KALPRAJ DHARAMSHI & ANR. versus KOTAK INVESTMENT ADVISORS LTD. & ANR.

Citation: [2021] 2 S.C.R. 677 · Decided: 10-03-2021 · Supreme Court of India · Bench: A.M. KHANWILKAR · Disposal: Disposed off

Cited by 3 judgment(s) · cites 26 · see the full citation network in Lexace

Judgment (excerpt)

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KALPRAJ DHARAMSHI & ANR.
v.
KOTAK INVESTMENT ADVISORS LTD. & ANR.
(Civil Appeal Nos. 2943-2944 of 2020)
MARCH 10, 2021
[A.M. KHANWILKAR, B. R. GAVAI AND
KRISHNA MURARI, JJ.]
Insolvency and Bankruptcy Code, 2016:
ss. 10, 61, 238A – Proceedings or appeals before the
adjudicating Authority, appellate tribunal etc – Application of
Limitation Act – On facts, application u/s. 10 by Corporate Debtor
for initiation of Corporate Insolvency Resolution Process –
Successively five Form G notified – Resolution applicant-KIAL
submitted Resolution Plan (RP) within the stipulated time and
resolution applicant-Kalpraj submitted plan after the stipulated time
– Objection raised by KIAL – Subsequently on direction by
Committee of Creditors (CoC), submission of revised plan by KIAL
and Kalpraj – Thereafter, approval of revised plan submitted by
Kalpraj – KIAL challenged the approval of Kalpraj’s Resolution
Plan before NCLT – Plan of Kalpraj approved by NCLT – Thereafter,
KIAL filed Writ Petition before the High Court which was dismissed
on the ground of alternate remedy – KIAL then filed appeal before
NCLAT which was allowed, rejecting Kalpraj submission that appeal
were filed beyond the limitation period prescribed in IBC – On
appeal, held: Provisions of s. 14 of the Limitation Act are available
to KIAL – Applying the principles underlying s. 14, KAIL entitled to
exclusion of the period during which it was bona fide prosecuting
a remedy before the High Court in good faith and with due diligence,
thus, the appeals filed before NCLAT within the limitation – Though
an alternate remedy was available to it, it was approaching the
High Court since the issue with regard to functioning of NCLT also
fell for consideration – High Court dismissed the writ petition
relegating KIAL to an alternate remedy available in law – High
Court could have exercised extra-ordinary jurisdiction u/Art. 226
inasmuch as, the grievance was regarding procedure followed by
NCLT to be in breach of principles of natural justice – Limitation
Act, 1963 – s. 29(2) – Constitution of India – Art. 226.
[2021] 2 S.C.R. 677
677
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SUPREME COURT REPORTS
[2021] 2 S.C.R.
Waiver and acquiescence – Inference of – Objection by KIAL
to the acceptance of belated Resolution Plan of Kalpraj – However,
when no choice left, KIAL submitted revised Resolution Plan –
Conduct of KIAL, if amounts to waiver and acquiescence by KIAL
so as to estop it from challenging the participation of Kalpraj –
Held: KIAL had objected to participation of other applicant
submitting plan after the due date as per the last Form G and also
reiterated its objection to the participation of Kalpraj – It cannot
be said that having participated by submitting the revised plans,
KIAL is estopped from challenging the decision of Resolution
Professional (RP) or CoC on the ground of acquiescence and waiver
– Merely because, the revised plans are not submitted with the words
“without prejudice”, would not make any difference – KIAL had no
other option than to submit its revised plans in view of clause 11.2
of the Process Memorandum – Had it not responded, it had to run
the risk of being out of competition – Also it is not established that
KIAL had given up/surrendered its rights to take recourse to the
legal remedies, and that on account of waiver or acquiescence the
parties had altered their position to their detriment.
ss. 10, 30, 31 – Submission and approval of Resolution plan
– Decision of Committee of Creditors-CoC accepting the resolution
plan of Resolution applicant-Kalpraj – NCLAT annulled decision
of CoC to accept the Resolution Plan – Interference with the decision
of CoC by NCLAT – Correctness of – Held: Statute has not invested
jurisdiction and authority either with NCLT or NCLAT, to review
the commercial decision exercised by CoC of approving the resolution
plan or rejecting the same – Commercial wisdom of CoC is not to be
interfered with, except within the limited scope u/ss. 30 and 31 of
the Code – Decision of CoC was taken by a thumping majority of
84.36% – Only creditor voted in favour of KIAL is having voting
rights of 0.97% – In view of the paramount importance given to the
decision of CoC, NCLAT not correct in law in interfering with the
commercial decision taken by CoC – Furthermore, for a long period,
there was no restraint on implementation of the resolution plan of
Kalpraj, which was duly approved by NCLT and during the said
period, Kalpraj has spend a huge amount

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