CMA Harshad Deshpande Vs. Shri Rakesh Kumar Relan (RP) and Anr. - The purpose of prescribing minimum fees is to ensure reasonable professional compensation for functions performed during CIRP. Such provisions cannot be read to mean that the IRP becomes automatically entitled to full professional fees even during a period when the CIRP itself was functioning under substantial judicial restrictions and most statutory functions could not be undertaken.

 NCLAT (2026.05.19)  in CMA Harshad Deshpande Vs. Shri Rakesh Kumar Relan (RP) and Anr. [(2026) ibclaw.in 687 NCLAT, Company Appeal (AT) (Ins.) No. 108 of 2026] held that;-

• The purpose of prescribing minimum fees is to ensure reasonable professional compensation for functions performed during CIRP. Such provisions cannot be read to mean that the IRP becomes automatically entitled to full professional fees even during a period when the CIRP itself was functioning under substantial judicial restrictions and most statutory functions could not be undertaken.

• The Adjudicating Authority neither accepted the stand of the CoC that no fees were payable, nor accepted the claim of the Appellant for full fees at the rate demanded by him. Instead, it attempted to strike a balance between the two competing positions.

• The Adjudicating Authority neither accepted the stand of the CoC that no fees were payable, nor accepted the claim of the Appellant for full fees at the rate demanded by him. Instead, it attempted to strike a balance between the two competing positions.

• The Adjudicating Authority acknowledged that the Appellant had performed certain functions and therefore deserved remuneration. Simultaneously, it also recognized that the CIRP was functioning under serious restrictions and therefore payment of full fees as claimed by the Appellant would not be justified. It is in this background that the Adjudicating Authority directed payment of fees at the rate of Rs. 50,000/- per month along with reimbursement of actual expenses after verification.

• The question of CIRP costs and fee ratification falls within the commercial domain of the CoC, subject of course to judicial scrutiny where the decision is shown to be arbitrary or contrary to law. In the present case, the reduction during the stay period and payment as per the regulations after vacation of stay had direct nexus with the restricted functioning of the CIRP during the relevant period and therefore the same cannot be said to be mala fide or irrational.

Excerpts of the order;

The present appeal has been preferred by the Appellant, CMA Harshad Deshpande, who had been appointed as the Interim Resolution Professional (“IRP”) of the Corporate Debtor, namely M/s Shri Tradco Deesan Private Limited, challenging the Order dated 07.10.2024 passed by the Hon’ble National Company Law Tribunal, Mumbai Bench-V, (Adjudicating Authority) in IA (IBC) No. 4549/2024 in CP (IB) No. 1135/MB/2021. By the said order, the Adjudicating Authority partly allowed the application filed by the Appellant against Respondent No. 1, Shri Rakesh Kumar Relan, who was subsequently appointed as the Resolution Professional (“RP”) of the Corporate Debtor in the place of Appellant, and against Respondent No. 2, namely the Committee of Creditors (“CoC”) of M/s Shri Tradco Deesan Private Limited through State Bank of India, regarding payment of professional fees and reimbursement of expenses incurred by the Appellant during the Corporate Insolvency Resolution Process (“CIRP”).

# 2. The dispute in the present appeal arises from the grievance of the Appellant that despite discharging various statutory duties as IRP throughout the CIRP period, including during the period when this Appellate Tribunal had stayed the constitution of the CoC, the CoC/Respondent No. 2 refused to ratify and pay his professional fees for a substantial duration and further arbitrarily reduced the agreed fee structure. The Appellant has therefore filed this appeal contending that the Adjudicating Authority failed to grant him fees in accordance with the agreed remuneration as well as the minimum fee structure prescribed under Regulation 34B read with Schedule II of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016.

Facts of the Case

# 3. The brief facts of the case relevant to deciding this case are as under:

(i) The Corporate Insolvency Resolution Process against M/s Shri Tradco Deesan Private Limited commenced pursuant to an Order passed by the Adjudicating Authority, under Section 7 of the Insolvency and Bankruptcy Code, 2016 (herein referred to as ‘Code’) on 15.02.2023, whereby the Corporate Debtor was admitted into CIRP and the Appellant/ CMA Harshad Deshpande, was appointed as the Interim Resolution Professional for conducting the insolvency process in accordance with the provisions of the Code and the CIRP Regulations. Following his appointment, the Appellant assumed charge and commenced discharge of statutory duties required under the Code.

(ii) The admission order dated 15.02.2023 was thereafter challenged before this Appellate Tribunal by the Suspended Board of Directors of the Corporate Debtor through Company Appeal (AT) (Insolvency) No. 244 of 2023. During pendency of the said appeal, the Hon’ble NCLAT by an interim order passed on 28.02.2023 stayed the constitution of the Committee of Creditors, while specifically permitting the IRP to continue with collation and verification of claims. The order expressly directed that the IRP shall not constitute the CoC and shall not take further steps except collation and verification of claims.

(iii) The interim stay granted by the NCLAT ultimately was vacated vide order dated 01.09.2023, following which the Appellant proceeded with constitution of the Committee of Creditors in accordance with the Code. Upon constitution of the CoC, the first CoC meeting was convened on 18.09.2023, wherein the members of the CoC resolved to replace the Appellant as the Interim Resolution Professional and proposed appointment of Respondent No. 1, namely Shri Rakesh Kumar Relan, as the new Resolution Professional of the Corporate Debtor.

(iv) Thereafter, during the second CoC meeting held on 10.10.2023, the Appellant sought ratification of the professional fees payable to him for services rendered during the CIRP period. At this stage, representatives of State Bank of India objected to payment of fees for the period during which the constitution of CoC had remained stayed on the ground that according to them no substantial work had been performed during the said period. It was also contended by the representatives of SBI that the Appellant should charge only the minimum fee prescribed under Schedule II of the CIRP Regulations, namely INR 2,00,000/- per month. The Appellant, however, clarified that the fee of INR 2,50,000/- per month had already been agreed between SBI and the Appellant at the time his name was proposed as IRP in Part III of Form-1 and further explained that the fee prescribed under Schedule II was only a minimum benchmark and not a ceiling restricting higher agreed remuneration.

(v) Subsequently, the application seeking replacement of the Appellant as Resolution Professional was allowed by the Adjudicating Authority through order dated 26.10.2023, whereby Respondent No. 1 came to be appointed as the Resolution Professional of the Corporate Debtor. Pursuant thereto, the Appellant formally handed over charge and records of the Corporate Debtor to Respondent No. 1 on 04.11.2023.

(vi) In the third CoC meeting held on 30.11.2023, the CoC ratified the Appellant’s fees only partially. The CoC approved payment of INR 1,25,000/- for the period from 15.02.2023 to 28.02.2023, INR 2,00,000/- for September 2023, INR 2,00,000/- for October 2023, and INR 26,666.67 for the period from 01.11.2023 to 04.11.2023, aggregating to INR 5,51,667/- exclusive of GST. Notably, no fees whatsoever were ratified for the six-month period from 01.03.2023 to 31.08.2023, during which the stay on constitution of CoC had remained operative. The CoC also reduced the Appellant’s fee from the originally agreed amount of INR 2,50,000/- per month to INR 2,00,000/- per month from September 2023 onwards.

(vii) Aggrieved by the refusal to pay fees for the aforesaid six-month period and the unilateral reduction of his remuneration, the Appellant issued a legal notice on 27.03.2024 to the Resolution Professional and the CoC raising objections regarding arbitrary curtailment and non-payment of fees. Despite issuance of the legal notice, the amounts claimed by the Appellant were not released.

(viii) Subsequently, the Appellant approached the Adjudicating Authority by filing IA (IBC) No. 4549/2024 under Section 60(5) of the Insolvency and Bankruptcy Code seeking directions for payment of his professional fees and reimbursement of expenses incurred during the CIRP. In the said application, the Appellant contended that the CIRP process had never been stayed and only constitution of the CoC had been restrained; therefore, he remained entitled to fees for all services rendered during the relevant period. He further asserted that the agreed fee of INR 2,50,000/- per month as well as the minimum statutory fee prescribed under Regulation 34B and Schedule II entitled him to remuneration substantially higher than what was being offered by the CoC.

(ix) During proceedings before the Adjudicating Authority, Respondent No. 1 filed an affidavit-in-reply contending that the Resolution Professional was bound by the decisions and resolutions passed by the Committee of Creditors and therefore could not release any amount beyond what had been approved by the CoC in its meetings. It was specifically asserted that the fee amount of INR 6,50,967/- inclusive of GST had already been ratified by majority vote of the CoC and consequently no further liability could be imposed upon the Resolution Professional beyond the approved amount.

(x) The AA ultimately disposed of IA (IBC) No. 4549/2024 by order dated 07.10.2024. By way of the impugned order, the Adjudicating Authority directed the CoC and the Financial Creditor to reimburse the fees of the Appellant for the period from 28.02.2023 to 01.09.2023 at the rate of INR 50,000/- per month on a pro-rata basis and also permitted reimbursement of actual expenses incurred by the Appellant subject to verification. However, the Adjudicating Authority did not accept the Appellant’s claim for payment at the rate of INR 2,50,000/- per month or at least the minimum fee prescribed under Schedule II of the CIRP Regulations during the period of stay. Aggrieved by the same the Appellant has filed this appeal.

SUBMISSIONS OF THE APPELLANT

# 4. Ld. Counsel for the Appellant submits that the Corporate Insolvency Resolution Process (“CIRP”) against the Corporate Debtor commenced pursuant to the Order dated 15.02.2023 passed under Section 7 of the Insolvency and Bankruptcy Code, 2016 and the Appellant was appointed as IRP. The said admission order was challenged before this Appellate Tribunal in Company Appeal (AT) (Ins.) No. 244 of 2023. While entertaining the said appeal, this Hon’ble Appellate Tribunal, vide Order dated 28.02.2023, directed that the appeal be listed for admission on 11.04.2023 and further directed that, in the meantime, the IRP shall not constitute the Committee of Creditors (“CoC”) and shall not take any further steps except collation and verification of claims. Therefore, the directions issued by this Appellate Tribunal were limited in nature and did not amount to a complete stay of the CIRP proceedings.

