NCLT approves Fincare Enterprises Rs 7.43-cr plan for Central Departmental Stores
The Mumbai bench of the National Company Law Tribunal (NCLT) has approved a Rs 7.43 crore resolution plan submitted by Fincare Enterprises for Central Departmental Stores Pvt Ltd, offering a sharply lower recovery to creditors against admitted claims of Rs 560.74 crore.
The resolution plan, approved on July 2, 2026, was approved by the Committee of Creditors (CoC) with 100% voting. Central Bank of India, the sole member of the CoC and an unsecured financial creditor, had admitted claims of Rs 560.58 crore.
Under the plan, Central Bank will receive an upfront payment of Rs 1.24 crore, after adjustment of the insolvency resolution process (CIRP) costs, along with recoveries from the sale of shares held by the corporate debtor in Niyman Mall Management Pvt Ltd. The plan provides for distribution of recoveries received within 30 months of the NCLT’s approval among unsecured financial creditors. It also provides for full recovery from any avoidance transactions under the Insolvency and Bankruptcy Code (IBC).
The total resolution plan value is Rs 7.43 crore, comprising upfront cash consideration and deferred consideration linked to recoveries. However, the tribunal noted that the immediately realisable amount, based only on the visible cash component, was Rs 1.24 crore, equivalent to just 5.95% of the company’s average fair value of Rs 20.80 crore and 7.56% of its average liquidation value of Rs 16.37 crore.
The corporate debtor’s total admitted claims stood at Rs 560.74 crore, including Rs 560.58 crore of corporate guarantee claims and Rs 16.67 lakh of other operational creditor claims. The resolution plan provides for total payments of about Rs 1.24 crore to creditors, apart from contingent recoveries.
The insolvency process began in September 2024 after the NCLT admitted a petition filed by Central Bank of India under Section 7 of the IBC. The CoC comprised only the bank. Two prospective resolution applicants eventually submitted plans — a consortium of Resurgent India Ltd and Sanjay Lodha, and a consortium involving Fincare Enterprise and Sonal Sumit Mehta. The former did not revise its offer, leaving Fincare as the successful applicant.
Fincare Enterprises is a partnership firm of Sonal Sumit Mehta and Sumit Mehta. The tribunal recorded that it had no relationship with the corporate debtor and was eligible to submit the resolution plan. Its net worth was Rs 15.96 crore as of March 31, 2024.
As part of the restructuring, the existing equity share capital of Central Departmental Stores will be extinguished. Fincare and its associates, nominees or affiliates will subscribe to 10 lakh new equity shares of Rs 10 each, aggregating Rs 1 crore. The company’s management will initially be overseen by a monitoring committee comprising the resolution professional, a representative of Fincare and Central Bank of India.
The NCLT directed Fincare to pay the balance upfront amount within seven days of communication of its order. It also directed the resolution professional to supervise implementation and submit periodic status reports to the tribunal. With the approval of the plan, the moratorium under Section 14 of the IBC ceased to operate. The tribunal said the plan met the requirements of Section 30(2) of the IBC and the relevant CIRP regulations and approved it under Section 31 of the Code.
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