MUMBAI: The National Company Law Appellate Tribunal (NCLAT) has rejected an appeal by the Central Bank of India challenging the approval of a resolution plan for Neptune Developers Pvt. Ltd, a bankrupt real estate company. The tribunal ruled that as a dissenting financial creditor, the bank cannot block a plan endorsed by the Committee of Creditors (CoC) in its “commercial wisdom.”

The order brings relief to more than 2,000 homebuyers who have waited more than a decade for possession of flats tied up in Neptune’s stalled project.

“There are no grounds made out to interfere with the approval of the resolution plan which is based on approval by the CoC in exercise of its commercial wisdom. There is no merit in the appeal. The appeal stands dismissed,” said the bench comprising Justices Ashok Bhushan and Barun Mitra.

The ruling came after the Central Bank of India challenged a 25 March order of the National Company Law Tribunal (NCLT) that cleared a ₹390 crore resolution plan submitted by Shree Naman Developers Pvt. Ltd. That plan had won 85.35% approval from creditors in March 2023.

This marks the second acquisition for Shree Naman Developers, which also bought Radius Infra Holdings in May 2024. Before the NCLT approved the plan, two other developers—KGK Realty (India) and Ess Gee Real Estate Developers—had also expressed interest in acquiring Neptune under the insolvency process.

Neptune Developers, which defaulted on loans from the Central Bank of India, had mortgaged its 26.05-acre “Project Swarajya” in Kalyan, in central Mumbai, to the lender. Following the bank’s insolvency petition under Section 7 of the Insolvency and Bankruptcy Code (IBC), the NCLT admitted the case in July 2021 and appointed Bijendra Kumar Jha as interim resolution professional (IRP).

During the corporate insolvency resolution process, the IRP appointed valuers Kunal Kantilal Vikamsey and Adroit Appraisers, who pegged liquidation values at ₹8.39 crore and ₹2.21 crore respectively. The Central Bank of India, holding 11.83% of voting rights, disputed those findings, claiming liquidation value was closer to ₹26.83 crore. It pushed for a fresh valuation, which the NCLT partly accepted, ordering a third valuer while allowing the CoC to continue deliberations.

That third valuer, Jayesh Mohan Kamat, later reported a fair value of ₹13.85 crore and liquidation value of ₹11.08 crore, higher than the earlier estimates but still far below the bank’s claim.

The Central Bank of India argued that critical assets, including 23 KDMC flats and 66 barter flats given to contractors, were excluded from the calculations, making the report “faulty.” But the valuer said the barter flats had already been exchanged for payment and could not be treated as realizable assets.

The CoC, meanwhile, set aside ₹26.83 crore as a disputed value for the bank, an arrangement the lender’s counsel initially agreed to in a 31 January 2025 NCLT hearing, but later contested.

Ravi Raghunath, counsel for the Central Bank of India, argued that “The NCLT prematurely approved the plan before considering the third valuation report. In fact, the approval process was vitiated and required fresh CoC voting after corrected valuations.”

But senior counsel Abhijeet Sinha, representing the resolution professional along with MDP Legal’s Niyati Merchant, countered that the bank itself had requested the third valuer, and could not renege once the report was submitted. He added that the CoC had exercised its commercial wisdom in approving the plan, and under Section 30(2)(b) of the IBC, a dissenting creditor is entitled only to its liquidation value.

Senior advocate Gaurav Mitra, appearing for Edelweiss ARC, and counsel for homebuyers also urged dismissal of the bank’s appeal, noting that buyers have already endured more than a decade-long wait and that further delays would be harmful.

The appellate tribunal observed that valuers are registered experts and their reports cannot be replaced with creditors’ subjective assessments. It also said the Central Bank of India could not “indirectly achieve what it could not directly” by blocking approval of the plan, and would receive only its liquidation value payout.

Finding “no substance” in the bank’s objections, the NCLAT dismissed both appeals and upheld the NCLT’s approval of Shree Naman Developers’ resolution plan.