# 5. Ld. Counsel submits that the interim protection granted by this Hon’ble Appellate Tribunal was subsequently vacated vide Order dated 01.09.2023. Therefore, from 01.09.2023 onwards, the CIRP proceedings continued without any restriction.

# 6. He submits that during the 03rd CoC Meeting held on 30.11.2023, the CoC itself approved and agreed to pay the fees of the IRP/Appellant for the relevant periods. The fee structure approved by the CoC included an amount of Rs.1,25,000/- for the period from 15.02.2023 to 28.02.2023, Rs.2,00,000/- each for the months of September and October 2023, and Rs.26,666.67 for the period from 01.11.2023 to 04.11.2023, aggregating to Rs.5,51,667/- exclusive of GST. After adding GST at the rate of 18%, the total approved amount came to Rs.6,50,967/-.

# 7. He further that despite having approved the fees payable to the IRP, the Respondent No.02/CoC deliberately refused to pay the fees of the Appellant for the period from 01.03.2023 to 31.08.2023. In view of such refusal, the Appellant was constrained to file IA No. 4549/MB/2024 before the Ld. Adjudicating Authority seeking, inter alia, directions against the CoC for payment of fees payable to the IRP for the aforesaid period. The Ld. Adjudicating Authority partly allowed the said application vide the impugned Order dated 07.10.2025 and directed the CoC to pay fees to the Appellant at the rate of Rs.50,000/- per month during the period from 01.03.2023 to 31.08.2023. However, despite the passing of the said order, the CoC/Respondent No.2 has till date failed to comply with the same and has not paid even the reduced amount directed by the Ld. Adjudicating Authority.

# 8. The Appellant submits that the stand taken by the CoC/Respondent No.2 that the CIRP itself stood stayed during the period from 28.02.2023 to 01.09.2023 is factually and legally incorrect. The Order dated 28.02.2023 passed by this Appellate Tribunal merely restrained the IRP from constituting the CoC and from taking further steps in the CIRP, except for verification and collation of claims. Thus, the CIRP proceedings were not completely stayed. The limited directions were issued only to facilitate settlement discussions between the parties and not to terminate or suspend the CIRP altogether. Therefore, the Appellant continued to discharge his statutory duties during the said period.

# 9. It is submitted that during the aforesaid period, the Appellant actively carried out the work of verification and collation of claims received from various creditors. The Appellant verified and collated claims exceeding Rs.250 crores. This fact has also been specifically recorded by the Ld. Adjudicating Authority in Paragraph 6 of the impugned Order dated 07.10.2025. The Ld. Adjudicating Authority categorically observed that the stay granted by this Appellate Tribunal was limited only to the constitution of the CoC and that the IRP was permitted to continue the functions relating to verification and collation of claims. The Hon’ble Adjudicating Authority further recorded that, after publication of Form-A, the IRP received claims from four financial creditors aggregating to more than Rs.250 crores and also received nine claims from operational creditors. The Hon’ble Adjudicating Authority therefore expressly held that it could not be said that no function was discharged by the IRP during the relevant period.

# 10. Ld. Counsel submits that in view of the above categorical findings recorded by the Hon’ble Adjudicating Authority, the argument advanced by the learned counsel for CoC/Respondent No.2 that no work was performed by the Appellant during the six-month period from 28.02.2023 to 01.09.2023 is wholly untenable and contrary to the material available on record. It is significant that the findings recorded in the impugned Order dated 07.10.2025 have not been challenged by Respondent No.02/CoC. Therefore, the Respondent cannot now dispute the fact that substantial work was in fact carried out by the Appellant during the relevant period.

# 11. Ld. Counsel submitted that Regulation 34-B of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 specifically governs the fees payable to the Interim Resolution Professional and Resolution Professional. Regulation 34-B(2) clearly provides that the fee payable to an IRP or RP appointed on or after 01.10.2022 shall not be less than the fee prescribed in Schedule-II for the period specified therein. The Regulation further provides that while the applicant or CoC may fix a higher amount considering market factors, the minimum prescribed fee cannot be reduced below the statutory threshold. The said Regulation also clarifies that the fee forms part of the insolvency resolution process costs.

# 12. He submits that Schedule-II of the CIRP Regulations prescribes the minimum fee structure applicable to the IRP/RP. As per Table-1 under Schedule-II, where the quantum of admitted claims exceeds Rs.50 crores but is less than or equal to Rs.500 crores, the minimum fee payable is Rs.2,00,000/- per month. Clause 2 of Schedule-II further provides that such minimum fixed fee shall apply from the date of appointment of the IRP/RP till submission of the application for approval of the resolution plan, filing of liquidation application, filing of withdrawal application under Section 12A, or closure of the CIRP, whichever is earlier.

# 13. Ld. Counsel submitted that the List of Creditors filed with the Insolvency and Bankruptcy Board of India (“IBBI”), which forms part of the Appeal Memo, clearly demonstrates that the Appellant admitted claims of financial creditors amounting to Rs.268,40,92,902/- and claims of operational creditors amounting to Rs.10,34,94,352/-. Thus, the admitted claims of the Corporate Debtor were well within the bracket attracting the statutory minimum fee of Rs.2,00,000/- per month under Regulation 34-B read with Schedule-II of the CIRP Regulations. In these circumstances, the direction of the Hon’ble Adjudicating Authority restricting the fees payable to the Appellant to only Rs.50,000/- per month for the period from 28.02.2023 to 01.09.2023 is contrary to the mandatory statutory framework and therefore unsustainable in law.

# 14. It is further submitted that the CoC/Respondent No.2 had itself agreed to pay the Appellant fees at the rate of Rs.2,50,000/- per month. The subsequent reduction of fees to Rs.2,00,000/- per month was applicable only after the interim directions were vacated on 01.09.2023. Therefore, for the period from 01.03.2023 to 31.08.2023, the Appellant is entitled to fees at the rate of Rs.2,50,000/- per month in terms of the resolutions passed by the CoC itself. The Ld. Adjudicating Authority failed to properly appreciate these material facts and consequently committed an error in reducing the fee payable to the Appellant.

# 15. It is submitted by the Appellant that he regularly filed the list of creditors before the IBBI from time to time as and when claims were received and verified. The records filed before the IBBI clearly show that the last claim was received and verified by the Appellant on 16.09.2023. The screenshot of the list of claims produced on record establishes that the Appellant continuously discharged his duties during the relevant period and remained actively engaged in the CIRP process.

# 16. It is submitted that the Appellant undertook extensive work as IRP during the relevant period between 28.02.2023 and 01.09.2023. The Appellant received and processed claims from several creditors including Poonam Pipes, State Bank of India, Encore ARC, Ashapura Fuels Pvt. Ltd., Raj Process Equipments and Systems Pvt. Ltd., Food & Biotech Engineers, B.G. Shirke Construction, HDFC Bank, Axis Bank, and the Deputy Commissioner of State Tax. The Appellant also sent multiple communications seeking additional documents and clarifications for the purpose of claim verification. Various creditors submitted additional documents in response to the communications issued by the Appellant. Therefore, the allegation that the Appellant performed no work during the relevant period is entirely baseless and contrary to the documentary record.

# 17. Ld. Counsel submitted that the Respondent No.2 has relied upon the judgment of this Hon’ble Appellate Tribunal in “IndusInd Bank Ltd. v. Mr. Rajendra K. Bhuta, reported in (2022) ibclaw.in 325 NCLAT”, to contend that no fee is payable during the period of stay. However, the said judgment is clearly distinguishable on both facts and law and has no application to the present case due to following reasons:

(a) It is submitted that in IndusInd Bank Ltd. v. Rajendra K. Bhuta, the admission order initiating CIRP was challenged before the Hon’ble Supreme Court and the Hon’ble Supreme Court granted a complete stay of the insolvency proceedings vide Order dated 26.11.2018 in Civil Appeal No.11020 of 2018. The Hon’ble Supreme Court specifically directed that “there shall be stay of insolvency proceedings in the meantime.” Therefore, there was an absolute and complete stay on the CIRP proceedings in the said matter.

(b) It is submitted that the factual position in the present case is entirely different. In the present matter, this Hon’ble Appellate Tribunal never stayed the insolvency proceedings in entirety. The Appellant was only restrained from constituting the CoC and from taking further steps except verification and collation of claims. Thus, the Appellant continued to perform statutory functions during the relevant period and the CIRP itself remained operational.

(c) It is further submitted that in the judgment relied upon by Respondent No.2, the dispute pertained to the fees of the Resolution Professional after constitution of the CoC, whereas in the present case the dispute concerns the fees payable to the IRP during the stage of verification and collation of claims prior to constitution of the CoC. In the present case, the Appellant demonstrably performed substantial work relating to claim verification and collation, which has already been acknowledged by the Hon’ble Adjudicating Authority in the impugned order itself. Therefore, the ratio of the aforesaid judgment cannot be mechanically applied to the facts of the present case.

Ld. Counsel therefore submitted that the judgment in IndusInd Bank Ltd. v. Rajendra K. Bhuta is clearly distinguishable both on facts and on law and cannot be relied upon to deny the legitimate fees payable to the Appellant for the work actually performed by him during the relevant period.

