Mr. Pradeep Pandurang Sot vs Bimal Kumar Agarwal & Ors

[Arising out of order dated 18.06.2025 passed by the Adjudicating Authority (National Company Law Tribunal, Mumbai Bench - VI) in IA (I.B.C) (Plan) No. 29/MB/2025 in CP (IB) No. 264/MB-VI/2020]

IN THE MATTER OF: Western Coalfields Ltd. ...Appellant Versus Bimal Kumar Agarwal, (RP of Vidarbha Industries Power Ltd.) & Ors. ...Respondents

Present: For Appellant : Ms. Pinky Anand, Sr. Advocate with Mr. Sumit Teterwal, Ms. Tanisha Samanta, Ms, Chanya Jaitly, Ms. Saudamini Sharma and Ms. Adeti Salooja, Advocates.

For Respondents : Mr. Krishnendu Datta, Sr. Advocate with Mr. Abhishek Swaroop, Ms. Shreya Chandhok and Mr. Yash Tandon, Advocates for R-1.

Mr. Arun Kathpalia, Sr. Advocate with Ms. Daizy Chawla, Mr. Himanshu Dubey, Mr. Jatin Kapoor and Mr. Shaswat Singh, Advocates for R-2/ SRA.

WITH

Company Appeal (AT) (Insolvency) No. 1317 of 2025

[Arising out of order dated 18.06.2025 passed by the Adjudicating Authority (National Company Law Tribunal, Mumbai Bench - VI) in IA (I.B.C) (Plan) No. 29/MB/2025 in CP (IB) No. 264/MB-VI/2020]

IN THE MATTER OF: Pradeep Sot, (Employee Rep) ...Appellant Versus Bimal Kumar Agarwal & Anr. ...Respondents

Present: For Appellant : For Respondents : Mr. Krishnendu Datta, Sr. Advocate with Mr. Abhishek Swaroop, Ms. Shreya Chandhok and Mr. Yash Tandon, Advocates for R-1.

Ms. Daizy Chawla, Mr. Himanshu Dubey, Mr. Jatin Kapoor and Mr. Shaswat Singh, Advocates for R-2/ SRA.

JUDGMENT

ASHOK BHUSHAN, J.

These two appeals have been filed against the same judgment and order

dated 18.06.2025 passed by the adjudicating authority (National Company

Law Tribunal, Mumbai Bench VI) in IA (IBC) (Plan) No. 29/MB/2025. By the

impugned order, the adjudicating authority has allowed the IA (IBC) (Plan) No.

29/MB/2025 and approved the resolution plan submitted by the respondent

No. 2 - Adani Power Ltd. Aggrieved by the order approving the resolution plan

of the corporate debtor - Vidarbha Industries Power Ltd, these appeals have

been filed.

2. Comp. App. (AT) (Ins.) No. 1281/2025 has been filed by Western

Coalfields Ltd., an operational creditor, who had filed its claim in the

Corporate Insolvency Resolution Process (CIRP). Comp. App. (AT) (Ins.) No.

1317/2025 has been filed by one Pradeep Sot an employee of the corporate

debtor, aggrieved by approval of the resolution plan which has provided only

Rs. 1 crore/- for total operational creditors including employees.

3. Brief facts of the case necessary to be noticed for deciding these two

appeals are:

i. On an application filed by the financial creditor of the corporate debtor,

CIRP against the corporate debtor M/s. Vidarbha Industries Power Ltd. Comp. App. (AT) (Ins.) No. 1281 & 1317 of 2025 2 of 18 commenced vide order dated 30.09.2024 in company petition bearing

C.P. (IB) No. 264/MB - VI/2020. Original financial creditors; Axis Bank

and State Bank of India assigned their debt to CFM Asset

Reconstruction Pvt. Ltd.

ii. Order dated 30.09.2024 was rectified on 08.10.2024 by the

adjudicating authority. IRP made a public announcement in Form A

on 04.10.2024 inviting the claim for creditors of the corporate debtor.

Committee of Creditors (CoC) was constituted with CFM Asset

Reconstruction Pvt. Ltd. as sole Member of the CoC.

iii. The Western Coalfields Ltd., the appellant in Comp. App. (AT) (Ins.) No.

