Kalpraj Dharamshi & Anr. vs Kotak Investment Advisors Ltd. & Anr.

ss. 10, 61, 238A – Proceedings or appeals before the adjudicating Authority, appellate tribunal etc – Application of Limitation Act – On facts, application u/s. 10 by Corporate Debtor for initiation of Corporate Insolvency Resolution Process – Successively five Form G notified – Resolution applicant-KIAL submitted Resolution Plan (RP) within the stipulated time and resolution applicant-Kalpraj submitted plan after the stipulated time – Objection raised by KIAL – Subsequently on direction by Committee of Creditors (CoC), submission of revised plan by KIAL and Kalpraj – Thereafter, approval of revised plan submitted by Kalpraj – KIAL challenged the approval of Kalpraj’s Resolution Plan before NCLT – Plan of Kalpraj approved by NCLT – Thereafter, KIAL filed Writ Petition before the High Court which was dismissed on the ground of alternate remedy – KIAL then filed appeal before NCLAT which was allowed, rejecting Kalpraj submission that appeal were filed beyond the limitation period prescribed in IBC – On appeal, held: Provisions of s. 14 of the Limitation Act are available to KIAL – Applying the principles underlying s. 14, KAIL entitled to exclusion of the period during which it was bona fide prosecuting a remedy before the High Court in good faith and with due diligence, thus, the appeals filed before NCLAT within the limitation – Though an alternate remedy was available to it, it was approaching the High Court since the issue with regard to functioning of NCLT also fell for consideration – High Court dismissed the writ petition relegating KIAL to an alternate remedy available in law – High Court could have exercised extra-ordinary jurisdiction u/Art. 226 inasmuch as, the grievance was regarding procedure followed by NCLT to be in breach of principles of natural justice – Limitation Act, 1963 – s. 29(2) – Constitution of India – Art. 226. Waiver and acquiescence – Inference of – Objection by KIAL to the acceptance of belated Resolution Plan of Kalpraj – However, when no choice left, KIAL submitted revised Resolution Plan – Conduct of KIAL, if amounts to waiver and acquiescence by KIAL so as to estop it from challenging the participation of Kalpraj – Held: KIAL had objected to participation of other applicant submitting plan after the due date as per the last Form G and also reiterated its objection to the participation of Kalpraj – It cannot be said that having participated by submitting the revised plans, KIAL is estopped from challenging the decision of Resolution Professional (RP) or CoC on the ground of acquiescence and waiver – Merely because, the revised plans are not submitted with the words “without prejudice”, would not make any difference – KIAL had no other option than to submit its revised plans in view of clause 11.2 of the Process Memorandum – Had it not responded, it had to run the risk of being out of competition – Also it is not established that KIAL had given up/surrendered its rights to take recourse to the legal remedies, and that on account of waiver or acquiescence the parties had altered their position to their detriment. ss. 10, 30, 31 – Submission and approval of Resolution plan – Decision of Committee of Creditors-CoC accepting the resolution plan of Resolution applicant-Kalpraj – NCLAT annulled decision of CoC to accept the Resolution Plan – Interference with the decision of CoC by NCLAT – Correctness of – Held: Statute has not invested jurisdiction and authority either with NCLT or NCLAT, to review the commercial decision exercised by CoC of approving the resolution plan or rejecting the same – Commercial wisdom of CoC is not to be interfered with, except within the limited scope u/ss. 30 and 31 of the Code – Decision of CoC was taken by a thumping majority of 84.36% – Only creditor voted in favour of KIAL is having voting rights of 0.97% – In view of the paramount importance given to the decision of CoC, NCLAT not correct in law in interfering with the commercial decision taken by CoC – Furthermore, for a long period, there was no restraint on implementation of the resolution plan of Kalpraj, which was duly approved by NCLT and during the said period, Kalpraj has spend a huge amount for implementation of the plan – Thus, the decision taken by CoC in accordance with its commercial wisdom which is duly approved by NCLT, would prevail. Corporate Insolvency Resolution Process – Initiation of – Resolution Plan from prospective resolution applicants – Decision of Committee of Creditors – Justiciability of, in the court of law – Discussed.

Limitation Act, 1963: s. 14 – Proceedings before the quasijudicial tribunal – Applicability of s. 14 – Held: Though strictly, the provisions of s. 14 would not be applicable to the proceedings before a quasi-judicial tribunal, however, the principles underlying the same would be applicable – Proper approach would be of advancing the cause of justice, rather than to abort the proceedings – Litigant would be entitled for exclusion of the period, during which he was bona fide prosecuting such a wrong remedy.

