K. SASHIDHAR v. INDIAN OVERSEAS BANK & ORS.

p. 886 Copy page pinpoint

A On a conjoint reading of these provisions it is amply clear that the stipulation is to reckon the percent of “voting share of the financial creditors”, for the purposes of determining as to whether the proposed resolution plan has been approved by the CoC or otherwise. When it comes to the method of voting and for determining the outcome of voting with regard to other subjects (other than the approval of the resolution B plan), discussed in the meeting of the CoC, the same is governed by Regulation 25 as applicable in October 2017. The same read thus: “25. Voting by the committee.-(1) the actions listed in section 28(1) shall be considered in meetings of the committee. C (2) Any action other than those listed in section 28(1) requiring approval of the committee may be considered in meetings of the committee. (3) Where all members are present in a meeting, the resolution professional shall take a vote of the members of the committee D on any item listed for voting after discussion on the same. (4) At the conclusion of a vote at the meeting, the resolution professional shall announce the decision taken on items along with the names of the members of the committee who voted for or against the decision, or abstained from voting. E (5) If all members are not present at a meeting, a vote shall not be taken at such meeting and the resolution professional shall- (a) circulate the minutes of the meeting by electronic means to all members of the committee within forty-eight F hours of the conclusion of the meeting; and (b) seek a vote on the matters listed for voting in the meeting, by electronic voting system where the voting shall be kept open for twenty four hours from the circulation of the minutes.” G (emphasis supplied) Concededly, Regulations 25 and 39 must be read in light of Section 30(4) of the I&B Code, concerning the process of approval of a resolution plan. For that, the “percent of voting share of the financial creditors” approving vis-à-vis dissenting - is required to be reckoned. It is not on H

K. SASHIDHAR v. INDIAN OVERSEAS BANK & ORS. 887 [A. M. KHANWILKAR, J.]

the basis of members present and voting as such. At any rate, the A approving votes must fulfill the threshold percent of voting share of the financial creditors. Keeping this clear distinction in mind, it must follow that the resolution plan concerning the respective corporate debtors, namely, KS&PIPL and IIL, is deemed to have been rejected as it had failed to muster the approval of requisite threshold votes, of not less than B 75% of voting share of the financial creditors. It is not possible to countenance any other construction or interpretation, which may run contrary to what has been noted herein before.

30Copy pinpoint30. Thus understood, no fault can be found with the NCLAT for having recorded the fact that the proposed resolution plan in respect of both the corporate debtors was approved by vote of “less than 75%” of voting share of the financial creditors or deemed to have been rejected. In that event, the inevitable corollary is to initiate liquidation process relating to the concerned corporate debtor, as per Section 33 of the I&B Code.

31Copy pinpoint31. Indeed, in terms of Section 31 of the I&B Code, the adjudicating authority (NCLT) is expected to deal with two situations. The first is when it does not receive a resolution plan under sub-section (6) of Section 30 or when the resolution plan has been rejected by the resolution professional for non-compliance of Section 30(2) of the I&B Code or also when the resolution plan fails to garner approval of not less than seventy five percent of voting share of the financial creditors, as the case may be; and there is no alternate plan mooted before the expiry of the statutory period. The second is when a resolution plan duly approved by the CoC by not less than 75% of voting share of the financial creditors is submitted before it by the resolution professional under Section 30(6) of the Code, for its approval. F

32Copy pinpoint32. In the present case, we are concerned with a situation where in both the resolution processes under consideration, the resolution plan failed to garner support of not less than 75% of voting share of the financial creditors. That is the first category referred to above. In such a situation, the adjudicating authority can have no other option but to G initiate liquidation process in terms of Section 33 (1) of the I&B Code. Section 33 of the I&B Code as applicable at the relevant time in October 2017, read thus:

p. 888 Copy page pinpoint

A “33. Initiation of liquidation.-(1) Where the Adjudicating Authority,- (a) before the expiry of the insolvency resolution process period or the maximum period permitted for completion of the corporate insolvency resolution process under section 12 or B the fast track corporate insolvency resolution process under section 56, as the case may be, does not receive a resolution plan under sub-section (6) of section 30; or (b) rejects the resolution plan under section 31 for the non- compliance of the requirements specified therein, C It shall- (i) pass an order requiring the corporate debtor to be liquidated in the manner as laid down in this Chapter; (ii) issue a public announcement stating that the corporate debtor is in liquidation; and D (iii) require such order to be sent to the authority with which the corporate debtor is registered. (2) Where the resolution professional, at any time during the corporate insolvency resolution process but before confirmation E of resolution plan, intimates the Adjudicating Authority of the decision of the committee of creditors to liquidate the corporate debtor, the Adjudicating Authority shall pass a liquidation order as referred to in sub-clauses (i) (ii) and (iii) of clause (b) of sub- section (1).

F (3) Where the resolution plan approved by the Adjudicating Authority is contravened by the concerned corporate debtor, any person other than the corporate debtor, whose interests are prejudicially affected by such contravention, may make an application to the Adjudicating Authority for a liquidation order as referred to in sub-clauses (i), (ii) and (iii) of clause (b) of sub- G section (1). (4) On receipt of an application under sub-section (3), if the Adjudicating Authority determines that the corporate debtor has contravened the provisions of the resolution plan, it shall pass a liquidation order as referred to in sub-clauses (i), (ii) and (iii) of clause (b) of sub-section (1).

K. SASHIDHAR v. INDIAN OVERSEAS BANK & ORS. 889 [A. M. KHANWILKAR, J.]

(5) Subject to section 52, when a liquidation order has been passed, no suit or other legal proceeding shall be instituted by or against the corporate debtor: Provided that a suit or other legal proceeding may be instituted by the liquidator, on behalf of the corporate debtor, with the prior approval of the Adjudicating Authority. B (6) The provisions of sub-section (5) shall not apply to legal proceedings in relation to such transactions as may be notified by the Central Government in consultation with any financial sector regulator. (7) The order for liquidation under this section shall be deemed to be a notice of discharge to the officers, employees and workmen of the corporate debtor, except when the business of the corporate debtor is continued during the liquidation process by the liquidator.”