# 18. Summing up his arguments, Ld. Counsel submitted that the Appellant is legally entitled to fees in accordance with Regulation 34-B read with Schedule-II of the CIRP Regulations and also in terms of the resolutions passed by the CoC itself submitted that the present appeal deserves to be allowed. The impugned Order dated 07.10.2025 deserves to be set aside to the extent it restricts the fees payable to the Appellant to Rs.50,000/- per month for the period from 01.03.2023 to 31.08.2023. Accordingly, this Appellate Tribunal may be pleased to grant the reliefs prayed for in the Appeal.

Submissions of the Respondent No. 1/RP

# 19. Ld. Counsel for the Respondent No.1/ Resolution Professional Shri Rakesh Relan submitted that the substantive reliefs and prayers raised in the Appeal were essentially against Respondent No. 2, namely the Committee of Creditors. The counsel for Respondent No. 1 specifically emphasized that no direct allegations had been levelled against the Answering Respondent in the Appeal and no substantive reliefs had been sought against him. It was therefore argued that the role of the Answering Respondent in the present proceedings was only formal and limited in nature.

# 20. He further submitted that the Answering Respondent had received a legal notice dated 27.03.2024 from the Appellant. Upon receipt of the said notice, the same had been duly communicated by the Answering Respondent to the members of the Committee of Creditors. Thereafter, IA (IBC) No. 4549/MB/2024 came to be filed by the Appellant and a copy thereof had also been duly served upon the Answering Respondent. The counsel submitted that Respondent No. 1 had acted transparently and had kept the Committee of Creditors informed regarding all material communications received from the Appellant.

# 21. The counsel lastly submitted that since no substantive prayers had been sought against the Answering Respondent and no allegations warranting adjudication had been made against him, the Appeal deserved to be decided independently on its own merits as against the concerned parties.

Submissions of Respondent No.2/CoC

# 22. Ld. Counsel for Respondent No. 2/CoC submitted that the Appellant was initially appointed as the Interim Resolution Professional (“IRP”) of Shri Tradco Deesan Private Limited pursuant to the order dated 15.02.2023 passed by the Ld. Adjudicating Authority under Section 7 of the Insolvency and Bankruptcy Code, 2016 admitting the Corporate Debtor into Corporate Insolvency Resolution Process (“CIRP”). It was submitted that thereafter the admission order itself came to be challenged before this Appellate Tribunal by the Corporate Debtor. This Appellate Tribunal, vide order dated 28.02.2023 passed in Company Appeal (AT) (Insolvency) No. 244 of 2023, granted interim protection by directing the IRP not to constitute the Committee of Creditors and not to take further steps except collation and verification of claims.

# 23. Ld. Counsel submits that the Appellant is now deliberately attempting to take undue advantage of the wording of the order dated 28.02.2023 by contending that since there was no express stay of CIRP proceedings, he continued to remain entitled to full fees during the entire period from 01.03.2023 to 31.08.2023. Learned counsel submitted that such interpretation is wholly artificial and contrary to the practical and legal effect of the interim order passed by this Hon’ble Tribunal. It was submitted that once constitution of the CoC was specifically restrained and the IRP was directed not to proceed further except verification and collation of claims, the CIRP itself substantially remained in abeyance. Counsel submitted that any reasonable reading of the interim order would make it abundantly clear that no substantive CIRP work could proceed during the said period.

# 24. Learned counsel further submitted that prior to the interim stay, the Appellant had admittedly carried out certain limited functions such as issuance of public announcement for inviting claims from creditors. It was therefore acknowledged by the CoC that fees for the services actually rendered before the stay period were payable and accordingly the same were ratified. However, after the stay on constitution of CoC came into operation, no effective CIRP functions could legally be undertaken by the Appellant. It was therefore submitted that the Appellant could not claim fees for a period during which he was not discharging substantive statutory duties under the Code. Counsel emphasized that the Appellant was fully compensated for the period during which work was actually performed and there was no arbitrary denial of legitimate remuneration.

# 25. It was further submitted that the interim protection granted by this Hon’ble Tribunal remained in force till 01.09.2023, when the same was vacated. Thereafter, the Appellant proceeded to constitute the Committee of Creditors and subsequently, in the first CoC meeting itself, he came to be replaced by Respondent No. 1 as the Resolution Professional pursuant to the order dated 26.10.2023 passed by the Hon’ble NCLT, Mumbai Bench. Learned counsel submitted that therefore the actual period during which the Appellant rendered effective CIRP services was extremely limited and the fee structure was accordingly rationalized by the CoC on the basis of actual work performed.

# 26. Ld. Counsel then referred to the 3rd CoC meeting held on 30.11.2023 wherein the fees payable to the Appellant were specifically considered and ratified. It was submitted that the CoC, after due deliberation, approved payment of fees for the period between 15.02.2023 to 28.02.2023, September 2023, October 2023 and proportionate fees for the brief period between 01.11.2023 to 04.11.2023. The total amount ratified was Rs. 5,51,667/- plus GST amounting to Rs. 99,300/-, aggregating to Rs. 6,50,967/-. It was specifically recorded in the minutes that the period between 01.03.2023 to 31.08.2023 was covered by the stay order passed by this Hon’ble Appellate Tribunal on constitution of the CoC. Learned counsel submitted that the CoC thus took a conscious commercial decision not to approve fees for the stay period, since no effective CIRP functions were carried out during that time.

# 27. Ld. Counsel further submitted that the Appellant’s fees were also re-adjusted from Rs. 2,50,000/- per month to Rs. 2,00,000/- per month in accordance with the CIRP Regulations and the size of claims collated in the present CIRP. It was argued that under the CIRP Regulations, the IRP may request a higher fee, but such higher fee is ultimately subject to approval of the Committee of Creditors. It was therefore submitted that the CoC was fully within its commercial wisdom and statutory authority in approving a fee of Rs. 2,00,000/- per month instead of Rs. 2,50,000/- per month. Learned counsel clarified that this re-adjustment was made only after constitution of the CoC and was thus a valid exercise of powers by the CoC under the CIRP framework.

# 28. He stated that thereafter the Appellant filed IA No. 4549/MB/2024 before the Adjudicating Authority seeking payment of fees from the CoC. The said application was heard at length by the Adjudicating Authority. Learned counsel submitted that although the CoC had taken a legitimate position that no fees were payable for the stay period due to absence of discharge of statutory duties, the Adjudicating Authority nevertheless exercised equitable jurisdiction and directed payment of Rs. 50,000/- per month on pro rata basis for the stay period from 01.03.2023 to 31.08.2023. It was further directed that actual expenses incurred by the IRP could also be reimbursed upon verification. Counsel submitted that despite this equitable indulgence granted by the Adjudicating Authority, the Appellant has still chosen to challenge the order solely for enhancement of fees.

# 29. Learned counsel submitted that the present Appeal has been preferred by the Appellant mainly on two grounds, namely, firstly, that the CoC could not reduce the fees from Rs. 2.50 lakhs to Rs. 2.00 lakhs, and secondly, that the Adjudicating Authority erred in granting only Rs. 50,000/- per month for the stay period. It was submitted that both contentions are legally untenable and contrary to the statutory scheme governing CIRP costs and professional fees.

# 30. With respect to the Appellant’s reliance on Regulation 34B of the CIRP Regulations, Ld. Counsel submitted that the Appellant cannot invoke the minimum fee structure contemplated under the Regulations because the said provision presupposes active conduct of CIRP proceedings and actual discharge of statutory functions. It was argued that during the subsistence of the stay order, the Appellant was legally incapacitated from performing CIRP-related duties and therefore no legal entitlement to fees arose during that period. Ld. Counsel submitted that the Appellant cannot selectively rely upon the minimum fee provision while simultaneously ignoring the fact that the CIRP itself remained substantially halted pursuant to judicial orders.

# 31. Ld. Counsel further submitted that the direction issued by the Hon’ble Adjudicating Authority granting Rs. 50,000/- per month during the stay period was itself an act of equity and indulgence, since strictly speaking the CoC had resolved that no amount was payable for the said period. It was argued that the Appellant has no vested or statutory right to insist upon payment of minimum fees when admittedly no substantial CIRP work was undertaken during the relevant period. Counsel emphasized that the Hon’ble NCLT had not reduced any fees already approved by the CoC; rather, it had granted an additional equitable amount despite there being no legal obligation to do so.

# 32. It was also submitted that the Appellant has failed to demonstrate any illegality, perversity or arbitrariness in the decision of the CoC approving fees at Rs. 2,00,000/- per month. Learned counsel submitted that Respondent No. 2 has already shown its willingness to comply with the directions passed by the Hon’ble NCLT and to pay Rs. 2,00,000/- per month for the period between 01.09.2023 to 26.10.2023, apart from the fees directed for the stay period and reimbursement of verified expenses. Counsel submitted that the conduct of the CoC throughout has been fair, transparent and fully compliant with the statutory framework.

# 33. Learned counsel further argued that the fees ratified by the CoC for the periods before and after the stay are just, reasonable and in accordance with settled law. It was submitted that several judicial precedents have consistently held that no fees are payable to an IRP for periods during which effective CIRP functions could not be performed due to stay orders or non-constitution of the CoC. Counsel submitted that the present case squarely falls within the same principle because the Appellant admittedly could not undertake substantive CIRP activities during the stay period.

# 34. In support of the above proposition, learned counsel specifically relied upon the judgment of this Hon’ble NCLAT in IndusInd Bank Ltd. v. Rajendra K. Bhuta, wherein it was categorically held that no fees are payable for the period during which insolvency proceedings remain stayed. It was submitted that the claim raised by the Appellant for fees during the stay period is therefore ex facie contrary to the settled position of law laid down by this Hon’ble Tribunal itself.

# 35. Learned counsel further submitted that it is a settled principle under insolvency jurisprudence that fees of an Interim Resolution Professional are not automatic or absolute in nature but are contingent upon actual discharge of functions under the Code. During the period when constitution of the CoC stood stayed, the CIRP itself remained in abeyance and no effective steps could be undertaken. Consequently, the amounts claimed by the Appellant for the said period cannot qualify as CIRP costs under Section 5(13) of the Insolvency and Bankruptcy Code, 2016. Counsel submitted that the Appellant is attempting to convert a conditional professional entitlement into an unconditional right, which is impermissible in law.

