Back
2026 Supreme(Online)(NCLAT) 810
NATIONAL COMPANY LAW APPELLATE TRIBUNAL
Vinay Goel, Member Judicial, Ravichandran Ramasamy, Member Technical
N.K. Kurian – Appellant
Versus
K. Easwara Pillai – Respondent
IA(IBC)/284/KOB/2026 | IA(IBC)(Liq.)/04/KOB/2026
For the Appellants/Petitioners:Mr. Harikumar G Nair, Advocate
For the Respondents:Mr. Pranoy Harilal, Advocate
A judicial direction to fairly consider a resolution plan under the IBC requires the Committee of Creditors to evaluate it on its merits, without discrimination based on the applicant's role as a suspended director.
Headnote:(A) Insolvency and Bankruptcy Code, 2016 - Sections 60(5), 33(2), 33(1)(a), 34, 12, 30(2), 30(6) - CIRP Regulations - Regulation 31B and 40 - Liquidation is a measure of last resort under the Code; the primary objective is the revival of the corporate debtor and maximisation of value - The commercial wisdom of the Committee of Creditors (CoC) deserves respect, but its decision-making process must reflect fair and meaningful consideration of a resolution proposal, especially when directed by a judicial order - A resolution plan submitted by a suspended director must be considered on an equal footing and not denied parity simply because of the applicant’s status, if otherwise eligible - Judicial orders are to be interpreted to give effect to their true spirit, not narrowly - Allegations of procedural irregularities or collusion must be examined, but the court may focus on the implementation of its own directions - Insolvency professionals must act with independence, objectivity, and selfless commitment to the Code’s objectives. (Paras 34, 35, 36, 37, 39, 40, 41, 42, 43)
(B) Commercial Wisdom of CoC - While the CoC’s commercial decision is entitled to deference, it must not be influenced by personal prejudice, animosity, or a desire to punish the corporate debtor or its management - The decision must reflect that the opportunity granted by the adjudicating authority has been considered in its proper perspective. (Para 39)
Facts of the case:
The suspended director of the corporate debtor filed an application challenging the legality of the 17th CoC meeting and the conduct of the resolution professional (RP), alleging procedural irregularities, non-compliance with CIRP regulations, collusion with the sole financial creditor, and arbitrary rejection of a revised resolution plan. A separate liquidation application was filed by the RP after the CoC voted for liquidation. The adjudicating authority had earlier, on 06.03.2026, directed the RP to consider the suspended director’s revised plan fairly. This plan was rejected, and the suspended director challenged the process, claiming it was not given meaningful consideration.
Findings of Court:
The court found that its order dated 06.03.2026 was not merely a procedural direction but required the CoC to give fair, objective, and meaningful consideration to the revised plan, particularly if it was substantially on par with or better than a previously approved plan. The CoC’s decision-making process did not appear to reflect the spirit of that order. The court did not adjudicate on the merits of the specific allegations against the RP or the financial creditor but focused on ensuring that the judicial order was implemented correctly. The court held that liquidation is a last resort and that every genuine opportunity for revival must be considered before ordering liquidation.
Issues: The main issues were (i) whether the order dated 06.03.2026 was implemented in its true letter and spirit, ensuring fair and meaningful consideration of the suspended director’s revised resolution plan; (ii) the validity of the 17th CoC meeting and the subsequent decision to initiate liquidation; and (iii) the extent to which the commercial wisdom of the CoC is subject to judicial scrutiny when procedural irregularities are alleged.
Ratio Decidendi: The court reasoned that the objective of the IBC is revival, not liquidation. Therefore, any judicial direction to consider a resolution plan must be implemented in a manner that gives full effect to that objective. The CoC cannot reject a plan from a suspended director on a more onerous standard solely because of the applicant’s identity. The court directed the CoC to reconsider the plan afresh, keeping in view the true spirit of its earlier order and the primary objectives of the Code.
