NCLT clears ex-director’s Rs 18.23-crore bid for Raninga Paper Mills, but ring-fences Rs 20-crore-plus ‘NIL-value’ assets for SBI

The National Company Law Tribunal’s Ahmedabad bench has approved a Rs 18.23-crore resolution plan by Chandresh Lalitbhai Soni, a suspended director of Raninga Paper Mills Pvt Ltd, for the insolvent MSME. It also ruled that Soni will get no benefit from financial assets with a book value of more than Rs 20 crore that valuers had written down to zero because information was not provided.

In an order pronounced on September 24, a bench of Shammi Khan (judicial member) and Sanjeev Sharma (technical member) said the recovery from these assets would belong to State Bank of India. SBI is the company’s sole financial creditor and its only Committee of Creditors member. The bench directed the plan’s monitoring committee to gather full information on the assets from the company’s records, help SBI identify the people from whom collections are to be made, and report progress to the tribunal every month.

“We are of the view that none should benefit from the consequences of non-cooperation,” the bench said. It noted that the information “was in the specific knowledge of the suspended management” and asked how loans and advances and fixed deposits could be valued at NIL.

The two registered valuers had put a zero fair and liquidation value on inventory, sundry debtors, loans and advances, fixed deposits and deposits. One report shows those assets with a book value of Rs 25.85 crore and the other Rs 21.63 crore. Both valuers cited incomplete records. One noted that no financial statements had been prepared or approved for any period after March 31, 2023, and that the suspended management had not authenticated any balances.

The tribunal noted that the resolution professional had repeatedly asked Soni for explanations on account entries, and that he “provided limited information”. It also said the valuation reports were shared with the CoC but not with prospective resolution applicants. The information memorandum listed only land, buildings and plant and machinery. As a result, the bench said, the plan was based on those tangible assets alone, and the corporate debtor was valued lower because of the NIL assets. Since Soni bid treating those assets as worthless, he “will have no right or claim” over them, the order said.

The plan

SBI, whose admitted claim is Rs 29.59 crore, will receive Rs 16.85 crore under the plan. That works out to a recovery of about 57%. The bank gets Rs 8.25 crore within 30 days of the plan taking effect and Rs 8.60 crore by the 90th day. The plan also provides Rs 70 lakh for insolvency process costs.

The plan’s liquidation value was Rs 13.16 crore and its fair value Rs 20.87 crore. The resolution professional said the plan was about 38.5% above liquidation value. After implementation, Soni will hold 74% of the company and his funding partner Rajneesh Tiwari 26%. According to the order, the funding includes a confirmation from RARE Asset Reconstruction Pvt Ltd for release of an inter-corporate deposit of about Rs 13.85 crore. The plan also envisages about Rs 7.50 crore in capital expenditure within six months and Rs 15 crore in working capital. Soni has furnished a Rs 3-crore performance bank guarantee.

The company went into insolvency on July 29, 2025, on SBI’s petition. Because it is an MSME, Soni could invoke Section 240A of the Insolvency and Bankruptcy Code. That section exempts MSME bidders from two Section 29A bars, including the one aimed at promoters of defaulting companies. Six plans were received after a second round of bidding. In a challenge mechanism held on March 31, 2026, Soni was the only bidder. Three plans were found compliant: Soni’s, one from M/s Deep Chemical (Rs 14.11 crore) and one from Ajaybhai Chandulal Bhajda (Rs 12.06 crore). SBI approved Soni’s plan with 100% of the vote on May 21.

Objections rejected

Deep Chemical is an unsuccessful bidder and also an operational creditor, with unpaid supply bills of Rs 1.52 crore. Its proprietor, Harnesh Nareshbhai Mehta, argued that Soni’s antecedents had not been properly disclosed or considered. According to Deep Chemical, these include an FIR it lodged in March 2025 at Narol police station under the Bharatiya Nyaya Sanhita, Soni’s arrest and later bail from the Gujarat High Court, and pending cheque-bounce cases. Deep Chemical also challenged the transaction audit’s “nil” finding on avoidance transactions. It cited SBI’s February 2026 web notice, which set a Rs 25.05-crore reserve price for selling its stressed loan, as evidence that the company had been undervalued.

The bench held that Deep Chemical had limited standing to raise specific statutory objections but could not question the CoC’s commercial wisdom. It rejected the objections on merit. It said pending criminal cases do not bar a bidder under Section 29A(d) without a conviction. It found no subsisting disqualification of Soni as a director under Section 164(2)(a) of the Companies Act. It also said SBI’s reserve price belonged to a separate loan-sale process. Many of these findings were drawn from separate orders passed the same day. Those orders dealt with objections by Dhananjay Sanjay Agarwal, a shareholder and personal guarantor, and by operational creditor Anshu Anand Chaudhary.

The tribunal also refused any blanket waivers. It said any protection from criminal proceedings would operate only within the limits of Section 32A. It confirmed that SBI remains free to pursue personal guarantors. It directed that a copy of the order be sent to the Principal Chief Commissioner of Income Tax, Ahmedabad.

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