NCLT clears Rs 1,611-crore Shree Naman plan for Gstaad Hotels; secured lenders to recover 138.7% of claims

The Mumbai bench of the National Company Law Tribunal has approved a Rs 1,611-crore resolution plan submitted by Shree Naman Developers Private Limited for Gstaad Hotels Private Limited, the owner of the JW Marriott hotel on Bengaluru’s Vittal Mallya Road, in a rare insolvency outcome where every class of creditor is paid in full and the sole secured financial creditor walks away with substantially more than its admitted claim.

The bench of Prabhat Kumar (Technical Member) and Sushil Mahadeorao Kochey (Judicial Member) approved the plan under Section 31 of the Insolvency and Bankruptcy Code, 2016, in IA (IBC) (Plan) No. 42 of 2026 in CP (IB) 291 of 2023, and simultaneously dismissed an objection application filed by the suspended directors.

The resolution amount of Rs 1,611 crore sits 56.7% above the average liquidation value of Rs 1,028.33 crore and 28.8% above the average fair value of Rs 1,250.59 crore determined by the two registered valuers — an unusual position, since resolution plans in Indian CIRPs typically clear liquidation value but fall short of fair value.

Under the approved distribution, creditors will realise Rs 1,610.83 crore against admitted claims of Rs 1,175.76 crore — an overall recovery of 137.0% of admitted debt, driven almost entirely by post-commencement interest paid to the secured lender.

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The headline numbers

Particular	Amount
Resolution plan value	Rs 1,611.00 crore
Total claims received	Rs 1,573.59 crore
Total claims admitted	Rs 1,175.76 crore
Total realisable under plan	Rs 1,610.83 crore
Average fair value	Rs 1,250.59 crore (Rs 1,232.53 cr / Rs 1,268.64 cr)
Average liquidation value	Rs 1,028.33 crore (Rs 1,047.65 cr / Rs 1,009.01 cr)
CoC approval	98.96% voting share
Performance bank guarantee	Rs 161.10 crore, HDFC Bank, valid to May 13, 2027
Earnest money deposit per bidder	Rs 5 crore

Class-wise treatment

Class	Claimed (Rs cr)	Admitted (Rs cr)	Realisable (Rs cr)	Recovery on claim
Secured FCs (assenting)	1,123.60	1,123.28	1,558.35	138.69%
Unsecured FCs (no voting right)	387.53	0.82	0.82	0.21%
Unsecured FCs (dissenting)	14.72	11.84	11.84	80.37%
Government dues	1.41	1.41	1.41	100%
Employees (other dues)	0.0027	0.0027	0.0027	100%
Other operational creditors	46.33	38.40	38.40	82.90%
Total	1,573.59	1,175.76	1,610.83	102.37% (derived)

The single most striking line is the secured financial creditor row. Omkara Assets Reconstruction Private Limited, which holds 95.76% of the CoC voting share, is set to receive Rs 435.07 crore over and above its admitted claim (derived figure) — the accrued interest component running from the insolvency commencement date to the payment date. The objectors put this figure at Rs 435.60 crore in their pleadings.

At the other end, unsecured financial creditors without voting rights claimed Rs 387.53 crore but had only Rs 82.48 lakh admitted — roughly 99.8% of that claim category was rejected at the verification stage, a point the order does not explain and which is worth a separate line of reporting.

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Two admissions, one Supreme Court appeal, no stay

Gstaad Hotels reached plan approval only after an unusually contorted admission history.

The tribunal first admitted the company into CIRP on January 9, 2024, appointing Jayesh Sanghrajka as interim resolution professional. The suspended director appealed, and the NCLAT stayed the constitution of the CoC by an interim order dated January 24, 2024, freezing the process. On January 8, 2025, the NCLAT allowed Company Appeal (AT) (Insolvency) No. 165 of 2024, set aside the admission order and remanded the matter.

The bench admitted the Section 7 petition afresh on July 8, 2025, again appointing Sanghrajka. The promoters challenged that second admission before the NCLAT in Company Appeal (AT) (Ins.) No. 1040 of 2025, which was dismissed on August 19, 2025. An appeal to the Supreme Court remains pending, but no stay was granted — a point the bench relied on to hold there was no bar to the CIRP running to completion.

The underlying debt originates in a December 2017 term loan from Piramal Capital & Housing Finance, assigned to Omkara ARC on December 27, 2022. Omkara’s Section 7 petition, filed in March 2023, claimed a default of about Rs 666 crore as on February 27, 2023.

Forty bidders, thirteen plans, no challenge mechanism

The RP published Form G on August 30, 2025 and received 43 expressions of interest by the extended September 25 deadline. A final list of 40 eligible prospective resolution applicants was published on October 27, 2025, and 13 resolution plans were received on November 27, 2025.

Among the disclosed contenders was Juniper Hotels Limited, whose board approved participation in the CIRP on November 26, 2025 and which told the stock exchanges it was pursuing the asset as a distressed acquisition aligned with its premium hospitality strategy.

