NGAITLANG DHAR versus PANNA PRAGATI INFRASTRUCTURE PRIVATE LIMITED & ORS.

Citation: [2021] 9 S.C.R. 1009 · Decided: 17-12-2021 · Supreme Court of India · Bench: L. NAGESWARA RAO · Disposal: Appeal(s) allowed

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Judgment (excerpt)

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   [2021] 9 S.C.R. 1009
1009
NGAITLANG DHAR
v.
PANNA PRAGATI INFRASTRUCTURE
PRIVATE LIMITED & ORS.
(Civil Appeal Nos.3665-3666 of 2020)
DECEMBER 17, 2021
[L. NAGESWARA RAO AND B. R. GAVAI, JJ.]
Insolvency and Bankruptcy Code, 2016 – ‘Material
irregularity’ – When not – Corporate Insolvency Resolution Process
(CIRP) initiated in respect of Corporate Debtor – Resolution Plans
were received from four prospective Resolution Applicants including
the appellant, respondent no.2 and other two – In the meeting of
Committee of Creditors (CoC), the appellant emerged as H-1 bidder
– Resolution Plan of the appellant approved by CoC, further
approved by NCLT – Respondent No.1- contended that in the
proceedings before the CoC it had sought some time to submit its
revised Resolution Plan and had accordingly submitted the same –
Filed application seeking direction to the Resolution Professional
(RP) to take on record its revised Resolution Plan – Rejected by
NCLT – RP sought approval to the Resolution Plan submitted by the
appellant – Allowed by NCLT – Both the orders challenged by
respondent no.1 before NCLAT – Appeals allowed – Held:
Commercial wisdom of the CoC should not be interfered with, it is
only the process of decision making, which can be challenged if
there is any material irregularity in the said proceedings – In the
present case, CoC evaluated the Resolution Plans of all the four
prospective Resolution Applicants – Equal opportunity was accorded
to all – However, the respondent no.1, without improving his bid
amount, went on insisting for more time – Procedure adopted by the
RP as well as the CoC was fair, transparent and equitable – No
material irregularity – NCLAT erred in interfering with the decision
of the CoC which was duly approved by the NCLT – Impugned
judgment set aside.
Insolvency and Bankruptcy Code, 2016 – ss.30(2), 61(3) –
Held: Opinion expressed by Committee of Creditors (CoC) after due
deliberations in the meetings through voting, as per voting shares,
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SUPREME COURT REPORTS
[2021] 9 S.C.R.
is the collective business decision – Decision of the CoC’s
‘commercial wisdom’ is non-justiciable, except on limited grounds
for challenge u/ss.30(2) or 61(3).
Allowing the appeals, the Court
1.1 The respondent No.1-PPIPL was very much aware that
the CoC has decided to finalise the proceedings by 12th February,
2020. It is also clear that though PPIPL was first called upon by
the CoC to enhance the bid amount, it had specifically rejected
the same. It insisted on disclosing the basis of score. In the
proceedings of the 5th meeting of the CoC dated 11th February,
2020, post lunch, though the appellant had enhanced his bid from
Rs.63 crore to Rs.64 crore, the representative of PPIPL
subsequently came and requested for adjourning the meeting for
few days. The said request was specifically rejected by the CoC
by informing the representative of PPIPL that it had to adhere to
the IBC timeline and would have to conclude the matter by next
day. On the next day, i.e., 12th February, 2020, when the
adjourned proceedings of the CoC were held, the respondent
No.1-PPIPL had sent an email, stating therein that the Directors
of its Company will not be available for the said meeting and
requested for deferring the meeting by a day or two. On the
insistence of all the prospective Resolution Applicants present,
the CoC clarified that since the timeline was coming to an end, it
had decided to exclude the prospective Resolution Applicants
who were not present in the said meeting. In the said meeting,
the appellant came to be declared as the highest bidder after he
improved his bid in the open bidding held between him and Mr.
‘AA’. The Resolution Plan of the appellant was approved
unanimously by Allahabad Bank having 68.34% voting rights and
the Corporation Bank having 31.66% voting rights. It could thus
be seen that the RP as well as the CoC had acted in a totally
transparent manner. An equal opportunity was accorded to all
the prospective Resolution Applicants. However, the respondent
No.1-PPIPL, without improving his bid amount, went on insisting
for more time, which request was specifically rejected by the CoC.
[Paras 25-27][1019-D-H; 1020-A-B]
1.2 The procedure adopted by the RP as well as the CoC
was fair, transparent and equitable. The CoC was facing the
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timeline, which was to end on 24 th February, 2020, before which
it had to finalise its decision. In these circumstan

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