Commercial wisdom in insolvency shields resolution plan approval despite challenge over unpaid provident fund dues.

Approval of a resolution plan under the Insolvency and Bankruptcy Code will not be disturbed merely because provident fund dues were not paid in full, where the plan was approved by the committee of creditors with 97.18% voting share and found compliant with the Code and applicable regulations. Appellate review is confined to statutory parameters and does not extend to reassessing the commercial wisdom of the committee of creditors. The provident fund authority's claim was treated as an operational or statutory dues claim within the resolution process, and no legal flaw was shown that justified interference with the approval order. The challenge was therefore rejected and the resolution plan approval was upheld.

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Issues: Whether the approval of the resolution plan could be interfered with on the ground that the provident fund dues of the operational creditor were not paid in full and in priority, and whether the plan violated the insolvency framework and the provident fund law.

Analysis: The resolution plan had been approved by the committee of creditors with 97.18% voting share and was found by the adjudicating authority to satisfy the requirements of the Insolvency and Bankruptcy Code, 2016 and the applicable regulations. The appellate review of such approval is confined to the parameters under the Code and does not permit the appellate forum to sit in appeal over the commercial wisdom of the committee of creditors. The claim of the provident fund authority was dealt with as an operational/statutory dues claim within the resolution process, and the challenge did not establish any legal flaw warranting interference with the approval order.

Conclusion: The approval of the resolution plan was upheld, and the challenge based on non-payment of the provident fund claim in full was rejected.

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