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2023 (10) TMI 750 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , CHENNAIApproval of Resolution Plan - no proposal of distribution mechanism for consideration of the CoC - delegation of task of proposing the manner of distribution of funds to the CoC - whether the Adjudicating Authority was justified in approving a Resolution Plan where the manner of distribution was proposed, and decided by the CoC? HELD THAT:- It is not in dispute that the Resolution Plan of Vedanta was approved by the CoC by a majority of 94.96 % - The Hon’ble Supreme Court in a catena of Judgments has held that the ‘Adjudicating Authority’ and the ‘Appellate Tribunal’ cannot enter into the merits of a ‘Business Decision’ of the requisite majority of the CoC, unless it is violative of the provisions of Section 30 (2) of the Code. An approved Resolution Plan cannot be subject to judicial review in terms of carrying out a quantitative analysis qua each Stakeholder. The Hon’ble Supreme Court has observed so in ‘India Resurgence ARC private Limited Vs. Amit Metaliks Limited’ [2021 (6) TMI 684 - SUPREME COURT], that the commercial wisdom of CoC and the scope of judicial review remains limited within the four corners of Section 30 (2) of the Code for the ‘Adjudicating Authority’ and Section 30 (2) read with Section 61 (3) for the Appellate Authority. Whether the CoC is empowered to decide the distribution methodology? - HELD THAT:- The Hon’ble Supreme Court in the matter of Amit Metaliks has held that ‘thus, what amount is to be paid to different classes or subclasses of creditors in accordance with provisions of the Code and the related Regulations, is essentially the commercial wisdom of the Committee of Creditors; and a dissenting secured creditor like the appellant cannot suggest a higher amount to be paid to it with reference to the value of the security interest’. Though the IBC does not have a specific Provision that uses the term ‘Business Decision’ of the CoC, the Code contains several provisions that detail the powers and functions of the CoC, which encompass various decision-making responsibilities relating to the Insolvency Resolution Process, which definitely includes distribution methodology of the Resolution Plan - This Tribunal is of the earnest view that the Appellant having taken part in these Meetings and not having raised any substantial objections at that point of time, is estopped from questioning the commercial wisdom of the CoC in proposing, considering and approving the distribution methodology of the Resolution Plan. Keeping in view the catena of Judgments of the Hon’ble Apex Court regarding the commercial wisdom of the CoC in approving the Plan and the limited jurisdiction therein, this Tribunal is of the considered view that ‘the CoC in its commercial wisdom can propose, consider and decide on the distribution mechanism under the Resolution Plan’, as long as it is within the domain of Section 30(2) of the Code. Appeal dismissed.
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