Doctrines/Principles: Principle of waiver and acquiescence – When can be inferred – Held: Waiver is an intentional relinquishment of a right, advantage, benefit, claim or privilege – For applying the principle of waiver, it has to be established, that though a party was aware about the relevant facts and the right to take an objection, he has neglected to take such an objection – It has to be established that a party expressly or by its conduct acted in a manner, which is inconsistent with the continuance of its rights – Whereas, acquiescence would be a conduct where a party is sitting by, when another is invading his rights – Acquiescence must be such as to lead to the inference of a licence sufficient to create a new right in the defendant.

Disposing of the appeals, the Court

HELD: 1.1 Though the provisions of the Limitation Act, as far as may be, would apply to the proceedings or appeals before the Adjudicating Authority, NCLAT, the Debt Recovery Tribunal or the Debt Recovery Appellate Tribunal, where a period of limitation for initiation of proceedings is provided under any special or local law, different from the period prescribed by the Schedule, the provisions of Section 3 shall apply, as if such period were the period prescribed by the Schedule. It would further reveal, that for the purpose of determining any period of limitation prescribed for any suit, appeal or application by any special or local law, the provisions contained in sections 4 to 24 (inclusive), shall apply only in so far, and to the extent to which, they are not expressly excluded by such special or local law. [Para 37] [712-D-G]

1.2 Since under IBC Code there is a period different from the one which is prescribed by the Schedule to the Limitation Act, the limitation for an appeal would be governed by Section 61 of the I&B Code, which is a special statute. As such, an appeal will have to be preferred within a period of thirty days from the date on which the order was passed by NCLT. However, if NCLAT is satisfied, that there was sufficient cause for not filing the appeal within a period of thirty days, it may allow an appeal to be filed within a further period of fifteen days. As such, the normal period of limitation prescribed under the I&B Code is thirty days, with a provision for allowing the filing of an appeal within a further period of fifteen days, if NCLAT is satisfied, that there was a sufficient cause for not filing the appeal within thirty days. [Para 39][713-A-D]

1.3 When a litigant bona fide under a mistake litigates before a wrong forum, he would be entitled for exclusion of the period, during which he was bona fide prosecuting such a wrong remedy. Though strictly, the provisions of Section 14 of the Limitation Act would not be applicable to the proceedings before a quasi judicial Tribunal, however, the principles underlying the same would be applicable i.e. the proper approach will have to be of advancing the cause of justice, rather than to abort the proceedings. [Para 51][720-D-F]

1.4 The judgment of NCLT is dated 28.11.2019. As such, as per Section 61(2) of the I&B Code, the appeal was required to be filed on or prior to 28.12.2019. The appeal could have been filed within a further period of fifteen days, if NCLAT was satisfied, that there was sufficient cause for not filing the appeal within a period of thirty days. As such, the said period would come to an end on 12.1.2020. The certified copy of the impugned judgment of NCLT was made available on 18.12.2019. If the allowance for the said period is granted, the appeal should have been preferred on or prior to 2.2.2020. However, in the instant case, the appeal is filed on 18.2.2020. [Para 40][713-D-F]

1.5 Immediately after NCLT pronounced its judgment on 28.11.2019 and even before the certified copy was made available on 18.12.2019, KIAL had filed writ petition before the Division Bench of the High Court on 11.12.2019 on the principal ground, that the procedure followed by NCLT was in breach of principles of natural justice. Such a ground could be legitimately pursued before a writ court. In that sense, it was not a proceeding before a wrong court, as such. [Para 54][723-B-D]

1.6 It is a settled principle of law, that non-exercise of jurisdiction by the High Court under Article 226 of the Constitution is not a hard and fast rule, but a rule of self-restraint. When the proceedings invoked before a statutory authority are de hors the jurisdiction or when they are in breach of principles of natural justice, the party would be entitled to invoke the jurisdiction of the High Court under Article 226 of the Constitution. [Paras 59, 61][724-G-H; 725-H; 726-A]

