The NCLAT, New Delhi expounded that due regard has to be given to the commercial wisdom of the Committee of Creditors (“CoC”) vide which the Resolution Plan is approved. Further, there is very limited ground on which such a decision can be challenged.
It was opined that the allocation to the creditors can only be questioned when the plan value earmarked for them is less than the liquidation value. However, the present case is not such. It was ruled that the mere allocation of a meagre amount cannot be a ground to challenge the resolution plan.
Brief Facts:
The present Appeal has been preferred against the order of the NCLT vide which the application of the Appellant challenging the Resolution Plan was rejected.
The Appellant was an unsecured financial creditor who has a vote share in the CoC of 0.264%. the Resolution Plan was approved with more than 99% voting.
Contentions of the Appellant:
It was contended that the plan could not have been approved since the objections regarding the partial rejection of the claim of the Appellant were pending before the NCLT.
Further, it was argued that the Asset Reconstruction Company was a fraudulent company which should not be allowed to take over the Corporate Debtor.
Observations of the Tribunal:
It was expounded that due regard has to be given to the commercial wisdom of the CoC vide which the Resolution Plan is approved. Further, there is very limited ground on which such a decision can be challenged.
Further, the allocation to the creditors can only be questioned when the plan value earmarked for them is less than the liquidation value. However, the present case is not such. It was ruled that the mere allocation of a meagre amount cannot be a ground to challenge the resolution plan.
The decision of the Tribunal:
Based on the aforementioned findings, the NCLAT dismissed the appeal accordingly.
Case Title: Pani Logistics v. Vikas G. Jain & Ors.
Coram: Justice Ashok Bhushan, Barun Mitra (Technical Member)
Case No.: Company Appeal (AT)(Insolvency) No. 205 of 2023
Advocates for Appellant: Advs, Mrs. Lakshmy Iyengar, Ms. Vishakha Gupta, Mr. Kshitij Maheshwari
Advocates for Respondents: Advs. Mr. Sumit Shukla, Mr. Krishnendu Datta, Mr. Mohd. Shahan Ulla, Mr. Nikunj Mahajan, Mr. Krishan Kumar
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