Univastu India Limited vs Setubandhan Infrastructure Limtied

Company Appeal (AT) (Insolvency) No. 612 of 2025 [Arising out of the Impugned Order dated 24.03.2025 passed by the Adjudicating Authority, National Company Law Tribunal, Mumbai Bench-V in I.A. No. 07 of 2024 in CP(IB) No. 106 of 2022] In the matter of: Univastu India Limited Bungalow No. 36/B.C.TS. No. 994 & 945, (S. No. 117 & 118), Madhav Baug, Shivtirth Nagar, Kothrud, Pune, Maharashtra 411038. ...Appellant Versus

1. Setubandhan Infrastructure Limited, (formerly known as Prakash Constrowell Limited) Office No. A, 3rd Floor, The Exchange, Near Ved Mandir, Tidke Colony, Trimbak Road, Nashik, Maharashtra - 422002.

2. Sandeep D. Maheswari, Resolution Professional, Setubandhan Infrastructure Limited 1503, Bella Vista, Near Oswal Park, Pokhran Road No. 2, Majiwada, Thane, Maharashtra - 400601.

3. State Bank of India Stressed Asset Management Branch -II, Raheja Chambrs, Ground Floor, Wing-B, Free Press Journal Marg, Nariman Point, Mumbai, Maharashtra - 400021. ...Respondents Present:

For Appellant : Ms. Anusha Nagarajan, Ms. Aakanksha Bhola, Mr. Prajeet Ghosh and Mr. Vikas Tomar, Advocates.

For Respondent : WITH Company Appeal (AT) (Insolvency) No. 613 of 2025

[Arising out of the Impugned Order dated 24.03.2025 passed by the Adjudicating Authority, National Company Law Tribunal, Mumbai Bench-V in I.A. No. 07 of 2024 in CP(IB) No. 106 of 2022] In the matter of: Sandeep D. Maheshwari (Resolution Professional of Setubandh Infrastructure Limited; formerly known as Prakash Constrowell Limited) On behalf of the Committee of Creditors Having his address at: 1503, Bella Vista, Near Oswal Park, Pokharan Road No.2, Majiwada, Thane, Maharashtra - 400 601 Email id: setu.cirp@gmail.com ...Appellant Versus 1. State Bank of India Having its office at: Stressed Asset Management Branch - II, Raheja Chambers, Ground Floor, Wing-B, Free Press Journal Marg, Nariman Point, Mumbai, Maharashtra - 400 021 Email id: agm1infra2.sarg@sbi.co.in

2. IL&FS Financial Services Limited Having its registered office at: IL&FS Financial Centre, Plot No. C-22, G Block, Bandra Kurla Complex, Bandra (East), Mumbai, Maharashtra - 400 051 Email id: Jinesh.Sanghavi@ilfsindia.com

3. Kotak Mahindra Prime Ltd. Having its registered office at: 27 BKC, G Block, Bandra (East), Mumbai, Maharashtra - 400 051 Email id: RajShekhar.Roy@kotak.com

4. Union Bank of India Having its registered office at: Asset Recovery Management Branch, 21, Veena Chambers, Mezzanine Floor,

Company Appeal (AT) (Insolvency) Nos. 612 & 613 of 2025 Page 2 of 30 Dalal Street, Fort, Mumbai 400 001 Email id: samvmumbai@unionbankofindia.bank

5. Univastu India Limited, Having its registered office at: Bungalow No. 36/B, C.T.S. No. 994 & 945, (S. No. 117 & 118), Madhav Baug, Shivtirth Nagar, Kothrud, Pune, Maharashtra 411038 Email id: cs@univastu.com ...Respondents Present: For Appellant : Mr. Krishnendu Datta, Sr. Advocate with Mr. Pranjit Bhattacharya and Ms. Salonee Shukla, Advocates. For Respondent : Mr. Abhijeet Sinha Sr. Advocate with Mr. Lokesh Malik, Advocates for SBI & IL&FS.

JUDGMENT

(Hybrid Mode)

Per: Barun Mitra, Member (Technical)

The present two appeals filed under Section 61 of Insolvency and

Bankruptcy Code 2016 ('IBC' in short) by the Appellants arise out of the

common order dated 24.03.2025 (hereinafter referred to as the 'Impugned

Order') passed by the Adjudicating Authority (National Company Law

Tribunal, Mumbai Bench-V) in I.A. No. 07 of 2024 in CP(IB) No. 106 of 2022.

By the impugned order, the Adjudicating Authority has dismissed I.A. No. 07

of 2024 filed by the Resolution Professional seeking approval of the resolution

plan filed by Univastu India Limited as the Successful Resolution Applicant in

the Corporate Insolvency Resolution Proceedings ("CIRP" in short) of the

Corporate Debtor- Setubandhan Infrastructure Ltd. Aggrieved by the

impugned order, CA No.612 of 2025 has been preferred by the Resolution

Company Appeal (AT) (Insolvency) Nos. 612 & 613 of 2025 Page 3 of 30 Professional and CA No.613 of 2025 has been preferred by the Successful

Resolution Applicant.

2. The sequence of events and the salient facts which are relevant to be

noticed for consideration of both the appeals at hand are as depicted below:

 Setubandhan Infrastructure Ltd.-Corporate Debtor was initiated into

the rigours of CIRP vide order dated 28.11.2022 passed by the

Adjudicating Authority.

 The Respondent No. 2 was appointed by the Adjudicating Authority as

the Resolution Professional ('RP' in short) for insolvency resolution of

the Corporate Debtor. The RP has filed the present appeal also on behalf

of the CoC having been so authorised by the CoC with 64.83% vote

share.

 The RP constituted the final Committee of Creditors ('CoC' in short)

comprising of Respondent No. 3-State Bank of India as a lead member

of CoC. The other members of the CoC were IL&FS Financial Services

Limited, Kotak Mahindra Bank and the Union Bank of India.

 The 2nd meeting of the CoC on 23.01.2023 resolved to go ahead with

the issuance of the invitation of Expression of Interest in Form-G under

Regulation 36A of the CIRP Regulations which was published by the RP

in newspapers with circulation in Nashik on 28.01.2023.

