Adjudicating Authority’s Role Limited to Section 30(2) Compliance Check after CoC Approval with Required Majority: NCLT [Read Order]

The Mumbai Bench of the National Company Law Tribunal (NCLT) approved a resolution plan for Steadfast Shipping Private Limited under Section 31 of the Insolvency and Bankruptcy Code, 2016, after finding that the plan met all requirements under Section 30(2) of the Code and was approved by the Committee of Creditors (CoC) with 100% voting share.

The application was filed by the Resolution Professional, Mr. Nilesh Rajendra Kothari, under Section 30(6) read with Section 31 of the Code, seeking approval of the resolution plan submitted by Priyam Projects (I) Private Limited, which had been revised and improved before being placed in the 7th CoC meeting. The CoC, consisting of a single secured financial creditor, Punjab National Bank (International) Limited, approved the plan unanimously.

The RP submitted that the plan met all requirements of Section 30(2) and the relevant CIRP Regulations, provided for priority payment of CIRP costs, dealt with operational creditors as required by the Code, and ensured management and supervision through a monitoring committee consisting of the RP, a nominee of the SRA, and a CoC member.

And, the plan also set out three implementation phases over 120 days, proposed acquisition of the corporate debtor as a going concern, allowed for restructuring through a special purpose vehicle, and maintained compliance with Section 29A eligibility norms.

The two-member bench comprising Prabhat Kumar (Technical Member) and Sushil Mahadeorao Kochey (Judicial Member) examined the plan, supporting documents, and compliance certificate in Form H.

The tribunal referenced the Supreme Court’s decision in K. Sashidhar v. Indian Overseas Bank & Others, that once the CoC has approved a resolution plan with the required majority, the Adjudicating Authority’s role is limited to checking compliance with Section 30(2) and that it cannot interfere with the commercial wisdom of the CoC.

It pointed out that the plan in this case satisfied all statutory requirements, did not contravene any law, and addressed stakeholder interests as per the Code.

Based on these findings, the tribunal approved the resolution plan dated 18 April 2025 as revised on 20 May 2025. The moratorium under Section 14 was lifted, and the Resolution Professional was directed to supervise the implementation of the plan and submit periodic status reports. The Registry was instructed to send a certified copy of the order to the CoC and the Successful Resolution Applicant for compliance.

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates