Fixed Deposit Holders Rights vs. CoC’s Commercial Decision: Supreme Court Verdict in DHFL Insolvency”
The Supreme Court upheld the commercial wisdom of the Committee of Creditors (CoC) in approving the resolution plan for Dewan Housing Finance Corporation Limited (DHFL), emphasizing limited judicial review under the Insolvency and Bankruptcy Code (IBC). The Court ruled that recoveries from avoidance applications under Section 66 of the IBC could be appropriated by the successful resolution applicant, while recoveries under Sections 43, 45, and 50 would benefit the creditors. The Court clarified that the National Company Law Appellate Tribunal (NCLAT) exceeded its jurisdiction by interfering with the CoC's decision. The appeals by fixed deposit holders and ex-promoters were dismissed, affirming the primacy of the CoC's commercial decisions under the IBC.
Facts of The Case:
The c...