TaxTMI 
TaxTMI 
2023 (2) TMI 1466
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....solution plan dated 02.02.2022 submitted by ASG Hospital Private Limited, which has been approved by the CoC with 97.90% voting share on 21.02.2022; B. Pass orders granting such reliefs and concessions as prayed for in the resolution plan dated 02.02.2022 submitted by ASG Hospital Private Limited, Jodhpur which has been approved by the CoC with 97.90% voting share on 21.02.2022; C. Pass such other orders as the Hon'ble Tribunal deems fit and proper in the circumstances of the case and thus render justice; A. CORPORATE INSOLVENCY RESOLUTION PROCESS - VASAN HEALTH CARE PRIVATE LIMITED 2.1. The Corporate Insolvency Resolution Process (CIRP) in respect of the Corporate Debtor viz. Vasan Health Care Private Limited was initiated by this Tribunal in an Application filed by an Operational Creditor under Section 9 of IBC, 2016 in CA/1/IB/2017 vide its order dated 21.04.2017, and one Mr. V. Mahesh was appointed as the 'Interim Resolution Professional' (IRP). 2.2. In the meantime, pursuant to a Company Petition filed before the Hon'ble High Court of Madras, an order of stay of CIRP proceedings was granted on 04.05.2017. Thereafter, on 05.09.2019 the....
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....ted was considered. However, the said Resolution plan was rejected with 89.04% voting of the CoC. 2.8. In the 12th meeting of the Committee of Creditors held on 21.05.2021 the CoC members expressed that the Resolution Plan submitted by Dr. Agarwal's was rejected by them as the same was not a feasible plan in the health care sector of the Corporate Debtor, considering the brand value, dedicated staff, footfall in various branches despite the litigations and the pandemic. The CoC was of the view that the previous round of expression of interest did not yield the desired results due to various reasons and that the resolution applicant reportedly did not have adequate information to offer an acceptable/viable resolution plan. 2.9. The CoC after taking note of the pending matters that require completion, such as carrying out compliances, revising the Information Memorandum, floating of Expression of Interest, process of issuing Request for Resolution Plan, obtaining a Resolution Plan, holding negotiations with bidders, identifying and approving a viable and feasible resolution plan, decided that at least a minimum of 6 months was required with effect from 01.06.2021 taking int....
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....tted their bid security deposit of Rs. 5 Crores along with the resolution plan. The Resolution Applicants were invited and given an opportunity to present their respective resolution plans, Resolution Applicants interacted with the CoC members and clarified the doubts of the creditors. They further expressed their willingness to negotiate the proposal submitted. It was decided that the evaluation of the resolution plans received and examination of the terms of the plans would take a week, the next meeting of the CoC was scheduled on 20.12.2021. During the interactions with the Resolution Applicants in the COC when they were presenting their resolution plans references were made to the amendment dated 30thSeptember 2021 to IBBI (Insolvency Resolution Process for Corporate Persons) Regulations 2016 which stipulates that the modification to the resolution plan can be made only once. The Resolution Applicants were requesting whether a challenge mechanism, if any, was planned to be used to enable the applicants to improve their plan. RP responded that no challenge mechanism was proposed in the RFRP, as it was issued much earlier to the above-stated amendment and that the resolution plan....
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....CoC members present in the meeting deliberated on the possibility of further maximization of value of the Corporate Debtor and by a majority of 51.03% of voting share decided in favour of giving all the resolution applicants a final chance to improve upon their plans and to submit the final and improved resolution plans incorporating all the mutually agreed modifications. The Resolution Applicants were thereafter informed that they have a final chance to further improve their resolution plans. All RA's except Labs India Special Situations Fund agreed to submit their improved resolution plan by 02.02.2022 as agreed with the CoC. 2.19. Three Resolution Applicants, viz., Dr. Agarwal's Health Care Limited, Mr. M.K. Rajagopalan and ASG Hospital Private Limited submitted their revised and final resolution plans in the said meeting. The request of Maxivision Eye Hospitals Private Limited to withdraw their resolution plan was put for e-voting and the request was approved by the CoC with 96.63% voting. 2.20. At this juncture one of the Resolution Applicants viz. Mr. M.K. Rajagopalan filed IA(IBC)/507(CHE)/2022 before this Tribunal with a plea to reject the Resolution Plan subm....
