Case Note & Summary
The case involved an appeal under Section 62 of the Insolvency and Bankruptcy Code, 2016, against a judgment by the National Company Law Appellate Tribunal (NCLAT) which upheld the NCLT's order to keep the approval of a Resolution Plan in abeyance pending revaluation of the corporate debtor's assets. The corporate debtor, ACIL Limited, was undergoing a Corporate Insolvency Resolution Process initiated by IDBI Bank Ltd. The Resolution Professional (RP) had submitted a Resolution Plan which was approved by the CoC with a majority vote. The NCLT's order for revaluation was contested on the grounds that it exceeded its jurisdiction and interfered with the CoC's commercial wisdom. The appellant argued that the NCLT had no basis for questioning the valuation process already conducted by registered valuers as per the Code's provisions. The court analyzed the statutory framework governing the approval of Resolution Plans and emphasized that the CoC's decisions should not be interfered with unless there are clear violations of the Code. The court ultimately held that the NCLT's direction for revaluation was unjustified and reinstated the approval of the Resolution Plan, affirming the supremacy of the CoC's commercial decisions.
Headnote
A) Insolvency Law - Approval of Resolution Plan - Jurisdiction of NCLT - Insolvency and Bankruptcy Code, 2016, Sections 30, 31 - The NCLT's direction for revaluation of assets was beyond its jurisdiction as the CoC had already approved the Resolution Plan with no objections raised. The court held that the CoC's decision should not be subjected to unnecessary judicial scrutiny and that the NCLT must adhere to the statutory requirements without overstepping its authority (Paras 27-32).
Issue of Consideration
Whether the National Company Law Tribunal (NCLT) exceeded its jurisdiction by directing a revaluation of assets after the Committee of Creditors (CoC) approved the Resolution Plan.
Final Decision
The Supreme Court held that the NCLT exceeded its jurisdiction by directing a revaluation of assets after the CoC had approved the Resolution Plan. The court reinstated the approval of the Resolution Plan, emphasizing the supremacy of the CoC's commercial decisions.
Law Points
- Insolvency and Bankruptcy
- Corporate Insolvency Resolution Process
- Resolution Plan Approval
- Jurisdiction of NCLT
- Commercial Wisdom of CoC
