The Adjudicating Authority's role in approving a resolution plan is limited to ensuring compliance with Section 30(2) of the IBC; it cannot substitute its judgment for the commercial wisdom of the Committee of Creditors.

Headnote:(A) Insolvency and Bankruptcy Code, 2016 - Sections 29A, 30(2), 30(6), 31(1) - Approval of Resolution Plan - The Adjudicating Authority's role is limited to scrutinizing whether the Resolution Plan, as approved by the Committee of Creditors (CoC) with the requisite voting share, meets the requirements specified in Section 30(2) of the Code - The commercial wisdom of the CoC is paramount, and the NCLT has no power to modify the plan. (Paras 49, 50)

(B) Insolvency and Bankruptcy Code, 2016 - Section 29A - Eligibility of Resolution Applicant - Disqualification under Section 29A must be based on cogent and credible evidence - The NCLAT held that no such evidence existed to disqualify the successful resolution applicant consortium. (Para 40)

(C) Company Appeal (AT) (Ins) No. 35 of 2024 - NCLAT set aside the NCLT order rejecting the resolution plan on grounds of Section 29A ineligibility, finding the objections devoid of merit, and directed the NCLT to hear the plan application on merits. (Para 27)

Facts of the case:
The Resolution Professional for Vijay Citispace Private Limited (Corporate Debtor) filed an application under Section 30(6) read with Section 31(1) of the IBC for approval of a resolution plan submitted by a consortium (Shree Krishna Structures Private Limited and JP Infra Realty Private Limited), which was approved by the CoC with 100% voting share. The NCLT had previously rejected the plan on the ground that the successful resolution applicant was ineligible under Section 29A. The NCLAT set aside this order, and the matter was remanded for consideration on merits. The CIRP was initiated on 20.07.2021. Multiple publications of Form G were made to invite Expression of Interest. Four resolution plans were initially received, but only the consortium submitted a revised plan. The CoC was reconstituted after a new financial creditor, Asset Care and Reconstruction Enterprise Limited (ACRE), was admitted with a 91% voting share.

Findings of Court:
The court found that the Resolution Plan met all statutory requirements under the IBC, including payment of CIRP costs, operational creditors' dues, and management provisions. The plan was approved by 100% of the CoC voting share. The court directed that the plan (with addendums and clarifications) be approved, subject to specific directions regarding the effective date (date of NCLT approval), transfer date (date of payment to creditors), maintenance of performance guarantee, payment of gratuity and provident fund, treatment of excess recovery by ACRE, payment of CIRP costs within E+45 days, and the constitution of a Monitoring Committee including a homebuyer representative as a non-voting observer.

Issues: The main issues were whether the Resolution Plan complied with the requirements of the Code; whether the successful resolution applicant was disqualified under Section 29A; and whether the plan should be approved in light of the NCLAT's remand order.

Ratio Decidendi: The NCLT must respect the commercial wisdom of the CoC. Its scrutiny is limited to ensuring the resolution plan meets the mandatory requirements of Section 30(2) of the Code. Once the CoC has approved the plan with the requisite majority, the NCLT cannot reject it on grounds not specified in the Code, such as unsubstantiated Section 29A objections.

Result: The resolution plan submitted by the consortium was approved. The application (I.A. 2145 of 2023) was disposed of with specific directions for implementation.

Table of Content
1. application for approval of resolution plan. (Para 1)
2. commencement of cirp and initial steps. (Para 2 , 3 , 4 , 5 , 6)
3. process of inviting and evaluating resolution plans. (Para 7 , 9 , 10 , 11 , 12 , 13 , 14 , 15 , 16 , 17)
4. reconstitution of coc and approval of plan. (Para 18 , 19 , 20 , 21 , 22 , 23)
5. procedural history and appellate directions. (Para 24 , 25 , 26 , 27 , 28)
6. salient features of the resolution plan. (Para 29)
7. clarifications and additional submissions on plan. (Para 30 , 31 , 32 , 33 , 34 , 35 , 36 , 37)
8. compliance certificate and plan implementation details. (Para 38 , 39 , 40 , 41 , 42 , 43 , 44 , 45)
9. legal framework and scope of judicial review. (Para 46 , 47 , 48 , 49 , 50)
10. final approval of resolution plan with directions. (Para 51 , 52 , 53 , 54 , 55)

