Content Provider | Supreme Court of India |
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e-ISSN | 30484839 |
Language | English |
Access Restriction | NDLI |
Subject Keyword | 29-A(e) 30(2)(e) & 30(6) Insolvency and Bankruptcy Code 2016 – ss. 12A |
Content Type | Text |
Resource Type | Law Judgement |
Jurisdiction | India |
Act(s) Referred | Companies Act, 2013 (18 of 2013) Insolvency and Bankruptcy Code, 2016 (31 of 2016) |
Case(s) Referred | Referred Case 0 Referred Case 1 Referred Case 2 Referred Case 3 |
Case Type | Appeal |
Court | Supreme Court of India |
Disposal Nature | Appeal Disposed Off |
Headnote | Insolvency and Bankruptcy Code, 2016 – ss. 12A, 29-A(e),30(2)(e) & 30(6) – Insolvency and Bankruptcy Board of India(Insolvency Resolution Process for Corporate Persons) Regulations,2016 – Regulation 36-A(2)(iii) – Disapproval of resolution plan bythe Appellate Tribunal (NCLAT) for want of presentation of finalresolution plan before CoC – Held: Is unexceptionable and callsfor no interference – When the modified resolution plan, even ifcarrying minor modification /revision was not finally approved byCoC, its presentation to the Adjudicating Authority amounts to amaterial irregularity and this defect cannot be cured – There is noand there cannot be any concept of post facto approval of anyresolution plan by CoC which had not been placed before it priorto the filing before the Adjudicating Authority – Requirement ofCIRP Regulations, particularly of placing the resolution plan in itsfinal form before the CoC, has to be scrupulously complied with –This is so for the specific reason concerning law that if the processas adopted in the present matter is approved, the very scheme of theCode and CIRP regulations would be left open-ended and wouldbe capable of inviting arbitrariness at any level – The irregularityin the process of approval by CoC and filing before AdjudicatingAuthority are not the matters of such formal nature that deviation inthat regard could be ignored or condoned – When commercialwisdom of CoC is assigned primacy, it presupposes a considereddecision on the resolution plan in its final form – The principlesunderlying the decisions of this Court respecting the commercialwisdom of CoC cannot be over-expanded to brush aside a significantshortcoming in the decision making of CoC when it had not dulytaken note of the operation of any provision of law for the timebeing in force – On facts, disapproval of the resolution plan inquestion by the Appellate Tribunal (NCLAT) in the impugned orderis not to be interfered with but, not for all the reasons which weighed with the Appellate Tribunal – The reasons and findings of theAppellate Tribunal in relation to the valuation process and allegednon-compliance of some of the procedural provisions as also theobservations against increase of fees of resolution professional arenot approved – Similarly, the Appellate Tribunal was not right inholding the resolution applicant ineligible to submit a resolutionplan with reference to s.164(2)(b) of the Companies Act, 2013 –The disapproval by the Appellate Tribunal, with reference to thesettlement offer of promoter in terms of s.12-A of the Code, and itspurported non-consideration is also not approved and such findingsof the Appellate Tribunal are required to be set aside – Similarly,the Appellate Tribunal erred in applying the principles of nondiscriminationin relation to the related party – However, even whilerespecting the commercial wisdom of CoC, in the present case, theresolution plan in question could not have been approved by theAdjudicating Authority for two major reasons: one, for theineligibility of the resolution applicant; and second, for not placingof the revised resolution plan in the CoC before seeking approvalfrom the Adjudicating Authority – So far the subsequent eventsconcerning invitation of fresh Expression of interest (EOIs) andapproval of the fresh settlement proposal of the promoter by theCoC are concerned, all the relevant aspects are kept open forconsideration of the Adjudicating Authority. |
Judge | Hon'ble Mr. Justice Dinesh Maheshwari |
Neutral Citation | 2023 INSC 486 |
Petitioner | M. K. Rajagopalan |
Respondent | Dr. Periasamy Palani Gounder & Anr |
SCR | [2023] 9 S.C.R. 783 |
Judgement Date | 2023-05-03 |
Case Number | 1682-1683 |
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