 At the 3rd meeting of the CoC on 20.02.2023, the RP presented the

updated list of creditors before the CoC. The CoC approved the Request

for Resolution Plan ("RFRP") including the Evaluation Matrix ("EM") by

e-voting.

Company Appeal (AT) (Insolvency) Nos. 612 & 613 of 2025 Page 4 of 30  The RP verified and circulated the final list of the four Proposed

Resolution Applicants ("PRAs"in short) to the CoC on 26.02.2023. The

RP then issued the RFRP, EM and Information Memorandum ("IM" in

short) to the eligible PRAs.

 On 06.04.2023, at the 5th meeting of the CoC, the Respondent No. 2

informed the CoC that two PRAs had withdrawn from the process. The

resolution plans received from the other two PRAs was circulated to the

CoC members by email on 12.04.2023.

 On 24.04.2023, at the 6th meeting of the CoC, the RP gave a

presentation on the details of the plans received. On 23.05.2023, at the

7th CoC meeting, it was decided that the last date for submission of

modified resolution plans be kept as 20.06.2023.

 On 23.06.2023, in the 8th CoC meeting, the RP apprised the members

of the CoC about discovery of certain properties over which the

ownership of the Corporate Debtor was disputed and the steps taken

by RP to safeguard the interests of Respondent No. 1 in the said

properties.

 On 20.07.2023, at the 9th CoC meeting, the RP gave a presentation

regarding the modified resolution plans received from the PRAs.

 The 10th CoC meeting on 02.08.2023 decided to proceed with voting

upon the modified resolution plan and the e-voting window was opened

on 16.08.2023. However, the e-voting window for approval of resolution

plans was halted and cancelled owing to intimation received from the

Company Appeal (AT) (Insolvency) Nos. 612 & 613 of 2025 Page 5 of 30 Respondent No. 3 seeking re-issuance of Form G with wider

publication.

 On 21.08.2023, at the 11th CoC meeting, the CoC decided to re-issue

the Form G to be published in the whole of Maharashtra and Gujarat,

with the intent of value maximisation of the Respondent No. 1. The

Form G was reissued on 26.08.2023.

 On 05.09.2023 and 13.10.2023, the Adjudicating Authority allowed two

extensions of 90 days for completion of the CIRP, in order to allow value

maximisation.

 The RP had received four EOIs from PRAs with whom the IM and the

RFRP was shared along with EM. The last date for submission of the

resolution plan of 09.11.2023 was further extended up to 17.11.2023

at the request of the PRAs.

 On 05.12.2023, at the 13th CoC meeting, it was resolved by the CoC,

to go forward with modification of the resolution plans after one time

negotiations for value maximisation. The CoC members further resolved

to seek third extension of 60 days for completion of the CIRP. RP

apprised the CoC regarding the claims received after the issue of RFRP

dated 10.10.2023. This included a claim from Mohini Buildwell Pvt. Ltd.

 On the advice of the CoC members, as discussed in the 8th meeting,

the RP informed the PRAs to exclude the Pinnacle Mall as an asset

which though appeared in the books of accounts of the Corporate

Debtor but there was no legal documentation in place; title had not been

Company Appeal (AT) (Insolvency) Nos. 612 & 613 of 2025 Page 6 of 30 transferred to the Corporate Debtor and possession of the asset was

also not with the Respondent No. 1.

 On 26.12.2023, in the 15th CoC meeting, the RP informed the members

of the CoC that he had received a claim of Rs. 28 lakhs from the

Employees' Provident Fund Organisation ('EPFO' in short) and

thereafter CoC decided to put the modified resolution plans for e-voting.

 Voting on the modified resolution plans was opened from 04.01.2024

to 11.01.2024 which was extended twice, on the request of the CoC

until 16.01.2024. Upon conclusion of the e-voting window, the CoC, in

its commercial wisdom, approved the Resolution plan along with the

Addendum received from Univastu India Limited, with a voting share of

98.57%. Kotak Mahindra with voting share of 1.43% had abstained

from voting and classified as dissenting Financial Creditor.

 Subsequent to approval by the CoC, the RP issued the Letter of Intent

('LoI' in short) dated 16.01.2024 to the Univastu India Limited as the

Successful Resolution Applicant (hereinafter referred to as the 'SRA')

which thereafter remitted the balance amount of Rs. 2.50 Cr towards

performance guarantee on 17.01.2024 having already deposited Rs. 25

Cr towards EMD earlier.

 In January 2024, the RP filed IA No. 7 of 2024 in CP No. 106 of 2022

before the Adjudicating Authority, under Sections 30(6) and Section 31

of the IBC for approval of the Resolution Plan of the SRA.

Company Appeal (AT) (Insolvency) Nos. 612 & 613 of 2025 Page 7 of 30  The Adjudicating Authority on 21.08.2024 reserved IA No. 7 of 2024 for

Orders. Thereafter, vide Order dated 17.12.2024, IA No. 7 of 2024 was

listed for clarification on certain issues.

 On 18.12.2024, the RP provided a clarificatory note giving justification

on the issues raised by the Adjudicating Authority which the latter

however found to be insufficient particularly the amount of Rs 48 lakhs

to be paid to the Dissenting Financial Creditor. Vide Order dated

19.12.2024, the Adjudicating Authority adjourned the matter to

06.01.2025 with liberty to the RP to respond to all the issues raised

earlier on 17.12.2024.

 On 03.01.2025, the RP conducted the 18th CoC Meeting and apprised

the CoC of the clarifications sought by the Adjudicating Authority. On

07.01.2025, the RP requested for time from the Adjudicating Authority

to place on record the proceedings of the 18th CoC meeting by an

Additional Affidavit. The Additional Affidavit was filed on 15.01.2025

which the Adjudicating Authority allegedly refused to consider on the

ground that the said affidavit was rife with procedural irregularities.

 On 06.02.2025, the Adjudicating Authority reserved IA No. 07 of 2024

for Orders. By way of the Impugned Order dated 24.03.2025, the

Adjudicating Authority rejected the Resolution Plan of the SRA

purportedly for reasons of statutory violations and procedural

irregularities and for compromise of the principles of transparency and

fairness.

