1. Unsuccessful resolution applicants challenged the approval of a corporate insolvency resolution plan on grounds of material irregularity and violation of bidding process terms under the Insolvency and Bankruptcy Code. (Para 1 , 2 , 3 )
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2026 Supreme(SC) 221
SUPREME COURT OF INDIA
B.V. NAGARATHNA, R. MAHADEVAN, JJ.
Torrent Power Ltd. – Appellant
Versus
Ashish Arjunkumar Rathi and Others – Respondents
Civil Appeal Nos. 11746-11747 of 2024, Civil Appeal Nos. 11689-11690 of 2024, Civil Appeal Nos. 12994-12995 of 2024
Decided On : 27-02-2026
Advocates appeared:
For the Appellant(s) : Mrs. Gauri Rasgotra, Adv. Mr. Manish Kharbanda, Adv. Ms. Charu Mathur, AOR Ms. Priyashree Sharma Ph, Adv. Ms. Ekta Gupta, Adv. Mr. Shivansh Agarwal, Adv. Ms. Neha Maniktala, Adv. Mr. Karan Singh Duggal, Adv. Mr. S. S. Shroff, AOR M/S. D.S.K. Legal, AOR Mr. Samir Malik, Adv. Mr. Shahan Ulla, Adv. Mr. Jash Shah, Adv. Mr. Varun Kalra, Adv. Mr. Pranav Khana, Adv.
For the Respondent(s):Mr. N. Venkatraman, A.S.G. Mr. Gopal Jain, Sr. Adv. Mr. Madhav Kanoria, Adv. Ms. Srideepa Bhattacharyya, Adv. Ms. Srideepa Bhattachharyya, Adv. Ms. Neha Shivhare, Adv. Mr. Vikash Kumar Jha, Adv. M/S. Cyril Amarchand Mangaldas, AOR Mr. Ramakant Rai, Adv. Mr. Somesh Srivastava, Adv. Ms. Drishti Kaushik, Adv. M/s Trilegal Advocates On Record, AOR Mr. Neeraj Kishan Kaul, Sr. Adv. Mr. Mahesh Agarwal, Adv. Mr. Manu Krishnan, Adv. Ms. Pooja Mahajan, Adv. Ms. Geetika Sharma, Adv. Mr. Savar Mahajan, Adv. Ms. Sanjivani Pattjoshi, Adv. Mr. Uday Aditya Jetly, Adv. Mr. Uday Aditya Jetley Pocha, Adv. Mr. Toshiv Goyal, Adv. Mr. Saurabh Bachhawat, Adv. Mr. Varun Tyagi, Adv. Mr. Srivatsava Reddy Beerapall, Adv. Mr. E. C. Agrawala, AOR Mr. Aman Malik , AOR
For the Appellant(s) : Mrs. Gauri Rasgotra, Adv. Mr. Manish Kharbanda, Adv. Ms. Charu Mathur, AOR Ms. Priyashree Sharma Ph, Adv. Ms. Ekta Gupta, Adv. Mr. Shivansh Agarwal, Adv. Ms. Neha Maniktala, Adv. Mr. Karan Singh Duggal, Adv. Mr. S. S. Shroff, AOR M/S. D.S.K. Legal, AOR Mr. Samir Malik, Adv. Mr. Shahan Ulla, Adv. Mr. Jash Shah, Adv. Mr. Varun Kalra, Adv. Mr. Pranav Khana, Adv.
