NCLAT Restores Promoters' Right To Bid In JC World Hospitality Resolution Process

The National Company Law Appellate Tribunal has recently overturned a July 2025 order of the National Company Law Tribunal, New Delhi, that had declared the promoters of JC World Hospitality Pvt Ltd ineligible to submit resolution plan under the Insolvency and Bankruptcy Code.

The Bench of Chairperson Justice Ashok Bhushan and Member Barun Mitra restored the promoters' resolution plan for consideration and directed the NCLT to decide the pending plan approval application within three months.

The tribunal said several findings of the NCLT were “wholly erroneous,” “unsustainable,” and based on “clearly erroneous” appreciation of evidence.

JC World Hospitality is an MSME real estate company from UP that entered insolvency on December 13, 2019 on a petition filed by homebuyers who form 100 percent of the Committee of Creditors.

Competing plans were submitted by the promoters-.Vijay Kant Dixit and Vasudha Gaur Dixit and by Amrapali Fincap Ltd. Voting was conducted through the authorised representative of the homebuyers. The promoters' plan received 51.56 percent yes votes in the class. Under Section 25A(3A) this is treated as approval by the entire class.

A Letter of Intent was issued in November 2021. The process was delayed for more than two years because Amrapali obtained an interim stay from the Supreme Court in April 2022.

Amrapali argued that the promoters were ineligible due to alleged NPAs, director disqualification under the Companies Act, association with companies facing findings of preferential transactions, and insufficient net worth (less than Rs 50 crores).

The promoters said they were protected by Section 240A because the corporate debtor is an MSME. They said the alleged director disqualification had been removed by the Delhi High Court and the NCLT. They relied on a 2025 email from the Ministry of Corporate Affairs confirming that their Director Identification Numbers were active and compliant. They also said the Resolution Plan clearly stated that the Performance Bank Guarantee and funds would be brought in by an investor, Rishikesh Hire Purchase and Leasing Pvt Ltd.

The NCLAT rejected each ground of ineligibility. On the finding of the court that the account of the promoters was declared Non Performing Asset at the time of submission of resolution plan, the appellate tribunal noted that such a finding of the tribunal was "unfounded and cannot be sustained"

On director disqualification, it noted, “We, thus, are of the view that the Adjudicating Authority in a callous manner without looking into materials on record have come to conclusion that Mrs. Rita Dixit and Dr. Vijay Dixit are disqualified under Section 164(2) resulting into disqualification under Section 29-A (e) which reason and finding is perverse and unsustainable.”

The tribunal added that once the MCA had confirmed that the DINs were active and compliant, the NCLT could not have treated the promoters as ineligible.

Subsequently, the appellate tribunal allowed the promoters' appeals and rejected Amrapali's challenge to their eligibility. It revived the Resolution Professional's application seeking approval of the promoters' plan before the NCLT.

It dismissed Amrapali's separate appeal seeking approval of its own plan and also dismissed a homebuyer's appeal seeking a fresh invitation of plans. The tribunal asked the NCLT to dispose of the plan approval application within three months.

Case Title: Dr Vijay Kant Dixit & Anr vs Amrapali Fincap Ltd. & Ors.

Case Number: Comp. App. (AT) (Ins) No. 1149 – 1151 of 2025

For Appellants: Senior Advocates Krishnendu Datta and Abhijeet Sinha with Advocates Prachi Johri, Kamal Naini Sharma and Mrigangi Parul

For Respondents:  Advocate Kunal Godhwani and Kinjal Chadha for Advocates for R3.Advocates Sumant Batra, Neeha Nagpal, Malak Bhatt, Ajatshatru Singh Rawat, Sarthak Bhandari and Riya Kaur Arora, Advocates; Advocate Sumant Batra, Neeha Nagpal, Malak Bhatt, Ajatshatru Singh Rawat, Sarthak Bhandari and Riya Kaur Arora for RP

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