Holding

The order of the adjudicating authority allowing the other resolution applicant to modify its plan to maintain a level playing field was reasonable and not liable to interference.

Summary

Ajay Gupta, leading a consortium, was a resolution applicant in the CIRP of B.B. Foods Pvt. Ltd. He sought to amend his resolution plan to uncap CIRP costs and reduce the plan term from 180 to 90 days, but the resolution professional rejected the amendment. The adjudicating authority (NCLT) allowed the amendment and, to maintain a level playing field, also permitted the competing resolution applicant to make modifications to its plan. The Committee of Creditors later approved the competing applicant’s plan, prompting Gupta to challenge the NCLT order before the NCLAT, arguing that his plan had already been disclosed and the other applicant should not be given a chance to modify. The NCLAT dismissed the challenge, and the Supreme Court upheld that decision, holding that the adjudicating authority acted reasonably by allowing the other applicant to modify its plan to ensure fairness, and there was no fault on the part of the resolution professional or the CoC. Consequently, the appeal was dismissed.

Issues considered

Whether the adjudicating authority could permit a competing resolution applicant to modify its resolution plan after allowing amendment to the appellant's plan under Section 62 of the IBC.
Whether such permission violates the principle of a level playing field and the appellant's right to a fair process.

Legislation cited

Insolvency and Bankruptcy Code, 2016s. 62

Subjects

InsolvencyCorporate Insolvency Resolution ProcessResolution Plan ModificationSection 62NCLTNCLATCommittee of CreditorsLevel Playing Field

Judgment

196 SUPREME COURT
[2022]REPORTS
2 S.C.R. 196 [2022] 2 S.C.R.

A AJAY GUPTA
v.
PRAMOD KUMAR SHARMA
(Civil Appeal No. 1385 of 2022)
B FEBRUARY 25, 2022
[DINESH MAHESHWARI AND VIKRAM NATH, JJ]
Insolvency and Bankruptcy Code, 2016: s. 62 – Appellant
was one of the resolution applicants in the corporate insolvency
resolution process concerning the corporate debtor – Deliberation
C
took place between the appellant, the other applicant and the
Committee of Creditors (CoC) over the resolution plan submitted
and as a result of which the appellant and the other applicant were
asked to remove defects from the resolution plan so submitted –
Appellant proposed for modification/amendment of the resolution
D plan but the same was declined by the resolution professional –
Aggrieved by it, the appellant approached the Adjudicatory
Authority, which allowed the appellant’s prayer of modification of
resolution plan but at the same time, to provide level playing field,
allowed the other resolution applicant also to make modification in
its resolution plan which was submitted to the CoC – Pursuant to
E
the order of the Adjudicating Authority, the CoC considered the
resolutions plans of appellant and the other resolution applicant
and approved the resolution plan of the other resolution applicant
– Appellant questioned the order of the Adjudicating Authority before
the Appellate Tribunal on the ground that since the resolution plan of
F the appellant was known to everyone hence no opportunity should
have been given to the resolution applicant for modification –
Appellate Tribunal dismissed the appeal – On appeal, held: The
modification was permitted at the request of the appellant himself
hence Adjudicating Atuhority, so as to provide level playing field,
was justified for granting permission to other resolution applicant to
G
place its modification for consideration of CoC – Since the appellant
had chosen to disclose the terms of its resolution plan before the
Adjudicating Authority, there was no fault on the part of the resolution
professional or CoC or other resolution applicant – The view taken
by the Adjudicating Authority as also by the Appellate Tribunal
H appeared to be reasonable and sound, calling for no interference.
196
AJAY GUPTA v. PRAMOD KUMAR SHARMA 197

