Case Note & Summary
The dispute arose from a corporate insolvency resolution process concerning B.B. Foods Pvt. Ltd., where two resolution applicants, including a consortium led by the appellant, submitted plans. The appellant sought to amend its resolution plan by reducing the term from 180 days to 90 days and uncapping CIRP costs, filing an application before the National Company Law Tribunal. The NCLT allowed the amendment but also permitted the other resolution applicant to modify its plan to maintain a level playing field. The appellant challenged this order before the National Company Law Appellate Tribunal, which declined interference, leading to the present appeal under Section 62 of the Insolvency and Bankruptcy Code, 2016. The appellant contended that its affidavit was merely a clarification, not a modification, and that granting liberty to the other applicant was unjustified. The Supreme Court, after hearing arguments, found that the appellant's changes constituted material modifications, and the NCLT's order to allow corresponding modifications for the other applicant was reasonable to ensure fairness. The court emphasized the principle of level playing field and non-interference with the commercial wisdom of the Committee of Creditors, which had approved the other applicant's plan. The appeal was dismissed, upholding the lower tribunals' decisions.
Headnote
A) Insolvency Law - Corporate Insolvency Resolution Process - Level Playing Field Principle - Insolvency and Bankruptcy Code, 2016, Section 62 - Appellant, a resolution applicant, sought to amend its resolution plan by reducing the term from 180 days to 90 days and uncapping CIRP costs - NCLT allowed the amendment but also permitted the other resolution applicant to modify its plan to maintain level playing field - Supreme Court upheld the orders, stating that when modification is permitted at the appellant's request, corresponding permission to the other applicant is justified to balance positions (Paras 1-7). B) Insolvency Law - Judicial Review - Commercial Wisdom of Committee of Creditors - Insolvency and Bankruptcy Code, 2016 - Appellant challenged the NCLAT order that declined interference with NCLT's decision - Court found no fault in the Adjudicating Authority's order as it was reasonable and sound, emphasizing non-interference with the commercial wisdom of the CoC in approving the other resolution applicant's plan (Paras 1-7). C) Insolvency Law - Resolution Plan Modifications - Permissibility and Disclosure - Insolvency and Bankruptcy Code, 2016 - Appellant argued that its affidavit dated 17.11.2021 was not a modification but a clarification to meet CoC requirements - Court held that the affidavit included material changes like reducing the plan term, which constituted modification, and the appellant's disclosure of plan terms before NCLT was its own making, not prejudicial to others (Paras 1-7).
Issue of Consideration
Whether the National Company Law Appellate Tribunal erred in not interfering with the order of the National Company Law Tribunal that allowed the appellant to amend its resolution plan while also permitting the other resolution applicant to modify its plan to maintain a level playing field.
Final Decision
The Supreme Court dismissed the appeal, finding no case for interference, and upheld the orders of NCLT and NCLAT as reasonable and sound.
Law Points
- Level playing field principle in corporate insolvency resolution process
- Judicial non-interference in commercial wisdom of Committee of Creditors
- Permissibility of modifications to resolution plans under Insolvency and Bankruptcy Code
- 2016
