He had sat in three earlier meetings. At the one where the plans were opened, he was asked for the paperwork

Resolving a split at the Chennai bench, Naresh Salecha held that the confidentiality undertaking recognised in Vijay Kumar Jain is how a suspended board gets access to a resolution plan, not a formality that past practice can waive.

A suspended director of NSL Nagapatnam Power and Infratech sent his representative to the meeting at which the Committee of Creditors would consider three competing resolution plans for the first time. The representative was turned away because he had not filed a written authorisation or a confidentiality undertaking. A Division Bench at Chennai split on whether that was lawful. The third member has now broken the tie in favour of the resolution professional, holding that the undertaking the Supreme Court contemplated in Vijay Kumar Jain is the mechanism that makes access possible, not a formality that can be waived.

The dispute

NSL Nagapatnam Power and Infratech Limited has been in insolvency since 2017. By July 2024, when its Committee of Creditors met for the twentieth time, the process was in its seventh year.

Mandava Prabhakar Rao, a suspended director of the company, had been represented at the 10th, 18th and 19th meetings by Mr Nelluri Bapuji. On 12 July 2024 the notice for the 20th meeting went out, and it specifically drew attention to three requirements: prior intimation of the identity of the authorised representative, a valid authorisation, and a confidentiality undertaking. On the day of the meeting — 16 July 2024 — none of those documents had been furnished. Mr Bapuji was excluded from the residual proceedings.

Those residual proceedings were not routine. Three competing resolution plans were to be placed before the Committee and considered for the first time. The plan of Rungta Mines Limited was eventually approved, and the Hyderabad bench of the National Company Law Tribunal approved it by a common order of 27 May 2025, dismissing the suspended director's applications. Two appeals followed to the Chennai bench of the Appellate Tribunal.

The Tribunal below had dismissed the suspended director's two applications with costs quantified at ₹5,00,000. One appeal attacks the 20th meeting, at which the Rungta Mines plan was considered and then approved by 85.35 per cent of the Committee on e-voting that closed on 1 August 2024. The connected appeal attacks the 21st and 22nd meetings, held on 23 September and 18 December 2024.

On 10 November 2025 the Division Bench at Chennai — Justice Sharad Kumar Sharma, Member (Judicial), and Mr Jatindranath Swain, Member (Technical) — recorded a difference of opinion. It did so on the very first date of hearing, before formal notice had even been issued to the parties. The points of difference went to a third member, and this opinion is his.

What happened in the fifteen minutes, and the fortnight after

Mr Bapuji was directed to leave roughly fifteen minutes into the 20th meeting. The reason the resolution professional gave was that he held neither a written authorisation from the appellant nor a confidentiality undertaking, both of which the professional took to be necessary before confidential resolution plans could be discussed in his presence.

What followed matters more than the exclusion. The appellant furnished the confidentiality undertaking on 25 July 2024. On 29 July the professional sent him the minutes of the 20th meeting together with the connected documents — leaving three clear days before the e-voting window closed on 1 August. The appellant filed his application before the adjudicating authority on 12 August. While it was pending, the 21st and 22nd meetings were convened, and he neither attended the 22nd nor raised any objection to it.

What divided the Bench

The split turned on a single word in Regulation 21(2) of the insolvency resolution process regulations. The Judicial Member read "shall" as making prior intimation of the representative's identity, a valid authorisation and a confidentiality undertaking into mandatory preconditions of participation. The notice had flagged all three, the documents were admittedly not furnished, and on that view participation at three earlier meetings could create no vested or continuing right to attend this one.

A reference of this kind is not an appeal at large. The third member confined himself to the specific points of difference, as the proviso governing references to a third judge requires, and framed three issues: whether the exclusion was justified and legally sustainable; whether furnishing the resolution plan and connected documents only after receipt of the confidentiality undertaking is consistent with the law declared in Vijay Kumar Jain; and whether, taking a holistic view of the record and the appellant's own conduct, the 20th, 21st and 22nd meetings and the plan approved pursuant to them call for interference.