1.7 In the instant case, perusal of the writ petition would reveal, that it was the specific case of KIAL, that its application, objecting to the application of RP for approval of the resolution plan was heard by a Member (Judicial), whereas, the final orders were passed by a Bench consisting of Member (Judicial) and Member (Technical). It has specifically averred, that though an alternate remedy was available to it, it was invoking the jurisdiction of the High Court since the question involved was also with regard to the manner in which the jurisdiction was exercised by NCLT. It could thus be seen, that KIAL was bona fide prosecuting the proceedings before the High Court in good faith. Perusal of the dates would also reveal, that KIAL was prosecuting the proceedings before the High Court with due diligence. Even before the availability of the certified copy, it had knocked the doors of the High Court. The matter before the High Court was hotly contested and ultimately, the petition was dismissed by an elaborate judgment relegating KIAL to the alternate remedy available to it in law. As such, the conditions which enable a party to invoke the provisions of Section 14 of the Limitation Act are very much available to KIAL. If the period during which KIAL was bona fide prosecuting the writ petition before the High Court and that too with due diligence, is excluded applying the principles underlying Section 14 of the Limitation Act, the appeals filed before NCLAT would be very much within the limitation. KIAL would be entitled to exclusion of the period during which it was bona fide prosecuting the remedy before the High Court with due diligence. [Para 64][726-E-H; 727-A-C]

1.8 In the instant case, KIAL had approached the High Court making a specific grievance, that NCLT had adopted a procedure which was in breach of the principles of natural justice. It is specifically mentioned in the writ petition, that though an alternate remedy was available to it, it was approaching the High Court since the issue with regard to functioning of NCLT also fell for consideration. It is thus apparently clear, that KIAL was bona fide prosecuting a remedy before the High Court in good faith and with due diligence. In a given case, the High Court could have exercised jurisdiction under Article 226 of the Constitution inasmuch as, the grievance was regarding procedure followed by NCLT to be in breach of principles of natural justice. That would come within the limited area earmarked by this Court for exercise of extraordinary jurisdiction under Article 226 despite availability of an alternate remedy. Therefore, KIAL was entitled to extension of the period during which it was bona fide prosecuting a remedy before the High Court with due diligence. [Paras 83, 85][735-A-D; 736-A]

Consolidated Engineering Enterprises vs. Principal Secretary, Irrigation Department and others (2008) 7 SCC 169 : [2008] 5 SCR 1108; M.P. Steel Corporation vs. Commissioner of Central Excise (2015) 7 SCC 58; State of Goa vs. Western Builders (2006) 6 SCC 239 : [2006] 3 Suppl. SCR 288; Embassy Property

Developments Pvt. Ltd. vs. State of Karnataka and Others 2019 SCC Online 1542 – relied on.

Commissioner of Sales Tax, U.P. vs. Madan Lal Das & Sons, Bareilly (1976) 4 SCC 464 : [1977] 1 SCR 683 – per incuriam.

Union of India vs. Popular Construction Co. (2001) 8 SCC 470 : [2001] 3 Suppl. SCR 619; Singh

Enterprises vs. Commissioner of Central Excise, Jamshedpur & Ors. (2008) 3 SCC 70 : [2007]

13 SCR 952; Chhattisgarh State Electricity Board vs. Central Electricity Regulatory Commission & Ors. (2010) 5 SCC 23 : [2010] 4 SCR 680; Neeraj Jhanji vs. Commissioner of Customs & Central Excise (2015)

12 SCC 695; Ketan V. Parekh vs. Special Director, Directorate of Enforcement & Anr. (2011) 15 SCC 30 : [2011] 14 SCR 1204; Commissioner of Customs and Central Excise vs. Hongo India Private Limited and another (2009) 5 SCC 791; Bengal Chemists and Druggists Association vs. Kalyan Chowdhury (2018) 3 SCC 41 : [2018] 2 SCR 1099 - distinguished.

Commissioner of Sales Tax. U.P., Lucknow vs. Parson Tools and Plants, Kanpur (1975) 4 SCC 22: [1975] 3 SCR 743 – held distinguished.

Whirlpool Corporation vs. Registrar of Trade Marks, Mumbai & Ors. (1998) 8 SCC 1 : [1998] 2 Suppl. SCR 359; Babu Ram Prakash Chandra Maheshwari vs.

