New Delhi: The National Company Law Appellate Tribunal (NCLAT), New Delhi, has dismissed an application seeking recall of its earlier order excluding the additional time required to obtain vacant possession of an industrial property from the implementation timeline of an approved resolution plan. The Tribunal held that a successful resolution applicant cannot be penalised for delays caused by the continued unauthorised occupation of the property by a company controlled by members of the suspended management’s family.
A three-member bench comprising Officiating Chairperson Justice Yogesh Khanna and Technical Members Barun Mitra and Ajai Das Mehrotra rejected the recall application filed by B.D. Agarwal, a shareholder and personal guarantor of the corporate debtor, Krystal Stone Exports Limited. The application challenged the NCLAT’s order dated July 17, 2026, which excluded the additional period required to secure vacant possession of the property from the resolution plan’s implementation timeline.
Background of the Insolvency Proceedings
The corporate debtor entered the Corporate Insolvency Resolution Process (CIRP) on May 3, 2024. The resolution plan submitted by the successful resolution applicant was approved by the Committee of Creditors in May 2025 and subsequently received approval from the National Company Law Tribunal (NCLT), Mumbai, on February 23, 2026.
Under the approved plan, the successful resolution applicant was required to make an upfront payment of approximately ₹4.20 crore, while the remaining amount of ₹14.60 crore was payable within 90 days of approval.
The dispute arose because a portion of the property situated at SP-2, RIICO Industrial Area, Shivdaspura, Jaipur, continued to be occupied by Countertops, a company controlled by B.D. Agarwal and his immediate family members. Despite the successful resolution applicant paying the upfront amount within the stipulated period, vacant possession of the property was not handed over.
The NCLT initially granted an additional 45 days for payment of the outstanding amount, subject to interest at 12% per annum. However, it declined to exclude the period required to obtain vacant possession from the resolution plan’s implementation timeline.
On July 17, 2026, the NCLAT set aside that part of the NCLT’s decision and allowed exclusion of the additional period necessary to secure possession of the property.
Applicant Argued That Exclusion of Time Modified the Resolution Plan
Seeking recall of the appellate tribunal’s order, B.D. Agarwal argued that the approved resolution plan required payment of the balance amount within 90 days and that excluding the period of delay effectively modified the plan’s terms.
He relied on the binding and unconditional nature of an approved resolution plan, contending that the successful resolution applicant had accepted the risk that the reliefs and concessions sought before the adjudicating authority might not be granted.
The NCLAT rejected this argument, noting that the successful resolution applicant had paid the entire upfront amount of ₹4,20,43,964 within 30 days of the plan’s approval. Nevertheless, the property remained unavailable because of its continued occupation by Countertops.
The Tribunal found that the delay was not attributable to any default by the successful resolution applicant.
“The exclusion of time granted on 17.07.2026 was made precisely because the Subject Property (which was not under any valid tenancy) and despite the Successful Resolution Applicant having promptly paid the entire upfront amount, could not be handed over due to the continued and unauthorized occupation by M/s Countertops; infact by applicant’s own family,” the Tribunal observed.
The NCLAT also noted that, on June 3, 2026, the NCLT had directed Countertops to hand over vacant possession within 15 days. However, the direction remained uncomplied with.
According to the appellate tribunal, the obligation to hand over possession arose upon receipt of the upfront payment and did not depend on the grant of any separate concession by the adjudicating authority.
Extension of Payment Timeline Does Not Automatically Modify Resolution Plan
The NCLAT further rejected the contention that excluding the period of delay amounted to an impermissible modification of the approved resolution plan.
Relying on its earlier decisions in GP Global Energy Pvt. Ltd. v. Sandeep Mahajan and Ashok Dattaray Atre v. State Bank of India, the Tribunal reiterated that the adjudicating authority has jurisdiction to extend or exclude timelines for payments under a resolution plan where circumstances justify such relief.
It clarified that an extension or exclusion of time does not, by itself, amount to a modification of the approved resolution plan. The Tribunal also observed that express concurrence from the Committee of Creditors is not necessarily required in every case involving such an extension.
The ruling underscores the distinction between altering the substantive commercial terms of an approved resolution plan and adjusting its implementation timeline when performance is affected by circumstances beyond the successful resolution applicant’s control.
NCLAT Questions Applicant’s Right to Seek Recall
The Tribunal also examined whether B.D. Agarwal had the legal standing to seek recall of the earlier order.
It noted that he was neither a financial creditor nor an operational creditor of the corporate debtor and had not been impleaded as a party in the earlier appeal. His counsel’s appearance before the NCLT did not, by itself, make him a party to those proceedings, as no order permitting his intervention had been passed.
The NCLAT further observed that his earlier application had already been dismissed and that he had been directed to pursue his grievances through appropriate legal proceedings.
The Tribunal concluded that the recall application failed to establish any legal injury suffered by the applicant and appeared to be an attempt to obstruct or delay implementation of the approved resolution plan.
It consequently rejected the attempt to hold the successful resolution applicant responsible for a delay caused by the continued occupation of the property by a company controlled by the applicant’s family.
Final Decision
The NCLAT dismissed the recall application and left its order dated July 17, 2026, undisturbed. Accordingly, the additional period required to obtain vacant possession of the property continues to be excluded from the implementation timeline of the approved resolution plan.
The decision reinforces the principle that a successful resolution applicant should not ordinarily bear the consequences of implementation delays caused by unauthorised occupation of property, particularly where the applicant has complied with the stipulated upfront payment obligation.
Case Details
Case Title: Sonal Sumit Mehta v. Chirag R. Shah & Anr.
Case Number: IA No. 5856 of 2026 in Company Appeal (AT) (Ins.) No. 1262 of 2026
Tribunal: National Company Law Appellate Tribunal (NCLAT), New Delhi
Bench: Justice Yogesh Khanna (Officiating Chairperson), Barun Mitra (Technical Member) and Ajai Das Mehrotra (Technical Member)
Outcome: Recall application dismissed; exclusion of the additional property-possession period from the resolution plan’s implementation timeline remains in force.