Notably, the CoC did not run a challenge mechanism. At its ninth meeting on December 24, 2025, it recorded that the plans differed materially in structure — treatment of cash balances, continuation of the Marriott arrangement, statutory dues, reliefs sought and the implementation reference date — and opted instead for bilateral negotiations, relying on discretion vested in it by the RFRP. Revised plans were submitted on March 12, 2026.

E-voting on May 10–11, 2026 returned 98.96% in favour. Omkara ARC (95.76%) and Global Hospitality Licensing S.A.R.L. (3.20%) assented; Kanazawa Holdings (0.91%) and Ahuja Finance (0.13%) abstained.

The plan: a hotel becomes mixed-use

The plan contemplates the corporate debtor continuing as a going concern, but with redevelopment and refurbishment of the hotel premises into a high-end mixed-use property comprising luxury hospitality, residential and retail/commercial space including fine dining and premium offices. Given that the asset is a 281-key JW Marriott operating under a management arrangement in Bengaluru’s central business district, the interaction between the redevelopment proposal and the operator agreement is an obvious follow-up.

The implementing entity will infuse Rs 1 crore for 10,00,000 equity shares of Rs 10 each. All existing equity and preference share capital — other than the newly issued shares — stands extinguished without consideration. Payments to stakeholders and all implementation steps must be completed within 30 days of the approval date, i.e. by October 3, 2026.

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Objections dismissed — but with two significant riders

Suspended directors Deepak B. Raheja and Anita D. Raheja filed IA (IBC)/2516/2026 raising 22 grounds, including defective CoC constitution, inflated claim admission, prohibited penal and compounded interest, personal use of the corporate debtor’s assets by the RP, and extinguishment of shareholder value despite a 138%-plus recovery to secured lenders.

The bench dismissed the application, holding that the objectors — who were also guarantors, promoters and majority shareholders — had notice of CoC meetings throughout and could have raised these issues earlier, and that no cogent material had been produced to show the CoC lacked relevant information.

On the merits it held that:

• The assignment of debt from Piramal to Omkara, including the ECLGS facility, could not be reopened, the Karnataka High Court having ruled in the financial creditor’s favour and the NCLAT having found no fault in the assignment.
• Alleged defects in the security trustee arrangement and perfection of security interest were irrelevant “as all the creditors, whether secured or unsecured, are being paid in full.”
• Kanazawa Holdings and Ahuja Finance are not related parties under Section 5(24) of the IBC. Ahuja Finance is a related party under Section 2(76)(iv) of the Companies Act because Anil Ahuja, brother of the corporate debtor’s director Sunil Ahuja, is its director — but Section 5(24)(d) requires the corporate debtor’s own director to be a director of the lender, which was not the case. Kanazawa’s link ran through Royal Investments Limited, which held under 20% of the corporate debtor. The bench relied on Phoenix ARC v. Spade Financial and EPC Constructions v. Matix Fertilisers for the proposition that accounting treatment does not determine the relationship.
• Late claims were validly admitted under Regulation 13(1B) read with 13(1C), delay having been condoned by the tribunal’s order of June 2, 2026.
• Unapproved CIRP cost falls outside the plan’s consideration and is not a material irregularity.

Reliefs granted and withheld

The bench applied Ghanshyam Mishra and Abhilash Lal, waiving additional ROC filing fees on capital reduction and fresh issue, directing the ROC to mark the company ‘Active’ and to accept physical filings if the portal blocks them, and exempting the company from using the words “and reduced.” It left the Income Tax Department at liberty to examine implications under Sections 2(24), 28, 56 and GAAR, and preserved the department’s right to examine carry-forward of losses — the company reported business loss carry-forward of Rs 69.01 crore, Section 35AD specified-business loss of Rs 625.78 crore and unabsorbed depreciation of Rs 2.25 crore for AY 2025-26.

Any relief sought but not expressly dealt with in paragraph 98(a)–(j) is deemed denied. Third-party contracts remain subject to counterparty consent. The moratorium ceased with effect from September 3, 2026.

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Timeline

Date	Event
Dec 26, 2017	Loan agreement with Piramal entities
Dec 27, 2022	Assignment of debt to Omkara ARC
Mar 2023	Section 7 petition CP (IB) 291/2023 filed
Jan 9, 2024	First admission order
Jan 24, 2024	NCLAT stays constitution of CoC
Jan 8, 2025	NCLAT sets aside admission, remands
Jul 8, 2025	Second admission; CIRP commencement
Jul 30, 2025	CoC constituted
Aug 19, 2025	NCLAT dismisses appeal against second admission
Aug 30, 2025	Form G issued
Oct 27, 2025	Final list of 40 PRAs; RFRP issued
Nov 27, 2025	13 resolution plans received
Jan 4, 2026	180-day CIRP period expires
Mar 12, 2026	Revised plans submitted
May 11, 2026	CoC approves plan (98.96%); LOI issued
May 18, 2026	Plan filed with AA — 134 days beyond 180-day mark
Jun 2, 2026	Tribunal condones delay, admits Rs 65.48 lakh of further claims
Sep 3, 2026	Plan approved — day 422 of CIRP

Also See: NCLT initiates insolvency proceedings against Gstaad Hotels over Rs 666 crore default