Sarda Agro Oils Ltd vs. Indian Bank - (NATIONAL COMPANY LAW APPELLATE TRIBUNAL) (23 Nov 2023)

Commercial wisdom of the CoC is to be given paramount importance for approval/rejection of a Resolution Plan

MANU/NL/0941/2023

Insolvency

Aggrieved by the Impugned Order, the Suspended Director and Promotor of the Corporate Debtor Company, preferred presentappeal, under Section 61 of the Insolvency and Bankruptcy Code, 2016 (IBC).By the Impugned Order, the Adjudicating Authority has allowed the Application filed by the Resolution Professional ("RP") of the Corporate Debtor Company seeking direction to liquidate the Corporate Debtor and to appoint the Applicant as the Liquidator to administer the Liquidation Process. It is noted by the Adjudicating Authority that the CoC in its commercial wisdom, approved the Liquidation of the Corporate Debtor, with a 100 % majority. In view of the fact that the CIRP Period of 270 days was concluded on 28th August, 2020, the Adjudicating Authority thought it fit to allow the Application.

It is an admitted fact that, there was no Resolution Plan which was approved by the CoC, prior to the expiry of the CIRP Period and therefore, the Adjudicating Authority passed the Liquidation Order as mandated under Section 33 (2) of the IBC. Having regard to the fact that, the CIRP period of 270 days was over and the CoC had voted in favour of Liquidation of the Corporate Debtor Company with a 100 % majority, present Tribunal do not see any substantial reasons in the argument of the Learned Counsel for the Appellant that, their Plan ought to have been considered.

The material on record establishes that, Section 33 (1) (a) (i) and Section 33 (2) of the IBC have been satisfied, IBC is a time bound process and the commercial wisdom of the CoC is to be given paramount importance for approval/rejection of a Resolution Plan. The Hon'ble Supreme Court in a catena of Judgments namely, 'Kalparaj Dharamshi v. Kotak Investment Advisors Ltd.', 'K. Sashidhar Vs. Indian Overseas Bank' has laid down that, the Judicial review of the Tribunals is limited in terms of impeding the commercial wisdom of the CoC except when a Plan is not in adherence to Section 30 (2) of the IBC.

In the instant Case, there is no Resolution Plan, and the CoC has approved the Liquidation with a 100 % Voting as mandated under Section 33 of the IBC, and there being no possibility of sale of the Corporate Debtor as 'a Going Concern', present Tribunal see no substantial grounds to interfere with the well- considered Order of the Adjudicating Authority and hence, this Company Appealis dismissed.

Tags : COMMERCIAL WISDOM COC JUDICIAL REVIEW