Tribunal cannot sit in appeal on commercial wisdom of CoC and annul approved resolution plan. SC dismissed SLP

Appellate Tribunal cannot sit in appeal on commercial wisdom of the ‘Committee of Creditors’ and to annul the resolution plan. SC dismissed SLP

ABCAUS Case Law Citation
ABCAUS 3488 (2021) (04) SC

Important case law relied referred:
Committee of Creditors of Essar Steel India Limited vs. Satish Kumar Gupta & Ors. (2019) SCC Online SC 147

In the instant case, the Commercial Taxes Department had challenged the order of the National Company Law Appellate Tribunal (NCLAT) refusing to entertain the appeal for delay in terms of Section 61(2) of the I&B Code.

The appeal was filed by the Revenue against the order of the National Company Law Tribunal (NCLT) whereby ‘corporate insolvency resolution process’ (CIRP) against the respondent company (corporate debtor) had been closed by approving the resolution plan of the successful resolution applicant.   

Before the NCLAT, the Revenue contended that delay was caused due to the fact that the certified copy of the Resolution Plan was received late.  

The NCLAT observed that there was more than 17 days delay after 30 days of the time to file the appeal in terms of Section 61(2) of the ‘I&B Code’.

The NCLAT stated that it cannot entertain the appeal having no jurisdiction to condone the delay of more than 15 days after 30 days.

The NCLAT further stated that the reason that the resolution plan had been received late could not be a ground to entertain the appeal.

The NCLAT, in view of the decision of the Hon’ble Supreme Court had held that Adjudicating Authority and the Appellate Tribunal cannot enter into the merits of a business decision of the requisite majority of the Committee of Creditors provided that it is otherwise in conformity with the provisions of the Code and the Regulations.

Accordingly, the NCLAT stated that the Appellate Tribunal cannot sit in appeal on commercial wisdom of the ‘Committee of Creditors’ and to annul the resolution plan.

Aggrieved by the order passed by the NCLAT, the Revenue filed a Appeal to the Hon’ble Supreme Court challenging it.

However, the Hon’ble Supreme Court dismissed the appeal stating that there no reason could be found to interfere with the impugned order passed   by   the   National   Company   Law   Appellate Tribunal.

Download Full Judgment Click Here >>

• In absence of mala fide intention bank should not be treated as assessee in default
• Whether bank account was fraudulently open in the name of assessee is question of fact
• SBI Concurrent Auditor Empanelment of Chartered Accountant Firms 2024-25. Last date 18.05.2024
• Change in the constitution of Appellate Authority for CAs CSs and Cost Accountants
• Trade Tax refund withheld beyond stipulated period & adjusted from demand unjustified – SC