NCLT Mumbai Upholds CoC’s Right to Conduct Second E-Challenge in Future Enterprises CIRP, Dismisses Orissa Metaliks Plea

April 8, 2026 : The National Company Law Tribunal (NCLT), Mumbai Bench (Court-III), has dismissed an application filed by Orissa Metaliks Private Limited (OMPL) challenging the Committee of Creditors’ (CoC) decision to conduct a second round of e-challenge mechanism in the corporate insolvency resolution process (CIRP) of Future Enterprises Limited.

The Bench comprising Member (Judicial) Ms. Lakshmi Gurung and Member (Technical) Mr. Hariharan Neelakanta Iyer held that the CoC’s decision falls squarely within its commercial wisdom and does not violate Regulation 39(1A) of the CIRP Regulations.

The application, filed under Section 60(5) of the Insolvency and Bankruptcy Code, 2016, assailed the CoC’s resolution taken in its 38th meeting to undertake a second e-challenge process for Cluster 3 assets of the corporate debtor.

Background:
The CIRP of Future Enterprises Limited commenced on 27 February 2023 pursuant to a Section 9 application. The CoC was constituted on 22 May 2023 and adopted a strategy of inviting resolution plans by dividing the assets into three clusters, with Cluster 3 representing the residual business.

Two prospective resolution applicants—OMPL and Uniworth Finlease Limited—submitted plans. Initially, bids were low (₹30 crore and ₹15.10 crore respectively), but following earlier litigation and adoption of a challenge mechanism, an e-challenge conducted on 18 July 2025 significantly improved the bids to ₹148 crore (OMPL) and ₹146 crore (Uniworth).

Subsequently, the CoC, in its 38th meeting held on 29 August 2025, resolved to conduct a second round of e-challenge, citing that the earlier outcome was “sub-optimal and not satisfactory.”

Contentions:
OMPL argued that once the first challenge mechanism had concluded and value maximisation achieved, there was no legal basis to reopen the process. It contended that repeated challenge rounds undermine certainty and violate the time-bound nature of CIRP.

The Resolution Professional and CoC countered that the Request for Resolution Plan (RFRP) expressly permits multiple rounds of negotiation or challenge mechanisms, and that no restriction had been imposed by prior judicial orders.

Tribunal’s Findings:
The Tribunal framed the central issue as whether conducting a second challenge mechanism violates Regulation 39(1A). It held that the restriction “not more than once” applies only to modification of plans under clause (a), and not to challenge mechanisms under clause (b). It observed that the Tribunal cannot read limitations into the Regulation where none exist.

The Bench further emphasized that the Code balances two key objectives—time-bound resolution and maximisation of asset value—and where no specific timeline is prescribed, value maximisation cannot be curtailed by judicial interpretation.

Reaffirming settled law, the Tribunal held that decisions relating to value maximisation and process design fall within the exclusive domain of the CoC’s commercial wisdom, which is not subject to judicial review absent any legal violation. It also reiterated that even the highest bidder does not acquire a vested right to have its plan accepted.

The Tribunal relied on precedent to hold that the CoC retains the power to continue negotiations or adopt further challenge mechanisms so long as no resolution plan has been approved.

Conclusion:
Finding no arbitrariness or illegality, the Tribunal declined to interfere with the CoC’s decision and dismissed the application. However, noting the time already elapsed in the CIRP, it directed the CoC to complete the process expeditiously in a time-bound manner.

Case Details:
Orissa Metaliks Private Limited v. Avil Jerome Menezes & Ors.
I.A. No. 4320/2025 in CP No. 513/2022
Order dated: 08 April 2026