Result: Both applications (IA(IBC)/284/KOB/2026 and IA(IBC)(Liq.)/04/KOB/2026) were disposed of with a direction that the revised resolution plan be reconsidered by the Committee of Creditors within fifteen days, in the true letter and spirit of the court's earlier order dated 06.03.2026. The liquidation application was not granted at this stage."
| Table of Content |
|---|
| 1. preliminary issues and joinder of applications. (Para 1 , 2 , 3) |
| 2. applicant's allegations of procedural irregularities. (Para 4 , 5 , 6 , 7 , 8 , 9 , 10 , 11 , 12) |
| 3. respondent's defense of cirp compliance. (Para 13 , 14 , 15 , 16 , 17 , 18) |
| 4. applicant's rebuttal and counter-arguments. (Para 19 , 20 , 21 , 22 , 23 , 24 , 25 , 26) |
| 5. court's framing of issues and order interpretation. (Para 27 , 28 , 29 , 30 , 31 , 32) |
| 6. objectives of ibc and duties of stakeholders. (Para 33 , 34 , 35 , 36 , 37 , 38 , 39 , 40 , 41 , 42) |
| 7. order for reconsideration of resolution plan. (Para 43 , 44) |
| 8. disposal of applications and final directions. (Para 45 , 46 , 47 , 48) |
O R D E R
1. The present Application, IA(IBC)/284/KOB/2026, has been filed by the Applicant, Mr. N.K. Kurian, the Suspended Director of Mangomeadows Agricultural Pleasure Land (P) Ltd., under Section 60(5) of the Insolvency and Bankruptcy Code, 2016, against Mr. Eswara Pillai, Resolution Professional of Mangomeadows Agricultural Pleasure Land (P) Ltd., and M/s Kosamattom Finance, the Financial Creditor of Mangomeadows Agricultural Pleasure Land (P) Ltd. The reliefs sought in IA(IBC)/284/KOB/2026 are reproduced below:
a. Examine the legality and validity of the 17th CoC Meeting and the decisions taken therein and declare the 17th COC meeting as invalid
b. Direct the Resolution Professional to explain why CIRP costs were not placed before the CoC for approval as mandated under Regulation 31B of the CIRP Regulations ;
c. Order an independent examination/investigation into the conduct of the Resolution Professional and the role of Kosamattam Finance Limited in the CIRP;
d. Direct forwarding of the records to the Insolvency and Bankruptcy Board of India for examination of violations committed by the Resolution Professional;
e. Direct production of all records relating to extension of the CIRP period, including CoC resolutions, voting records and applications, if any;
f. Examine the conduct of the Resolution Professional in relation to the CIRP process and the preparation of CoC Minutes;
g. The Applicant respectfully submits that the proposal to appoint the Liquidator ought not to be accepted. Having regard to the disputes raised regarding the conduct of the CIRP, the concerns relating to procedural irregularities, and the allegations requiring independent examination, it would be in the interests of justice, transparency and stakeholder confidence that the Liquidator, if required to be appointed, be selected independently by this Hon'ble Tribunal from the panel maintained for such purposes h. Pass appropriate directions against the Resolution Professional for non-compliance with the provisions of the Insolvency and Bankruptcy Code, 2016 and CIRP Regulations ;
i. Pass such other and further orders as this Hon'ble Tribunal may deem fit and proper in the interest of justice.
2. IA(IBC)(Liq.)/04/KOB/2026 has been filed by Mr. K. Easwara Pillai, Resolution Professional of Mangomeadows Agricultural Pleasure Land Private Limited, under Section 33(2) read with Sections 33(1)(a) and 34 of the Insolvency and Bankruptcy Code, 2016, seeking following:
i. Pass an order initiating the liquidation process of the Corporate Debtor in terms of Section 33 of the Code;
ii. Pass an order appointing Mr. Najeeb T.P, Insolvency Professional having IP Reg. No. IBBI/IPA-002/IP-N01014/2020-2021/13316 as the Liquidator of the Corporate Debtor in terms of Section 34 of the Code;
iii. Pass such other orders as this Hon'ble Tribunal may deem fit in the interest of justice.
3. Since the outcome of the application has a direct bearing on the issues involved in the other application, and the adjudication of one application would necessarily affect the consideration of the other, both IAs were heard together. Accordingly, both IAs are being decided by this common order.
Brief facts of the case in IA(IBC)/284/KOB/2026: -
4. The Applicant submitted that the Corporate Debtor is a unique and nationally recognised Agri
