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The National Company Law Appellate Tribunal, New Delhi (hereinafter referred to as the “Appellate Tribunal”), vide its judgment dated 09.07.2025 has allowed the appeals preferred against the order passed by the National Company Law Tribunal, Mumbai (hereinafter referred to as the “Adjudicating Authority”), whereby the Adjudicating Authority had dismissed the application filed by the Resolution Professional seeking approval of the resolution plan submitted by Univatsu India Ltd., the Successful Resolution Applicant, in the Corporate Insolvency Resolution Process (CIRP) of the Corporate Debtor, Setubandhan Infrastructure Ltd.
In Univatsu India Ltd. v. Setubandhan Infrastructure Ltd. (formerly known as Prakash Constrowell Ltd.) & Ors. Company Appeals INS 612&613 of 2025, the Appellate Tribunal held that the Adjudicating Authority, while exercising its limited jurisdiction of judicial review under the Insolvency and Bankruptcy Code, 2016, is not empowered to examine and reconsider the merits of a resolution plan or to supplant its own views in place of the commercial wisdom of the Committee of Creditors (CoC).
The Appellate Tribunal further held that observations of the adjudicating authority in rejecting the resolution plan runs contrary to the material on the record; and that the Adjudicating Authority has nowhere outlined that it found the resolution plan in non-compliance of Regulation 38 and 39 of the CIRP Regulations,2016. The Adjudicating authority has ended up in reconsidering the financial aspects of the plan which could not be done in view of settled position of law.
It was observed that the authority to approve or reject a resolution plan squarely lies with the CoC, and such decision is immune from judicial interference unless it is demonstrated that the resolution plan is in contravention to the express provisions of the law or is against public interest. While setting aside the impugned order and expunging the remarks made against the Resolution Professional, Hon’ble NCLAT was pleased to extent the CIRP period by 90 days and directed the Adjudication Authority to remit back the plan to CoC for consideration in light of the clarifications sought earlier.
Mr. Abhijeet Sinha, Sr. Advocate duly briefed by Mr. Lokesh Malik and Ms. Atika Chaturvedi of SNG & Partners represented 90 percent of CoC members i.e., SBI and IL&FS.