1281/2025 filed its revised claim From B dated 30.10.2024 claiming

total amount of Rs.514,91,17,368.52/-.

iv. Appellant claimed the above amount as an operational debt in terms

and conditions of the Fuel Supply Agreement (FSA) with the Vidarbha

Industries Power Ltd. The Resolution Professional (RP) admitted the

claim of the appellant Western Coalfields to the extent of

Rs.502,58,00,000/- and balance amount was kept under verification.

v. List of creditors was published on 30.12.2024 and thereafter on

18.02.2025, where the same amount of admitted claim was reflected.

The revised claim of the employees was submitted on 18.10.2024. A

list of creditors was published reflecting the verified claim of operational

creditor including the claim of employees. Form G was published

inviting Expression of Interest (EoI).

Comp. App. (AT) (Ins.) No. 1281 & 1317 of 2025 3 of 18 vi. One claim was received from Pallas Holdings Ltd. whose claim was also

verified as financial creditor. The CoC was reconstituted with CFM

Asset Reconstruction Pvt. Ltd. with more than 94% vote shares and

Pallas Holdings Ltd. about 5% vote shares.

vii. In pursuance of Form G, EoI were received and resolution plans

received from 4 resolution applicants. The resolution plan submitted

by R-2 came to be considered and approved unanimously in the 10th

CoC Meeting held on 19.02.2025, who was declared as Successful

Resolution Applicant (SRA).

viii. Letter of Intent (LoI) was issued to respondent No. 2 on 24.02.2025.

SRA submitted its performance security of Rs.100 crore/- on

27.02.2025, thereafter RP filed an application I.A. (IBC) (Plan) No.

29/MB/2025 on 11.03.2025 before the adjudicating authority for

approval of the resolution plan.

ix. On 01.04.2025, the SRA in exercise of its jurisdiction, reserved under

Clause 3.7.1 of the resolution plan sought to modify the acquisition

structure pertaining to the residual portion of the operational debt after

accounting for the plan amount, the SRA decided instead of converting

the resolution operational debt into equity shares followed by capital

reduction such residual debts would stand extinguished.

x. The CoC convened its 11th Meeting on 01.04.2025 deliberated and

unanimously approved the same. RP by additional affidavit dated

02.04.2025 placed the same before the NCLT. The RP also filed a

Comp. App. (AT) (Ins.) No. 1281 & 1317 of 2025 4 of 18 revised Form H as on 20.03.2025 and filed an affidavit dated

27.03.2025 in terms of the order dated 20.03.2023 passed by the NCLT.

xi. Adjudicating authority heard the parties and by impugned order

approved the resolution plan. Aggrieved by the order approving the

resolution plan, these two appeals have been filed.

4. We have heard learned Sr. counsel Ms. Pinky Anand appearing for the

appellant in Comp. App. (AT) (Ins.) No. 1281/2025, learned counsels Mr.

Anshul Agarwal and Ms. Kamakshi Gupta appearing for the appellants in

Comp. App. (AT) (Ins.) No. 1371/2025. We have also heard learned Sr.

counsel Mr. Arun Kathpalia appearing for the SRA as well as learned Sr.

counsel Mr. Krishnendu Dutta appearing for the RP.

5. Learned Sr. counsel Ms. Pinki Anand appearing for the appellant in

Comp. App. (AT) (Ins.) No. 1281/2025 submits that approval of the resolution

plan is not in accordance with the provisions of the Insolvency and

Bankruptcy Code, 2016 (for short the IBC). It is submitted that CoC has

approved the resolution plan after expiry of 180 days as stipulated under

Section 12(1) of the IBC without seeking any extension from the adjudicating

authority. The modified resolution plan dated 01.04.2025 was approved by

the NCLT without there being any extension sought by the RP. It is submitted

that original resolution plan was modified by the SRA after expiry of 180 days

on 01.04.2025 which modified plan was approved by the CoC on the same

day i.e., on 01.04.2025. CoC never passed a resolution for seeking extension

of the period of CIRP beyond 180 days and RP by way of an affidavit dated

02.04.2025 after expiry of 185 days filed the modified resolution plan. The Comp. App. (AT) (Ins.) No. 1281 & 1317 of 2025 5 of 18 NCLT erred in approving the revised resolution plan despite the resolution

plan having been approved after expiry of 180 days. The submission of the

SRA that modification to the resolution plan was made in exercise of power

under Clause 3.7.1 is not correct. Revised plan having been approved after

expiry of statutory period, the resolution plan ought not to have been

approved by the adjudicating authority. Adjudicating authority erred in

approving the resolution plan, which having been approved after expiry of 180

days.

