19 October 2026
Introduction
The National Company Law Appellate Tribunal (“NCLAT”), Principal Bench, New Delhi, in its recent judgment in Prateek Jain v. Mr. Anurag Nirbhaya, Resolution Professional & Ors. (2026), has reaffirmed that a shareholder, merely by virtue of holding shares in a corporate debtor, cannot be regarded as an “aggrieved person” entitled to challenge the approval of a resolution plan under Section 61 of the Insolvency and Bankruptcy Code, 2016 (“IBC”).
The judgment was delivered by a Bench comprising Justice Sharad Kumar Sharma, Member (Judicial), and Mr. Indevar Pandey, Member (Technical), addresses the scope of appellate rights available to shareholders and the binding nature of precedents concerning the maintainability of appeals under the IBC.
In arriving at its decision, the NCLAT relied upon the larger Bench judgment in Park Energy Private Limited v. State Bank of India & Anr. (2023), holding that the principles established therein continue to govern the rights of shareholders to challenge insolvency proceedings. The Tribunal also examined whether allegations of fraud, collusion and material irregularities in the approval of a resolution plan could independently confer appellate standing upon a shareholder.
The ruling is particularly relevant to shareholders, promoters, resolution professionals, creditors and successful resolution applicants, as it reinforces the importance of determining locus standi before challenging an approved resolution plan.
Background and Facts of the Case
The dispute arose from the corporate insolvency resolution process (“CIRP”) of a corporate debtor in which a resolution plan had been submitted by Red Apple Buyers Welfare Association, the successful resolution applicant (“SRA”). The resolution plan was approved with 100% voting support by the Committee of Creditors (“CoC”). Subsequently, a memorandum of understanding (“MoU”) was executed between the SRA and Windsor Paradise Heights Private Limited, introducing certain arrangements concerning the transfer of equity and construction-related responsibilities. The National Company Law Tribunal (“NCLT”), New Delhi Bench, approved the resolution on 11.06.2024.
Aggrieved by the approval, Mr. Prateek Jain, a shareholder of the corporate debtor, preferred an appeal before the NCLAT. The appellant contended that the subsequent arrangements introduced through the MoU had materially altered the resolution plan originally approved by the CoC.
According to the appellant, the modifications concerning equity ownership and construction responsibilities were substantial and ought to have been placed before the CoC for reconsideration. It was argued that approving the modified arrangements without appropriate consideration by the CoC constituted a material irregularity under Section 61(3)(ii) of the IBC. The appellant further alleged that the modifications resulted from collusion among the SRA, the resolution professional and Windsor Paradise Heights Private Limited, and that relevant information had been concealed from the CoC and the adjudicating authority.
The principal question before the NCLAT, however, was whether the appellant, admittedly acting in his capacity as a shareholder, possessed the requisite locus standi to maintain an appeal against the order approving the resolution plan.
Legal Framework: Appeals Under Section 61 of the IBC
Section 61(1) of the IBC provides that any person aggrieved by an order of the adjudicating authority may prefer an appeal before the NCLAT. The expression “person aggrieved” is not expressly defined under the IBC. Consequently, its interpretation has been developed through judicial decisions, particularly in relation to shareholders, promoters, directors and other stakeholders affected by insolvency proceedings.
Section 61(3) further specifies the grounds on which an order approving a resolution plan under Section 31 may be challenged. These include contravention of applicable law, material irregularity in the exercise of powers by the resolution professional, failure to provide for certain operational creditors’ debts, non-payment of insolvency resolution process costs in priority to other debts, and non-compliance with criteria specified by IBBI.
However, the existence of a statutory ground for challenging a resolution plan does not automatically establish the appellant’s right to maintain such an appeal. The appellant must first satisfy the requirement of being a person aggrieved within the meaning of Section 61(1). The distinction between the availability of grounds of appeal and the entitlement to invoke appellate jurisdiction formed the central issue in the present case.
Key Findings and Observations of the NCLAT
The NCLAT held that the appellant, being admittedly a shareholder of the corporate debtor, could not maintain an appeal against the approval of the resolution plan solely on that basis. The Tribunal relied upon the larger Bench decision in Park Energy Private Limited v. State Bank of India & Anr., which addressed the limits of shareholders’ rights to participate in insolvency proceedings and challenge orders under the IBC.
The Tribunal reiterated that the insolvency framework operates through designated statutory authorities and representatives, including the resolution professional and the liquidator, who discharge responsibilities concerning the corporate debtor and its stakeholders. Permitting individual shareholders to challenge insolvency proceedings merely because their shareholding interests are affected could undermine the objective of achieving time-bound insolvency resolution.
Accordingly, the NCLAT concluded that the appellant’s admitted status as a shareholder did not entitle him to maintain the appeal against the approved resolution plan.
An important aspect of the judgment concerns the precedential relationship between Park Energy and Balkishan Shrikisan Baldawa v. Agri-Tech (India) Limited & Ors. (2025)
The appellant relied upon Balkishan to contend that shareholders could maintain proceedings in exceptional circumstances involving allegations of fraud or collusion in the initiation of insolvency proceedings. The NCLAT rejected this argument and distinguished the two decisions on the basis of their respective Bench constitutions.