Company Appeal (AT) (Insolvency) Nos. 612 & 613 of 2025 Page 8 of 30  Aggrieved by the rejection of their resolution plan, the impugned order

has been assailed by the SRA in C.A. No.613 of 2025 for rejecting the

plan by overriding the commercial wisdom of the CoC and by the RP in

C.A. No.612 of 2025 for the Adjudicating Authority not having

considered their clarifications to the resolution plan provided by way of

the Additional Affidavit dated 15.01.2025 and for rejecting the plan on

grounds which did not constitute part of the clarifications sought vide

its orders of 17.12.2024.

3. Before we proceed further, it may be useful to notice the prayers of the

RP and the SRA in their respective appeals which are as reproduced:

Reliefs sought by the RP in CA- 613 of 2025

(i) That this Hon'ble Appellate Tribunal may be pleased to allow this appeal and set aside the Impugned Order dated 24.03.2025 passed by the Ld. NCLT, Mumbai in I.A. No.7 of 2024 in C.P. (IB) No.106 of 2024;

(ii) That this Hon'ble Appellate Tribunal may be pleased to hold that the Resolution Plan of the SRA does not contravene any of the provisions of Section 30(2)(e) of the Code;

(iii) That this Hon'ble Appellate Tribunal may be pleased to direct the Ld. NCLT, Mumbai to proceed to pass fresh order in I.A. No.7 of 2024 in C.P. (IB) No. 106 of 2022 approving the Resolution Plan of the SRA within a short period of time;

(iv) That this Hon'ble Appellate Tribunal may be pleased to remove the observations made against the Resolution Professional;

(v) That costs in relation to this Appeal be provided for; and

(vi) Any such other and/or further order/orders be passed as this Hon'ble Tribunal may deem fit and proper.

Reliefs sought by the SRA in CA- 612 of 2025

(a) That the Hon'ble Tribunal be pleased to allow this Appeal and set aside the Impugned Order dated 24.03.2025 passed by the Hon'ble NCLT, Mumbai in IA No. 7 of 2024 in CP No. 106 of 2024;

Company Appeal (AT) (Insolvency) Nos. 612 & 613 of 2025 Page 9 of 30

(b) Declare that the Resolution Plan submitted by the Appellant, Univastu Infrastructure Ltd., ought to approved by the Adjudicating Authority under Section 31 of the IBC;

(c) Pending the hearing and final disposal of the said Appeal, the Hon'ble Appellate Tribunal may be pleased to grant a stay of the operation of the Impugned Order; and/or

(d) and grant any such other reliefs and orders as this Hon'ble Tribunal may deem fit and proper.

(e) Grant any other reliefs and pass any other orders as this Hon'ble Tribunal may deem fit and proper.

4. Shri Krishnendu Datta, Ld. Senior Advocate appeared for the RP;

Learned Sr. Counsel, Shri Abhijeet Sinha appeared for the CoC while Ms

Anusha Nagarajan appeared for the SRA in both appeals. The Learned

Counsels appearing for the RP, CoC as well as the SRA and have collectively

assailed the findings of the Adjudicating Authority in the impugned order.

Making their submissions, it has been submitted that the impugned order

has been passed without due application of mind and without consideration

of the relevant material placed on record for approval of the resolution plan

by the Adjudicating Authority. Since their submissions largely overlap, for

reasons of convenience, their arguments are compositely captured.

5. It has been contended that the reasoning adduced in the impugned

order for rejection of the resolution plan cannot be sustained as no valid

grounds of rejection as envisaged under Section 30(2) and Section 31 of the

IBC have been substantiated. It was vehemently contended that the

Adjudicating Authority had substituted the commercial wisdom of the CoC

with its own findings which is not permissible as it is well-settled law that the

jurisdiction of the Adjudicating Authority under the IBC is limited in that it

cannot sit in appeal over the justness of the commercial wisdom of the CoC

Company Appeal (AT) (Insolvency) Nos. 612 & 613 of 2025 Page 10 of 30 while considering the approval of the resolution plan. It was emphatically

asserted that the Adjudicating Authority failed to appreciate that the CoC had

voted in favour of the resolution plan of the SRA after detailed deliberations

by the members of the CoC with an overwhelming majority of 98.57%.

Reliance was placed upon the recent decision of the Hon'ble Supreme Court

in Piramal Capital & Housing Finance Ltd. v. 63 Moons Technologies

Ltd. in Civil Appeal No.1632-1634 of 2022 wherein it has been held that

it is no more res integra that the legislature has given paramount importance

to the commercial wisdom of CoC and that the scope of the judicial review by

the Adjudicating Authority is limited to the extent provided under Section 31

and that of the authority of the Appellate Authority is limited to the extent

provided under Section 61(3) of the IBC.

6. It is the case of the RP and CoC that it is not for the Adjudicating

Authority to decide on the fitness and justness of the plan as the legislative

fiat of IBC has not provided for any such ground to challenge the justness of

the plan which is approved by the CoC in the exercise of its commercial

wisdom. It was strenuously contended that the Adjudicating Authority has

exceeded its jurisdiction under Sections 31 and 30(2) of the IBC as it cannot

examine the justness or commercial prudence or any other aspect of the

resolution plan which the CoC has already considered. The Adjudicating

Authority has transgressed its jurisdiction in having entered into the issue of

admittance/rejection of claims of particular creditors, valuation of the

Respondent No. 1's purported assets, alleged arithmetical discrepancies in

the plan, etc. and in not going by the wisdom of the CoC which has approved

Company Appeal (AT) (Insolvency) Nos. 612 & 613 of 2025 Page 11 of 30 the plan under Section 30(4) of the IBC. It is not for the Adjudicating Authority

to adjudge whether the most viable resolution plan has been tabled before the

CoC for bringing about an effective resolution of the Corporate Debtor.

7. It was also asserted that the Adjudicating Authority had rejected the

resolution plan on grounds other than those in respect of which it had sought

clarifications in its order dated 17.12.2024. The Learned Counsel for the RP

highlighted that five queries were posed by the Adjudicating Authority for

clarification while the matter was reserved for orders. It was contended that

the RP had placed a note on record by way of an affidavit on 18.12.2024 to

provide clarifications sought by the Adjudicating Authority. Admittedly, the

clarifications offered by the RP were found insufficient by the Adjudicating

Authority, and hence the RP furnished an Additional Affidavit dated

15.01.2025 with requisite clarifications which however the Adjudicating

Authority did not take proper cognisance of.