For the Respondent(s):Mr. N. Venkatraman, A.S.G. Mr. Gopal Jain, Sr. Adv. Mr. Madhav Kanoria, Adv. Ms. Srideepa Bhattacharyya, Adv. Ms. Srideepa Bhattachharyya, Adv. Ms. Neha Shivhare, Adv. Mr. Vikash Kumar Jha, Adv. M/S. Cyril Amarchand Mangaldas, AOR Mr. Ramakant Rai, Adv. Mr. Somesh Srivastava, Adv. Ms. Drishti Kaushik, Adv. M/s Trilegal Advocates On Record, AOR Mr. Neeraj Kishan Kaul, Sr. Adv. Mr. Mahesh Agarwal, Adv. Mr. Manu Krishnan, Adv. Ms. Pooja Mahajan, Adv. Ms. Geetika Sharma, Adv. Mr. Savar Mahajan, Adv. Ms. Sanjivani Pattjoshi, Adv. Mr. Uday Aditya Jetly, Adv. Mr. Uday Aditya Jetley Pocha, Adv. Mr. Toshiv Goyal, Adv. Mr. Saurabh Bachhawat, Adv. Mr. Varun Tyagi, Adv. Mr. Srivatsava Reddy Beerapall, Adv. Mr. E. C. Agrawala, AOR Mr. Aman Malik , AOR
IMPORTANT POINT
Corporate Insolvency Resolution Process – Scope of judicial interference – When concurrent view has been taken by two adjudicating authorities, unless it is found that such a view was in ignorance of mandatory statutory provisions or was based on irrelevant considerations or was ex-facie arbitrary or perverse, interference by Supreme Court would not be permissible.
Headnote:
Insolvency and Bankruptcy Code, 2016 – Section 62 – Corporate Insolvency Resolution Process – Scope of judicial interference – Where Resolution Professional acts on instructions of Committee of Creditors, such conduct cannot be characterised as a “material irregularity” within meaning of Section 61(3)(ii) – When concurrent view has been taken by two adjudicating authorities, unless it is found that such a view was in ignorance of mandatory statutory provisions or was based on irrelevant considerations or was ex-facie arbitrary or perverse, interference by Supreme Court would not be permissible – In present case, findings on all issues are concurrent – IBC represents a conscious legislative choice to privilege speed, certainty, and creditor-driven decision-making over exhaustive judicial scrutiny – When commercial decisions taken by Committee of Creditors are subjected to expansive judicial scrutiny, resolution timelines lengthen, transaction costs rise, and going-concern value of Corporate Debtor erodes – An efficient insolvency resolution system performs an important allocative function: it preserves viable firms through timely reorganisation while ensuring swift liquidation and exit of non-viable businesses – Where insolvency laws are tardily enforced, viable firms are driven into failure, and non-viable firms are permitted to persist – Impugned judgment passed by NCLAT affirmed. (Paras 8.1, 8.3, 14, 14.1, 14.5 and 15)
Facts of the case:
NCLAT by impugned order dated 01.10.2024 dismissed appeals preferred by unsuccessful resolution applicants and confirmed order dated 13.08.2024 passed by NCLT, holding that approval of a Resolution Plan by CoC on the basis of its commercial wisdom cannot be interfered with.
Findings of Court:
Predictability and finality are thus essential to maintaining a robust insolvency regime. Judicial intervention beyond the narrow statutory confines undermines both predictability and finality. Recognising this, IBC deliberately confines judicial review to strict statutory compliance under Sections 30(2) and 61(3). Respecting these limits will preserve economic sense of IBC and ensure that insolvency remains a predictable, time-bound, and market-driven process.
Result : Appeals dismissed.
Judgement Key Points
Based on the provided legal document, here are the key points regarding the judgment:
- Core Principle of Commercial Wisdom: The Insolvency and Bankruptcy Code (IBC) represents a conscious legislative choice to vest decisive authority in the Committee of Creditors (CoC) regarding viability, valuation, and acceptable haircuts, recognizing these as commercial rather than judicial decisions (!) (!) (!) .
- Limited Scope of Judicial Interference: Courts do not substitute their assessment for that of the CoC. Judicial review is confined to strict statutory compliance under Sections 30(2) and 61(3), ensuring the process remains efficient, market-responsive, and time-bound (!) (!) (!) .
