IBC resolution plan must meet liquidation-based minimum payouts, while CoC commercial wisdom and pending avoidance claims remain limited grounds of challenge.

A resolution plan under the Insolvency and Bankruptcy Code must meet the statutory minimum payable to operational creditors by reference to the liquidation framework, including proper treatment of workmen's dues and exclusion of provident fund, pension fund and gratuity from the liquidation estate; the plan was sustained with limited modification on that basis. Disputes over the composition of the Committee of Creditors and a secured creditor's voting share did not invalidate approval where the creditor's share remained substantial and the plan was unanimously approved. Pending avoidance proceedings and asserted Section 29A ineligibility did not, by themselves, unsettle an approved plan, as such matters were treated as collateral to the resolution process.

---

---

Issues: (i) Whether the resolution plan complied with the minimum payment requirements for workmen's dues and employees' dues, including provident fund and gratuity. (ii) Whether the constitution of the Committee of Creditors and the voting share of the secured financial creditor were vitiated by the disputed claim position. (iii) Whether pending allegations of fraudulent or preferential transactions, non-disposal of applications, and alleged ineligibility under Section 29A invalidated approval of the resolution plan.

Issue (i): Whether the resolution plan complied with the minimum payment requirements for workmen's dues and employees' dues, including provident fund and gratuity.

Analysis: The payment proposed to operational creditors had to satisfy the minimum prescribed under Section 30(2)(b) of the Insolvency and Bankruptcy Code, 2016, read with the liquidation priority under Section 53. Workmen's dues for the relevant 24-month period ranked in the liquidation waterfall alongside secured creditors who had relinquished security, while wages and unpaid dues of employees other than workmen ranked below that category. Provident fund, pension fund and gratuity fund were treated as amounts which could not be brought into the liquidation estate. The plan was therefore examined against the liquidation benchmark, with a limited recalibration of the amount payable to workmen and direction for provident fund to be paid in accordance with the earlier tribunal ruling.

Conclusion: The resolution plan was held to require modification to the limited extent of enhanced workmen's dues and proper treatment of provident fund, but it was otherwise found to comply with the Code.

Issue (ii): Whether the constitution of the Committee of Creditors and the voting share of the secured financial creditor were vitiated by the disputed claim position.

Analysis: The disputed financial claim of the secured creditor was examined in the context of the admitted position and the voting pattern in the Committee of Creditors. Even on the reduced figure, the creditor's voting share remained substantial, and the resolution plan had been approved unanimously. The commercial wisdom of the Committee of Creditors, including the manner of distribution and the feasibility and viability assessment, was treated as non-justiciable once the statutory threshold under Section 30(4) was satisfied.

Conclusion: The challenge to the constitution of the Committee of Creditors and the voting share was rejected.

Issue (iii): Whether pending allegations of fraudulent or preferential transactions, non-disposal of applications, and alleged ineligibility under Section 29A invalidated approval of the resolution plan.

Analysis: The pendency of avoidance-related proceedings was held not to affect the corporate insolvency resolution process by virtue of Section 26 of the Insolvency and Bankruptcy Code, 2016. The unresolved allegations and requests for forensic inquiry were treated as matters requiring deeper examination, but not as grounds to unsettle the resolution plan once it had been approved within the insolvency framework. The plan was not found vulnerable on the ground of the asserted Section 29A ineligibility in the manner urged, and the tribunal confined itself to the plan approval process rather than collateral allegations.

Conclusion: The challenge based on pending avoidance allegations and alleged ineligibility was rejected.

Final Conclusion: The approval of the resolution plan was sustained with limited modification in favour of workmen and employees, and the appeal was disposed of accordingly.

Ratio Decidendi: A resolution plan must satisfy the statutory minimum payable to operational creditors with reference to the liquidation framework, while the commercial wisdom of the Committee of Creditors and the pendency of avoidance proceedings do not, by themselves, invalidate an approved plan.

---