Antarim Zilla Parishad Muzaffar Nagar [1969] 1 SCR 518; Nivedita Sharma vs. Cellular Operators Association of India & Ors. (2011) 14 SCC 337; Bharat Bank Ltd., Delhi vs. Employees of the Bharat Bank Ltd., Delhi [1950] SCR 459; Town Municipal Council, Athani vs. Presiding Officer, Labour Courts, Hubli and others etc. (1969) 1 SCC 873 : [1970] 1 SCR 51; Nityananda M. Joshi and others vs. Life Insurance Corporation of India and others (1969) 2 SCC 199: 1970 (1) SCR 396; Bhudan Singh and another vs. Nabi Bux and another (1969) 2 SCC 481: [1970] 2 SCR 10; J. Kumaradasan Nair and another vs. Iric Sohan and others (2009) 12 SCC 175: [2009] 3 SCR 238; Kerala State Electricity Board, Trivandrum vs. T.P. Kunhaliumma (1976) 4 SCC

634 : [1977] 1 SCR 996; Officer on Special Duty (Land Acquisition) and another vs. Shah Manilal Chandulal and others (1996) 9 SCC 414: [1996] 2 SCR 366 referred to.

2.1 KIAL had no choice than to accept the terms of the contract. Paragraph 5(b) of the covering letter for submission of resolution plan by KIAL is a part of a covering letter format, which is provided in the Process Memorandum itself. The covering letter is in Format I and the party desiring to participate in the Resolution Plan Process has no other option, than to sign the dotted lines. Hence, the parties cannot be said to have equal bargaining power and the applicants have no other choice than to sign on the documents prescribed in the format. Paragraph 5(b) of the covering letter format, requires a party to undertake, that it will accept all the decisions made by CoC, RP and/or the Adjudicating Authority and that the decisions taken will be binding on it. It also requires the applicant, to sign on the document thereby, providing expressly waiving any and all claims with respect to the Resolution Plan Process. In turn, it provides for a party to agree to a stipulation, that even if RP or CoC acts in any manner, which is not permissible in law, still the resolution applicant would be bound by such a decision and shall waive any or all its claims in respect of the Resolution Plan Process. [Para 95][739-H; 740-A-D]

2.2 In the first place, RP and the resolution applicant cannot be said to be the contracting parties having equal bargaining power. Secondly, since RP functions under the I&B Code for discharging the duties bestowed upon him and assisting the process for finalization of resolution plan for survival of the Corporate Debtor, it cannot be said that it is a purely commercial transaction between RP and the resolution applicant. There is no reason, as to why the said principle should not be applicable when RP and CoC are acting under the statutory provisions under the Code. Thus, KIAL cannot be held to be bound by such unconscionable clause in the letter, which is in a prescribed format. [Paras 97, 99, 100][740-E-F; 741-B-D]

Halsbury’s Laws of England, Vol. 16(2), 4th Edn., Para 907, 1471 – referred to

2.3 For considering, as to whether a party has waived its rights or not, it will be relevant to consider the conduct of a party. For establishing waiver, it will have to be established, that a party expressly or by its conduct acted in a manner, which is inconsistent with the continuance of its rights. However, the mere acts of indulgence will not amount to waiver. A party claiming waiver would also not be entitled to claim the benefit of waiver, unless it has altered its position in reliance on the same. For applying the principle of waiver, it will have to be established, that though a party was aware about the relevant facts and the right to take an objection, he has neglected to take such an objection. [Paras 104, 107][742-F-G; 743-E-F]

2.4 For constituting acquiescence or waiver it must be established, that though a party knows the material facts and is conscious of his legal rights in a given matter, but fails to assert its rights at the earliest possible opportunity, it creates an effective bar of waiver against him. Whereas, acquiescence would be a conduct where a party is sitting by, when another is invading his rights. The acquiescence must be such as to lead to the inference of a licence sufficient to create a new right in the defendant. Waiver is an intentional relinquishment of a right. It involves conscious abandonment of an existing legal right, advantage, benefit, claim or privilege. It is an agreement not to assert a right. There can be no waiver unless the person who is said to have waived, is fully informed as to his rights and with full knowledge about the same, he intentionally abandons them. [Para 112][747-E-G]