# 36. Lastly, learned counsel submitted that the Appellant has deliberately suppressed material facts before this Hon’ble Tribunal, including the limited nature of work actually performed during the stay period, and has attempted to create a misleading impression regarding his alleged entitlement. It was submitted that the Appeal deserves dismissal with costs as the Appellant is seeking unjustified enhancement of fees despite already having received equitable relief from the Adjudicating Authority.

# 37. In light of the aforesaid submissions, learned counsel for Respondent No. 2 prayed that the present Appeal be dismissed with costs, the impugned order dated 07.10.2025 passed by the Hon’ble NCLT be upheld in its entirety, the prayer seeking payment of interest be rejected, and such further orders be passed as this Hon’ble Tribunal may deem fit and proper in the facts and circumstances of the case.

Analysis and Findings

# 38. We have gone through the records of the case including the written submissions filed by the parties and heard the Ld. Counsels at length.

# 39. The present Appeal is confined only to the issue of fees payable to the Appellant during the period when the constitution of the CoC stood stayed by order dated 28.02.2023 passed by this Appellate Tribunal. The validity of the CIRP admission order or the appointment of the Appellant as IRP is not under challenge before us.

# 40. The limited issue for our consideration in this appeal is whether the Learned Adjudicating Authority was justified in directing payment of fees to the Appellant-IRP at the rate of Rs. 50,000/- per month for the period from 28.02.2023 to 01.09.2023, during which the constitution of the CoC remained stayed by this Appellate Tribunal or whether the Appellant is entitled to fees at the rate of Rs. 2,00,000/- or Rs. 2,50,000/- per month for the said period.

# 41. The only question here is whether the limited work performed during a restricted CIRP period would entitle the Appellant to claim full fees at the same rate as payable during a fully operational CIRP.

# 42. The Appellant has argued that the CIRP itself was never stayed by this Appellate Tribunal. According to the Appellant, only the constitution of the CoC and further CIRP steps were stayed, while he was expressly permitted to continue with collation and verification of claims. It has been submitted that during the said period, claims exceeding Rs. 250 Crores were received, examined and collated by him and therefore the contention of the CoC that no work was performed is factually incorrect. The Appellant has further argued that Regulation 34-B read with Schedule II of the CIRP Regulations prescribes minimum fees payable to an IRP and therefore the CoC could not reduce or deny the same. It has also been contended that the SBI itself had initially agreed to fees at the rate of Rs. 2.50 Lakhs per month and could not subsequently reduce the same arbitrarily.

# 43. Per contra, the Respondents have contended that the role and functioning of the Appellant during the relevant period remained substantially restricted because of the interim order passed by this Appellate Tribunal. According to the Respondent, the Appellant could neither constitute the CoC, nor could he take substantive steps in CIRP during the aforesaid period of stay granted by this Appellate Tribunal. It has therefore been argued that the scope of work performed by the Appellant was limited only to collation and verification of claims and accordingly the Learned Adjudicating Authority rightly awarded limited remuneration proportionate to the work actually discharged.

# 44. Having noticed the rival submissions, we must now examine the true effect of the interim order dated 28.02.2023 and the nature of duties which were actually performed by the Appellant during the relevant period.

# 45. This Appellate Tribunal in the CA (AT) (Ins) No. 244 of 2023 involving the same CIRP proceedings of the Corporate Debtor had passed the following order on 28.02.2023

• “ORDER

• 28.02.2023: Learned Counsel for the Appellant submits that after passing of the Impugned Order dated 15.02.2023, Appellant is in continuous dialogue with the Bank for submitting an OTS Proposal and certain correspondence has taken place between the Appellant and the Bank and Appellant is waiting for reply of the Bank for the expected amount and the manner of deposit. Learned Counsel for the Appellant submits that Appellant shall endeavor to enter into settlement and try to liquidate the debt as per decision of the Bank.

• 2. Issue Notice. Learned Counsel for the Bank accepts notice and allowed three weeks ‘ time to file Reply. Appellant may also file Rejoinder within two weeks, thereafter.

• List this Appeal “For Admission” on 11th April, 2023. In the meantime, in pursuance of the Impugned Order, IRP shall not constitute the Committee of Creditors and he shall not take further steps except collation and verification of the claim.”

# 46. A careful reading of the order dated 28.02.2023 passed by this Appellate Tribunal shows that the IRP was specifically restrained from constituting the CoC and from taking further steps in the CIRP except collation and verification of claims. Therefore, the IRP was permitted to take only the specific activity relating to collation and verification of claims. All further actions to be taken in the CIRP were stayed completely and the activities of the IRP stood drastically curtailed.

# 47. Under the normal course of CIRP, an IRP is expected to undertake various statutory and managerial functions including constitution of CoC, conducting CoC meetings, managing the affairs of the Corporate Debtor as a going concern, appointing professionals, supervising operations of the Corporate Debtor and facilitating the overall resolution process. However, because of the interim stay granted by this Appellate Tribunal, most of these functions could not proceed during the period from 28.02.2023 till 01.09.2023 when the stay was vacated.

# 48. It is on record that the Appellant did perform limited function relating to receipt and collation of claims during the aforesaid period. The Ld. Adjudicating Authority has also recorded that the Appellant had received claims from creditors, prepared a list of four Financial Creditors involving claims exceeding Rs. 250 Crores and also processed claims of Operational Creditors.

# 49. In our considered view, the answer to the question of remuneration of IRP during the stay period must necessarily depend upon the nature and extent of functions actually discharged during the relevant period. In this regard, we take a look at the duties to be performed by Interim Resolution Professional which are prescribed in Section 18 and Section 20 of the Code: . . . . . .

# 50. We note from the Section 18 that out of various duties listed in respect of IRP in Section 18, which are given at sub-section (a) to (g), of Section 1; the Appellant was performing only one duty listed in subsection (b) relating to receipt and collation of claims by the creditors during the period of stay granted by this Appellate Tribunal.

# 51. We further note that under Section 20 of the Code the main responsibility of the IRP is the management of operations of the corporate debtors as a going concern during the CIRP. Appellant admittedly could not take control and custody of the assets of the Corporate Debtor during the relevant period and the same occurred only after the interim stay was vacated, this fact was also noticed by the Adjudicating Authority. Further, no CoC meetings could be held and no substantive progress in the resolution process could take place, because of the interim order operating at the relevant time. As we note from the Section 20 of the Code, the main role of the IRP during the CIRP process is to keep the Corporate Debtor running as a going concern. Whereas in this case we note that the CD was being run by the existing management during the period of the stay. Clearly the role performed by the Appellant was extremely limited in comparison to the role of an IRP in normal CIRP proceedings.

# 52. The Appellant has relied upon Regulation 34-B and Schedule II of the CIRP Regulations. However, those provisions cannot be interpreted in isolation from the factual circumstances of the case. The purpose of prescribing minimum fees is to ensure reasonable professional compensation for functions performed during CIRP. Such provisions cannot be read to mean that the IRP becomes automatically entitled to full professional fees even during a period when the CIRP itself was functioning under substantial judicial restrictions and most statutory functions could not be undertaken.

# 53. Once this factual position is appreciated, the reasoning adopted by the Adjudicating Authority becomes clear. The Adjudicating Authority neither accepted the stand of the CoC that no fees were payable, nor accepted the claim of the Appellant for full fees at the rate demanded by him. Instead, it attempted to strike a balance between the two competing positions.

# 54. The Adjudicating Authority acknowledged that the Appellant had performed certain functions and therefore deserved remuneration. Simultaneously, it also recognized that the CIRP was functioning under serious restrictions and therefore payment of full fees as claimed by the Appellant would not be justified. It is in this background that the Adjudicating Authority directed payment of fees at the rate of Rs. 50,000/- per month along with reimbursement of actual expenses after verification.

# 55. In our opinion, such an approach cannot be termed arbitrary or unreasonable. The determination of professional fees in such circumstances is essentially a factual and discretionary exercise which must consider the actual work performed, the stage of CIRP and the surrounding circumstances. Merely because another view may also be possible does not justify appellate interference under Section 61 of the Insolvency and Bankruptcy Code, 2016.

# 56. We also do not find merit in the submission of the Appellant that because fees at the rate of Rs. 2.50 Lakhs per month were initially contemplated, the CoC became permanently bound to continue payment at the same rate irrespective of subsequent developments. The CoC agreed to pay at this rate during the period prior to stay. For the period after the Stay CoC had gone by the rates provided in the regulations. The question of CIRP costs and fee ratification falls within the commercial domain of the CoC, subject of course to judicial scrutiny where the decision is shown to be arbitrary or contrary to law. In the present case, the reduction during the stay period and payment as per the regulations after vacation of stay had direct nexus with the restricted functioning of the CIRP during the relevant period and therefore the same cannot be said to be mala fide or irrational.

# 57. We are also not convinced by the Appellant’s contention that the ratio of the judgement in IndusInd (supra) is not applicable in this case. The Appellants contention is that in the aforesaid matter the Supreme Court had granted complete stay of insolvency proceedings, whereas in this case the appellant was only restrained from constituting the CoC and from taking further steps except collation and verification of claims. He continued to perform his statutory functions during the period of interim stay. As we have noted earlier the appellant perform only one function relating to processing of claims. There was a complete stay on all other activities. The main activity during CIRP relating to keeping the Corporate Debtor functional as a going concern under Section 20 was not in the hands of the IRP, apart from several other activities as listed in Section 18 of the Code. We are of the view that the ratio as laid down by IndusInd (supra) squarely applies to this case.