33Copy pinpoint33. As aforesaid, upon receipt of a “rejected” resolution plan the adjudicating authority (NCLT) is not expected to do anything more; but is obligated to initiate liquidation process under Section 33(1) of the I&B Code. The legislature has not endowed the adjudicating authority (NCLT) with the jurisdiction or authority to analyse or evaluate the commercial decision of the CoC muchless to enquire into the justness of the rejection of the resolution plan by the dissenting financial creditors. From the legislative history and the background in which the I&B Code has been enacted, it is noticed that a completely new approach has been adopted for speeding up the recovery of the debt due from the defaulting companies. In the new approach, there is a calm period followed by a swift resolution process to be completed within 270 days (outer limit) failing which, initiation of liquidation process has been made inevitable and mandatory. In the earlier regime, the corporate debtor could indefinitely continue to enjoy the protection given under Section 22 of Sick Industrial Companies Act, 1985 or under other such enactments which has now been forsaken. Besides, the commercial wisdom of the CoC has been given paramount status without any judicial intervention, for ensuring completion of the stated processes within the timelines prescribed by the I&B Code. There is an intrinsic assumption that financial creditors are fully informed about the viability of the corporate debtor and feasibility of the proposed resolution plan. They act on the basis of thorough examination of the proposed resolution plan and assessment made by their team of experts. The opinion on the subject matter H

p. 890 Copy page pinpoint

A expressed by them after due deliberations in the CoC meetings through voting, as per voting shares, is a collective business decision. The legislature, consciously, has not provided any ground to challenge the “commercial wisdom” of the individual financial creditors or their collective decision before the adjudicating authority. That is made non- justiciable. B

34Copy pinpoint34. In the report of the Bankruptcy Law Reforms Committee of November 2015, primacy has been given to the CoC to evaluate the various possibilities and make a decision. It has been observed thus: “The key economic question in the bankruptcy process C When a firm (referred to as the corporate debtor in the draft law) defaults, the question arises about what is to be done. Many possibilities can be envisioned. One possibility is to take the firm into liquidation. Another possibility is to negotiate a debt restructuring, where the creditors accept a reduction D of debt on an NPV basis, and hope that the negotiated value exceeds the liquidation value. Another possibility is to sell the firm as a going concern and use the proceeds to pay creditors. Many hybrid structures of these broad categories can be envisioned.

E The Committee believes that there is only one correct forum for evaluating such possibilities, and making a decision: a creditors committee, where all financial creditors have votes in proportion to the magnitude of debt that they hold. In the past, laws in India have brought arms of the Government (legislature, executive or judiciary) into this question. This F has been strictly avoided by the Committee. The appropriate disposition of a defaulting firm is a business decision, and only the creditors should make it.” (emphasis supplied) The report also highlights that having timelines is the essence of G the resolution process. It then refers to the principles driving the design of the new insolvency bankruptcy resolution frame work. While dealing with this aspect, it is noted that the Code would facilitate the assessment of the viability of the enterprise at a very early stage. The relevant extract of the report reads thus: H

K. SASHIDHAR v. INDIAN OVERSEAS BANK & ORS. 891 [A. M. KHANWILKAR, J.]

“Principles driving the design A The Committee chose the following principles to design the new insolvency and bankruptcy resolution framework: I. The Code will facilitate the assessment of viability of the enterprise at a very early stage. B (1) The law must explicitly state that the viability of the enterprise is a matter of business, and that matters of business can only be negotiated between creditors and debtor. While viability is assessed as a negotiation between creditors and debtor, the final decision has to be an agreement among creditors who are the financiers willing C to bear the loss in the insolvency. (2) The legislature and the courts must control the process of resolution, but not be burdened to make business decisions. D (3) The law must set up a calm period for insolvency resolution where the debtor can negotiate in the assessment of viability without fear of debt recovery enforcement by creditors. (4) The law must appoint a resolution professional as the manager of the resolution period, so that the creditors can negotiate the assessment of viability with the confidence that the debtors will not take any action to erode the value of the enterprise. The professional will have the power and responsibility to monitor and manage the operations and assets of the enterprise. The professional will manage the resolution process of negotiation to ensure balance of power between the creditors and debtor, and protect the rights of all creditors. The professional will ensure the reduction of asymmetry of information between creditors and debtor in the resolution process. …………………… IV. The Code will ensure a collective process. G

(9) The law must ensure that all key stakeholders will participate to collectively assess viability. The law must ensure that all creditors who have the capability and the willingness to restructure their liabilities must be part of the negotiation process. H

p. 892 Copy page pinpoint

A The liabilities of all creditors who are not part of the negotiation process must also be met in any negotiated solution. V. The Code will respect the rights of all creditors equally. (10) The law must be impartial to the type of creditor in counting their weight in the vote on the final solution in resolving insolvency. B VI. The Code must ensure that, when the negotiations fail to establish viability, the outcome of bankruptcy must be binding. (11) The law must order the liquidation of an enterprise which has been found unviable. This outcome of the negotiations should be C protected against all appeals other than for very exceptional cases. …” (emphasis supplied)

35Copy pinpoint35. Whereas, the discretion of the adjudicating authority (NCLT) is circumscribed by Section 31 limited to scrutiny of the resolution plan D “as approved” by the requisite percent of voting share of financial creditors. Even in that enquiry, the grounds on which the adjudicating authority can reject the resolution plan is in reference to matters specified in Section 30(2), when the resolution plan does not conform to the stated requirements. Reverting to Section 30(2), the enquiry to be done is in respect of whether the resolution plan provides : (i) the payment of insolvency resolution process costs in a specified manner in priority to the repayment of other debts of the corporate debtor, (ii) the repayment of the debts of operational creditors in prescribed manner, (iii) the management of the affairs of the corporate debtor, (iv) the implementation and supervision of the resolution plan, (v) does not contravene any of the provisions of the law for the time being in force, (vi) conforms to such other requirements as may be specified by the Board. The Board referred to is established under Section 188 of the I&B Code. The powers and functions of the Board have been delineated in Section 196 of the I&B Code. None of the specified functions of the Board, directly or indirectly, pertain to regulating the manner in which the financial creditors ought to or ought not to exercise their commercial wisdom during the voting on the resolution plan under Section 30(4) of the I&B Code. The subjective satisfaction of the financial creditors at the time of voting is bound to be a mixed baggage of variety of factors. To wit, the feasibility and viability of the proposed resolution plan and including their perceptions H

K. SASHIDHAR v. INDIAN OVERSEAS BANK & ORS. 893 [A. M. KHANWILKAR, J.]

about the general capability of the resolution applicant to translate the projected plan into a reality. The resolution applicant may have given projections backed by normative data but still in the opinion of the dissenting financial creditors, it would not be free from being speculative. These aspects are completely within the domain of the financial creditors who are called upon to vote on the resolution plan under Section 30(4) of the I&B Code.

