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TMI Blog2024 (9) TMI 1362X X X X Extracts X X X X X X X X Extracts X X X X ..... f the IBC to take action on any issue relating to the insolvency proceedings. Thus, the resolution plan decided by the CoC shall be put up for consideration before the Adjudicating Authority, which forum alone shall finally decide whether the CoC has performed its fiduciary duty as per the legislative mandate of the IBC. This Court is not enjoined upon to exercise its power of judicial review and thereby usurp upon the powers of the NCLT to inquire into the commercial wisdom of the CoC whereby the Resolution Plan of the petitioner was rejected vide impugned letter dated 18.09.2024. In the end, a last desperate attempt is made by the petitioner that it is willing to renew its offer and match the offer given by the SRA in every aspect, but the same cannot be entertained by this Court. Although there is no gainsaying that in matters of public funds auction the best methodology for discovering fair value and the principle criteria is to ensure maximizing the recovery, the bottom line is that the decision of the CoC shall definitely be considered by the NCLT in a just and expedient manner, and if it deems fit it, may even allow Open Court Bidding in accordance with law - the present wri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of respondent no. 2, 4 5 in the meeting held on 05.09.2024 throwing all commercial norms financial prudence to the wind. It is pertinent to mention that respondent no. 3 Punjab National Bank is lead secured creditor. 3. Mr. Rajiv Nayar, learned Senior Advocate for the petitioner, while inviting the attention of this Court to the result of the bidding process, has pointed out that the petitioner as one of the Resolution Applicant [ RA ] bided in the e-auction held on 29.07.2024 and had offered revival plan by infusion of Rs. 109,87,50,000/- (Rupees One Hundred and Nine Crores Eighty Seven Lakh Fifty Thousand) (Annexure P-3 ) payable to the secured creditors over a period of 12 months 1 , which was the highest bid and yet it has been declined by the CoC on 18.09.2024 in an arbitrary manner, exhibiting complete lack of commercial wisdom despite the fact that the Successful Resolution Applicant {SRA} had offered to infuse Rs. 99 crores in thirty days besides overlooking the fact that the petitioner had made a revised offer to make payment of the second instalment of Rs. 75 crores within 90 days during the time deliberations were going in the CoC. 4. Learned Senior Advocate for the peti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Asset Reconstruction Company Limited, submitted that in the realm of a private contract between the parties and the bidding process, the petitioner/bidder is only entitled to be considered but there is no rule of thumb that the highest bidder should also be accorded priority or be preferred for the Resolution Plan. It was urged that the IBC [Insolvency and Bankruptcy Code, 2016] is a complete Code in itself which cannot be by-passed and this is a case where the CoC, after a series of deliberations, in its commercial wisdom , accepted the Resolution Plan bided/submitted by respondent No. 4 envisaging a total payment of Rs. 99 crores within a period of 30 days. 6. It was vehemently urged that in terms of Sections 31 2 and 34 3 of the IBC, the Resolution Plan accepted by the CoC shall be placed for approval before the Adjudicating Authority/ NCLT [National Company Law Tribunal] and the petitioner is at liberty to air his grievances by filing objections before the NLCT and cannot approach this Court in writ jurisdiction. Alternatively, it was argued that although the respondent No. 4 is not enjoined upon to justify the decision arrived at by the CoC, it could be appreciated that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mercial wisdom of CoC is given such a status of primacy that the same is considered rather a matter nonjusticiable in any adjudicatory process, be it by the Adjudicating Authority or even by this Court. However, the commercial wisdom of CoC means a considered decision taken by CoC with reference to the commercial interests and the interest of revival of the corporate debtor and maximization of value of its assets. This wisdom is not a matter of rhetoric but is denoting a well-considered decision by the protagonist of CIRP i.e., CoC. As observed by this Court in K. Sashidhar (supra), the financial creditors forming CoC 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 expressed by them after due deliberations in CoC meetings through voting, as per voting shares, is a collective business decision. This Court also observed in K. Sashidhar that 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. These observations read with the observations in Essar Steel (supra) with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n integrity in discharging their roles and functions as envisioned under the Code. (c) maintain objectivity during the decision-making process. (d) foster informed decision making and share with the CoC/Insolvency Professional any relevant information relating to transactions, guarantees, recoveries, claims, etc. relating to the corporate debtor. Independence and impartiality (e) disclose to the CoC/Insolvency Professional the details of any existing or potential conflict of interest arising due to pecuniary, personal or professional relationship with any stakeholder, immediately on becoming aware of it. 14. In view of the aforesaid guidelines coupled with the relevant provisions of the IBC, which have been referred to during the course of arguments, this Court is not enjoined upon to exercise its power of judicial review and thereby usurp upon the powers of the NCLT to inquire into the commercial wisdom of the CoC whereby the Resolution Plan of the petitioner was rejected vide impugned letter dated 18.09.2024. 15. In the end, a last desperate attempt is made by the petitioner that it is willing to renew its offer and match the offer given by the SRA in every aspect, but the same c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uidator under this section, all powers of the board of directors, key managerial personnel and the partners of the corporate debtor, as the case may be, shall cease to have effect and shall be vested in the liquidator. (3) The personnel of the corporate debtor shall extend all assistance and cooperation to the liquidator as may be required by him in managing the affairs of the corporate debtor and provisions of section 19 shall apply in relation to voluntary liquidation process as they apply in relation to liquidation process with the substitution of references to the liquidator for references to the interim resolution professional. (4) The Adjudicating Authority shall by order replace the resolution professional, if (a) the resolution plan submitted by the resolution professional under section 30 was rejected for failure to meet the requirements mentioned in sub-section (2) of section 30; or (b) the Board recommends the replacement of a resolution professional to the Adjudicating Authority for reasons to be recorded in writing. (5) For the purposes of clause (a) of sub-section (4), the Adjudicating Authority may direct the Board to propose the name of another insolvency profession ..... 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