NCLT Approves ₹7.42 Crore Resolution Plan For Central Departmental Stores Despite ₹560 Crore Claims By Central Bank Of India

Mumbai: The Mumbai bench of the National Company Law Tribunal (NCLT) has approved a resolution plan of Rs 7,42,77,830 submitted by Fincare Enterprises for Central Departmental Stores Private Limited.

Financial Creditor’s ₹560 Crore Claims Rejected During Resolution Process

The resolution professional has rejected the admitted claims of Rs 560 crore made by the financial creditor, Central Bank of India. However, under the approved resolution plan, only Rs 7,42,77,830 has been approved.

“As per the approved resolution plan, the total Resolution Plan Value is Rs 7,42,77,830, which is bifurcated into upfront cash consideration and deferred consideration on recovery basis, at actuals,” the order copy reads.

NCLT Bench Finds Plan Compliant With IBC Regulations

A Bench comprising Member (Technical) Prabhat Kumar and Member (Judicial) Sushil Mahadeorao Kochey approved the plan on July 2, 2026, observing that it complied with the requirements of the Insolvency and Bankruptcy Code (IBC) and the Corporate Insolvency Resolution Process (CIRP) Regulations.

The CIRP of Central Departmental Stores commenced on September 24, 2024, following the admission of a Section 7 petition. The Committee of Creditors (CoC) comprised only Central Bank of India, an unsecured financial creditor. Two resolution applicants submitted plans, with Fincare Enterprises ultimately emerging as the successful applicant.

₹7.42 Crore Plan Includes Cash Payment And Future Recoveries

The CoC approved its plan with a 100% voting share. The approved plan has a total value of Rs 7.42 crore, comprising a cash component of Rs 1.24 crore and recoveries at actuals. Of this, Central Bank of India is to receive an upfront payment of Rs 1.2375 crore, after adjustment towards the CIRP cost, along with recoveries from the proposed sale of shares held in Niyman Mall Management Pvt. Ltd. and recoveries from avoidance transactions.

The admitted claims against the corporate debtor stood at about Rs 560.57 crore, including Rs 381.62 crore in corporate guarantee claims and Rs 178.94 crore towards interest and penalty. The company's fair value was assessed at Rs 20.80 crore, while its liquidation value was Rs 16.37 crore.

Legal Expert Explains Difference Between Claims And Approved Recovery

An advocate, on condition of anonymity, while explaining the difference in the recovery amount, said, “Normally, if the valuation amount of the company is lesser than the actual claim amount, in that case, the tribunal initially proceeds with the initial amount as approved by the resolution professional. The resolution professional will work on the actual amount which can be officially paid by the corporate debtor, which also includes the value of the property. However, the further big amount which remains pending, which is not reflected in the records, then comes into the picture if there is a requirement for the company’s profile to be examined by the investigating agencies.”

The tribunal noted that the resolution plan provides for a monitoring committee comprising the resolution professional, an authorised representative of Fincare Enterprises and a representative of Central Bank of India. The committee will supervise implementation, after which management will be handed over to the resolution applicant.

The NCLT directed Fincare Enterprises to pay the balance upfront amount within seven days of communication of the order. It also clarified that recoveries from the shares of Niyman Mall Management would benefit the unsecured financial creditor, with the 30-month period mentioned in the plan to be treated as directory.

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