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1385 A
of 2022.
From the Judgment and Order dated 13.01.2022 of the National
Company Law Appellate Tribunal, New Delhi in Company Appeal (AT)
(Insolvency) No.35 of 2022.
B
Nakul Dewan, Sidhartha Dave, Siddharth Bhatnagar, Sr. Advs.,
Shikhar Khare, M/s Kings and Alliance LLP, Nilotpal Shyam, Gaurav
Srivastava, Sudhanshu Prakash, Mrs. Babita Jain, Ms. Aarushi Singh,
Aditya Singh, Mahesh Thakur, Ms. Shailija Das, Abhishek Kumar,
Ashutosh Kumar Sharma, Pracheta Kar, Aditya Sidhra, Nadeem Afroz,
Advs. for the appearing parties. C
The Order of the Court was passed by
DINESH MAHESHWARI, J.
Having heard learned senior counsel for the appellant at sufficient
length and having perused the material placed on record, we do not feel D
persuaded to entertain this appeal under Section 62 of Insolvency and
Bankruptcy Code, 20161 by one of the resolution applicants2 in the
corporate insolvency resolution process3 concerning the corporate debtor-
B.B. Foods Pvt. Ltd.
The appellant seeks to question the judgment and order dated E
13.01.2022 as passed by the National Company Law Appellate Tribunal,
Principal Bench, New Delhi4 in Company Appeal (AT) Insolvency No.
35 of 2022 whereby, the Appellate Tribunal declined to interfere in the
order dated 13.12.2021 passed in I.A. No. 367 of 2021 in CP No.(IB)349/
ALD/2018 by the National Company Law Tribunal, Allahabad Bench, F
Allahabad5 by which, the Tribunal granted the prayer of the appellant to
amend his resolution plan dated 22.10.2021 but, at the same time, also
allowed the other resolution applicant to place any modification in their
resolution plan before the Committee of Creditors6.

1
Hereinafter also referred to as “the Code’.
G
2
A consortium led by the appellant (comprising of a private limited company and the
appellant himself) has been the resolution applicant.
3
‘CIRP’, for short.
4
Hereinafter also referred to as ‘the NCLAT’ or ‘the Appellate Tribunal’.
5
Hereinafter also referred to as ‘the NCLT’ or ‘the Adjudicating Authority’.
6
‘CoC’, for short. H
198 SUPREME COURT REPORTS [2022] 2 S.C.R.

A Shorn of unnecessary details, the relevant background aspects
for the present purpose are that as regards the CIRP in question, there
had been two resolution applicants, the consortium led by appellant being
one of them. It appears that there had been deliberations in the CoC
over the resolution plans submitted by the appellant and other resolution
applicant; and in the minutes of eighth meeting dated 02.11.2021, the
B
CoC indicated its deliberations/observations concerning the two resolution
plans in the following terms:
“At this stage, the representative of Resolution Applicant, namely,
Sirius Foods Private Limited was invited to have detailed
deliberations on the Resolution Plan submitted by Sirius Foods
C Private Limited and during the course of deliberations, defects/
technical difficulty was pointed out and thereafter, representative
of Resolution Applicant, namely, Sirius Foods Private Limited
assured that all defects would be removed to the extent possible
and to the satisfaction of the COC and Resolution Professional.
D No further objections/issues were raised by any other participant
of the meeting and accordingly, representative of Resolution
Applicant, namely, Sirius Foods Private Limited left the meeting
thereafter.
At this stage, the representative of Resolution Applicant, namely,
E consortium of Prabhat Warehouse and Cold Storage Limited and
Mr. Ajay Gupta was invited to have detailed deliberations on the
Resolution Plan submitted by, consortium of Prabhat Warehouse
and Cold Storage Limited & Mr. Ajay Gupta and during the course
of deliberations, defects/technical difficulty were pointed out and
thereafter, representative of Resolution Applicant, namely,
F consortium of Prabhat Warehouse and Cold Storage Limited and
Mr. Ajay Gupta assured that all defects will be removed to the
extent possible and to the satisfaction of the COC and Resolution
Professional and left the meeting room. No further objections/
issues were raised by any other participant of the meeting and
G accordingly, representative of the said Resolution Applicant, left
the meeting thereafter.”
After the aforesaid deliberations/observations of CoC, the appellant
sent a communication dated 18.11.2021 and annexed therewith his affidavit
dated 17.11.2021 in the so-called ‘clarification in respect of the resolution
H plan’. The contents of this affidavit dated 17.11.2021 read as under: -
AJAY GUPTA v. PRAMOD KUMAR SHARMA 199
[DINESH MAHESHWARI, J.]