6. Learned counsel appearing for the appellant in Comp. App. (AT) (Ins.)

No. 1317/2025 submits that the resolution plan has been approved in

violation of Section 30(2)(b) of the IBC, Regulation 36(4)(a)(iii) of the Insolvency

and Bankruptcy Board of India (Insolvency Resolution Process for Corporate

Persons) Regulations, 2016 and Section 53 of the IBC. It is submitted that

Section 30 of the IBC implies the expression "fair and equitable". The

payment of financial creditors in the resolution plan are in the range of about

60%, whereas total pay out for the operational creditors including employees

is only Rs.1 crore/- which is negligible without any intelligible differentia,

rational or classification. The above provision of resolution plan is contrary

to the scheme of the IBC and defeats the statutory authorisation embodied

under Section 53. Provident fund and gratuity dues are trust money and the

plan fails to provide a full payment of provident fund and gratuity to current

employees.

7. Learned counsel appearing for the SRA refuting the submissions of the

appellant submits that the resolution plan approved by the CoC and approved

Comp. App. (AT) (Ins.) No. 1281 & 1317 of 2025 6 of 18 by the adjudicating authority is in compliance with Section 30(2) of the IBC.

Replying to the submissions of Ms. Pinki Anand learned Sr. counsel for the

appellant, it is submitted that the resolution plan submitted by SRA was

approved within 180 days from the commencement of the CIRP. It is

submitted that CIRP commenced against the corporate debtor vide order

dated 30.09.2024 and the CoC in its 10th CoC Meeting held on 19.02.2025

and 21.02.2025 has approved the resolution plan. When the resolution plan

was approved by the CoC within 180 days, there is no occasion for filing any

application for extension of CIRP period. The RP also within the period of 180

days has filed an application I.A. (IBC) (Plan) No. 29/2025 on 11.03.2025 thus

there is no question of approval of plan being beyond 180 days as contended

by learned Sr. counsel appearing for the appellant in Comp. App. (AT) (Ins.)

No. 1281/2025. Insofar as the modification dated 01.04.2025 proposed by

the SRA and approved by the CoC on 01.04.2025, the same was in exercise

of liberty reversed in Clause 3.7.1 of the resolution plan which liberty was

there with the SRA even after approval of the resolution plan by the NCLT.

The modification dated 01.04.2025 did not in any manner altered the amount

receivable by stakeholders under the resolution plan. The submission of the

counsel for the appellant in Comp. App. (AT) (Ins.) No. 1281/2025 that plan

has been approved beyond CIRP period is misconceived. Adjudicating

authority after considering all relevant facts have rightly approved the

resolution plan.

8. Replying to the submission made by counsel for the appellant in Comp.

App. (AT) (Ins.) No. 1317/2025, it is submitted that pay out to all the

Comp. App. (AT) (Ins.) No. 1281 & 1317 of 2025 7 of 18 operational creditors including the employees of Rs.1 crore/- is in accordance

with Section 30(2) of the IBC. It is submitted that liquidation value of the

corporate debtor was Rs. 1263.50 crore/-, whereas, admitted claim of all

creditors was Rs.6,753.92 crore/-. Liquidation value of the corporate debtor

was not even sufficient to satisfy the claims of the financial creditors of

Rs.66,200.03 crore/-, hence the liquidation value of the operation creditor

was NIL. Under Section 30(2) of the IBC, operational creditors are entitled an

amount not less than the liquidation value which they would have received as

per distribution under Section 53. Payment of Rs. 1 crore/- to the operational

creditors including the employees does not violate the provision of Section

30(2). The amount of PF and gratuity has been paid in full. The adjudicating

authority has clearly directed in paragraph 12.12 to pay the entire amount of

gratuity and PF dues which shall not subject to outer limit of Rs.1 crore/-.

Thus, full PF and gratuity are to be paid and no grievance can be raised in

that regard.

