The National Company Law Appellate Tribunal (NCLAT) has overturned the National Company Law Tribunal’s (NCLT) orders regarding the forensic audit and change of resolution professional for Golden Tobacco, a debt-ridden cigarette manufacturer. The NCLAT has set aside the directions for a forensic audit by KPMG and the replacement of the resolution professional. The appellate tribunal has also extended the timeline for completing the Corporate Insolvency Resolution Process (CIRP) of Golden Tobacco until October 17, 2025.
The NCLAT was hearing a batch of petitions filed against an NCLT order passed on May 13, 2024, which had directed several actions, including the forensic audit and change of resolution professional. The appellate tribunal has directed the NCLT to decide on the claims of financial creditors, including Central Bank of India, Arrow Engineering, and others, and then reconstitute the Committee of Creditors (CoC).
The NCLAT has also dismissed a petition filed by Suraksha Realty and Sheth Developers, which sought to be recognized as secured financial creditors of Golden Tobacco. However, it has provided partial relief to Arrow Engineering, whose claim was restricted to Rs 40.75 crore. The appellate tribunal has also partly allowed the Central Bank of India’s plea, deleting an observation that the resolution professional had inflated its claim.
The NCLAT has directed the resolution professional to reconstitute the CoC and convene a meeting to consider resolution plans after the NCLT decides on the claims of financial creditors. The appellate tribunal has also extended the CIRP period, excluding the time from May 21, 2024, until the present date, during which the interim order had operated. The CIRP process is now expected to be completed by October 17, 2025.
Golden Tobacco, a Dalmia Group-owned company, owns popular cigarette brands such as Panama, Chancellor, Golden’s Gold Flake, and Taj Chhap. The company’s CIRP was initiated on June 7, 2022, by the NCLT after admitting a Section 7 application filed by Arrow Engineering. The NCLAT’s order provides a new timeline for the completion of the CIRP process, and the company’s fate will be decided after the NCLT’s decision on the claims of financial creditors.