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....fidavits in IA(IBC)/489(CHE)/2022 and the same will be dealt with in the later portion of this order. 2.24. The Applicant has filed a Compliance Certificate in the prescribed form i.e. Form 'H' in terms of Regulation 39(4) of the CIRP Regulations, 2016. A brief snapshot of the Resolution Plan submitted by the Successful Resolution Applicant, is as follows; S. No. PARTICULARS ADMITTED CLAIMS Rs. CRORE RESOLUTION PLAN AMOUNT (RS. IN CRORE) 1 CIRP Cost NA 42.07 2 Payment to Operational Creditors 709.07 8.93 3 Payment to Financial Creditors (other than dissenting Financial Creditors) 1368.91 343.00 Plan amount for Creditors 2077.98 394.00 4 Working Capital and Capex Infusion Amount NA 126.00 Total Resolution Plan Amount 520.00 Additional Contingency Fund NA Rs.6 Crore provided towards escalation in CIRP costs. 3. The Summary of the Resolution Plan submitted by ASG Hospital Private Limited is as under: S. No. DETAILS AMOUNT AS PER RESOLUTION PLAN 1 Total Resolution Plan Amount and payment terms INR 520.0....
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....itors (without changing the overall amount of timeline of FC payment) Payment to Financial Creditors (other than dissenting Financial Creditors) Financial creditors shall be paid INR 343 Crores from the Initial Infusion Amount into the Corporate Debtor through the SPV. The FC Payment shall be paid within 30 days of the NCLT Approval Date after payment of CIRP Cost. Working Capital and Capex Infusion amount INR 126 crore towards capex for Year 1 and Working Capital requirements. 50% of the proposed amount shall be infused within 6 months and balance 50% in 6-12 months. The said amount of INR 126 crore is proposed to be infused by SPV from its own funds into the corporate debtor in form of equity of INR 6crore and balance in the form of quasi equity loan. The terms of the quasi-equity loan shall be junior to financial creditors till such time financial creditor pay-out is completed. 8 Payment for Other Creditors (under Regulation 9A) NIL Payment to Related Parties Creditors NIL Other unverified or unclaimed liabilities NIL Reduction of Share Capital....
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....ernal accruals, existing banking facilities and their anchor investor, Foundation Holding. The Resolution Applicant has cash and bank balances of INR 56.7 Crores as on 31st December 2021. INR 126 Crores is proposed to be infused for capital expenditure for year one and working capital. The committed funds are stated to be infused into the corporate debtor within the timelines as stipulated in Resolution Plan. Further, Foundation Holdings has submitted a commitment letter dated 03.02.2022 to Resolution Professional for supporting fund infusion to honor commitments under this resolution plan. Further a letter dated 10.02.2022 by Ajman Bank, UAE, informing approved lines of credit in place to Foundation Corporation Holdings for a sum of USD 75 Millions, has been submitted by the Successful Resolution Applicant in support of their Resolution Plan. C. TREATMENT OF SUBSIDIARIES 5.1. Details of investment in subsidiaries as per audited financial statements as of 31st March 2020 PARTICULARS Nos. % HOLDING AMOUNT Vasan Dental Hospitals Private Limited 8,000 100 8,00,000 Ramakrishna Eye Care and Research Private Limited 50,000 100 30,00,00,000 Nor....