# 58. We are therefore of the considered opinion that the Adjudicating Authority correctly appreciated the factual matrix and adopted an equitable approach by granting reasonable remuneration proportionate to the functions actually performed by the Appellant during the restricted CIRP period. For the reasons recorded above, we find no material irregularity in the impugned order dated 07.10.2025 passed by the Adjudicating Authority in IA No. 4549/2024 in CP (IB) No. 1135/MB/2021.

# 59. In view of the findings above, we find no merit in the appeal and the same is accordingly dismissed. Pending IA’s, if any, shall stand disposed of. No order as to costs..

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Sanjay Dave Vs. Andhra Bank Ltd. and Ors. - Equally, the condition with regard to the underwriting, the risk of staff and workers in any pending litigation, cannot be said to be a conditional one on the facts of the present case. As the discussion in the minutes indicate, the appellant in the 27th CoC meeting agreed to the same. The appellant cannot be permitted to blow hot and cold.

  SCI (2026.05.17)  in Sanjay Dave Vs. Andhra Bank Ltd. and Ors. [2026 INSC 580, (2026) ibclaw.in 401 SC, Civil Appeal Nos. 12264-12266 of 2024] held that;-

• Hence, the stipulation about the LoI being subject to the outcome of the pending applications of PRA would not make the LoI conditional for the appellant to renege from the plan.

• Equally, the condition with regard to the underwriting, the risk of staff and workers in any pending litigation, cannot be said to be a conditional one on the facts of the present case. As the discussion in the minutes indicate, the appellant in the 27th CoC meeting agreed to the same. The appellant cannot be permitted to blow hot and cold.

• Therefore, in light of the discussions above, it is beyond cavil that the appellant had not just acquiesced but had agreed expressly to the so-called contingencies that would fall upon him as per the LoI.

• Acquiescence can be either direct with full knowledge and express approbation, or indirect where a person having the right to set aside the action stands by and sees another dealing in a manner inconsistent with that right and in spite of the infringement takes no action mirroring acceptance. However, acquiescence will not apply if lapse of time is of no importance or consequence.

• The doctrine of election is not however confined to instruments. A person cannot say at one time that a transaction is valid and thereby obtain some advantage, to which he could only be entitled on the footing that it is valid, and then turn round and say it is void for the purpose of securing some other advantage. That is to approbate and reprobate the transaction.

• A party cannot be permitted to “blow hot-blow cold”, “fast and loose” or “approbate and reprobate”. Where one knowingly accepts the benefits of a contract, or conveyance, or of an order, he is estopped from denying the validity of, or the binding effect of such contract, or conveyance, or order upon himself.

• The binding nature of a resolution plan on a resolution applicant, who is the proponent of the plan which has been accepted by the CoC cannot remain indeterminate at the discretion of the resolution applicant. The negotiations between the resolution applicant and the CoC are brought to an end after the CoC’s approval.

• The only conditionality that remains is the approval of the adjudicating authority, which has a limited jurisdiction to confirm or deny the legal validity of the resolution plan in terms of Section 30(2) IBC. If the requirements of Section 30(2) are satisfied, the adjudicating authority shall confirm the plan approved by the CoC under Section 31(1) IBC.”

• In this context, we hold that the existing insolvency framework in India provides no scope for effecting further modifications or withdrawals of CoC-approved resolution plans, at the behest of the successful resolution applicant, once the plan has been submitted to the adjudicating authority.

• A resolution applicant, after obtaining the financial information of the corporate debtor through the informational utilities and perusing the IM, is assumed to have analysed the risks in the business of the corporate debtor and submitted a considered proposal.

• A submitted resolution plan is binding and irrevocable as between the CoC and the successful resolution applicant in terms of the provisions of IBC and the CIRP Regulations.

• The Explanation to Section 33(2) of IBC makes it amply clear that the CoC is entitled to take a final call, to liquidate the Corporate Debtor prior to affirmation of the resolution plan by the CoC. This decision of the CoC is a business decision taken in the exercise of their commercial wisdom which is clearly not amenable to judicial review.

• That where an SRA after lulling the CoC to believe that it will comply with the plan, reneges from the plan and where the CoC resolves to liquidate the company so as to realize the money and disburse the claims of the different claimants, no fault can be found with the process.

• Besides, the commercial wisdom of CoC has been given paramount status without any judicial intervention, for ensuring completion of the stated processes within the timelines prescribed by the I&B Code. There is an intrinsic assumption that financial creditors are fully informed about the viability of the corporate debtor and feasibility of the proposed resolution plan.

• The legislature, consciously, has not provided any ground to challenge the “commercial wisdom” of the individual financial creditors or their collective decision before the adjudicating authority. That is made non-justiciable.”

Excerpts of the order;

# 1. The present appeals under Section 62 of the Insolvency and Bankruptcy Code, 2016 (for short, “the Code”) call in question the correctness of the judgment dated 29th October, 2024 passed by the National Company Law Appellate Tribunal New Delhi (for short, “the NCLAT”) in Company Appeal (AT)(INS) Nos. 1128, 1131 and 1134 of 2024.

SUMMARY OF THE FACTS

# 2. The Corporate Insolvency Resolution Process (CIRP) out of which the present appeals arise, concerns the Corporate-Debtor by the name M/s. Oracle Home Textiles Limited. The CIRP was admitted on 9th August, 2018 and the Resolution Professional (RP) came to be appointed. On 6th February, 2019 a Request For Resolution Plan (RFRP) was issued by the RP. With the permission of the National Company Law Tribunal (for short, “the NCLT”), the appellant submitted a Resolution Plan. The appellant was the Promotor/Director of M/s. Oracle Homes Textiles Limited. This entity had a certificate of MSME (Micro, Small, and Medium Enterprises). On 10th May, 2021 the appellant was informed that the Resolution Plan submitted by him had been approved by the Committee of Creditors (CoC) with the voting majority of 99.90%.

# 3. It must be pointed out at this stage that at the time when the appellant’s plan was submitted and was under consideration, certain third parties had moved the Adjudicating Authority as prospective resolution applicants (for short “PRA”) seeking permission to file Resolution Plans for the Corporate-Debtor. Those applications were pending before the Adjudicating Authority.

# 4. It was at this stage that on 23rd May, 2021, a Letter of Intent (LoI) was issued by the RP to the appellant. The appellant characterised the LoI as a conditional LoI. Be that as it may, the RP refused to treat them as conditional. At this stage, the appellant filed IA No.1205 of 2021 seeking re-issuance of an unconditional LoI. The case of the appellant was that the LoI dated 23rd May, 2021 was conditional as it carried the following paragraph:

• “The above e-voting results, thereby approving the said final resolution plan (including the addendum) submitted by the member of the suspended Board are subject to the order reserved by Hon’ble NCLT (Mumbai Bench) in the hearing held on 21st Jan, 2021, the same has already been discussed in the CoC meetings along with you and the same is in your knowledge too.”

# 5. In the meantime, pending the appellants Interlocutory Application, a second LoI came to be issued on 23rd June, 2021. The reason for issuing the second LoI was that the appellant failed to submit the accepted copy of the LoI within the time stipulated. In this LoI too, it was stated that the LoI would be subject to the outcome of the pending applications filed by the prospective resolution applicants.

# 6. There was another clause to which also the appellant raised a grievance. The clause was to the following effect:

• “You hereby acknowledge and agree that all applications, cases etc. filed by the staff, employees, workers etc. to any authority, courts etc. is the risk of the successful resolution applicant and the successful resolution applicant is aware and ready to take such calculated risk and has configured the same in his resolution plan and hence the same (risk and cost) shall be borne by the successful resolution applicant only.”

# 7. Since the acceptance was not forthcoming, on 23rd July, 2021 a third LoI was issued on the very same terms and a specific clause was incorporated that the unconditional performance guarantee was to be submitted within a period of seven days in terms of clause 1.10 of the Request For Resolution Plan (for short “RFRP”).

# 8. Since here again the acceptance was not received, on 2nd August, 2021 the RP informed the appellant that the earnest money deposit of Rs.1,00,00,000/- (One Crore) was forfeited as per the terms and conditions of the RFRP on account of non-acceptance of the LoI dated 23rd June, 2021.

# 9. This resulted in the appellant’s filing of IA No.2029 of 2021 before the Adjudicating Authority on 27th August, 2021 seeking restoration of Earnest Money Deposit (EMD) contending that the forfeiture was contrary to clause 1.9.4 of the RFRP.

# 10. The CIRP period came to an end on 21st February, 2023. Since there was no valid Resolution Plan under Section 33 of the Code, the CoC on 5th June, 2023 voted on the liquidation of the Corporate-Debtor. The same was approved with a voting percentage of 99.61%. After the CoC voted for liquidation, the RP filed IA No.3914 of 2023. seeking approval for liquidation based upon the decision of the CoC in its 33rd meeting.

# 11. Two Interlocutory Applications of the appellant being IA Nos. 1205 of 2021 and IA No.2029 of 2021 and the Interlocutory Application of the RP, namely, IA No.3914 of 2023 were disposed of by three separate orders by the Adjudicating Authority on 30th April, 2024. While the two applications of the appellant were dismissed, the application of the RP came to be allowed. This resulted in three appeals being filed before the NCLAT by the appellant. By the impugned order of 29th October, 2024, all three Company Appeals have been dismissed. That is how the appellant is before us by way of the further appeals under Section 62 of the Code.

CONTENTIONS OF THE LEARNED COUNSEL

# 12. We heard Ms. Purti Gupta, learned counsel for the appellant. Mr. Gaurav Agrawal, learned senior counsel appearing for respondent No.1-the lead bank-the Union Bank and Ms. Anjali Sharma, learned counsel for respondent No.3-Liquidator.

