The National Company Law Appellate Tribunal has reaffirmed the primacy of the Committee of Creditors' commercial wisdom in the insolvency resolution process, setting aside an order that improperly remanded a duly approved resolution plan back for reconsideration. This judgment reinforces the statutory boundaries of judicial review under the Insolvency and Bankruptcy Code, 2016, and provides critical clarity for resolution professionals and stakeholders navigating post-approval challenges.
Background & Facts
The Dispute
The Corporate Debtor, M/s Adel Landmarks Ltd., was admitted into Corporate Insolvency Resolution Process (CIRP) on 05.12.2018. The Resolution Professional (RP) invited Expressions of Interest (EoI) in Form-G. The Appellant, M/s Art Construction Pvt. Ltd., submitted a resolution plan which underwent extensive negotiations with the Committee of Creditors (CoC). The plan was approved by the CoC in its 27th meeting held on 15.09.2022 with a vote-share of 82.66%. The RP filed I.A. No. 1817 of 2023 before the National Company Law Tribunal (NCLT), New Delhi, seeking approval of the plan under Section 31 of the IBC. The Adjudicating Authority, however, dismissed the application on 27.02.2026 and remanded the plan back to the CoC for reconsideration on five grounds.
Key Facts
- The Corporate Debtor was incorporated to develop residential projects in Delhi and surrounding areas.
- The Appellant-SRA submitted its resolution plan on 23.06.2022, with an addendum dated 23.08.2022.
- The CoC approved the plan on 15.09.2022 with 82.66% voting share, including 41% from the home-buyer class (approximately 4,500 allottees).
- The RP issued a Letter of Intent (LoI) to the SRA on 10.11.2022.
- The SRA furnished a Performance Bank Guarantee on 13.12.2022.
- The Directorate of Enforcement (ED) issued a Provisional Attachment Order (PAO) dated 09.01.2026 on certain assets of the Corporate Debtor, after CoC approval.
- The Khan Property in Bangalore, belonging to Mr. K.H. Khan and Mrs. Shaheda Begum, was subject to litigation since IA No. 4648 of 2020, dismissed by NCLT on 30.04.2024, with directions to the RP to exclude it from the CIRP scope.
- The Hon'ble Supreme Court granted interim protection to the Khans on 15.11.2025 but directed continuation of CIRP.
- BPTP Ltd. filed IA No. 5717 of 2024 objecting to 30 flats in Project Era Divine Court; NCLT dismissed it on 05.06.2025.
- The Department of Town and Country Planning (DTCP) filed IA No. 1399 of 2025 seeking exclusion of 13 licenses issued to subsidiaries; the resolution plan addressed this by earmarking funds for license renewal fees.
- The resolution plan explicitly provided that home-buyers who had not filed claims would be treated equally with those who had.
- The CoC reaffirmed its approval of the plan in its 35th meeting held on 13.03.2026, despite the impugned order.
Procedural History
- 05.12.2018: CIRP initiated against M/s Adel Landmarks Ltd.
- 15.09.2022: CoC approved resolution plan with 82.66% vote-share.
- 13.12.2022: SRA submitted Performance Bank Guarantee.
- 23.06.2022 & 23.08.2022: Resolution plan and addendum submitted.
- 18.01.2023: RP filed I.A. No. 1817 of 2023 seeking approval under Section 31.
- 27.02.2026: NCLT (Adjudicating Authority) dismissed I.A. No. 1817 of 2023 and remanded plan to CoC on five grounds.
- 13.03.2026: CoC held 35th meeting and reiterated approval of plan.
- 27.03.2026: Appellant filed Company Appeal (AT) (Insolvency) No. 460 of 2026 before NCLAT.
- 16.04.2026: NCLAT delivered judgment.
The Parties' Positions
Appellant (SRA): Argued that the Adjudicating Authority had no jurisdiction to remand the plan as all five grounds were either already addressed in the plan, pending before other forums, or protected under Section 32A of the IBC. Emphasized that the CoC’s commercial decision, backed by majority vote, was non-justiciable.
Resolution Professional (R1): Supported the SRA, contending that the grounds for remand were redundant, legally untenable, and violated the statutory scheme of IBC. Highlighted that the CoC had full knowledge of all issues at the time of approval.
Class of Creditors (R2 - Homebuyers): Urged the Tribunal to uphold the plan, noting that 4,500 homebuyers, many senior citizens, had waited over 14 years for possession and faced irreparable harm from further delay.
Respondents R3-R7: Supported the SRA, asserting that the Adjudicating Authority had overstepped its limited judicial review powers under Sections 30(2) and 31 of the IBC.
Relief Sought
The Appellant sought: (1) Setting aside of the Adjudicating Authority’s order dated 27.02.2026; (2) Directing the Adjudicating Authority to consider and approve the resolution plan submitted by the SRA; (3) Expeditious disposal of the application within 60 days.
The Legal Issue
The central question was whether the Adjudicating Authority under the IBC can remand a resolution plan approved by the Committee of Creditors with a statutory majority on grounds that are either already addressed in the plan, pending before other forums, or arise post-approval, without identifying a specific violation of Section 30(2) or material irregularity in the CIRP process.
