Resolution plan compliance and commercial wisdom upheld where stakeholder entitlements met liquidation benchmark.

A resolution plan compliant with the Insolvency and Bankruptcy Code and the CIRP Regulations was approved because it provided for priority payment of insolvency resolution process costs, treated secured and unsecured financial creditors, operational creditors and employee dues in accordance with the statutory framework, and did not fall below liquidation entitlement. Objections by stakeholders were rejected where claims were filed belatedly after completion of the resolution process, or where challenges were raised after committee approval and lacked merit. The tribunal also deferred to the committee of creditors' commercial wisdom, holding that disagreement with the plan's allocation did not justify rejection when the liquidation benchmark was satisfied.

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Issues: Whether the resolution plan satisfied the requirements of the Insolvency and Bankruptcy Code, 2016 and the relevant regulations, and whether the objections raised by stakeholders to the plan warranted rejection.

Analysis: The resolution plan was examined with reference to Section 30(2) of the Insolvency and Bankruptcy Code, 2016 and Regulations 37, 38, 38(1A) and 39(4) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. The objections of the municipal authority and the electricity authority were rejected because no claim had been filed before the resolution process was completed and, after approval by the committee of creditors, belated claims could not be entertained. The objections of the financial creditor were rejected as being raised after approval of the plan and as lacking merit. The operational creditor's challenge to the payment structure was rejected in light of the committee of creditors' commercial wisdom and the plan's compliance with the liquidation benchmark under Section 53 of the Insolvency and Bankruptcy Code, 2016. The Employees State Insurance Corporation's objection was also rejected because the proposed treatment matched the amount available under liquidation. The plan was found to provide for priority payment of insolvency resolution process costs, treatment of secured and unsecured financial creditors, operational creditors, and employee dues, and to be consistent with the statutory requirements for approval.

Conclusion: The resolution plan was approved and the objections were rejected.

Ratio Decidendi: A resolution plan that complies with the statutory requirements and does not yield less than the liquidation entitlement of stakeholders cannot be rejected merely because some creditors dispute the commercial allocation approved by the committee of creditors.

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