NCLAT, Principal Bench retreated the commercial wisdom of the Committee of Creditors (CoC) in approving a Resolution Plan that is not subject to judicial review unless it violates the provisions of Section 30(2) of the IBC.
The National Company Law Appellate Tribunal (NCLAT), Principal Bench comprising Justice Ashok Bhushan (Chairperson), Justice Yogesh Khanna (Judicial Member) and Barun Mitra (Technical Member) was hearing an appeal and observed that the commercial wisdom of the Committee of Creditors (CoC) in approving a Resolution Plan is not subject to judicial review unless it violates the provisions of Section 30(2) of the Insolvency and Bankruptcy Code, 2016.
The NCLAT bench noted that the appellant failed to demonstrate any such violation. The Resolution Plan, having been duly approved by the CoC and the Adjudicating Authority, provided appropriate provisions for the appellant's claims, including the execution of conveyance deeds and assured returns. Consequently, the appeal was dismissed as it lacked merit.
The NCLAT dismissed an appeal challenging the NCLT's approval of a Resolution Plan on 20.11.2023 in IA No.1854 of 2022. The appellant argued that their claims regarding Units CB-05, CB-06, 1GF, and 5GF had not been rightly considered and sought to have the Resolution Plan set aside for reconsideration. However, the Resolution Professional (RP) and the Successful Resolution Applicant (SRA) contended that the plan complied with Section 30(2) of the Insolvency and Bankruptcy Code, 2016, and provisions were made to address the appellant's claims.
The appellant's claims for Units 1GF and 5GF had already been admitted, and a provision was included in the plan for the assured return. Additionally, the SRA undertook to execute conveyance deeds for Units CB-05 and CB-06. The appellant was offered 40% of the enhanced admitted claim towards the assured return for Units 1GF and 5GF. The SRA also noted that the appellant had pursued grievances in several forums.
The NCLAT reviewed the submissions and upheld the NCLT's order. The tribunal found that the Resolution Plan, approved by the Committee of Creditors (CoC) and the Adjudicating Authority, provided for payment to all stakeholders, including 40% payment to other creditors, under which the appellant's claim was admitted. The NCLAT reiterated that the commercial wisdom of the CoC is not subject to interference unless it violates Section 30(2) of the Code. No such violation was demonstrated in this case.
Thus, the NCLAT dismissed the appeal, finding no merit in it, and affirmed the approval of the Resolution Plan.
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