Mandatory bid compliance and value maximisation govern resolution plans; belated deposit and flawed scoring justified setting aside approval.

Mandatory bid conditions for a resolution plan were not complied with where the earnest money deposit was credited only after the stipulated deadline; acceptance of such a belated deposit rendered the plan non-responsive and contrary to the request for resolution plan. The approval process was also unsustainable because the evaluation did not properly reflect value maximisation, with inadequate consideration of unsecured and operational creditors and unexplained scoring anomalies favouring the selected applicant. A dissenting financial creditor was held entitled to challenge the approval where illegality, non-compliance and procedural unfairness were alleged. The approval order was set aside, the plan invalidated, and the matter remitted for fresh consideration of the remaining plans in accordance with law.

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Issues: (i) Whether the resolution plan was liable to be rejected for non-submission of earnest money deposit within the stipulated time and for being treated as non-responsive under the request for resolution plan. (ii) Whether the approval of the resolution plan and the scoring process were sustainable in the light of the objective of value maximisation and the treatment of secured and unsecured creditors. (iii) Whether the dissenting financial creditor had locus to challenge the approval of the resolution plan.

Issue (i): Whether the resolution plan was liable to be rejected for non-submission of earnest money deposit within the stipulated time and for being treated as non-responsive under the request for resolution plan.

Analysis: The request for resolution plan required the earnest money deposit to accompany the resolution plan within the stipulated time, and expressly provided that non-submission would render the plan non-responsive and liable to rejection or non-evaluation. Mere debit from the bidder's bank account on the due date did not amount to compliance when the amount was actually credited to the corporate debtor only after the deadline. The acceptance of the belated deposit was therefore contrary to the stipulated bid conditions.

Conclusion: The plan was non-responsive and ought not to have been accepted.

Issue (ii): Whether the approval of the resolution plan and the scoring process were sustainable in the light of the objective of value maximisation and the treatment of secured and unsecured creditors.

Analysis: The record showed that the majority committee relied heavily on faster recovery for secured creditors and gave inadequate consideration to unsecured and operational creditors. The deliberations did not sufficiently explain why higher-value plans were not preferred or why the evaluation matrix resulted in anomalous scoring that elevated the selected applicant. In the circumstances, the decision-making process did not reflect a proper application of value maximisation consistent with the insolvency framework.

Conclusion: The approval process was unsustainable.

Issue (iii): Whether the dissenting financial creditor had locus to challenge the approval of the resolution plan.

Analysis: A dissenting financial creditor with a stake in the insolvency process is not barred from raising grievances where alleged illegality, non-compliance, and procedural unfairness are asserted. The objections had been raised before the committee and were not mere afterthoughts. The challenge was therefore maintainable.

Conclusion: The appellant had locus to maintain the challenge.

Final Conclusion: The impugned order was set aside, the approved resolution plan was invalidated, and the matter was directed to proceed afresh in accordance with law with consideration of the remaining resolution plans.

Ratio Decidendi: A resolution plan that does not comply with mandatory bid conditions and is accepted in disregard of the prescribed eligibility requirements cannot be sustained merely on the basis of majority approval or commercial wisdom; where the process also fails to properly address creditor treatment and value maximisation, the plan and its approval are liable to be interfered with.

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