36Copy pinpoint36. For the same reason, even the jurisdiction of the NCLAT being in continuation of the proceedings would be circumscribed in that regard and more particularly on account of Section 32 of the I&B Code, which envisages that any appeal from an order approving the resolution plan shall be in the manner and on the grounds specified in Section 61(3) C of the I&B Code. Section 61(3) of the I&B Code reads thus: “61. Appeals and Appellate Authority.-(1) Notwithstanding anything to the contrary contained under the Companies Act, 2013 (18 of 2013), any person aggrieved by the order of the Adjudicating Authority under this part may prefer an appeal to the National D Company Law Appellate Tribunal. (2) xxx xxx xxx (3) An appeal against an order approving a resolution plan under section 31 may be filed on the following grounds, namely:- E (i) the approved resolution plan is in contravention of the provisions of any law for the time being in force; (ii) there has been material irregularity in exercise of the powers by the resolution professional during the corporate insolvency resolution period; F (iii) the debts owed to operational creditors of the corporate debtor have not been provided for in the resolution plan in the manner specified by the Board; (iv) the insolvency resolution process costs have not been provided for repayment in priority to all other debts; or G

(v) the resolution plan does not comply with any other criteria specified by the Board. xxx xxx xxx.” H

p. 894 Copy page pinpoint

37Copy pinpoint37. On a bare reading of the provisions of the I&B Code, it would appear that the remedy of appeal under Section 61(1) is against an “order passed by the adjudicating authority (NCLT)” – which we will assume may also pertain to recording of the fact that the proposed resolution plan has been rejected or not approved by a vote of not less than 75% of voting share of the financial creditors. Indubitably, the remedy of appeal including the width of jurisdiction of the appellate authority and the grounds of appeal, is a creature of statute. The provisions investing jurisdiction and authority in the NCLT or NCLAT as noticed earlier, has not made the commercial decision exercised by the CoC of not approving the resolution plan or rejecting the same, justiciable. This position is reinforced from the limited grounds specified for instituting an appeal that too against an order “approving a resolution plan” under Section 31. First, that the approved resolution plan is in contravention of the provisions of any law for the time being in force. Second, there has been material irregularity in exercise of powers “by the resolution professional” during the corporate insolvency resolution period. Third, the debts owed to operational creditors have not been provided for in the resolution plan in the prescribed manner. Fourth, the insolvency resolution plan costs have not been provided for repayment in priority to all other debts. Fifth, the resolution plan does not comply with any other criteria specified by the Board. Significantly, the matters or grounds - be it under Section 30(2) or under Section 61(3) of the I&B Code - are regarding testing the validity of the “approved” resolution plan by the CoC; and not for approving the resolution plan which has been disapproved or deemed to have been rejected by the CoC in exercise of its business decision.

38Copy pinpoint38. Indubitably, the inquiry in such an appeal would be limited to the power exercisable by the resolution professional under Section 30(2) of the I&B Code or, at best, by the adjudicating authority (NCLT) under Section 31(2) read with 31(1) of the I&B Code. No other inquiry would be permissible. Further, the jurisdiction bestowed upon the appellate authority (NCLAT) is also expressly circumscribed. It can examine the challenge only in relation to the grounds specified in Section 61(3) of the G I&B Code, which is limited to matters “other than” enquiry into the autonomy or commercial wisdom of the dissenting financial creditors. Thus, the prescribed authorities (NCLT/NCLAT) have been endowed with limited jurisdiction as specified in the I&B Code and not to act as a court of equity or exercise plenary powers. H

K. SASHIDHAR v. INDIAN OVERSEAS BANK & ORS. 895 [A. M. KHANWILKAR, J.]

39Copy pinpoint39. In our view, neither the adjudicating authority (NCLT) nor the appellate authority (NCLAT) has been endowed with the jurisdiction to reverse the commercial wisdom of the dissenting financial creditors and that too on the specious ground that it is only an opinion of the minority financial creditors. The fact that substantial or majority percent of financial creditors have accorded approval to the resolution plan would be of no avail, unless the approval is by a vote of not less than 75% (after amendment of 2018 w.e.f. 06.06.2018, 66%) of voting share of the financial creditors. To put it differently, the action of liquidation process postulated in Chapter-III of the I&B Code, is avoidable, only if approval of the resolution plan is by a vote of not less than 75% (as in October, 2017) of voting share of the financial creditors. Conversely, the legislative intent is to uphold the opinion or hypothesis of the minority dissenting financial creditors. That must prevail, if it is not less than the specified percent (25% in October, 2017; and now after the amendment w.e.f. 06.06.2018, 44%). The inevitable outcome of voting by not less than requisite percent of voting share of financial creditors to disapprove the proposed resolution plan, de jure, entails in its deemed rejection.

40Copy pinpoint40. Notably, the threshold of voting share of the dissenting financial creditors for rejecting the resolution plan is way below the simple majority mark, namely not less than 25% (and even after amendment w.e.f. 06.06.2018, 44%). Thus, the scrutiny of the resolution plan is required to pass through the litmus test of not less than requisite (75% or 66% as may be applicable) of voting share - a strict regime. That means the resolution plan must appear, to not less than requisite voting share of the financial creditors, to be an overall credible plan, capable of achieving timelines specified in the Code generally, assuring successful revival of the corporate debtor and disavowing endless speculation. F

41Copy pinpoint41. The counsel appearing for the resolution applicant and the stakeholders supporting the resolution plan of the concerned corporate debtor, were at pains to persuade us to take a view that voting by the dissenting financial creditors suffers from the vice of being unreasonable, irrational, unintelligible and an abuse of exercise of power. The power G bestowed on the financial creditors to cast their vote under Section 30(4) is coupled with a duty to exercise that power with utmost care, caution and reason, keeping in mind the legislative intent and the spirit of the I&B Code - fullest attempt should be made to revive the corporate debtors and not to mechanically shove them to the brink of liquidation process, H

p. 896 Copy page pinpoint

A which has the inevitable impact on larger public interests and the stakeholders in particular, including workers associated with the company.

