NCLAT Scraps Zaveri Resolution Plan for Gujarat Hydrocarbons SEZ; Orders Fresh Form G and Corrected Information Memorandum
The National Company Law Appellate Tribunal has set aside the resolution plan approved for Gujarat Hydrocarbons and Power SEZ Limited (GHPSL) and ordered the corporate insolvency resolution process to move forward again from the stage of inviting fresh expressions of interest. The August 31, 2026 decision is a significant reminder that a committee of creditors' commercial approval cannot cure a resolution plan that rests on unresolved legal or asset assumptions central to feasibility.
The appellate tribunal directed that a fresh resolution professional be appointed and that a new Form G process be undertaken on the basis of a corrected and complete Information Memorandum. The dispute arose from the plan submitted by Zaveri & Co. and approved earlier by the NCLT.
What NCLAT found problematic in the approved plan
A central issue was the treatment of the company's leasehold land and the assumption that the land would be de-notified from the special economic zone framework. Contemporary reporting on the judgment records that NCLAT considered the plan to be built around an unverified and contested presumption that such de-notification would occur.
That assumption was not peripheral. GHPSL was incorporated in 2007 for development of a sector-specific SEZ at Vilayat in Bharuch, Gujarat, and the leasehold land formed the core asset around which the resolution plan had to operate. NCLAT held that feasibility could not be assessed in isolation from the rights of the Gujarat Industrial Development Corporation as lessor and the regulatory requirements linked to the SEZ.
The tribunal also recognised GIDC's locus to challenge the plan. According to the judgment reporting, the plan could not realistically be implemented without the lessor's consent and the relevant certificate or action from the Development Commissioner for the proposed de-notification.
Information Memorandum errors were treated as material
The case also focused on the quality of the Information Memorandum supplied to prospective resolution applicants. NCLAT identified errors and omissions that went to the foundation of the bidding process rather than merely clerical details.
Among the issues recorded in the judgment coverage were an overstated claim relating to SREI, an incorrect description of Assam Company India Limited as a corporate guarantor and inadequate disclosure around the proposed de-notification of the SEZ land. If bidders are evaluating the company on incomplete or materially inaccurate information, the competitive process itself can be distorted because different applicants may price the same asset on different assumptions.
That is why the direction for a fresh Form G matters. Rather than simply sending the existing plan back for a limited correction, NCLAT required the process to restart at a point where potential applicants can evaluate a corrected Information Memorandum on an equal footing.
Background to the insolvency process
GHPSL's CIRP was admitted under Section 7 of the Insolvency and Bankruptcy Code on November 18, 2020. The financial relationship included a credit facility of about ₹100 crore extended by SREI in 2011. The NCLT had approved the Zaveri resolution plan on February 19, 2025; contemporary reports placed the plan value at about ₹135 crore.
The fresh appellate order changes the direction of that process. The tribunal required steps for a new resolution professional and a renewed invitation process instead of allowing the existing approved plan to proceed on the disputed asset and regulatory assumptions.
What resolution professionals, lenders and advisers should take from the ruling
- Asset assumptions need documentary support: where the plan depends on lease transfer, de-notification, licence continuation or regulator consent, the underlying legal pathway should be verified before feasibility is accepted.
- The Information Memorandum is foundational: claim amounts, guarantees, ownership rights, encumbrances and regulatory restrictions must be accurate enough for all bidders to price the opportunity on a comparable basis.
- Commercial wisdom has limits: creditor approval is important, but the plan must still satisfy the statutory requirements of the IBC and be capable of lawful implementation.
- Land and regulatory rights should be mapped early: for infrastructure, industrial park and SEZ entities, the value of the business can depend more on lease and regulatory permissions than on ordinary movable assets.
- A defective process can require a fresh market test: material information failures may justify a new Form G and fresh bids rather than a narrow amendment to the winning plan.
The GHPSL ruling is a useful diligence benchmark for insolvency professionals and financial creditors. Before approving a plan that assumes a change in land status, licence or regulatory character, the record should clearly show who must consent, whether that consent is legally available and whether every bidder has been given the same material information. A resolution plan may be commercially attractive, but if its core asset assumptions cannot be implemented lawfully, the process remains vulnerable to being reopened.
Official source: View the official source document
Key takeaway
NCLAT has set aside the approved Zaveri resolution plan for Gujarat Hydrocarbons and Power SEZ, directing a fresh Form G process after finding material problems in asset assumptions and the Information Memorandum.