8. It was contended that the Adjudicating Authority instead of cursorily

dismissing the additional affidavit and debunking the clarifications contained

therein as an afterthought to cover loop-holes in the resolution plan ought to

have referred the plan back to the CoC for reconsideration in terms of the

judgement of the Hon'ble Supreme Court in Essar Steel India Ltd.

Committee of Creditors v. Satish Kumar Gupta (2020) 8 SCC 531. If the

resolution plan was found deficient on the grounds as pointed out by the

Adjudicating Authority in its order dated 17.12.2024, it ought to have given

proper and adequate opportunity to the RP who had filed an application for

approval of the plan to properly explain and clarify various aspects of the

Company Appeal (AT) (Insolvency) Nos. 612 & 613 of 2025 Page 12 of 30 resolution plan. Even the SRA was not given a chance to address any queries

or give any clarifications on the plan to the Adjudicating Authority at a time

when they were the best placed to address any such queries. By depriving the

SRA of such an opportunity and rejecting the resolution plan without seeking

clarifications from them, the Adjudicating Authority had violated the basic

principles of natural justice.

9. We have duly considered the arguments advanced by the Learned

Counsel for the parties and perused the records carefully.

10. The narrow issue for consideration before us is whether the

Adjudicating Authority was justified in passing the impugned order rejecting

the plan when the CoC had already approved the plan with majority voting

and whether the adverse observations made by the Adjudicating Authority

that the RP had failed in steering the CIRP in a procedurally correct manner

is tenable or not.

11. Before we go into our analysis and findings, it may be constructive to

look at the main grounds outlined by the Adjudicating Authority for rejecting

the plan of the SRA and for questioning the conduct of the RP which are

encapsulated at para 21(xxvii) and (xxviii) of the impugned order as extracted

hereunder:

"xxvii. While this Tribunal accords due deference to the commercial wisdom of the Committee of Creditors, it must be emphasized that such wisdom cannot override statutory compliance and mandatory legal requirements. The numerous violations of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, particularly concerning treatment of dissenting creditors and feasibility & viability assessment, non-collating and securing the assets of Corporate Debtor, scope for non-adherence to timeline, unequal

Company Appeal (AT) (Insolvency) Nos. 612 & 613 of 2025 Page 13 of 30 treatment to the same class of creditors, pending unpaid dues owed to employees, and pending claims render the Plan legally untenable. xxviii. The conduct of the Resolution Professional in this matter requires separate consideration by the IBBI on the following issues-

 Keeping 3 of the immovable properties of the Corporate Debtor out of the collated assets for the valuation of the Corporate Debtor for maximization of the assets of the Corporate Debtor for the Resolution Plan without any legally justifiable grounds which has deprived the CoC from appreciating the true value and worth of the assets of the Corporate Debtor while evaluating and approving the Resolution Plan of the SRA on flimsy ground of some legal opinion. Reference deserves to be made to Paragraphs 6-8 of the present Order.

 Further, the RP's actions of not making a specific provision for pending EPFO Claims on the baseless premise of talking to / settling with EPFO Authorities.

 Not making any specific provision for dissenting / abstaining Financial Creditor in the total plan outlay against the statutory provisions.

 convening the 18th CoC meeting on 03.01.2025 while the matter was Reserved for Orders, filing an Additional Affidavit date 15.01.2025 as a belated attempt to address fundamental deficiencies.

 RP kept claims of Mohini Buildwell Private Limited and Assistant Commissioner of State Tax, Mazgaon, Mumbai on hold and got the plan approved from the CoC.

 Made no efforts to recover, protect, and preserve the assets of the Corporate Debtor."

12. At this juncture, it is equally pertinent to notice the earlier order of the

Adjudicating Authority dated 17.12.2024 in which it had sought clarifications

from the RP which have been extracted at para 2(xi) of the impugned order as

reproduced here-under:

"1. The case was listed for clarification on the following issues:

(i) The upfront cash payment in the Plan, to be paid within 45 days is stated to be Rs. 4.97 Crores. The breakup of the amount is as under:

a) Rs. 75 lacs CIRP cost.

b) Rs. 2 lacs Operational Creditor.

c) Rs. 48 lacs Dissenting Financial Creditor.

d) Rs. 4 Crores to the Secured Financial Creditor.

Company Appeal (AT) (Insolvency) Nos. 612 & 613 of 2025 Page 14 of 30 The sum total of the above-stated figures is more than Rs. 4.97 Crores. RP may clarify the same.

2. The Plan also says that RA proposes to pay Rs. 26.50 Crores to Financial Creditors which is as under:

(i) Rs. 4 Crores upfront.

(ii) Rs. 7 Crores after 360 days from transfer.

(iii) Rs. 4 Crores by issuance of Secured Convertible Debentures for a tenure of one year.

(iv) Rs. 4 Crores by issuance of Secured Convertible Debentures for a period of 5 years.

The Plan further says that the amount of Secured Convertible Debentures shall be paid after 1 year/5 years with a put option, it should not exceed 4% of the total shareholding of the Company by the end of 5th year. In view of the fact that the shareholding of the Company is not given in the Plan/not clarified thus, it leaves enough room for manipulation. Otherwise also, the sum total of the payment stipulated above does not make it Rs. 26.50 Crores for Financial Creditor-RP is directed to clarify the position.

3. RP is further directed to place on record the Balance-Sheet of the Corporate Debtor so as to show the Secured Loan of Kotak Mahindra Prime Limited. In the CoC proceedings, it has been stated by the RP that there is nothing on record to show that any loan was advanced by the Kotak Mahindra Prime Limited and also stated that no vehicle is traceable.

4. The Plan also says that the RA proposes to pay interest at the prevailing SBI base rate if there is any delay by RA in implementation of Plan due to any reason. Incorporation of such a clause is 'Implied Extension' on the part of CoC. CoC may clarify the position. Adjourned to 18.12.2024."

