The appellant/promoter filed this appeal in opposition to the order made by the adjudicating authority (NCLT), Bengaluru Bench on January 8, 2020, which resulted in the liquidation of the corporate debtor, M/s Unishire Housing LLP, following the start of the corporate insolvency resolution process at the request of the financial creditor, M/s VSL Securities Pvt. Ltd.
In the instant case titled Praveen Kumar Nanda Kumar v. VSL Securities Pvt. Ltd. & Ors, the issue raised for clarification before the NCLAT was:
- Whether the decision of the Committee of Creditors be questioned?
With regard to this issue, the NCLAT noted that no Resolution Plan was presented in the current case within the allotted time frames because the liquidation cost could not be determined and the liquid assets that were readily available only had a value of Rs. 29,60,000/- while the total claims made against the Corporate Debtor totaled Rs. 2,35,72,27,259/-. There being no other option, a majority of 70.97 percent of the Committee of Creditors recommended starting the liquidation process. It is clearly established that neither the Adjudicating Authority nor even this Appellate Tribunal may contest the Committee of Creditors' business judgement about the viability and feasibility of the Resolution Plan. Similarly, the Committee of Creditors' recommendation to liquidate the Corporate Debtor after a thorough assessment of its assets and liabilities and the absence of a Resolution Plan would be a business decision made in the Committee of Creditors' domain of commercial wisdom and not subject to judicial review.
We find no validity in the immediate appeal because the Corporate Insolvency Resolution Process is complete and all decisions made throughout it are upheld. As a result, the appeal was denied.
The NCLAT categorically stated that," Likewise, the decision of the Committee of Creditors recommending liquidation of the Corporate Debtor after proper evaluation of the assets and liabilities of Corporate Debtor with no Resolution Plan forthcoming would be a business decision falling within the domain of commercial wisdom of the Committee of Creditors which is not amenable to judicial review. Admittedly, the Corporate Insolvency Resolution Process period has expired and the order of admission on application under Section 7 culminating in passing of impugned order of liquidation has not been assailed by the Appellant".