KSS Limited Resolution Plan Approved by NCLT; Moratorium Ceases, Stakeholder Rights Defined

KSS Limited Resolution Plan Approved by NCLT; Moratorium Ceases, Stakeholder Rights Defined​

The National Company Law Tribunal (NCLT), Mumbai Bench, has passed consequential orders giving effect to the approval of the Resolution Plan for KSS Limited, marking a major milestone in the company's Corporate Insolvency Resolution Process (CIRP). The order confirms that the plan, submitted by Micro Capitals Private Limited, is now binding on all stakeholders, and the moratorium under Section 14 of the Insolvency and Bankruptcy Code has ceased to have effect as of August 5, 2026.

The NCLT decision formalized key aspects of the resolution, which was initially approved by the Committee of Creditors (CoC) in October 2023 and subsequently confirmed by the NCLAT on June 30, 2026. The Tribunal's order stipulated that the Resolution Plan would be binding on KSS Limited, its employees, members, creditors, the Central Government, state governments, local authorities, guarantors, and all other stakeholders involved in the resolution.

Crucially, the order clarified that all claims not forming part of the approved Resolution Plan shall stand extinguished, aligning with judicial precedents. The Memorandum of Association (MoA) and Articles of Association (AoA) of KSS Limited are mandated to be amended and filed with the Registrar of Companies, Mumbai, Maharashtra, and the company's share capital must be reorganized according to the plan's provisions.

Financial Structure and Stakeholder Impact​

The approved Resolution Plan entails a significant restructuring and recapitalization aimed at reviving KSS Limited as a going concern. The plan provides for a total settlement outlay of Rs. 3,01,00,000 against an aggregate of claims admitted in the CIRP amounting to Rs. 1,21,61,08,617.03.

The restructuring includes substantial financial provisions and commitments:

Capital Restructuring and Future Outlook​

The plan mandates a complete change in management and control, with Micro Capitals Private Limited appointed as the new promoter. The Resolution Applicant (SRA) will subscribe to 3,00,00,000 equity shares at par, aggregating Rs. 3,00,00,000, representing approximately 95.00% of the post-CIRP capital.

The pre-CIRP public shareholders, who held 100.00% of the company's equity shares (2,13,58,75,070), will have their holdings reduced/consolidated. Public shareholders will be issued one equity share of Re. 1 for every 1,400 existing equity shares, which is projected to aggregate approximately 5.00% of the post-CIRP capital.

The company’s operational strategy focuses on revival as a going concern through financial and operational restructuring. Projections released within the plan anticipate substantial growth, with revenue expected to grow from Rs. 18.00 crore in Year 1 to Rs. 28.75 crore by Year 5, and profit before tax (PBT) projected to rise from Rs. 3.50 crore in Year 1 to Rs. 7.39 crore in Year 5.

The Monitoring Committee has been appointed to oversee the implementation of the Resolution Plan, requiring regular status updates to the Adjudicating Authority until full completion. The order also clarified that the avoidance application concerning preferential transactions, previously allowed by the NCLT on August 1, 2025, will be handled according to the approved plan and CoC decisions.