Resolution plan challenges under insolvency law fail where disqualification, creditor distribution, and collateral land disputes are not established.

Section 29A(d) was discussed as applying only where a resolution applicant or connected person had a qualifying conviction for an offence punishable with imprisonment of two years or more; on the stated facts, the disqualification was not made out. The approved resolution plan was also protected from interference on the ground of operational creditor allocation, because the plan satisfied the Code's minimum framework and commercial distribution choices were left to the creditor approval process. Objections based on preference shares and section 55 of the Companies Act were rejected, as were land-related challenges arising from pending State proceedings, which did not affect title or warrant disruption of the plan.

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Issues: (i) Whether the resolution applicants were ineligible under section 29A(d) of the Insolvency and Bankruptcy Code, 2016 on account of convictions of their connected persons outside India; (ii) Whether the approved resolution plan could be interfered with on the ground that the allocation to operational creditors was unfair or impermissibly discretionary; (iii) Whether the resolution plan was illegal for dealing with preference shares and alleged violation of section 55 of the Companies Act, 2013; (iv) Whether the challenge to the plan on the basis of disputed land and pending proceedings by the State could defeat approval of the resolution plan.

Issue (i): Whether the resolution applicants were ineligible under section 29A(d) of the Insolvency and Bankruptcy Code, 2016 on account of convictions of their connected persons outside India?

Analysis: The disqualification under section 29A(d) applies where the resolution applicant or a connected person has been convicted for an offence punishable with imprisonment for two years or more. The expression was held to refer to the severity and nature of the offence, but the provision was not read to cover every foreign conviction carrying a maximum term where the offence was not shown to be correspondingly severe in the sense contemplated by section 29A(d). The Court also held that, on the facts, no director or natural person connected with the relevant corporate entities had been shown to have been convicted in the manner required by clause (d).

Conclusion: The resolution applicants were held eligible and section 29A(d) was held not attracted.

Issue (ii): Whether the approved resolution plan could be interfered with on the ground that the allocation to operational creditors was unfair or impermissibly discretionary?

Analysis: The resolution plan had to satisfy section 30(2) of the Insolvency and Bankruptcy Code, 2016, including treatment of operational creditors at least to the extent required in liquidation. The Court held that the plan disclosed a substantial allocation to operational creditors and that the commercial structuring of distribution within the plan fell within the framework of the Code and the creditor approval process. The Court declined to substitute its view for the commercial assessment reflected in the approved plan.

Conclusion: The challenge to the allocation in the resolution plan was rejected.

Issue (iii): Whether the resolution plan was illegal for dealing with preference shares and alleged violation of section 55 of the Companies Act, 2013?

Analysis: The Court held that shareholders are not creditors within the insolvency framework and that an approved resolution plan, once sanctioned under section 31 of the Insolvency and Bankruptcy Code, 2016, binds stakeholders. The alleged violation of section 55 of the Companies Act, 2013 was held not to bar approval at the stage when the plan was only a proposal and had not yet been sanctioned. The objection therefore did not justify interference.

Conclusion: The objection based on preference shares and section 55 was rejected.

Issue (iv): Whether the challenge to the plan on the basis of disputed land and pending proceedings by the State could defeat approval of the resolution plan?

Analysis: The Court noted that proceedings concerning the disputed land were already pending before the competent forums and that approval or rejection of the resolution plan would not determine title or extinguish any independent legal remedy of the State. The resolution applicant would acquire only such assets as lawfully belonged to the corporate debtor, and the pendency of separate litigation did not warrant interference with the plan.

Conclusion: The land-related challenge was rejected.

Final Conclusion: The approved resolution plans were upheld, no ground for interference was made out, and all the appeals were dismissed.

Ratio Decidendi: Section 29A(d) disqualifies a resolution applicant only where the offence and conviction of the applicant or a relevant connected person answer the statutory threshold of punishment contemplated by the provision; insolvency courts will not interfere with an approved resolution plan absent a legal infirmity under the Code, and commercial decisions on distribution within the statutory framework are not to be reopened in appeal.

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