Zicom Electronic Security Systems531404NCLT order update

NCLT Order on Central Bank of India's Plea Over Resolution Plan Distribution; Plan Approved Under Section 31

The company is under CIRP.

By ScoutQuest · Fri 25 Sep 2026, 12:03 PM IST · 3 min read

12.7%Central Bank voting share (as submitted in application

Central Bank voting share (as submitted in application: 12.70%.

NCLT Order Date: September 24, 2026
Resolution Applicant: Advaita Trading Private Limited
Plan Outlay for Financial Creditors: Rs 16 Cr (plus commitment under Brand litigation)
Liquidation Value Range: approx ₹13.50 crore to ₹14.99 crore
Central Bank of India Admitted Claim: approx ₹74.55 crore

What was shared

The company, which is under the Corporate Insolvency Resolution Process (CIRP), informed the exchanges that the National Company Law Tribunal, Mumbai Bench-I pronounced an order dated September 24, 2026 under Section 31 of the Insolvency and Bankruptcy Code, 2016, approving the resolution plan submitted by Advaita Trading Private Limited, the successful Resolution Applicant. The order in IA(I.B.C)/1566/MB/2026 in CP(IB) No. 610 of 2021 has been enclosed for dissemination.

Background

CIRP commenced by an order dated 29.07.2022 under Section 7 of the Code on a petition by IDBI Bank Limited. The present Resolution Professional was appointed by order dated 04.09.2025, replacing the earlier one.

The application by Central Bank of India

Central Bank of India, a member of the Committee of Creditors (CoC), applied under Section 60(5) against the Resolution Professional, the CoC and the successful Resolution Applicant, seeking:

reconsideration of the distribution mechanism so that it receives not less than the liquidation value of its security interest;
recomputation of the minimum amount payable to dissenting financial creditors under Section 30(2)(b);
restraint on prosecuting the plan approval application in its present form, and a stay on plan approval and implementation.

The numbers in dispute

Admitted claim of Central Bank of India: approx ₹74.55 crore as secured financial debt.
Its voting share in the CoC: 12.48% (the application also refers to a 12.70% voting share).
Liquidation value of the company: approx ₹13.50 crore to ₹14.99 crore.
Value attributable to assets exclusively charged to the bank: approx ₹9.19 crore.
Amount accruing to the bank under the approved plan on dissent: approx ₹2.83 crore.
Plan provision for secured and unsecured financial creditors: Rs 16 Cr, plus commitment under Brand litigation.
The bank's claimed exclusive first charge is said by the respondents to be confined to an SBLC facility of ₹52.25 crore.

How the CoC voted

IDBI Bank 39.27%, Union Bank of India 18.85%, Punjab National Bank 11.63%, Export-Import Bank of India 2.39%, Assets Care & Reconstruction Enterprises 1.59% and National Skill Development Corporation 1.73% voted for the plan. Central Bank of India 12.48%, Bank of Baroda 5.34%, J.C. Flowers Asset Reconstruction 3.36% and Indian Bank 3.36% dissented.

The competing arguments

At the 19th CoC meeting on 06.06.2023, distribution of the financial outlay in the ratio 40:60 between secured and unsecured financial creditors was approved with a 75.03% voting share. Central Bank of India argued that a uniform pro-rata split ignores the priority and realisable value of individual security interests, relying on DBS Bank v. Ruchi Soya and the Essar Steel judgment.

The Resolution Professional and the CoC argued that all secured creditors rank equally under Section 53(1)(b), that the plan already pays dissenting creditors not less than their liquidation entitlement with priority, that the CoC's commercial wisdom cannot be interfered with, and that the objection was raised for the first time at the 45th CoC meeting, nearly three years after the mechanism was settled. They relied on India Resurgence ARC v. Amit Metaliks and the NCLAT ruling in Beacon Trusteeship v. Jayesh Sanghrajka.

What it means for shareholders

A resolution plan approved under Section 31 binds the company, its creditors and other stakeholders. Recoveries under the plan are being contested among lenders, and the amounts available to financial creditors are far below the admitted claims involved. Shareholders of a company emerging from CIRP should follow subsequent disclosures on how the approved plan treats existing equity.

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