IN THE NATIONAL COMPANY LAW TRIBUNAL MUMBAI BENCH COURT III I.A. 2145 of 2023 IN C.P.(IB)/3352 (MB)/C-III/2019 Under Section 30(6) read with Section 31(1) of the Insolvency and Bankruptcy Code, 2016, read with Regulation 39(4) of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016.

In the matter of: Mr. Ashish Vyas, Resolution Professional of Vijay Citispace Private Limited.

B-1A, Viceroy Court CHS, Thakur Village, Kandivali (East), Mumbai – 400101.

… Applicant/ Resolution Professional In the matter of Under Section 9 of the Insolvency and Bankruptcy Code, 2016.

Regency Ispat Private Limited.

Office at 112, 1^st Floor, Anil Complex, New Link Road, Ulhasnagar, Thane- 421003.

… Operational Creditor Vs Vijay Citispace Private Limited.

Office at 205, Marine Chambers, 43, New Marine Lines, Mumbai- 400020.

[CIN: U45202MH2009PTC196272]

… Corporate Debtor Order pronounced on: 05.05.2026 Coram:

Ms. Lakshmi Gurung, Hon’ble Member (Judicial)

Shri Hariharan Neelakanta Iyer, Hon’ble Member (Technical)

Appearances:

For the Applicant Sr. Counsel Mr. Gaurav Joshi, Adv. Shyam Kapadia, Adv. Manashi Agarwal, Adv. Salomi Kalwade i/b Menaki Chambers. Mr. Ashish Vyas (RP in person).

For SRA S r. Counsel Mr. Vikram Nankani, Adv. Nausher Kohli, Adv. Jash Shah, Adv. Prateek Kumar i/b DSK Legal.

For Erstwhile Adv. Pulkit Sharma, Adv. Ankit Pitti, Adv. Chinamay Promoter Bhojane.

For Homebuyers Adv. Rohan Agarwal, Adv. Darshit Dave.

PER: SHRI. HARIHARAN NEELAKANTA IYER, MEMBER (TECHNICAL)

I.A No. 2145/2023:

1. This I.A. is filed by the Resolution Professional (‘the Applicant’) of Vijay Citispace Private Limited (‘the Corporate Debtor’) under Section 30(6) read with Section 31(1) of the Insolvency and Bankruptcy Code, 2016 (‘the Code’) read with Regulation 39(4) of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (‘CIRP Regulations’)

seeking the following reliefs:

a) The Resolution Plan along with the Addendum dated April 18, 2023 and clarification Email dated April 28, 2023 submitted by Shree Krishna Structure Private Limited and JP Infra Realty Private Limited be approved;

b) Pass such other and further order as this Tribunal may deem fit in the facts and circumstances of this case.

Commencement of CIRP:

2. The Corporate Debtor was admitted into Corporate Insolvency Resolution Process (‘CIRP’) vide order dated 20.07.2021 and the Applicant was appointed as the Interim Resolution Professional (‘IRP’)

Public Announcement:

3. The IRP made a public announcement under Regulation 6 of the IBBI (CIRP) Regulations, 2016 on 27.07.2021 to invite claims from the creditors of the Corporate Debtor in two newspapers namely, Financial Express and Navasakti. After receiving claims, the IRP prepared a list of Creditors, and constituted the Committee of Creditors (‘CoC’) on 12.08.2021 which consisted of JM Financial Credit Solutions Limited and Axis Bank Limited. Later, claims were received from other creditors and the CoC was reconstituted on 20.10.2023. The list of reconstituted CoC members are as follows: