Review of resolution plans limited to statutory grounds; clarifications not material change and appellate interference denied.

The Supreme Court held that clarifications by the resolution applicant merely explained mechanics of margin money replacement and valuation options for deferred payment and did not effect any enhancement or material modification of the approved Resolution Plan; outcome: clarifications are not a modification. The Court further held that post-approval and implementation, judicial review is confined to statutory grounds and absent demonstrable arbitrariness, illegality or material irregularity by the resolution professional or CoC, interference is impermissible; outcome: appeals dismissed and concurrent NCLT/NCLAT findings upheld.

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Issues: (i) Whether the clarifications furnished by the resolution applicant (SEML) in response to queries from the resolution professional/CoC resulted in any enhancement or modification of SEML's Resolution Plan; (ii) Whether, after approval by the NCLT and affirmation by the NCLAT and implementation of the plan, this Court may interfere at this stage.

Issue (i): Whether clarifications furnished by SEML altered the substance of its resolution plan with respect to (a) replacement/ treatment of bank guarantees and related margin money and (b) conversion of deferred payment into an enhanced upfront payment.

Analysis: The Resolution Plan originally provided that margin money aggregating to Rs.180.05 crores would flow to the CoC and that SEML would infuse Rs.103.39 crores as fresh margin money for BGs it intended to continue; the remaining Rs.76.61 crores related to BGs proposed to be extinguished and thereby released to the CoC. The RP's email sought clarifications on timing and treatment; SEML's responses explained that the margin money for BGs to be extinguished would be returned to the CoC and that replacement margin money would be provided to issuing banks until formal release. On deferred payment, SEML's plan offered NCDs whose face value and coupon produced an aggregate higher cashflow, with Rs.240 crores being the present discounted value (NPV) payable upfront if the CoC so elected. The clarifications merely explained mechanics and reaffirmed existing valuation (NPV) and timing options; they did not increase the aggregate consideration payable to the CoC nor substitute new commercial terms beyond what the plan already allowed.

Conclusion: The clarifications did not amount to any enhancement or material modification of SEML's Resolution Plan.

Issue (ii): Whether this Court may entertain interference after concurrent approvals by NCLT and NCLAT and implementation of the Resolution Plan.

Analysis: Appeals to this Court under Section 62 are confined to questions of law. Appeals under Section 61(3) before the NCLAT are limited to specified grounds including material irregularity by the RP. The RP acted on the CoC's directions in seeking clarifications; such conduct cannot be characterised as material irregularity. There are concurrent factual and legal findings by the NCLT and NCLAT that no material irregularity occurred and that the CoC's commercial wisdom governed approval; absent demonstrable arbitrariness, illegality, or ignorance of mandatory provisions, appellate interference is not warranted. The Resolution Plan was implemented and amounts paid, further diminishing scope for intervention.

Conclusion: No interference is permissible; the appeals are not maintainable on the invoked grounds and must be dismissed.

Final Conclusion: The concurrent findings of the NCLT and NCLAT that SEML's clarifications did not modify its Resolution Plan and that no material irregularity by the RP occurred are upheld; the commercial wisdom of the CoC in approving the plan remains non-justiciable except on the narrow statutory grounds, and the appeals are dismissed.

Ratio Decidendi: Courts' review of an approved resolution plan is limited to the statutory grounds in Sections 30(2) and 61(3) of the Insolvency and Bankruptcy Code, 2016; clarifications that merely explain contractual mechanics or reaffirm present values do not constitute material modification, and decisions of the Committee of Creditors exercising commercial wisdom are not amenable to substitution by judicial review absent arbitrariness, illegality or material irregularity by the resolution professional.

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