NCLT, NCLAT cannot sit in appeal over the commercial wisdom of CoC: SC

The Supreme Court on Friday said it has time and again emphasised that there is need for minimal judicial interference by the National Company Law Appellate Tribunal (NCLAT) and the National Company Law Tribunal (NCLT) in the framework of the Insolvency and Bankruptcy Code (IBC).

A bench of Justices B.R. Gavai and Hima Kohli said: "When 90 per cent and more of the creditors, in their wisdom after due deliberations, find that it will be in the interest of all the stake holders to permit settlement and withdraw CIRP (Corporate Insolvency Resolution Process), in our view, the adjudicating authority or the appellate authority cannot sit in an appeal over the commercial wisdom of CoC (committee of creditors)."

It noted that the top court has consistently held that the commercial wisdom of the CoC has been given paramount status without any judicial intervention for ensuring completion of the stated processes within the timelines prescribed by the IBC.

The bench added that it has been held that there is an intrinsic assumption, that financial creditors are fully informed about the viability of the corporate debtor and feasibility of the proposed resolution plan.

They act on the basis of thorough examination of the proposed resolution plan and assessment made by their team of experts, it said. (IANS)

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