The Supreme Court held that Approval of Resolution Plan (RP) not to be interfered with, if the Committee of Creditors (CoC) considered all factors.
The Appellant, Karad Urban Cooperative Bank Ltd., which is the financial creditor, filed an application under Section 7 of the IBC before the NCLT against M/s. Khandoba Prasanna Sakhar Karkhana Limited, which is the corporate debtor.
NCLT admitted the application and an Interim Resolution Professional was appointed. The first meeting of the CoC took place. As per the decision taken therein, one Mr. Jitendra Palande was appointed by the NCLT, by an order, as Resolution Professional.
Several meetings of the Committee of Creditors were held thereafter and eventually the Committee of Creditors, in its 8th Meeting held resolved to approve the Resolution Plan submitted by one M/s. Sai Agro (India) Chemicals.
On the basis of the approval of the Resolution Plan by the Committee of Creditors, the Resolution Professional moved an application before the NCLT, Mumbai.
At this stage, the Director/Promoter of the corporate debtor also came up with an application seeking permission to file a resolution plan. But by a common order, NCLT, Mumbai Bench, rejected the application filed by the Director/Promoter of the corporate debtor and approved the Resolution Plan submitted by M/s. Sai Agro (India) Chemicals. Thus, M/s. Sai Agro (India) Chemicals, have become the Successful Resolution Applicant.
The appellant challenge an order passed by the National Company Law Appellate Tribunal setting aside the approval granted by the National Company Law Tribunal (NCLT) to a Resolution Plan and remanding the matter back to the NCLT with a direction to have the Resolution Plan resubmitted before the Committee of Creditors, the financial creditor, and the Resolution Professional have come up with these appeals.
The three judge bench headed by Chief Justice S.A. Bode held that if all the factors that need to be taken into account for determining whether or not the corporate debtor can be kept running as a going concern have been placed before the Committee of Creditors and the CoC has taken a conscious decision to approve the resolution plan, then the adjudicating authority will have to switch over to the hands off mode.
The court further said that the question of breach of confidentiality and leakage of confidential information can easily be tested on the touchstone of the benefit that accrued to the party who got the information.
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