NCLAT upholds Committee of Creditors' resolution plan approval, dismisses challenge citing Section 30(2) compliance

The NCLAT dismissed an appeal challenging the rejection of a resolution plan by the third respondent. The tribunal held that Committee of Creditors' approval of resolution plans reflects commercial wisdom and can only be challenged on limited grounds when non-compliance with Section 30(2) of the Code is demonstrated. The appellant failed to establish any non-compliance with Section 30(2). The tribunal referenced precedent from AJR INFRA case confirming the plan met all mandatory requirements and had been previously upheld. Finding no grounds to interfere with the Adjudicating Authority's order, the appeal was dismissed.

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Issues Involved:
1. Rejection of the Resolution Plan submitted by Respondent No. 3.
2. Categorization of the Appellant's claim as disputed.
3. Confidentiality and provision of the Resolution Plan to the Appellant.
4. Commercial wisdom of the Committee of Creditors (CoC) in approving the Resolution Plan.
5. Compliance of the Resolution Plan with the Insolvency and Bankruptcy Code.

Summary:

Issue 1: Rejection of the Resolution Plan submitted by Respondent No. 3
The Appellant challenged the Order dated 10th May 2022, passed by the National Company Law Tribunal (NCLT), rejecting the Application for the rejection of the Resolution Plan submitted by Respondent No. 3. The Appellant argued that the Resolution Plan included a claim of Rs. 428,22,98,000/- from NHAI, which was also a claim by the Appellant but was kept under the disputed category. The Adjudicating Authority had approved the Resolution Plan, which the Appellant contended was prejudicial to their interest.

Issue 2: Categorization of the Appellant's claim as disputed
The Resolution Professional categorized the Appellant's claim as disputed due to ongoing arbitration. The Appellant did not challenge this categorization before the Adjudicating Authority. The Tribunal noted that the claim was collated and verified by the Resolution Professional and kept under the disputed category, which the Appellant did not contest at any point.

Issue 3: Confidentiality and provision of the Resolution Plan to the Appellant
The Appellant requested a copy of the approved Resolution Plan, which was denied on the grounds of confidentiality. The Tribunal upheld that the Resolution Plan is a confidential document, and the Appellant, being a promoter and related party, was not entitled to receive a copy.

Issue 4: Commercial wisdom of the CoC in approving the Resolution Plan
The Tribunal emphasized the paramountcy of the commercial wisdom of the CoC, which had approved the Resolution Plan with a 97.95% vote share. The Tribunal referred to the Supreme Court judgments in K. Sashidhar Vs. Indian Overseas Bank and Ors. and CoC of Essar Steel India Limited Through Authorised Signatory Vs. Satish Kumar Gupta & Ors., highlighting that neither the NCLT nor the NCLAT has jurisdiction to reverse the commercial decisions of the CoC.

Issue 5: Compliance of the Resolution Plan with the Insolvency and Bankruptcy Code
The Tribunal noted that the Resolution Plan had already been upheld by the Tribunal in its judgment dated 25th May 2023, which confirmed that the plan complied with all mandatory requirements under the Insolvency and Bankruptcy Code. The Tribunal found no legal infirmity in the treatment of the Appellant's claim and no non-compliance with Section 30(2) of the Code.

Conclusion:
The Tribunal dismissed the Appeal, affirming that no grounds were made out to interfere with the Order of the Adjudicating Authority, which had rejected the Appellant's Application for the rejection of the Resolution Plan. The commercial wisdom of the CoC and the compliance of the Resolution Plan with the Code were upheld.

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