42Copy pinpoint42. The argument, though attractive at the first blush, but if accepted, would require us to re-write the provisions of the I&B Code. It would also result in doing violence to the legislative intent of having consciously not stipulated that as a ground - to challenge the commercial wisdom of the minority (dissenting) financial creditors. Concededly, the process of resolution plan is necessitated in respect of corporate debtors in whom their financial creditors have lost hope of recovery and who have turned into non-performer or a chronic defaulter. The fact that the concerned corporate debtor was still able to carry on its business activities does not obligate the financial creditors to postpone the recovery of the debt due or to prolong their losses indefinitely. Be that as it may, the scope of enquiry and the grounds on which the decision of “approval” of the resolution plan by the CoC can be interfered with by the adjudicating authority (NCLT), has been set out in Section 31(1) read with Section D 30(2) and by the appellate tribunal (NCLAT) under Section 32 read with Section 61(3) of the I&B Code. No corresponding provision has been envisaged by the legislature to empower the resolution professional, the adjudicating authority (NCLT) or for that matter the appellate authority (NCLAT), to reverse the “commercial decision” of the CoC muchless of the dissenting financial creditors for not supporting the proposed resolution plan. Whereas, from the legislative history there is contra indication that the commercial or business decisions of the financial creditors are not open to any judicial review by the adjudicating authority or the appellate authority.

43Copy pinpoint43. It was argued that the dissenting financial creditors have not assigned any reason for recording their dissent and therefore, their action is vitiated. As per the provisions applicable at the relevant time in October 2017, there was no requirement of recording reasons for the dissent. That requirement has been introduced by an amendment to the regulations effected in 2018 w.e.f. 4th July, 2018. Whether that amendment is prospective or has retrospective effect is a matter which will be considered a little later.

44Copy pinpoint44. Suffice it to observe that in the I&B Code and the regulations framed thereunder as applicable in October 2017, there was no need for the dissenting financial creditors to record reasons for disapproving or rejecting a resolution plan. Further, as aforementioned, there is no

K. SASHIDHAR v. INDIAN OVERSEAS BANK & ORS. 897 [A. M. KHANWILKAR, J.]

provision in the I&B Code which empowers the adjudicating authority A (NCLT) to oversee the justness of the approach of the dissenting financial creditors in rejecting the proposed resolution plan or to engage in judicial review thereof. Concededly, the inquiry by the resolution professional precedes the consideration of the resolution plan by the CoC. The resolution professional is not required to express his opinion on matters within the domain of the financial creditor(s), to approve or reject the resolution plan, under Section 30(4) of the I&B Code. At best, the Adjudicating Authority (NCLT) may cause an enquiry into the “approved” resolution plan on limited grounds referred to in Section 30(2) read with Section 31(1) of the I&B Code. It cannot make any other inquiry nor is competent to issue any direction in relation to the exercise of commercial wisdom of the financial creditors - be it for approving, rejecting or abstaining, as the case may be. Even the inquiry before the Appellate Authority (NCLAT) is limited to the grounds under Section 61(3) of the I&B Code. It does not postulate jurisdiction to undertake scrutiny of the justness of the opinion expressed by financial creditors at the time of voting. To take any other view would enable even the minority dissenting financial creditors to question the logic or justness of the commercial opinion expressed by the majority of the financial creditors albeit by requisite percent of voting share to approve the resolution plan; and in the process authorize the adjudicating authority to reject the approved resolution plan upon accepting such a challenge. That is not the scope of jurisdiction vested in the adjudicating authority under Section 31 of the I&B Code dealing with approval of the resolution plan.

45Copy pinpoint45. To put it differently, since none of the grounds available under Section 30(2) or Section 61(3) of the I&B Code are attracted in the fact situation of the present case, the Adjudicating Authority (NCLT) as well as the Appellate Authority (NCLAT) had no other option but to record that the proposed resolution plan concerning the respective corporate debtor (KS&PIPL and IIL) stood rejected. Further, as no alternative resolution plan was approved by the requisite percent of voting share of the financial creditors before the expiry of the statutory period of 270 days, the inevitable sequel is to pass an order directing initiation of liquidation process against the concerned corporate debtor in the manner specified in Chapter III of the I&B Code.

46Copy pinpoint46. Realising this position, the resolution applicant and the stakeholders supporting the proposed resolution plan of the concerned H

p. 898 Copy page pinpoint

A corporate debtors, would contend that the NCLAT has failed to give effect to the amended provisions which came into effect from 23rd day of November, 2017 and the second amendment from 6th June, 2018 to Section 30(4) of the I&B Code in particular. According to them, the said amendment ought to be given retrospective effect and in any case, being retroactive in nature, ought to govern the proceedings before the NCLAT B where the appeal was pending for consideration. For considering this submission, we may advert to the Insolvency and Bankruptcy Code (Amendment) Act, 2017 (No.8 of 2018) which is deemed to have come into force on the 23rd day of November, 2017. Section 6 of this Act purports to substitute Section 30(4) of the principal Act. The amended sub-section (4) reads thus: “6. In section 30 of the principal Act, for sub-section (4), the following sub-section shall be substituted, namely:- (4) The committee of creditors may approve a resolution plan by a vote of not less than seventy-five per cent. of voting share of the financial creditors, after considering its feasibility and viability, and such other requirements as may be specified by the Board: Provided that the committee of creditors shall not approve a resolution plan, submitted before the commencement of the Insolvency and Bankruptcy Code (Amendment) Ordinance, 2017, E where the resolution applicant is ineligible under section 29A and may require the resolution professional to invite a fresh resolution plan where no other resolution plan is available with it: Provided further that where the resolution applicant referred to in the first proviso is ineligible under clause (c) of section 29A, the resolution applicant shall be allowed by the committee of creditors such period, not exceeding thirty days, to make payment of overdue amounts in accordance with the proviso to clause (c) of section 29A: Provided also that nothing in the second proviso shall be construed as extension of period for the purposes of the proviso to sub- section (3) of section 12, and the corporate insolvency resolution process shall be completed within the period specified in that sub- section.”.

