Case Note & Summary
The appeal was filed by Suraksha Realty Ltd. against an order by the National Company Law Tribunal, Mumbai, which approved a Resolution Plan for Mahavir Roads and Infrastructure Pvt. Ltd. The Appellant had sanctioned a loan of Rs. 60 crores to the Corporate Debtor, which defaulted on repayment, leading to the initiation of Corporate Insolvency Resolution Process (CIRP) under Section 7 of the Insolvency and Bankruptcy Code, 2016. The Appellant claimed an amount of Rs. 109.63 crores as a secured financial creditor, but the Interim Resolution Professional admitted only Rs. 40.84 crores, categorizing the Appellant as unsecured. The CoC later approved a Resolution Plan by Bermaco Energy Systems Ltd. with a voting percentage of 78.83%. The Appellant contended that the plan was based on false information and did not classify it correctly as a secured creditor. The Respondents argued that the CoC was aware of all proceedings and acted within its commercial wisdom. The Tribunal found that the CoC had adequately considered the Appellant's objections and upheld the approval of the Resolution Plan, emphasizing the importance of the CoC's commercial wisdom in such decisions.
Headnote
A) Insolvency Law - Approval of Resolution Plan - Validity of Approval - Insolvency and Bankruptcy Code, 2016, Section 61 - The Appellant challenged the approval of the Resolution Plan on grounds of material concealment and incorrect classification as a creditor. The Tribunal held that the CoC had considered all relevant facts and exercised its commercial wisdom in approving the plan, thus upholding the decision (Paras 10-41).
Issue of Consideration
Whether the approval of the Resolution Plan was valid despite allegations of material concealment and non-classification of the Appellant as a secured creditor.
Final Decision
The Tribunal dismissed the appeal, upholding the approval of the Resolution Plan by the CoC, affirming that the CoC had exercised its commercial wisdom appropriately and had considered all relevant facts.
Law Points
- Insolvency and Bankruptcy Code
- 2016
- Section 61
- Section 30
- Regulation 39
- eligibility of resolution applicant
- commercial wisdom of CoC
- material concealment
Case Details
2026 LawText (NCLAT) (09) 56
CA (AT) (Ins) No. 1041 of 2024
Justice Mohd. Faiz Alam Khan
Mr. Krishnendu Datta, Sr. Adv., Mr. J. Rajesh, Mr. Abhijeet Sinha, Sr. Adv., Mr. Sunil Fernandes, Sr. Adv.
Amit Gupta Resolution Professional of Mahavir Roads and Infrastructure Pvt. Ltd.
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Nature of Litigation
Appeal against the approval of a Resolution Plan under the Insolvency and Bankruptcy Code, 2016.
Remedy Sought
The Appellant sought to challenge the approval of the Resolution Plan.
Filing Reason
The Appellant alleged material concealment and incorrect classification as a creditor.
Previous Decisions
The National Company Law Tribunal approved the Resolution Plan on 14.05.2024.
Issues
Whether the approval of the Resolution Plan was valid despite allegations of material concealment.
Whether the Appellant was correctly classified as a secured creditor.
Submissions/Arguments
The Appellant argued that the Resolution Plan was based on false information and did not classify it correctly as a secured creditor.
The Respondents contended that the CoC acted within its commercial wisdom and was aware of all relevant proceedings.
Ratio Decidendi
The Tribunal emphasized the importance of the commercial wisdom of the Committee of Creditors in approving a Resolution Plan and held that allegations of material concealment must be substantiated to invalidate such approvals.
Judgment Excerpts
The Appellant challenged the approval of the Resolution Plan primarily on the grounds of material concealment and false information provided.
The Tribunal held that the CoC had considered all relevant facts and exercised its commercial wisdom in approving the plan.
The Appellant's charge over the assets of the Corporate Debtor was registered prior to the submission of the revised Resolution Plan.
Procedural History
The appeal was filed against the order of the National Company Law Tribunal approving the Resolution Plan after the Corporate Debtor was admitted into CIRP and the Appellant's claim was partially admitted.
Acts & Sections
- Insolvency and Bankruptcy Code, 2016: Section 61, Section 30
- Prevention of Money Laundering Act, 2002: Section 3
- Indian Penal Code, 1860: Section 420, Section 120-B