2.5 As per the invitation of EOI published on 9.7.2018, the last date for submission of EOI was 8.8.2018. The first Form G was also issued on 9.7.2018, according to which, the last date for submission of resolution plan was 21.9.2018. KIAL had submitted its EOI on 7.8.2018. First Process Memorandum was issued on 17.8.2018. However, since there was no response, four more Form G were issued on various dates. The last of such Form G was issued on 11.12.2018, according to which the last date for submission of resolution plan was 8.1.2019. KIAL submitted its resolution plan on 8.1.2019. Subsequently, Kalpraj submitted its resolution plan on 27.1.2019. On KIAL coming to know about the same, on 29.1.2019 itself, it had sent an email protesting to RP against acceptance of belated resolution plan of Kalpraj. [Paras 116, 117][748-F-H; 749-A]

2.6 It could be seen that immediately within a day of the submission of the plan by Kalpraj, KIAL objected to the acceptance of its plan after 8.1.2019, when no extension of time for the same was notified. It is specifically stated, that the said severely jeopardized its position and was against the spirit of the Code, especially when KIALs resolution plan was opened immediately and discussed at length with various stakeholders. KIAL has therefore requested for sharing the requisite information providing for extension of time for bid submission. It is further stated, that in the event no such notification was issued, all plans submitted after 8.1.2019 should be held to be invalid. After the said email was addressed by KIAL to RP, it received an email from RP on 30.1.2019. It is stated in the said email dated 30.1.2019, that subsequent to the resolution plan submitted on 8.1.2019, CoCs representative and RP had a detailed discussion with its team on the changes required to be made in the resolution plan. Vide the said email dated 30.1.2019, KIAL was requested to submit the amended resolution plan by 3 p.m. on 1.2.2019. On 1.2.2019, left with no choice, KIAL submitted its revised resolution plan. [Paras 118, 119][749-E-H; 750-A]

2.7 On 10.2.2019 KIAL sent another email. It was stated therein that it has been quite sometime, that it had sought a response from RP on his decision to accept another resolution plan well after the expiry of the deadline for submission of the same. It was reiterated, that such an action, after opening of the bids and having detailed discussions on the same was not only prejudicial to its interest but against the spirit of the I&B Code. It was reiterated, that the I&B Code, provides equal treatment to all potential resolution applicants within the framework of law and fixes personal responsibilities upon CoC members and RPs in the event of instances of discrimination or departure from the established law. [Para 121][750-D-F]

2.8 Perusal of the record would reveal, that RP had replied to KIAL by email dated 11.2.2019. It was stated in the said email, that his act of acceptance of resolution plans, submitted after the due date, was under the overall supervision of CoC and as per the opinion given by CoCs legal counsel and RPs legal counsel. It was also submitted, that this was in the spirit of value maximisation of assets of the Corporate Debtor. Further, it is in dispute, as to whether RP had again directed KIAL and Kalpraj vide email dated 11.2.2019 to submit revised plan. It is asserted on behalf of the KIAL, that such email was received by it, whereas it is denied by RP. In any event, it is not in dispute, that both KIAL and Kalpraj submitted their revised plans on 12.2.2019. [Paras 122 - 123][750-F-H; 751-A]

2.9 On 13/14.2.2019, the resolution plan of Kalpraj was accepted by CoC. On 18.2.2019, RP filed M.A. No.691/2019 before NCLT for approval of the resolution plan of Kalpraj. KIAL filed its M.A. on 14.3.2019 before the Adjudicating Authority objecting to the approval of resolution plan of Kalpraj. It could thus, be clearly seen, that KIAL had raised its objection immediately after the Kalpraj submitted its resolution plan. Not only that, but, it had also reiterated its objection to the participation of Kalpraj. Insofar as, submission of amended plans is concerned, it had no other option than to submit its revised plan. It is thus clear that, had KIAL not responded to the email of RP and submitted its revised plan, it had to run the risk of being out of fray. [Paras 124-126][751-A-C, E-F]

2.10 Taking into consideration the fact, that KIAL had objected to participation of any other applicant submitting plan after the due date as per the last Form G and also reiterated its objection, it cannot be held, that having participated by submitting the revised plans, KIAL is estopped from challenging the process on the ground of acquiescence and waiver. Merely because, the revised plans are not submitted with the words “without prejudice”, would not make any difference. [Para 132][753-A-B]

2.11 The conduct of the party is relevant for considering, whether it can be held, that a case is made out of waiver or acquiescence. None of the appellants have been in a position to establish, that KIAL had given up/surrendered its rights to take recourse to the legal remedies. In any case, the appellants had also not been in a position to establish, that on account of any such waiver or acquiescence any of the appellants had altered their position to their detriment. As such, it cannot be held, that KIAL had waived or acquiesced its rights to challenge the decision of RP or CoC. [Paras 132-134][753-C-E]

Central Inland Water Transport Corporation Limited and another vs. Brojo Nath Ganguly and another (1986)

3 SCC 156 : [1986] 2 SCR 278; Vodafone International Holdings BV vs. Union of India and another (2012) 6 SCC 613: [2012] 1 SCR 573 – relied on.

