NCLT finds Reliance Communication arm’s Rs 3,000-crore-plus resolution plan unimplementable

The National Company Law Tribunal’s Mumbai Bench-I has held that the resolution plan for Reliance Communications Infrastructure Ltd, approved by the tribunal in December 2023, is unimplementable in its present form and directed the erstwhile committee of creditors (CoC) to decide the way forward. The bench, comprising Prabhat Kumar, Member (Technical), and Sushil Mahadeorao Kochey, Member (Judicial), directed the erstwhile resolution professional to convene a meeting of the erstwhile CoC within 30 days to consider the issue and decide the future course of action.

The order, passed on August 21, came on applications filed by IDBI Bank and the successful resolution applicant, Reliance Projects and Property Management Services Ltd – once a Reliance Industries promoted company. The Mukesh Ambani-promoted RIL divested its entire stake in Reliance Projects and Property Management Services Ltd (RPPMSL) for ₹274 crore to Jaipur Enclave Pvt Ltd (JEPL).

Rs 16.95-crore gap

The tribunal’s finding centres on the funds available to meet mandatory payments to dissenting financial creditors. The corporate debtor’s liquidation value was assessed at Rs 428.51 crore. Based on this, IDBI Bank’s entitlement under Section 53 of the Insolvency and Bankruptcy Code was calculated at Rs 48.22 crore, while the entitlement of all dissenting financial creditors together stood at Rs 318.67 crore.

Against this, the tribunal found that Rs 266.72 crore was available to meet these payments. This included Rs 57 crore to be paid by the resolution applicant, Rs 154.32 crore in cash and Rs 55.50 crore from realised real estate proceeds. The approved resolution plan capped any additional funding by the resolution applicant at Rs 35 crore. This took the total available funds to Rs 301.72 crore, leaving a shortfall of Rs 16.95 crore against the Rs 318.67 crore required.

However, the monitoring committee had earlier identified a higher shortfall of Rs 26.29 crore in meeting mandatory payments under the plan.

Dispute over Rs 195-crore Bhutan loan

The shortfall is linked to a dispute over distribution of the resolution proceeds. The resolution plan, approved by the CoC in August 2021 with 67.97% votes, envisaged payments including Rs 57 crore from the resolution applicant, use of cash available with the company, assignment of the Reliance Bhutan Loan with a face value of Rs 195 crore to financial creditors and proceeds from real estate monetisation.

The CoC later decided to assign the Bhutan loan to dissenting financial creditors. IDBI challenged the decision, and the NCLT in October 2025 held that the CoC could not alter the distribution mechanism without allowing creditors to reconsider their votes on the modified plan.

The NCLAT upheld the decision in December 2025. The matter is now under appeal before the Supreme Court. With the Bhutan loan assignment no longer available for distribution to dissenting creditors, the cash and realisation pool was insufficient to meet their statutory entitlement.

Tribunal pulls up resolution applicant

The tribunal also rejected the resolution applicant’s contention that it was not required to deposit the resolution money until the plan’s effective date.

It held that the plan required mandatory payments to dissenting creditors as a condition precedent to the effective date and that the resolution applicant was therefore required to deposit the money.

The bench also noted that the plan specifically provided that disputes between stakeholders over distribution would not affect implementation if they did not increase the overall resolution amount or the applicant’s liability.

The tribunal questioned why the monitoring committee had not issued a closing action notice to the resolution applicant after expiry of the statutory appeal period against the plan approval order.

RCom arm’s plan dates back to 2021

The resolution plan was submitted in July 2020 and amended subsequently. The CoC approved it on August 30, 2021, with 67.97% voting support. The NCLT eventually approved the plan on December 19, 2023.

The tribunal said it could neither direct the resolution applicant to deposit more than the Rs 35 crore additional funding permitted under the plan nor direct implementation of the plan without first making the mandatory payments to dissenting creditors. Either course, it said, would amount to modifying the approved plan.

Significantly, the bench said the case was not one of contravention of an approved resolution plan. Rather, “it is the terms of the plan itself which have rendered it unimplementable”.

The tribunal referred to Section 33(1A) of the IBC, which allows the erstwhile CoC to consider re-initiation of CIRP where an approved plan is contravened, and said the provision reflected the legislative intent of allowing a second attempt at resolution following a failed process.

It directed the erstwhile resolution professional to convene the erstwhile CoC within 30 days of the August 21 order to consider the unimplementability of the plan and decide the future course of action. The matter has been listed before the tribunal on September 24.

Reliance Communications Infrastructure Ltd was admitted to CIRP on September 25, 2019.

Reliance Communications Ltd disclosed the NCLT order to the stock exchanges on August 22. It said no specific violation or contravention had been alleged against it in the order and that the financial and operational impact, if any, was not presently quantifiable.

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