Ambika bhardwaj
Published On: February 15, 2022 at 19:35 IST
In the Case of Noida Special Economic Zone Authority v. Mr. Manish Agarwal, the NCLAT, Principal Bench consisting of Justice Anant Bijay Singh (Judicial Member) and Ms. Shreesha Merla (Technical Member), declined to set aside the Order given by Adjudicating Authority, which accepted the Resolution Plan.
It affirmed that the commercial wisdom of the Committee of Creditors (CoC) with regard to viability and financial decision taken while assessing the Resolution Plan will prevail, until it is in violation of any Law.
The Appellant is an Operational Creditor of the Corporate Debtor and filed an Appeal against the Adjudicating Authority’s Order which rejected the Appellant’s Application questioning the Resolution Plan.
The Resolution Plan was approved by the Adjudicating Authority in accordance with Sections 31(1) and 60(5).
It was asserted that the Resolution Plan’s approval violated Section 30(2)(e) because the Claim admitted is of worth Rs. 6 Crores but the amount paid is only Rs. 50 Lacks.
It was contended that the Resolution Applicant was attempting to bypass the Statutory fees, which would result in unjust enrichment and that the Resolution Plan violated Section 34(2)(d) of the Special Economic Zone Act, 2018.
The Appellant was also discontented with the valuation of the land and building as the value of which had been shown to have devalued significantly in a single year.
The Tribunal examined Section 30(2)(e) of the Code, which states that the Resolution Professional must examine each resolution plan received by him to ensure that it does not violate any current Law.
The Tribunal noted that the CoC’s commercial wisdom is Non-Justiciable except on the basis of Section 30(2).
The Tribunal relied on Section 238 of the Insolvency and Bankruptcy Code, which grants the Code a Precedence over other Laws.
Further, NCLAT denied to set aside the Adjudicating Authority’s Order approving the Resolution Plan.