9. Learned counsel for the RP supported the impugned order and

submitted that resolution plan was approved in the 10th CoC Meeting held on

19.02.2025 and 21.02.2025 which was well within 180 days period. The CIRP

having commenced on 30.09.2024, 180 days period was to continue till

28.03.2025 and well within the said period. Application for approval of the

plan was filed on 11.03.2025, thus the submission of the appellant that there

is a breach of Section 12(1) in CIRP process is wholly incorrect and

misconceived. As far as the modification dated 01.04.2025 undertaken by

the SRA and approved by the CoC was in exercise of power reserved for the

Comp. App. (AT) (Ins.) No. 1281 & 1317 of 2025 8 of 18 SRA under the resolution plan and that in no manner violates the timeline

under Section 12(1) of the IBC. The resolution plan fully complies with

provisions of Section 30(2) of the IBC.

10. We have considered the submissions of the counsel for the parties and

perused the records.

11. We need to first notice the submission raised by the counsel for the

appellant in Comp. App. (AT) (Ins.) No. 1317/2025 regarding violation of

timelines under Section 12(1) of the IBC. Section 12(1) of the IBC provides

for time limit for completion of insolvency resolution process. Sections 12(1)

& 12(2) of the IBC are as follows:

"12. Time-limit for completion of insolvency resolution process.-

(1) Subject to sub-section (2), the corporate insolvency resolution process shall be completed within a period of one hundred and eighty days from the date of admission of the application to initiate such process. (2) The resolution professional shall file an application to the Adjudicating Authority to extend the period of the corporate insolvency resolution process beyond one hundred and eighty days, if instructed to do so by a resolution passed at a meeting of the committee of creditors by a vote of 1[sixty-six] per cent. of the voting shares."

12. In the present case, the CIRP commenced against the corporate debtor

vide order dated 30.09.2024. 180 days period thus was to come to an end on

28.03.2025. The 10th CoC Meeting was held on 19.02.2025 for consideration

and voting of final signed resolution plan which approved the resolution plan

of the respondent No. 2. LoI was issued to SRA on 24.02.2025 and SRA

submitted performance security on 27.02.2025. Adjudicating authority by

Comp. App. (AT) (Ins.) No. 1281 & 1317 of 2025 9 of 18 the impugned order in paragraph 2.18 has noticed on which date the final

signed resolution plan were voted. RP has also filed an additional affidavit

dated 27.03.2025 before the adjudicating authority. It was pleaded that CoC

in its commercial wisdom approved the plan within prescribed period of 180

days and no extension for CIPR period was sought. Adjudicating authority in

paragraph 7.3 of the impugned order has noticed the additional affidavit dated

08.05.2025, where following was stated:

"... In the present case, since the offers were received from the market leaders in the field of power generation, such as NTPC, Adani Power and Vedanta, the COC in its commercial wisdom was able to approve the plan within the prescribed period of 180 days, and no extension for CIRP period was sought."

13. The minutes of the 10th CoC Meeting held on 19.08.2025 and

21.02.2025 were part of the application which was filed for approval of the

resolution plan. As noted above, the 180 days period was expiring on

28.03.2025, whereas, resolution plan was approved on 19.02.2025 and

21.02.2025 in 10th CoC Meeting and thereafter LoI was also issued on

24.02.2025 to SRA. LoI came to be accepted by 24.02.2025 and performance

security was submitted on 27.02.2025. In paragraph 2.19 of the impugned

order, adjudicating authority has noticed the above facts, which are as

follows:

"2.19 Accordingly, the members of the CoC casted their votes on the submitted resolution plans and unanimously approved the Resolution Plan of Adani Power Limited, declaring it as the SRA. Thereafter, the applicant issued the Letter of Intent ('LOI') dated 24.02.2025 to the SRA wherein the SRA was called upon to submit the Performance Security of INR 100 crores within three business days from the issuance of LOI as per Clause 3.3 of the RFRP. The LOI came to be Comp. App. (AT) (Ins.) No. 1281 & 1317 of 2025 10 of 18 accepted by the SRA on 24.02.2025 and the Performance Security was submitted by it on 27.02.2025."

14. When the resolution plan was approved and the LoI was issued on

24.02.2025 which was accepted on 24.02.2025 and performance security was

also deposited on 27.02.2025, the submission of the appellant that CIRP has

completed within 180 days is unfounded. There was no requirement for

extension of CIRP period since plan stood approved.

