2026 Supreme(Online)(NCLAT) 623

NATIONAL COMPANY LAW APPELLATE TRIBUNAL
Ashok Bhushan, Chairperson, Barun Mitra, Member (Technical)
Manohar Lal Vij – Appellant
Versus
Meghdoot Leisure LLP – Respondent
Company Appeal (AT) (Insolvency) Nos. 512 of 2026|Company Appeal (AT) (Insolvency) Nos. 513 of 2026

The commercial wisdom of the Committee of Creditors in approving a resolution plan is paramount and cannot be judicially substituted, limited judicial review is only for compliance with Section 30(2) of the IBC.

Headnote:(A) Insolvency and Bankruptcy Code, 2016 (IBC) - Sections 30, 31 and 61 - CIRP Regulations, 2016 - Scope of judicial review - Commercial wisdom of Committee of Creditors (CoC) - Material irregularity in CIRP - Role of Resolution Professional (RP) - Jurisdiction of Adjudicating Authority (NCLT) and Appellate Authority (NCLAT) - Approval of Resolution Plan - If CoC, with 100% vote share, approves a resolution plan and it meets the requirements of Section 30(2), the Adjudicating Authority must approve it under Section 31 - The commercial wisdom of the CoC is paramount and cannot be substituted by judicial review - The limited judicial review available is to see that the CoC has taken into account the maximization of value of assets, the going concern of the corporate debtor, and the interests of all stakeholders, as per Section 30(2) - The NCLT/NCLAT cannot interfere on merits with a commercial decision of the CoC - Any interference on grounds not specified in Section 30(2) or Section 61(3) is impermissible - A challenge to the decision-making of the CoC is non-justiciable unless grounds under the Code are satisfied. (Paras 10, 13-14)

(B) IBC - Section 18 - Duty of RP to take possession of assets - Section 25 - Duty to conduct CIRP - If RP conducts CIRP under the directions of 100% CoC and all relevant information is in the Information Memorandum, the RP cannot be said to have committed material irregularity - The fact that an unsuccessful resolution applicant was treated as non-compliant does not give it locus to challenge the approval of the successful plan, especially when the CoC was aware of the facts. (Paras 11, 15, 17-18)

(C) IBC - Unsuccessful Resolution Applicant - Locus standi - An unsuccessful resolution applicant whose plan was non-compliant cannot be heard to object to the approval of a compliant plan, particularly when no other stakeholder has objected - Courts must guard against strategic litigation by unsuccessful bidders seeking to secure a second shot. (Paras 13, 18)

(D) IBC - Evidentiary value - Information Memorandum - If the Information Memorandum captures all facts and uncertainties regarding assets (like title and possession), and the RFRP invites plans on an 'as is where is' basis, there is no informational asymmetry - The Adjudicating Authority's finding of possible informational asymmetry is erroneous if all bidders had equal access to a virtual data room and the Information Memorandum. (Paras 12, 16) (E) Judicial Review - Limit - Excessive judicial review in CIRP carries significant economic costs, lengthens resolution timelines, and distorts incentives for future bidders - Courts must remain vigilant against expanding the scope of review beyond the narrow boundaries prescribed by the IBC. (Para 14)

Facts of the case:
A Section 7 application was admitted against the Corporate Debtor (CD), and an Interim Resolution Professional (RP) was appointed. The CoC was constituted with the IDBI Bank having 100% vote share. The RP issued an RFRP inviting plans on an 'as is where is' basis. Four compliant resolution plans were received. In the 6th CoC meeting, the plan of the Successful Resolution Applicant (SRA) was approved with 100% vote share. The RP filed an application for approval of the plan. An unsuccessful resolution applicant (Claro Energy), whose plan was held non-compliant, filed applications alleging irregularities. The Adjudicating Authority rejected the plan approval application, holding that the CIRP was affected by material irregularities and lacked transparency, particularly concerning the possession and valuation of the CD's assets.

Findings of Court:
The NCLAT found no material irregularity in the CIRP process. The entire process was conducted under the direction of the 100% CoC. All relevant information regarding the assets and their possession was in the Information Memorandum, which was available to all resolution applicants. The valuation was conducted on the asset in possession of the RP. The Adjudicating Authority's observation of informational asymmetry was erroneous. The plan of the SRA was compliant with Section 30(2). The commercial wisdom of the CoC in approving the plan is paramount and cannot be judicially substituted. The rejection of the plan was unsustainable. The court set aside the impugned order, revived the plan approval application for fresh consideration, and directed early disposal.

Issues: (i) Whether the CIRP was conducted in a fair and transparent manner. (ii) Whether the SRA was ineligible under Section 29A. (iii) Whether the RP was justified in treating the plan of the unsuccessful applicant as non-compliant. (iv) Whether the resolution plan, approved with 100% vote share, satisfied the requirements of Section 30(2) for approval under Section 31. The main issue was whether the Adjudicating Authority could reject the plan based on its own assessment of irregularities when the CoC had approved it with 100% vote share and it was compliant with the Code.

