Commercial wisdom in insolvency resolution prevailed; plan selection, escrow treatment, and voting extensions were upheld as compliant.

In insolvency resolution, the CoC's commercial wisdom governed plan selection, valuation preference and negotiation method, and the Tribunal would interfere only for clear non-compliance with mandatory statutory requirements. A resolution plan that capped CIRP costs at actuals, with any excess met from the secured financial creditors' share, and separately provided for disputed EPF dues through escrow, was treated as compliant where the CoC had considered the issue and no prejudice was shown. Extension of the e-voting window and common clarificatory queries to resolution applicants did not amount to material procedural irregularity, as the process remained within the CIRP timeline and the final plan terms were not altered.

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Issues: (i) Whether the approved resolution plan was non-compliant because it capped CIRP costs and treated EPF dues by keeping them in escrow and allocating them from the secured financial creditors' share if unpaid. (ii) Whether extension of the e-voting period, and the obtaining of clarifications from resolution applicants, vitiated the CIRP as a material procedural irregularity. (iii) Whether the CoC was bound to adopt a Swiss Challenge or accept the highest bidder, and whether the Tribunal could interfere with the CoC's approval of the resolution plan.

Issue (i): Whether the approved resolution plan was non-compliant because it capped CIRP costs and treated EPF dues by keeping them in escrow and allocating them from the secured financial creditors' share if unpaid.

Analysis: The plan stated that unpaid CIRP costs were payable at actuals and, if internal accruals and cash flows were insufficient, any amount beyond Rs. 25 lakhs would be met from the secured financial creditors' share. The record showed that the CoC was aware that no unpaid CIRP cost was then outstanding and accepted the treatment in its commercial wisdom. As to EPF dues, the plan specifically provided for a separate amount to be kept aside from the secured financial creditors' share, with the sum to be appropriated to them if the EPF liability did not crystallise. The issue was deliberated in the CoC, the liability was treated as sub judice, and the objecting dissenting creditor could not show prejudice because the amount would not come out of its own distribution.

Conclusion: The plan was held to be compliant on both CIRP costs and EPF treatment, and the objection failed.

Issue (ii): Whether extension of the e-voting period, and the obtaining of clarifications from resolution applicants, vitiated the CIRP as a material procedural irregularity.

Analysis: The voting window was extended after the Adjudicating Authority had directed completion of voting by 20.05.2025, but the outer CIRP period was extended up to 31.05.2025 and the voting concluded within that outer limit. The CoC members and resolution applicants were kept informed of the consequence of the extension, and no contemporaneous objection was raised by the participating applicants. Clarifications were sought from all relevant resolution applicants on common queries, and the responses did not alter the final plan value or amount to post-submission modification of the frozen plans. The Court therefore found no material irregularity or unfairness sufficient to invalidate the process.

Conclusion: The challenge based on voting extension and clarificatory communications was rejected.

Issue (iii): Whether the CoC was bound to adopt a Swiss Challenge or accept the highest bidder, and whether the Tribunal could interfere with the CoC's approval of the resolution plan.

Analysis: The RFRP reserved to the CoC the discretion to negotiate, to reject any plan without assigning reasons, and to declare a successful resolution applicant on the basis of commercial wisdom, even if that applicant was not the highest bidder. The applicants had already been given multiple rounds of opportunity to revise their offers, and later attempts to enhance bids after the deadline were impermissible post-submission modifications. The Tribunal reiterated that its jurisdiction under the insolvency framework is limited to checking compliance with the statutory requirements, and not to substituting its view for the CoC's commercial decision. The dissenting creditor also could not complain when the plan yielded more than the liquidation value.

Conclusion: No right to a Swiss Challenge or to insist on the highest bid was recognised, and no ground for interference with CoC approval was made out.

Final Conclusion: The resolution plan was found to satisfy the statutory requirements, the CoC's commercial decision was upheld, and the appeals were dismissed.

Ratio Decidendi: In insolvency resolution, judicial interference is confined to statutory compliance under the Code, while matters of plan selection, valuation preference, negotiation method, and commercial acceptability remain within the CoC's commercial wisdom unless a clear breach of the mandatory provisions is shown.

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