Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2026 Supreme(Online)(NCLAT) 177

NATIONAL COMPANY LAW APPELLATE TRIBUNAL
Indevar Pandey, Judicial Member
Pragiti Construction – Appellant
Versus
Committee of Creditor of the Corporate Debtor, represented by M/s Mahavir Medicare – Respondent
Company Appeal (AT) (Ins.) No. 2330 of 2024|Company Appeal (AT) (Ins.) No. 2331 of 2024

Advocates:
For the Appellants/Petitioners:Mr. Rajat Srivastava, Advocate
For the Respondents: Mr. Milan Singh Negi, Mr. Nikhil Kr. Jha, Ms. Katyayani, Mr. Saket Gogia, Mr. Gauri Pande, Man Singh, Sheetal Maggon, Ms. Damini, Mr. Deepesh M.

Operational creditor who is sole CoC member cannot vote on/approve own resolution plan under Section 30(5) IBC; such act void ab-initio due to conflict; CoC must fairly evaluate higher-value plans per value maximisation, natural justice.

Headnote:(A) Insolvency and Bankruptcy Code, 2016 - Sections 30(5), 61 - CIRP Regulations - Regulation 39 - Resolution plan approval by sole operational creditor holding 100% CoC voting rights, who is also resolution applicant - Held: Operational creditor (not financial creditor) barred from voting on own resolution plan; approval void ab-initio as violates statutory bar; CoC decision vitiated by conflict of interest, material irregularity, non-compliance with natural justice; no fair evaluation of competing higher-value plan; RP failed to ensure compliance, notice issued to regulator; liquidation ordered. (Paras 75-103)

(B) Committee of Creditors - Commercial wisdom - Scope - Not absolute; must conform to Code objectives like value maximisation, fairness, transparency; judicial review permissible for procedural flaws, bias, extraneous considerations; single-member CoC acting as judge in own cause invalidates process. (Paras 90-98)

(C) Resolution Professional - Duties - Must conduct process per Code, highlight statutory violations; failure to invite resolution applicant to CoC meeting or prepare evaluation matrix breaches principles; Adjudicating Authority must enforce compliance with directions. (Paras 88, 99-101)

Facts of the case:
CIRP initiated by operational creditor (sole claimant, 100% CoC member) admitted; both operational creditor and another eligible applicant shortlisted; latter's plan submitted late but within 180 days, offered 20 times higher value; CoC (sole member) approved own lower-value plan, rejected higher despite court direction; NCLT approved operational creditor's plan.

Findings of Court:
Approval of own plan by operational creditor-CoC member illegal; 6th CoC meeting procedural sham, no matrix, no applicant invitation, pre-determined rejection; higher-value plan ignored contrary to value maximisation; process flawed, liquidation only remedy.

Issues: (i) Whether operational creditor-sole CoC member can approve own resolution plan? (ii) Whether such CoC can fairly evaluate competing plans?

Ratio Decidendi: Section 30(5) prohibits non-financial creditor resolution applicants from CoC voting; sole member CoC's self-approval void; rejection of superior plan without objective evaluation, amid conflict, violates natural justice, Code goals; RP/AA lapses aggravate irregularity.

Result: Appeals allowed; impugned orders set aside; Corporate Debtor ordered liquidated.

Table of Content
1. background and initiation of cirp by operational creditor. (Para 1 , 2 , 3 , 4 , 5)
2. appellant's contentions on coc bias and procedural unfairness. (Para 6 , 7 , 8 , 10 , 11 , 12 , 14 , 15 , 16 , 17)
3. reliance on precedents for value maximisation and fairness. (Para 18 , 19 , 20 , 21 , 22 , 24 , 25 , 26)
4. respondent's defence of timeline compliance and commercial wisdom. (Para 28 , 29 , 30 , 31 , 32 , 33 , 34 , 35 , 36 , 37 , 38 , 39 , 40)
5. rejection of higher plan justified by feasibility and expertise. (Para 41 , 42 , 43 , 44 , 45 , 46 , 47 , 48 , 49 , 50 , 51 , 52 , 53 , 54)
6. rp's compliance with code; non-justiciability of coc decisions. (Para 55 , 57 , 58 , 59 , 60 , 61 , 62 , 63 , 64 , 65 , 66 , 67 , 68 , 69 , 70 , 71 , 72)
7. identification of conflict in sole coc member approving own plan. (Para 73 , 75 , 76 , 77 , 78)
8. section 30(5) bars operational creditor from voting on own plan. (Para 79 , 80 , 81 , 82)
9. procedural irregularities in 6th coc meeting evaluation. (Para 83 , 84 , 85 , 86 , 87 , 88 , 89)
10. coc decision vitiated by bias, ignoring value maximisation. (Para 90 , 91 , 92 , 93 , 94 , 95 , 96 , 97)
11. material irregularity and natural justice violation necessitate intervention. (Para 98 , 99 , 100 , 101 , 102)
12. set aside approval; order liquidation of corporate debtor. (Para 103)