# 13. Ms. Purti Gupta, learned Counsel, who very ably presented the case for the appellant, vehemently contended that all the LoIs were conditional and such conditional LoIs were contrary to the Code as well as the plan submitted by the appellant. According to the learned counsel for the appellant, the stipulation in the LoI that the approval of the final Resolution Plan would be subject to the orders reserved by the NCLT in the applications filed by the PRAs makes the LoI a conditional one.

# 14. The further argument is that the stipulation about underwriting, any liability that may result in the litigation initiated, if any, by the staff, employees and workers would be the risk of the SRA, also makes the LoI conditional.

# 15. The third contention is that after having originally granted a period of forty-five days for submitting the performance guarantee in the LoI of 23rd May, 2021 reducing the same to seven days in the LoI of 23rd July, 2021 for submitting performance guarantee was contrary to the resolution of the CoC.

# 16. In response, the learned senior counsel Mr. Gaurav Agrawal for respondent No.1 and Ms. Anjali Sharma, learned counsel for respondent No.3 drew attention to the findings of both the Adjudicating Authority and the Appellate Authority and reiterated the findings recorded thereon. They also drew the attention of this Court to the said findings.

# 17. The Adjudicating Authority had recorded in its order that the appellant was present in the 15th CoC meeting dated 24th January 2020 wherein the Resolution Plans received from M/s. Faze Three Limited and M/s Munish Kohli and Associates were discussed and deliberated. These two entities had filed MA Nos. 2005 and 1618 of 2019 which were the two applications pending before the NCLT. The NCLT held that the appellant was aware of the ongoing litigations with respect to submission of Resolution Plans by the PRA and that it was unjust on his part to insist that his plan, which itself was submitted pursuant to the order of the NCLT dated 18th February, 2020 be considered without subjecting it to the outcome of the decision of the Adjudicating Authority. The relevant findings of the adjudicating authority is reproduced below:

• “19…. On perusal of records, such as the minutes of the 15th CoC Meeting held on 24.01.2020 annexed at Annexure ‘A’ to the Application, it is evident that the Applicant herein was present in the 15th CoC meeting wherein the resolution plans received from M/s. Faze Three Ltd and M/s. Munish Kohli & Associates were discussed and deliberated upon in the backdrop of M.A. No. 2005/2019 and M.A. No. 1618/2019 which were then pending for hearing before this Tribunal. The Applicant expressed his interest to submit a resolution plan vide Letter dated 11.02.2020 and he submitted his initial resolution plan only after passing of the Order dated 18.02.2020 by this Tribunal in MA No. 608/2020. Thus, it is evident from records that the Applicant was aware of the ongoing litigations with respect to submission of resolution plans by other resolution applicants and, therefore, it goes without saying that the Applicant herein cannot now insist on his plan being considered without subjecting it to the outcome of the decision of the Adjudicating Authority or any other court or tribunal under the laws of the land. Thus, the plea of the Applicant that the Applicant cannot be made subject to outcome of third-party applications where the Applicant is not even a party, is hereby rejected in toto as being irrational, absurd and untenable in law.”

# 18. The NCLAT has also concurred with the finding of the NCLT. The NCLAT has recorded that it cannot be held that the appellant was taken by surprise as the pendency of the application of the PRA was discussed in the presence of the appellant and that the CoC had raised the issue in several meetings, namely, in the meetings of 1st March, 2021, 10th March, 2021, 29th April, 2021 and 21st May, 2021. The Appellate Authority found that the LoIs were issued based on the Resolution Plan of the Successful Resolution Applicant (SRA)/appellant along with the addendum and CoC decisions in which the SRA was also a participant. It was pursuant to the refusal of the appellant to comply with the third LOI of 23rd July, 2021 that the EMD also came to be forfeited in accordance with the relevant clause 1.9.4 of the RFRP on 2nd August, 2021. The relevant findings in the impugned order are extracted below:-

• “20. The SRA never objected at any stage upto the 28th CoC meeting to making the resolution plan subject to the prospective orders to be passed by the Adjudicating Authority. Instead the SRA requested the CoC to issue him a LoI. However, after the LoI was circulated to the SRA for his perusal and acceptance on 24.05.2021 by email, it is at this stage that the SRA through his Advocate on 29.05.2021 raised preliminary objections to the Lol being conditional for being subjected to the prospective orders of the Adjudicating Authority. This shows that the SRA was well aware before seeking the Lol from the CoC that the Loi was to be subject to the outcome of hearing dated 21.01.2021. Hence it becomes clear that it was an after-thought on the part of the SRA to raise the bogey of conditional Lol. If the SRA was so aggrieved, it could have sought impleadment in the matter before the Adjudicating Authority or taken up the matter with the RP/ CoC to seek early resolution of the matter. In any case, it is an admitted fact that both the IAs filed by the PRAs stood dismissed for non-prosecution before the Adjudicating Authority took up IA 1205 for hearing.

• 26. In the present case once CoC had approved the resolution plan, the SRA stood precluded from raising any observations to the conditions stated in the LoI as these were not alien to the resolution plan as submitted by the SRA which was approved by the CoC. Present was not a case of conditional and addendum LoI but a case where the SRA was vacillating in accepting the LoI and not wanting to put his skin in the game by baselessly alleging that the LoI was conditional. The Adjudicating Authority rightly refused to entertain the objections of the SRA to the conditions in the Lol since withdrawal or modification of resolution plan after approval by the CoC is not permissible in law.”

ANALYSIS AND REASONING: –

# 19. We find that the stand of the appellant that the stipulated clauses objected to by the appellant made the LOI conditional is bereft of any merit. All that the stipulations mentioned was that the LoI would be subject to the final decision of a judicial body in a proceeding to which the CoC and RP were privy. Even if such a stipulation was not mentioned, ultimately it will be the order of the Adjudicating Authority, unless duly called in question and set aside before the higher body, which will prevail. Hence, the stipulation about the LoI being subject to the outcome of the pending applications of PRA would not make the LoI conditional for the appellant to renege from the plan.

# 20. Moreover, a perusal of the minutes of meetings of the CoC make it evident that the appellant was very well made aware of the pending litigation and the other conditions which the LoIs have allegedly imposed on the appellant. The relevant extracts from the various minutes of meetings have been set out below:-

Minutes of 28th CoC Meeting Held on 21st May 2021

“The details of the e-Voting result on the above said resolution plan(including addendum) is as follows:

Agree	Disagree	Abstain from Voting	Total
99.90%	0.10%	0%	100 %

The RP further informed that the above results are subject to the order reserved by Hon’ble NCLT in the hearing held on 21st Jan, 2021. The RP has already sent the intimation on 10th May, 2021 to Mr. Sanjay Dave (Member of the suspended board & Successful Resolution Applicant) and has asked him to provide a final signed hardcopy (3 sets) of the resolution plan including the addendum along with the word documents of the same after making due corrections as discussed in the above mentioned meetings of the committee of creditors, and also to attach all the revised and relevant documents including the board resolution and letter from the financial sponsors to the resolution plan in support of the final resolution amount as soon as possible so that the same can be filed before Hon’ble NCLT at the earliest.

Mr. Sanjay Dave (Member of the suspended board & Successful Resolution Applicant) stated that he has received the said communication on email but he is wanting the formal letter of Intent on letter head to proceed further. The COC asked the RP to issue the “Letter of Intent” on letterhead to Mr. Sanjay Dave (Member of the suspended board & Successful Resolution Applicant). Adv. A.K. Mishra (M/s MDP Partners -Advocates & Solicitors) Advocates for Resolution Professional suggested to issue the “Letter of Intent” on the letterhead giving reference of the email dt. 10th May, 2021 and also the discussion being held in the current COC meeting. The COC members agreed to the same.”

Minutes of 29th COC Meeting Held on 11th June 2021

“The COC asked Mr. Sanjay Dave (Member of the suspended board & Successful Resolution Applicant) if he has any other query or resistance to the LOI. Mr. Sanjay Dave (Member of the suspended board & Successful Resolution Applicant) handed over the letter of his advocates to the COC. The COC asked Adv. U.C. Nayak (M/s M.V. Kini & Co. – Law Firm) – Advocates for Financial Creditors to read the whole letter for the benefit of all the participants. After going through the letter the COC again asked Mr. Sanjay Dave (Member of the suspended board & Successful Resolution Applicant) if he has any specific query or resistance to the LOI as there is nothing specifically mentioned in the letter of the advocate been submitted by him. Mr. Sanjay Dave (Member of the suspended board & Successful Resolution Applicant) replied in negative.”

# 21. Equally, the condition with regard to the underwriting, the risk of staff and workers in any pending litigation, cannot be said to be a conditional one on the facts of the present case. As the discussion in the minutes indicate, the appellant in the 27th CoC meeting agreed to the same. The appellant cannot be permitted to blow hot and cold. The relevant portion of the minutes are extracted below:

• “The RP then asked Mr. Sanjay Dave (Member of the suspended board & Resolution Applicant) to elaborate on the following point

• Quote from addendum (dt. 5th May, 2021) Page No. 6

• 7.11 The Resolution Applicant has been Informed by the Resolution Professional that an MA has been filed by the workers and employees in respect of their salaries and dues post commencement of CIRP but since the workers and employees have not reported for work and hence there is no question of any payment of remuneration post commencement of CIRP as the RP is clear on the concept of NO WORK NO PAY and hence the same is not considered as payable. If any amount is found due and payable by the Hon’ble Tribunal or the Appellate Tribunal for the time the plant was functioning in CIRP period, then and in that event, the same will be dealt by Resolution Applicant accordingly.

