M. K. RAJAGOPALAN versus DR. PERIASAMY PALANI GOUNDER & ANR

Citation: [2023] 9 S.C.R. 783 · Decided: 03-05-2023 · Supreme Court of India · Bench: DINESH MAHESHWARI · Disposal: Disposed off

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Judgment (excerpt)

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M. K. RAJAGOPALAN
v.
DR. PERIASAMY PALANI GOUNDER & ANR.
(Civil Appeal Nos. 1682-1683 of 2022)
MAY 03, 2023
[DINESH MAHESHWARI AND VIKRAM NATH, JJ.]
Insolvency and Bankruptcy Code, 2016 – ss. 12A, 29-A(e),
30(2)(e) & 30(6) – Insolvency and Bankruptcy Board of India
(Insolvency Resolution Process for Corporate Persons) Regulations,
2016 – Regulation 36-A(2)(iii) – Disapproval of resolution plan by
the Appellate Tribunal (NCLAT) for want of presentation of final
resolution plan before CoC – Held: Is unexceptionable and calls
for no interference – When the modified resolution plan, even if
carrying minor modification /revision was not finally approved by
CoC, its presentation to the Adjudicating Authority amounts to a
material irregularity and this defect cannot be cured – There is no
and there cannot be any concept of post facto approval of any
resolution plan by CoC which had not been placed before it prior
to the filing before the Adjudicating Authority – Requirement of
CIRP Regulations, particularly of placing the resolution plan in its
final form before the CoC, has to be scrupulously complied with –
This is so for the specific reason concerning law that if the process
as adopted in the present matter is approved, the very scheme of the
Code and CIRP regulations would be left open-ended and would
be capable of inviting arbitrariness at any level – The irregularity
in the process of approval by CoC and filing before Adjudicating
Authority are not the matters of such formal nature that deviation in
that regard could be ignored or condoned – When commercial
wisdom of CoC is assigned primacy, it presupposes a considered
decision on the resolution plan in its final form – The principles
underlying the decisions of this Court respecting the commercial
wisdom of CoC cannot be over-expanded to brush aside a significant
shortcoming in the decision making of CoC when it had not duly
taken note of the operation of any provision of law for the time
being in force – On facts, disapproval of the resolution plan in
question by the Appellate Tribunal (NCLAT) in the impugned order
is not to be interfered with but, not for all the reasons which weighed
[2023] 9 S.C.R. 783 : 2023 INSC 486
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SUPREME COURT REPORTS
[2023] 9 S.C.R.
with the Appellate Tribunal – The reasons and findings of the
Appellate Tribunal in relation to the valuation process and alleged
non-compliance of some of the procedural provisions as also the
observations against increase of fees of resolution professional are
not approved – Similarly, the Appellate Tribunal was not right in
holding the resolution applicant ineligible to submit a resolution
plan with reference to s.164(2)(b) of the Companies Act, 2013 –
The disapproval by the Appellate Tribunal, with reference to the
settlement offer of promoter in terms of s.12-A of the Code, and its
purported non-consideration is also not approved and such findings
of the Appellate Tribunal are required to be set aside – Similarly,
the Appellate Tribunal erred in applying the principles of non-
discrimination in relation to the related party – However, even while
respecting the commercial wisdom of CoC, in the present case, the
resolution plan in question could not have been approved by the
Adjudicating Authority for two major reasons: one, for the
ineligibility of the resolution applicant; and second, for not placing
of the revised resolution plan in the CoC before seeking approval
from the Adjudicating Authority – So far the subsequent events
concerning invitation of fresh Expression of interest (EOIs) and
approval of the fresh settlement proposal of the promoter by the
CoC are concerned, all the relevant aspects are kept open for
consideration of the Adjudicating Authority.
Committee of Creditors of Essar Steel India Limited
through Authorised Signatory v. Satish Kumar Gupta
and Ors. (2020) 8 SCC 531 : [2019] 16 SCR 275;
Jaypee Kensington Boulevard Apartments Welfare
Association and Ors. v. NBCC (India) Limited and Ors.
(2022) 1 SCC 401; Swiss Ribbons (P) Ltd. and Anr. v.
Union of India and Ors. (2019) 4 SCC 17 : [2019] 3
SCR 535 – relied on.
K. Sashidhar v. Indian Overseas Bank (2019) 12 SCC
150 : [2019] 3 SCR 845; Maharashtra Seamless Ltd. v.
Padmanabhan Venkatesh and Ors. (2020) 11 SCC 467
: [2020] 2 SCR 1157; Phoenix ARC (P) Ltd v. Spade
Financial Services Ltd. and Ors. (2021) 3 SCC 475; C.
Raja John v. R. Raghavendran and Ors. Comp. Appl.
(AT)(CH)(Ins) No. 207 of 2021; Kalp

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