JUDGMENT

(6^th February, 2026)

INDEVAR PANDEY, MEMBER (T)

The present appeals has been preferred under Section 61 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as ‘Code’) by M/s Pragiti Construction, through its Proprietor Ms. Renu Verma, assailing the impugned orders dated 12.11.2024 passed by the Learned National Company Law Tribunal, Allahabad Bench, in I.A. No. 358 of 2024 and I.A. No. 401 of 2024, arising out of Company Petition (IB) No. 31/ALD/2021 in the matter of M/s Mahavir Medicare (Operational Creditor) versus Rancom Healthcare Pvt. Ltd (Corporate Debtor/CD).

2. The first appeal CA AT Ins No. 2330 of 2024 has been filed against the order passed by the Adjudicating Authority (AA hereinafter) in IA No. 358 of 2024 on 12.11.2024. The AA, vide the said order, rejected the application filed by the Appellant seeking consideration of its Resolution Plan by the Committee of Creditors (CoC) and Resolution Professional (RP) which has been earlier rejected by the RP and CoC vide their order/communication dated 16.06.2024.

3. The second appeal CA AT Ins No. 2331 of 2024 has been filed by the same appellant against the order passed by the Adjudicating Authority in IA No. 401 of 2024 on 12.11.2024. The IA No. 401 had been filed by the RP seeking the approval of Resolution Plan submitted by the Operational Creditor, M/s Mahavir Medicare. The AA vide the aforesaid order approved the Resolution submitted by OC, the same order is under challenge here.

The same parties are arrayed in both the appeals.

4. M/s Mahavir Medicare/OC was also the sole member of the Committee of Creditors holding 100% voting rights. The Appellant contends that the Adjudicating Authority failed to consider material facts placed on record, including that the Appellant was an eligible Prospective Resolution Applicant under Section 29A of the Code, that its Resolution Plan had been submitted within the overall statutory Corporate Insolvency Resolution Process period of 180 days, and that the comparative merits of the competing Resolution Plans were not objectively examined. Aggrieved by the rejection of its Resolution Plan and the approval of the Resolution Plan submitted by the sole CoC member in the same CIRP proceedings, the Appellant has approached this Appellate Tribunal by way of the present appeal.

Brief facts of the case

5. The brief facts of the case are as given below:

i. The Corporate Insolvency Resolution Process (CIRP) of the Corporate Debtor commenced after an application filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as ‘Code’) by the Operational Creditor was admitted by

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2026 Supreme(Online)(NCLAT) 177

NATIONAL COMPANY LAW APPELLATE TRIBUNALIndevar Pandey, Judicial MemberPragiti Construction – AppellantVersusCommittee of Creditor of the Corporate Debtor, represented by M/s Mahavir Medicare – RespondentCompany Appeal (AT) (Ins.) No. 2330 of 2024|Company Appeal (AT) (Ins.) No. 2331 of 2024

Operational creditor who is sole CoC member cannot vote on/approve own resolution plan under Section 30(5) IBC; such act void ab-initio due to conflict; CoC must fairly evaluate higher-value plans per value maximisation, natural justice.

Cases Referred (3)

NATIONAL COMPANY LAW APPELLATE TRIBUNAL
Indevar Pandey, Judicial Member
Pragiti Construction – Appellant
Versus
Committee of Creditor of the Corporate Debtor, represented by M/s Mahavir Medicare – Respondent
Company Appeal (AT) (Ins.) No. 2330 of 2024|Company Appeal (AT) (Ins.) No. 2331 of 2024