NCLAT Rejects Ex-Director's Plea for Resolution Plans in Aviom Housing Finance Insolvency

The National Company Law Appellate Tribunal (NCLAT) at Delhi  has refused a suspended director of Aviom India Housing Finance Pvt. Ltd. access to resolution plans submitted during the company's insolvency process. The tribunal reiterated that once the board of a financial service provider is superseded by the Reserve Bank of India, former directors have no right to participate in the CIRP or seek copies of resolution plans.

The order was passed by a coram comprising Chairperson Justice Ashok Bhushan and Technical Member Barun Mitra, which upheld the National Company Law Tribunal, New Delhi's rejection of an application seeking copies of resolution plans submitted by prospective resolution applicants.

The appeal was filed by Kaajal Aijaz Ilmi, a suspended director of Aviom India Housing Finance Pvt. Ltd., challenging the NCLT's refusal to supply copies of resolution plans submitted by prospective resolution applicants during the ongoing insolvency proceedings.

The insolvency proceedings began after the Reserve Bank of India stepped in, superseded Aviom's board of directors, and appointed Ram Kumar as the administrator to take charge of the company. The RBI then approached the NCLT to start insolvency proceedings against Aviom India Housing Finance Pvt. Ltd., which the tribunal allowed in in February 2025.

After the administrator invited bids from interested buyers, the suspended director moved the NCLT seeking copies of all resolution plans submitted by the prospective resolution applicants. The tribunal rejected the request, relying on the Supreme Court's ruling in Piramal Capital and Housing Finance Ltd. v. 63 Moons Technologies Ltd.

Challenging this decision before the appellate tribunal, Ilmi argued that even a suspended director is entitled to receive copies of the resolution plans submitted during the insolvency process.

Opposing the appeal, the administrator submitted that the appellant had vacated office upon supersession of the board and had no right either to participate in the insolvency process of a financial service provider or to seek copies of resolution plans.

Agreeing with the respondent, the NCLAT observed that the issue stood squarely covered by the apex court's ruling which held that upon supersession of the board by the RBI and appointment of an administrator, the board of directors and management stand vacated and cannot claim any right to attend committee of creditors meetings or participate in the CIRP.

In view of the settled position of law, the appellate tribunal dismissed the appeal.