NCLT Indore: Restricting CIRP Negotiations to H1, H2 Bidders Not Arbitrary If Based on RFRP

March 27, 2026 : The Indore Bench of the National Company Law Tribunal (NCLT) has ruled that limiting negotiations in a Corporate Insolvency Resolution Process (CIRP) to higher-ranked bidders is not arbitrary when such a restriction is clearly provided in the Request for Resolution Plan (RFRP) and aimed at maximising value.

Delivering its order on March 27, 2026, a Bench comprising Judicial Member Brajendra Mani Tripathi and Technical Member Man Mohan Gupta dismissed an application filed by Bio Treasure Overseas challenging the CIRP of Indian Soya Industries Pvt. Ltd.

The Tribunal held that the framework adopted by the Committee of Creditors (CoC), which permitted negotiations only with H1 and H2 bidders, was consistent with the RFRP and aligned with the objective of value maximisation under the Insolvency and Bankruptcy Code (IBC). It observed that such differential treatment cannot be termed arbitrary unless there is clear evidence of discrimination or mala fide conduct.

Background of the Dispute

Bio Treasure Overseas, an unsuccessful resolution applicant, alleged material irregularities in the CIRP. It contended that despite submitting its resolution plan within the prescribed timelines and revising it as required, it was classified as an H3 bidder and excluded from further negotiations. The applicant argued that other bidders were repeatedly allowed to improve their offers while it was denied a similar opportunity.

The plea also alleged that the Resolution Professional (RP) and CoC acted arbitrarily and failed to ensure fair consideration of all plans, thereby violating provisions of the IBC.

CoC’s Stand and Evaluation Process

The Resolution Professional and CoC defended the process, stating that all resolution plans were evaluated strictly in accordance with the approved evaluation matrix. Bidders were ranked based on financial metrics, particularly the net present value (NPV) of their proposals.

As reflected in the record, Bio Treasure Overseas was ranked H3, offering a lower value compared to the H1 and H2 bidders. The CoC, exercising its commercial wisdom, chose to negotiate only with the top two bidders to maximise value. The process ultimately resulted in a significantly improved final offer from the H1 bidder.

The Tribunal also noted that all resolution plans, including that of the applicant, were eventually placed before the CoC for voting. The applicant’s plan was rejected with 100% voting share, while the successful resolution plan received unanimous approval.

Tribunal’s Findings

After examining the record, including the CIRP timeline and evaluation details (notably reflected in tabulated financial comparisons on pages 10 and 17 of the order), the Tribunal found that:

• All bidders were given equal opportunity at the initial stages.
• Classification into H1, H2, and H3 was based on objective financial criteria.
• The RFRP explicitly allowed the CoC to negotiate only with H1 and H2 bidders.
• The applicant’s plan was not excluded from voting and was duly considered.

The Bench emphasised that iterative negotiations with higher-ranked bidders are inherent to the CIRP framework and serve the core objective of value maximisation.

Reiterating settled law, the Tribunal held that the commercial wisdom of the CoC in evaluating and negotiating resolution plans is generally non-justiciable, except in cases of proven illegality or material irregularity.

Conclusion

Finding no evidence of arbitrariness, discrimination, or statutory violation, the NCLT concluded that the CIRP was conducted in accordance with the IBC and applicable regulations. Accordingly, the application filed by Bio Treasure Overseas was dismissed, and the resolution process was upheld.

Case Title: Bio Treasure Overseas v. Mangesh Vithal Kekre, Resolution Professional of Indian Soya Industries Pvt. Ltd. & Ors.
Case No.: I.A. No. 208 (MP) 2021 in T.P. No. 49 of 2019 [C.P.(IB) No. 484 (MP) 2019]
Coram: Brajendra Mani Tripathi (Judicial Member), Man Mohan Gupta (Technical Member)