commercial wisdom - The Legal Chamber

This Supreme Court judgment reinforces the finality and binding nature of an approved resolution plan under the IBC. It held that claims not part of the Request for Resolution Plan (RfRP) or the final plan are extinguished, preventing "hydra-headed" post-approval claims. The commercial wisdom of the Committee of Creditors (CoC) in approving the plan is paramount and not open to judicial review on merits. Facts Of The Case: The case originated from the Corporate Insolvency Resolution Process (CIRP) of Bhushan Power and Steel Limited (BPSL), initiated in 2017. JSW Steel Limited was selected as the Successful Resolution Applicant (SRA), and its resolution plan was approved by the Committee of Creditors (CoC) and later by the National Company Law Tribunal (NCLT) in September 2019. However,...

This Supreme Court judgment affirms the paramountcy of the commercial wisdom of the Committee of Creditors (CoC) under the Insolvency and Bankruptcy Code, 2016. It clarifies that the moratorium under Section 14(1)(d) does not bar the return of possession of a corporate debtor's leased asset when such a decision is a conscious business choice made by the CoC and the Resolution Professional to alleviate a financial burden on the estate. Facts Of The Case: The case originated from a dispute over the possession of a property leased by Nandini Impex Private Limited, the corporate debtor. The appellants had provided loans to the company, secured by the title deeds of the property's front and rear portions. Following a default, the property was conveyed to the appellants through separate deeds ...

Tag: commercial wisdom

Landmark Ruling: Supreme Court Backs Creditors & JSW, Shuts Door on Promoter Interference

Supreme Court Rules Property Can Be Returned During Insolvency If Not Needed