NCLAT grants relief; board gets leave to increase authorised capital and undertake rights issue

NCLAT Chennai Bench took up the matter on 07.10.2026 and granted relief to the Company.

Thu 8 Oct 2026

NCLAT Hearing Date

07.10.2026

Principal Financial Creditor CoC Voting Share

close to 97%

Next Hearing Date

16.11.2026 at 12:00 P.M.

What the tribunal did

The National Company Law Appellate Tribunal, Chennai Bench, took up Company Appeal (AT) (CH) (Ins) No. 252/2026 on 07.10.2026 and granted relief to the Company. The order also directs the Interim Resolution Professional to take necessary steps to file the requisite forms with the Ministry of Corporate Affairs/Registrar of Companies, intimate the Insolvency and Bankruptcy Board of India, and take steps in relation to the MCA21 portal and other matters as specified in the order. The Company states it received a copy of the order on 08.10.2026.

Background set out in the order

• On 17.04.2026 the corporate debtor, an EPC company, was drawn into CIRP.
• On 30.04.2026 the tribunal suspended the order admitting the corporate debtor to CIRP.
• The appellant is the suspended director of the corporate debtor.

What the restructuring involves

• On 05.10.2026 a Master Restructuring Agreement was signed between the petitioning financial creditor and the corporate debtor.
• The principal financial creditor has close to 97% voting share in the Committee of Creditors.
• The restructuring strategy envisages that a substantial sum of money would be infused into the corporate debtor through equities.
• For that purpose, the company proposes to increase its authorised share capital, to be followed by a rights issue.
• The banker has stipulated a timeline for completing the process, which is required to start on 09.10.2026 and conclude on 31.12.2026.

Reliefs granted

The tribunal granted the reliefs contemplated in reliefs (b), (c), (d) and (f) sought in the application. In substance these cover:

• Leave to the Board of Directors to convene and hold Board and members' meetings, increase the authorised share capital in accordance with Section 61 of the Companies Act, 2013, make consequential alterations to the Memorandum of Association and undertake the requisite statutory updates.
• Leave to the Board to approve, undertake and complete a rights issue of equity shares in accordance with Section 62(1)(a) of the Companies Act, 2013 and the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, including the letter of offer, allotment and listing of shares, and to make updates, disclosures and applications before SEBI, BSE Limited, the National Stock Exchange of India Limited and other authorities.
• Leave to the Directors and/or Company Secretary to execute and file, with their digital signatures, e-Forms and statutory updates, including Forms SH-7, MGT-14 and PAS-3.
• Direction to the Interim Resolution Professional, within 3 days of receipt of the order, to file the order dated 30.04.2026 and the order on this application with the Registrar of Companies, Vijayawada in the appropriate form; intimate the Insolvency and Bankruptcy Board of India; remove the association of his digital signature with the corporate debtor on the MCA21 portal and restore the association of the digital signatures of the directors and company secretary; and hand over to the Board of Directors all MCA21 login credentials, records and effects of the Company in his possession.

The application also sought a direction that the proceeds of the rights issue be deposited in a designated account of the corporate debtor and applied, in the first instance, towards settlement with Respondent No. 1, with a statement of receipts and utilisation shared before the tribunal. This falls under relief (e).

Counsel's submissions recorded in the order

• Senior counsel for the appellant submitted that once the restructuring requirement as required by the principal financial creditor is met, the entire course of action would eventually adopt the Section 12A route.
• Senior counsel for the financial creditor concurred with that statement.

Next date

The appeal is listed on 16.11.2026 at 12:00 P.M. The Company states it will continue to keep the stock exchanges informed of further material developments in the matter as and when they arise.

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