Resolution plan compliance under insolvency law upheld despite objections on competition clearance, debt assignment, disputed land and later revised bids.

A resolution plan under the insolvency framework was examined against competition-clearance requirements, debt assignment structures, treatment of disputed land, and a later revised offer. The plan was said to fall within the competition exemption because the corporate debtor's assets and turnover were below the prescribed threshold, so prior CCI approval was not needed. Assignment of unsustainable debt and foreign lender debt was treated as permissible within the plan structure, with approvals under other laws capable of being addressed after plan approval. The disputed Noida project land was only acknowledged as a pending dispute, and the committee of creditors was not bound to reopen the process for a later higher offer once voting had commenced and the requisite majority was obtained.

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Issues: (i) Whether prior approval of the Competition Commission of India was required for the resolution plan as a combination under the Competition Act, 2002; (ii) Whether assignment of unsustainable debt by an asset reconstruction company to the resolution applicant was impermissible; (iii) Whether the proposed assignment of the debt owed to the foreign lender required rejection of the plan for want of prior regulatory approval; (iv) Whether the treatment of the Noida project land in the plan violated the insolvency framework; (v) Whether the committee of creditors was bound to consider a revised post-challenge offer for alleged value maximisation.

Issue (i): Whether prior approval of the Competition Commission of India was required for the resolution plan as a combination under the Competition Act, 2002.

Analysis: The plan was examined in the light of the proviso to section 31(4) of the Insolvency and Bankruptcy Code, 2016 and section 5 of the Competition Act, 2002. The relevant notification exempted combinations where the acquired enterprise's assets or turnover were below the prescribed threshold. The financial position of the corporate debtor, as reflected in the record, was far below the exemption threshold, so the combination approval requirement was not attracted.

Conclusion: The objection based on prior CCI approval failed and was against the appellant.

Issue (ii): Whether assignment of unsustainable debt by an asset reconstruction company to the resolution applicant was impermissible.

Analysis: Section 9 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 permits an asset reconstruction company to take measures for settlement of dues payable by the borrower, and the RBI's directions recognise settlement as a permissible mode of realisation. The plan bifurcated the debt into sustainable and unsustainable components, with payment offered for the sustainable part and assignment of the balance as part of the settlement structure. Such structuring fell within the permissible commercial framework.

Conclusion: The challenge to the debt assignment by the asset reconstruction company was rejected and was against the appellant.

Issue (iii): Whether the proposed assignment of the debt owed to the foreign lender required rejection of the plan for want of prior regulatory approval.

Analysis: The plan contemplated assignment of the foreign lender's debt and the parties placed reliance on the statutory window under section 31(4) of the Insolvency and Bankruptcy Code, 2016 for obtaining approvals required under other laws after approval of the resolution plan. On that basis, the proposed treatment did not render the plan unlawful at the stage of approval.

Conclusion: The objection regarding the foreign lender's debt assignment was not accepted and was against the appellant.

Issue (iv): Whether the treatment of the Noida project land in the plan violated the insolvency framework.

Analysis: The record showed that the lease had already been terminated and that the dispute concerning the land was pending independently. The plan only acknowledged the dispute and provided a mechanism to address it without displacing any concluded rights. The arrangement did not amount to inclusion of an impermissible third-party asset in the resolution process.

Conclusion: The challenge based on the Noida project land failed and was against the appellant.

Issue (v): Whether the committee of creditors was bound to consider a revised post-challenge offer for alleged value maximisation.

Analysis: The resolution process had proceeded through the approved request for resolution plan, challenge process, final bids and voting. Once the process had reached the voting stage and the plan had secured the requisite majority, the committee of creditors was entitled to act on its commercial wisdom and was not bound to reopen the process merely because a higher revised offer was later made. The appellant could not derive a separate enforceable right from that later offer.

Conclusion: The plea based on a revised offer and value maximisation was rejected and was against the appellant.

Final Conclusion: The approved resolution plan suffered from no legal infirmity, and the committee of creditors' decision, having attained the required majority, was sustained in exercise of commercial wisdom.

Ratio Decidendi: Where a resolution plan falls within a statutory exemption from competition clearance and otherwise conforms to the insolvency framework, the commercial decision of the committee of creditors approving the plan by the prescribed majority will not be disturbed on speculative objections to debt treatment, collateral assets, or a later revised offer.

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