• Unquote:

• Mr. Sanjay Dave (Member of the suspended board & Resolution Applicant) then read the above clause 7.11 from the addendum) Page 6. Adv. Rohan Agarwal (M/ s MDP Partners – Advocates & Solicitors) Advocates for Resolution Professional clearly stated that the same is subjudice and contingent till the order of Hon’ble NCLT is pronounced. The Resolutional Professional clearly stated that he has been personally targeted and misrepresented by the Mr. Sanjay Dave (Member of the suspended board & Resolution Applicant). Further the Resolution Professional stated that “NO WORK NO PAY” is a precedent set by Hon’ble Supreme Court and the same has been discussed at length in the past COC meetings also where Mr. Sanjay Dave (Member of the suspended board & Resolution Applicant) has duly participated.”

• “The Resolution Professional specifically asked Mr. Sanjay Dave (Member of the suspended board & Resolution Applicant) on what he meant by the words in the above clause 7 .11 “the same will be dealt by resolution applicant accordingly” and what is his proposal or intention. Mr. Sanjay Dave (Member of the suspended board & Resolution Applicant) that he is not clear on the same. Mr. Deena Dayal (Representative of M/s Union Bank of India including erstwhile Andhra Bank) stated that all such applications of the staff, employees, workers etc. is the risk of the resolution applicant and the resolution applicant is required to take such calculated risk and configure the same in his resolution plan and hence the same (risk and cost) shall be borne by the resolution applicant only. Mr. Sanjay Dave (Member of the suspended board & Resolution Applicant) agreed to the same.”

# 22. In such a background, we do not accept the contention that the stipulation was in the nature as to make the LoI a conditional one to enable the appellant to renege from the CoC approved plan.

# 23. The third contention that the period of forty-five days as mentioned in the CoC minutes of 27th meeting dated 6th May, 2021 which resulted in the issuance of the LOI of 23rd May, 2021 was reduced to seven days in the third LOI dated 23rd July, 2021 also does not carry the case of the appellant any further. Under the RFRP, the time stipulated for the issuance of performance guarantee was seven days. What the learned counsel for the appellant contends is that, at the meeting on 6th May, 2021, a decision was taken to extend the time to forty-five days for issuance of the performance guarantee. The relevant portions of the 27th CoC meeting is extracted below:-

• “Mr. Sanjay Dave (Member of the suspended board & Resolution Applicant) requested the COC to grant 45 days time instead of 7 days as prescribed in the RFRP documents to provide the performance guarantee, this is due to the ongoing pandemic. Adv. Rohan Agarwal (M/s MDP Partners – Advocates & Solicitors) Advocates for Resolution Professional objected to this request. Mr. Deena Dayal (Representative of M/ s Union Bank of India including erstwhile Andhra Bank) stated that it is agreeable to the COC due to the ongoing pandemic and thereby relaxed the condition and granted the time of 45 days for submission of the performance guarantee against the prescribed time of 7 days, the participants agreed to the same.”

# 24. To counter this, Mr. Gaurav Agrawal, learned senior counsel for respondent No.1 submitted that forty-five days which was granted in the 6th May, 2021 minutes was due to the COVID Pandemic. By the time the third LoI was issued on 23rd July, 2021, that period had long since expired. The appellant did not convey acceptance. As such, there was no question of granting a further forty-five days and rightly a period of seven days was prescribed. We are inclined to accept this submission.

# 25. In fact, our attention was drawn by Mr. Gaurav Agrawal, learned senior counsel to the Minutes of the Meeting of the CoC dated 23rd July, 2021 where by the appellant agreed to submit the performance bank guarantee in seven days as prescribed in the RFRP document. The relevant parts of the minutes are extracted below:-

• “Mr Sanjay Dave(Member of the suspended board & Successful Resolution Applicant) further stated that even though COC had allowed him 45 days time to submit the Performance Bank Guarantee, he has agreed to submit the same in seven days as prescribed in the RFRP document. Further he also drew the attention of the participants on the word “Personal” in the agenda items which needs to the read as “Performance”, the participants noted the same.”

# 26. Therefore, in light of the discussions above, it is beyond cavil that the appellant had not just acquiesced but had agreed expressly to the so-called contingencies that would fall upon him as per the LoI.

# 27. Dealing with the meaning of “acquiescence”, this Court in Chairman, State Bank of India and Another v. M.J. James1, held as under:

• “39. Before proceeding further, it is important to clarify distinction between “acquiescence” and “delay and laches”. Doctrine of acquiescence is an equitable doctrine which applies when a party having a right stands by and sees another dealing in a manner inconsistent with that right, while the act is in progress and after violation is completed, which conduct reflects his assent or accord. He cannot afterwards complain. In literal sense, the term acquiescence means silent assent, tacit consent, concurrence, or acceptance, which denotes conduct that is evidence of an intention of a party to abandon an equitable right and also to denote conduct from which another party will be justified in inferring such an intention. Acquiescence can be either direct with full knowledge and express approbation, or indirect where a person having the right to set aside the action stands by and sees another dealing in a manner inconsistent with that right and in spite of the infringement takes no action mirroring acceptance. However, acquiescence will not apply if lapse of time is of no importance or consequence.”

• (Emphasis supplied)

# 28. The appellant cannot be allowed to approbate and reprobate. In the celebrated case of Nagubai Ammal and Others v. B. Shama Rao and Others2, this Court held as under:

• “9.15. The observations of Scrutton, L.J. on which the appellants rely are as follows: (Verschures Creameries, KB pp. 611-12)

• “… A plaintiff is not permitted to “approbate and reprobate”. The phrase is apparently borrowed from the Scotch law, where it is used to express the principle embodied in our doctrine of election — namely, that no party can accept and reject the same instrument: Ker v. Wauchope; Douglas-Menzies v. Umphelby. The doctrine of election is not however confined to instruments. A person cannot say at one time that a transaction is valid and thereby obtain some advantage, to which he could only be entitled on the footing that it is valid, and then turn round and say it is void for the purpose of securing some other advantage. That is to approbate and reprobate the transaction.”

# 29. Further, in Rajasthan State Industrial Development & Investment Corporation and Another. v. Diamond & Gem Development Corporation Limited and Another3, it was held:

• “I. Approbate and reprobate

• 15. A party cannot be permitted to “blow hot-blow cold”, “fast and loose” or “approbate and reprobate”. Where one knowingly accepts the benefits of a contract, or conveyance, or of an order, he is estopped from denying the validity of, or the binding effect of such contract, or conveyance, or order upon himself. This rule is applied to ensure equity, however, it must not be applied in such a manner so as to violate the principles of what is right and of good conscience.

• 16. Thus, it is evident that the doctrine of election is based on the rule of estoppel—the principle that one cannot approbate and reprobate is inherent in it. The doctrine of estoppel by election is one among the species of estoppels in pais (or equitable estoppel), which is a rule of equity. By this law, a person may be precluded, by way of his actions, or conduct, or silence when it is his duty to speak, from asserting a right which he would have otherwise had.”

• (Emphasis supplied)

# 30. In view of the abovementioned decisions of this Court, the appellant cannot be permitted to approbate and reprobate and the fora below have rightly dismissed the objections of the Appellant in this regard. Not only did the appellant not object to the terms, as evidenced from the minutes of the meetings, he had expressly agreed for the same. The device adopted by the appellant was an indirect attempt to renege from the plan. It was a clear subterfuge. Knowing fully well that one cannot withdraw directly from the plan approved by the CoC, an attempt was made in an indirect manner by harping on about certain stipulations as conditionalities to shift the blame on the CoC for the appellant’s unwillingness to take the plan forward. This clever ploy has rightly been scotched by the fora below. If such artifices are allowed to succeed, the entire architecture of the IBC would crumble and the laudable objects sought to be achieved by the said Code would become a far cry.

# 31. In this light, it is also important to examine the binding nature of the resolution plan that is approved by the CoC. In Ebix Singapore Private Limited vs. Committee of Creditors of Educomp Solutions Limited and Another [(2021) ibclaw.in 153 SC]4, this Court held as under: –

• “166. The binding nature, as between the CoC and the successful resolution applicant, of the resolution plan submitted for approval by the adjudicating authority is further evidenced from the fact that the CoC issues an LoI to a successful resolution applicant stating that it has been selected as the successful resolution applicant and its plan would be submitted to the adjudicating authority for its approval. The successful resolution applicant is typically required to accept the LoI unconditionally and submit a PBG. Sequentially, the issuance of an LoI is followed by its unconditional acceptance by the successful resolution applicant. In AMTEK Auto, this Court thwarted a similar attempt by a successful resolution applicant who had relied on certain open-ended clauses in its resolution plan to seek a direction compelling the CoC to negotiate a modification to its resolution plan. The resolution plan had been approved by the adjudicating authority and the resolution applicant’s IA was not entertained. The resolution applicant had then sought to challenge the approval of the resolution plan under Section 61(3) IBC by seeking the same relief. This Court rejected the claim and observed that : (SCC p. 475, para 30)

• “30. … To assert that there was any scope for negotiations and discussions after the approval of the resolution plan by the CoC would be plainly contrary to the terms of IBC.”

• “167. .. … The binding nature of a resolution plan on a resolution applicant, who is the proponent of the plan which has been accepted by the CoC cannot remain indeterminate at the discretion of the resolution applicant. The negotiations between the resolution applicant and the CoC are brought to an end after the CoC’s approval. The only conditionality that remains is the approval of the adjudicating authority, which has a limited jurisdiction to confirm or deny the legal validity of the resolution plan in terms of Section 30(2) IBC. If the requirements of Section 30(2) are satisfied, the adjudicating authority shall confirm the plan approved by the CoC under Section 31(1) IBC.”

• “172. … … The adjudicating authority cannot compel a CoC to negotiate further with a successful resolution applicant. A rejection by the adjudicating authority is followed by a direction of mandatory liquidation under Section 33. Section 30(2) does not envisage setting aside of the resolution plan because the resolution applicant is unwilling to execute it, based on terms of its own resolution plan.”

