NCLAT sets aside Zaveri Group's bid for Gujarat Hydrocarbons and Power SEZ

New Delhi: The insolvency appellate tribunal NCLAT has set aside Zaveri Group's resolution plan for Gujarat Hydrocarbons and Power SEZ Ltd (GHPSL) and directed the Resolution Professional and NCLT to start the process again by inviting fresh bids.

A two-member NCLAT bench observed that the bid submitted by Zaveri & Co was based on an "unverified and contested presumption" that the leasehold of the land owned by the Gujarat Hydrocarbons and Power SEZ Ltd (GHPSL) will be de-notified from Special Economic Zone (SEZ) status.

Setting aside an order of the Delhi-bench of the National Company Law Tribunal (NCLT), the appellate tribunal said that within two weeks of this order, it will issue fresh orders and appoint a new Resolution Professional to carry the process forward in terms of this judgment.


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"The Adjudicating Authority/Resolution Professional shall recommence the Corporate Insolvency Resolution Process (CIRP) of the Corporate Debtor (GHPSL) from the stage of issuance of a fresh Form G / invitation of Expression of Interest, on the basis of a corrected and complete Information Memorandum," said the National Company Law Appellate Tribunal (NCLAT) in its order dated August 31.

The NCLAT also upheld the locus of the Gujarat Industrial Development Corporation (GIDC) as a party. It was opposed by Zaveri & Co's claim as an Operational Creditor, which stood frozen on admission. Moreover, only SEZ authorities, not GIDC, could raise the question of the land's de-notification status.

However, NCLAT said GIDC had raised issues relating to the legality and feasibility of the plan and was not attacking the commercial wisdom of creditors.

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GHPSL was incorporated in August 2007 to develop a sector-specific Special Economic Zone (SEZ) for the oil, gas, energy and petrochemical sectors in Vilayat, Bharuch, Gujarat, in a 450-hectare land.

The insolvency resolution process was started after it defaulted on a Rs 100 crore loan facility granted by SREI Infrastructure Finance Ltd (SIFL).

NCLAT held that the resolution plan proceeded on the successful resolution applicant's (SRA's) "own stated assumption recorded in terms in the plan itself 'that because the Corporate Debtor does not presently appear on the published list of notified SEZs and the Development Commissioner has filed no claim in the CIRP, the SRA has "all the good reasons to believe that the SEZ de-notification is approved".

"The resolution plan of Zaveri & Co, proceeding on an unverified and contested presumption that the Demised Premises stand or will stand de-notified from SEZ to non-SEZ industrial use, without GIDC's consent as lessor and without the Development Commissioner's certificate, is not feasible or viable and its approval cannot be sustained," said NCLAT in its 84-page order.

Moreover, the Information Memorandum on which the bids were "invited and evaluated was materially erroneous in overstating SREI's claim, misclassifying the status of Assam Company India Ltd (ACIL), the corporate guarantor, and omitting material disclosures on the de-notification process.

"In these circumstances, the appropriate and only just course is to set aside the approval of the resolution plan and direct that the CIRP of the Corporate Debtor be recommenced from the stage of a fresh invitation of Expression of Interest, on a corrected and complete Information Memorandum," said NCLAT.

NCLAT also noted that the CIRP proceedings have not gone ahead smoothly, partly due to the errors which have crept into the information memorandum and also partly due to acceptance of the "exaggerated claims" and consequently defective information memorandum being published.

CIRP was started against GHPSL after NCLT admitted a Section 7 application on November 18, 2020, filed by its sole financial creditor, SREI Infrastructure, which had extended a Rs 100-crore credit facility in 2011.

Earlier, the NCLT had on February 19, 2025, approved Zaveri's bid worth Rs 135 crore, according to some reports.