13. On 18.12.2024, the Respondent No. 2 provided a clarificatory note

giving justification on all the issues raised by the Adjudicating Authority

which the Adjudicating Authority found to be insufficient and vide its Order

dated 19.12.2024, the Adjudicating Authority made the following

observations which have been extracted at para 2(xiii) of the impugned order

as under:

"The short note provided by the Ld. Counsel for the RP on 18.12.2024 has once again failed to take into consideration, the amount of Rs. 48

Company Appeal (AT) (Insolvency) Nos. 612 & 613 of 2025 Page 15 of 30 lacs to be paid to Dissenting Financial Creditor at the outset. On the request of the Ld. Counsel for the RP to respond all the issues raised vide order dated 17.12.2024. Adjourned to 06.01.2025."

14. When we look at the contents of paras 10 to 12 above, it broadly

captures the various grounds which have been inter-alia adverted to by the

Adjudicating Authority in the impugned order for rejecting the resolution

plan. The thrust of the impugned order primarily centers around the finding

that the CoC had not been presented with the correct facts and value of the

assets by the RP and that the latter had failed to take proper efforts to recover,

protect and preserve the assets of the Corporate Debtor thus necessitating

separate consideration by the IBBI on the conduct of RP.

15. Coming to the various grounds held by the Adjudicating Authority for

not approving the plan, we notice that one of the principal grounds was

inconsistency and blatant discrepancies in the total plan value of the SRA.

The Adjudicating Authority has observed that the total plan value in the I.A.

No 7 of 2024 filed by the RP mentions plan value to be Rs 27.50 cr while

perusal of the resolution plan reveals that the plan value is only Rs 20 cr. Yet

again the total plan amount mentioned by the SRA as put to the CoC was Rs

67.21 cr. Since there were three different plan values which are inconsistent

with each other, it has been concluded by the Adjudicating Authority that the

RP had called the 18th CoC meeting when the matter was already reserved for

orders so as to cover up these inconsistencies and discrepancies in the plan

values.

16. Per contra, the RP and CoC in their defence contended that the

Adjudicating Authority had disregarded the fact that that the RP had Company Appeal (AT) (Insolvency) Nos. 612 & 613 of 2025 Page 16 of 30 presented all the 3 figures to the CoC - (a) Rs. 67.21 Cr. as the plan value

which included Rs. 19.32 crores against which debentures were to be issued

to the SRA and Rs. 20.40 crores of estimated incentive to Financial Creditors

based on contingent dues; (b) Rs. 47.90 Cr. as the plan value without payment

to self of Rs. 19.32 cr; and (c) Rs. 27.50 as the plan value without payment to

self and incentive. The incentive was conditional upon the recovery and hence

no definitive value could be assigned. The reasons behind giving all these

variable numbers was with the purpose of making a full and complete

disclosure to the CoC so as to enable the CoC to take an informed decision

while considering the resolution plan. It is also the case of the RP that the

Adjudicating Authority did not seek any clarification on these alleged

inconsistencies in the plan value but made it a ground to reject the plan.

17. When we look at the impugned order, we find that the Adjudicating

Authority has concluded that the total plan value was misrepresented by the

RP to the CoC and to the Adjudicating Authority in I.A. No. 7 of 2024 by

showing inconsistent and separate figures of Rs. 67.21 Cr to the CoC, Rs.27.5

Cr in the IA of RP before the Adjudicating Authority and Rs. 20 Cr. in the

Resolution Plan. The Adjudicating Authority has also expressed an

apprehension that the RP had convened the 18th CoC meeting without seeking

leave of the Court to cover up these inconsistencies in the plan value.

18. The above finding of the Adjudicating Authority however lacks force

when we look at the material on record. We find that the various plan values

of the SRA were discussed in various CoC meetings. The breakup of the

modified plan of the SRA in the table at page 459 of Appeal Paper Book ("APB"

in short) in the 15th CoC minute quite clearly depicts the basis of arriving at Company Appeal (AT) (Insolvency) Nos. 612 & 613 of 2025 Page 17 of 30 these plan values. The three different amounts arising due to

incentive/upside and buy-back of shares therefore stood explained at the 15th

CoC meeting. It was clarified by the RP in the 15th CoC meeting that the plan

value of Rs. 67.21 Cr. was by the inclusion of maximum recoveries to be made

from arbitration claim/car/ITNL dues and debentures to be issued to the

SRA. The RP cannot be faulted for having communicated to CoC the maximum

amount that may be payable upon recovery to make the CoC aware of the

maximum amount that can be recovered from contingent events. The RP at

IA No 7 of 2024 depicted the plan value as Rs 27.50 Cr. as seen at page 616-

617 of APB. However, Rs. 20 Cr therein was referred to as the amount payable

through upfront cash and secured convertible debentures. Note 1 therein also

stated that the SRA proposed to buy back equity shares issued to all Secured

Financial Creditors at a value of Rs. 7.5 Cr. at the end of five years thus adding

Rs. 7.5 Cr. over and above the Rs. 20 Cr. to the total plan value. The Plan

therefore clearly mentioned that in addition to this amount of Rs. 20 Cr.,

equity shares of Rs.7.50 cr were to be issued. The total of funds infused and

shares issued was thus Rs. 27.50 cr which was the amount also mentioned

in IA No 7 of 2024.

19. When resolution plans submitted by PRAs including the present SRA

have been subjected to extended deliberations and detailed negotiations in

the CoC and the financial component of the plan of the SRA which includes

the actual and minimum upfront payments has been approved by the CoC

with an overwhelming majority vote, such commercial wisdom deserves due

deference and cannot be called into question either by the Adjudicating

Authority or this Appellate Authority by supplanting its own wisdom. It is Company Appeal (AT) (Insolvency) Nos. 612 & 613 of 2025 Page 18 of 30 clearly misconstrued on the part of the Adjudicating Authority to reject the

plan of the SRA on the ground that the plan values projected before the CoC

and the Adjudicating Authority suffered from inconsistencies.

