LexPIRAMAL CAPITAL AND HOUSING FINANCE LIMITED (FORMERLY KNOWN AS DEWAN HOUSING FINANCE CORPORATION LIMITED) versus 63 MOONS TECHNOLOGIES LIMITED & OTHERS
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[2025] 4 S.C.R. 344 : 2025 INSC 421 Piramal Capital and Housing Finance Limited (Formerly Known as Dewan Housing Finance Corporation Limited) v. 63 Moons Technologies Limited & Others (Civil Appeal No(s). 1632-1634 of 2022) 01 April 2025 [Bela M. Trivedi* and Satish Chandra Sharma, JJ.] Issue for Consideration Whether Resolution Plan-RP approved by Committee of Creditors-CoC and NCLT was in contravention of provisions of any law requiring NCLAT to exercise its jurisdiction u/s.61 of the Insolvency and Bankruptcy Code, 2016; whether the NCLAT should have entertained the appeals filed by the respondents-63 Moons u/s.61 of the Code and tinkered with the RP approved by the CoC and the NCLT; whether NCLAT was correct in dismissing appeals by FD Holders challenging the distribution mechanism whereby full amount was not reimbursed; and whether ex-promoters/directors have a right to participate in meetings of CoC, when Board of Directors has been superseded under the RBI Act. Headnotes† Insolvency and Bankruptcy Code, 2016 – s.26 – Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 – Reg.37(a) – IBBI (Liquidation Process) Regulations, 2016 – Reg.37A – DHFL-finance company involved in accusation of loan frauds, money laundering, etc. worth thousands of crores – Company conducted its affairs detrimental to the interest of its depositors and creditors – Initiation of Corporate Insolvency Resolution Process-CIRP proceedings of DHFL-corporate debtor – Appellant-PC submitted Resolution Plan-RP for consideration of Administrator/Committee of Creditors-CoC – Respondent voted in favour of RP within its class of debenture holders and RP approved by majority – Authorised representative-AR of class of debenture holders voted in favour of RP – RP approved by CoC as also by NCLT – Respondent challenged * Author [2025] 4 S.C.R. 345 Piramal Capital and Housing Finance Limited (Formerly Known as Dewan Housing Finance Corporation Limited) v. 63 Moons Technologies Limited & Others the provisions of RP that s.66 recoveries will go to the benefit of Successful Resolution Applicant-SRA – NCLT dismissed application – Thereafter, NCLAT set aside the term in RP that permitted SRA to appropriate recoveries from avoidance applications and sent back RP to CoC for reconsideration – Correctness: Held: Applications filed in respect of “Fraudulent and Wrongful trading” carried on by CD, could not be termed as “Avoidance Applications” used for Applications filed u/ss.43, 45 and 50 to avoid or set aside the Preferential, Undervalued or Extortionate transactions – If the Resolution Professional has filed common applications u/s.43, 45, 50 and also u/s.66, the Adjudicating Authority shall have to distinguish the same and decide as to which provision would be attracted to which of the Applications, and then shall exercise the powers and pass the orders in terms of the provisions of IBC – If finality and binding force is not provided to votes cast by Authorised representative-ARs of a class of Financial Creditors, RP involving large number of parties may never fructify – Vote cast by AR on behalf of the class of Financial Creditors he represented was binding on respondent and other appellants and thus, they were estopped from raising any objection before NCLT/NCLAT against RP approved by majority of CoC – When s.26 specifically states that filing of an Avoidance Application u/s.25(2)(j) shall not affect CIRP proceedings, and Reg.37(a) of Regulations 2016 also permits provision in RP for transfer of assets of Corporate Debtor-CD to one or more persons, reference of Reg.37A of Liquidation Process Regulations in the impugned order unwarranted and ex-facie fallacious – NCLAT also misdirected itself by relying on foreign texts and jurisprudence, which could not be made applicable to insolvency regime of India – In absence of any perversity palpable on the face of approved RP, and CoC having taken a firm commercial decision by voting overwhelmingly in favour of RP, NCLAT ought not to have interfered – NCLAT clearly transgressed its jurisdiction u/s.61, by interfering with the clause pertaining to treatment of recoveries u/s.66 – Impugned judgment and order passed by the NCLAT set aside, and the judgment and order passed by the NCLT granting its approval to the Plan Approval Application, and thereby approving the Resolution Plan, upheld
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