47Copy pinpoint47. The change brought about by this amendment is insertion of words “after considering its feasibility and viability, and such other

K. SASHIDHAR v. INDIAN OVERSEAS BANK & ORS. 899 [A. M. KHANWILKAR, J.]

requirements as may be specified by the Board”. In addition, three provisos have been added to sub-section (4). For considering the issue on hand, the three provisos are not relevant. As regards the insertion of the above quoted words in sub-section (4), that does not alter the requirement regarding approval of a resolution plan, by a vote of not less than 75% of voting share of the financial creditors. The amendment is only to declare that the financial creditors ought to consider the feasibility and viability and such other requirements as may be specified by the Board, while exercising their option on the resolution plan - to approve or not to approve the same. It is rudimentary that the financial creditors (in most cases are national Bankers), who are called upon to consider the proposed resolution plan would take into account all the relevant materials, including the feasibility and viability and such other requirements as may be specified by the Board. Additionally, the financial creditors are also required to bear in mind that the legislative intent is to bring about resolution and revival of the corporate debtors so as to benefit not only the corporate debtor but also other stake-holders in equal measure. D

48Copy pinpoint48. Suffice it to observe that the amended provision merely restates as to what the financial creditors are expected to bear in mind whilst expressing their choice during consideration of the proposal for approval of a resolution plan. No more and no less. Indubitably, the legislature has consciously not provided for a ground to challenge the justness of the “commercial decision” expressed by the financial creditors – be it to approve or reject the resolution plan. The opinion so expressed by voting is non-justiciable. Further, in the present cases, there is nothing to indicate as to which other requirements specified by the Board at the relevant time have not been fulfilled by the dissenting financial creditors. As noted earlier, the Board established under Section 188 of the I&B Code can perform powers and functions specified in Section 196 of the I&B Code. That does not empower the Board to specify requirements for exercising commercial decisions by the financial creditors in the matters of approval of the resolution plan or liquidation process. Viewed thus, the amendment under consideration does not take the matter any further. G

49Copy pinpoint49. We may not be understood to have expressed any opinion either way about the effect of the three provisos introduced by the same amendment to Section 30(4) - as to whether it would have retrospective or retroactive effect. That question does not arise for consideration in these appeals. Our discussion is restricted to the efficacy of the H

p. 900 Copy page pinpoint

A amendment to main provision viz., Section 30(4), whereby the above quoted words (“after considering feasibility and viability, and such other requirements as may be specified by the Board”) have been inserted.

50Copy pinpoint50. The learned counsel for the resolution applicant and other stakeholders supporting the resolution plan of the concerned creditors, next relied upon the amendment to Section 30(4) which has come into force w.e.f. 6th day of June, 2018 vide the Insolvency and Bankruptcy Code (Second Amendment) Act, 2018 (No.8 of 2018). Vide section 23(iii)(a) of the said amendment Act, the word “seventy-five” in sub- section (4) of Section 30 has been substituted by the word “sixty-six”. Taking clue from this amendment, it was argued that since the amendment substitutes the threshold requirement of 75% to 66% and since the same has been brought into force when appeals were pending, the NCLAT was obliged to consider its effect on the present cases. Further, being substitution, it must be assumed that the amended provision was always there from the beginning of the Code.

51Copy pinpoint51. We are not impressed by this submission. In our opinion, by this amendment, a new norm and qualifying standard for approval of a resolution plan has been introduced. That cannot be treated as a declaratory/clarificatory or stricto sensu procedural matter as such. Whereas, the stated Amendment Act makes it expressly clear that it shall be deemed to have come into force on the 6th day of June, 2018. Thus, by mere use of expression “substituted” in Section 23(iii)(a) of the Amendment Act of 2018, it would not make the provision retrospective in operation or having retroactive effect. This interpretation is reinforced by the fact that there is no indication in the Amendment Act of 2018 that the legislature intended to undo and/or govern the decisions already taken by the CoC of the concerned corporate debtors prior to 6-06-2018.

52Copy pinpoint52. Our attention was invited to the report of the Insolvency Law Committee of March, 2018. Even the said report does not mention about introducing the amendment to Section 30(4), regarding the threshold requirement with retrospective or retroactive effect. Indeed, the report has noted about the necessity to alter the low threshold level of 25% of voting share for rejection of the resolution plan which, it felt, should be increased to 44%. It may be useful to reproduce paragraph 11 of the said report dealing with voting share threshold for decisions of the CoC, which reads thus: H

K. SASHIDHAR v. INDIAN OVERSEAS BANK & ORS. 901 [A. M. KHANWILKAR, J.]

“11.VOTING SHARE THRESHOLD FOR DECISIONS OF A THE COC 11.1 Section 21(8) of the Code provides that all decisions of the CoC shall be taken by a vote of not less than 75 percent of the voting share of the financial creditors. Regulation 25(5) read with regulation 26 of the CIRP Regulations provides that if all members B of the CoC are not present, an option to vote through electronic means must be provided. 11.2 It was represented to the Committee that the high threshold of 75 percent of voting share of financial creditors for decisions of the CoC was proving to be a road-block in the resolution process. C Effectively, as a result of the high threshold, blocking the resolution plan and other decisions of the CoC, was easier than approving these. 11.3 The Committee considered the fact that, so far, various benches of the NCLT have passed liquidation orders in 30 cases. D 76 Out of these 30 cases, only nine cases went into liquidation on account of rejection by the CoC. Further, only in one case, a liquidation order was passed owing to lack of consensus of 75 percent financial creditors for approval of the resolution plan. 77 In respect of the remaining eight cases, the plan was rejected by an overwhelming majority of voting share above 80 percent. Thus, E empirical evidence suggests that the apprehension that companies are being put into liquidation by minority creditors is pre-mature. The Committee reiterated that the objective of the Code is to respect the commercial wisdom of the CoC. F 11.4 The Committee noted the voting thresholds across other statutes and guidelines that deal/have dealt with rehabilitation of companies as follows: (a) Section 230(6) of the CA 2013 which deals with power to compromise or make arrangements with creditors and members G provides that any compromise or arrangement must be approved by 75 percent in value of creditors or class of creditors or members or class of members, as the case maybe. (b) Section 262 of the CA 201378 provided for a scheme of rehabilitation which required approval by (i) secured creditors H

p. 902 Copy page pinpoint

A representing 75 percent in value of the debts owed by the company to such creditors; and (ii) unsecured creditors representing 25 percent in value of the amount of debt owed to them. Further, in case of voluntary winding up, section 311 of the CA 2013 provided for replacement of the company liquidator by approval of 75 percent of creditors or 75 percent of members of the company.79 B (c) The Joint Lender’s Forum (“JLF”) framework formulated by the RBI (which has now been replaced) to enable creditors to identify and deal with stressed assets at an early stage prescribed a voting threshold of 60 percent (reduced from 75 percent) of creditors by value and 50 percent (reduced from 60 percent) of creditors by number in the JLF, for proceeding with the restructuring of the account.80 (d) Section 13(9) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 provided that in the case of financing of a financial asset by more than one secured creditors or joint financing of a financial asset by secured creditors, no secured creditor would be entitled to exercise any or all of the rights conferred on her under the relevant law (such as taking possession of the secured asset or takeover the management of the borrower) unless exercise of such right was agreed upon by secured creditors representing not less than 60 percent (reduced from 75 percent) 81 in value of the amount outstanding as on a record date and such action was binding on all the secured creditors. 11.5 The Committee also noted that globally, bankruptcy laws prescribe different voting thresholds for decisions of the CoC. In USA, approval of a plan requires 66 percent or more voting share in value and 50 percent or more voting share in number for each class of creditors.82 The position is similar in Canada, however, such requirement applies to each class of unsecured creditors.83 In the UK, approval of a plan under administration requires a G simple majority in value of the creditors present and voting. While such threshold is higher in Singapore as the requirement therein is to obtain 75 percent or more of voting share by value and more than 50 percent voting share in number of creditors present and voting, for approval of the plan.84 The Committee was of the view a higher threshold with the present and voting requirement,

