Suspended director wins back Sapphire Hospitals under IBC; lenders recover 11% of ₹213 crore dues

The Mumbai bench of the National Company Law Tribunal (NCLT) has approved a ₹26.25 crore resolution plan for Sapphire Hospitals Pvt Ltd. The plan was submitted by Dr Sanjiv Walanj, the Thane pulmonologist who is also the company’s suspended director. It hands the hospital company back to him at a fraction of its admitted debt and below its estimated liquidation value.

The bench of Anil Raj Chellan (Technical Member) and K. R. Saji Kumar (Judicial Member) approved the plan in an order dated August 10, 2026. The company’s committee of creditors (CoC) had voted 100% in favour of the plan. Less than three weeks before that vote, the same committee had voted to send the company into liquidation.

Recovery under the plan

Admitted claims against Sapphire Hospitals total ₹232.08 crore. Secured financial creditors account for ₹213 crore of that and will receive ₹23.36 crore. The two secured lenders will be paid as follows:

• Omkara ARC (77.06% of the vote): admitted claim ₹164.15 crore, will receive ₹18 crore.
• Unity Small Finance Bank (22.94%), formerly Punjab & Maharashtra Co-operative Bank: admitted claim ₹48.84 crore, will receive ₹5.36 crore. Unity’s Section 7 petition triggered the insolvency.

Other creditors get the following:

• Unsecured financial creditors: ₹1.70 crore admitted, nothing under the plan.
• Operational creditors: ₹2.72 crore admitted, ₹24.48 lakh under the plan.
• Workmen and employees: ₹71.33 lakh admitted, ₹6.42 lakh under the plan.
• Other unsecured creditors: ₹13.94 crore admitted, ₹55.77 lakh under the plan.

The plan also sets aside ₹1.25 crore for CIRP costs and ₹77.33 lakh for statutory dues, property taxes and other expenses it says are needed to maintain and restart the hospital. All creditors are to be paid within 16 weeks of approval.

The registered valuers put the company’s average fair value at ₹73.85 crore and its average liquidation value at ₹56.69 crore, more than double the plan value. Existing shareholders get nothing, and all 2.08 crore outstanding equity shares will be cancelled.

Liquidation vote reversed

Unity’s petition was admitted on January 27, 2023, with Prasad Dharap as interim resolution professional, later confirmed as resolution professional. The process soon stalled. The first invitation for expressions of interest, published in March 2023, drew no compliant plan. The CoC then cut the earnest money deposit (EMD) required from bidders from ₹5 crore to ₹5 lakh and issued a fresh invitation in July 2023.

Walanj was initially left out of the list of prospective resolution applicants because he had not deposited the EMD. He was later included, subject to his ₹5 lakh cheque being realised.

After that, the dispute over his bid went through several rounds:

• December 2023: The CoC rejected Walanj’s request to waive the EMD. With the 330-day limit for the process expiring on December 29, 2023, the RP applied for liquidation.
• April 2024: The CoC refused to accept a scanned copy of a ₹1 crore cheque from Walanj as EMD. He then asked the tribunal to waive the requirement and direct the CoC to consider his plan.
• February 2025: The CoC reversed its position. It waived both the EMD and the performance security that the CIRP regulations require from successful bidders.
• July 16, 2025: The CoC voted 77.06% to liquidate the company.
• August 4, 2025: At a meeting called to reconsider his plan, the CoC resolved not to act on the liquidation vote. It approved Walanj’s plan with 100% of the vote and rejected liquidation with the same majority.

The performance-security waiver came back to the CoC after the tribunal raised the issue in July 2026. The CoC then required security equal to 2.5% of the plan amount, and Walanj deposited ₹65.63 crore in two instalments on July 23 and 24.

The order says Sapphire Hospitals holds an MSME registration certificate dated August 10, 2020. For MSME corporate debtors, Section 240A of the Code relaxes some of the Section 29A bars that would otherwise stop a promoter or director of a defaulting company from bidding. Walanj has filed an affidavit confirming his eligibility under Section 29A.

Funding

Walanj will fund the plan through equity and unsecured loans, with asset sales possible if there’s a shortfall. The order also says that “Avenue Super Marts” is financially supporting the plan and has sent a board resolution and a confirmation letter for any asset sale.

A monitoring committee will oversee implementation. Its members are Walanj, a representative each from Omkara ARC and Unity Small Finance Bank, and Dharap. The tribunal refused concessions on stamp duty, taxes and registration charges, leaving Walanj free to approach the authorities concerned.

According to the order, Walanj founded Sapphire Hospitals’ 142-bed facility in Kalwa in 2016. He has practised as a chest consultant and intensivist in Thane for more than 25 years.

Also See: NCLT approves Hynite Farms’ ₹138.7-crore plan for stalled Greater Noida project Manorath