to complete the CIRP of Hindusthan National Glass within six weeks from May 16, 2025.

NCLAT's Decision

The NCLAT set aside the NCLT's direction to change the resolution professional, citing "no majority opinion on Point No.3, i.e., replacement of the RP". The appellate tribunal asked the NCLT to proceed with the plan approval application in accordance with the Supreme Court's directions.

Issues

1. Resolution Professional: Whether the NCLT's direction to change the resolution professional of HNG was justified.

2. Plan Approval Application: Whether the NCLT can proceed with the plan approval application in accordance with the Supreme Court's directions.

Contentions of Parties

Appellant's Contentions: Not reported in detail, but the NCLAT's order suggests that the appellant challenged the NCLT's direction to change the resolution professional.

Respondent's Contentions: Not reported in detail.

Reasoning & Analysis

The NCLAT's decision allows the NCLT to proceed with the plan approval application, taking into account the Supreme Court's directions. The appellate tribunal's order sets aside the NCLT's direction to change the resolution professional, citing lack of majority opinion.

Final Outcome

The NCLAT has set aside the NCLT's direction to change the resolution professional of HNG and asked the NCLT to decide on the approval of bids for Hindusthan National Glass Industries in accordance with the Supreme Court's directions.

Implications

The NCLAT's order allows the NCLT to proceed with the plan approval application, which could potentially lead to the resolution of the insolvency proceedings of HNG. The Supreme Court's directions have set a timeline for the CoC to consider Independent Sugar Corporation's bid and for the NCLT to complete the CIRP.