- No Material Irregularity by Resolution Professional (RP): Where the RP acts strictly on the instructions of the CoC, such conduct cannot be characterized as a "material irregularity" under Section 61(3)(ii) of the IBC (!) (!) .
- Analysis of Alleged Modifications (Bank Guarantees): The Supreme Court held that SEML's clarification regarding Bank Guarantees did not modify its offer. The Resolution Plan from inception contemplated the return of the entire margin money (Rs. 180.05 crores) to the Corporate Debtor for payment to secured creditors, regardless of whether specific guarantees were continued or extinguished (!) (!) .
- Analysis of Alleged Modifications (Upfront Payment): The Court found that SEML did not convert a deferred payment into an upfront one in a way that altered the offer. The Rs. 240 crores figure represented the Net Present Value (NPV) of a deferred payment of Rs. 301.64 crores; the clarification merely confirmed that if the CoC chose the upfront option, it would receive the discounted value (Rs. 240 crores) without further discounting (!) (!) .
- Concurrent Findings: The Supreme Court affirmed the NCLAT order based on the principle that when concurrent views are taken by two adjudicating authorities (NCLT and NCLAT), interference is not permissible unless the view was in ignorance of mandatory provisions, based on irrelevant considerations, or ex-facie arbitrary (!) (!) .
- Economic Consequences of Excessive Review: Excessive judicial scrutiny lengthens timelines, increases transaction costs, and erodes the going-concern value of the Corporate Debtor, ultimately harming all stakeholders including the corporate debtor itself (!) (!) (!) .
- Result: The appeals filed by Torrent Power Ltd., Vantage Point Asset Management Pte. Ltd., and Jindal Power Limited were dismissed, and the impugned judgment of the NCLAT was affirmed (!) (!) .
Legal Category Hierarchy
Table of Contents
2. Appellants contended that the resolution plan was illegally modified post-negotiation through unauthorized clarifications, while respondents argued the committee’s commercial wisdom is non-justiciable and the process was sound. (Para 5 , 6 )
3. The court found no evidence of modification or material irregularity in the resolution process, noting that clarifications addressed ambiguities without altering commercial terms or the committee’s commercial wisdom. (Para 8 , 10 , 11 )
4. Judicial review of the Committee of Creditors’ commercial decisions is limited to verifying statutory compliance under Section 30(2) and identifying material irregularity by the Resolution Professional under Section 61(3). (Para 7 , 8 , 12 )
5. The Supreme Court dismissed the appeals, affirming the National Company Law Appellate Tribunal's judgment and confirming that the resolution plan's approval fell within the committee's non-justiciable commercial wisdom. (Para 13 , 15 )
6. Does seeking and accepting clarifications on a resolution plan post-negotiation constitute a material irregularity under the Insolvency and Bankruptcy Code?
No. When the Resolution Professional acts on the instructions of the Committee of Creditors to seek clarifications from all applicants to clear ambiguities, this does not amount to a material irregularity, provided the clarifications do not alter the financial offer or commercial terms. (Para 8 , 10 , 11 )
7. What is the scope of judicial review over the commercial wisdom of the Committee of Creditors in approving a resolution plan?
Judicial review is strictly limited. The Adjudicating Authority and Appellate Authority cannot substitute their assessment for the Committee’s commercial wisdom. Review is confined to ensuring compliance with Section 30(2) requirements and identifying material irregularity in the Resolution Professional’s conduct under Section 61(3). (Para 7 , 12 )
8. Can an unsuccessful resolution applicant challenge the approval of a resolution plan on the basis of superior bid value?
No. An unsuccessful resolution applicant has no vested right to claim their plan should have been accepted. Approval is solely within the Committee’s commercial wisdom, and value maximization does not grant courts the power to interfere with or re-evaluate the Committee's business decision. (Para 6 , 12 , 14 )
JUDGMENT :
B.V. NAGARATHNA, J.
