Setubandhan Infra CIRP: NCLT Rejection Sparks NCLAT Appeal, Results Delayed

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AuthorAditi Singh|Published at:
Setubandhan Infra CIRP: NCLT Rejection Sparks NCLAT Appeal, Results Delayed
Overview

Setubandhan Infrastructure Limited remains entangled in Corporate Insolvency Resolution Process (CIRP) following the NCLT's rejection of its resolution plan. With an appeal filed at the NCLAT, the company cannot submit crucial financial results for FY25 and H1 FY25, citing a lack of records from the erstwhile management and an auditor's disclaimer. This ongoing insolvency proceeding and non-compliance highlight significant operational and governance challenges.

Setubandhan Infrastructure Limited Faces Continued Uncertainty Amidst CIRP and Filing Delays

Setubandhan Infrastructure Limited's resolution plan was rejected by the NCLT on March 24, 2025, leading to an appeal filed with the NCLAT on July 09, 2025.
Consequently, the company cannot submit its audited financial results for the year ended March 31, 2025, and unaudited results for the half-year ended September 2024 due to ongoing CIRP and lack of records.

Reader Takeaway: NCLAT appeal filed seeking resolution; management's non-cooperation and auditor disclaimer create uncertainty.

What just happened (today’s filing)

Setubandhan Infrastructure Limited has informed the exchanges that it is unable to submit its audited financial results for the year ended March 31, 2025, and unaudited results for the half-year ended September 2024.

The inability stems from the ongoing Corporate Insolvency Resolution Process (CIRP) initiated in November 2022. The company's resolution plan, approved by the Committee of Creditors, was rejected by the National Company Law Tribunal (NCLT) on March 24, 2025.

An appeal against this rejection was subsequently filed with the National Company Law Appellate Tribunal (NCLAT) on July 09, 2025. Compounding the issues, the erstwhile management has persistently failed to provide essential financial records, hindering the Resolution Professional's efforts.

Adding to the compliance challenges, the statutory auditors have issued a disclaimer in the standalone audit report due to non-receipt of audit reports from subsidiaries, making it impossible to comment on consolidated statements.

Why this matters

For investors, the inability to access audited financial results means a significant lack of transparency regarding the company's financial health and performance. This delay prolongs the uncertainty surrounding the resolution process and potential future outcomes.

The ongoing CIRP means the company's board powers remain suspended, with operations primarily focused on the resolution process rather than business expansion or routine management.

The failure of the erstwhile management to provide records underscores governance concerns and potential deep-seated issues that continue to plague the company even under insolvency proceedings.

The backstory (grounded)

Setubandhan Infrastructure Limited, formerly Prakash Constrowell Limited, has been in CIRP since November 28, 2022, initiated by the State Bank of India. The company, which operates in infrastructure development and civil construction, offers integrated EPC services.

The NCLT's rejection of the resolution plan on March 24, 2025, followed by the NCLAT appeal filing on July 09, 2025, highlights the complex legal battles involved. Interestingly, in a development that could influence the appeal, the NCLAT on July 11, 2025, overturned a similar NCLT rejection for Univastu India Limited's plan for Setubandhan Infra, directing reconsideration and emphasizing the CoC's commercial judgment.

The company faces additional hurdles as depositories and registrars have ceased providing shareholding data due to non-payment of fees by the previous management.

What changes now

  • The company continues to operate under the supervision of the Resolution Professional, Sandeep D. Maheshwari.
  • Shareholders face prolonged uncertainty regarding the resolution of the company's insolvency.
  • The powers of the erstwhile Board of Directors remain suspended.
  • The focus shifts entirely to the legal and resolution processes at the NCLAT and NCLT.

Risks to watch

  • Continued Insolvency Proceedings: The NCLAT appeal could lead to further protracted legal battles, delaying any resolution.
  • Lack of Financial Transparency: The inability to file financial results means investors cannot assess the company's current performance or financial position.
  • Management Non-Cooperation: The persistent failure of the erstwhile management to provide essential records poses a significant risk to the resolution process.
  • Auditor Concerns: The disclaimer on consolidated statements raises questions about the accuracy and completeness of the company's overall financial reporting.
  • Regulatory Compliance: Ongoing delays in submitting mandatory filings could attract further scrutiny from regulatory bodies.

Peer comparison

Setubandhan Infrastructure operates in the construction and engineering sector, an industry that has seen several companies undergo significant financial distress. Peers like IRB Infrastructure Developers Ltd. and Kalpataru Projects International Ltd. are major players in infrastructure development. Other construction firms such as Jyoti Structures Ltd., Unity Infraprojects Ltd., IVRCL Ltd., and Pratibha Industries Ltd. have previously faced or are currently undergoing insolvency proceedings.

While competitors like Ircon International Ltd. remain active in public sector infrastructure projects, Setubandhan Infra's current CIRP status places it in a unique and challenging position.

Context metrics (time-bound)

  • Setubandhan Infrastructure Limited has been under Corporate Insolvency Resolution Process (CIRP) since November 28, 2022.
  • The company's resolution plan was rejected by the NCLT on March 24, 2025.
  • An appeal against this rejection was filed with the NCLAT on July 09, 2025.

What to track next

  • Updates from the NCLAT regarding the appeal against the resolution plan rejection.
  • Progress on obtaining essential financial records from the erstwhile management.
  • Any timeline set by regulatory bodies or the NCLAT for the submission of delayed financial results.
  • Developments concerning the status of Univastu India Limited's resolution plan, given the NCLAT's directive for reconsideration.
  • The outcome of the CIRP and potential restructuring or liquidation.
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