NCLT Sanctions Over Rs. 12.80 Crore Payout in Sterling Healthcare Resolution Plan [Read Order]
The NCLT found the plan to be compliant with all statutory requirements and not in contravention of any law.
The National Company Law Tribunal (NCLT), Mumbai Bench, has approved a resolution plan for Sterling Healthcare Limited, sanctioning a total payout of over Rs. 12.80 crore to its creditors. The plan, submitted by Mrs. Kanak S. Kewalramani, was approved by 100% of the voting share of the Committeeof Creditors (CoC) following a competitive Swiss Challenge process.
The Corporate Insolvency Resolution Process (CIRP) against the pharmaceutical company, Sterling Healthcare Limited, was initiated in December 2023, with Mr. Dhiren Shah appointed as the Resolution Professional. After receiving two resolution plans, the CoC opted for a Swiss Challenge. Ultimately, the plan submitted by Mrs. Kanak S. Kewalramani, a qualified Company Secretary and CFO, was declared the highest bidder and approved by the CoC on January 25, 2025.
The approved resolution plan outlines a comprehensive payment structure. Financial creditors will receive Rs. 11.65 crore, along with any benefits from avoidance transactions. Operational creditors, including employees and workmen, will be paid their admitted claims in full, while other operational creditors will receive a portion of their claims. The entire payout, totaling over Rs. 12.80 crore, will be funded by the Successful Resolution Applicant's own liquid assets, amounting to approximately INR 545.62 Crores.
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A division bench of Justice Sushil Mahadeorao Kochey and Member (Technical) Sh. Prabhat Kumar, in its order, clarified that its role was limited to scrutinizing the CoC-approved plan for compliance with Section 30(2) of the Insolvency and Bankruptcy Code (IBC). Citing the Supreme Court's decision in K Sashidhar v. Indian Overseas Bank, the bench reiterated that its discretion is circumscribed and it cannot re-evaluate the commercial wisdom of the CoC. The NCLT found the plan to be compliant with all statutory requirements and not in contravention of any law.
Accordingly, the NCLT approved the resolution plan, making it binding on the corporate debtor, its employees, creditors, and government authorities. The order grants significant reliefs to the Successful Resolution Applicant, including immunity from past proceedings as per Section 32A of the IBC.
The Tribunal also directed statutory bodies, including the Registrar of Companies (RoC), to facilitate the implementation of the plan and grant necessary waivers, in line with the principles laid down by the Supreme Court in Ghanshyam Mishra & Sons Private Limited. The moratorium under Section 14 of the IBC was consequently lifted.
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