Disputed Property Cannot Be Excluded From Information Memorandum After CoC Approval: NCLT Mumbai

“Once the Resolution Plan has been approved by the Committee of Creditors and is pending approval before this Tribunal, permitting exclusion of the subject property from the Information Memorandum would unsettle the resolution process,” the tribunal observed.

A coram of Judicial Member Mohan Prasad Tiwari and Technical Member Charanjeet Singh Gulati rejected an application filed by Jayesh Krushnakant Parekh against Orion Resolution & Turnaround Pvt Ltd, the resolution professional of C & M Farming Ltd.

It sought exclusion of a disputed immovable property from the insolvency proceedings after approval of the resolution plan by the CoC.

The application arose from the CIRP initiated against C & M Farming in March 2024 on a petition filed by Omkar Asset Reconstruction Pvt Ltd. Parekh claimed ownership over agricultural land and structures situated in Kolhapur. He relied on consent terms dated October 21, 2021, a civil court decree passed shortly thereafter, and a registered sale deed executed in October 2021.

He argued that the resolution professional wrongly included the property in the information memorandum despite the alleged transfer.

Rejecting the plea, the tribunal noted that the sale transaction was under challenge in pending civil proceedings instituted in 2024 and that restraint orders were already operating. It held that the CIRP Regulations mandate disclosure of contingent and disputed interests. Since the property originally belonged to the corporate debtor and its ownership is sub judice, the tribunal said continued disclosure was necessary.

Finding that the resolution professional had made full disclosures and that the approved plan accounted for the litigation outcome, the tribunal dismissed the application.