The doctrinal anchor: what Vijay Kumar Jain actually decided

The appellant's case rested on the Supreme Court's recognition that a suspended board is entitled to the resolution plan. The third member's answer is that the same judgment supplies the condition on which that entitlement operates.

Vijay Kumar Jain did not hold that resolution plans must be furnished unconditionally or without safeguards. It expressly recognised the resolution professional's authority to take an undertaking of confidentiality from members of the erstwhile board — in the form of a non-disclosure agreement under which the professional can be indemnified if the information is not kept strictly confidential. The undertaking was contemplated as the means of reconciling two competing considerations: the entitlement of the former directors to see the plan, and the legitimate need to keep its contents confidential. It is integral to the reconciliation, not an optional formality.

Read that way, the professional was not withholding anything. He was asking for the thing the Supreme Court said he was entitled to ask for, before handing over documents the Supreme Court said should be handed over.

The argument from past practice fared no better. That a requirement had not been insisted upon at earlier meetings of a different character cannot operate as a waiver when the Committee is called upon to consider material of a significantly higher degree of confidentiality. The 20th meeting stood on a materially different footing precisely because three competing plans were to be deliberated for the first time. An administrative practice adopted in circumstances of lesser sensitivity does not override an express requirement in Regulation 21(2), and the professional was not precluded from insisting on compliance at the stage when the plans were to be discussed.

Procedure, prejudice, and what actually follows from a breach

The third member then addressed the question that decides most procedural challenges and is too often skipped: suppose the requirement had been applied too strictly — so what?

For that he went to State Bank of Patiala v. S.K. Sharma, where the Supreme Court held that an order made in violation of rules governing an enquiry should not be set aside automatically, and that the first question is whether the provision violated is substantive or procedural in character. A substantive provision must be complied with, and neither substantial compliance nor the test of prejudice applies to it. A procedural one is different.

From that the opinion draws the proposition it needs. A departure from a procedural requirement does not by itself vitiate the proceeding unless actual and demonstrable prejudice is shown. The relevant enquiry is whether the complaining party was, in substance, denied a fair and effective opportunity to present its case — not whether a procedural requirement was imperfectly complied with in form. There is, in his words, no concept of automatic invalidation.

On this record no such prejudice was established. The appellant had notice of exactly what was required, four days in advance, and did not supply it. When he did supply it, the documents reached him with three clear days still to run before the vote closed. He then chose not to attend the 22nd meeting at all.

The money question

What makes the third issue decisive is that there is no longer a plan merely awaiting approval. The Rungta Mines plan was approved on 27 May 2025, and the successful applicant, the Committee, the company and its other stakeholders have all proceeded on the footing of that approval. Implementation has been completed.

By the time of the 20th meeting the insolvency had been running more than six years. Setting aside an approved and fully implemented resolution plan on a procedural objection which, on examination, establishes no denial of a substantive opportunity would have consequences reaching well beyond the alleged irregularity, and would be inconsistent with the time-bound and value-preserving framework of the Code. The third member was careful to record that this conclusion rests on the objective sequence of events in the record and amounts to no finding of mala fides against the appellant.

The closure report was taken on record by the adjudicating authority on 10 February 2026, and the management and control of the company have vested in the successful applicant. That is a different world from the one the Division Bench was looking at in November 2025, when the appeals were still at an interlocutory stage against an order of approval.

Rungta Mines had asked to be impleaded in the reference. It was held unnecessary to formally implead it; its caveat was taken on record and its written submissions of 24 August 2026 were considered to the extent relevant to its interest.

Outcome

The third member held that the proceedings of the 20th, 21st and 22nd meetings of the Committee, and the resolution plan of Rungta Mines Limited approved pursuant to them, do not warrant interference, and that the common order of 27 May 2025 dismissing the two applications calls for no interference either.

He concurred in entirety with the opinion of the Member (Judicial), so the appeals fall to be disposed of in terms of the majority opinion. His opinion is to be read together with the two opinions of 10 November 2025. The registry was directed to place it, with the record, before the Officiating Chairperson or the Division Bench at Chennai that originally heard the appeals, for the final order to be passed in accordance with law.