“AFFIDAVIT A
I, Ajay Gupta, a director in Prabhat Warehouse Cold Storage
Private Limited and on behalf of Ajay Gupta individual, which
form a consortium and being the lead member of the said
consortium, do hereby affirm as follows:
1. The consortium of Prabhat Warehouse Cold Storage Private B
Limited and Ajay Gupta have submitted a resolution plan dated
27 th September, 2021 which was further amended vide
Resolution Plan dated 22 nd October, 2021. In the amended
resolution plan, payment schedule and the resolution of the
corporate debtor has been mentioned, which we would be C
honouring at the earliest.
2. That while submitting the amended resolution plan, I was under
certain apprehensions regarding litigations being involved in the
process of resolution of the corporate debtor, but now after seeking
legal advice on behalf of the consortium, state that the amount of D
payment to be made under the resolution plan of Rs. 16.10 crores
will remain the same and is not being modified, however I’m
putting forth my gesture of making the payment upfront, if the
bank allows the same within 90 days of the receipt of the order of
Hon’ble NCLT approving our resolution plan, as I would be taking
the possession of the corporate debtor on the payment of upfront E
amount of resolution amount i.e. Rs.16.10 crore.
3. Our payment of upfront amount under the resolution plan is in
no way going to modify the plan and I am submitting this affidavit
so to clear my point.”
F
It appears that the appellant’s proposal for such modification/
amendment of the resolution plan was declined by the resolution
professional. Thereupon, the appellant approached the Adjudicating
Authority by filing I.A. No. 367 of 21 in C.P. No. (IB) 349/ALD/2018.
The Adjudicating Authority took note of the submissions made on behalf
of the appellant and passed the order dated 13.12.2021 granting the G
prayer of the appellant but, at the same time, correspondingly allowed
the other resolution applicant to place any modification in their submitted
resolution plan before CoC so as to provide level playing field. The
order dated 13.12.2021 so passed by the Adjudicating Authority reads
as under:-
H
200 SUPREME COURT REPORTS [2022] 2 S.C.R.

A “I.A. No. 367/2021
Ld. Counsel for the applicant present. Ld. Counsel for the
CoC present. Ld. Counsel for the RP present. Ld. Senior Counsel
for the other Resolution Applicant whose plan is also being
considered by the CoC present.
B This is an application filed by one of the Resolution Applicant
seeking to amend the final Resolution Plan dated 22.10.2021
submitted by the applicant to make the following amendments:-
(a) To uncaps the CIRP costs on conditions stated
therein;
C
(b) To reduce term of the plan from 180 days to 90 days.
At this point of time, we are conscious of the fact that the
CIRP period will come to end on 06.01.2022 and a decision on the
resolution plans will have to be taken first by the CoC and,
D thereafter by this Adjudicating Authority.
Therefore, the ends of justice will be met if we direct the
applicant herein to place the affidavits at Page Nos. 290 to 298
alongwith the covering letter addressed to the sole member of the
CoC for consideration. Since we do not wish to disturb level playing
field, the other resolution applicants whose plans are also being
E
considered will also be permitted to place any modification in their
submitted resolution plan before the CoC for its consideration.
Such modifications shall be communicated to the CoC, no later
than 48 hours from now.
Accordingly, IA No. 367/2021 is disposed of.”
F
Thereafter, the resolution plans were considered by the CoC on
21/22.12.2021 and the plan of the other resolution applicant was approved.
The appellant, on the other hand, attempted to question the said
order dated 13.12.2021 before the Appellate Tribunal. The Appellate
G Tribunal took note of the grievance of the appellant that its resolution
plan came to be known to everyone and hence, no opportunity should
have been given to the others to modify.
The Appellate Tribunal found no substance in those submissions
while taking the view that the Adjudicating Authority had passed the
H impugned order so as to maintain the level playing field. The Appellate
AJAY GUPTA v. PRAMOD KUMAR SHARMA 201
[DINESH MAHESHWARI, J.]

Tribunal also took note of the fact that the resolution plans had already A
been considered by CoC on 21.12.2021.
We may also indicate that earlier, the said order dated 13.01.2022
as passed by the Appellate Tribunal was sought to be questioned before
us by the erstwhile director of the corporate debtor but, we declined to
accede locus to the said appellant and hence, the said appeal [@ Dy. B
No. 2729 of 2022] was dismissed, while rejecting the application seeking
permission to file appeal, by our order dated 07.02.2022.
Now, the said order dated 13.01.2022 of the Appellate Tribunal is
sought to be questioned by the unsuccessful resolution applicant.
The learned senior counsel has painstakingly taken us through the C
relevant contents of the Request for Resolution Plan7 as issued by the
Resolution Professional as also the minutes of the meeting of CoC and
the affidavit filed by the appellant. Learned counsel would strenuously
contend that so far as the appellant is concerned, it had not been a case
of modification of the resolution plan because modification as such was D
not even permissible under the conditions of RFRP; and the submissions
of the appellant by way of the affidavit dated 17.11.2021 had only been
to meet with the requirements of the COC, as reflected in the minutes of
the meeting dated 02.11.2021 and for such a proposition, there was no
justification in granting any liberty to the other resolution applicant to
modify its resolution plan. Learned senior counsel has also contended E
that appellant had been rather prejudiced in the matter for the reason
that the terms of its resolution plan became known to the other resolution
applicant when the matter was examined by the Adjudicating Authority
while passing order dated 13.12.2021.
We do not find the submissions aforesaid making out a case for F
interference. This is for the simple reason that on a perusal of the order
dated 13.12.2021, this much is clear that certain key features/stipulations
of the resolution plan were sought to be amended by the appellant.
Whether it was done in response to the requirement of the CoC or
otherwise, the fact of the matter remains that there was going to be G
modification of the relevant terms of the resolution plan of the appellant.
When that was being permitted at the request of the appellant himself,
we cannot find fault in the Adjudicating Authority having passed an order
so as to balance the position of the respective parties and to provide
7
‘RFRP’, for short. H
202 SUPREME COURT REPORTS [2022] 2 S.C.R.

A level playing field by granting corresponding permission to the other
resolution applicant to place its modification for consideration of CoC.
So far as affidavit dated 17.11.2021 is concerned, though the
appellant stated in paragraph 3 thereof that the payment of upfront amount
under the resolution plan was in no way going to modify the plan but,
B that had only been an expression of the understanding of the appellant
about the legal effect of the propositions put forward by him, which
included the modification of the term of plan from 180 days to 90 days.
Such a proposition could not have been treated as formal or innocuous
or of no material bearing.
C So far as the factor relating to divulging of the contents of the
plan is concerned, the same had been of the making of the appellant
himself. If the appellant had chosen to divulge/disclose the terms of its
resolution plan before the Adjudicating Authority, there had not been any
fault on the part of the resolution professional or the CoC or the other
resolution applicant.
D
Thus, the view taken by the Adjudicating Authority as also by the
Appellate Tribunal appears to be reasonable and sound, calling for no
interference.
Before concluding on the matter, we need to indicate two other
E relevant factors concerning this matter. One is that the other resolution
applicant, whose resolution plan has been accepted by the Committee of
Creditors, is not before us and has not been impleaded as a party
respondent in this appeal. Hence, no order prejudicial to the interest of
the successful resolution applicant could be passed in this appeal.
Secondly, the matter would nevertheless require further processing before
F the Adjudicating Authority; and for that matter, we are informed that the
approval of the Committee of Creditors has already been placed before
the Adjudicating Authority.
Taking note of all the facts and circumstances of the case, while
declining to interfere in this appeal, we leave all the relevant aspects of
G the matter open for examination by the Adjudicating Authority but, strictly
in accordance with law.
Subject to the observations foregoing, this appeal stands dismissed.

Devika Gujral Appeal dismissed.
H