Intimation of Judgement passed by the NCLAT
Awaiting price reaction for this filing.
Prabhat Technologies, currently under Corporate Insolvency Resolution Process (CIRP), informed the stock exchange that the NCLAT has set aside the NCLT Mumbai order dated 9 January 2024, which had directed liquidation of the company. The NCLAT found the NCLT order to be non-speaking and against principles of natural justice, as the resolution applicants were never given a chance to respond to fraud allegations raised by SBI. The committee of creditors (CoC) had earlier approved a resolution plan worth Rs 77.98 crore with a 98.15% majority, while the liquidation value was only Rs 23.45 crore. SBI had unilaterally withdrawn its consent citing a title dispute over one property (Girgaon flat) valued at just Rs 90 lakh — only 1.5% of the resolution value. The matter has been sent back to NCLT for a fresh, reasoned decision preferably within 8 weeks.
This is a positive development for shareholders and the resolution applicants, as the liquidation order has been effectively stayed and the company gets another shot at getting its resolution plan approved. However, the company remains under CIRP and final resolution is still pending, keeping uncertainty around the stock.