K. SASHIDHAR v. INDIAN OVERSEAS BANK & ORS. 903 [A. M. KHANWILKAR, J.]

or a lower threshold sans the present and voting requirement, may be adopted. 11.6 After due deliberation and factoring in the experience of past restructuring laws in India and international best practices, the Committee agreed that to further the stated object of the Code i.e. to promote resolution, the voting share for approval of resolution plan and other critical decisions may be reduced from 75 percent to 66 percent or more of the voting share of the financial creditors. In addition to approval of the resolution plan under section 30(4), other critical decisions are extension of the CIRP beyond 180 days under section 12(2), replacement or appointment of RP under sections 22(2) and 27(2), and passing a resolution for liquidation under section 33(2) of the Code. Further, for approval of the other routine decisions for continuing the corporate debtor as going concern by the IRP/RP, the voting share threshold may be reduced to 51 percent or more of the voting share of the financial creditors.” (emphasis in para 11.3 supplied)

53Copy pinpoint53. Significantly, the report mentions that the empirical record suggests that the apprehension regarding companies are being put into liquidation by minority creditors is pre-mature and further that the objective of the Code is to respect the commercial wisdom of the CoC. As aforesaid, the amendment of 2018 cannot be considered as clarificatory but it envisages a new norm of threshold for considering the decision of the CoC as approval of the resolution plan. The Amendment Act of F 2018 having come into force w.e.f. 6th day of June, 2018, therefore, will have prospective application and apply only to the decisions of CoC taken on or after that date concerning the approval of resolution plan.

54Copy pinpoint54. Reliance was placed by the resolution applicants and the stakeholders supporting the resolution plan of the concerned corporate G debtors, on the decisions of this Court in Gottumukkala Venkata Krishamraju (supra), B.K. Educational Services Private Ltd. (supra), and State Bank of India (supra). In the case of Gottumukkala (supra), this Court, after adverting to the dictum in Government of India vs. India Tobacco Association (supra), and Zile Singh vs. State of Haryana (supra), opined in paragraph 15 as under: H

p. 904 Copy page pinpoint

A “15. Ordinarily wherever the word ‘substitute’ or ‘substitution’ is used by the legislature, it has the effect of deleting the old provision and make the new provision operative. The process of substitution consists of two steps: first, the old rule is made to cease to exist and, next, the new rule is brought into existence in its place. The rule is that when a subsequent Act amends an earlier one in such B a way as to incorporate itself, or a part of itself, into the earlier, then the earlier Act must thereafter be read and construed as if the altered words had been written into the earlier Act with pen and ink and the old words scored out so that thereafter there is no need to refer to the amending Act at all. No doubt, in certain situations, the Court having regard to the purport and object sought to be achieved by the Legislature may construe the word “substitution” as an “amendment” having a prospective effect. Therefore, we do not think that it is a universal rule that the word ‘substitution’ necessarily or always connotes two severable steps, that is to say, one of repeal and another of a fresh enactment even if it implies two steps. However, the aforesaid general meaning is to be given effect to, unless it is found that legislature intended otherwise. Insofar as present case is concerned, as discussed hereinafter, the legislative intent was also to give effect to the amended provision even in respect of those incumbents who were in service as on September 01, 2016.” (emphasis supplied) The Court has restated the position that there can be no hard and fast rule merely because of the usage of expression “substituted” in the amendment Act. For, in certain situations like the case on hand, the amendment will have prospective effect as it is not intended to reverse or nullify the decisions already taken by the CoC of the concerned corporate debtors before coming into force of the amended provision.

55Copy pinpoint55. This Court in Thirumalai Chemicals Limited vs. Union of G India and Ors.,24 in paragraph 23, observed that it is trite law that every statute is prospective unless it is expressly or by necessary implication made to have retrospective operation. This proposition has been reiterated in Purbanchal Cables & Conductors (P) Ltd. vs. Assam SEB and Anr.25 in paragraphs 51, which reads thus: 24 H (2011) 6 SCC 739 25 (2012) 7 SCC 462

K. SASHIDHAR v. INDIAN OVERSEAS BANK & ORS. 905 [A. M. KHANWILKAR, J.]

“51. There is no doubt about the fact that the Act is a substantive law as vested rights of entitlement to a higher rate of interest in case of delayed payment accrues in favour of the supplier and a corresponding liability is imposed on the buyer. This Court, time and again, has observed that any substantive law shall operate prospectively unless retrospective operation is clearly made out in the language of the statute. Only a procedural or declaratory law operates retrospectively as there is no vested right in procedure. (emphasis supplied) It may be useful to notice the exposition in CIT vs. Vatika C Township (P) Ltd.26 In paragraph 29, the Court observed thus: “29. The obvious basis of the principle against retrospectivity is the principle of “fairness”, which must be the basis of every legal rule as was observed in L’Office Cherifien des Phosphates v. Yamashita-Shinnihon Steamship Co. Ltd.7 Thus, legislations D which modified accrued rights or which impose obligations or impose new duties or attach a new disability have to be treated as prospective unless the legislative intent is clearly to give the enactment a retrospective effect; unless the legislation is for purpose of supplying an obvious omission in a former legislation or to explain a former legislation. E We need not note the cornucopia of case law available on the subject because aforesaid legal position clearly emerges from the various decisions and this legal position was conceded by the counsel for the parties. In any case, we shall refer to few judgments containing this dicta, a little later.” F (emphasis supplied) Once again, in Vijayalakshmi Rice Mills, New Contractors Co. and Ors. vs. State of Andhra Pradesh27, in paragraph 5, the Court observed thus: G “5. Mr Nariman appearing on behalf of the appellants has laid great emphasis on the word “substituted” occurring in clause 2 of the Rice (Andhra Pradesh) Price Control (Third Amendment) 26 (2015) 1 SCC 1 27 (1976) 3 SCC 37 H

