Resolution plan approval resists challenge absent statutory non-compliance, protecting creditor committee decisions on bidding, valuation and implementation.
Suspended directors who are personal guarantors and unsuccessful resolution applicants may challenge resolution-plan approval under the Insolvency and Bankruptcy Code. E-bidding terms may prevent unilateral post-closure bid revisions, while the Committee of Creditors may seek clarifications and permit compliance-related modifications without reopening financial bidding. Approved plans are not displaced unless statutory non-compliance or material irregularity is established; commercial decisions on negotiations, viability and compliant valuations ordinarily remain within the Committee's domain. Valuations conducted through the prescribed process, continuation of a retained resolution professional, and optional special-purpose-company structures do not by themselves invalidate a plan. A consortium must retain majority shareholding during implementation, and acceptance of a declined one-time settlement cannot be compelled after plan approval.
Issues: (i) Whether a suspended director who is also a personal guarantor and unsuccessful resolution applicant may maintain an appeal against plan approval under Section 61 of the Insolvency and Bankruptcy Code, 2016; (ii) Whether the challenge-process, e-bidding, treatment of secured statutory dues, Section 29A verification, and consideration of the successful plan were vitiated by material irregularity or unequal treatment; (iii) Whether the CIRP valuation of the corporate debtor's land and building warranted interference; (iv) Whether the continuation of the resolution professional during suspension of authorisation for assignment invalidated the CIRP; (v) Whether the approved consortium plan breached the special-purpose-company and shareholding requirements of the request for resolution plan; and (vi) Whether refusal of the suspended director's one-time-settlement proposal warranted interference.
Issue (i): Whether a suspended director who is also a personal guarantor and unsuccessful resolution applicant may maintain an appeal against plan approval under Section 61 of the Insolvency and Bankruptcy Code, 2016.
Analysis: A suspended director who is also a personal guarantor and an unsuccessful resolution applicant is an aggrieved person with standing to challenge approval of a resolution plan under the statutory appellate framework.
Conclusion: In favour of the appellants: their status as suspended directors, personal guarantors, and unsuccessful resolution applicants did not bar the appeals.
Issue (ii): Whether the challenge-process, e-bidding, treatment of secured statutory dues, Section 29A verification, and consideration of the successful plan were vitiated by material irregularity or unequal treatment.
Analysis: The e-bidding terms, accepted by all participating resolution applicants, required incorporation of the bid placed in the price-discovery process and prohibited unilateral deviation from that bid. The request for resolution plan allowed the Committee of Creditors to seek clarifications, negotiate terms, and require modifications necessary to ensure feasibility, viability, and statutory compliance. The higher second proposal submitted after closure of e-bidding was unsolicited and could not compel a reopening of the concluded process.
Analysis: Clarifications on equal treatment of the secured operational creditor were sought from all applicants. The successful applicant's subsequent addendum, made in response to a written query and allocating an additional amount to comply with the applicable treatment of secured statutory dues, was a permitted compliance-related modification rather than a discriminatory reopening of financial bidding. Eligibility verification under Section 29A had no bearing on the appellants' failure to enhance their bids during e-bidding. The amended Regulation 39(2), applicable when the plans were considered, required all plans, including non-compliant plans, to be placed before the Committee of Creditors with relevant particulars; the successful plan was compliant when voted upon.
Conclusion: Against the appellants: no material irregularity or unequal treatment was established in rejection of the unilateral revised bid or approval of the successful resolution plan.
Issue (iii): Whether the CIRP valuation of the corporate debtor's land and building warranted interference.
Analysis: Valuation under Regulations 27 and 35 was performed by two registered valuers. The reports accounted for the land's agricultural planning zone, industrial use, surrounding properties, access, prevailing market rates, and relevant adjustments. The objections based on different circle rates, prior valuations, and a private valuation did not establish a glaring illegality in the CIRP valuation. Valuation accepted by the Committee of Creditors after compliance with the prescribed process falls within its commercial domain.
Conclusion: Against the appellants: the valuation process did not justify fresh valuation or interference with plan approval.
Issue (iv): Whether the continuation of the resolution professional during suspension of authorisation for assignment invalidated the CIRP.
Analysis: The suspension order permitted the Committee of Creditors to decide whether the resolution professional should continue. Given the advanced stage of CIRP, the Committee of Creditors consciously retained the same resolution professional. No statutory breach or material irregularity affecting plan approval was shown.
Conclusion: Against the appellants: the resolution professional's continuation did not invalidate the CIRP or the approved plan.
Issue (v): Whether the approved consortium plan breached the special-purpose-company and shareholding requirements of the request for resolution plan.
Analysis: The request for resolution plan used the expression "may" regarding incorporation of a special-purpose company, making such incorporation optional rather than mandatory. The proposed shareholding demonstrated that the consortium collectively retained more than 50% shareholding in the corporate debtor. The consortium remains responsible for implementation of the resolution plan.
Conclusion: Against the appellants: no breach of the special-purpose-company requirement was established; the consortium must retain more than 50% shareholding in the corporate debtor until full implementation of the plan.
Issue (vi): Whether refusal of the suspended director's one-time-settlement proposal warranted interference.
Analysis: The financial creditor had already declined the one-time-settlement proposal. The limited appellate jurisdiction under the Insolvency and Bankruptcy Code, 2016 does not permit a direction requiring acceptance of such a proposal after approval of the resolution plan. Any separate dispute regarding retention of pre-CIRP amounts must be pursued before the competent forum.
Conclusion: Against the appellants: refusal of the one-time-settlement proposal did not warrant interference.
Final Conclusion: The objections disclosed no statutory non-compliance or material irregularity capable of displacing the Committee of Creditors' commercial decision approving the resolution plan, which remains binding and enforceable subject to the consortium's shareholding obligation during implementation.
Ratio Decidendi: A resolution plan approved by the Committee of Creditors is not open to appellate interference absent statutory non-compliance or material irregularity; commercial decisions concerning permitted negotiations, plan viability, and compliant valuation remain within the Committee's domain.