NCLT Approves ARK Industries Plan With 0.51% Realisation on ₹215.39 Crore Admitted Claims
The National Company Law Tribunal's Mumbai Bench-I has approved the resolution plan for ARK Industries Private Limited, a case that presents a striking contrast between the value available in the distressed company and the scale of creditor claims. The order, pronounced on September 4, 2026 in IA (IBC) (Plan) No. 11 of 2026 in CP (IB) No. 102 of 2025, approves the plan submitted by Sanjay Punglia together with Farmswipe Private Limited as the person acting in concert.
The tribunal records total admitted claims of about ₹215.39 crore, while the amount proposed to be realised by stakeholders under the plan is about ₹1.10 crore. In percentage terms, the order states that the stakeholder realisation equals 0.51% of total admitted claims. At the same time, the same ₹1.10 crore realisable amount is stated to be 1,053.52% of the company's fair value and liquidation value, each recorded at about ₹10.45 lakh. The case therefore illustrates why recovery percentages under the Insolvency and Bankruptcy Code need to be read alongside the value actually available in the corporate debtor.
CoC approved the plan with 100% voting share
ARK Industries entered the corporate insolvency resolution process through an admission order dated January 8, 2025. The resolution professional, Vivek Satyaprakash Jalan, later invited expressions of interest and the process produced multiple prospective applicants. The order records that five EOIs were initially received, with three names appearing on the final list of prospective resolution applicants. Two resolution plans were ultimately received, but one competing applicant later withdrew from further participation.
Sanjay Punglia, acting together with Farmswipe Private Limited, submitted an updated resolution plan dated January 2, 2026. The Committee of Creditors considered it at its tenth meeting on January 12 and approved it with 100% voting share through e-voting conducted from January 15 to January 29, 2026. Canara Bank held 99.06% of the CoC voting share, while Irabati Tie-Up Private Limited held 0.94%.
₹1.10 crore for stakeholders, plus CIRP cost and working-capital commitments
The order sets the total realisable amount for stakeholders at ₹11,004,300. Separately, the plan earmarks ₹25 lakh for CIRP costs, payable in priority. The tribunal also records that the resolution applicant proposes a total plan funding amount of ₹1,35,04,300, consisting of ₹50 lakh from its own sources and ₹85,04,300 through unsecured loans from relatives and funds. In addition, the plan contemplates infusion of ₹2 crore toward working-capital requirements of the corporate debtor as and when required.
The distribution table shows the scale of the haircut across creditor classes. Secured financial creditors had admitted claims of about ₹115.26 crore and are allocated about ₹1.09 crore, or 0.95%. Unsecured financial creditors had admitted claims of ₹1.092 crore and are allocated about ₹1.03 lakh, also 0.95%. Government operational-creditor claims admitted at about ₹95.45 crore are allocated ₹2,000. The plan also provides small payments against admitted claims of other operational creditors identified in the order.
The tribunal records aggregate claims of about ₹219.58 crore and aggregate admitted claims of about ₹215.39 crore. Existing equity share capital is to be extinguished as part of the restructuring contemplated by the approved plan.
Why the 0.51% figure needs context
The headline recovery of 0.51% is exceptionally low when compared only with admitted claims. But the tribunal's own valuation comparison provides essential context: the ₹1.10 crore stakeholder realisation is more than ten times the recorded fair and liquidation value of approximately ₹10.45 lakh. This does not eliminate the economic loss suffered by creditors, but it shows that a recovery percentage measured against debt can tell a very different story from a recovery measured against the value of the insolvency estate.
For insolvency professionals, lenders and finance teams, the case is a reminder to examine at least three numbers together: admitted claims, liquidation value and the amount actually offered under the resolution plan. A large haircut may coexist with a plan that still materially exceeds liquidation value where the corporate debtor has a very small asset base relative to its liabilities.
Tax losses and past statutory non-compliance remain subject to law
The order also contains several points relevant to tax and compliance professionals. The plan sought enabling treatment for carry-forward and set-off of business losses and unabsorbed depreciation. The tribunal noted that the return filed for FY 2018-19 reflected carried-forward figures, while returns for FY 2019-20 and subsequent years had not been filed even though statutory audits had been completed.
Importantly, the NCLT did not give the successful applicant a blanket tax waiver. It stated that carry-forward of losses and unabsorbed depreciation would remain subject to the Income-tax law and the Income Tax Department would be free to examine the position. The order similarly allows tax authorities to examine accounting-treatment implications, including under the relevant charging and anti-avoidance provisions, and permits GST or VAT authorities to examine any proposed carry-forward of input tax credit.
The order also addresses company-law clean-up after approval. It directs that necessary forms and prescribed fees relating to capital changes be filed, while providing that the Registrar of Companies should update the corporate debtor's status to active on filing pending returns and forms with normal fees rather than additional fees. Statutory appointments and other compliance steps are to be completed within the period contemplated by the plan and the order.
What professionals should track during implementation
- Payment sequencing: CIRP costs have priority, and stakeholder payments are linked to the timeline defined in the approved plan.
- Tax attributes: business losses, unabsorbed depreciation and indirect-tax credits are not automatically preserved merely because the plan is approved.
- ROC regularisation: pending company-law filings and capital-restructuring forms still require implementation action.
- Working capital: the proposed ₹2 crore infusion should be distinguished from the ₹1.10 crore amount distributed to stakeholders and the ₹25 lakh CIRP-cost provision.
- Recovery analysis: advisers should compare the 0.51% recovery against admitted debt with the much higher recovery relative to the stated liquidation value before drawing conclusions about plan economics.
The September 4 order approves a plan that gives stakeholders about ₹1.10 crore against ₹215.39 crore of admitted claims, yet delivers more than ten times the corporate debtor's recorded liquidation value. For CAs, insolvency professionals and lender teams, the useful lesson is not simply the size of the haircut. The implementation file should separately track creditor distributions, CIRP costs, fresh working capital, tax attributes, ROC filings and the legal conditions attached to each relief rather than treating NCLT approval as an automatic clean slate for every statutory issue.
Official source: View the official source document
Key takeaway
NCLT Mumbai has approved ARK Industries' resolution plan, with about ₹1.10 crore earmarked for stakeholders against ₹215.39 crore of admitted claims while the plan value remains more than ten times the recorded liquidation value.