p. 906 Copy page pinpoint

A Order, 1964 and has urged that the claim of the appellants cannot be validly ignored. Elaborating his submission, counsel has contended that as the prices fixed by the Government are meant for the entire season, the appellants have to be paid at the controlled price as fixed vide the Rice (Andhra Pradesh) Price Control (Third Amendment) Order, 1964, regardless of the dates on which the supplies were made. We cannot accede to this contention. It is no doubt true that the literal meaning of the word “substitute” is “to replace” but the question before us is from which date the substitution or replacement of the new schedule took effect. There is no deeming clause or some such provision in the Rice (Andhra Pradesh) Price Control (Third Amendment) Order, 1964 to indicate that it was intended to have a retrospective effect. It is a well recognized rule of interpretation that in the absence of express words or appropriate language from which retrospectivity may be inferred, a notification takes effect from the date it is issued and not from any prior date. The principle is also well settled that statutes should not be construed so as to create new disabilities or obligations or impose new duties in respect of transactions which were complete at the time of the amending Act came into force. See Nani Gopal Mitra v. State of Bihar1.” E (emphasis supplied)

56Copy pinpoint56. As regards the decision in B.K. Educational (supra), the Court was called upon to consider the question as to whether the Limitation Act, 1963 will apply to applications that are made under Section 7 and/or Section 9 of the Code on and from its commencement on 01-12-2016 till F 06-06-2018. That question was examined in the context of Section 238- A inserted in the I&B Code by the self-same amendment Act of 2018. The Court after adverting to the contents of the report of the Insolvency Law Committee of March, 2018 and other provisions of the Code and other enactments, opined that Section 238-A was clarificatory in nature G and being a procedural law, came to hold that it had retrospective effect. The Court held that taking any other view would result in an incongruous situation as the provisions of the Limitation Act would apply in some set of cases to be decided by the same Tribunal and not in other set of cases. Besides, the Court adverted to the principle that right to sue

K. SASHIDHAR v. INDIAN OVERSEAS BANK & ORS. 907 [A. M. KHANWILKAR, J.]

accrues on the date when default occurs and if the default occurred even three years prior to the date of filing of the application, the same cannot be treated as “debt that is due and payable” or “debt” due.

57Copy pinpoint57. In the case of State Bank of India (supra), the Court considered the question as to whether Section 14 of the I&B Code, which provides for moratorium for the period mentioned in the Code, insolvency would apply to a personal guarantor of a corporate debtor. Even in this judgment, the Court after adverting to all the relevant materials and the governing provisions in the Code, concluded that the amended Section 14 was only to clarify and set at rest what the Committee thought was an over-board interpretation of Section 14. On that reasoning the Court concluded that the amendment of Section 14 had retrospective effect. C

58Copy pinpoint58. In the present case, however, the amendment under consideration pertaining to Section 30(4), is to modify the voting share threshold for decisions of the CoC and cannot be treated as clarificatory in nature. It changes the qualifying standards for reckoning the decision of the CoC concerning the process of approval of a resolution plan. The D rights/obligations crystallized between the parties and, in particular, the dissenting financial creditors in October 2017, in terms of the governing provisions can be divested or undone only by a law made in that behalf by the legislature. There is no indication either in the report of the Committee or in the Amendment Act of 2018 that the legislature intended to undo the decisions of the CoC already taken prior to 6th day of June,

2018. It is not possible to fathom how the provisions of the amendment Act 2018, reducing the threshold percent of voting share can be perceived as declaratory or clarificatory in nature. In such a situation, the NCLAT could not have examined the case on the basis of the amended provision. For the same reason, the NCLT could not have adopted a different approach in these matters. Hence, no fault can be found with the impugned decision of the NCLAT.

59Copy pinpoint59. In our view, no other contention raised to support the resolution plan of the concerned corporate debtors would be of any avail. Even so, we may advert to the argument regarding the effect of amendment of G Regulation 39 which has come into force with effect from 4th July, 2018. Prior to that amendment, Regulation 39(3) merely provided that the Committee may approve any resolution plan with such modifications as it deems fit. This was amended vide Notification dated 3rd July, 2018 and the substituted Regulation 39(3), now reads thus: H

p. 908 Copy page pinpoint

A “39. Approval of resolution plan.- xxx xxx xxx (3) The committee shall evaluate the resolution plans received under sub-regulation (1) strictly as per the evaluation matrix to identify the best resolution plan and may approve it with such modification as it deems fit: PROVIDED that the committee shall record the reasons for approving or rejecting a resolution plan.”

60Copy pinpoint60. In the first place, amendment to regulation cannot have retrospective effect so as to impact the decision of the CoC of the concerned corporate debtor – taken before the amendment of the said regulation. There is no indication in the Code as amended or the regulations to suggest that as a consequence of this amendment the decisions aleady taken by the concerned CoC prior to 3rd July, 2018 be treated as deemed to have been vitiated or for that matter, necessitating reversion of the proposal to CoC for recording reasons, that too beyond the statutory period of 270 days. A new life cannot be infused in the resolution plan which did not fructify within the statutory period, by such circuitous route.

61Copy pinpoint61. Assuming that this provision was applicable to the cases on hand, non-recording of reasons for approving or rejecting the resolution plan by the concerned financial creditor during the voting in the meeting of CoC, would not render the final collective decision of CoC nullity per se. Concededly, if the objection to the resolution plan is on account of infraction of ground(s) specified in Sections 30(2) and 61(3), that must be specifically and expressly raised at the relevant time. For, the approval of the resolution plan by the CoC can be challenged on those grounds. However, if the opposition to the proposed resolution plan is purely a commercial or business decision, the same, being non-justiciable, is not open to challenge before the Adjudicating Authority (NCLT) or for that matter the Appellate Authority (NCLAT). If so, non-recording of any reason for taking such commercial decision will be of no avail. In the present case, admittedly, the dissenting financial creditors have rejected the resolution plan in exercise of business/commercial decision and not because of non-compliance of the grounds specified in Section 30(2) or Section 61(3), as such. Resultantly, the amended regulation pressed into service, will be of no avail. H

