Summary
The Court restored the resolution-plan approval displaced by the NCLAT at the instance of a bidder seeking consideration of a later revised offer. The bidder had received equal opportunities, refused to improve its bid when asked and knew that its adjournment request had been rejected. The RP and CoC followed a fair and transparent process, so no material irregularity justified interference with the CoC’s commercial decision. A subsequent CIRP extension did not invalidate the earlier deadline-based decision. The plan had also been implemented, financial creditors paid and the debtor revived as a going concern.
Issues
- Whether refusal to consider the bidder’s later revised offer constituted material procedural irregularity.
- Whether the later extension of CIRP warranted reopening the completed bidding process.
Provisions considered
- Sections 30(2) and 61(3), particularly Section 61(3)(ii), Insolvency and Bankruptcy Code, 2016Review of CoC commercial wisdom remained confined to statutory grounds; a material procedural irregularity was reviewable but not established. (¶ 28-34)
Held
- The minutes established repeated opportunities to rectify and improve the plan. The bidder declined to increase its offer, sought an adjournment that was expressly refused and did not attend the next meeting despite knowing that the process would be concluded. Equal opportunity was afforded to all bidders. (¶ 23-27)
- The RP and CoC followed a fair, transparent and equitable procedure. Refusal of further time in those circumstances, with the insolvency timeline approaching, did not constitute material irregularity under Section 61(3)(ii). (¶ 28-34)
- CoC commercial wisdom is not open to substitution by the adjudicating or appellate authority outside the limited statutory grounds. The existence of review for material procedural defects does not authorise reopening a compliant bidding process merely because another offer is later made. (¶ 28-34)
- The subsequent CIRP extension was sought after selection of the highest bidder to enable the approval process. It did not undermine the decision taken earlier to conclude negotiations within the then-applicable timeline. (¶ 35-36)
- The selected plan had been implemented, the financial creditors paid and the corporate debtor restored as a going concern. The NCLAT erred in directing the process to resume from consideration of plans; its judgment was set aside. (¶ 37-38)
Result
Appeals allowed; NCLAT judgment reopening the resolution process set aside, restoring the NCLT-approved plan; no costs.