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.... c) Measures for implementation and Supervision of the resolution plan are provided in clause 7 of the resolution plan. E. MONITORING COMMITTEE 7.1. It is seen that on the approval of the Resolution Plan by NCLT, a Monitoring Committee is proposed to be constituted which shall comprise (a) Resolution Professional as its Chairman, (b) two representatives appointed by the Resolution Applicant; and (c) two representatives of the Financial Creditors. 7.2. The monitoring committee shall supervise the Implementation of the Resolution Plan and ensure that it is implemented without any deviations, ensure timely disbursement of funds, facilitate approvals to the extent required, bring to the notice of Adjudicating Authority any deviation / violation of the Resolution Plan by any person, provide regular updates to the AA as and when required and control the management of the CD from the date of approval of Resolution Plan till the implementation is complete. Monitoring Committee shall have the powers and functions of the Board of Directors. The monitoring committee shall stand disbanded and the reconstituted board of the RA shall take control of the management of the CD upon paymen....
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....deration to the above share capital, the SPV shall become 100% shareholder of the Corporate Debtor, as follows: PARTICULARS NEW ISSUE OF SHARES SHARE CAPITAL @ 100 FACE VALUE (54 LAKH X 100) SHAREHOLDING % SPV 54,00,000 54,00,00,000 100% Total 54,00,000 54,00,00,000 100% 8.5. Post infusion of funds from Resolution Applicant to SPV and thereafter from SPV to Corporate Debtor as indicated in the points above, the equity share capital held by Resolution Applicant into SPV and SPV into Corporate Debtor will be INR 54 crores each at 100% shareholding. 8.6. This Initial Infusion by SPV into the Corporate Debtor of INR 385.07crores, would be utilised towards settlement of outstanding CIRP cost of INR 42.07 crores and Financial Creditor's claim at INR 343 crores. 8.7. In addition to the above and upon satisfaction of the above indicative steps, the Resolution Plan proposes merger of the SPV with the Corporate Debtor, on the closing date i.e., after the payment of dues to all the creditors of the Corporate Debtor. In addition, after the merger, the authorized share capital of the SPV, as the transferor company, will be merged with the authori....
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....b-section(1)ofsection53,whicheveris higher and (iii) provides for payment of debts of financial creditors who do not vote in favour of the resolution plan, in such manner as may be specified by the Board. Clause 6.3 at Pages 71 to 77 of the Resolution Plan. Clause 6.2 at page 69 of the Resolution Plan. (c) Management of the affairs of the Corporate Debtor after approval of the Resolution Plan. Clause 9at Pages 106 to 107 of the Resolution Plan. (d) Implementation and Supervision. Clause 9 at Pages 90 to 102 of the Resolution Plan. (e) Plan does not contravene any of the provisions of the law for the time being in force. Clause 12 at Pages 124 to 125 of the Resolution Plan. (f) Conforms to such other requirements as may be specified by the Board. Clause 12 at Pages 124 to 125 of the Resolution Plan. MEASURES REQUIRED FOR IMPLEMENT OF THE RESOLUTION PLAN IN TERMS OF REGULATION 37 OF CIRP REGULATIONS PARTICULARS RELEVANT PAGE OF THE RESOLUTION PLAN DEALING AFORESAID COMPLIANCE WITH REGULATION A resolution plan shall provide for the measures, as may be necessary, for insolvency resolution of the corporate debtor for maximi....
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....lan shall include a statements as to how it has dealt with the interest of all stakeholders, including Financial Creditors and Operational Creditors of the Corporate Debtor Clause 6.13 at Page 89 of the Resolution Plan. A Reference to relevant Regulation Requirement How dealt with in the Resolution Plan 38(1B) A Resolution Plan shall include a statement giving details if the resolution Applicant or any of its related parties has failed to implement or contributed to the failure of implementation of any other resolution plan approved by the Adjudicating Authority at any time in the past. Clause 12(e) at Page 124 of the Resolution Plan. 38(2) A Resolution Plan shall provide (a) the term of the plan and its implementation schedule Clause 7 at Pages 90 to 102 of the Resolution Plan. (b) the management and control of the business of the Corporate Debtor during its terms; and Clause 9atPages 106 to 107 of the Resolution Plan. (c) adequate means for supervising its implementation Clause 7.6 at Pages 101 to 102 of the Resolution Plan. 38(3) A Resolution Plan shall demonstrate that (a) It address....