K. SASHIDHAR v. INDIAN OVERSEAS BANK & ORS. 909 [A. M. KHANWILKAR, J.]

62Copy pinpoint62. Relying on the dictum in Mardia Chemicals (supra), in A particular paragraph 45, it was argued that even in regard to the option exercisable by the financial creditors under Section 30(4), the requirement of giving reasons for approval or disapproval of the proposed resolution plan must be read into it. In that case, the Court had considered the mechanism specified in Section 13 of the Securitisation and B Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, which provided for giving a notice to the borrower and upon receipt of such notice the borrower could raise objections as to why the proposed action of the secured creditor was uncalled for. In that context, this Court in paragraph 45, observed thus: “45. In the background we have indicated above, we may consider as to what forums or remedies are available to the borrower to ventilate his grievance. The purpose of serving a notice upon the borrower under sub-section (2) of Section 13 of the Act is, that a reply may be submitted by the borrower explaining the reasons as to why measures may or may not be taken under sub-section (4) of Section 13 in case of non- compliance with notice within 60 days. The creditor must apply its mind to the objections raised in reply to such notice and an internal mechanism must be particularly evolved to consider such objections raised in the reply to the notice. There may be some meaningful consideration of the objections raised rather than to ritually reject them and proceed to take drastic measures under sub-section (4) of Section 13 of the Act. Once such a duty is envisaged on the part of the creditor it would only be conducive to the principles of fairness on the part of the banks and financial institutions in dealing with their borrowers to apprise them of the reason for not accepting the objections or points raised in reply to the notice served upon them before proceeding to take measures under sub- section (4) of Section 13. Such reasons, overruling the objections of the borrower, must also be communicated to the borrower by the secured creditor. It will only be in fulfillment of a requirement of reasonableness and fairness in the dealings of institutional financing which is so important from the point of view of the economy of the country and would serve the purpose in the growth of a healthy economy. It would certainly provide guidance to the secured debtors in general in conducting H

p. 910 Copy page pinpoint

A the affairs in a manner that they may not be found defaulting and being made liable for the unsavoury steps contained under sub- section (4) of Section 13. At the same time, more importantly, we must make it clear unequivocally that communication of the reasons for not accepting the objections taken by the secured borrower may not be taken to give occasion to resort to such proceedings which are not permissible under the provisions of the Act. But communication of reasons not to accept the objections of the borrower, would certainly be for the purpose of his knowledge which would be a step forward towards his right to know as to why his objections have not been accepted by the secured creditor who intends to resort to harsh steps of taking over the management/business of viz. secured assets without intervention of the court. Such a person in respect of whom steps under Section 13(4) of the Act are likely to be taken cannot be denied the right to know the reasons of non-acceptance and of his objections. It is true, as per the provisions under the Act, D he may not be entitled to challenge the reasons communicated or the likely action of the secured creditor at that point of time unless his right to approach the Debts Recovery Tribunal as provided under Section 17 of the Act matures on any measure having been taken under sub- E section (4) of Section 13 of the Act.” (emphasis supplied) In the present case, however, we are concerned with the provisions of I&B Code dealing with the resolution process. The dispensation provided in the I&B Code is entirely different. In terms of Section 30 of the I&B Code, the decision is taken collectively after due negotiations between the financial creditors who are constituents of the CoC and they express their opinion on the proposed resolution plan in the form of votes, as per their voting share. In the meeting of CoC, the proposed resolution plan is placed for discussion and after full interaction in the presence of all concerned and the resolution professional, the constituents of the CoC finally proceed to exercise their option (business/commercial decision) to approve or not to approve the proposed resolution plan. In such a case, non-recording of reasons would not per se vitiate the collective decision of the financial creditors. The legislature has not envisaged challenge to the “commercial/business decision” of the H

K. SASHIDHAR v. INDIAN OVERSEAS BANK & ORS. 911 [A. M. KHANWILKAR, J.]

financial creditors taken collectively or for that matter their individual opinion, as the case may be, on this count.

63Copy pinpoint63. It was then contended that NCLAT committed manifest error in not calling upon the dissenting financial creditors to respond to the applications filed in the concerned appeals pending before it, including with a prayer to allow the resolution applicant to revise the resolution plan. We find no merits in this submission. The reliefs claimed in the stated application filed before the NCLAT would not take the matter any further. For, it is enough for the dissenting financial creditors to disapprove the proposed resolution plan by voting as per its voting share, based on commercial decision. Indeed, if the opposition of the dissenting financial creditors is in regard to matter(s) within the jurisdiction of the C Tribunal ascribable to Sections 30(2) or 61(3), then the situation may be somewhat different. But that is not in issue in these cases.

64Copy pinpoint64. As regards the application by the resolution applicant for taking his revised resolution plan on record, the same is also devoid of merits inasmuch as it is not open to the Adjudicating Authority to entertain a D revised resolution plan after the expiry of the statutory period of 270 days. Accordingly, no fault can be found with the NCLAT for not entertaining such application.

65Copy pinpoint65. The counsel appearing for the resolution applicant and the stakeholders supporting the resolution plan were at pains to persuade us E to exercise powers under Article 142 of the Constitution of India. Inasmuch as, in both the cases, the vote of approval exceeded more than 66% of the voting share of the financial creditors and yet the benefit of the amended provision could not be availed, as it came only during the pendency of the appeal before the NCLAT. The submission is that this F Court may set aside the order passed by the Tribunal and relegate the parties in both the cases, before the NCLT for considering the proceedings afresh in light of the amended provision reducing the threshold requirement of percent of voting share of financial creditors to 66%. We are afraid, it is not possible for us to exercise powers under Article 142 of the Constitution which will result in issuing directions in G the teeth of the provisions as applicable to the cases on hand. We, therefore, decline to accede to this request. Having answered the core issues and to avoid prolixity, we do not wish to dilate on the exposition in other reported decisions relied upon by the counsel. H

p. 912 Copy page pinpoint

66Copy pinpoint66. As a result, we hold that the NCLAT has justly concluded in the impugned decision that the resolution plan of the concerned corporate debtor(s) has not been approved by requisite percent of voting share of the financial creditors; and in absence of any alternative resolution plan presented within the statutory period of 270 days, the inevitable sequel is to initiate liquidation process under Section 33 of the Code. That view is B unexceptional. Resultantly, the appeals must fail.

67Copy pinpoint67. In view of the above, the appeals are dismissed. The companion applications also stand dismissed. No order as to costs.

Kalpana K. Tripathy Appeals dismissed. C