March 12, 2021 3:09:36 am
Commercial decisions taken by the Committee of Creditors (CoC) with regard to resolution of a corporate debtor under the insolvency regime can’t usually be held up for judicial review by the relevant tribunals, the Supreme Court has reiterated.
This is for the third time since March 2019 that the apex court has ruled against the attempts by the National Company Law Tribunal (NCLT) and the appellate body NCLAT to interfere with the merits of the COC’s majority business decisions regarding distribution of the proceeds of resolution among various classes of stakeholders.
The court’s holding on to the view that the tribunals have little residual equity jurisdiction upon the CoC’s well-laid-out mandate will help fast-track resolutions.
In the latest ruling, a three-judge SC Bench, comprising Justices AM Khanwilkar, BR Gavai and Krishna Murari set aside an NCLAT order that had annulled the decision of CoC to accept a resolution plan for corporate debtor Ricoh India, submitted by Kalparaj Dharamshi & Rekha Jhunjunwala. In issuing the order, the NCLAT had upheld the challenge posed by unsuccessful bidder Kotak Investment Advisors Ltd (KIAL) to the COC-approved resolution.
Kotak’s challenge was on grounds that the Kalparaj’s plan was submitted beyond the prescribed time limit; the court, however, noted that both the bidders submitted revised plans after the time-line quoted by KIAL. —FE
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