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....LS SL. NO RELIEF AND/OR CONCESSIONS AND APPROVAL SOUGHT BY RESOLUTION APPLICANT (CLAUSE 10 OF RESOLUTION PLAN) ORDERS THEREON 1 Cancellation and extinguishment of Share Capital: The approval of the Adjudicating Authority shall constitute adequate approval for cancellation and extinguishment of the existing issued, subscribed and paid-up capital share capital of the Company (both equity and preference shares) in full for NIL consideration and accordingly, no further approval/consent shall be necessary from any other Person / Governmental Authority in relation to either of these actions under any agreement, the constitutional documents or under any applicable Law. The Order of Adjudicating Authority approving this Resolution Plan shall be deemed to be an order under Section 66 of the Companies Act 2013 and other applicable Law confirming the reduction of share capital of the Corporate Debtor and no separate sanction or approval or compliance under Section 66 of the Companies Act, 2013, the NCLT (Procedure for Reduction of Share Capital), Rules 2016 or any other provisions of the applicable Law shall be necessary. Granted, subject to the provi....
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....anted, subject to Companies Act, 2013. However, no shifting of Registered office beyond the State of Tamil Nadu is permissible till the implementation of the Resolution Plan. 6 Re-constitution of the Board: Approval of this plan shall be deemed approval for automatic vacation of Office by the existing Directors from the record of the Company and from the records of the Ministry of Corporate Affairs by Registrar of Companies and appointment of new directors nominated by the Resolution Applicant. Certified copy of the Order approving Resolution Plan shall be a direction on such statutory authorities to do the needful. Granted 7 Regularize any non-registration, non-compliances under applicable Law (including waiver of penalties non- registration, inadequate or non-stamping of documents as required under Applicable Law) existing prior to the Closing Date. Granted 8 All licenses, consents and approvals held by the Company, shall continue in favour of the Company. As far as the licenses, consents and approvals which expire prior to the date of approval of this Resolution Plan or within a period of 6(six) months thereafter, shall be re....
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....f control, transfer charges, compensation, or any other such liability whatsoever under any contract, agreement, lease, license, approval, consent or permission to which the Company or its subsidiaries, joint ventures or associates are entitled; (d) any leasehold rights or freehold rights to movable or immovable properties in the possession of the Company; and (e) any contracts, agreements or commitments made by the Company, in each of the foregoing cases whether claimed or unclaimed, admitted or not, due or contingent, asserted or unasserted, crystallised or not, known or unknown, secured or unsecured, disputed or undisputed, present or future, whether or not set out in the provisional balance sheet, the balance sheets of the Company or the profit and loss account statements of the Company or the list of creditors, in relation to any period prior to the Implementation Date, will be written off in full and will be deemed to be permanently extinguished with effect from the NCLT Approval Date by virtue of the order of the NCLT approving this Resolution Plan, and all consequential liabilities, if any, that may arise in the future on account of the aforesaid (including but not limited ....
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....gations of any other entity (including any invocation or other enforcement action already undertaken against assets of the Company), in relation to any period prior to the Implementation Date (whether in favour of or for the benefit of a person appearing in the list of creditors or not), shall to the extent not assigned/ novated/ transferred/ converted in accordance with this Resolution Plan automatically fall away and be permanently extinguished, unless these were adjusted prior to CIRP to extent permitted by respective contracts and only if such adjustment was in accordance with respective contracts and applicable laws. All title deeds and other documents held by the creditors of the Company or on their behalf relating to any security, charge, encumbrance, or any other form of collateral (over immovable assets or any other rights) shall to the extent not assigned/ novated/ transferred/ converted in accordance with this Resolution Plan, be immediately returned to the Company by the relevant persons and the relevant security trustee/agent. Granted, subject to the various terms contained in this order. 13 Indemnity obligations of the Company in relation to assignme....
