In a recent ruling, the NCLAT upheld the resolution plan approved by the Committee of Creditors (CoC), denying the suspended promoter's request for a fresh valuation post-approval, underscoring the principle of commercial wisdom.
NCLAT Upholds Resolution Plan and Rejects Fresh Valuation Plea
The National Company Law Appellate Tribunal (NCLAT) has upheld a resolution plan approved by the Committee of Creditors (CoC) while dismissing a plea by a suspended promoter for a fresh valuation of the corporate debtor's assets. The Tribunal emphasized that once a resolution plan is ratified, the valuation determined by the CoC retains its finality and is safeguarded by the principles of commercial wisdom.
This ruling highlights the NCLAT's firm stance on maintaining the integrity of decisions made by the CoC under the Insolvency and Bankruptcy Code (IBC). The decision reinforces that the valuation exercise and the choices made during the insolvency process are to be respected, as they reflect the collective judgment of the creditors.
By rejecting the call for a new valuation, the NCLAT has reiterated that parties seeking to challenge an approved resolution must present compelling justifications beyond mere dissatisfaction with the process. This approach is designed to ensure that approved plans are not unduly delayed or disrupted.
The implications for practitioners are significant, as this ruling supports the finality of resolutions approved by the CoC, promoting stability and predictability in insolvency proceedings. Legal professionals must counsel their clients to engage fully in the valuation processes and the consequent resolution plans to avoid unfavorable outcomes.
Citations
- NCLAT Order (2026) 1 NCLAT 2