Arguments Presented
For the Appellant/Petitioner
The Appellant, through senior counsel Krishnendu Datta and Abhijeet Sinha, argued that the Adjudicating Authority’s remand order was a clear violation of the principle of commercial wisdom of the CoC, as established in K. Sashidhar v. Indian Overseas Bank and Committee of Creditors of Essar Steel v. Satish Kumar Gupta. They contended that the five grounds for remand were either: (i) already considered by the CoC; (ii) protected under Section 32A of the IBC (ED attachments); (iii) subject to pending litigation where the plan had incorporated safeguards; or (iv) addressed by undertakings and provisions in the plan itself. They emphasized that judicial review under Section 31 is limited to verifying compliance with Section 30(2), not re-evaluating commercial feasibility.
For the Respondent/State
The Resolution Professional and other respondents supported the Appellant’s position. They argued that the Adjudicating Authority had no statutory basis to interfere with the CoC’s decision. The ED’s provisional attachment was post-approval and protected under Section 32A. The Khan Property was excluded per Supreme Court directions. The 30 flats were subject to an undertaking and NCLT’s dismissal of BPTP’s objection. DTCP licenses were accounted for in Clause 29 of the plan. Homebuyer claims were treated equitably. The CoC’s 35th meeting reaffirmed approval, confirming the plan’s legitimacy.
The Court's Analysis
The NCLAT undertook a rigorous statutory interpretation of Sections 30 and 31 of the IBC, emphasizing that the Adjudicating Authority’s role is not to substitute its commercial judgment for that of the CoC. The Tribunal held that judicial review under Section 31 is confined to verifying whether the resolution plan satisfies the requirements under Section 30(2), which include payment of insolvency resolution process costs, repayment of operational debts, and compliance with the IBC framework.
"The legislature, consciously, has not provided any ground to challenge the 'commercial wisdom' of the individual financial creditors or their collective decision before the adjudicating authority. That is made non-justiciable."
The Court examined each of the five grounds for remand and found them legally unsustainable. Regarding the ED’s Provisional Attachment Order dated 09.01.2026, the Tribunal held that Section 32A of the IBC provides automatic protection to corporate assets once a resolution plan is approved, and such attachments cannot be used to invalidate a plan. The Tribunal relied on Kalyani Transco v. Bhushan Power and Steel Limited and its own precedent in Vantage Point Asset Management v. Gaurav Misra to affirm this principle.
On the Khan Property, the Court noted that the plan explicitly subjected the property to the final outcome of litigation before the Supreme Court, and the CoC had taken this into account. The NCLT’s earlier directions to exclude the property were already implemented. The Court held that further remand was redundant.
Regarding the 30 flats in Project Era Divine Court, the Tribunal observed that BPTP’s objection had been dismissed by the Adjudicating Authority itself on 05.06.2025, and the Appellate Tribunal had directed the Adjudicating Authority to proceed with plan approval. The SRA’s undertaking to protect the flats rendered the issue moot.
On DTCP licenses, the Court noted that Clause 29 of the resolution plan provided for payment of renewal fees, and the CoC had approved this provision. The Tribunal distinguished the Granite Gate Property case, noting the absence of lease agreements.
On homebuyer claims, the Court cited M/s RPS Infrastructure Ltd. v. Mukul Kumar to hold that reopening belated claims after plan approval violates the finality of the resolution process. The plan’s explicit provision for parity rendered the remand ground invalid.
The Court concluded that the Adjudicating Authority had no statutory basis to interfere with the CoC’s decision. The remand order was an impermissible intrusion into the commercial domain of the CoC, contrary to the legislative intent of the IBC to ensure time-bound resolution.
The Verdict
The Appellant succeeded. The NCLAT set aside the Adjudicating Authority’s order dated 27.02.2026. The application under I.A. No. 1817 of 2023 was revived and directed to be considered afresh by the Adjudicating Authority. The Tribunal directed the Adjudicating Authority to complete the process of considering and approving the resolution plan within sixty days from the date of production of this order, given that the CIRP has already dragged on for over seven years. No costs were awarded.
What This Means For Similar Cases
Commercial Wisdom Is Non-Justiciable
- Practitioners must now argue that any attempt by an Adjudicating Authority to remand a plan based on perceived commercial inadequacies, without citing a specific violation of Section 30(2), is legally unsustainable.
- The CoC’s approval, backed by statutory majority, is conclusive on feasibility and viability unless a clear breach of IBC provisions is demonstrated.
Section 32A Provides Automatic Protection
- Provisional attachments by enforcement agencies (ED, IT Dept.) issued after CoC approval cannot be grounds to reject or remand a resolution plan.
- Resolution applicants may rely on Kalyani Transco and this judgment to assert protection under Section 32A even if attachments are pending.
Post-Approval Developments Are Irrelevant
- Events occurring after CoC approval - including new litigation, attachments, or regulatory notices - cannot be used to invalidate a plan unless they render the plan legally impossible to implement.
- The plan must be assessed as of the date of CoC approval, not at the time of Adjudicating Authority’s review.
Homebuyer Claims Must Be Finalized at Approval Stage
- Plans must clearly state treatment of pending and unfiled claims; once approved, reopening claims is barred under RPS Infrastructure.
- Practitioners should ensure resolution plans contain explicit, unambiguous clauses on equitable treatment of all homebuyers, whether claims are filed or not.
Timeliness Is a Core Statutory Value
- Delays beyond the statutory timeline (270+180 days) are now viewed as prejudicial to creditors, especially homebuyers.
- Tribunals are expected to enforce strict timelines for plan approval post-appeal, as demonstrated by the 60-day directive in this case.