It observed that Park Energy had been decided by a specially constituted three-member Bench tasked with answering a referred question of law arising from conflicting decisions. In contrast, Balkishan had been decided by a regular three-member Bench constituted according to the applicable roster. It was held that the specially constituted Bench’s decision in Park Energy continued to have binding effect and could not be displaced merely because a subsequent regular Bench of three members had expressed a different view.
The NCLAT also noted that the special leave petition challenging Park Energy had been dismissed by the Supreme Court. The Tribunal treated this development as reinforcing the authority of the earlier decision.
The appellant argued that the resolution plan had been approved despite alleged collusion among the SRA, the resolution professional and Windsor Paradise Heights Private Limited. It was submitted that material information concerning modifications to the plan had been concealed from the CoC and the NCLT, thereby affecting the validity of the approval process.
The NCLAT, however, found that the allegations of fraud were not substantiated by specific documentary evidence sufficient to support the appellant’s attempt to maintain the proceedings. The Tribunal observed that the relevant documents and circumstances concerning the MoU were already available during consideration of the resolution plan. It further noted that the NCLT had examined the financial viability of the SRA and its sources of funding before approving the plan.
The judgment demonstrates that allegations of fraud or collusion cannot, without an adequate evidentiary foundation, be relied upon to overcome objections concerning the maintainability of an appeal. Importantly, the Tribunal did not undertake a comprehensive adjudication of every alleged irregularity on its merits, having concluded that the shareholder’s appeal itself was not maintainable.
The NCLAT also considered the attempts of certain homebuyers to participate in the shareholder’s appeal and raise objections concerning the approval process. The Tribunal noted that these homebuyers had not independently challenged the resolution plan and were instead seeking to advance their grievances through the proceedings initiated by the shareholder.
It observed that parties could not indirectly pursue challenges that they had not independently instituted, particularly where such proceedings might otherwise be barred by limitation. The Tribunal further considered that the resolution plan had already been approved and was reported to have been implemented. These observations reflect the importance attached to procedural finality and the timely conclusion of insolvency proceedings.
Significance of the Judgment
One of the principal objectives of the IBC is to ensure that insolvency proceedings are completed within prescribed timelines and that commercially viable resolution plans are implemented without unnecessary delay. Repeated challenges to approved resolution plans may affect the certainty required by creditors, resolution applicants and other stakeholders.
By reaffirming restrictions on appeals instituted solely in the capacity of a shareholder, the judgment seeks to prevent insolvency proceedings from being prolonged through challenges by persons who do not satisfy the statutory requirement of being aggrieved.
The judgment is also significant for successful resolution applicants because it reinforces the finality of resolution plans approved by the CoC and the adjudicating authority. Resolution applicants frequently undertake substantial financial commitments and implementation obligations based on the approval of their plans. The possibility of subsequent challenges by individual shareholders may create uncertainty concerning implementation, ownership restructuring and contractual arrangements.
The NCLAT’s decision provides support for the proposition that such challenges must satisfy the statutory requirements governing appellate standing and cannot proceed merely because a shareholder disagrees with the approved resolution.
The ruling highlights the limitations of shareholders’ participation in insolvency proceedings in their individual capacity. Shareholders seeking to challenge an order under the IBC must carefully evaluate whether they possess an independently recognisable legal grievance and whether the proposed challenge is maintainable under the applicable judicial precedents.
The decision should not, however, be interpreted as conclusively determining every possible circumstance in which a shareholder may have standing under the IBC. Questions involving separate legal rights, different procedural contexts or independently established wrongdoing may require distinct consideration. The present ruling specifically concerned an appeal against the approval of a resolution plan instituted by an appellant acting solely in his capacity as a shareholder.
The judgment also reinforces the importance of procedural compliance during the approval and implementation of resolution plans. Although the appeal was dismissed on maintainability grounds, the underlying dispute concerned allegations that subsequent modifications had materially altered the approved plan.
Resolution professionals, CoCs and successful resolution applicants should therefore continue to ensure that proposed modifications, funding arrangements and implementation structures comply with the applicable provisions of the IBC and relevant judicial precedents. A restriction on the standing of a particular appellant does not dispense with the statutory obligation to conduct insolvency proceedings in accordance with law.
Conclusion
This judgment provides an important clarification concerning the appellate rights of shareholders under Section 61 of the IBC. By holding that a shareholder, solely in that capacity, cannot maintain an appeal challenging the approval of a resolution plan, the Tribunal has reaffirmed the principle established in Park Energy and emphasised the importance of binding judicial precedent.
The decision also highlights that allegations of fraud, collusion or material irregularity must be supported by credible evidence and cannot automatically overcome the requirement of locus standi. For creditors and resolution applicants, the ruling reinforces certainty in the resolution process. For shareholders and promoters, it underscores the need to identify a legally sustainable basis for challenging insolvency-related orders.
Ultimately, the judgment reflects the continuing judicial effort to balance the rights of stakeholders with the IBC’s fundamental objective of achieving an efficient, time-bound and legally compliant insolvency resolution process.