15. The next leg of submission on which reliance is placed by the appellant

is that SRA modified his resolution plan on 01.04.2025 and the CoC on

01.04.2025 itself has approved the modification, hence the said modification

was beyond 180 days and could not have been approved. The SRA has filed

an affidavit in the present appeal in Comp. App. (AT) (Ins.) No. 1281/2025,

where relevant facts have been pleaded. SRA has relied on Clause 3.7.1 of

the resolution plan which relate to acquisition structure. Clause 3.7.1(ii)

extracted in paragraph 12 of the short affidavit of the SRA which is as follows:

"3.7.1 The structure proposed may, at the Resolution Applicant discretion, but without altering the amounts receivable by any stakeholder of the Corporate Debtor and timelines as envisaged under the Resolution Plan for making such payments, be altered from time to time, by the Resolution Applicant at its discretion with the approval of the CoC or the Implementation and Monitoring Committee, as the case may be, and such alteration may include but not be limited to:

(ii) Identifying such other source of funds for funding the Total Resolution Amount including by way of borrowings or equity infusion from any Person into the Resolution Applicant or the Corporate Debtor (provided each such Person is eligible under Section 29A of the Code to be resolution applicant);"

Comp. App. (AT) (Ins.) No. 1281 & 1317 of 2025 11 of 18

16. The above clause in the end contains "any such alteration or

modification to the acquisition structure as contemplated above shall not require

any further actions, deed or notice and shall have the same binding effect as

the resolution plan." The resolution which was approved on 19.02.2025 and

21.02.2025 contains the above clause which reserves right of the SRA to alter

or modify the acquisition structure which did not require any further action

and the same was to be done at discretion of the SRA with approval of the

CoC or the implementation and Monitoring Committee as the case may be,

which is clearly contemplated in Clause 3.7.1. When resolution applicant was

entitled to alter the acquisition structure with the approval of the CoC or with

the approval of the implementation in Monitoring Committee, the said

alteration was clearly permissible even after the approval of the resolution

plan. Thus, exercise of right by SRA under Clause 3.7.1 which was part of

the approved resolution plan of the CoC in no manner be said to be beyond

the timelines as fixed in Section 12(1) of the IBC. Approved resolution plan

having already been submitted before the adjudicating authority on

11.03.2025 by the application of RP, no violation of timelines can be

contended and the modification in the acquisition structure undertaken on

01.04.2025 and approved by the CoC on 01.04.2025 and placed before the

adjudicating authority on 02.04.2025 cannot be said to be violating any

timeline as prescribed under Section 12(1) of the IBC and the resolution plan

stood approved in 10th CoC Meeting on 19.02.2025 and 21.02.2025 well

within 180 days period of commencement of CIRP. We thus do not find any

substance in the submission advanced by the counsel for the appellant in

Comp. App. (AT) (Ins.) No. 1281/2025.

Comp. App. (AT) (Ins.) No. 1281 & 1317 of 2025 12 of 18

17. Now coming to the submissions raised by the learned counsel for the

appellant in Comp. App. (AT) (Ins.) No. 1317/2025 which is an appeal filed by

one employee claiming to be representative of the employees challenging the

approval of the resolution plan. The impugned order has noticed the amount

claimed and amount admitted of different stakeholders and the amount

proposed in the resolution plan. Paragraph 6.1 of the impugned order

captures the salient features of plan approved by the CoC. Paragraph 6.1 is

as follows:

"6.1 The SRA has proposed a Total Resolution Amount of INR 4000,00,00,000/- (Rupees Four Thousand Crores only) for the resolution of the Corporate Debtor in the following manner:

Sr. Category of Sub- Amount Claimed Amount Admitted Amount Provided Amount No. Stakeholder Category of under the Plan Provided * Stakeholder to the Amount Admitted (%)

1. CIRP Cost N.A. - - 292,91,00,000 -

(Estimated Accrued and Unpaid)

2. Secured (b)(ii) who 6200,04,83,387 6200,03,83,837 3706,09,00,000 59.78% Financial voted in Creditors favour of the resolution plan