Ratio Decidendi: The commercial wisdom of the CoC is paramount and cannot be interfered with by the NCLT, NCLAT, or Supreme Court unless the resolution plan violates the requirements of Section 30(2) of the Code. The limited judicial review available is to ensure the plan meets the statutory requirements. If all relevant information is available to all bidders, a finding of material irregularity cannot be sustained merely because an unsuccessful bidder raises concerns. Unsuccessful bidders cannot use litigation to secure a second shot.

Result: Both appeals allowed. The impugned order of the Adjudicating Authority is set aside. The plan approval application is revived before the Adjudicating Authority for fresh consideration in light of the observations of the NCLAT. The applications filed by the unsuccessful resolution applicant stand closed. No order as to costs. (Paras 29-30)

Table of Content
1. what is the factual background of the case? (Para 1 , 2)
2. what are the court's observations regarding cirp fairness and transparency? (Para 3 , 8 , 10 , 11 , 12 , 13 , 14 , 15 , 16 , 17 , 18 , 19 , 20 , 21 , 22 , 23 , 24)
3. what are the parties' arguments? (Para 4 , 5 , 6 , 7)
4. what is the ratio decidendi regarding commercial wisdom and judicial review? (Para 25 , 26 , 27 , 28)
5. what is the final conclusion and order? (Para 29 , 30)

Ashok Bhushan, J.

These two Appeals have been filed against the same order dated

12.03.2026 passed by National Company Law Tribunal, Division Bench, Court-1, Ahmedabad in IA(Plan)19(AHM) 2025 with IA/1451/(AHM)2025 and IA/62(AHM)2026 in C.P. (IB/61(AHM)2025. By the impugned order, the Adjudicating Authority has rejected IA(Plan)19(AHM) 2025 by issuing various directions, IA/1451/(AHM)2025 and IA/62(AHM)2026 were accordingly disposed of. Company Appeal (AT) (Ins.) No.512 of 2026 has been filed by Resolution Professional (“RP”) challenging the impugned order, whereas Company Appeal (AT) (Ins.) No.513 of 2026 has been filed by Successful Resolution Applicant, whose Resolution Plan was approved by 100% by the Committee of Creditors (“CoC”) in its 6^th CoC Meeting held on 12.11.2025. The Adjudicating Authority by the impugned order after rejecting the Plan approval application, restored the CIRP at the stage of issuance of Form-G. The RP was replaced and a direction was issued to complete the CIRP within

90 days.

2. Brief facts of the case necessary to be noticed for deciding the Appeal are:

(i) The Corporate Debtor (“CD”) Aldiam Motors Pvt. Ltd. had obtained financial facilities from IDBI Bank Ltd. (“IDBI Bank”) The facilities were taken by the CD against the mortgage of the immovable property to the Financial Creditor.

(ii) The CD failed to adhere to the financial discipline and default was committed on 08.01.2020 and Loan Agreement was declared as NPA on 08.01.2020. Financial Creditor issued notice under Section 13 sub-section (2) of the SARFAESI Act, 2002 . An OTS proposal was submitted by the CD, which was not accepted.

(iii) A Section 7 application was filed by the Financial Creditor being C.P. (IB/61(AHM)2025 claiming dues of Rs.30,46,11,634.42, where Rs.19,06,29,908/- being principal amount and rest the interest. The Adjudicating Authority issued notice and by an order dated 06.05.2025 admitted Section 7 application and appointed Manohar Lal Vij as Interim Resolution Professional (“IRP”)

(iv) In the Corporate Insolvency Resolution Process (“CIRP”), claims were filed. The IDBI Bank filed its claim as Financial Creditor. The CoC was constituted by the IRP with IDBI Bank Ltd. having 100% vote share. The State Tax Department filed its claim, which was admitted by the RP. Income Tax Department also filed its claim. No other claim was admitted by the IRP.

(v) The first CoC meeting was held on 03.06.2025, in which IRP placed the steps to be taken towards the CIRP. The IDBI Bank informed the IRP about the security interest in Plot No.986/31 only. IRP was confirmed as RP. The 2nd CoC Meeting was held on 23.06.2025 where eligibility criteria for Prospective Resolution Applicants (“PRAs”) was decided, Evaluation Matrix and request for Resolution Plans were also noted and approved.

(vi) RFRP was issued inviting Resolution Plans on 21.08.2025 including detailed terms and conditions of participation. Information Memorandum was also prepared. In response to the Form-G, seven Expression of Interests (“EoIs”) were received. Final list containing six PRAs was published on 16.08.2025. Four Resolution Plans which were received were opened in 4^th CoC Meeting. In 6th CoC Meeting, it was noted that Resolution Plan of Meghdoot Leisure LLP and Survi Infra Space LLP are fully compliant. It was further informed that Plan of Parshvanath Trading and Claro Energy Ltd. (“Claro Energy”) are non- compliant. The CoC deliberated on the feasibility and viability of three Resolution Plans and on the basis of e-voting the

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