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.... creditors, and all inquiries, investigations or proceedings in relation to the foregoing, whether civil or criminal in relation to any period prior to the Implementation Date, shall to the extent not assigned/ novated/ transferred/ converted in accordance with this Resolution Plan, be written off in full and will be deemed to be permanently extinguished with effect from the NCLT Approval Date by virtue of the order of the NCLT approving this Resolution Plan and all the investigations, inquiries or show-cause, whether civil or criminal in relation to the foregoing shall be disposed of and the Company or the Resolution Applicant shall at no point of time be, directly or indirectly, held responsible or liable in relation thereto. Granted, subject to the various terms contained in this order. 15 Corporate Debtor shall: (i) be treated as a widely held company for the purposes of section 79 read with sections 2(18) of the Income Tax Act 1961, and the change in shareholding of the Corporate Debtor pursuant to this Resolution Plan shall not lead to lapse of brought forward losses of the Corporate Debtor; (ii) be provided waiver from all Tax dues including any interest an....
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....ping in view the object of IBC, 2016 18 The transactions contemplated under this Resolution Plan (including a potential Merger) shall not be considered void under any Applicable Laws, including without limitation, Section 281 of the Income Tax Act, 1961 and Section 81 of the Central Goods and Service Tax Act, 2017. This is for the CBDT and other appropriate authorities to consider keeping in view the object of IBC, 2016 19 Resolution Applicant shall have no liability under Applicable Laws, including pursuant to Section 170 of the Income Tax Act, 1961 and no successor liability shall be imposed on the Resolution Applicant and the Corporate Debtor. This is for the CBDT and other appropriate authorities to consider keeping in view the object of IBC, 2016 20 Respective Governmental Authorities (including but not limited to the Central Board of Direct Taxes, Central Board of Excise and Customs / respective Value Added Tax / GST Authorities, tribunals, arbitral body, land revenue records, stamp authorities) shall provide relief from applicability of and payment of Taxes (including under the provisions of Goods and the Services Taxes) which ....
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.... any tax liability up to the Implementation Date (including any liability on account of IGAAP accounting being followed for the purpose of computing taxable income instead of statutorily required IND AS method of accounting. This is for the CBDT and other appropriate authorities to consider keeping in view the object of IBC, 2016 24 All expenses claimed by the Company in the preceding eight years and returns as submitted or not submitted to be treated as assessed and all carry forward losses and depreciation to be treated as allowed. This is for the CBDT and other appropriate authorities to consider keeping in view the object of IBC, 2016 25 All pending litigation, notices, past and on-going assessments, past and on-going investigations, tax demands under all Indirect Tax statutes (including those set out in the table below), towards the Company would be treated as closed and no further action would be taken for any action / transaction carried out before the implementation of this resolution plan. It is clarified that no tax (including interest and penalty) would be paid for any liability or claim raised for period up to the Implementation Date.....
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....to utilize such amounts to set off against tax liability arising in future in accordance with Applicable Laws; This is for the CBDT and other appropriate authorities to consider keeping in view the object of IBC, 2016 31 All benefits, exemptions, deductions, rebates, reliefs, credits etc. under any tax laws in India available to the Company shall not lapse pursuant to the Resolution Plan and shall be available post the Implementation Date. Not Granted 32 All proceedings, investigations, inquiries, etc. made, commenced or initiated by any person (including SEBI, ED, SFIO, ROC, CLB, CBI etc) against the Company in relation to the period prior to the Closing Date shall irrevocably and unconditionally stand abated, withdrawn, settled and/or extinguished, and the Company, Resolution Applicant shall have no liability in this regard. Granted, in terms of Section 32A of IBC, 2016 33 All the civil and criminal litigations, investigations, enquires, proceedings, causes of action, claims, disputes or other judicial, regulatory proceedings against the Corporate Debtor or the affairs of the Corporate Debtor, pending or threatened, present or....