3. Unsecured N.A. - - - -

Financial Creditors

4. Operational (b)(ii) 8,99,34,232 5,26,15,968 Creditors Employees 1,00,00,000 0.18%

(b)(iv) Other 564,13,35,217 548,62,27,485 Operational Creditors Sub-Total 569,63,35,136 553,88,43,453 1,00,00,000 0.18%

5. Other debts - - - - -

and dues Total 67,73,17,52,836/- 67,53,92,26,840/- 4000,00,00,000/-

18. The challenge in the appeal is with regard to pay out to the operational

creditors which include the employees. Employees claim which was admitted

for Rs.5,26,15,968/- and another claim of other operational creditor was

Comp. App. (AT) (Ins.) No. 1281 & 1317 of 2025 13 of 18 Rs.5,48,62,27,485/- against total admitted claim of the operational creditor

of Rs.553,88,43,453/-, amount of Rs. 1 crore/- has been proposed in the

resolution plan. It is brought on the record that the liquidation value of the

corporate debtor was Rs.1263.50 crore/- and total admitted claim was

Rs.6,753.92 crore/-. In paragraph 15 of the short affidavit filed by SRA, the

above facts has been noticed. Paragraph 15 of the short affidavit is as follows:

"15. It is humbly submitted that the average liquidation value of the Corporate Debtor was Rs. 1263.50 crores, which was much less than the total admitted claims of Rs. 6753.92crores. It is apparent that the liquidation value of the Corporate Debtor was not even sufficient to fulfil the claims of Rs. 6200.03 crores of Financial Creditors, as such, the Operational Creditors were entitled to receive NIL amount."

19. Under Section 30(2) of the IBC, operational creditors are entitled to

receive the amount which is not less than the amount payable to the

operational creditor in the event of the liquidation of the corporate debtor

under Section 53. Section 30(2)(b) of the IBC provides as follows:

"30. Submission of resolution plan.-

(2) The resolution professional shall examine each resolution plan received by him to confirm that each resolution plan--

(b) provides for the payment of debts of operational creditors in such manner as may be specified by the Board which shall not be less than-

(i) the amount to be paid to such creditors in the event of a liquidation of the corporate debtor under section 53; or

(ii) the amount that would have been paid to such creditors, if the amount to be distributed under the resolution plan had been distributed in accordance with the order of priority in sub-

section (1) of section 53, whichever is higher and provides for the payment of debts of financial creditors, who do not vote in favour of the Comp. App. (AT) (Ins.) No. 1281 & 1317 of 2025 14 of 18 resolution plan, in such manner as may be specified by the Board, which shall not be less than the amount to be paid to such creditors in accordance with sub-section (1) of section 53 in the event of a liquidation of the corporate debtor."

20. In event, the liquidation of the corporate debtor as per Section 53, the

liquidation value of the operational creditors including employees being NIL

under Section 30(2)(b) no amount was mandated. The payment of Rs. 1

crore/- thus cannot be said to be in any manner in breach the provisions of

Sections 30(2)(b) of the IBC.

21. Learned counsel for the appellant has contended that as per Section

30(2)(b), the distribution has to be fair and equitable.

22. Learned counsel for the SRA has relied on the judgment of the Hon'ble

Supreme Court in the matter of 'CoC of Essar Steel India Ltd.' Vs. 'Satish

Kumar Gupta & Ors.' reported in [(2020) 8 SCC 531], where Hon'ble

Supreme Court had occasion to consider the argument of equal distribution

between different stakeholders of the corporate debtor. Hon'ble Supreme

Court in the above judgment has clearly held that financial and operational

creditors are not mandated to pay the same amount in any resolution plan.

Difference in payment of the debts of the financial creditor and operational

creditor is clearly contemplated. In paragraph 88 of the judgment, following

was laid down:

"88. By reading para 77 (of Swiss Ribbons [Swiss Ribbons (P) Ltd. v. Union of India, (2019) 4 SCC 17] ) dehors the earlier paragraphs, the Appellate Tribunal has fallen into grave error. Para 76 clearly refers to the Uncitral Legislative Guide which makes it clear beyond any doubt that equitable treatment is only of similarly situated creditors. This being so, the observation in para 77 cannot be read to mean that Comp. App. (AT) (Ins.) No. 1281 & 1317 of 2025 15 of 18 financial and operational creditors must be paid the same amounts in any resolution plan before it can pass muster. On the contrary, para 77 itself makes it clear that there is a difference in payment of the debts of financial and operational creditors, operational creditors having to receive a minimum payment, being not less than liquidation value, which does not apply to financial creditors. The amended Regulation 38 set out in para 77 again does not lead to the conclusion that financial and operational creditors, or secured and unsecured creditors, must be paid the same amounts, percentage wise, under the resolution plan before it can pass muster. Fair and equitable dealing of operational creditors' rights under the said regulation involves the resolution plan stating as to how it has dealt with the interests of operational creditors, which is not the same thing as saying that they must be paid the same amount of their debt proportionately. Also, the fact that the operational creditors are given priority in payment over all financial creditors does not lead to the conclusion that such payment must necessarily be the same recovery percentage as financial creditors. So long as the provisions of the Code and the Regulations have been met, it is the commercial wisdom of the requisite majority of the Committee of Creditors which is to negotiate and accept a resolution plan, which may involve differential payment to different classes of creditors, together with negotiating with a prospective resolution applicant for better or different terms which may also involve differences in distribution of amounts between different classes of creditors."

23. The Hon'ble Supreme Court in paragraph 90 has held that equality

principle cannot be stretched to treating unequal equally. In paragraph 90,

following was laid down:

"90. ...Quite clearly, secured and unsecured financial creditors are differentiated when it comes to amounts to be paid under a resolution plan, together with what dissenting secured or unsecured financial creditors are to be paid. And, most importantly, operational creditors are separately viewed from these secured and unsecured financial creditors in Sl. No. 5 of Para 7 of statutory Form H. Thus, it can be seen that the Code and the Regulations, read as a whole, together with the observations of expert bodies and this Court's judgment, all lead to the conclusion that the equality Comp. App. (AT) (Ins.) No. 1281 & 1317 of 2025 16 of 18 principle cannot be stretched to treating unequal equally, as that will destroy the very objective of the Code -- to resolve stressed assets. Equitable treatment is to be accorded to each creditor depending upon the class to which it belongs: secured or unsecured, financial or operational."

24. Operational creditors are statutorily entitled to receive the amount as

provided under Section 30(2)(b) of the IBC. No case has been pleaded or

proved by the appellant that amount paid in the plan to the operational

creditors including employees is in violation of Section 30(2)(b) of the IBC i.e.,

and the appellants were entitled for some monitory statutory payment under

Section 30(2)(b) of the IBC which is more than the amount as provided in the

resolution plan. Insofar as submission of the counsel for the employees that

the full amount of provident fund and gratuity is not paid, we need to refer

paragraph 12.12 of the impugned order, where adjudicating authority while

approving the plan has provided as follows:

"12.12 We also hereby make it clear that the Employees Provident Fund dues of INR 24,83,544/- and the Gratuity dues of INR 30,55,049/-, as provided by the Applicant in the Annexure 'B' to the additional affidavit dated 02.04.2025, being the statutory dues, are required to be paid in full and the same shall not be subject to the outer limit of INR 1 crores earmarked by the SRA in the Resolution Plan for the Operational Creditors including the Employees."

25. As per the impugned order of the adjudicating authority, the employees

are entitled for provident fund dues and the gratuity dues which is required

to be paid in full and same shall not be subject to the outer limit of

Rs.1 crore/- earmarked by the SRA in the resolution plan. Thus, entitlement

of the employees to receive full provident fund and gratuity is fully protected

Comp. App. (AT) (Ins.) No. 1281 & 1317 of 2025 17 of 18 by above clause. Thus, the submission of the appellant that employees are

not being paid their full provident fund and gratuity cannot be accepted.

26. In view of the foregoing discussions, we are of the view that the pay outs

to the operational creditor including the employees cannot be said to be

violating the provisions of Section 30(2)(b) of the IBC. Appellants have not

been able to prove any other violation in the approval of the resolution plan.

27. In view of the foregoing discussions, we are of the view that no grounds

have been made out to interfere with the order impugned approving the

resolution plan submitted by respondent No. 2.

28. In result, both the appeals are dismissed.

Parties shall bear their own costs.

[Justice Ashok Bhushan] Chairperson

[Barun Mitra] Member (Technical)

NEW DELHI

16th January, 2026

himanshu

Comp. App. (AT) (Ins.) No. 1281 & 1317 of 2025 18 of 18