Preface:
1. The Insolvency and Bankruptcy Code, 2016 (for short “IBC”) marks a fundamental shift in India’s insolvency regime: from a court-centric model to a creditor-driven process. At its core lies the doctrine of commercial wisdom: a conscious legislative choice to vest decisive authority in the Committee of Creditors (for short “CoC”), comprising financial creditors who bear the economic consequences of failure.
1.1 The IBC recognises that decisions on viability, valuation, and acceptable haircuts are inherently commercial, not judicial. Courts, therefore, do not substitute their assessment for that of the CoC. The adjudicating authority performs a supervisory role, ensuring statutory compliance and procedural fairness but refrains from second-guessing economic bodies, in this case, the CoC.
1.2 The doctrine of commercial wisdom thus embodies both institutional discipline and legislative intent: insolvency resolution must be efficient, market-responsive and guided by those best placed to evaluate commercial risk.
1.3 With this preface, we now proceed to examine the facts and issues arising in the present civil appeals.
Introduction:
2. The unsuccessful resolution applicants being aggrieved by the dismissal of their appeals by the National Company Law Appellate Tribunal, Principal Bench, New Delhi (for short “NCLAT”), are before this Court by filing the present civil appeals under Section 62 of the IBC.
2.1 By the impugned order dated 01.10.2024 in Company Appeal (AT) (Ins) Nos. 1621-1622 of 2024, the NCLAT has affirmed the order dated 13.08.2024 in CP (IB) No. 893 (MB) of 2021 passed by the National Company Law Tribunal, Mumbai Bench-IV (for short “NCLT”) which allowed IA No. 2794 of 2023 filed by Mr. Ashish Arjunkumar Rathi, Resolution Professional (for short “RP”) of SKS Power Generation (Chhattisgarh) Limited (“Corporate Debtor”) for approval of the Resolution Plan submitted by Sarda Energy and Minerals Limited (for sake of convenience “SEML”). By the same order, the applications filed by the appellants herein - Torrent Power Limited (for short “Torrent”) being IA No. 3399 of 2023, Vantage Point Asset Management Pte. Ltd. (for short “Vantage”) being IA No. 3336 of 2023, and Jindal Power Limited (for short “Jindal”) being Intervention Petition No. 40 of 2024 also came to be rejected by the NCLT.
2.2 By way of this common order, we are disposing of Civil Appeal Nos. 11746-47 of 2024, 11689-90 of 2024, and 12994-95 of 2024 preferred by the appellants - Torrent, Vantage, and Jindal respectively.
Brief Facts:
3. SKS Power Generation (Chhattisgarh) Ltd. is the Corporate Debtor against whom an application was filed by Bank of Baroda under Section 7 of the IBC seeking initiation of Corporate Insolvency Resolution Process (for short “CIRP”). The same was admitted by order dated 29.04.2022 passed by the NCLT in Company Petition (IB) No. 893 of 2021. Respondent No. 1 was appointed as the Interim Resolution Professional (for short “IRP”) and he came to be confirmed as the RP by the CoC and subsequently by the NCLT.
3.1 On 17.07.2022, the RP issued Form-G inviting Expressions of Interest (for short “EoIs”) from prospective resolution applicants. On receipt of the EoIs, the RP issued a Request for Resolution Plan (for short “RFRP”), Information Memorandum, and provided access to the Virtual Data Room of the Corporate Debtor to all prospective resolution applicants on 12.08.2022. After granting several extensions, the final date for submission of Resolution Plans was decided as 30.12.2022. Pursuant thereto, SEML and six other applicants including the appellants herein submitted their Resolution Plans and negotiations were held from January 2023 to February 2023.
3.2 As its 26th Meeting held on 12.04.2023 and 13.04.2023, the CoC decided to hold an inter-se bidding process amongst the applicants on 19.04.2023. A Process Note dated 13.04.2023 (for short “Process Note”) governing the said bidding process was also issued