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.... of the judgment of the Hon'ble Supreme Court in Ghanashyam Mishra and Sons v. Edelweiss Asset Reconstruction Company Limited. 2021 SCC Online SC 313 36 Any person that other than as disclosed under the Information Memorandum and the list of creditors, there are no persons having the benefit of "security interest' as defined under Section 3 (31) of the Code over the assets of the Company, and if any, all such security interest over the assets of the company to the extent not assigned / novated / transferred / converted in accordance with this Resolution Plan are hereby waived and released unconditionally without any cost or liability of the Company. Granted 37 Any person that other than the payments contemplated in this Resolution Plan, the Resolution Applicant and/or the Company shall not be liable to make any payments for any and all claims, demands, liabilities or obligations owed or payable as on the Implementation Date to any Operational Creditor, Financial Creditor, workmen, employees, Governmental Authority or to any other stakeholder of the Company in relation to any period prior to the Implementation Date, or any amounts that are due a....
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....icant has filed an Affidavit dated 21.11.2022 in IA(IBC)/489(CHE)/2022, which states as follows: a. The SPV or the RA shall further infuse INR 8.93 Crore into the Corporate Debtor in form of quasi - equity, in addition to INR 385.07 Cores. Thereafter, the Corporate Debtor will pay an amount of INR 8.93 crore towards full and final satisfaction of the claims of the Operational Creditors thereby leading to extinguishment of all their rights under law and equity as against the Corporate Debtor / the SPV / the RA and therefore, there shall not be any requirement to assign the operational debt to the SPV and this shall be treated as part of the Resolution Plan. 11.3. The above-said Affidavit dated 21.11.2022 filed by the Resolution Applicant is taken on record. The dues of the Operational Creditors shall be paid by the SPV or RA, as the case may be, however, it is made clear that there shall be NO assignment of the dues of the Operational Creditor to the RA or the SPV. The Affidavit dated 21.11.2022 shall be treated as an integral part of the Resolution Plan, which is the subject matter of consideration in the present Application. 11.4. In respect of the Landlords of the ....
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....upreme Court in the matter of Maharashtra State Cooperative Bank Limited -Vs- Assistant Provident Fund Commissioner; (2009) 10 SCC 123, it has been held by the Hon'ble NCLAT that any amount due from the employer appearing in sub-section (2) of Section 11 also covers the amount determined under Sections 7A, 7Q, 14B and 15(2) and there cannot be any quarrel to the preposition as laid down by the Hon'ble Supreme Court in the above case. Also, by placing reliance upon Section 36(4)(a)(iii) of IBC, 2016 it was held that Provident Fund dues are not subject to distribution under Section 53(1) of IBC, 2016. 12.4. In so far as the present case is concerned, it is seen that the EPFO has claimed a sum of Rs.69.15 Crores, and the RP has admitted the claim of the EPFO to the tune of Rs.24.39 Crore. As per the Resolution Plan, the Resolution Applicant proposes to pay only a sum of Rs. 0.17 Crore to the EPFO. If the dues of the EPFO are not paid in full it goes against the dictum laid by the Hon'ble NCLAT in the matter of Jet Aircraft Maintenance Engineers Welfare Association(supra)and as such it is in violation of Section 30(2)(e) of IBC, 2016. 12.5. Further, it is also seen th....
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....ll bear such expenses. 15. Further, the Division Bench of the Hon'ble High Court of Delhi in the matter of Tata Steels BSL Limited-Vs- Venus Recruiters Private Limited & Ors .; 2023/DHC/00025 7while dealing with the continuation of PUFE transaction Applications after the completion of CIRP, has held as follows; "89. Conclusion a) ....... b) CIRP and avoidance applications, are, by their very nature, a separate set of proceedings wherein, the former, being objective in nature, is time bound whereas the latter requires a proper discovery of suspect transactions that are to be avoided by the Adjudicating Authority. The scheme of the IBC reinforces this difference. Accordingly, adjudication of an avoidance application is independent of the resolution of the corporate debtor and can survive CIRP c) The endeavour of the IBC and its rules and regulations is to ensure that all processes within the insolvency framework are time efficient. While the law mandates a resolution plan to necessarily provide for the treatment of avoidance applications if the same are pending at the time of submission of resolution plans, it cannot be accepted that avoidan....
