Case Note & Summary
The appeal arose from a decision by the National Company Law Appellate Tribunal regarding the approval of a resolution plan under the Insolvency and Bankruptcy Code, 2016. The appellant, India Resurgence ARC Private Limited, challenged the approval of the resolution plan submitted by Amit Metaliks Limited for the corporate debtor VSP Udyog Private Limited. The appellant, as an assignee of a secured financial creditor, expressed dissent regarding the proposed share in the resolution plan, arguing that it did not adequately consider the value of its security interest. The National Company Law Tribunal had approved the resolution plan with a 95.35% voting share from the Committee of Creditors, which the appellant contested on grounds of feasibility and viability. The Appellate Authority upheld the Tribunal's decision, emphasizing that the Committee of Creditors had the discretion to determine the feasibility and viability of the plan, and that the amendment to Section 30(4) of the Code merely provided guidelines rather than mandatory requirements. The Supreme Court, upon review, found no merit in the appeal, reiterating that the commercial wisdom of the Committee of Creditors should not be subject to judicial review unless there was a clear violation of statutory provisions. The court dismissed the appeal, affirming the validity of the resolution plan and the process followed by the Committee of Creditors.
Headnote
A) Insolvency Law - Approval of Resolution Plan - Commercial Wisdom of Committee of Creditors - The Committee of Creditors has the discretion to approve a resolution plan based on commercial wisdom, which includes considerations of feasibility and viability, as per Section 30 of the Insolvency and Bankruptcy Code, 2016. The court held that the approval of the resolution plan by the Committee of Creditors was valid as it complied with the statutory requirements and did not warrant judicial intervention (Paras 6-12).
Issue of Consideration
Whether the approved resolution plan considered the priority and value of security interest of creditors as required under the Insolvency and Bankruptcy Code, 2016.
Final Decision
The Supreme Court dismissed the appeal, affirming the decision of the Appellate Authority and the approval of the resolution plan by the Committee of Creditors, stating that the considerations regarding feasibility and viability of the plan fell within the exclusive domain of the Committee of Creditors.
Law Points
- Insolvency and Bankruptcy Code
- 2016
- Section 30
- Section 61
- commercial wisdom of Committee of Creditors
- feasibility and viability of resolution plan
- equitable treatment of creditors