ITC Ltd. vs. Blue Coast Hotels Limited & Ors. (2018)

15 SCC 99 : [2018] 5 SCR 516; Tarapore & Company vs. Cochin Shipyard Ltd., Cochin & Anr. (1984) 2 SCC 680: [1984] 3 SCR 118 - Distinguished

Assistant General Manager and others vs. Radhey Shyam Pandey (2020) 6 SCC 438; Pioneer Urban Land and Infrastructure Limited vs. Govindan Raghavan (2019) 5 SCC 725 : [2019] 5 SCR 1169; Manak Lal vs. Dr. Prem Chand 1957 SCR 575 = AIR 1957 SC 425; Krishna Bahadur vs. Purna Theatre and others (2004) 8 SCC 229 : [2004] 3 Suppl. SCR 833; State of Punjab vs. Davinder Pal Singh Bhullar and others (2011) 14 SCC 770 : [2011] 15 SCR 540; Galada power and Telecommunication limited vs. United India Insurance Company Limited and another (2016) 14 SCC 161: 2016 (4 ) SCR 69 – referred to.

3.1 For deciding key economic question in the bankruptcy process, the only one correct forum for evaluating such possibilities, and making a decision was, a creditors committee, wherein all financial creditors have votes in proportion to the magnitude of debt that they hold. The Bankruptcy Law Reforms Committee-BLRC has observed, that laws in India in the past have brought arms of the Government (legislature, executive or judiciary) into the question of bankruptcy process. This has been strictly avoided by the Committee and it has been provided, that the decision with regard to appropriate disposition of a defaulting firm, which is a business decision, should only be made by the creditors. It has been observed, that the evaluation of proposals to keep the entity as a going concern, including decisions about the sale of business or units, restructuring of debt, etc., are required to be taken by the Committee of the Financial Creditors. It has been provided, that the choice of the solution to keep the entity as a going concern will be voted upon by CoC and there are no constraints on the proposals that the resolution professional can present to CoC. The requirements, that the resolution professional needs to confirm to the Adjudicator, are: (i) that the solution must explicitly require the repayment of any interim finance and costs of the insolvency resolution process will be paid in priority to other payments; (ii) that the plan must explicitly include payment to all creditors not on the creditors committee, within a reasonable period after the solution is implemented; and lastly (iii) the plan should comply with existing laws governing the actions of the entity while implementing the solutions. [Para 138][760-B-G]

3.2 There should be freedom permitted to the overall market, to propose solutions on keeping the entity as a going concern. The details as to how the insolvency is to be resolved or as to how the entity is to be revived, or the debt is to be restructured will not be provided in the I&B Code but such a decision will come from the deliberations of CoC in response to the solutions proposed by the market. [Para 139][760-G-H; 761-A]

3.3 The appeal is a creature of statute and that the statute has not invested jurisdiction and authority either with NCLT or NCLAT, to review the commercial decision exercised by CoC of approving the resolution plan or rejecting the same. The limited judicial review, which is available, can in no circumstance trespass upon a business decision arrived at by the majority of CoC. [Paras 149, 152][766-B-C, G-H]

3.4 The legislative scheme is unambiguous. The commercial wisdom of CoC is not to be interfered with, excepting the limited scope as provided under Sections 30 and 31 of the I&B Code. [Para 155][768-A-B]

3.5 It was submitted that since there has been a material irregularity in exercise of the powers by RP, NCLAT was justified in view of the provisions of clause (ii) of sub section (3) of Section

61 of the I&B Code to interfere with the exercise of power by RP. However, it could be seen, that all actions of RP have the seal of approval of CoC. No doubt, it was possible for RP to have issued another Form G, in the event he found, that the proposals received by it prior to the date specified in last Form G could not be accepted. However, it has been the consistent stand of RP as well as CoC, that all actions of RP, including acceptance of resolution plans of Kalpraj after the due date, albeit before the expiry of timeline specified by the Code for completion of the process, have been consciously approved by CoC. The decision of CoC is taken by a thumping majority of 84.36%. The only creditor voted in favour of KIAL is Kotak Bank, holding company of KIAL, having voting rights of 0.97%. In view of the paramount importance given to the decision of CoC, which is to be taken on the basis of commercial wisdom, NCLAT was not correct in law in interfering with the commercial decision taken by CoC by a thumping majority of 84.36%. [Para 156][768-B-F]

