M/S LEAD FINANCIAL SERVICES LTD vs UNION BANK OF INDIA on 19 October 2026

1. Corporation Bank (now represented through respondent Union Bank of India) filed O.A. bearing no.74212018 now titled as Union Bank of India V. H.S. Bharana & others which is stated to be pending before DRT-III, Delhi. The appellant being the defendant no.2 in the O.A. filed I.A. bearing no.6412025 for taking Resolution Plan passed by NCLT on record and pass a preliminary adjudication order as to the satisfaction of liability of the corporate debtor in terms of Resolution Plan. DRT-III, Delhi vide the impugned order dated 26.03.2025 has partly allowed the I.A. bearing no.6412025 to the extent of taking on record the Resolution Plan. . However, another application bearing no.0212023 filed by the appellant was ordered to be dismissed. The appellant being aggrieved filed the present appeal.

2. Sh. Pallav Saxena, Advocate for the appellant stated that the main grievances of the appellant are the observations made by DRT as contained in para 4 and 8 of the impugned order dated 26.03.2025, which are reproduced as under:-

4. Considering the submissions advanced on behalf of Ld. counsels for both the parties to take on record the Resolution PIan approved by the Ld. NCLT, Bench-v, New Delhi, in CP(rB) No.190/2017, vide order dated 11.06.2024. The Resolution Plan, as submitted by M/s SA Infrastructure Consultants Pvt. Ltd., provides for the settlement of the admitted financial debts of the Corporate Debtor, M/s Era Infra Engineering Limited. However, it is a settled legal position, as affirmed by the Hon'ble NCLAT in its decision dated 24,01.2024, that the approval of a Resolution Plan does not automatically discharge the liability of corporate guarantors and third-party security providers unless expressly stated, In the present case, the applicant bank has contended that while it has received Rs.93.35 crores as of 16.12.2024 under the implementation of the Resolution Plan and an additional Rs.174 crores from defendant No.3, M/s Dore Realtors Private Limited pursuant to a settlement, a su bstantia I o utsta nding a mount ofRs.433,33,3 1,375/- remains recovera ble along with pendent lite interest, future interest. In view of the above, it is necessary for the Tribunal to assess the extent of residual liability, if any, of defendant NO.2 and other parties in the present OA. In tight of above discussions, it is appropriate to allow the present application to the extent of resolution plan to be taken on records. Hence IA No.6412025 is hereby partly allowed.

8. Furthermore, defendant No.2 had executed the Guarantee Agreements dated 23.03.2013 and 30.12.2013, thereby acknowledging its liability under the corporate guarantee. The objections raised in the application are, therefore, devoid of legal sustainability, particularly when the Original Application is still pending adjudication on its merits. Mere clerical mistakes cannot be equated with fraud or false representation, and no conclusive evidence has been brought forth to substantiate the allegations of fabrication. The present application appears to be a deliberate attempt to delay the adjudication of the OA and lacks any prima facie grounds to warrant intervention. Consequently, IA No.212023 is dismissed as being misconceived and devoid of merit.

3. Sh. Saxena funher argued that DRT be directed to decide O.A bearing no.74212018 without being influenced by any observation made by it in the impugned order dated 26.03.2025,particularly, in para4 and 8.

4. Sh. Alok Kumar, Advocate for the respondent no.l stated that the O.A. is already listed for 27.10.2026 for final arguments and during the hearing of O.A. the appellant had taken all the objections available to it besides filing written submissions which were also considered by DRT. Sh. Alok Kumar, to contovert the arguments advanced by Sh. Pallav Saxena, referred para 3 of the impugned order and stated that DRT in para 4 of the impugned order only refered as to the fact and decision of the NCLAT, dated 24.01.2025, that the approval of the Resolution Plan does not extinguish the liability of the corporate guarantor/third party. Sh. Alok Kumar, in response to the argument advanced by Sh. Saxena pertaining to para 8, referred para 6 stated that the corporate guarantee was executed on29.03.2014 and mere typographical error cannot extinguish corporate guarantee stated to have been executed by the appellant. He further stated that DRT shall pass the final order on merit of the case based on facts and law.

5. The perusal of the order dated 26.03.2025 reflects that DRT in para 4 of the impugned order only mentioned that NCLAT in its decision dated 24.01.2024has affirmed the settled legal position that the approval of a Resolution Plan does not autornatically discharge the liability of corporate guarantors and third-party security providers. Para 8 of the impugned order dated 26.03.2025 only related to a typographical error in mentioning the date of corporate guarantee agreement. The present appeal does not involve any error on the part of DRT and is accordingly dismissed. However, it is made clear that DRT while passing the final order in O.A. bearing no.74212018 shall be taking decision purely based on the merit of relevant facts and law and shall not be influenced by any observation made in any interlocutory or interim order unless and until it is necessary to mention. 9J- a )/ @r. Justice Sudhir Kumar Jain) Chairperson -pks