20. Another ground for turning down the plan by the Adjudicating

Authority in the impugned order is that the resolution plan created a class

within a class of operational creditors by the SRA as it provided itself with

Optionally Convertible Debentures issued at 0% coupon rate for 30 years with

18% p.a. discount while only providing for upfront payment amounting to 1%

of the total admitted claim value to other operational creditors. The

Adjudicating Authority held that such diverse treatment of same class of

creditors by bifurcating them is against the mandate of Section 53 of the IBC

thus rendering the plan unsustainable in law. Further the resolution plan by

not providing for a specific and separate provision for priority payment to

dissenting/abstaining financial creditors in the total plan outlay was violative

of Regulation 38(1)(b) of the CIRP Regulations, 2016 and this constituted a

fatal defect in the plan.

21. The SRA has denied that it had discriminated in favour of its own

claims as an operational creditor in the plan by proposing a payment of Rs.

19 Cr. to itself as against only Rs. 2 lakh to be paid upfront to the other

operational creditors which was 1% of the admitted claim. Attention was

adverted to the judgement of this Tribunal in Gail India Ltd. v. Ajay Joshi,

2021 SCC OnLine NCLAT 359 wherein it has been held that the CoC in its

commercial wisdom has the discretion to classify Operational Creditors into

further categories for deciding the manner in which payment is made to them.

It is also the case of the RP that the Adjudicating Authority did not seek any Company Appeal (AT) (Insolvency) Nos. 612 & 613 of 2025 Page 19 of 30 clarification on this issue but erroneously made this a ground for not

approving the plan.

22. When we peruse the CoC deliberations, we find that the Adjudicating

Authority has failed to notice that during the 15th CoC meeting, the said

question of potential differentiation between the operational creditors was

placed by the SRA before the RP and the CoC alongwith justification in a

transparent manner. It was contended that the repayment to self by the SRA

was proposed in form of Optionally Convertible Debentures issued at 0% for

30 years with an immediate call option discounting the same at 18% p.a. as

can be seen at page 460 of APB. Payment to self by SRA was thus to be made

after 30 years without interest while payment to other operational creditors

was to be upfront and that if both these payments were compared on the same

time-scale, the quantum of self-payment to the SRA would be lower than other

operational creditors. When the amounts amount proposed to be paid upfront

to the operational creditors and SRA is juxtaposed on the same time-lines, it

was stated that the SRA proposed to clear only 0.69% of its own dues as

against clearing 1% of the dues of the other operational creditors on an

immediate cash basis. The SRA had even proposed to grant the same option

to the other operational creditors but the CoC in its commercial wisdom did

not approve the same.

23. It is also pertinent to add here that the resolution plan of the SRA also

clearly provided for payment to Financial Creditors who voted against their

resolution plan or abstained from voting. The plan provided for payment to

such dissenting Financial Creditors an amount which shall be equal to the

Company Appeal (AT) (Insolvency) Nos. 612 & 613 of 2025 Page 20 of 30 amount to be paid to such creditors in accordance with Section 53(1) of the

IBC in the event of a liquidation of the Corporate Debtor. The plan also

provided that such Financial Creditors will be paid in priority to the Financial

Creditors who voted in favour of the resolution plan as may be seen at page

540 of APB. Further, the RP had expressly clarified in the additional affidavit

dated 15.01.2025 that the upfront payment amount of Rs 4.97 Cr. included

the amount of Rs 48 lakhs which was payable to the dissenting Financial

Creditor as placed at page 657 of APB.

24. It is well settled that it lies within the domain of the CoC as regards the

manner in which the debt of the Corporate Debtor is to be dealt with. In the

present factual matrix, all the resolution plans were circulated to the CoC

members for evaluation. The 13th, 14th and 15th meetings of the CoC had

discussed the plans submitted by all the PRAs in the presence of the PRAs for

clear clarifications. The plan of the SRA having been approved by the 98.57%

of the CoC and that too after considerable deliberations, we find no good

reason for substituting the wisdom of the CoC by that of the Adjudicating

Authority and making it a ground for not approving the resolution plan.

25. Another set of objection to the plan by the Adjudicating Authority was

on the ground that that RP had violated Sections 18 and 25 of IBC by ignoring

three assets of the Corporate Debtor viz shops in Raipur; Pinnacle Mall and

Bhakti Sankul Hotel at Nashik. It has been held by the Adjudicating Authority

that this conduct of the RP tantamount to material violations of statutory and

regulatory requirements by the RP who is otherwise ordained to take proper

safeguards for the maximization of the corporate debtor's assets.

Company Appeal (AT) (Insolvency) Nos. 612 & 613 of 2025 Page 21 of 30

26. It was emphatically asserted by the RP and SRA that no clarification

was sought even on this issue at all by the Adjudicating Authority but was

surprisingly made a ground for knocking down the plan. It was asserted that

the Adjudicating Authority had failed to appreciate that these immoveable

properties could not be made part of the plan as their titles were defective in

nature. It was canvassed that no immovable property bereft of registered

ownership transfer, can become part of the resolution plan in terms of the

judgement of this Tribunal in Gaurav Mahendru v. Sunil Kumar Aggarwal

in CA(AT)(Ins) No.1590 of 2024.

27. When we look at the material facts placed before us, we find that the

details of such properties and related shortcomings were brought to the notice

of the CoC by the RP at 8th CoC meeting and discussed in detail. As regards

the Pinnacle Mall in Nashik, only an advance payment had been made and

RP was in possession of only an unstamped and unregistered purchase

agreement. SBI, as the lead member of CoC, had advised valuers to exclude

this property as it was in the name of a related company of the Corporate

Debtor and separately mortgaged with SBI. Hence Pinnacle Mall was excluded

from the assets of the Corporate Debtor. The shops in Raipur were in the

possession of third party and no title documents were available to the RP

except for purchase agreements. As regards Bhakti Sankul in Nashik, the title

was in the name of the Corporate Debtor but in possession of third party.

Neither the lenders nor the erstwhile management had given valid title

documents to the RP. Given this backdrop, we are not persuaded to agree

with the Adjudicating Authority that the RP had violated either Section 18 or

25 of the IBC particularly when the Adjudicating Authority has not rendered Company Appeal (AT) (Insolvency) Nos. 612 & 613 of 2025 Page 22 of 30 any conclusive finding on the rights, title and interests of the Corporate

Debtor qua these immoveable properties.

