Case Note & Summary
The Supreme Court upheld the approval of a Resolution Plan by Sarda Energy and Minerals Limited (SEML) for SKS Power Generation (Chhattisgarh) Ltd. under the Insolvency and Bankruptcy Code, 2016 (IBC), dismissing appeals by Appellants -- The Court affirmed the doctrine of commercial wisdom, stating that the Committee of Creditors (CoC) has primary authority in insolvency resolution, and judicial bodies should not interfere with commercial decisions -- The CoC conducted an inter-se bidding process, sought clarifications, and approved SEML's plan with unanimous voting -- The NCLT initially remitted the plan for reconsideration but later approved it after the NCLAT set aside the remittance order due to procedural lapses -- The Supreme Court held that the CoC's decision was based on commercial wisdom, and the adjudicating authority's role is limited to ensuring compliance and fairness -- All appeals were dismissed, confirming the lower tribunals' orders
Headnote
The Supreme Court dismissed civil appeals filed by unsuccessful resolution applicants -- against the approval of a Resolution Plan by Sarda Energy and Minerals Limited (SEML) for SKS Power Generation (Chhattisgarh) Ltd. under the Insolvency and Bankruptcy Code, 2016 (IBC) -- The Court emphasized the doctrine of commercial wisdom, holding that the Committee of Creditors (CoC) has decisive authority in insolvency resolution, and courts should not substitute their assessment for that of the CoC -- The adjudicating authority's role is supervisory, ensuring statutory compliance and procedural fairness without second-guessing economic decisions -- The CoC approved SEML's plan with a 100% vote share after an inter-se bidding process and clarifications -- The NCLT and NCLAT orders were affirmed, rejecting applications for fresh consideration by other applicants -- The judgment reinforces the IBC's shift from a court-centric to a creditor-driven process, prioritizing efficiency and market responsiveness
Premium Content
The Headnote is only available to subscribed members.
Subscribe Now to access key legal points
Issue of Consideration: The Issue of whether the National Company Law Tribunal (NCLT) and National Company Law Appellate Tribunal (NCLAT) erred in approving the Resolution Plan of Sarda Energy and Minerals Limited (SEML) and rejecting the applications of other resolution applicants, particularly regarding the CoC's commercial wisdom and procedural fairness under the IBC
Premium Content
The Issue of Consideration is only available to subscribed members.
Subscribe Now to access critical case issues
Final Decision
The Supreme Court dismissed all civil appeals, upholding the NCLAT and NCLT orders that approved SEML's Resolution Plan and rejected the applications of other resolution applicants
