Resolution Professional Cannot Be Faulted To Revise Plans Multiple Times As Per Instructions Of CoC: NCLAT

The NCLAT New Delhi bench of Justice Ashok Bhushan and Barun Mitra has held that adverse remarks cannot be passed by the Adjudicating Authority against the RP for performing his duties in accordance with the commercial wisdom of the CoC. Thus, when there is no mandatory requirement to use the evaluation matrix to identify the best resolution plan and the resolution plan of Parth had been voted upon and approved with a majority of 84.52% vote share, it amounted to be the commercial wisdom of the CoC in which the RP could not have interfered. The Financial Creditor submitted that once CoC has approved the resolution plan by requisite majority, there was limited scope of interference by the Adjudicating Authority since commercial wisdom of CoC is not justiciable. In such circumstances, when the CoC had approved the resolution plan with majority share, the Adjudicating Authority erred in setting aside the entire CIRP proceedings and re-initiating fresh proceedings merely on the grounds of irregularities purportedly committed by the RP. The tribunal agreed with this contentions and observed that “the RP was allowed to seek votes of even those CoC members who are not physically present at the meeting by electronic means.” The tribunal further observed that In the given circumstances, the RP cannot be blamed for having breached the IBC for the CoC to have approved the resolution plan of Parth with requisite majority share which action was taken by the CoC in the exercise of its commercial wisdom.