28. Given this backdrop, the question that arises is whether sufficient steps

had been taken by the RP to safeguard these immovable properties or whether

the RP had disregarded the asset maximisation objective of IBC. The shops at

Raipur and Bhakti Sankul had been added to the assets of Corporate Debtor

as seen at page 512 of APB and these assets were also valued by the valuer.

No objection was received from any quarter with regard to the valuation

undertaken. The RP has given evidence that it had filed police complaint and

eviction application to protect the assets of the Corporate Debtor. Even

otherwise all assets were considered in the PUFE and Avoidance Applications

which were also filed by the RP with respect to each property vide I.A. Nos.

2967 of 2023 and 1204 of 2024. Moreover, the SRA's Resolution Plan also

provided for distribution of proceeds from avoidance applications for the

benefit of Secured Financial Creditors. The Adjudicating Authority has clearly

failed to take these aspects into account. We are also inclined to agree with

the RP that valuation is not a question to be casually raised by the

Adjudicating Authority after the commercial wisdom of the CoC has approved

a plan in terms of the judgement of the Hon'ble Apex Court in Ramkrishna

Forgings Ltd. v. Ravindra Loonkar, 2023 INSC 1013.

29. Another reason for not approving the plan stems from the findings

returned by the Adjudicating Authority that three claims had not been

considered by the RP. The claims of operational creditors like Mohini Buildwell

Pvt. Ltd. and Commissioner of Sales Tax, Mazgaon, Mumbai were not verified

and the SRA did not make provision for these claims in the resolution plan. Company Appeal (AT) (Insolvency) Nos. 612 & 613 of 2025 Page 23 of 30 No specific provision was made in the plan for the claim of the EPFO which

has been held to be violative of Section 30(2)(e) and Section 53 of the IBC by

the Adjudicating Authority.

30. The findings of the Adjudicating Authority have been contended to be

misplaced by the RP since claims raised by these creditors were brought to

the notice of the CoC by the RP and the same was discussed by the CoC. The

CoC had noted that the plan did make provision for these claims in that an

amount of Rs 3 lakhs was set aside by the SRA towards contingencies to

squarely provide for these claims if they so materialised. It was also asserted

that no clarification was sought on these claims by the Adjudicating Authority

except with respect to the status of the claim filed by Mohini Buildwell Pvt.

Ltd. as may be seen at page 649 of APB.

31. As regards claims of Mohini Buildwell Pvt. Ltd., clearly the claim was

received after the last date for filing claims. Hence the claim could not have

been admitted. This fact was categorically communicated to Mohini Buildwell.

Admittedly, however, there was a bonafide error on the part of the RP that the

status of the claim was not changed from the category of "under verification"

to "not admitted" immediately. When the reasons for non-acceptance of the

claims had already been duly communicated to Mohini Buildwell and the

latter had not challenged the rejection of their claim, mere inability on the part

of the RP in not contemporaneously modifying and updating this position does

not constitute a cogent statutory ground for rejection of the entire plan. It is

also noteworthy that this technical omission was endeavoured to be clarified

by the RP vide Additional Affidavit dated 15.01.2025 but the same was not

accepted by the Adjudicating Authority for no sound reasons.

Company Appeal (AT) (Insolvency) Nos. 612 & 613 of 2025 Page 24 of 30 32. As regards claims of the Assistant Commissioner of State Tax, Mazgaon,

the RP had raised a query regarding these claims as appeals were filed against

GST orders which are yet to be decided. Upon not receiving any response from

them, the RP committed no mistake in placing the claim on hold. The Assistant

Commissioner of State Tax, Mazgaon had in any case not challenged the non-

inclusion of their claims.

33. As regards EPFO claims, we find that RP informed CoC in the 15th CoC

meeting that a claim of Rs. 28 lakh had been received from EPFO and that if

the liability stood confirmed and validated, the claim amount will have to be

reduced from the Plan amount. Being in the nature of an unverified claim, no

provision could have been made in the plan especially as it was not a part of

the Information Memorandum. EPFO had subsequently revised its claim on

28.12.2023 from Rs. 27.96 lakhs to be only Rs. 4520/- which amount would

have been squarely covered by the amount set aside for contingencies in the

Plan. We are therefore inclined to agree with the RP and SRA that in any event,

the plan cannot be set aside for a trivial claim amount of Rs. 4520/- only.

34. Coming to yet another ground cited by the Adjudicating Authority in

rejecting the plan which is that the provision to pay interest on delayed

implementation of the plan was prejudicial to the interests of the creditors

and violative of Regulation 38 of the CIRP Regulations. The Adjudicating

Authority had therefore sought clarifications vide its order dated 17.12.2024

and the RP had responded to this query by issuing a clarification note dated

18.12.2024 as seen at page 634-635 of APB. However, in the order dated

19.12.2024, the clarification provided by the RP vide clarification note dated

Company Appeal (AT) (Insolvency) Nos. 612 & 613 of 2025 Page 25 of 30 18.12.2024 was not accepted without giving any reasons as is seen at page

636 of APB.

35. We do not find much force in this finding of the Adjudicating Authority

to strike down the plan on grounds that interest payment upon delay in

implementation of the resolution plan was indicative of impending default in

payment. We find that the CoC had duly considered the Resolution Plan and

after arriving at its own satisfaction the Resolution Plan has been approved

by it. Furthermore, this clause did not deprive the CoC of the prerogative to

initiate appropriate proceedings against the SRA for non-implementation of

the plan as Clause 11 in the Addendum to the plan had categorically and

expressly provided for secured financial creditor to proceed against SRA for

default in payment. We find no good grounds to disagree with the RP and the

CoC that the issue of interest payment upon delay in implementation of the

Resolution Plan is a subject which falls squarely within the commercial

wisdom of the CoC.

36. Yet another ground of objection to the plan expressed by the

Adjudicating Authority was that the feasibility and viability of the plan was

not expressly mentioned in the resolution plan thus violating Regulation 38

of CIRP Regulations. It was asserted by the RP that no clarification was sought

on this issue by the Adjudicating Authority but surprisingly made a ground

for rejecting the plan. Feasibility and viability aspects were parameters clearly

expressed in the RFRP. The feasibility and viability of all PRAs' plans were

considered during the explanations sought in several CoC meetings including

the 15th meeting. Furthermore, the resolution plan of the SRA contained a

Company Appeal (AT) (Insolvency) Nos. 612 & 613 of 2025 Page 26 of 30 declaration qua the feasibility and viability of the resolution plan as can be

seen at page 532 of APB. As per the provision and procedure prescribed with

regard to approval of Resolution Plan and the powers and functions of the

CoC as outlined in the IBC, it is the CoC which is required to deliberate on

the feasibility and viability of Resolution Plan of SRA which deliberations were

taken up by the CoC.

37. Prima facie, for the aforesaid reasons as discussed, we find the

observations of the Adjudicating Authority in rejecting the resolution plan

runs contrary to the material on record; the deliberations and minutes of the

meetings of the CoC; the provisions of the plan of the SRA and the

clarifications provided by the RP vide their clarification note dated 19.12.2024

and the Additional Affidavit dated 15.01.2025. Furthermore, the Adjudicating

Authority has nowhere recorded that on examination of the resolution plan of

SRA, it found that any provision of law appears to have been contravened or

that there is any incidence of non-compliance to Regulations 38 and 39 of

CIRP Regulations, 2016. We are of the considered view that though the CoC

has done due diligence and meticulously evaluated the matrix in approving

the plan of SRA, however, the Adjudicating Authority has ended up

reconsidering various financial aspects of the plan. The majority CoC has

already approved the plan in their commercial wisdom as contemplated under

the law. That being the case, the Adjudicating Authority with the limited

powers of judicial review available to it, cannot deal with the merits of

Resolution Plan or substitute its views with the commercial wisdom of the

CoC in rejecting the resolution plan unless it is found it to be contrary to the

Company Appeal (AT) (Insolvency) Nos. 612 & 613 of 2025 Page 27 of 30 express provisions of law and against the public interest. There can be no

fetters on the commercial wisdom of CoC and the supremacy of commercial

wisdom of CoC has been reaffirmed time and again by the Hon'ble Supreme

Court in a catena of judgements including K. Sashidhar v. Indian Overseas

Bank (2019) 12 SCC 150 ; Committee of Creditors of Essar Steel India

Limited v. Satish Kumar Gupta (2020) 8 SCC 531; Maharashtra

Seamless Limited v. Padmanabhan Venkatesh (2020) 11 SCC 467;

Kalpraj Dharamshi v. Kotak Investment Advisors Limited, (2021) 10

SCC 401 and Ghanashyam Mishra and Sons Private Limited through

the Authorized Signatory v. Edelweiss Asset Reconstruction Company

Limited through the Director (2021) 9 SCC 657. When the CoC has

approved a Resolution Plan by requisite voting share after considering its

feasibility and viability, such decision of CoC cannot be interfered in the

exercise of judicial review either by the Adjudicating Authority or by this

Tribunal in the exercise of its appellate powers.

38. Having said that we also do not find any good ground to refer the

conduct of the RP in the present facts of the case to the IBBI. When we look

at the sequence of events, we find that after the Corporate Debtor was

admitted into CIRP, the RP on the basis of claims admitted, constituted the

CoC. The composition of the CoC was never challenged at any stage. Material

on record show that timely CoC meetings were also held. It is also an

undisputed fact that the RP had published Form G on two occasions. The RP

had given sufficient opportunity to PRAs to modify their plans to get the best

possible plan for the revival of the Corporate Debtor. In any case, the CoC and

Company Appeal (AT) (Insolvency) Nos. 612 & 613 of 2025 Page 28 of 30 the RP together ensured value maximisation by republishing Form G twice.

In both rounds, modified plans were received. The plan value of SRA's

Resolution Plan as submitted in I.A. No.7 of 2024 is Rs. 27.50 Cr which is

much higher than the plan value received in the first round of Form G of Rs

11.10 Cr and also the liquidation value of Rs. 7.48 Cr. This reinforces that

there was no compromise on maximisation of the plan value on the part of

the RP. We also find force in the contention of the RP that it was imperative

for the RP to apprise the CoC of the clarifications being made before the

Adjudicating Authority since the resolution plan had already been approved

by the CoC. On the holding of the 18th CoC meeting, we do not find any

infirmity or irregularity on the part of the RP. The clarifications sought by the

Adjudicating Authority on 17.12.2024 being germane to the decision-making

process of the CoC in the appraisal and evaluation of the resolution plan, the

RP was duty bound to place these clarifications only after approval of the CoC.

The submission of the RP that there is no bar under the IBC which prohibits

the CoC from convening meetings after it has approved the resolution plan

and the same is pending approval before the Adjudicating Authority is fully

supported by the judgment of this Tribunal in Venus India Asset-Finance

(P) Ltd. v. Suresh Kumar Jain 2023 SCC OnLine NCLAT 69. The

Adjudicating Authority ought to have considered the deliberation of the 18th

CoC meeting to satisfy the queries raised by itself rather than outrightly ignore

the same merely on an apprehension that the RP had held this meeting

unauthorisedly to plug the loopholes in the plan.

Company Appeal (AT) (Insolvency) Nos. 612 & 613 of 2025 Page 29 of 30

39. In view of the above, we find sufficient merit in both the appeals. The

impugned order is set aside with the direction to the Adjudicating Authority

to remit the resolution plan of the SRA to the CoC for its consideration in the

light of the queries raised by the Adjudicating Authority earlier on 17.12.2024

and 19.12.2024. The CIRP period is extended by 90 days for this purpose. We

also expunge the observations made by the Adjudicating Authority on the

conduct of the RP and do not find any reason for referencing the RPs conduct

to IBBI. No costs.

[Justice Ashok Bhushan] Chairperson

[Barun Mitra] Member (Technical)

[Arun Baroka] Member (Technical)

Place: New Delhi Date: 09.07.2025

Abdul/ Harleen

Company Appeal (AT) (Insolvency) Nos. 612 & 613 of 2025 Page 30 of 30