Pranav B Prem

The National Company Law Tribunal, Mumbai Bench, has dismissed an application filed by a suspended director seeking disclosure of valuation reports and other documents generated during the Corporate Insolvency Resolution Process (CIRP), holding that valuation reports are confidential and cannot be shared with persons who are themselves prospective or competing resolution applicants. The Tribunal observed that disclosure in such circumstances would undermine the sanctity and integrity of the insolvency resolution process.

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The application was decided by a Bench comprising Mohan Prasad Tiwari, Judicial Member, and Charanjeet Singh Gulati, Technical Member. The Bench categorically held that “valuation reports are confidential documents, and disclosure to persons who are themselves potential resolution applicants would undermine the sanctity of the process and is contrary to settled legal principles.”

The application was filed by Abhay Narhar Kadam, a suspended director of Megi Agro Chem Limited, invoking Section 60(5) of the Insolvency and Bankruptcy Code, 2016. He sought deferment of the hearing on approval of a resolution plan submitted by Arainfra Projects Private Limited and sought directions to the Resolution Professional to furnish copies of the approved resolution plan, valuation reports, information memorandum, expressions of interest, and minutes of Committee of Creditors (CoC) meetings. The applicant also questioned the overall conduct of the CIRP and alleged violations of the provisions of the Code and the CIRP Regulations.

The CIRP of Megi Agro Chem Limited had been initiated in August 2022 on a petition filed under Section 7 of the Code by Pridhvi Asset Reconstruction and Securitisation Company Limited, which was the sole member of the Committee of Creditors. The applicant alleged that the Resolution Professional failed to share valuation reports and other key documents with the suspended directors, thereby violating transparency requirements and undermining stakeholder participation in the insolvency process. He further contended that the non-disclosure prevented him from effectively assessing whether the resolution plan met the statutory benchmarks of fair value and liquidation value.

Opposing the application, the Resolution Professional and the Committee of Creditors submitted that members of the erstwhile management, including persons connected with the applicant, had either submitted or sought to submit resolution plans during the CIRP. It was argued that disclosure of valuation reports and sensitive commercial information to such persons would confer an unfair advantage and defeat the objective of value maximisation under the Code. The respondents further pointed out that earlier challenges to the resolution plan had already been rejected by the Tribunal and the Appellate Tribunal.

After examining the record, the NCLT noted that the applicant and other suspended directors had participated in several CoC meetings and that notices and minutes of such meetings had been duly circulated. The Tribunal held that while suspended directors are entitled to attend CoC meetings and receive certain information, such entitlement does not extend to unfettered access to confidential documents when they or their associates are themselves prospective or competing resolution applicants.

The Tribunal relied on settled principles laid down by the Supreme Court and the Appellate Tribunal to hold that the right of suspended directors to participate in the CIRP is not absolute and must be balanced against the confidentiality and fairness of the process. It observed that valuation reports are prepared exclusively to enable the CoC to take informed commercial decisions and are not meant to be shared with persons whose interests may conflict with the resolution process.

Rejecting the allegations of procedural irregularities and violation of the Code, the Tribunal held that the applicant had failed to establish any illegality, material irregularity, or breach of mandatory provisions warranting interference under Section 60(5) of the Code. It further noted that issues relating to eligibility of the resolution applicant and conduct of the CIRP had already been adjudicated in earlier proceedings and could not be re-agitated.

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Accordingly, the NCLT dismissed the application, holding that a suspended director who is also a prospective resolution applicant is not entitled to seek disclosure of valuation reports or other confidential CIRP documents. The Tribunal found no ground to interfere with the resolution process or the consideration of the resolution plan and disposed of the application without costs.

Appearance

For Applicant: Advocate Smit Shah

For Respondents: Advocates Pulkitesh Dutt Tiwari, A. Abhiraj Ray, Shivesh Kaushik

Cause Title: Abhay Narhar Kadam vs Vakati Balasubramanyam Reddy

Case Number: IA (IBC) NO. 3078 OF 2025 IN CP (IB) NO. 144/MB/2021

Coram: Judicial Member Mohan Prasad Tiwari and Technical Member Charanjeet Singh Gulati