Commercial wisdom and statutory compliance limit rejection of a resolution plan; broad fairness objections alone are insufficient.

A resolution plan should not be rejected on broad fairness objections where the information memorandum disclosed the material asset position, including any mismatch between title and possession, and resolution applicants had access to the data room; in such circumstances, no material irregularity is established. The successful resolution applicant was found not disqualified under section 29A, and the treatment of the Claro Energy proposal as non-compliant and non-responsive was upheld. Where the Committee of Creditors had approved the plan, judicial interference remains confined to statutory compliance under sections 30(2) and 31, and the adjudicating authority cannot substitute its own view for commercial wisdom absent contravention.

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Issues: (i) Whether the corporate insolvency resolution process was conducted in a fair and transparent manner and whether any informational asymmetry or material irregularity justified rejection of the approved resolution plan; (ii) whether the successful resolution applicant suffered disqualification under section 29A; (iii) whether the resolution plan submitted by Claro Energy Limited was rightly treated as non-compliant and non-responsive; and (iv) whether the plan approved by the Committee of Creditors could be rejected despite 100% approval on the ground that it did not satisfy sections 30(2) and 31.

Issue (i): Whether the corporate insolvency resolution process was conducted in a fair and transparent manner and whether any informational asymmetry or material irregularity justified rejection of the approved resolution plan.

Analysis: The Information Memorandum and request for resolution plans disclosed the relevant position of the assets, including the mismatch between title and possession, and all resolution applicants were given access to the data room. The property in possession of the resolution professional was valued, the process proceeded on an as-is-where-is basis, and the Committee of Creditors had approved the framework and the plan after considering the known asset position. The alleged unfairness was held not to establish any material irregularity warranting rejection of the plan.

Conclusion: The process was held not to suffer from such material irregularity as would justify setting aside the Committee of Creditors' decision; the objection was rejected.

Issue (ii): Whether the successful resolution applicant suffered disqualification under section 29A.

Analysis: The alleged relationship and related-party concerns were examined on the materials placed before the adjudicating authority. The adjudicating authority had already found that the successful resolution applicant was not hit by section 29A, and the appellate scrutiny found no reason to disturb that finding.

Conclusion: The successful resolution applicant was held to be not ineligible under section 29A.

Issue (iii): Whether the resolution plan submitted by Claro Energy Limited was rightly treated as non-compliant and non-responsive.

Analysis: The record showed that the Committee of Creditors and the resolution professional treated the Claro Energy proposal as non-responsive after assessing compliance with the process requirements and the information available to prospective resolution applicants. The concerns raised by that applicant about asset possession did not displace the finding that its plan was not compliant.

Conclusion: The decision treating the Claro Energy plan as non-compliant and non-responsive was upheld.

Issue (iv): Whether the plan approved by the Committee of Creditors could be rejected despite 100% approval on the ground that it did not satisfy sections 30(2) and 31.

Analysis: Judicial interference with a resolution plan is confined to the statutory limits of section 30(2) and section 31. In the absence of any finding that the approved plan contravened the mandatory requirements of section 30(2), the adjudicating authority could not substitute its own view for the commercial decision of the Committee of Creditors. The appellate forum emphasised the primacy of commercial wisdom and the narrow scope of review.

Conclusion: The rejection of the approved plan was unsustainable; the plan was liable to be considered for approval.

Final Conclusion: The impugned rejection order was set aside, the appeals succeeded, and the plan approval application was revived for fresh consideration in accordance with the appellate directions.

Ratio Decidendi: An approved resolution plan cannot be rejected on broad fairness concerns where the process disclosed the material asset position and no contravention of section 30(2) is established; the adjudicating authority's review remains confined to statutory compliance and cannot supplant the commercial wisdom of the Committee of Creditors.

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