# In the matter of Puissant Towers India Pvt. Ltd. vs. Neueon Towers Limited Company Appeal (AT) (CH) (Ins) No. 181-2022

> NCLAT judgment dated 2023-06-12. Citation: TCN-2023-NCLAT-00444. This appeal challenges the order dated 14/10/2021 passed by the National Company Law Tribunal…

- **Court:** NCLAT
- **Order date:** 12 Jun 2023
- **Citation:** TCN-2023-NCLAT-00444
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/puissant-towers-india-pvt-ltd-vs-neueon-towers-limited-company-appeal-975df871

## Summary

### Background

This appeal challenges the order dated 14/10/2021 passed by the National Company Law Tribunal (NCLT), Hyderabad Bench, Hyderabad, in IA No. 1114/2020 in C.P.(IB)/679/7/HDB/2018, which dismissed the application filed by the Resolution Professional (RP) under Section 31(1) of the Insolvency and Bankruptcy Code (IBC), 2016, seeking approval of the Resolution Plan. The NCLT rejected the application because one of the co-resolution applicants was an Asset Reconstruction Company (ARC) and the NCLT believed that prior approval from the Reserve Bank of India (RBI) was required.

## Facts

The Committee of Creditors (CoC) approved a Resolution Plan with a 98.70% majority vote in its 27th meeting held on 19/10/2020. The Adjudicating Authority (NCLT) rejected the Resolution Plan because one of the co-resolution applicants was an Asset Reconstruction Company (ARC). The NCLT believed that prior approval from the Reserve Bank of India (RBI) was required for the ARC to participate in the resolution process. The Appellant argued that the ARC was not proposing to acquire any equity shareholding and that the other co-resolution applicants would solely acquire the shareholding and run the business. The Appellant also argued that Section 238 of the IBC would prevail over the SARFAESI Act if there were inconsistencies. The NCLT relied on previous judgments stating

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## Issues and analysis

### Issue 1: Whether an Asset Reconstruction Company (ARC), acting as a co-resolution applicant, requires prior …

**Ratio:** An ARC does not require prior approval of RBI for participating as a ‘resolution

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**Reasoning:** The Tribunal relied on the submissions of the Learned Counsel that an ARC does not

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**Interpretation:** This clarifies that the IBC allows ARCs to participate in the resolution

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**Application:** In this case, since the ARC's activities were not prohibited under the SARFAESI

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## Parties

- **Judges:** M. Venu…; Shreesha…
- **Appellants:** Puissant Towers…
- **Respondents:** Neueon Towers…

## Timeline

- **2018-01-01 — Initiation…**: CIRP initiated against Neueon Towers…
- **2020-10-19 — CoC Appr…**: Committee of Creditors approved the…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 61 — Appeals and Appellate Authority](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-61)

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