3.6 After the resolution plan of Kalpraj was approved by NCLT on 28.11.2019, Kalpraj had begun implementing the resolution plan. NCLAT had heard the appeals on 27.2.2020 and reserved the same for orders. There was no stay granted by NCLAT, while reserving the matters for orders. After a gap of five months, NCLAT passed the final order on 5.8.2020. Thus, for a long period, there was no restraint on implementation of the resolution plan of Kalpraj, which was duly approved by NCLT. It is the case of Kalpraj, RP, CoC and Deutsche Bank, that during the said period, various steps have been taken by Kalpraj by spending a huge amount for implementation of the plan. No doubt, this is sought to be disputed by KIAL. However, it is not necessary to go into that aspect of the matter in light of the conclusion, that NCLAT acted in excess of jurisdiction in interfering with the conscious commercial decision of CoC. [Para 157][868-F-H; 769-A]

3.7 In pursuance of the order dated 5.8.2020 passed by NCLAT, CoC has approved the resolution plan of KIAL on 13.8.2020. However, since the decision of NCLAT dated 5.8.2020 does not stand the scrutiny of law, it must follow, that the subsequent approval of the resolution plan of KIAL by CoC becomes non est in law. For, it was only to abide by the directions of NCLAT. Nothing would turn on it. The decision of CoC dated 13/14.2.2019 is a decision, which has been taken in exercise of its commercial wisdom. As such, the decision taken by CoC dated 13/14.2.2019, which is taken in accordance with its commercial wisdom and which is duly approved by NCLT, will prevail. Further, NCLAT was not justified in interfering with the stated decision taken by CoC. [Para 158][769-B-D]

K. Sashidhar vs. Indian Overseas Bank & Ors. (2019)

12 SCC 150: [2019] 3 SCR 845; Committee of Creditors of Essar Steel India Limited through Authorised Signatory vs. Satish Kumar Gupta & Ors. (2019) SCC Online SC 1478 – relied on.

Maharashtra Seamless Limited vs. Padmanabhan

Venkatesh and others (2020) 11 SCC 467; Arcelormittal India Private Limited vs. Satish Kumar Gupta and others (2019) 2 SCC 1 : [2018] 12 SCR 362 – referred to

4 The order passed by NCLAT dated 5.8.2020 is quashed and set aside and the orders passed by NCLT dated 28.11.2019 are restored and maintained. Insofar as, the Civil Appeals arising out of D.No. 24125 of 2020 filed by Fourth Dimension Solutions Limited, since the appeal against the order of NCLT is still pending before NCLAT, NCLAT is directed to decide the appeal as expeditiously as possible, and in any case, within the stipulated period. [Paras 159-160][769-D-G]

Innoventive Industries Ltd. vs. ICICI Bank & Anr. (2018)

1 SCC 407: [2017] 8 SCR 33; Kumar Dutta prop. K.D. Trading vs. Simplex Infrastructure Ltd. 2019 SCC Online NCLAT 575; Asha Goyal vs. Pharma Traders Pvt. Ltd. 2019 SCC Online NCLAT 150; Radhika

Mehra vs. Vaayu Infrastructure LLP & Ors. 2020 SCC Online NCLAT 532; Dhirendra Kumar vs. Randstand India Pvt. Ltd. & Anr. 2019 SCC Online NCLAT 444; Neeraj Jhanji vs. Commissioner of Customs & Central Excise (2015) 12 SCC 695; G.J. Fernandez vs. State of Karnataka & Ors. (1990) 2 SCC 488: [1990] 1 SCR 229; NTPC Ltd. (Simhadri Project) vs. Rajiv

Chakraborty] Civil Appeal No. 2798 of 2020; Union of India & Ors. vs. West Coast Paper Mills Ltd. & Anr. (2004) 3 SCC 458: [2004] 2 SCR 642; Binani

Industries Limited vs.Bank of Baroda & Anr. 2018 SCC Online NCLAT 565 – referred to.