Resolution applicant eligibility survives pending money-laundering proceedings, while creditors' commercial judgment limits review of an approved insolvency plan.
Resolution-applicant eligibility under the insolvency framework is not defeated merely by pending proceedings or attachment under the Prevention of Money Laundering Act; the statutory bar turns on the specified conviction. Disclosure requirements must be read consistently with statutory ineligibility, and an informed Committee of Creditors that considers the proceedings, eligibility and plan feasibility may approve the plan without material irregularity. Review of that approval is limited to statutory non-compliance and does not permit substitution of commercial judgment on viability, valuation or funding. A disputed secured-creditor claim may be protected through a plan mechanism adjusting distributions if secured status is subsequently recognised.
Issues: (i) Whether the resolution applicant's non-disclosure of pending proceedings and attachment under the Prevention of Money Laundering Act rendered it ineligible or vitiated the resolution plan under Section 29A and Regulation 39(1)(c); (ii) Whether interference with the Committee of Creditors' approval of the resolution plan was warranted on alleged deficiencies in feasibility, valuation, source of funds, and treatment of the appellant's claimed secured-creditor status.
Issue (i): Whether the resolution applicant's non-disclosure of pending proceedings and attachment under the Prevention of Money Laundering Act rendered it ineligible or vitiated the resolution plan under Section 29A and Regulation 39(1)(c).
Analysis: Section 29A(d) prescribes ineligibility on the basis of the specified conviction, not merely the pendency of an inquiry, investigation, criminal proceeding, or attachment action. Although attachment of proceeds of crime is civil in form, it is connected with alleged criminal activity; nevertheless, attachment or pending proceedings alone do not establish the statutory disqualification. Regulation 39(1)(c) must be harmoniously read with Section 29A. The Committee of Creditors was apprised of the proceedings, deferred voting, obtained an independent eligibility assessment, deliberated on the disclosures and feasibility of the plan, and approved it after being fully informed. Any omission consequently did not establish a material irregularity affecting the integrity of the resolution process.
Conclusion: The pending proceedings and alleged non-disclosure did not render the resolution applicant ineligible or invalidate the resolution plan. The issue is against the appellant.
Issue (ii): Whether interference with the Committee of Creditors' approval of the resolution plan was warranted on alleged deficiencies in feasibility, valuation, source of funds, and treatment of the appellant's claimed secured-creditor status.
Analysis: Judicial review of a plan approved by the requisite majority is confined to statutory non-compliance under Section 30(2) and the limited appellate grounds under Section 61(3); it does not permit substitution of the Committee of Creditors' commercial wisdom on feasibility, viability, valuation, or funding arrangements. The plan disclosed its funding sources and payment structure. Appointment of a third valuer is discretionary under Regulation 35(1)(b), and a plan need not match liquidation value. The appellant's secured-creditor status remained sub judice, while the plan provided for automatic modification of distribution among secured financial creditors if that status is ultimately recognised, adequately safeguarding the claimed entitlement.
Conclusion: No reviewable statutory non-compliance or material irregularity justified interference with the Committee of Creditors' approval of the plan. The issue is against the appellant.
Final Conclusion: The approved resolution plan remains operative, and any eventual recognition of the appellant as a secured financial creditor is to be accommodated through the plan's stipulated distribution-adjustment mechanism.
Ratio Decidendi: Pending criminal proceedings or attachment under the Prevention of Money Laundering Act do not, absent a statutory conviction-based disqualification or a material irregularity affecting the integrity of the insolvency process, invalidate a resolution plan approved by an informed Committee of Creditors; feasibility and viability remain within its commercial wisdom subject to the limited statutory review.