Resolution plan compliance and commercial wisdom of creditors upheld, with pending disputes and waiver requests left outside plan modification

A resolution plan approved unanimously by the Committee of Creditors was found compliant with Section 30(2), Section 29A, and Regulations 37, 38, 38(1A) and 39(4) of the CIRP Regulations, so approval under Section 30(6) was warranted. Pending interlocutory applications on claims and creditor classification did not bar approval, as distribution disputes could follow those proceedings. Requests for concessions and waivers were declined, and the Adjudicating Authority reiterated that it could not modify the plan or interfere with the Committee of Creditors' commercial wisdom. The plan was approved and became binding on the corporate debtor and stakeholders.

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Issues: (i) Whether the resolution plan satisfied the requirements of the Insolvency and Bankruptcy Code, 2016 and the applicable CIRP Regulations so as to merit approval under Section 30(6). (ii) Whether the pendency of collateral applications and requests for concessions or waivers prevented approval of the resolution plan or justified interference with the commercial decision of the Committee of Creditors.

Issue (i): Whether the resolution plan satisfied the requirements of the Insolvency and Bankruptcy Code, 2016 and the applicable CIRP Regulations so as to merit approval under Section 30(6).

Analysis: The plan was examined against the statutory requirements governing resolution plans, including compliance with Section 30(2), eligibility under Section 29A, and the mandatory contents under Regulations 37, 38, 38(1A) and 39(4) of the CIRP Regulations. The Committee of Creditors had approved the revised plan unanimously after considering feasibility, viability, implementation structure, stakeholder treatment, and the proposed funding and continuation of the corporate debtor as a going concern. The Adjudicating Authority held that the plan met the prescribed legal threshold and required approval.

Conclusion: The issue was decided in favour of approval of the resolution plan and against any objection that the plan failed statutory compliance.

Issue (ii): Whether the pendency of collateral applications and requests for concessions or waivers prevented approval of the resolution plan or justified interference with the commercial decision of the Committee of Creditors.

Analysis: The pending interlocutory applications concerning claims and creditor classification were held not to obstruct approval of the resolution plan, since distribution issues could abide by orders in those proceedings. The request for concessions and waivers was declined, with statutory obligations left to the competent authorities in accordance with law. The Adjudicating Authority also reiterated that it could not modify the plan approved by the Committee of Creditors and that its review remained confined within the limits of the Code.

Conclusion: The issue was decided against interference with the Committee of Creditors' approval and against granting blanket waivers or concessions in the plan.

Final Conclusion: The resolution plan was approved and became binding on the corporate debtor and stakeholders, while statutory liabilities and pending distribution-related disputes were left to be dealt with as directed and in accordance with law.

Ratio Decidendi: Once a resolution plan satisfies the statutory requirements under the Code and is approved by the requisite majority of the Committee of Creditors, the Adjudicating Authority's scrutiny is confined to those statutory requirements and it cannot modify the plan on considerations outside that framework or override the commercial wisdom of the Committee of Creditors.

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