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D. Y. CHANDRACHUD, PAMIDIGHANTAM SRI NARASIMHA
Aggarsain Spinners Limited – Appellant
Versus
Rajiv Khurana (Formerly Mr Sumat Gupta) – Respondent
Headnote: Read headnote
ORDER
1. This batch of two appeals arises from a common judgment dated 14 September 2022 of the National Company Law Appellate Tribunal ['NCLAT'] in (i) Company Appeal (AT) (Insolvency) Nos 637 and 638 of 2022; and (ii) Company Appeal (AT) (Insolvency) Nos 635 and 636 of 2022.
Facts pertaining to Company Appeal (AT) (Insolvency) Nos 637 and 638 of 2022
2. Punjab National Bank, the financial creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code ['IBC'] 2016 for initiating the Corporate Insolvency Resolution Process ['CIRP'] against Vallabh Textiles Limited, the Corporate Debtor. The application was admitted on 12 April 2019. An Interim Resolution Professional ['IRP'] was appointed. The IRP was confirmed as Resolution Professional['RP'] by the Committee of Creditors ['CoC'] on 9 May 2019. The appellant, Aggarsain Spinners Limited was confirmed as the highest bidder after various rounds of meetings before the CoC. The CoC approved the plan on 25 May 2020. An application was filed by Vallabh Textiles Limited seeking to declare the a
The judgment emphasizes the applicability of Section 29A(f) of the IBC and the validity of SEBI's actions in debarment, highlighting the need for compliance with SEBI's circulars.
Legislative intent of section 29A is to rope in all persons who may be acting in concert with the person submitting a resolution plan.
Creative interpretation necessary to lift the corporate veil.....
The commercial wisdom of the Committee of Creditors in approving a resolution plan cannot be interfered with unless there is non-compliance with regulatory requirements.
The Commercial wisdom of the Committee of Creditors in approving resolution plans must be respected, and judicial review is limited to statutory compliance under the Insolvency and Bankruptcy Code.
The rejection of a Resolution Plan must comply with statutory requirements, and commercial wisdom of the Committee of Creditors is paramount, limiting the adjudicatory review.
The court affirmed that a resolution plan, once approved by the Committee of Creditors under the IBC, is binding and must comply with statutory provisions for effective business revival.
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