Name of the case: Ramakrishan Forgings Limited v Ravindra Loonkar & Anr

Case Number: Civil Appeal No.1527 of 2022

Name of Judges: Hon’ble Judges Mr Ahasanduddin Amanullah and Prashant Kumar Mishra

Order Date: 21.11.2023

Facts of the Case:

• ACIL (“Corporate Debtor”) was admitted into Corporate Insolvency Resolution Process (“CIRP”) under the IBC by the NCLT.
• The Resolution Plan submitted by Ramkrishna Forgings Limited (“Successful Resolution Applicant/SRA”) was approved by the Committee of Creditors (CoC) for the Corporate Debtor. Accordingly, the Resolution Professional filed an application under Section 30(6) of IBC before the NCLT, seeking approval of resolution plan
• On 01.09.2021, the NCLT kept the approval of SRA’s Resolution Plan in abeyance and directed the Official Liquidator (OL) to provide exact figures/value of assets. The SRA filed an appeal before the National Company Law Appellate Tribunal (“NCLAT”) against the order dated 01.09.2021.

The Hon’ble Supreme Court observed and held as follows:

• The main issue before the Supreme Court was regarding the jurisdiction of the NCLT’s to order a revaluation when there were no objections raised regarding the Resolution Plan’s Approval process. The Court had the question of whether the NCLT & NCLAT have overstepped their powers in overlooking the decision of the CoC(Committee of Creditors).
• The Supreme Court held that the Resolution Professional has compiled with the statutory terms of involving two approved valuers for giving reports regarding the fair market value and the liquidation value.
• The Court emphasised the fact that the NCLT should not interfere with the commercial decisions of the CoC, especially when there were no irregularities raised. The Judgment also underlined the fact that the objective of the Resolution Plan was revival and not liquidation.
• The Court highlighted the CoC’s Authority to decide on the Corporate Debtor’s Debt Resolution.