Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2026 Supreme(Online)(NCLT) 67

NATIONAL COMPANY LAW TRIBUNAL
Praveen Gupta, Judicial Member, Ashish Verma, Technical Member
Aditya Kumar Chauhan – Appellant
Versus
Raama Paper Mills Limited – Respondent
M.A No. 4 of 2025 | CP (IB) NO.37/ALD/2024 | IA. No. 04/2025

Advocates:
For the Appellants/Petitioners: Shishir Dwivedi, Ajay Garg, Shivani Jaiswal

CoC-approved resolution plans offering grossly discriminatory recoveries (5% to operational creditors vs 35-100% to unsecured/secured financial creditors) without justification violate IBC's fair/equitable treatment mandate; judicial review ensures balance for going concern viability.

Headnote:(A) Insolvency and Bankruptcy Code, 2016 - Sections 5(24), 30(2)(b), 60(5) read with Rule 11 of NCLT Rules, 2016; CIRP Regulations - Sections 24(3)(c), 38(1), 38(1A), 54A, 240A; Section 238 - Corporate Insolvency Resolution Process - Resolution plan approved by CoC with 99.16% votes offering 4.20%-5% to operational creditors (raw material suppliers, mostly MSMEs, admitted claims Rs.32.17 crores), 35% to unsecured financial creditors, 100% to secured financial creditors (who form majority CoC voting share and are part of successful resolution applicant consortium) - Impleadment application by operational creditors challenging plan as discriminatory, unfair, non-compliant with fair/equitable treatment, liquidation value threshold, equitable distribution among similarly situated unsecured creditors, tainted by related party dominance/influence - Held: CoC commercial wisdom not absolute; subject to statutory compliance and non-discrimination; operational creditors (suppliers) entitled to fair/equitable treatment similar to unsecured financial creditors; discriminatory treatment (100% vs 5%) without justification violates Section 30(2)(b) r/w Reg.38, principles of equity, value maximisation, going concern; plan cannot reward majority CoC members (related to applicant) at expense of operational creditors whose supplies essential for operations; no special MSME rights but equitable balancing required to prevent advance payment demands post-resolution harming economy/revival. (Paras 29-44)

(B) Resolution Plans - Judicial Review - Scope - CoC cannot approve discriminatory plans against operational creditors; Adjudicating Authority to ensure fairness, no undue preference to financial creditors maximising own recovery; operational creditors' interests not perfunctory; must balance stakeholder claims for going concern value. (Paras 31-39)

Facts of the case:
CIRP initiated on financial creditors' application; RP appointed; resolution plan by consortium (including majority CoC secured financial creditors) approved by CoC filed for approval; operational creditors (158 raw material suppliers, mostly MSMEs) filed impleadment application aggrieved by 5% payout (Rs.1.60 crores on Rs.32.17 crores admitted) vs 100%/35% to secured/unsecured financial creditors; alleged undervaluation of assets, related party control (80.48% CoC vote), discrimination, RP denied documents.

Findings of Court:
Resolution plan discriminatory; operational creditors unfairly treated; RP directed to place before CoC for reconsideration of disbursements to operational creditors in fair, reasonable, equitable manner against admitted claims.

Issues: Whether resolution plan compliant with IBC on fair/equitable treatment, non-discrimination among unsecured creditors, related party influence, MSME operational creditor protections; locus/rights of operational creditors to challenge pre-approval.

Ratio Decidendi: Resolution plans must provide equitable treatment to similarly situated unsecured creditors; gross discrimination (5% operational vs 35%/100% unsecured/secured financial) without justification invalidates plan despite CoC approval; operational suppliers critical for going concern cannot be tokenised; CoC dominated by related party applicants cannot self-deal unfairly.

Result: M.A. disposed directing RP to seek CoC reconsideration for fair operational creditor payments. (Para 44)

Table of Content
1. impleadment application by operational creditors in cirp. (Para 1 , 2)
2. grievance over discriminatory low payout to operational creditors. (Para 3 , 4 , 5 , 6 , 7 , 10 , 11)
3. denial of documents and related party allegations. (Para 8 , 9)
4. coc commercial wisdom and no special msme rights. (Para 12 , 13 , 14 , 15)
5. discrimination violates equitable treatment under ibc. (Para 16 , 17 , 18 , 19 , 20 , 21 , 22 , 23 , 24 , 25 , 26 , 27)
6. resolution plan discriminatory against operational creditors. (Para 28 , 29 , 30 , 31 , 32 , 33 , 34 , 35 , 36 , 37 , 38 , 39 , 40 , 41 , 42 , 43)
7. direct coc to reconsider equitable operational creditor payout. (Para 44)

