Case: – Sita Chaudhary v/s Haryana Telecom Limited; Company Appeal (AT)(Insolvency) No. 727-728 of 2023
The National Company Law Appellate Tribunal recently issued a judgment which sheds light on the scope of enquiry by the Adjudicating Authority under Section 31 of the Insolvency and Bankruptcy Code, 2016 (IBC).
The case involved Sita Chaudhary, a suspended director of Haryana Telecom Limited, and the resolution of the company’s insolvency. The resolution plan of the SRA had already been approved by the Committee of Creditors (CoC) with a 100% vote share, meeting the conditionalities laid down in Section 30(4) of the IBC. The Resolution Professional filed an application before the Adjudicating Authority seeking approval of the Resolution Plan under Section 31 of the IBC.
The NCLAT held that the scope of enquiry of Adjudicating Authority under Section 31 of the IBC is confined to scrutinizing whether Section 30(4) has been complied with or not. In the present case, the Adjudicating Authority found that no provision of law appears to have been contravened and that there is compliance to Regulations 38 and 39 of CIRP Regulations, 2016.
The judgement of the Appellate Tribunal elucidated that the scope of interference with an order approving the resolution plan is very limited. The approved resolution plan can only be challenged before the Appellate Authority on limited grounds in terms of Section 61(3) of the IBC. Thus, the Tribunal found that the Appellant had failed to make out a case of applicability of any such limited grounds.
Author of this article:
Adv. Ravish Bhatt,
Partner, R&D Law Chambers,
Dual Qualified Lawyer Solicitor | International Tax Affiliate
Connect with Mr. Bhatt on Linkedin: https://www.linkedin.com/in/adit-ravishbhatt/
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