• “221. … … Enabling withdrawals or modifications of the resolution plan at the behest of the successful resolution applicant, once it has been submitted to the adjudicating authority after due compliance with the procedural requirements and timelines, would create another tier of negotiations which will be wholly unregulated by the statute. Since the 330 days’ outer limit of the CIRP under Section 12(3) IBC, including judicial proceedings, can be extended only in exceptional circumstances, this open-ended process for further negotiations or a withdrawal, would have a deleterious impact on the corporate debtor, its creditors, and the economy at large as the liquidation value depletes with the passage of time….”

• “223. … … In this context, we hold that the existing insolvency framework in India provides no scope for effecting further modifications or withdrawals of CoC-approved resolution plans, at the behest of the successful resolution applicant, once the plan has been submitted to the adjudicating authority. A resolution applicant, after obtaining the financial information of the corporate debtor through the informational utilities and perusing the IM, is assumed to have analysed the risks in the business of the corporate debtor and submitted a considered proposal. A submitted resolution plan is binding and irrevocable as between the CoC and the successful resolution applicant in terms of the provisions of IBC and the CIRP Regulations. …” (Emphasis supplied)

# 32. Therefore, it is clear that once the CoC, after applying its commercial wisdom, has approved the resolution plan, the SRA is prohibited from negotiating further and is expected to act in a time bound manner to implement the plan. In the present case, it is seen that the appellant was deliberately trying to delay the implementation of the plan citing the purported conditionality of the LoI. This defeats the purpose of the Code as the otherwise timebound and swift process is now being delayed at the behest of the appellant. In view of this, we find no merit in the third contention of Ms. Purti Gupta, learned counsel for the appellant.

# 33. On the aspect of forfeiture of the EMD, the RFRP in clause 1.9.4 clearly stipulates that where there is failure to submit the performance guarantee within the stipulated time or in case of any non-compliance with the plan, there could be forfeiture of EMD. Clause 1.9.4 is extracted hereinbelow:-

• “1.9.4 Forfeiture of Earnest Money Deposit of the Applicant The Designated Lender shall be entitled to forfeit Earnest Money Deposit where:

• ……

• b) the Successful Applicant fails to submit the Performance Guarantee within the stipulated time; or

• e) in case of any other non-compliance with the Resolution Plan Process or the Resolution Plan submitted by the Applicant.

• ……

• Provided, that the Designated Lender shall not be entitled to forfeit the Earnest Money Deposit of the Successful Applicant in accordance with this Clause 1.9.4, if any non-compliance with the requirements set out above arises due to (a) non-receipt of the Letter of Intent from the Committee of Creditors; or (b) the Successful Applicant not accepting additional terms stipulated by the Committee of Creditors in addition to the Resolution Plan, pursuant to discussions of the Committee of Creditors with the Successful Applicant.” 

# 34. Hence, we find no illegality in the RP forfeiting the EMD of Rs.1,00,00,000/- (Rupees one crore). The minutes of the 31st CoC meeting held on 26th July make it clear as to the premise on which the EMD stood forfeited:-

• “The representative of the Union Bank of India stated that we can go ahead with the RFRP terms & conditions of non acceptance of the LOI dt. 23rd June, 2021, the consequences and the said provisions can be invoked and proceeded further. The representatives of Union Bank further stated that sufficient opportunities has been given to Mr. Sanjay Dave (Member of the suspended board & Successful Resolution Applicant), in spite of making good these opportunities he has only misused the opportunities. Since Mr. Sanjay Dave (Member of the suspended board & Successful Resolution Applicant) has not accepted the LOI, the consequences of non acceptance of LOI will follow. Mr. Sanjay Dave (Member of the suspended board & Successful Resolution Applicant) objected to the forfeiture on the EMD on the ground for the non-acceptance of LOI, the COC asked whether there is any reason to not to proceed further with the terms & conditions stipulated in the RFRP to which Mr. Sanjay Dave (Member of the suspended board & Successful Resolution Applicant) could not give any satisfactory reply to the COC, hence in the event of noncompliance with the Conditions Subsequent the resolution plan submitted by Mr. Sanjay Dave (Member of the suspended board & Successful Resolution Applicant) was rejected by the COC.” (Emphasis supplied)

# 35. The appellant, having become the SRA, failed to carry out the obligations resulting in not only time running out for invitation of fresh plans but also forced the CoC to resort to liquidation under Section 33 of the Code.

# 36. The final submission of the learned counsel for the appellant that the proposal for liquidation ought not to have been approved since it was contrary to Section 33 of the Code need not detain us any further. Rejecting the submission, the NCLAT held as under:-

• “28. …Since the CoC is statutorily empowered to decide on the liquidation of the Corporate Debtor at any time before the confirmation of the resolution plan. This decision is a collegiate1 commercial wisdom of the CoC which is not subject to judicial review except for ensuring that the resolution plan meets the requirements of the IBC and related Regulations. The paramount supremacy of the commercial wisdom of CoC has been upheld in a catena of judgments by the Hon’ble Supreme Court. The Explanation to Section 33(2) of IBC makes it amply clear that the CoC is entitled to take a final call, to liquidate the Corporate Debtor prior to affirmation of the resolution plan by the CoC. This decision of the CoC is a business decision taken in the exercise of their commercial wisdom which is clearly not amenable to judicial review. There is no incidence of any statutory aberration having been committed by the RP or CoC in this regard.”

# 37. This Court in Manish Kumar v. Union of India [(2021) ibclaw.in 16 SC]5, has held as under:

• “101. Section 33, which is in Chapter III in Part II, compels announcing the death knell of the corporate debtor. That is if, before the expiry of insolvency resolution process period or the maximum period permitted which is CIRP under Section 12, inter alia, a resolution plan is not received or though received is rejected by the adjudicating authority, then under Section 33, order is to be passed. The curtains are wrung down on the insolvency resolution process. The corporate debtor goes into liquidation. The adjudicating authority is bound to pass an order requiring corporate debtor to be liquidated as provided in Chapter III Part II. Section 33(2) contemplates that before the confirmation of the resolution plan if the Committee of Creditors so approved by not less than 66% of the voting decide to liquidate the corporate debtor, the adjudicating authority is to pass the liquidation order.” (Emphasis supplied)

38. Section 33 of the Code is reproduced hereinbelow:-

• “Section 33: Initiation of liquidation.

• *33. (2) Where the resolution professional, at any time during the corporate insolvency resolution process but before confirmation of resolution plan, intimates the Adjudicating Authority of the decision of the committee of creditors [approved by not less than sixty-six per cent. of the voting share] to liquidate the corporate debtor, the Adjudicating Authority shall pass a liquidation order as referred to in sub-clauses (i), (ii) and (iii) of clause (b) of sub-section (1).

• 2[Explanation. – For the purpose of this sub-section, it is hereby declared that the committee of creditors may take the decision to liquidate the corporate debtor, any time after its constitution under sub-section (1) of section 21 and before the confirmation of the resolution plan, including at any time before the preparation of the information memorandum.]”

# 39. A plain reading of clause 2 of Section 33 and specifically the explanation to the said clause 2, which came into force from 16.08.2019, makes it clear that where an SRA after lulling the CoC to believe that it will comply with the plan, reneges from the plan and where the CoC resolves to liquidate the company so as to realize the money and disburse the claims of the different claimants, no fault can be found with the process.

# 40. There is nothing in Section 33 of the Code which detracts from the said course of action. Hence, we are of the opinion that the Fora below rightly allowed the application of the RP viz-a-viz the liquidation process and rightly dismissed the applications of the appellant.

# 41. Another aspect that has to be brought out is that once the CoC has, in its commercial wisdom, come to the decision to reject the appellant’s plan and liquidate the CD on account of the appellant’s own default, there can be no case for interference. This Court in K. Sashidhar v. Indian Overseas Bank [(2019) ibclaw.in 08 SC]6, has held as under:-

• “52. … The legislature has not endowed the adjudicating authority (NCLT) with the jurisdiction or authority to analyse or evaluate the commercial decision of CoC much less to enquire into the justness of the rejection of the resolution plan by the dissenting financial creditors. From the legislative history and the background in which the I&B Code has been enacted, it is noticed that a completely new approach has been adopted for speeding up the recovery of the debt due from the defaulting companies. In the new approach, there is a calm period followed by a swift resolution process to be completed within 270 days (outer limit) failing which, initiation of liquidation process has been made inevitable and mandatory. In the earlier regime, the corporate debtor could indefinitely continue to enjoy the protection given under Section 22 of the Sick Industrial Companies Act, 1985 or under other such enactments which has now been forsaken. Besides, the commercial wisdom of CoC has been given paramount status without any judicial intervention, for ensuring completion of the stated processes within the timelines prescribed by the I&B Code. There is an intrinsic assumption that financial creditors are fully informed about the viability of the corporate debtor and feasibility of the proposed resolution plan. They act on the basis of thorough examination of the proposed resolution plan and assessment made by their team of experts. The opinion on the subject-matter expressed by them after due deliberations in CoC meetings through voting, as per voting shares, is a collective business decision. The legislature, consciously, has not provided any ground to challenge the “commercial wisdom” of the individual financial creditors or their collective decision before the adjudicating authority. That is made non-justiciable.”   (Emphasis supplied)

# 42. Therefore, in the light of the position of the law above, it is held that the fora below have rightly refused to interfere in the well-informed commercial decision of the CoC to reject the plan of the appellant and liquidate the CD, which was approved with a voting percentage of 99.61%.

# 43. For the reasons stated above, we find no merit in the appeals. The appeals are accordingly dismissed.

# 44. It is made clear that all interim orders will stand vacated with the dismissal of the appeals. The respondent No.3-Liquidator is directed to proceed with the remaining part of the liquidation in accordance with the Code.

# 45. There will be no order as to costs.

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