ORDER

1. The present miscellaneous application bearing IA. No. 04/2025 was filed on 27.05.2025 by certain operational creditors of M/s Raama Paper Mills Limited (hereinafter referred to as the “Corporate Debtor") under the provisions of Sections 60(5) of the Insolvency & Bankruptcy Code, 2016 [hereinafter referred to as "the Code" or "IBC"] read with Rule 11 of NCLT Rules 2016, praying for following reliefs. Pleased to implead the applicants Aditya Kumar Chauhan S/o Madan Pal Singh, 188/3, Lal Sare, Punjabi Colony, Nagina, District- Bijnor, U.P- 246762 as Respondent No. 2 and Dr. Ramendra Singh S/o Late Shri Balbir Singh, R/o Village & post- Baldia, District- Bijnor-UP-246726 as respondent no.3 along with sole Respondent Rama Paper Mills Ltd. in the array of parties of above noted case and/or to pass such other and further order which this Hon’ble court may deem fit and proper under the circumstances of case.

2. In this matter, this Tribunal vide Order dated 07.06.2024 initiated Corporate Insolvency Resolution Process (hereinafter referred to as “CIRP”) in respect of the Corporate Debtor in an Application filed under Section 7 of the Code by two Financial Creditors, Amar Ujala Limited and Impressions Printing & Packaging Limited appointing Mr. Sandeep Agarwal as the Interim Resolution Professional (IRP), who was subsequently approved to be appointed as Resolution Professional(RP) by the Committee of Creditors ( CoC) constituted by the IRP. Pursuant to completion of all the process of carrying out the CIRP a resolution plan was approved by the CoC and this resolution plan was filed on 04.05.2025 vide IA (IBC)(Plan) NO.2/2025 before this Adjudicating Authority for approval. Thereafter, the present miscellaneous application has been filed on 27.05.2025 as the applicant operational creditors felt aggrieved by the provision for the payment made in the resolution plan for them as not being commensurate with the claims made by them.

3. These Operational Creditors filed claims to the RP for payment of the outstanding demands amounting to Rs. 32,56,82,105/- for consideration of CoC while approving the Resolution Plan. It is stated in the application that the Proposed resolution Plan submitted by RP didn't justify the interest of Operational Creditors as proposed plan is paying 5% to Operational Creditors and 35% to unsecured Financial Creditors which is purely an injustice to Operational Creditors as both are unsecured creditors while resolution plan proposed 100% to secured Financial Creditors.

4. It is stated in the Application that the value of the plant & machinery of the Corporate Debtor, M/s Raama Paper Mills Limited, is very high as shown in the Balance Sheet of FY - 2023-24 at Rs. 50.57 Crore and the land value of plant is also very high but Plan offered by the Ujala Renewable LLP is of Rs. 54.92 crores only. Further, as stated in the application, as per the Balance Sheet of FY 2023-24, the Company’s plant, equipment and building cost is shown at Rs. 50.57 crores, land cost which is app. 25 acre is shown only at Rs. 99 lakhs whereas, the actual market value of the land is appox. Rs. 60 crores (including workers colony which is situated in Town Kiratpur, is having the area of approx 5000 sq yard) as it is situated on Meerut-Pauri NH - 119 on prime location near T

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2026 Supreme(Online)(NCLT) 67

NATIONAL COMPANY LAW TRIBUNALPraveen Gupta, Judicial Member, Ashish Verma, Technical MemberAditya Kumar Chauhan – AppellantVersusRaama Paper Mills Limited – RespondentM.A No. 4 of 2025 | CP (IB) NO.37/ALD/2024 | IA. No. 04/2025

CoC-approved resolution plans offering grossly discriminatory recoveries (5% to operational creditors vs 35-100% to unsecured/secured financial creditors) without justification violate IBC's fair/equitable treatment mandate; judicial review ensures balance for going concern viability.

Cases Referred (6)

NATIONAL COMPANY LAW TRIBUNAL
Praveen Gupta, Judicial Member, Ashish Verma, Technical Member
Aditya Kumar Chauhan – Appellant
Versus
Raama Paper Mills Limited – Respondent
M.A No. 4 of 2025 | CP (IB) NO.37/ALD/2024 | IA. No. 04/2025