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A resolution plan cannot answer a mandatory-content objection merely by invoking CoC commercial wisdom. In Dickey Special Situation Investment Trust-DSSF Series 2 v. Manish Agarwal, NCLAT upheld rejection because the plan did not explain how it addressed the cause of default. It nevertheless rejected the assumption that a bid below liquidation value was necessarily unlawful. Judgment, paragraphs 38–55.
The order and its mixed result
| Point | Verified record |
|---|---|
| Tribunal | NCLAT, Principal Bench, New Delhi |
| Members | Justice Mohammad Faiz Alam Khan and Arun Baroka |
| Appeals | Company Appeal (AT) (Insolvency) Nos. 1725 and 1706 of 2026 |
| Order date | |
| Corporate debtor | Worlds Window Exim Private Limited |
| Challenged order | NCLT New Delhi Bench-III, 14 August 2026, IA-32/ND/2026 in CP(IB)-108/(PB)/2025 |
| Result | Plan rejection, liquidation and investigation upheld; premature limit on assignee's entitlement set aside |
The appeals were dismissed subject to that modification. An account of the result must preserve the correction: the assignee-distribution restriction did not survive, even though the plan was not approved. Paragraphs 66–67.
Mandatory content and commercial evaluation are different inquiries
The NCLAT accepted the limited nature of judicial scrutiny of a CoC-approved plan. It distinguished reviewing a commercial choice from checking whether the plan contained what the insolvency framework required. Regulation 38(3)(a), read with Section 30(2)(f) of the Insolvency and Bankruptcy Code, 2016, required a demonstration that the plan addressed the cause of default.
The CoC's vote did not make that content unnecessary. In the tribunal's reasoning, commercial wisdom operates on a plan meeting the mandatory requirements; it cannot itself supply an omitted explanation. The finding was tied to a specific clause and statutory requirement, rather than a judicial preference for another business model. Paragraphs 38–41 and 48–50.
Why Clause 2.14 was insufficient
Clause 2.14 stated that the applicant was not fully aware of the cause of default, referred to losses, nil turnover and excess liabilities, and proposed attempts to use secured land and generate positive returns. The tribunal found that those matters described the financial result and an aspiration, without identifying the cause or explaining a workable cure.
The corporate debtor was an asset-holding company with no operations, and much of its land stood charged for group-company lenders. The missing link was concrete: what business would be undertaken, how it would earn revenue, and how that proposal would address the default. Reliance on the Information Memorandum did not cure that omission. Paragraphs 42–50.
For plan drafters, the useful distinction is between reciting financial distress and explaining the proposed response to its cause. This is an application of the order's reasoning, not a new judicially prescribed business-plan format.
A lower plan value was not enough to defeat the plan
The plan offered ₹7 crore, against a liquidation value of ₹9,42,25,758. NCLAT did not sustain the inference that the dissenting creditor must therefore receive less than its protected entitlement. Clause 3.4 expressly assured the relevant statutory minimum and priority treatment.
The tribunal held that a plan's bid need not match liquidation value merely because that value has been calculated. The individual dissenting creditor's protection still required examination. The two inquiries—total bid and protected distribution—could not be substituted for each other. That correction did not save this plan because the cause-of-default defect remained independently sufficient. Paragraphs 51–55.
This is why a valuation headline would miss the central holding. The appellate tribunal corrected one ground but found another adequate to sustain rejection.
Investigation was not a final fraud determination
NCLAT upheld an investigation by the liquidator into the corporate debtor's affairs and possible applications under Sections 43, 45, 50 and 66. It considered the overall circumstances alongside the established plan-content defect, expressly declining to rest its decision on suspicion alone.
The inquiry direction did not determine every potential claim against the persons concerned. Paragraph 59 preserves their opportunity to be heard in proceedings in which relief is sought. Likewise, paragraph 61 set aside the NCLT's premature cap on the assignee's distribution by reference to its purchase price, leaving the issue open for the appropriate stage. Paragraphs 56–61.
Rectification and revival were not automatic entitlements here
The appellants relied on the 2026 provisions concerning an opportunity to rectify a plan and consideration of restoration of CIRP before liquidation. For the purpose of its analysis, NCLAT took those provisions to be in force and read the relevant powers as enabling rather than compulsory in every case.
It found that the concerns here were more than minor drafting gaps and upheld liquidation. That reasoning must not be converted into a rule that rectification can never be allowed or liquidation must follow every deficient plan. Nor does this note independently settle every commencement or transitional issue arising under the 2026 amendment. It reports the particular construction and outcome in paragraphs 62–65. Official judgment.
A focused plan-review approach
Veritect's analysis suggests a useful review sequence: identify the precise mandatory requirement; locate the plan text said to satisfy it; test the connection between the stated cause and proposed cure; separately verify protected distributions; and distinguish established defects from matters merely referred for investigation.
That approach preserves the CoC's commercial role while making statutory compliance reviewable. It also avoids treating a favourable correction on valuation as equivalent to approval of the entire plan.
Questions practitioners may ask
Must every bid equal or exceed liquidation value?
The NCLAT rejected that proposition as an independent ground here. It nevertheless examined the dissenting creditor's protected entitlement and the plan's other mandatory content.
Was the assignee's entitlement finally limited to its acquisition price?
No. The appellate tribunal set that restriction aside as premature, keeping the parties' rights and contentions open.
Did the investigation direction establish fraud by every person involved?
No. It authorised inquiry and possible applications, with persons concerned to be heard before orders against them.
Source and limits
The official NCLAT common judgment, particularly paragraphs 38–67, is the primary source. This is a dated case analysis, checked on 1 November 2026. Later appeals, stays or subsequent liquidation outcomes were not exhaustively established. For live plan advice, verify the statutory version, full record and subsequent treatment.