Rejection of the appellant's proposal for settlement u/s 12A of ...

Creditors reject settlment proposal, tribunal upholds decision to expedite resolution.

Case Laws     IBC

November 7, 2024

Rejection of the appellant's proposal for settlement u/s 12A of the Insolvency and Bankruptcy Code (IBC) by the Committee of Creditors (CoC) and the National Company Law Appellate Tribunal's (NCLAT) decision upholding the denial of another opportunity to submit a Section 12A proposal. The key points are: 80.22% of CoC members had already voted against the appellant's settlement proposal, deeming it unfeasible and commercially unviable. Simultaneously, the Successful Resolution Applicant's (SRA) resolution plan was approved by 80.84% of the CoC. The NCLAT emphasized the primacy of the CoC's commercial wisdom, stating that the suspended management cannot insist on consideration of its proposal when the CoC has categorically decided against it. The Tribunal also noted the time-sensitive nature of IBC proceedings and the need to avoid indefinite delays, as the resolution plan had been pending for nearly four years. Consequently, the NCLAT dismissed the appeal, finding no error in the Adjudicating Authority's decision to disallow further opportunities for the appellant to submit a Section 12A proposal.

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