Tribunal Upholds CoC Decision on Resolution Plan Approval; Commercial Decisions Paramount

The Tribunal upheld the decision of the Committee of Creditors (CoC) to approve the resolution plan of M/s. Sterlite Power Transmission Ltd. and dismissed the application filed by the unsuccessful resolution applicant. The Tribunal emphasized that the CoC's commercial decisions are paramount and not subject to judicial review, as long as they comply with the provisions of the Insolvency and Bankruptcy Code.

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Issues Involved:
1. Validity of the Committee of Creditors' (CoC) decision to approve a resolution plan.
2. Allegations of unfair evaluation by the CoC.
3. Judicial review of CoC's commercial decisions.
4. Locus standi of an unsuccessful resolution applicant to challenge the CoC's decision.

Detailed Analysis:

1. Validity of the Committee of Creditors' (CoC) decision to approve a resolution plan:
The application was filed under Section 60(5) read with Rule 11 of the National Company Law Tribunal Rules, 2016 by M/s. IMR Metallurgical Resources AG, challenging the approval of the resolution plan of M/s. Sterlite Power Transmission Ltd. by the CoC. The applicant contended that their financial bid was superior and that the CoC had unfairly evaluated the resolution plan contrary to the objective of maximizing the value of the corporate debtor. The applicant sought a direction from the Adjudicating Authority to reconsider and re-evaluate the resolution plan.

2. Allegations of unfair evaluation by the CoC:
The applicant argued that their resolution plan was superior in many aspects, particularly in terms of payment to operational creditors, compared to the approved plan of M/s. Sterlite Power Transmission Ltd. They cited the case of Committee of Creditors of Essar Steel India Ltd. v. Satish Kumar Gupta, emphasizing that the CoC's decision should not be arbitrary and must consider the interests of all stakeholders. The applicant claimed that the CoC had not objectively evaluated their plan, which was superior in terms of operational creditors' dues.

3. Judicial review of CoC's commercial decisions:
The respondent countered that the application was an attempt by an unsuccessful resolution applicant to thwart the corporate insolvency resolution process. They cited the Supreme Court's decision in ArcelorMittal India P. Ltd. v. Satish Kumar Gupta, which held that a resolution applicant has no vested right to insist that their resolution plan be considered. The respondent emphasized that the CoC's commercial decision is paramount and not subject to judicial review, as upheld in K. Sashidhar v. Indian Overseas Bank. The Tribunal reiterated that the Adjudicating Authority's jurisdiction is limited to ensuring compliance with Section 30(2) of the Insolvency and Bankruptcy Code (IBC), and it cannot interfere with the CoC's commercial wisdom.

4. Locus standi of an unsuccessful resolution applicant to challenge the CoC's decision:
The respondent argued that the unsuccessful resolution applicant had no locus standi to file the intervening application. The Tribunal noted that both resolution applicants were given equal opportunities to revise and submit their plans. The CoC, exercising its commercial wisdom, had approved the resolution plan of Sterlite Power Transmission Ltd. with a 95.15% majority. The Tribunal found no merit in the applicant's claims of unfair evaluation or discrimination, stating that the evaluation matrix was applied equally to both parties.

Conclusion:
The Tribunal upheld the decision of the CoC to approve the resolution plan of M/s. Sterlite Power Transmission Ltd. and dismissed the application (C.A. (IB) No. 160/CTB/2019) filed by the unsuccessful resolution applicant. The Tribunal emphasized that the commercial decisions of the CoC are paramount and not subject to judicial interference, provided they comply with the provisions of the IBC.

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