2023 (9) TMI 461 - SCH - Insolvency and Bankruptcy

Interpretation of statute - Scope of the term OR - Regulation 39(1A) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 - whether the word or in the said sub-regulation should be read as in addition to and not to the exclusion of ? - HELD THAT - NCLAT is right in observing that, the word or in the said sub-regulation should be read as in addition to and not to the exclusion of . This means that the resolution professional may, if envisaged in the request of the resolution plan, can allow under the said sub-regulation, modification of the resolution plan received, albeit only once. However, this will not have any effect on and bar recourse to the challenge mechanism when adopted by the Committee of Creditors to enable resolution applicants to improve/better their plans. Appeal dismissed.

Summary

Issues involved: Interpretation of Regulation 39(1A) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016

The Supreme Court granted permission to file the appeal and agreed with the findings of the National Company Law Appellate Tribunal (NCLAT) at Chennai regarding the interpretation of Regulation 39(1A). The Court clarified that the word 'or' in the sub-regulation should be understood as 'in addition to' and not 'to the exclusion of.' This interpretation allows the resolution professional to permit modifications to the resolution plan received, as long as it is envisaged in the request of the resolution plan, albeit only once. Importantly, this ruling does not prevent the Committee of Creditors from challenging the resolution plan, providing an opportunity for resolution applicants to enhance their plans. As a result, the appeal was dismissed, and any pending applications were disposed of accordingly.