Resolution Plans Cannot Be Rejected Based on Pending Avoidance Applications Under IBC Section 66

The SC clarified that applications for fraudulent and wrongful trading under Section 66 of IBC are distinct from avoidance applications under Sections 43, 45, and 50. The Court upheld NCLT's approval of the Resolution Plan, ruling that NCLAT had improperly interfered with the Committee of Creditors' commercial wisdom regarding recoveries from fraudulent transactions. The Court emphasized that judicial review of resolution plans is limited to compliance with Section 30(2) requirements, with commercial decisions left to the CoC's discretion. The SC further determined that the resolution plan did not violate RBI or NHB Acts, as neither statute mandates full payment of deposits. The NCLT was directed to separately adjudicate avoidance applications and Section 66 applications. .....

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