Commercial wisdom of Committee of Creditors in resolution plans cannot be judicially modified; restriction on corporate account funds set aside and matter remitted.

Commercial review is confined to limited judicial scrutiny; interference with Committee of Creditors' commercial wisdom is impermissible, and a tribunal lacks power to suo moto modify an approved resolution plan. The article explains that a condition restricting utilisation of funds in the corporate debtor's current account constituted an unlawful modification of a CoC-approved plan and was set aside, while directions concerning crystallisation of employee welfare dues were not contested. The operative effect is remittance for fresh disposal by the Adjudicating Authority in conformity with statutory parameters, restoring deference to CoC commercial decision-making and prohibiting judicial alteration of compliant resolution plans.

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Issues: (i) Whether the Adjudicating Authority was empowered to suo moto modify an approved resolution plan and impose conditions restricting utilisation of funds lying in the Corporate Debtor's current account for payments to creditors.

Analysis: The Tribunal examined whether the impugned modifications effected by the Adjudicating Authority in paragraph 25 of its order amounted to an impermissible interference with the commercial decision of the Committee of Creditors. Reliance was placed on the statutory scheme (Sections 30 and 31 of the IBC) and settled precedents establishing that the Adjudicating Authority's jurisdiction is limited to approving or rejecting a resolution plan and to a confined judicial review under Section 30(2), including Section 30(2)(e). The Tribunal noted that the Adjudicating Authority had recorded satisfaction that the resolution plan complied with Section 30 and 31, yet proceeded to impose conditions altering the plan's provisions regarding the use of funds in the Corporate Debtor's bank account. The Tribunal found that such a condition directly impacted the commercial allocation approved by the CoC and was not necessitated by any deficiency under Section 30(2); the Monitoring Committee and the secured financial creditor had not supported restriction of the appellant's utilisation of the funds. The Tribunal contrasted the permissible remedial power (remitting a plan to the CoC where it fails Section 30(2) parameters) with unilateral modification of commercially approved terms by the Adjudicating Authority.

Conclusion: The Adjudicating Authority exceeded its jurisdiction by imposing the condition restricting the use of the Corporate Debtor's current account funds for payment to creditors; that condition is set aside. The impugned order dated 28.08.2025 is set aside and the matter is remitted to the Adjudicating Authority to pass fresh orders in accordance with law within 30 days.

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