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....ing share. In the meeting of the CoC, the proposed resolution plan is placed for discussion and after full interaction in the presence of all concerned and the Resolution Professional, the constituents of the CoC finally proceed to exercise their option (business/commercial decision) to approve or not to approve the proposed resolution plan. In such a case, non-recording of reasons would not per-se vitiate the collective decision of the financial creditors. The legislature has not envisaged challenge to the "commercial/business decision" of the financial creditors taken collectively or for that matter their individual opinion, as the case may be, on this count." 17. Further, the Hon'ble Supreme Court of India in the matter of Committee of Creditors of Essar Steels -Vs- Satish Kumar Gupta & Ors. in Civil Appeal No. 8766 - 67 of 2019at para 42 has held as follows; 42. ......... Thus, it is clear that the limited judicial review available, which can in no circumstance trespass upon a business decision of the majority of the Committee of Creditors, has to be within the four corners of Section 30(2) of the Code, insofar as the Adjudicating Authority is concerned, and Sec....
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.... dissenting financial creditors, it would not be free from being speculative. These aspects are completely within the domain of the financial creditors who are called upon to vote on the resolution plan under Section 30(4) of the I&B Code. 58. Indubitably, the inquiry in such an appeal would be limited to the power exercisable by the resolution professional under Section 30(2) of the I&B Code or, at best, by the adjudicating authority (NCLT) under Section 31(2) read with Section 31(1) of the I&B Code. No other inquiry would be permissible. Further, the jurisdiction bestowed upon the appellate authority (NCLAT) is also expressly circumscribed. It can examine the challenge only in relation to the grounds specified in Section 61(3) of the I&B Code, which is limited to matters "other than" enquiry into the autonomy or commercial wisdom of the dissenting financial creditors. Thus, the prescribed authorities (NCLT/NCLAT) have been endowed with limited jurisdiction as specified in the I&B Code and not to act as a court of equity or exercise plenary powers." (emphasis supplied) 19. Also, the Supreme Court of India in the matter of Committee of Creditors of Essar Steel ....
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....iquidated is essentially a business decision; and in the scheme of IBC, this decision has been left to the Committee of Creditors, comprising of the financial creditors. Differently put, in regard to the insolvency resolution, the decision as to whether a particular resolution plan is to be accepted or not is ultimately in the hands of the Committee of Creditors; and even in such a decision making process, a resolution plan cannot be taken as approved if the same is not approved by votes of at least 66% of the voting share of financial creditors. Thus, broadly put, a resolution plan is approved only when the collective commercial wisdom of the financial creditors, having at least 2/3rd majority of voting share in the Committee of Creditors, stands in its favour. 77. In the scheme of IBC, where approval of resolution plan is exclusively in the domain of the commercial wisdom of CoC, the scope of judicial review is correspondingly circumscribed by the provisions contained in Section 31 as regards approval of the Adjudicating Authority and in Section 32 read with Section 61 as regards the scope of appeal against the order of approval. 77.1. Such limitations on judici....
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.... of the resolution plan results in maximisation of the value of assets or not. The generalised submissions and objections made in relation to this aspect of value maximisation do not, by themselves, make out a case of interference in the decision taken by the Committee of Creditors in its commercial wisdom 78. To put in a nutshell, the Adjudicating Authority has limited jurisdiction in the matter of approval of a resolution plan, which is well defined and circumscribed by Sections 30(2) and 31 of the Code read with the parameters delineated by this Court in the decisions above referred. The jurisdiction of the Appellate Authority is also circumscribed by the limited grounds of appeal provided in Section 61 of the Code. In the adjudicatory process concerning a resolution plan under IBC, there is no scope for interference with the commercial aspects of the decision of the CoC; and there is no scope for substituting any commercial term of the resolution plan approved by the CoC. Within its limited jurisdiction, if the Adjudicating Authority or the Appellate Authority, as the case may be, would find any shortcoming in the resolution plan vis-à-vis the specified paramete....