IBC Code: NCLT Has No Jurisdiction To Enquire Into Justness Of Rejection Of The Resolution Plan: SC [Read Judgment]
The Supreme Court has observed that National Company Law Tribunal has no jurisdiction and authority to analyse or evaluate the commercial decision of the Committee of Creditors to enquire into the justness of the rejection of the resolution plan by the dissenting financial creditors. The bench was considering appeals against an NCLAT Rulings which held that the requirement of approval of resolution plan by vote of not less than 75% of voting share of financial creditors is mandatory. Rejecting the appeal filed by Resolution applicants, the bench observed that the action of liquidation process is avoidable, only if approval of the resolution plan is by a vote of not less than 75% of voting share of the financial creditors. The inevitable outcome of voting by not less than requisite percent of voting share of financial creditors to disapprove the proposed resolution plan, de jure, entails in its deemed rejection" The court also observed the scope of enquiry and the grounds on which the decision of "approval" of the resolution plan by the CoC can be interfered with by the adjudicating authority, has been set out in Section 31 read with Section 30 and by the appellate tribunal under Section 32 read with Section 61 of the I&B Code. What is significant is the second part of the said provision, which stipulates the requisite threshold of "not less than seventy five percent of voting share of the financial creditors" to treat the resolution plan as duly approved by the CoC.
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