Holding

The NCLAT transgressed its jurisdiction under s.61 of the IBC by modifying the resolution plan, and the Supreme Court set aside its order, thereby upholding the NCLT’s approval of the plan.

Summary

The Supreme Court examined the corporate insolvency resolution of Dewan Housing Finance Corporation Ltd (DHFL), where Piramal Capital submitted a resolution plan (RP) that allocated recoveries from Section 66 applications to itself. The plan was approved by the Committee of Creditors (CoC) and the National Company Law Tribunal (NCLT), but the National Company Law Appellate Tribunal (NCLAT) set aside a clause of the RP and sent it back to the CoC, claiming it contravened law. The Court held that the NCLAT exceeded its jurisdiction under section 61 of the Insolvency and Bankruptcy Code (IBC) by interfering with the commercial wisdom of the CoC and that the RP complied with the mandatory requirements of section 30(2) and the IBBI regulations. It clarified the distinction between avoidance applications under chapters III and fraudulent trading applications under chapter VI, directing the NCLT to decide the pending avoidance applications. The Court also ruled that the RP did not violate the RBI Act or the National Housing Bank Act, and that ex‑promoters whose board was superseded under the RBI Act have no right to attend CoC meetings or obtain the RP. Consequently, the NCLAT order was set aside and the NCLT’s approval of the RP was upheld.

Issues considered

The RP approved by the CoC and NCLT contravened any law requiring NCLAT to entertain appeals under s.61 of the IBC.
Whether NCLAT should have interfered with the clause allowing the Successful Resolution Applicant (SRA) to appropriate recoveries from Section 66 applications.
The scope of NCLAT’s jurisdiction to entertain appeals by 63 Moons and other NCD holders.
Whether the distribution mechanism for Fixed Deposit holders violated the RBI Act or the National Housing Bank Act.
The right of ex‑promoters/directors to participate in CoC meetings after supersession of the board under the RBI Act.
The distinction between avoidance applications under s.43, s.45, s.50 and applications under s.66 of the IBC.
The authority of the NCLT to decide pending avoidance applications under chapters III and VI.
The validity of assigning a notional INR 1 value to Section 66 recoveries in the RP.

Legislation cited

Banking Regulation Act, 1949
Companies Act, 2013
Evidence Act, 1872
Financial Service Provider Rules, 2019s. Rule 5(d)(i)
IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016s. Regulation 37(a), s. Regulation 37A, s. Regulation 38, s. Regulation 39
IBBI (Liquidation Process) Regulations, 2016s. Regulation 37A
Insolvency and Bankruptcy Code, 2016s. 25, s. 26, s. 30(2), s. 31(1), s. 31(2), s. 32, s. 43, s. 45, s. 50, s. 60(5), s. 61(3), s. 66, s. 67
National Housing Bank Act, 1987s. 36(A)
Reserve Bank of India Act, 1934s. 45-IE, s. 45(QA)

Headnote

Issue for Consideration Whether Resolution Plan-RP approved by Committee of Creditors-CoC and NCLT was in contravention of provisions of any law requiring NCLAT to exercise its jurisdiction and Bankruptcy Code, 2016; whether the NCLAT should have entertained the appeals filed by the respondents-63 Moons u/s.61 of the Code and tinkered with the RP approved by the CoC and the NCLT; whether NCLAT was correct in dismissing appeals by FD Holders challenging the distribution

Subjects

Corporate Insolvency Resolution ProcessAvoidance applicationsFinancial scamSupersession of Board of DirectorsDetrimental to interest of depositorsAdministrator appointed by RBICommittee of CreditorsExpression of interestsResolution PlanCorporate DebtorProspective resolution applicantsRequest for resolution plan proposalSuccessful resolution applicantFraudulent or wrongful transactionsPreferential, undervalued, and extortionate transactionsPlan approval applicationAuthorised representative of debenture holdersAuthorized Representative of class of Financial CreditorsInformation memorandumCommercial wisdom of Committee of CreditorsMaximization of value of assetsLiquidation processFixed Deposit HoldersFinancial Service ProviderHousing Finance CompaniesNon-Banking Financial CompaniesNon-Convertible Debenture Holders

Judgment

[2025] 4 S.C.R. 344 : 2025 INSC 421

Piramal Capital and Housing Finance Limited (Formerly
Known as Dewan Housing Finance Corporation Limited)
v.
63 Moons Technologies Limited & Others
(Civil Appeal No(s). 1632-1634 of 2022)
01 April 2025
[Bela M. Trivedi* and Satish Chandra Sharma, JJ.]

Issue for Consideration
Whether Resolution Plan-RP approved by Committee of
Creditors-CoC and NCLT was in contravention of provisions of
any law requiring NCLAT to exercise its jurisdiction u/s.61 of the
Insolvency and Bankruptcy Code, 2016; whether the NCLAT should
have entertained the appeals filed by the respondents-63 Moons
u/s.61 of the Code and tinkered with the RP approved by the CoC
and the NCLT; whether NCLAT was correct in dismissing appeals
by FD Holders challenging the distribution mechanism whereby full
amount was not reimbursed; and whether ex-promoters/directors
have a right to participate in meetings of CoC, when Board of
Directors has been superseded under the RBI Act.

Headnotes†
Insolvency and Bankruptcy Code, 2016 – s.26 – Insolvency
and Bankruptcy Board of India (Insolvency Resolution Process
for Corporate Persons) Regulations, 2016 – Reg.37(a) –
IBBI (Liquidation Process) Regulations, 2016 – Reg.37A –
DHFL-finance company involved in accusation of loan frauds,
money laundering, etc. worth thousands of crores – Company
conducted its affairs detrimental to the interest of its depositors
and creditors – Initiation of Corporate Insolvency Resolution
Process-CIRP proceedings of DHFL-corporate debtor –
Appellant-PC submitted Resolution Plan-RP for consideration
of Administrator/Committee of Creditors-CoC – Respondent
voted in favour of RP within its class of debenture holders
and RP approved by majority – Authorised representative-AR
of class of debenture holders voted in favour of RP – RP
approved by CoC as also by NCLT – Respondent challenged

* Author
[2025] 4 S.C.R. 345

Piramal Capital and Housing Finance Limited (Formerly Known as Dewan Housing
Finance Corporation Limited) v. 63 Moons Technologies Limited & Others

the provisions of RP that s.66 recoveries will go to the benefit
of Successful Resolution Applicant-SRA – NCLT dismissed
application – Thereafter, NCLAT set aside the term in RP
that permitted SRA to appropriate recoveries from avoidance
applications and sent back RP to CoC for reconsideration –
Correctness:
Held: Applications filed in respect of “Fraudulent and Wrongful
trading” carried on by CD, could not be termed as “Avoidance
Applications” used for Applications filed u/ss.43, 45 and 50 to
avoid or set aside the Preferential, Undervalued or Extortionate
transactions – If the Resolution Professional has filed common
applications u/s.43, 45, 50 and also u/s.66, the Adjudicating
Authority shall have to distinguish the same and decide as to
which provision would be attracted to which of the Applications,
and then shall exercise the powers and pass the orders in terms of
the provisions of IBC – If finality and binding force is not provided
to votes cast by Authorised representative-ARs of a class of
Financial Creditors, RP involving large number of parties may
never fructify – Vote cast by AR on behalf of the class of Financial
Creditors he represented was binding on respondent and other
appellants and thus, they were estopped from raising any objection
before NCLT/NCLAT against RP approved by majority of CoC –
When s.26 specifically states that filing of an Avoidance Application
u/s.25(2)(j) shall not affect CIRP proceedings, and Reg.37(a) of
Regulations 2016 also permits provision in RP for transfer of assets
of Corporate Debtor-CD to one or more persons, reference of
Reg.37A of Liquidation Process Regulations in the impugned order
unwarranted and ex-facie fallacious – NCLAT also misdirected itself
by relying on foreign texts and jurisprudence, which could not be
made applicable to insolvency regime of India – In absence of any
perversity palpable on the face of approved RP, and CoC having
taken a firm commercial decision by voting overwhelmingly in
favour of RP, NCLAT ought not to have interfered – NCLAT clearly
transgressed its jurisdiction u/s.61, by interfering with the clause
pertaining to treatment of recoveries u/s.66 – Impugned judgment
and order passed by the NCLAT set aside, and the judgment
and order passed by the NCLT granting its approval to the Plan
Approval Application, and thereby approving the Resolution Plan,
upheld – However, the NCLT to decide the Avoidance Applications
filed by the Administrator u/ss.43, 45, and 50, and the Applications
u/s.66. [Paras 65, 67, 77, 79, 80, 83, 86, 87]
346 [2025] 4 S.C.R.

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Insolvency and Bankruptcy Code, 2016 – ss.30(2), 31 –
Insolvency and Bankruptcy Board of India (Insolvency
Resolution Process for Corporate Persons) Regulations,
2016 – Reg.38 – Mandatory requirements under, a Resolution
Professional required to confirm on the receipt of the
Resolution Plans submitted by the Prospective Resolution
Applicants:
Held: Entire process, from submission of Resolution Plans by
the Prospective Resolution Applicants till final approval/rejection
of the Plan by Adjudicating Authority has been duly prescribed,
which is mandatory in nature – If there is any non-compliance
of mandatory requirements stated in s.30(2), read with Reg.38,
Adjudicating Authority is empowered to reject the plan as envisaged
in s.31(2) – If however, the plan approved by CoC meets with
requirements u/s.30(2), the Adjudicating Authority has to approve
such plan u/s.31(1), which would be binding to all stakeholders.
[Para 65]

Insolvency and Bankruptcy Code, 2016 – Chapter III and
Chapter VI, ss.43, 45, 50, 66 – Avoidance Applications to
be filed by the Resolution Professional in accordance with
Chapter III, and applications in respect of Fraudulent trading
or Wrongful trading required to be filed by the Resolution
Professional u/s.66 under Chapter VI – Difference between:
Held: There is a clear distinction between Avoidance Applications
under Chapter III and Applications in respect of Fraudulent
trading or Wrongful trading under Chapter VI, both operate in
different situations – Applications filed in respect of “Fraudulent
and Wrongful trading” carried on by CD, could not be termed as
“Avoidance Applications” used for Applications filed u/ss.43, 45
and 50 to avoid or set aside the Preferential, Undervalued or
Extortionate transactions – There is clear demarcation of powers
of the Adjudicating Authority to pass orders in the Avoidance
Applications filed by the Resolution Professional u/ss.43, 45
and 50 falling under Chapter III and the Applications filed by the
Resolution Professional in respect of the Fraudulent and Wrongful
trading of CD, u/s.66 falling under Chapter VI of the IBC, and have
been separately circumscribed – If the Resolution Professional
has filed common applications u/ss.43, 45, 50 and also u/s.66,
the Adjudicating Authority shall have to distinguish the same and
[2025] 4 S.C.R. 347

Piramal Capital and Housing Finance Limited (Formerly Known as Dewan Housing
Finance Corporation Limited) v. 63 Moons Technologies Limited & Others

decide as to which provision would be attracted to which of the
Applications, and then shall exercise the powers and pass the
orders in terms of the provisions of IBC. [Paras 56, 61, 86]

Insolvency and Bankruptcy Code, 2016 – Insolvency and
Bankruptcy Board of India (Insolvency Resolution Process for
Corporate Persons) Regulations, 2016 – Reg. 37 – Approval
of Resolution Plan by Committee of Creditors – Maximization
of value of assets of the Corporate Debtor:
Held: Decisions of Committee of Creditors-CoC must reflect the
fact that it has taken into account maximization of value of assets
of Corporate Debtor-CD, and interest of all stakeholders has been
adequately balanced – Entire process has to be carried out in
an absolutely transparent manner, and each and every aspect
relating to the Resolution Plan, and more particularly its financial
layout and the measures proposed for maximization of the value
of the assets of the CD, has to be placed before the CoC – CoC,
if after considering such measures for maximization of value of
assets of CD as proposed in RP approves the plan after exercising
its commercial wisdom, then scope of judicial review by the
Adjudicating Authority u/s.31 will be limited only to the extent of
satisfying itself about the compliance of requirements of s.30(2).
[Paras 66-67]

National Housing Bank Act, 1987 – s.36(A) – Reserve Bank of
India Act, 1934 – s.45(QA) – Resolution Plan-RP, if violative
of the provisions of RBI Act or NHB Act – Fixed Deposit
Holders, including appellants, challenged RP before NCLT
on the ground that RP failed to provide for full repayment of
their deposits – Upon recommendation of NCLT, Committee
of Creditors-CoC reconsidered distribution keeping in view
benefit of FD Holders, which resolution was rejected – Appeals
filed by FD Holders dismissed by the NCLAT:
Held: None of the provisions mandates full payment of deposits
or confers any right upon depositors to have full payment of such
deposits – Also nothing to suggest that any authorized officer
under the NHB Act or the CLB under the RBI Act passed any
order to make full payment of deposits to the appellants – Thus,
RP providing for Distribution mechanism, not contrary to any of
the provisions of the RBI Act or of the NHB Act. [Paras 95, 99]
348 [2025] 4 S.C.R.

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Reserve Bank of India Act, 1934 – s.45-IE – Supersession
of Board of Directors by RBI and thereafter the Directors
vacated their offices, and then the Directors stood suspended
under the IBC – Difference between “Supersession” and
“Suspension” – Right of ex-promoters/directors to participate
in Committee of Creditors-CoC meetings, and interference in
the company affairs, and right to get copy of Resolution Plan
approved by CoC:
Held: Legal effects in both situations would be different, as
“Supersession” of Board of Directors is different from “Suspension” –
In common parlance also the use of the word “Supersession” has
different connotation than that of the word “Suspension” – Effect of
supersession is permanent in nature and effect of suspension is
temporary in nature – Appellants-Ex-Directors having deemed to have
vacated their offices on supersession of Board of Directors under
the RBI Act, could not have claimed any right to attend meetings of
CoC/participate in CIRP proceedings initiated under the IBC, which
right otherwise would have been available to Directors suspended
under the IBC – In absence of any specific provision in the IBC or
the Regulations 2016, they, as the members of the superseded
Board of Directors, could not have made any claim to have copy of
proposed RPs submitted by the PRAs during the CIRP proceedings –
Insolvency and Bankruptcy Code, 2016. [Paras 106, 109]

Insolvency and Bankruptcy Code, 2016 – ss.31, 61 – NCLT
and NCLAT – Scope of judicial review:
Held: Legislature has given paramount importance to the
“commercial wisdom” of Committee of Creditors-CoC, and that the
scope of judicial review by Adjudicating Authority-NCLT is limited to
the extent provided u/s.31, and that of Appellate Authority-NCLAT is
limited to the extent provided u/s.61(3) – Once Resolution Plan-RP
is approved by the requisite majority of CoC, and placed before
Adjudicating Authority for approval u/s.31, Adjudicating Authority
has to only see whether such RP as approved by CoC meets the
requirements of s.30(2) – It is only where the Adjudicating Authority
is satisfied that the RP does not confirm to the requirements of
sub-section (1) of s.31, it may by an order reject the RP – NCLT
has to decide all the questions on law or fact arising out of or
in relation to the insolvency resolution or liquidation under the
residuary jurisdiction vested in NCLT u/s.60(5), however such
residual jurisdiction does not in any manner impact s.30(2), which
circumscribes the jurisdiction of the Adjudicating Authority, when
[2025] 4 S.C.R. 349

Piramal Capital and Housing Finance Limited (Formerly Known as Dewan Housing
Finance Corporation Limited) v. 63 Moons Technologies Limited & Others

it comes to the confirmation of RP – Scope of interference by
Appellate Authority-NCLAT is also very limited and restricted to
specific grounds u/s.61(3). [Paras 42-44]

Case Law Cited
K. Sashidhar v. Indian Overseas Bank and Others [2019] 3 SCR
845 : (2019) 12 SCC 150; Maharashtra Seamless Limited v.
Padmanabhan Venkatesh and Others [2020] 2 SCR 1157 : (2020)
11 SCC 467; M.K. Rajagopalan v. Dr. Periasamy Palani Gounder
and Another [2023] 9 SCR 783 : (2024) 1 SCC 42; Embassy
Property Developments Private Limited v. State of Karnataka and
Others [2019] 17 SCR 559 : (2020) 13 SCC 308; Committee of
Creditors of Essar Steel India Limited v. Satish Kumar Gupta and
Others [2019] 16 SCR 275 : (2020) 8 SCC 531; Arcelormittal
India Private Limited v. Satish Kumar Gupta and Others [2018]
12 SCR 362 : (2019) 2 SCC 1; Ghanashyam Mishra and Sons
Private Limited through the Authorised Signatory v. Edelweiss
Asset Reconstruction Company Limited through the Director and
Others [2021] 13 SCR 737 : (2021) 9 SCC 657; Ebix Singapore
Private Limited v. Committee of Creditors of Educomp Solutions
Limited and Another [2021] 14 SCR 321 : (2022) 2 SCC 401;
Jaypee Kensington Boulevard Apartments Welfare Association &
Others v. NBCC (India) Limited & Others [2021] 12 SCR 603 :
2021 SCC Online SC 253; N. Mani v. Sangeetha Theatre (2004)
12 SCC 278; Vijay Kumar Jain v. Standard Chartered Bank and
Others [2019] 1 SCR 779 : (2019) 20 SCC 455; Tata Steel BSL
Limited v. Venus Recruiter Private Limited and Others (LPA No.
37 of 2021); Venus Recruiters Private Limited v. Union of India
and Others, 2020 SCC OnLine Del 1479 – referred to.

Books and Periodicals Cited
Black’s Law Dictionary (11th Edition) – referred to.

List of Acts
Banking Regulation Act, 1949; National Housing Bank Act, 1987;
Reserve Bank of India Act, 1934; IBBI (Liquidation Process)
Regulations, 2016; Insolvency and Bankruptcy Code (Amendment)
Act, 2019; Companies Act, 2013; Companies Act, 1956; Insolvency
and Bankruptcy Board of India (Insolvency Resolution Process
for Corporate Persons) Regulations, 2016; Financial Service
350 [2025] 4 S.C.R.

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Providers and Application to Adjudicating Authority Rules, 2019;
Evidence Act, 1872.

List of Keywords
Corporate Insolvency Resolution Process; Avoidance applications;
Financial scam; Supersession of Board of Directors; Detrimental to
interest of depositors; Administrator appointed by RBI; Committee
of Creditors; Expression of interests; Resolution Plan; Corporate
Debtor; Prospective resolution applicants; Request for resolution
plan proposal; Successful resolution applicant; Fraudulent or
wrongful transactions; Preferential, undervalued, and extortionate
transactions; Plan approval application; Authorised representative
of debenture holders; Authorized Representative of class of
Financial Creditors; Information memorandum; Commercial wisdom
of Committee of Creditors; Maximization of value of assets;
Liquidation process; Fixed Deposit Holders; Financial Service
Provider; Housing Finance Companies; Non-Banking Financial
Companies; Non-Convertible Debenture Holders.

Case Arising From
CIVIL APPELLATE JURISDICTION: Civil Appeal No(s). 1632-1634
of 2022
From the Judgment and Order dated 27.01.2022 of the National
Company Law Appellate Tribunal, Delhi in CAAT (I) Nos. 454, 455
and 750 of 2021
With
Civil Appeal No(s). 1707-1712 of 2022, Diary No. 6037 of 2022,
Civil Appeal Nos. 2989-2991, 2402, 2413-2415, 2567, 2987-2988,
8123, 8125, 3694-3695, 6286 and 2396 of 2022.

Appearances for Parties
Advs. for the Appellant:
Kapil Sibal, Gagan Gupta, Sr. Advs., Tabrez Malawat, Satish Kumar,
Ms. Misha Rohatgi, Ayush Kashyap, M. Yogesh Kanna, Ms. Neha
Rathi, Kamal Kishore, Harsha Gollamudi, Mahfooz Ahsan Nazki,
Divyam Agarwal, M/s. Cyril Amarchand Mangaldas, Rhishabh
Jetley, Dhruv Gupta, Tajas Popat, Mahesh Agarwal, Ankur Saigal,
Vishesh Malviya, Shivam Shukla, Pranav Narsaria, E. C. Agrawala,
Jasmeet Singh.
[2025] 4 S.C.R. 351

Piramal Capital and Housing Finance Limited (Formerly Known as Dewan Housing
Finance Corporation Limited) v. 63 Moons Technologies Limited & Others

Advs. for the Respondents:
Tushar Mehta, Solicitor General, Mrs. Aishwariya Bhati,
Raghavendra P. Shankar, A.S.Gs., Nakul Diwan, Navin Pahwa,
A.M. Singhvi, Balbir Singh, Sr. Advs., M/s. Juris Corp., Ms. Aditi
Sinha, Ms. Rajnandini Singh, Raunak Dhillon, Ms. Aishwarya
Gupta, Ms. Niharika Shukla, Danish Iqbal, Ashutosh Chaturvedi,
M/s. Cyril Amarchand Mangaldas, Ms. Misha Rohatgi, Ayush
Kashyap, Ms. Priyanka Vohra, Ketan Gaur, Ashish Bhan, Ms. Chitra
Rentala, Jasmeet Singh, Mukesh Kumar Maroria, Madhav Sinhal,
E. C. Agrawala, Nishant Upadhyay, Dhaval Vora, Navneet R.,
Ms. Alankrita Sinha, Deepak Prakash, Nachiketa Vajpayee, Manu
Shanker Mishra, Vedant Singh, Chand Qureshi, Mrs. Taruna Singh
Gohil, Pranav Sachdeva, Deepak Prakash, Nachiketa Vajpayee,
Satyadev Singh, Subhro Sanyal, A. Lakshminarayanan, Abbas B,
Sukesh Kumar Mishra, Ms. Sugandha Anand, Abhinav Mathur, Yash
Tandon, Gourav Asati, Tarun Gupta, Ms. Harsh Lata, Ms. Bharti
Tyagi, Vikash Kumar, D. K. Singh, Vijay Kinger, Ms. Roopa Nagpal,
Ashwani Gehlot, Shivaji M. Jadhav, Ms. Deepanwita Priyanka.

Judgment / Order of the Supreme Court

INDEX*

GLOSSARY .................................................................... 4
I. THE DETAILS AND CATEGORIES OF THE
APPEALS ....................................................................... 5
II. FACTUAL BACKGROUND ........................................... 13
III. SUBMISSIONS BY THE LEARNED ADVOCATES
FOR THE PARTIES ....................................................... 23
IV. RELEVANT PROVISIONS OF THE IBC AND
OTHER ACTS ................................................................ 47
V SCOPE OF JUDICIAL REVIEW .................................... 64
VI. ANALYSIS IN THE FIRST CATEGORY OF
APPEALS ....................................................................... 83
(i) Questions .............................................................. 87
(ii) Avoidance Applications ....................................... 89

* Ed. Note: Pagination as per the original Judgment.
352 [2025] 4 S.C.R.

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(iii) Mandatory Requirements of Section 30(2) of
the IBC and Regulation 38 of Regulations,
2016 ........................................................................ 95
(iv) Maximization of the value of the assets
of the Corporate Debtor ...................................... 98
(v) Whether the NCLAT should have entertained
the appeals filed by the 63 Moons under
Section 61 of the Code and tinkered with the
Resolution Plan approved by the CoC and the
NCLT? .................................................................... 101
VII. ANALYSIS IN THE SECOND CATEGORY OF
APPEALS ....................................................................... 122
(i) Whether the Resolution Plan violated the
Provisions Of RBI Act or NHB Act? ................... 126
VIII. ANALYSIS IN THE THIRD CATEGORY
OF APPEALS ................................................................. 133
IX. CONCLUSION ................................................................ 143

GLOSSARY
1. BR Act – The Banking Regulation Act, 1949
2. CD – Corporate Debtor
3. CIRP – Corporate Insolvency Resolution Process
4. CoC – Committee of Creditors
5. DHFL – Dewan Housing Finance Corporation Limited
6. EOI – Expression of Interest
7. FD Holders – Fixed Deposit Holders
8. FSP – Financial Service Provider
9. FSP Rules – Financial Service Provider Rules, 2019
10. GT – M/s. Grant Thornton
11. HFC – Housing Finance Companies
[2025] 4 S.C.R. 353

Piramal Capital and Housing Finance Limited (Formerly Known as Dewan Housing
Finance Corporation Limited) v. 63 Moons Technologies Limited & Others

12. IBC – The Insolvency and Bankruptcy Code, 2016
13. NBFC – Non-Banking Financial Companies
14. NCD Holders – Non-Convertible Debenture Holders
15. NCLAT – National Company Law Appellate Tribunal
16. NCLT/ Adjudicating Authority – National Company Law
Tribunal
17. NHB Act – The National Housing Bank Act, 1987
18. Piramal Capital – Piramal Capital and Housing Finance
Limited
19. PRAs – Prospective Resolution Applicants
20. RA – Resolution Applicant
21. RBI Act – The Reserve Bank of India Act, 1934
22. Regulations, 2016 – The Insolvency and Bankruptcy Board
of India (Insolvency Resolution Process for Corporate
Persons), Regulations, 2016
23. RFRP – Request for Resolution Plan Proposal
24. RP – Resolution Plan
25. SRA – Successful Resolution Applicant

Judgment

Bela M. Trivedi, J.
1. In the captioned Appeals, the contextual facts encompass the issues
involved and permit analogous adjudication. Hence, they are disposed
of by this common judgment and order.

(I) THE DETAILS AND CATEGORIES OF THE APPEALS: -
i. Civil Appeal Nos. 1632-1634 of 2022 have been filed
by the Appellant Piramal Capital and Housing Limited
(Piramal Capital), Successful Resolution Applicant (SRA)
354 [2025] 4 S.C.R.

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challenging the common judgment and order dated
27.01.2022 passed by the National Company Law Appellate
Tribunal, New Delhi, (NCLAT) in Company Appeal (AT)
(Insolvency) [hereinafter referred to as Company
Appeal] Nos. 454-455 and 750 of 2021, only to the extent
that it modified the Resolution Plan (RP) by holding that
the RP that permitted the SRA to appropriate recoveries,
if any, from Avoidance applications filed under Section
66 of the Insolvency and Bankruptcy Code (IBC) ought
to be set aside and the Resolution Plan be sent back to
the Committee of Creditors (CoC) for reconsideration on
that aspect.
ii. Civil Appeal Nos. 2989-2991 of 2022 have been filed by
the Appellant Union Bank of India challenging the said
common judgment and order dated 27.01.2022 passed
by the NCLAT in Company Appeal Nos. 454-455 and
750 of 2021.
iii. Civil Appeal Nos. 3694-3695 of 2022 have been filed by the
Appellant 63 Moons and Technologies Limited, challenging
the said common judgment and order dated 27.01.2022
passed by the NCLAT in Company Appeal No. 454 of
2021 and 455 of 2021, only to the extent of the sentence/
observation in the impugned order that “The Resolution
Plan be sent back to the CoC for reconsideration on this
aspect.”
iv. Civil Appeal Nos. 2413-2415 of 2022 have been filed by
the Appellants Vinay Kumar Mittal and Others, claiming
to be the Fixed Deposit Holders (FDH) of the Corporate
Debtor (CD) – Dewan Housing Finance Corporation Limited
(DHFL), challenging the common judgment and order dated
27.01.2022 passed by the NCLAT in Company Appeal
Nos. 506-507 and 516 of 2022, whereby the NCLAT has
held that Section 238 of IBC overrides the Reserve Bank
of India Act, 1934 (RBI Act), and the National Housing
Bank Act, 1987 (NHB Act), and that Adjudicating Authority/
NCLT had not committed any error in approving the RP
that proposed extinguishing Claims of the Fixed Deposits,
without discharging their payments in full to the FDHs.
[2025] 4 S.C.R. 355

Piramal Capital and Housing Finance Limited (Formerly Known as Dewan Housing
Finance Corporation Limited) v. 63 Moons Technologies Limited & Others

v. Civil Appeal arising out of Diary No. 6037 of 2022 has been
filed by the Appellants Raghu K.S. and Others (claiming to
be the Fixed Depositors/Investors in the schemes floated
by DHFL), challenging the judgment and order dated
07.02.2022 passed by the NCLAT in Company Appeal No.
538 of 2021, whereby the NCLAT disposed of the Appeal
by holding that the issues raised in the said Appeal were
the same as raised in Company Appeal Nos. 506, 507
and 516 of 2022 decided on 27.01.2022.
vi. Civil Appeal No. 2402 of 2022 has been filed by the
Appellant Uttar Pradesh State Power Corporation
Contributory Provident Fund Trust challenging the
judgment and order dated 27.01.2022 passed by the
NCLAT in Company Appeal No. 760 of 2021, whereby
the NCLAT has dismissed the Appeal of the Appellant
and confirmed the order dated 07.06.2021 passed by
the NCLT in M.A. No. 416/2020 in C.P.(IB) No. 4258/
MB/2019 in C.P. No. 4258/2019, rejecting the prayer of
the Appellant seeking repayment of the entire amounts
of matured fixed deposits.
vii. Civil Appeal Nos. 8123-8125 of 2022 have been filed
by the Appellants Senbagha Vivek A and Another (who
were not the Party before the NCLAT), challenging the
impugned common judgment and order dated 27.01.2022
passed by the NCLAT in Company Appeal Nos. 506, 507
and 516 of 2022.
viii. Civil Appeal No. 6286 of 2022 has been filed by the
Appellant THDC India Limited Employee Provident Fund
challenging the impugned judgment and order dated
04.02.2022 passed by the NCLAT in Company Appeal
No. 90 of 2022, whereby it has been held by the NCLAT
inter alia that the commercial wisdom of the CoC while
approving the RP, which has also received the approval of
the Adjudicating Authority as well as the Appellate Tribunal,
cannot be allowed to be questioned in the Appeal.
ix. Civil Appeal No. 2396 of 2022 has been filed by the
Appellant Uttar Pradesh State Power Sector Employees
Trust challenging the impugned judgment and order dated
356 [2025] 4 S.C.R.

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27.01.2022 passed by the NCLAT in Company Appeal
No. 759 of 2021.
x. Civil Appeal Nos. 1707-1712 of 2022 have been filed by
the Appellant Kapil Wadhawan (KW), an erstwhile Promoter
and Director of DHFL challenging the impugned judgment
and order dated 14.02.2022 passed by the NCLAT, in
Company Appeal No. 539 of 2021, dismissing the KW’s
challenge to the RP of Piramal Capital approved by the
NCLT vide Order dated 07.06.2021 in I.A. No. 449 of 2021
in CP (IB) No. 4258/2019. The said Appeal was dismissed
by the NCLAT on the ground that it had become infructuous
in view of the judgment and order dated 27.01.2022 in
Company Appeal Nos. 454, 455 and 750 of 2021. The
Appellant - KW has also challenged the order dated
27.01.2022 passed by the NCLAT in Company Appeal
No. 647 of 2021, wherein the NCLAT has held inter alia
that the Appellants being an erstwhile Directors who had
vacated their offices on the supersession of the Board
of Directors by the RBI under Section 45-IE (4)(a) of the
RBI Act, cannot claim their entitlement to participate in
the CoC of the CD, and that a superseded Director from
the Board of Directors cannot interfere in the Company’s
affairs, per contra a suspended Director always remains
on the erstwhile Board of the Company and assist the
IRP/ RP as per requirement. The Appellant - KW has also
challenged the judgment and order dated 27.01.2022
passed by the NCLAT in Company Appeal Nos.370,
376-377 and 393 of 2021, whereby the NCLAT has set
aside the order dated 19.05.2021 passed by the NCLT,
which had directed the CoC to consider and vote on 2nd
Settlement Proposal of KW.
xi. Civil Appeal No. 2567 of 2022 has been filed by the
Appellant Dheeraj Wadhawan (DW) challenging the
impugned judgment and order dated 27.01.2022 passed by
the NCLAT in Company Appeal No. 785 of 2020, whereby
the NCLAT has held that the Appellant – DW was not
entitled to participate in the CoC of DHFL.
xii. Civil Appeal Nos. 2987-2988 of 2022 have been filed by
the Appellant Piramal Capital challenging the impugned
[2025] 4 S.C.R. 357

Piramal Capital and Housing Finance Limited (Formerly Known as Dewan Housing
Finance Corporation Limited) v. 63 Moons Technologies Limited & Others

common judgment and order dated 27.01.2022 passed by
the NCLAT in Company Appeal No. 785 of 2020 and 647 of
2021, to the extent NCLAT has held that the RP does not
remain confidential after its approval by the Adjudicating
Authority and that a certified copy of such RP could be
obtained by all and sundry as per Rules.
2. As per the Order passed by this Court on 26.09.2024, all these
Appeals were heard, after categorizing them into the following three
categories: -

Sr. Name of the matter Party/CoC
No.
I. APPEALS RE AVOIDANCE APPLICATIONS- Impugned Order dated
27.01.2022 passed by the Hon’ble NCLAT in Company Appeal (AT) (Ins)
No. 454-455 and 750 of 2021 in relation to treatment of recoveries from
the Avoidance applications provided under the approved Resolution Plan
by Piramal Capital & Housing Finance Limited in the insolvency of Dewan
Housing Finance Corporation Limited
1. Piramal Capital & Housing Finance Limited Civil Appeal
(Formerly known as Dewan Housing Finance Nos.1632-
Corporation Limited) v 63 Moons Technologies 1634 of 2022
Limited and Ors.
2. Union Bank of India v 63 Moons Technologies Civil Appeal
Limited and Ors Nos. 2989–
2991 of 2022
3. 63 Moons Technologies Limited v Piramal Capital Civil Appeal
and Housing Finance Corporation Limited (Formerly Nos. 3694-
known as Dewan Housing Finance Corporation 3695 of 2022
Limited) & Ors
II. APPEALS BY FD HOLDERS / NCD HOLDERS- -(a)Impugned Order
dated 27.01.2022 passed by the Hon’ble NCLAT in Company Appeal (AT)
(INS) No. 506, Company Appeal (AT)(INS) No. 507, and Company Appeal
(AT) (INS) No.516 of 2022; (b) Impugned common order dated 27.01.2022
passed by Hon’ble NCLAT in Company Appeal (AT) (INS) No. 759 of 2021
and Company Appeal (AT) (INS) No. 760of 2021; (c) Impugned Order
dated 07.02.2022 passed by Hon’ble NCLAT in Company Appeal (AT)
(Ins) No. 538 of2021; (d) Impugned Order and Judgment dated 04.02.2022
in Company Appeal (AT) (Ins) No. 90 of 2021 challenging the payment
made to the FD Holders/NCD Holders under the approved Resolution
Plan by Piramal Capital & Housing Finance Limited.
358 [2025] 4 S.C.R.

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1. Raghu KS and Ors. v Piramal Capital and Housing Diary No.
Finance Limited & Ors 6037 of 2022
2. Vinay Kumar Mittal & Ors. V. Dewan Housing Civil Appeal
Finance Corporation Ltd. &Ors Nos.2413-
2415 of 2022
3. Uttar Pradesh State Power Sector Employees Civil Appeal
Trust v Dewan Housing Finance Corporation No.2396
Limited & Anr. of 2022 &
Civil Appeal
No.2402 of
2022
4. U.P. State Power Corporation Contributory
Provident Fund Trust v. Dewan Housing Finance “
Corporation Limited and Anr.
5. Senbagha Vivek A. & Anr v Dewan Housing Finance Diary
Corporation Ltd. & Anr. No.11104
of 2022/
Civil Appeal
Nos.8123-
8125 of 2022
6. THDC India Limited Employee Fund v The Civil Appeal
Administrator, Dewan Housing Finance Corporation No.6286 of
Ltd. 2022
III. APPEALS BY EX PROMOTERS- (a) Impugned Order dated 14.02.2022
passed in Company Appeal (AT) (Ins) No. 539 of 2021 approving the
Resolution Plan; (b) Impugned Order dated 27.01.2022 passed in
Company Appeal (AT)(Ins) No. 785 of 2020 and 647 of 2021 holding that
the Appellant does not have the right to attend CoC meetings or get a
copy of the Resolution Plan approved by the CoC; (c) Impugned Order
dated 27.01.2022 passed in Company Appeal (AT) (Ins) No. 370 of 2021,
376-377of 2021, 393 of 2021 which set aside the order directing CoC to
consider and vote on the second settlement proposal submitted by Appellant
1. Kapil Wadhawan v R. Subramaniakumar and Ors. Civil Appeal
Nos.1707-
1712 of 2022
2. Piramal Capital and Housing Finance Limited Civil Appeal
(Formerly known as Dewan Housing Finance Nos.2987-
Corporation Limited) v Dheeraj Wadhawan and Anr. 2988 of 2022
3. Dheeraj Wadhawan v The Administrator Civil Appeal
No.2567 of
2022
[2025] 4 S.C.R. 359

Piramal Capital and Housing Finance Limited (Formerly Known as Dewan Housing
Finance Corporation Limited) v. 63 Moons Technologies Limited & Others

(II) FACTUAL BACKGROUND
3. In these long-drawn proceedings, the Factual matrix may be
summarized as under: -
i. The DHFL was a housing finance company and a non-banking
financial company regulated under the provisions of NHB
Act and RBI Act, engaged in the business of providing
housing finance services to retail customers, including
under the Pradhan Mantri Awas Yojana (under the credit
linked subsidy scheme) as well as certain project loans,
mortgage finance and construction loans etc. The DHFL
had, for conducting its business availed financial assistance
through a range of instruments including inter alia rupee
loans, external commercial borrowings, non-convertible
debentures, perpetual debentures, subordinate debt, public
deposits etc. from banks, financial institutions, other lenders
like insurance companies, mutual funds, provident funds,
pension funds and individuals. The DHFL was accused of
committing India’s one of the biggest financial scams, worth
thousands of crores of rupees, involving accusation of loan
frauds, money laundering, creating web of fake borrowers
and shell companies etc.
ii. The RBI in exercise of its powers conferred under Section 45-IE
(1) of RBI Act, superseded the Board of Directors of DHFL, on
being satisfied that DHFL had conducted its affairs detrimental
to the interest of its depositors and creditors, and appointed
one Shri R. Subramaniakumar, Ex-MD and CEO of the Indian
Overseas Bank, vide communication dated 20.11.2019.
iii. The RBI then on 29.11.2019 filed a Company Petition under
Section 227 read with Section 239 (2) (zk) of IBC before the
NCLT, for initiating CIRP proceedings.
iv. The Adjudicating Authority – NCLT on 03.12.2019 directed
commencement of CIRP of the CD – DHFL and confirmed the
appointment of Mr. R. Subramaniakumar as the Administrator
to perform all functions of the Resolution Professional under
the IBC. On 05.12.2019, the Administrator, by issuing a public
announcement, called upon the creditors of the CD to submit
their claims with proof on or before 17.12.2019.
360 [2025] 4 S.C.R.

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v. The Administrator received the claims worth Rs.82,247 Crores.
The Administrator, after collating all claims received against the
CD and determining of financial position of the CD, constituted
CoC on 24.12.2019. The Administrator, on 28.01.2020 issued
an invitation for submissions of Expression of Interests (EOI)
and Form ‘G’ for submission of RPs for the CD in accordance
with the IBC and the relevant Rules and Regulations made
thereunder. Accordingly, the Administrator received 24 EOIs
from the PRAs.
vi. The Administrator had appointed M/s. Grant Thornton (GT)
as Transaction Auditors for unearthing the transactions under
Section 43 to 51 and 66 of IBC.
vii. The GT after conducting the transaction audit, submitted a
report to the Administrator, containing particulars of preferential,
undervalued, fraudulent, and extortionate transactions entered
into by DHFL, which could be set aside/ avoided under the said
provisions of IBC. The Administrator, based on the said report
of GT, filed eight Applications before the NCLT regarding the
Preferential, Undervalued, and Extortionate transactions, and
the Applications with regard to the Fraudulent and Wrongful
trading. The said Applications are pending for adjudication
by the NCLT. The total amount involved in the Avoidance
Applications pending before the NCLT is about Rs.45,050/-
Crores.
viii. On 02.03.2020, the Administrator issued a Request for
Resolution Plan Proposal (RFRP) for DHFL in accordance with
Regulation 36B of CIRP Regulations, 2016. The said RFRP
was revised by the Administrator, and the revised RFRP was
issued on 17.03.2020.
ix. However, thereafter considering the complexities involved
with respect to the transactions forming part of Section 66
application, the CoC in its Seventh meeting on 10.09.2020
decided that the RFRP may be suitably modified to incorporate
the language which was in the mutual interest of the CoC
members and the RA, by incorporating that the PRAs may
ascribe a value to the transactions to all the transactions that
are being filed under Section 66 and also propose the manner
of dealing with any recoveries therefrom.
[2025] 4 S.C.R. 361

Piramal Capital and Housing Finance Limited (Formerly Known as Dewan Housing
Finance Corporation Limited) v. 63 Moons Technologies Limited & Others

x. On 16.09.2020, pursuant to the discussion with the CoC,
the Administrator issued a revised and final version of the
RFRP titled “Invitation for Submissions of Resolution Plan for
Dewan Housing Finance Corporation Limited” (“RFRP dated
16 September 2020”) in accordance with Regulation 36B of
the CIRP Regulations.
xi. On 16.10.2022, following the issuance of the RFRP dated
16 September 2020, the Piramal Capital submitted the RP
dated 16.09.2020 for the consideration of the Administrator/
CoC. The Piramal Capital was initially keen on only taking
over the retail assets of the CD and accordingly, submitted its
RP dated 16.09.2020 for Group A assets under Option II (i.e.,
retail assets of the CD). Under this RP, the Piramal Capital
offered an amount of approx. INR 15,000 Crores (plus an
amount of 10% for FDH).
xii. On 09.11.2020, based on further discussions and upon
requests from the Administrator/ CoC to all PRAs, the Piramal
Capital revised its RP and submitted modified RP on 09.11.2020
(offering an amount of INR 23,700 Crores) and on 17.11.2020
(offering an amount of INR 27,500 Crores), respectively under
Option II for Group A (retail assets) of the CD.
xiii. On 22.12.2020, upon the request of the CoC, the Piramal
Capital submitted a revised and final RP offering a total
consideration of INR 37,250 Crores comprising cash and
non-cash considerations. Additionally, it also submitted a RP
under Option II for Group A (retail assets) of the CD, it offered
an aggregate amount of INR 27,200 Crores.
xiv. On 31.12.2020, the erstwhile Director Kapil Wadhawan filed
I.A. No. 2431 of 2020 under Section 60(5) of the Code praying
for a direction for RBI to place before CoC the 2nd Settlement
proposal for consideration.
xv. On 15.01.2021, all compliant resolution plans (including the
SRA’s RP) were put to vote during the voting window. The 63
Moons voted in favour of the RP within its class of debenture
holders and the RP was approved by a majority of 98.94%
votes of the debenture holders. On the basis of the same, the
Authorised representative of the class of debenture holders
362 [2025] 4 S.C.R.

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(M/s. Catalyst Trusteeship Limited) voted in favor of the RP
before the CoC. Resultantly, the RP of Piramal was approved
by an overwhelming majority of the CoC with 93.65 % votes.
xvi. On 24.02.2021, following the approval of the RP by the CoC,
the Administrator filed an I.A. No. 449 of 2021 (“Plan Approval
Application”) before the NCLT seeking approval of the RP
under Section 31 of the Code.
xvii. On 05.03.2021 – The 63 Moons filed an I.A. No. 623 of 2021
in the Plan Approval Application before the NCLT inter alia
challenging the provisions of the RP which provided that the
Section 66 Recoveries will go to the benefit of the SRA.
xviii. On 13.05.2021, the Plan Approval Application and I.A. No.
623 of 2021 were reserved for orders.
xix. The NCLT vide its Order dated 19.05.2021 allowed the I.A.
No. 2431 of 2020 filed by the erstwhile Director and directed
the Administrator to place the 2nd Settlement Proposal before
the CoC for consideration and voting within 10 days.
xx. On 23.05.2021, the Administrator, CoC and Piramal filed
Appeals under Section 61 of the Code, being Company Appeal
Nos. 370 of 2021, 376-77 before the NCLAT challenging the
order dated 19.05.2021.
xxi. On 25.05.2021, the NCLAT while issuing notice stayed the
NCLT order dated 19th May, 2021. Further, the NCLAT vide
the order directed the NCLT to decide the I.A. No. 449 of 2021
(for approval of the RP).
xxii. On 06.06.2021, Mr. Kapil Wadhawan filed an I.A. No.1229
of 2021 before the NCLT for consideration of his objections
to the RP.
xxiii. On 07.06.2021, the NCLT passed an order granting its approval
to the Plan Approval Application thereby approving the RP.
The NCLT vide a separate order, dismissed the I.A. No. 623
of 2021 filed by the 63 Moons. The NCLT refused to interfere
with the RP inter alia on the ground that the CoC comprising
of 77 financial creditors decided in its commercial wisdom to
give away the Section 66 Recoveries to the SRA after a hard
[2025] 4 S.C.R. 363

Piramal Capital and Housing Finance Limited (Formerly Known as Dewan Housing
Finance Corporation Limited) v. 63 Moons Technologies Limited & Others

bargain in exchange of a lump sum resolution amount of INR
37,250 Crores.
xxiv. On 14.06.2021 & 24.06.2021, the 63 Moons filed two separate
Company Appeals, being No. 454 and 455 of 2021 before
the NCLAT challenging the orders passed by the NCLT in
the Plan Approval Application and I.A. No. 623 of 2021 on
almost identical grounds. These Appeals were tagged and
heard together. Additionally, vide I.A. No. 1173 and 1170 of
2021 filed in the Company Appeal No. 455 and 454 of 2021
respectively, the 63 Moons sought an interim stay on execution
of the approved RP.
xxv. On 15.07.2021, erstwhile Promoter KW preferred Company
Appeal No. 539 of 2021 before the NCLAT seeking a prayer
to set aside the RP.
xxvi. On 23.07.2021, the NCLAT dismissed the 63 Moons’ interim
application for a stay on execution of the approved RP.
Following this, the 63 Moons approached this Court vide Civil
Appeal Nos. 4672-4673 of 2021.
xxvii. On 03.09.2021 - Roopjyot & Ors. filed a Company Appeal
No. 750 of 2021 before the NCLAT challenging the Plan
Approval Order raising grounds similar to those which were
raised by the 63 Moons. This Appeal was also tagged with
the Company Appeal No. 455 and 454 of 2021 filed by the
63 Moons. Pertinently, this was first time that any challenge
was raised by Roopjyot & Ors. against the RP.
xxviii. On 06.09.2021, this Court declined to entertain the Civil
Appeal Nos. 4672-4673 of 2021 and disposed of the same
with a direction to the NCLAT to decide the pending Appeals
expeditiously.
xxix. On 30.09.2021, the SRA implemented the RP and discharged
payment to the creditors. As per the RP, the SRA - Piramal
merged into the CD by way of a scheme of arrangement.
Resultantly, the SRA - Piramal ceased to exist with effect from
30.09.2021, and the CD under the name “DHFL” remained
as the continuing legal entity.
xxx. On 27.01.2022, the NCLAT passed the common impugned
judgment in the Appeals and directed as follows:
364 [2025] 4 S.C.R.

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“The term in the RP that permits the SRA to appropriate
recoveries, if any, from avoidance applications filed
under Section 66 of the Code ought to be set aside.
The RP be sent back to the CoC for reconsideration
on this aspect.”
xxxi. On 14.02.2022, the NCLAT dismissed the Company Appeal No.
539 of 2021 filed by the erstwhile Promoter KW, recording that
the RP is under consideration before the CoC and therefore
the Appeal had become infructuous.
Hence, the present set of Appeals have been filed.

(III) SUBMISSIONS BY THE LEARNED ADVOCATES FOR THE
PARTIES
4. Multidimensional submissions were made at length by all concerned
learned Advocates, the crux of which may be narrated below.
(I) Learned Senior Advocates, Mr. Abhishek Manu Singhvi and
Mr. Balbir Singh appearing for the SRA - Piramal Capital made
elaborate submissions in all the three categories of Appeals.
In the First category of Appeals with regard to the impugned
order dated 27.01.2022 passed by the NCLAT in Company
Appeal Nos.454-455 and 750 of 2021 in relation to treatment
of recoveries from Avoidance applications provided under the
approved RP, they made the following submissions: -
i. A small group of creditors like the 63 Moons whose
cumulative share in the CoC was less than 0.3%, could
not have preferred the Appeals before the NCLAT. The
respective classes of creditors who voted overwhelmingly
in favour of the RP included the said creditors, who were
NCD Holders, and therefore they were estopped from
challenging the RP.
ii. The decision on the recoveries arising out of Avoidance
transactions falls within the commercial wisdom of the
CoC and could not have been interfered with by the
NCLAT.
iii. The NCLAT in the impugned judgment has entered into
the domain of the CoC, in as much as it has isolated
a singular part of a composite and inter-connected RP,
[2025] 4 S.C.R. 365

Piramal Capital and Housing Finance Limited (Formerly Known as Dewan Housing
Finance Corporation Limited) v. 63 Moons Technologies Limited & Others

and has adjudicated upon the commercial soundness of
the CoC’s decision to take a higher upfront payment in
exchange of giving up the uncertain recoveries of Section
66 applications.
iv. The reliance placed on the decision in Tata Steel BSL
Limited vs. Venus Recruiter Private Limited and Others
(LPA No.37 of 2021) passed by the single bench of the
Delhi High Court was erroneous.
v. The impugned judgment of NCLAT is premised on a
misinterpretation of provisions of the IBC and allied
Regulations, in as much as Section 67 does not relate
to treatment of proceeds from Avoidance applications,
instead it deals with a situation where a respondent party
in an Avoidance application also happens to be a creditor
of the CD.
vi. The NCLAT has erroneously placed reliance on Regulation
37A of IBBI (Liquidation Process) Regulations, 2016
to arrive at a conclusion that the proceeds from the
Avoidance applications cannot be shared with the SRA
during resolution. In fact, the Regulation 37(a) of the CIRP
Regulations specifically mentions that the resolution plan
shall include measures for the transfer of all or part of the
assets of the CD.
vii. The NCLAT has incorrectly relied on the foreign jurisprudence
and extraneous considerations in impugned judgment.
viii. The notional value of INR 1 to Section 66 Applications was
legally sound, for the reason that the notional valuation
of Section 66 Applications was done in response to the
provisions of RFRP issued by the Administrator.
ix. In the alternative, the NCLAT had failed to appreciate
that value of INR 1 was only notional and the true value
ascribed to the Section 66 Applications was embedded in
the total resolution amount of INR 37,250 Crores proposed
under the RP.
x. The impugned judgment amounts to a unilateral modification
of RP contrary to the will of the SRA and commercial
wisdom exercised by the CoC.
366 [2025] 4 S.C.R.

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xi. The impugned judgment has far-reaching, and undesirable
consequences contrary to the intent of the Legislature.
(II) In the Second category of Appeals filed by the FD Holders/
NCD Holders challenging the impugned order dated 27.01.2022
passed by the NCLAT, Mr. Abhishek Manu Singhvi and Mr.
Balbir Singh appearing for the SRA-Piramal Capital made the
following submissions: -
i. The Appellants, that is the FD Holders/ NCD Holders,
have no locus standi to challenge the Resolution Plan by
filing the Civil Appeals.
ii. Section 21 (6A) (b) of IBC read with Regulation 16 (A) of
the CIRP Regulations, 2016 provides for a mechanism for
appointment of an Authorized Representative who could
look after the myriad interest of large number of financial
creditors in the CoC. In the instant case FD Holders
and NCD Holders were represented by the respective
representatives, who had demonstrated their objections to
the RP before the CoC, and therefore individual member
of such group cannot be allowed to raise independent
challenge in relation to the CIRP and/ or the RP separately
by filing the Appeals.
iii. Section 36 (A) of the NHB Act and Section 45 (QA) of
the RBI Act do not mandate full repayment of deposits.
Therefore, the distribution mechanism in the RP could not
be said to be illegal or contrary to the provisions of the
RBI Act and NHB Act.
iv. The RP is also compliant with Rule 5 (d)(i) of FSP Rules.
v. This Court has repeatedly held that the manner of
distribution of proceeds falls within the CoC’s commercial
wisdom and such commercial wisdom is given paramount
status and that the scope of judicial review by the NCLT and
NCLAT is very limited. (K. Sashidhar vs. Indian Overseas
Bank and Others,1 and Maharashtra Seamless Limited
vs. Padmanabhan Venkatesh and Others.2)

1 (2019) 12 SCC 150
2 (2020) 11 SCC 467
[2025] 4 S.C.R. 367

Piramal Capital and Housing Finance Limited (Formerly Known as Dewan Housing
Finance Corporation Limited) v. 63 Moons Technologies Limited & Others

vi. The NHB Act and the IBC are special statutes and the
statute enacted later in point of time must prevail.
vii. The FD Holders are estopped from contending that they
were not the financial creditors. As per the settled legal
position the relationship between a depositor and a Bank is
not equivalent to one between a beneficiary and a trustee.
(III) So far as Third category of Appeals filed by the ex-promoters
challenging the impugned order dated 14.02.2022 approving the
RP, the order dated 27.01.2022 holding that the ex-promoters
did not have the right to attend the CoC meetings or get a copy
of Resolution Plan approved by the CoC, the Learned Senior
Advocates Mr. Singhvi and Mr. Balbir Singh, defending the said
impugned order, made the following submissions: -
i. KW’s settlement proposals do not warrant any consideration
in these Appeals since they were not accepted by the
requisite majority of 89% of CoC. Moreover, an Application
under Section 12(A) of IBC for withdrawal of CIRP petition
pursuant to a settlement proposal had to be tabled by the
RBI, which had refused to do so.
ii. Commercial wisdom of CoC is paramount and ascription
of notional value INR 1 is acceptable.
iii. Decisions taken by an overwhelming majority of CoC
basing value of CD as determined by the registered
valuers, after negotiations with SRA, is not subject to
judicial scrutiny. Resolution Plans cannot be scrutinized
from an equitable perception.
iv. The Piramal Capital’s RP is binding inter se Piramal Capital
and CoC, and no modifications are permitted after the
approval of the plan by the CoC.
v. Independent recourses such as assignments, settlements,
and institution of recovery proceedings in respect of loans,
impugned in Avoidance applications are valid because it is
Piramal Capital’s responsibility to ensure a holistic revival
of DHFL and resolution of its distressed assets.
vi. Pendency of Avoidance applications does not bar the
CIRP proceedings.
368 [2025] 4 S.C.R.

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vii. Suspension and Supersession of Board of Directors have
distinct legal effects since suspension occurs only due to
inability to pay debts while supersession occurs due to
fraud and mismanagement.
viii. The Insolvency proceedings of DHFL were conducted in
a clear, transparent and time bound manner to preserve
and maximize value of the assets for CoC.
ix. The Piramal Capital’s RP was accepted by overwhelming
majority votes of 93.65% in the CoC, and RBI also has given
its NOC for change of control/ ownership/ management
basis to the said Resolution Plan on 16.02.2021.
5. The learned Senior Advocates Mr. Tushar Mehta and Mr. Navin Pahwa
appearing for the CoC made the following common submissions in
all the Appeals:
i. The CoC comprised of (a) 26 banks and 12 financial institutions
voting 40.60% in the CoC (b) NCD Holders (secured and
unsecured) 63 Moons class and Roopjyot class voting 53.22%
in the CoC (c) FD Holders voting 6.18% in the CoC.
ii. Section 32 readwith Section 61(3) contain limited ground to
challenge the RP and does not provide any ground to challenge
the RP on any of its commercial terms.
iii. Section 45-IE (1) of the RBI Act empowers the RBI to supersede
the Board of Directors of the company in the public interest or
to prevent the affairs of NBFC being conducted in a manner
detrimental to the interest of the depositors or the creditors or for
securing proper management of such company. The RBI having
been satisfied superseded the Board of DHFL on 20.11.2019
which was never challenged by the ex-promoters of DHFL.
iv. RBI had filed the Company Petition No. 4258 of 2019 under
Section 227 read with Section 239(2)(zk) of the IBC read with
Rules 5, 6 of the FSP Rules before the NCLT for initiating CIRP
of DHFL, and the said petition was admitted by the NCLAT vide
the order dated 03.12.2019, which was also never challenged
by the ex-promoters of DHFL.
v. Section 45-IE (4)(a) of the RBI Act states that upon supersession
of Board of Directors, the chairman, managing director and
[2025] 4 S.C.R. 369

Piramal Capital and Housing Finance Limited (Formerly Known as Dewan Housing
Finance Corporation Limited) v. 63 Moons Technologies Limited & Others

other directors shall, from the date of the supersession, vacate
their offices. Hence, once the directors vacate their office,
they are not a stakeholder of the CD any more and have no
locus either to sit in the CoC meetings, demand RP or even
challenge the same.
vi. Section 29A(c) of IBC explicitly disqualifies the promoters of
the CD from being a RA, subject to certain conditions, and the
Board of DHFL having been superseded, the promoters did not
have any right or locus to challenge the RP approved by CoC.
vii. The DHFL had used different enterprise resource planning
software application for maintaining fictitious books, loans
and verification of financial statement. It was found that the
underwriting procedures for loan sanctioning and disbursal
were not followed. It was further found that out of sampled 50
entities, 34 entities had invested a portion of amount received
from DHFL into the promoter company.
viii. As per the GT’s report dated 24.09.2020 on Slum Rehabilitation
Authority transaction, it was found that the loans aggregating
crores of rupees against the master developers and 14 assignee
developers for construction of two SRA projects, were used
for investments into the companies linked to the promoters
of DHFL.
ix. The Avoidance and Fraudulent transactions as contemplated
in IBC were identified by the GT, wherein it was found that the
DHFL had made inter-corporate deposits into three entities,
which were used for buying the NCDs of Wadhawan Global
Corporation, though the said three entities did not have any
income from the business operations.
x. The consortium of lenders had appointed KPMG, a Forensic
Auditor, to carry out a special review of DHFL who had prepared
the Special Review Audit Report highlighting large number of
fraudulent transactions and falsification of books of accounts.
Such fraudulent transactions and acts have resulted into number
of criminal cases registered against ex-promoters Mr. Kapil
Wadhawan and Dheeraj Wadhawan by CBI.
xi. When the ex-promoters of DHFL were found responsible for
the fraudulent transactions, which were the subject matter of
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Section 66 applications, they could not have contended that
the subject matter of these applications should be valued at a
higher value in the RP, and not INR 1 value for such Avoidance
transactions.
xii. The CoC in its commercial wisdom had decided to transfer
the speculative part of the assets i.e., Section 66 Fraudulent
Trading to the PRAs, thereby eliminating any risk from the said
transactions and resulting in an increase in the upfront value of
recovery. In any case, the benefit of avoiding/setting aside any
transaction under Section 43, 45, 47, 49 and 50 shall enure to
the benefit of DHFL’s creditors only.
xiii. The bid process was transparent, competitive and aimed at
maximizing the value of assets of the CD.
xiv. The conduct of ex-promoters has been marred by impropriety
in as much as several criminal cases relating to cheating, fraud
and siphoning of funds have been instituted against them which
are pending in the courts of law.
6. The learned Advocate Mr. Santosh Kumar Paul appearing for the
Respondent - 63 Moons Technologies Limited, the secured NCD
Holders has made the following submissions: -
i. Originally it was envisaged by the Piramal Capital that any
recoveries from the transactions avoided/ set aside under
Section 43 to 51 and 66 of the IBC would enure to the benefit of
DHFL’s creditors and that the PRAs will not receive any benefit
therefrom. Afterwards, the RFRP was amended on 16.09.2020 to
the effect that the recoveries from Section 43, 45, 47, 49 and 50
(and not Section 66) shall enure to the benefit of the creditors,
and with respect to the recoveries from Section 66, the RAs
must propose the manner of continuing and dealing with the
legal action initiated and propose the manner of treatment of
any proceeds arising therefrom. Ultimately, the Piramal Capital
was declared as SRA, and it was decided that all recoveries
from Avoidance applications filed by the Administrator would
benefit the Piramal Capital. The Respondent No. 1 - 63 Moons
had objected, such clause being illegal. The NCLAT having
considered the said objection decided the said issue in favour
of the Respondent - 63 Moons.
[2025] 4 S.C.R. 371

Piramal Capital and Housing Finance Limited (Formerly Known as Dewan Housing
Finance Corporation Limited) v. 63 Moons Technologies Limited & Others

ii. As per the settled legal position, the recoveries from Avoidance
transactions ought to enure to the benefit of DHFL’s creditors
only.
iii. As per the judgment of Delhi High Court, in case of Venus
Recruiters Private Limited vs. Union of India and Others,3
the Avoidance applications are meant to give benefit to the
creditors of the CD and not to the CD in its new avatar after
the approval of the RP. The said judgment of Delhi High Court
was not disturbed upon Appeal before the Division Bench of the
High Court, and the SLP against the said decision is pending
before this Court.
iv. A mandatory statutory duty has been cast upon the Tribunal
in terms of Section 31 read with Section 30(2) of the IBC to
ensure that a RP which is placed before it for approval has
complied with the relevant provisions of law.
v. The Respondent - 63 Moons had voted owing to express liberty
granted by the NCLT, without prejudice to the respondent’s
rights and contentions, hence the plea of estoppel was not
available to the Appellant - Piramal. As per the position of law
settled by this Court in M.K. Rajagopalan vs. Dr. Periasamy
Palani Gounder and Another,4 the commercial wisdom of
CoC means a considered decision taken by CoC with reference
to the commercial interest and interest of revival of CD and
maximization of value of its assets.
7. The Learned Senior Advocate Mr. Dhruv Mehta appearing for the
Appellants - the FD Holders of CD, who have challenged the impugned
order dated 07.02.2022 passed by the NCLAT in Company Appeal
No. 538 of 2021 made the following submissions: -
i. The NCLAT had erred in passing the impugned order, not
appreciating that in terms of Section 30(2)(e) read with Sections
31(3)(i) of the Code, the RP ought to have been struck down
as being in contravention of the provisions of the NHB Act and
RBI Act, which provide for security of deposits made by the
FD Holders.

3 2020 SCC OnLine Del 1479
4 (2024) 1 SCC 42
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ii. An unjustified resort to Section 238 of the Code has the effect
of rendering the provisions contained in Section 30(2)(e) of the
Code nugatory.
iii. Section 36(A) of NHB Act makes it clear that the deposits have to
be repaid strictly in accordance with the terms of such deposits.
Section 36 of NHB Act provides that the provisions thereof shall
have the effect notwithstanding anything inconsistent contained
in any other law for the time being in force.
iv. Unlike a regular CD, a FSP stands on a different footing and
should entail greater scrutiny in examining its compliance with
the applicable laws for the time being in force. The commercial
wisdom of CoC cannot stretch to cover regulatory aspects
specifically provided for under the NHB Act read with its
directions.
8. The Learned Senior Advocate Mr. Maninder Singh appearing for the
Appellant Uttar Pradesh State Power Sector Employees Trust in C.A.
No. 2396 of 2022 made the following submissions: -
i. The monies invested by the FD Holders were held in Trust by
DHFL.
ii. Rule 10 of the FSP Rules provides that Rule 5(b)(Moratorium)
of the FSP Rules and Section 14 of the Code do not apply to
any third-party assets or properties in custody or possession
of the FSP, including any funds, securities and other assets
required to be held in Trust for the benefit of third parties.
The Explanation to Section 18 of the Code also provides that
assets owned by third-party in possession of the CD, held under
Trust or under contractual arrangements including bailment,
could not be assets for the purpose of Section 18. In this
regard, reliance has been placed on the observations made in
Embassy Property Developments Private Limited vs. State
of Karnataka and Others.5
iii. As held by the various High Courts, the monies deposited by the
FD Holders are not in the nature of a loan but in fact a deposit
to be held in Trust by the Company till the time of maturity.

5 (2020) 13 SCC 308
[2025] 4 S.C.R. 373

Piramal Capital and Housing Finance Limited (Formerly Known as Dewan Housing
Finance Corporation Limited) v. 63 Moons Technologies Limited & Others

Therefore, the monies deposited by the FD Holders were not
the monies of DHFL but in fact were the monies deposited in
Trust, thereby making DHFL liable to repay such deposits in full.
iv. The NCLT and NCLAT had failed to consider that the repayment
obligations of DHFL, which was a deposit receiving Housing
Finance Institution, engaged in the business of providing
Financial Services in terms of the license granted by NHB
and RBI. Hence, the FD Holders ought to have been paid as
per the terms of their deposits, in full, in view of the statutory
obligation of DHFL.
v. In absence of any contradictions between the Code and the
NHB Act, the overriding effect contained in Section 238 of the
Code does not apply.
vi. Public Depositors are neither secured creditors nor unsecured
creditors but constitute a third class of creditors who stand on a
higher footing than secured/unsecured creditors with a statutory
right to the repayment. Hence, the claim of the public deposit
holders ought not to be equated with that of any other creditor
of DHFL and ought to be repaid in full as statutorily mandated.
9. The learned Senior Advocate Mr. Nakul Diwan appearing for the
Respondent Nos. 4 to 7 in C.A. Nos. 1632-1634 of 2022 and C.A.
Nos. 2989-2991 of 2022 has made following submissions, supporting
the judgment and order dated 27.01.2022 passed by the NCLAT:
i. Although the SRA - Piramal Capital has enhanced its offer in
the RP, such enhancement was not against consideration of
the recoveries to be made from the Avoidance transactions.
Even otherwise the value ascribed by the SRA to the Avoidance
applications was merely valued at a nominal price of INR 1 and
such enhancement cannot be said to be in consideration of the
recoveries to be made under the Avoidance transaction, which
were valued at INR 45,000 Crores alone.
ii. The Respondents had abstained from voting in favour of RP, as
Clause 2.13.3 was an illegal provision contrary to the IBC. On
careful appreciation of the provisions of IBC, the NCLAT vide
its judgment dated 27.01.2022 rightly set aside Clause 2.13.3
and directed the CoC to reconsider the same.
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iii. In K. Sashidhar vs. Indian Overseas Bank and Others (supra),
and in Committee of Creditors of Essar Steel India Limited
vs. Satish Kumar Gupta and Others,6 it is held that there is
a scope of judicial scrutiny in RP if it is not in accordance with
Section 30(2) read with Section 31(I) of the IBC.
10. The Learned Senior Advocate Mr. Kapil Sibal, appearing for the
ex-promoters Kapil Wadhawan and Dheeraj Wadhawan made the
following submissions: -
i. Any recoveries from the Avoidance applications ought to be for
the benefit of creditors, having regard to the object and purpose
and legal history of the IBC.
ii. Piramal Capital cannot be permitted to retain recoveries past/
future from the Avoidance applications, which otherwise should
be only for the benefit of the creditors.
iii. Section 25 of the IBC sets out the duties of the Resolution
Professional. One of the duties is to preserve and protect the
assets of the CD and to file Avoidance applications for the
benefit of the CD.
iv. The Avoidance applications are filed in respect of Sections 43,
44, 45, 46, 50 and 51, falling within Chapter III. The provisions
pertaining to the Fraudulent trading or Wrongful trading fall under
Section 66 contained in Chapter VI. Considering the scheme of
the Code, as also the object and purpose of the Code, it is clearly
demonstrated that the benefit of the Avoidance applications is
intended for the benefit of the CD, for which the responsibility
has been cast upon the Resolution Professional.
v. The provision of Piramal’s RP which permits benefits of
Avoidance applications under Section 66 of the Code to
be retained by the Piramal Capital is contrary to law. In the
alternative, it is submitted that as an exception the benefit of
Avoidance applications can be assigned to the third parties,
(in the present case Piramal), however, it was the duty of the
Resolution Professional to ensure that the assignment was
done for proper consideration, and in the instant case, the

6 2020 (8) SCC 531
[2025] 4 S.C.R. 375

Piramal Capital and Housing Finance Limited (Formerly Known as Dewan Housing
Finance Corporation Limited) v. 63 Moons Technologies Limited & Others

assignment of Avoidance transactions was not shown to be
for proper consideration.
vi. The fulcrum on which the Resolution Process under the Code
proceeds is the full and correct knowledge of the affairs of
the CD, however, in the instant case, the creditors had no
knowledge of the value of the securities/properties which
formed the basis of Avoidance transactions under Section 66
of the Code. Therefore, the CoC could not be said to have
exercised its commercial wisdom while approving the RP of
the Piramal Capital.
vii. The Administrator also sought to exclude the ex-promotors on a
specious plea that they were superseded, despite the fact that
the ex-promoters through several letters had made efforts to
inform Administrator and CoC, the significant value of business
and assets of DHFL in the interest of the creditors.
viii. Assuming, without admitting, that CoC had all the relevant
information, the CoC had miserably failed to demonstrate the
rationale behind the recoveries from Avoidance transactions
under Section 66 of the IBC Code being ascribed NIL value
and assigning the same to Piramal at Rupee 1.
ix. The Piramal Capital’s subsequent conduct demonstrated that
there was value locked up in the Avoidance transactions and
despite such value the benefit of the same was not factored
in the bid amount.
x. The CoC’s justification for the Piramal’s valuation of Avoidance
transactions for Rupee 1 was contrary to the records and
unjustified.
xi. The amount under Section 43 and 45 of the Code are a
small portion of the total amount impugned in the Avoidance
applications. There is no difference in the potentiality of recovery
from transactions impugned under Section 66 or Section 45 in
the present case. The nature of trading in respect of Section
66 applications is not fictitious. The actions of Piramal in filing
Section 7 applications makes it evident that the classification
of entire transactions as fraudulent by the Administrator was
incorrect.
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xii. The ex-promoters/KW and DW were entitled to participate in
the CoC, to have access to all records and documents as well
as the copy of the RP.
xiii. The provisions of the IBC would prevail over the RBI Act in view
of the non-obstante clause in Section 238 of the Code. Thus,
the rights of the Director under the Code remain unaffected by
the effect of supersession under the RBI Act.
xiv. The IBC was made applicable to the Financial Service Providers
such as the DHFL under the FSP Rules.
xv. There was no modification as provided under Rule 5 of the
FSP Rules, which could affect the ex-promoter/Director’s right
of participation.
xvi. Piramal Capital cannot be permitted to unjustly enrich itself at
the cost of the creditors by retaining the benefit for which it has
not paid any value.
xvii. The objective of the IBC for value maximization has not been
taken into consideration under the shield of commercial wisdom
of CoC.
xviii. Lastly, no fair and transparent procedure, in the nature of auction/
assignment of the underlying assets for the part of Avoidance
transactions, was undertaken to enable the realization of full
value of the underlying assets and ensure maximization of value
in the interest of the creditors of DHFL.

(IV) RELEVANT PROVISIONS OF THE IBC AND OTHER ACTS
11. Before adverting to the rival submissions made by the learned
counsels for the parties, let us have a glance through the provisions
contained in the IBC and other Acts & Rules relevant for the purpose
of deciding these Appeals.
12. As the long title of IBC suggests, IBC has been enacted to
consolidate and amend the laws relating to reorganization and
insolvency resolution of corporate persons, partnership firms and
individuals in a time bound manner for maximization of value of
assets of such persons, to promote entrepreneurship, availability
of credit and balance the interest of all the stakeholders including
alteration in the order of priority of payment of Government dues
[2025] 4 S.C.R. 377

Piramal Capital and Housing Finance Limited (Formerly Known as Dewan Housing
Finance Corporation Limited) v. 63 Moons Technologies Limited & Others

and to establish an Insolvency and Bankruptcy Board of India, and
for matters connected therewith or incidental thereto. The objective
behind enacting the IBC is to provide an effective legal framework for
timely resolution of Insolvency and Bankruptcy, which would support
the development of credit markets and encourage entrepreneurship.
It would also improve Ease of Doing Business, and facilitate more
investments leading to higher economic growth and development.
The provisions of the IBC had come into force on different dates
as notified by the Central Government by Notification in the Official
Gazette from time to time.
13. Chapter II pertains to the Corporate Insolvency Resolution Process.
Section 7 thereof pertains to the Initiation of Corporate Insolvency
Resolution Process by Financial Creditor and Section 8 thereof
pertains to the Insolvency Resolution by Operational Creditor.
Section 16 provides for appointment and tenure of Interim Resolution
Professional and Section 18 thereof enumerates the duties of the
Interim Resolution Professional appointed by the Adjudicating
Authority, on the commencement of insolvency proceedings. Section
21 empowers the Interim Resolution Professional to constitute a
Committee of Creditors (CoC), after collation of all claims received
against the CD and determination of financial position of the CD.
The CoC is comprised of all Financial Creditors of the CD, subject
to the provisions of Section 21.
14. Section 22 pertains to the Appointment of Resolution Professional
who is to be appointed by the CoC within 7 days of the constitution
of the CoC. The duties of Resolution Professional are enumerated
in Section 25. As per clause (j) of sub-section (2) of Section 25, the
Resolution Professional has to file an application for avoidance of
transactions in accordance with Chapter III, if any. Section 26 states
that the filing of an Avoidance application under clause (j) of sub-
section (2) of Section 25 by the Resolution Professional shall not
affect the proceedings of CIRP.
15. Section 29 requires the Resolution Professional to prepare an
information memorandum containing relevant information as may be
specified by the Insolvency and Bankruptcy Board of India. An eligible
RA can submit a RP on the basis of the information memorandum
prepared by the Resolution Professional, as per Section 30. The
Resolution Professional after examining each RP received by him and
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after confirming that the same are in consonance with sub-section (2)
of Section 30, would present the same to the CoC for its approval.
The relevant part of Section 30 is quoted below.
“30. Submission of Resolution Plan –
………………..
(2) The resolution professional shall examine each
resolution plan received by him to confirm that each
resolution plan--
(a) provides for the payment of insolvency resolution
process costs in a manner specified by the Board in
priority to the payment of other debts of the corporate
debtor;
(b) provides for the payment of debts of operational
creditors in such manner as may be specified by the
Board which shall not be less than--
(i) the amount to be paid to such creditors in
the event of a liquidation of the corporate debtor
under section 53; or
(ii) the amount that would have been paid to
such creditors, if the amount to be distributed
under the resolution plan had been distributed
in accordance with the order of priority in sub-
section (1) of section 53, whichever is higher
and provides for the payment of debts of
financial creditors, who do not vote in favour
of the resolution plan, in such manner as may
be specified by the Board, which shall not
be less than the amount to be paid to such
creditors in accordance with sub-section (1) of
section 53 in the event of a liquidation of the
corporate debtor.
Explanation 1.--For the removal of doubts, it is hereby
clarified that a distribution in accordance with the provisions
of this clause shall be fair and equitable to such creditors.
Explanation 2.-- For the purposes of this clause, it is hereby
declared that on and from the date of commencement of
[2025] 4 S.C.R. 379

Piramal Capital and Housing Finance Limited (Formerly Known as Dewan Housing
Finance Corporation Limited) v. 63 Moons Technologies Limited & Others

the Insolvency and Bankruptcy Code (Amendment) Act,
2019, the provisions of this clause shall also apply to the
corporate insolvency resolution process of a corporate
debtor--
(i) where a resolution plan has not been approved
or rejected by the Adjudicating Authority;
(ii) where an appeal has been preferred under
section 61 or section 62 or such an appeal is
not time barred under any provision of law for
the time being in force; or
(iii) where a legal proceeding has been initiated in
any court against the decision of the Adjudicating
Authority in respect of a resolution plan;
(c) provides for the management of the affairs of the
Corporate debtor after approval of the resolution plan;
(d) the implementation and supervision of the
resolution plan;
(e) does not contravene any of the provisions of the
law for the time being in force;
(f) conforms to such other requirements as may be
specified by the Board.
Explanation.-- For the purposes of clause (e), if any
approval of shareholders is required under the Companies
Act, 2013 or any other law for the time being in force for
the implementation of actions under the resolution plan,
such approval shall be deemed to have been given and
it shall not be a contravention of that Act or law];
(3)……………………….
(4) The committee of creditors may approve a resolution
plan by a vote of not less than “sixty-six” per cent of
voting share of the financial creditors, after considering its
feasibility and viability, the manner of distribution proposed,
which may take into account the order of priority amongst
creditors as laid down in sub-section (1) of section 53,
including the priority and value of the security interest of
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a secured creditor and such other requirements as may
be specified by the Board:
Provided …………………..
(5) & (6) ……………………”
Sub-section (6) of Section 30 requires the Resolution Professional
to submit the RP as approved by the CoC to the Adjudicating
Authority.
16. Section 31 being important for the purpose of these appeals, the
relevant part thereof is reproduced hereunder: -
“31. Approval of Resolution Plan –
(1) If the Adjudicating Authority is satisfied that the
resolution plan as approved by the committee of creditors
under sub-section (4) of section 30 meets the requirements
as referred to in sub-section (2) of section 30, it shall by
order approve the resolution plan which shall be binding
on the corporate debtor and its employees, members,
creditors, including the Central Government, any State
Government or any local authority to whom a debt in respect
of the payment of dues arising under any law for the time
being in force, such as authorities to whom statutory dues
are owed, guarantors and other stakeholders involved in
the resolution plan.
Provided that the Adjudicating Authority shall, before
passing an order for approval of resolution plan under this
sub-section, satisfy that the resolution plan has provisions
for its effective implementation.
(2) Where the Adjudicating Authority is satisfied that the
resolution plan does not confirm to the requirements
referred to in sub-section (1), it may, by an order, reject
the resolution plan.
(3) & (4) …………………………………..”
17. Section 32 pertains to the Appeal to be filed from an order approving
the RP in the manner and on the grounds laid down in sub-section
(3) of Section 61.
[2025] 4 S.C.R. 381

Piramal Capital and Housing Finance Limited (Formerly Known as Dewan Housing
Finance Corporation Limited) v. 63 Moons Technologies Limited & Others

18. The jurisdiction of the Adjudicating Authority (NCLT) for corporate
persons is circumscribed in sub-section (5) of Section 60, which
reads as under:
“60. Adjudicating authority for corporate persons:
(1) to (4)………………….
(5) Notwithstanding anything to the contrary contained
in any other law for the time being in force, the National
Company Law Tribunal shall have jurisdiction to entertain
or dispose of— (a) any application or proceeding by or
against the corporate debtor or corporate person; (b) any
claim made by or against the corporate debtor or corporate
person, including claims by or against any of its subsidiaries
situated in India; and (c) any question of priorities or any
question of law or facts, arising out of or in relation to the
insolvency resolution or liquidation proceedings of the
corporate debtor or corporate person under this Code.
(6)………………………..”
19. Section 61 provides for the Appeals and Appellate Authority. The
relevant part thereof is reproduced as under:
“61. Appeals and Appellate Authority. –
(1) Notwithstanding anything to the contrary contained
under the Companies Act 2013 (18 of 2013), any person
aggrieved by the order of the Adjudicating Authority under
this part may prefer an appeal to the National Company
Law Appellate Tribunal.
(2) ……………………………………
(3) An appeal against an order approving a resolution plan
under section 31 may be filed on the following grounds,
namely:
(i) the approved resolution plan is in contravention of the
provisions of any law for the time being in force;
(ii) there has been material irregularity in exercise of the
powers by the resolution professional during the corporate
insolvency resolution period;
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(iii) the debts owed to operational creditors of the corporate
debtor have not been provided for in the resolution plan
in the manner specified by the Board;
(iv) the insolvency resolution process costs have not been
provided for repayment in priority to all other debts; or
(v) the resolution plan does not comply with any other
criteria specified by the Board.
(4) & (5) …………………………………….”
20. So far as Avoidance applications under Chapter-III are concerned,
Section 43 pertains to the Application to be filed in respect of the
Preferential transactions and the relevant time therefor, and Section
44 pertains to the orders that may be passed by the Adjudicating
Authority in such application filed under Section 43(1). Section 45
pertains to the Application to be filed for the avoidance of Undervalued
transactions, and Section 46 pertains to the relevant period for
avoidable transactions. Section 47 pertains to the Application that
may be filed by Creditor in cases of Undervalued transactions,
and the orders to be passed by the Adjudicating Authority in such
Application. Section 48 pertains to the orders that may be passed
by the Adjudicating Authority in cases of Undervalued transactions
contemplated under sub-section (1) of Section 45, and Section
49 pertains to the orders that may be passed by the Adjudicating
Authority on being satisfied that CD has entered into an Undervalued
transaction as referred to in sub-section (2) of Section 45. Section
50 pertains to the Application to be filed in respect of Extortionate
Credit transactions and Section 51 pertains to the orders that may
be passed by the Adjudicating Authority in the Application made
under Section 50(1) of IBC.
21. Section 66 pertaining to the “Fraudulent trading or Wrongful trading”
being relevant for the purpose of the present Appeals, the same is
reproduced hereunder: -
“66. Fraudulent trading or wrongful trading. –
1) If during the corporate insolvency resolution process
or a liquidation process, it is found that any business
of the corporate debtor has been carried on with intent
to defraud creditors of the corporate debtor or for any
fraudulent purpose, the Adjudicating Authority may on the
[2025] 4 S.C.R. 383

Piramal Capital and Housing Finance Limited (Formerly Known as Dewan Housing
Finance Corporation Limited) v. 63 Moons Technologies Limited & Others

application of the resolution professional pass an order that
any persons who were knowingly parties to the carrying
on of the business in such manner shall be liable to make
such contributions to the assets of the corporate debtor
as it may deem fit.
(2) On an application made by a resolution professional
during the corporate insolvency resolution process, the
Adjudicating Authority may by an order direct that a director
or partner of the corporate debtor, as the case may be,
shall be liable to make such contribution to the assets of
the corporate debtor as it may deem fit, if—
(a) before the insolvency commencement date, such
director or partner knew or ought to have known that
there was no reasonable prospect of avoiding the
commencement of a corporate insolvency resolution
process in respect of such corporate debtor; and
(b) such director or partner did not exercise due
diligence in minimising the potential loss to the
creditors of the corporate debtor.
(3) Notwithstanding anything contained in this section, no
application shall be filed by a resolution profession under
sub-Section (2), in respect of such default against which
initiation of corporate insolvency resolution process is
suspended as per Section 10A.
Explanation. — For the purposes of this section a director
or partner of the corporate debtor, as the case may be,
shall be deemed to have exercised due diligence if such
diligence was reasonably expected of a person carrying
out the same functions as are carried out by such director
or partner, as the case may be, in relation to the corporate
debtor.”
22. Section 67 deals with the proceedings under Section 66. It reads
as under: -
“67. Proceedings under Section 66. –
(1) Where the Adjudicating Authority has passed an order
under sub-section (1) or sub-section (2) of section 66, as
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the case may be, it may give such further directions as it
may deem appropriate for giving effect to the order, and
in particular, the Adjudicating Authority may—
(a) provide for the liability of any person under the order
to be a charge on any debt or obligation due from the
corporate debtor to him, or on any mortgage or charge
or any interest in a mortgage or charge on assets of the
corporate debtor held by or vested in him, or any person
on his behalf, or any person claiming as assignee from
or through the person liable or any person acting on his
behalf; and
(b) from time to time, make such further directions as may
be necessary for enforcing any charge imposed under
this section.
Explanation. —For the purposes of this section, “assignee”
includes a person to whom or in whose favour, by the
directions of the person held liable under clause (a) the
debt, obligation, mortgage or charge was created, issued
or transferred or the interest created, but does not include
an assignee for valuable consideration given in good faith
and without notice of any of the grounds on which the
directions have been made.
(2) Where the Adjudicating Authority has passed an order
under sub-section (1) or sub-section (2) of section 66, as
the case may be, in relation to a person who is a creditor
of the corporate debtor, it may, by an order, direct that
the whole or any part of any debt owed by the corporate
debtor to that person and any interest thereon shall rank
in the order of priority of payment under section 53 after
all other debts owed by the corporate debtor.”
23. Section 238 states that the provisions of IBC shall have effect,
notwithstanding anything inconsistent therewith contained in any
other law for the time being in force or any instrument, having effect
by virtue of any such law.
24. The Insolvency and Bankruptcy Board of India (IBBI), in exercise
of the powers conferred under Section 240 of IBC, has framed
the Regulations called “The Insolvency and Bankruptcy Board
[2025] 4 S.C.R. 385

Piramal Capital and Housing Finance Limited (Formerly Known as Dewan Housing
Finance Corporation Limited) v. 63 Moons Technologies Limited & Others

of India (Insolvency Resolution Process for Corporate Persons)
Regulations, 2016 (for short, Regulations, 2016) laying down a
detailed procedure required to be followed for the Insolvency
Resolution Process for Corporate Persons. Regulation 37 of the said
Regulations requires the RP to provide for the measures, as may
be necessary, for Insolvency Resolution of the CD for maximization
of value of its assets. Regulation 38 states about the mandatory
contents of the RP. Regulation 39 states about the procedure to
be followed while approving the Plan, also prescribing time limit
for each stage of the process. The relevant part of Regulation 39
is reproduced as under:
“Regulation 39- Approval of Resolution plan –
(1) ………………………………….
(2) The resolution professional shall submit to the committee
all resolution plans which comply with the requirements of
the Code and regulations made thereunder along with the
details of following transactions, if any, observed, found
or determined by him: -
(a) preferential transactions under section 43;
(b) undervalued transactions under section 45;
(c) extortionate credit transactions under section 50; and
(d) fraudulent transactions under section 66,
and the orders, if any, of the adjudicating authority in
respect of such transactions.
(3) The committee shall-
(a) evaluate the resolution plans received under sub-
regulation (2) as per evaluation matrix;
(b) record its deliberations on the feasibility and viability
of each resolution plan; and
(c) vote on all such resolution plans simultaneously.
(3A) Where only one resolution plan is put to vote, it shall
be considered approved if it receives requisite votes.
(3B) …………………………….
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(4) The resolution professional shall endeavour to submit
the resolution plan approved by the committee to the
Adjudicating Authority at least fifteen days before the
maximum period for completion of corporate insolvency
resolution process under section 12, along with a
compliance certificate in Form H of the Schedule and the
evidence of receipt of performance security required under
sub-regulation (4A) of regulation 36B.
(5) to (8) ……………………………….
(9) A creditor, who is aggrieved by non-implementation of
a resolution plan approved under sub-section (1) of section
31, may apply to the Adjudicating Authority for directions.”
25. The IBBI has also framed the Regulations called the IBBI (Liquidation
Process) Regulations, 2016. Since, the NCLAT has referred to
Regulation 37A thereof, the same is reproduced as under:
“Regulation 37A – Assignment of not readily realizable
assets. –
1) A liquidator may assign or transfer a not readily realisable
asset through a transparent process, in consultation with
the stakeholders’ consultation committee in accordance
with regulation 31A, for a consideration to any person,
who is eligible to submit a resolution plan for insolvency
resolution of the corporate debtor.
Explanation. - For the purposes of this sub-regulation,
“not readily realisable asset” means any asset included
in the liquidation estate which could not be sold through
available options and includes contingent or disputed
assets and assets underlying proceedings for preferential,
undervalued, extortionate credit and fraudulent transactions
referred to in sections 43 to 51 and section 66 of the Code.”
26. The Reserve Bank of India Act, 1934 (RBI Act) was enacted to
regulate the issue of Bank Notes and for keeping reserves with a
view to securing monetary stability in India and generally to operate
the currency and credit system of the country to its advantage. The
RBI is also responsible to operate the monetary policy framework
in India. The relevant part of the provisions contained in Section
45-IE of RBI Act, under which the RBI had superseded the Board
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Finance Corporation Limited) v. 63 Moons Technologies Limited & Others

of Directors of DHFL and appointed the Administrator, is reproduced
as under: -
“45-IE. Supersession of Board of directors of
non-banking financial company (other than Government
Company). —
(1) Where the Bank is satisfied that in the public interest or
to prevent the affairs of a non-banking financial company
being conducted in a manner detrimental to the interest of
the depositors or creditors, or of the non-banking financial
company (other than Government Company), or for
securing the proper management of such company or for
financial stability, it is necessary so to do, the Bank may,
for reasons to be recorded in writing, by order, supersede
the Board of Directors of such company for a period not
exceeding five years as may be specified in the order,
which may be extended from time to time, so, however,
that the total period shall not exceed five years.
(2) The Bank may, on supersession of the Board of
Directors of the non-banking financial company under sub-
section (1), appoint a suitable person as the Administrator
for such period as it may determine.
(3) to (9)……………………..”
27. Section 45 (QA) of RBI Act having been relied upon, the same is
reproduced as under:
“45QA. Power of Company Law Board to order
repayment of deposit. —
(1) Every deposit accepted by a non-banking financial
company, unless renewed, shall be repaid in accordance
with the terms and condition of such deposit.
(2) Where a non-banking financial company has failed to
repay and deposit or part thereof in accordance with the
terms and conditions of such deposit, the Company Law
Board constituted under section 10E of the Companies
Act, 1956 (1 of 1956), may, if it is satisfied, either on its
own motion or on an application of the depositor, that it
is necessary so to do to safeguard the interests of the
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company, the depositors or in the public interest, direct,
by order, the non-banking financial company to make
repayment of such deposit or part thereof forthwith or
within such time and subject to such conditions as may
be specified in the order:
Provided that the Company Law Board may, before making
any order under this sub-section, give a reasonable
opportunity of being heard to the non-banking financial
company and the other persons interested in the matter.”
28. The NHB Act has been enacted to establish a Bank to be known
as the National Housing Bank to operate as a principal agency to
promote housing finance institutions, both at local and regional levels
and to provide financial and other support to such institutions and
for matters connected therewith or incidental thereto. Section 36(A)
of NHB Act having been relied upon, the same is also reproduced
for ready reference:
“36A. Power to order repayment of deposit. —
(1) Every deposit accepted by a housing finance institution
which is a company unless renewed, shall be repaid in
accordance with the terms and conditions of such deposit.
(2) Where a housing finance institution which is a company
has failed to repay any deposit or part thereof in accordance
with the terms and conditions of such deposit, such officer
of the National Housing Bank, as may be authorised by
the Central Government for the purpose of this section
(hereinafter referred to as the “authorised officer”) may,
if he is satisfied, either on his own motion or on any
application of the depositor, that it is necessary so to do to
safeguard the interests of the housing finance institution,
the depositors or in the public interest, direct, by order,
such housing finance institution to make repayment of such
deposit or part thereof forthwith or within such time and
subject to such conditions as may be specified in the order:
Provided that the authorised officer may, before making any
order under this sub-section, give a reasonable opportunity
of being heard to the housing finance institution and the
other persons interested in the matter.”
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Piramal Capital and Housing Finance Limited (Formerly Known as Dewan Housing
Finance Corporation Limited) v. 63 Moons Technologies Limited & Others

(V) SCOPE OF JUDICIAL REVIEW: -
29. Before adverting to the issues involved in these Appeals, let us
examine the scope of judicial review by the NCLT under Section 31
and the scope of judicial review by NCLAT under Section 61 of IBC.
30. From the bare perusal of the Statement of Objects and Reasons,
it is discernible that one of the prime objects of IBC is to provide
for implementation of the Insolvency Resolution Process in a time
bound manner for maximization of value of assets in order to balance
the interests of the stakeholders. The Legislature in order to fill
up critical gaps in the corporate insolvency framework, had made
amendments in certain provisions by Act of 26 of 2019, making the
RP approved by the Adjudicating Authority binding on the Central
Government, any State Government or local authority to whom a
debt is owned in respect of payment of dues arising under any law
for the time being in force.
31. If one glances through the scheme of the IBC, its purpose is also
explicitly spelt out from the various provisions of the Act itself. The
role and importance of the CoC have been stated in Section 21, the
duties of the Resolution Professional in Section 25, the approval of RP
by the Adjudicating Authority in Section 31. Certain mandates have
been given in Section 31 for the effective implementation of the RP,
as approved by the CoC. The said requirements are (i) the RP must
be approved by the CoC by a vote of not less than 66% of voting
share of the financial creditors, as contemplated in sub-section (4)
of Section 30. (ii) the RP submitted by the Resolution Professional
must confirm the requirements of sub-section (2) of Section 30. The
mandatory contents of the RP have also been stated in Regulation
38 of the Regulations, 2016. Thus, having regard to Section 31, it
is clear that the Adjudicating Authority i.e. NCLT, if it is satisfied that
the RP as approved by the CoC under sub-section (4) of Section 30
meets the requirements as referred to in sub-section (2) of Section
30, it shall by an order approve the RP, which shall be binding on all
the stakeholders. The Adjudicating Authority can reject the RP under
sub-section (2) of Section 31, where it is satisfied that the RP does
not confirm to the requirements referred to in sub-section (1) thereof.
32. At this juncture, it is also necessary to refer to Section 61 which
deals with the grounds on which Appeals could be preferred before
the Appellate Authority i.e. NCLAT against the order approving the
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RP under Section 31 by the NCLT. As per sub-section (3) of Section
61, an appeal against an order of approving the RP under Section 31
could be filed on one of the five grounds mentioned therein. One of
the grounds on which an Appeal could be filed is, when the approval
of RP by the NCLT is in contravention of the provisions of any law
for the time being in force. Another ground is, when there has been
material irregularity in exercise of the powers by the Resolution
Professional during the Corporate Insolvency Resolution period.
There are other three grounds with which we are not concerned in
the present set of Appeals. Suffice it to say that there are specific
grounds mentioned in the sub-section (3) for preferring of an Appeal
before the NCLAT under Section 61 of the Code. Thus, the powers
to be exercised by the NCLAT under Section 61, have also been
specifically confined to the grounds mentioned therein.
33. The reasons for circumscribing the powers of NCLT under Section
31 in approving/rejecting the RP approved by the CoC and of the
NCLAT under Section 61 in entertaining the Appeals arising out of the
orders passed by the NCLT approving the RP on limited grounds are
not far to be culled out. The very prominent purpose of the IBC has
been spelt out in the long title of the Act itself, which is to promote
entrepreneurship, availability of credit and balance the interest of all
the stakeholders in the CIRP proceedings in a time bound manner.
This Court in catena of decisions has dealt with the dominant purpose
and objectives of enacting the IBC, while examining the scope of
judicial review by the NCLT and the NCLAT over the commercial
wisdom exercised by the CoC.
34. In Arcelormittal India Private Limited vs. Satish Kumar Gupta and
Others,7 this Court had elaborately adverted to the legislative history
and delineated the broad contours of the provisions of the IBC, from
which it could be seen that the commercial wisdom of CoC has been
given prominent status without any judicial intervention, for ensuring
the completion of Resolution Process within the timelines prescribed
by the IBC. It is also required to be noted that there is a mandate of
completing the Resolution Process within 270 days (outer limit), failing
which an initiation of Liquidation process has been made inevitable.
This Court in the said judgment after discussing the scheme of the

7 (2019) 2 SCC 1
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Piramal Capital and Housing Finance Limited (Formerly Known as Dewan Housing
Finance Corporation Limited) v. 63 Moons Technologies Limited & Others

Act, and also the earlier judgments, emphasized on the prescription
of time-limit for the completion of Insolvency process. Paragraph
75 of the said judgment being relevant is reproduced hereunder: -
“75. In fact, even the literal language of Section 12(1)
makes it clear that the provision must read as being
mandatory. The expression “shall be completed” is used.
Further, sub-section (3) makes it clear that the duration
of 180 days may be extended further “but not exceeding
90 days”, making it clear that a maximum of 270 days
is laid down statutorily. Also, the proviso to Section 12
makes it clear that the extension “shall not be granted
more than once.”
35. In K. Sashidhar vs. Indian Overseas Bank and Others (supra),
this Court dealt with the discretion of the Adjudicating Authority
(NCLT) and the jurisdiction of the NCLAT as an Appellate Authority
and held as under: -
“55. Whereas, the discretion of the adjudicating authority
(NCLT) is circumscribed by Section 31 limited to scrutiny of
the resolution plan “as approved” by the requisite per cent
of voting share of financial creditors. Even in that enquiry,
the grounds on which the adjudicating authority can reject
the resolution plan is in reference to matters specified
in Section 30(2), when the resolution plan does not
conform to the stated requirements. Reverting to Section
30(2), the enquiry to be done is in respect of whether the
resolution plan provides : (i) the payment of insolvency
resolution process costs in a specified manner in priority
to the repayment of other debts of the corporate debtor,
(ii) the repayment of the debts of operational creditors in
prescribed manner, (iii) the management of the affairs of the
corporate debtor, (iv) the implementation and supervision
of the resolution plan, (v) does not contravene any of
the provisions of the law for the time being in force, (vi)
conforms to such other requirements as may be specified
by the Board. The Board referred to is established under
Section 188 of the I&B Code. The powers and functions
of the Board have been delineated in Section 196 of the
I&B Code. None of the specified functions of the Board,
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directly or indirectly, pertain to regulating the manner
in which the financial creditors ought to or ought not to
exercise their commercial wisdom during the voting on the
resolution plan under Section 30(4) of the I&B Code. The
subjective satisfaction of the financial creditors at the time
of voting is bound to be a mixed baggage of variety of
factors. To wit, the feasibility and viability of the proposed
resolution plan and including their perceptions about the
general capability of the resolution applicant to translate
the projected plan into a reality. The resolution applicant
may have given projections backed by normative data but
still in the opinion of the dissenting financial creditors, it
would not be free from being speculative. These aspects
are completely within the domain of the financial creditors
who are called upon to vote on the resolution plan under
Section 30(4) of the I&B Code.
56. ...........
57. On a bare reading of the provisions of the I&B Code,
it would appear that the remedy of appeal under Section
61(1) is against an “order passed by the adjudicating
authority (NCLT)”, which we will assume may also pertain to
recording of the fact that the proposed resolution plan has
been rejected or not approved by a vote of not less than
75% of voting share of the financial creditors. Indubitably,
the remedy of appeal including the width of jurisdiction of
the appellate authority and the grounds of appeal, is a
creature of statute. The provisions investing jurisdiction
and authority in NCLT or Nclat as noticed earlier, have
not made the commercial decision exercised by CoC of
not approving the resolution plan or rejecting the same,
justiciable. This position is reinforced from the limited
grounds specified for instituting an appeal that too against
an order “approving a resolution plan” under Section 31.
First, that the approved resolution plan is in contravention
of the provisions of any law for the time being in force.
Second, there has been material irregularity in exercise
of powers “by the resolution professional” during the
corporate insolvency resolution period. Third, the debts
owed to operational creditors have not been provided for
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Piramal Capital and Housing Finance Limited (Formerly Known as Dewan Housing
Finance Corporation Limited) v. 63 Moons Technologies Limited & Others

in the resolution plan in the prescribed manner. Fourth, the
insolvency resolution plan costs have not been provided for
repayment in priority to all other debts. Fifth, the resolution
plan does not comply with any other criteria specified by
the Board. Significantly, the matters or grounds—be it under
Section 30(2) or under Section 61(3) of the I&B Code—are
regarding testing the validity of the “approved” resolution
plan by CoC; and not for approving the resolution plan
which has been disapproved or deemed to have been
rejected by CoC in exercise of its business decision.
58. Indubitably, the inquiry in such an appeal would
be limited to the power exercisable by the resolution
professional under Section 30(2) of the I&B Code or, at
best, by the adjudicating authority (NCLT) under Section
31(2) read with Section 31(1) of the I&B Code. No other
inquiry would be permissible. Further, the jurisdiction
bestowed upon the appellate authority (Nclat) is also
expressly circumscribed. It can examine the challenge
only in relation to the grounds specified in Section 61(3)
of the I&B Code, which is limited to matters “other than”
enquiry into the autonomy or commercial wisdom of the
dissenting financial creditors. Thus, the prescribed
authorities (NCLT/NCLAT) have been endowed with
limited jurisdiction as specified in the I&B Code and
not to act as a court of equity or exercise plenary
powers.”
36. The Court also considered the amendment to Section 30(4) i.e.
fourth proviso which was added to sub-section (4) which came into
force from 23.11.2017, and observed as under: -
“68. Suffice it to observe that the amended provision
merely restates as to what the financial creditors are
expected to bear in mind whilst expressing their choice
during consideration of the proposal for approval of a
resolution plan. No more and no less. Indubitably, the
legislature has consciously not provided for a ground
to challenge the justness of the “commercial decision”
expressed by the financial creditors—be it to approve or
reject the resolution plan. The opinion so expressed by
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voting is non-justiciable. Further, in the present cases,
there is nothing to indicate as to which other requirements
specified by the Board at the relevant time have not been
fulfilled by the dissenting financial creditors. As noted
earlier, the Board established under Section 188 of the
I&B Code can perform powers and functions specified in
Section 196 of the I&B Code. That does not empower the
Board to specify requirements for exercising commercial
decisions by the financial creditors in the matters of
approval of the resolution plan or liquidation process.
Viewed thus, the amendment under consideration does
not take the matter any further.”
37. In Committee of Creditor of Essar Steel India Limited vs. Satish
Kumar Gupta and Others (supra), a Three-Judge Bench discussed
in detail the issues pertaining to the role of Resolution Professionals,
CoCs, and the jurisdiction of NCLT and NCLAT and observed as
under: -
“64. Thus, what is left to the majority decision of the
Committee of Creditors is the “feasibility and viability” of
a resolution plan, which obviously takes into account all
aspects of the plan, including the manner of distribution
of funds among the various classes of creditors. As an
example, take the case of a resolution plan which does not
provide for payment of electricity dues. It is certainly open
to the Committee of Creditors to suggest a modification
to the prospective resolution applicant to the effect that
such dues ought to be paid in full, so that the carrying on
of the business of the corporate debtor does not become
impossible for want of a most basic and essential element
for the carrying on of such business, namely, electricity.
This may, in turn, be accepted by the resolution applicant
with a consequent modification as to distribution of funds,
payment being provided to a certain type of operational
creditor, namely, the electricity distribution company, out
of upfront payment offered by the proposed resolution
applicant which may also result in a consequent reduction
of amounts payable to other financial and operational
creditors. What is important is that it is the commercial
wisdom of this majority of creditors which is to determine,
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Piramal Capital and Housing Finance Limited (Formerly Known as Dewan Housing
Finance Corporation Limited) v. 63 Moons Technologies Limited & Others

through negotiation with the prospective resolution
applicant, as to how and in what manner the corporate
resolution process is to take place.”
38. On the issue of jurisdiction of the Adjudicating Authority i.e. NCLT
and the Appellate Tribunal i.e. NCLAT, it was held in Essar Steel
(supra) as under:-
“Jurisdiction of the Adjudicating Authority and the
Appellate Tribunal

65. As has already been seen hereinabove, it is the
Adjudicating Authority which first admits an application
by a financial or operational creditor, or by the corporate
debtor itself under Sections 7, 9 and 10 of the Code. Once
this is done, within the parameters fixed by the Code,
and as expounded upon by our judgments in Innoventive
Industries Ltd. v. Icici Bank [Innoventive Industries Ltd. v.
Icici Bank (2018) 1 SCC 407 : (2018) 1 SCC (Civ) 356]
and Macquarie Bank Ltd. v. Shilpi Cable Technologies
Ltd. [Macquarie Bank Ltd. v. Shilpi Cable Technologies
Ltd. (2018) 2 SCC 674 : (2018) 2 SCC (Civ) 288], the
Adjudicating Authority then appoints an interim resolution
professional who takes administrative decisions as to the
day to day running of the corporate debtor; collation of
claims and their admissions; and the calling for resolution
plans in the manner stated above. After a resolution plan
is approved by the requisite majority of the Committee of
Creditors, the aforesaid plan must then pass muster of the
Adjudicating Authority under Section 31(1) of the Code.
The Adjudicating Authority’s jurisdiction is circumscribed by
Section 30(2) of the Code. In this context, the decision of
this Court in K. Sashidhar [K. Sashidhar v. Indian Overseas
Bank (2019) 12 SCC 150: (2019) 4 SCC (Civ) 222] is of
great relevance.
66. ................
67. …..Thus, it is clear that the limited judicial review
available, which can in no circumstance trespass upon
a business decision of the majority of the Committee of
Creditors, has to be within the four corners of Section
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30(2) of the Code, insofar as the Adjudicating Authority
is concerned, and Section 32 read with Section 61(3) of
the Code, insofar as the Appellate Tribunal is concerned,
the parameters of such review having been clearly laid
down in K. Sashidhar.
68. ……….
69. It will be noticed that the non obstante clause of
Section 60(5) speaks of any other law for the time being
in force, which obviously cannot include the provisions of
the Code itself. Secondly, Section 60(5)(c) is in the nature
of a residuary jurisdiction vested in NCLT so that NCLT
may decide all questions of law or fact arising out of or in
relation to insolvency resolution or liquidation under the
Code. Such residual jurisdiction does not in any manner
impact Section 30(2) of the Code which circumscribes the
jurisdiction of the Adjudicating Authority when it comes
to the confirmation of a resolution plan, as has been
mandated by Section 31(1) of the Code. A harmonious
reading, therefore, of Section 31(1) and Section 60(5)
of the Code would lead to the result that the residual
jurisdiction of NCLT under Section 60(5)(c) cannot, in any
manner, whittle down Section 31(1) of the Code, by the
investment of some discretionary or equity jurisdiction in
the Adjudicating Authority outside Section 30(2) of the
Code, when it comes to a resolution plan being adjudicated
upon by the Adjudicating Authority. This argument also
must needs be rejected.”
39. Again, a Three-Judge bench in Ghanashyam Mishra and Sons
Private Limited through the Authorised Signatory vs. Edelweiss
Asset Reconstruction Company Limited through the Director
and Others,8 examined the legislative intent of making the RP
binding on all the Stakeholders after it gets seal of approval from
the Adjudicating Authority, and observed as under: -
“64. It could thus be seen, that the legislature has given
paramount importance to the commercial wisdom of CoC

8 (2021) 9 SCC 657
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Finance Corporation Limited) v. 63 Moons Technologies Limited & Others

and the scope of judicial review by adjudicating authority
is limited to the extent provided under Section 31 of the
I&B Code and of the appellate authority is limited to the
extent provided under sub-section (3) of Section 61 of
the I&B Code, is no more res integra.
65. Bare reading of Section 31 of the I&B Code would
also make it abundantly clear that once the resolution
plan is approved by the adjudicating authority, after it is
satisfied, that the resolution plan as approved by CoC
meets the requirements as referred to in sub-section (2)
of Section 30, it shall be binding on the corporate debtor
and its employees, members, creditors, guarantors and
other stakeholders. Such a provision is necessitated since
one of the dominant purposes of the I&B Code is revival
of the corporate debtor and to make it a running concern.”
40. Recently, this Court in Ebix Singapore Private Limited vs.
Committee of Creditors of Educomp Solutions Limited and
Another,9 reiterating that the Adjudicating Authority is prohibited from
second-guessing the commercial wisdom of the parties or directing
unilateral modification to the RPs, as held in Essar Steel (supra)
and K. Sashidhar (supra), further held as under-
“157. These are binding precedents. Absent a clear
legislative provision, this Court will not, by a process of
interpretation, confer on the adjudicating authority a power
to direct an unwilling CoC to renegotiate a submitted
resolution plan or agree to its withdrawal, at the behest
of the resolution applicant. The adjudicating authority can
only direct the CoC to re-consider certain elements of
the resolution plan to ensure compliance under Section
30(2) IBC, before exercising its powers of approval or
rejection, as the case may be, under Section 31 [Essar
Steel (India) Ltd. (CoC) v. Satish Kumar Gupta (2020) 8
SCC 531, para 73 : (2021) 2 SCC (Civ) 443] . In State
of A.P. v. P. Laxmi Devi [State of A.P. v. P. Laxmi Devi
(2008) 4 SCC 720], while determining the constitutionality

9 (2022) 2 SCC 401
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of a statute, this Court observed that it should be wary of
transgressing into the domain of the legislature, especially
in matters relating to economic and regulatory legislation.
This Court observed : (P. Laxmi Devi case [State of A.P.
v. P. Laxmi Devi (2008) 4 SCC 720]
“80. … As regards economic and other
regulatory legislation judicial restraint must be
observed by the court and greater latitude must
be given to the legislature while adjudging the
constitutionality of the statute because the court
does not consist of economic or administrative
experts. It has no expertise in these matters,
and in this age of specialisation when policies
have to be laid down with great care after
consulting the specialists in the field, it will be
wholly unwise for the court to encroach into
the domain of the executive or legislative (sic
legislature) and try to enforce its own views
and perceptions.”
158. Judicial restraint must not only be exercised while
adjudicating upon the constitutionality of the statute relating
to economic policy but also in matters of interpretation of
economic statutes, where the interpretative manoeuvres
of the Court have an effect of transgressing into the
law-making power of the legislature and disturbing the
delicate balance of separation of powers between the
legislature and the judiciary. Judicial restraint must
be exercised in such cases as a matter of prudence,
since the court neither has the necessary expertise
nor the power to hold consultations with stakeholders
or experts to decide the direction of economic policy. A
court may be inept in laying down a detailed procedure
for exercise of the power of withdrawal or modification
by a successful resolution applicant without impacting
the other procedural steps and the timelines under IBC
which are sacrosanct. Thus, judicial restraint must be
exercised while intervening in a law governing substantive
outcomes through procedure, such as IBC. In this case, if
resolution applicants are permitted to seek modifications
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after subsequent negotiations or a withdrawal after a
submission of a resolution plan to the adjudicating authority
as a matter of law, it would dictate the commercial wisdom
and bargaining strategies of all prospective resolution
applicants who are seeking to participate in the process
and the successful resolution applicants who may wish
to negotiate a better deal, owing to myriad factors that
are peculiar to their own case. The broader legitimacy of
this course of action can be decided by the legislature
alone, since any other course of action would result in a
flurry of litigation which would cause the delay that IBC
seeks to disavow.”
41. What is “commercial wisdom” of CoC has been very aptly put by this
Court in a latest decision in M.K. Rajagopalan vs. Dr. Periasamy
Palani Gounder and Another (supra), which is worth reproducing: -
“160. As noticed hereinbefore, commercial wisdom of
CoC is given such a status of primacy that the same
is considered rather a matter non-justiciable in any
adjudicatory process, be it by the adjudicating authority
or even by this Court. However, the commercial wisdom
of CoC means a considered decision taken by CoC with
reference to the commercial interests and the interest of
revival of the corporate debtor and maximisation of value
of its assets. This wisdom is not a matter of rhetoric but is
denoting a well-considered decision by the protagonist of
CIRP i.e. CoC. As observed by this Court in K. Sashidhar
[K. Sashidhar v. Indian Overseas Bank (2019) 12 SCC
150 : (2019) 4 SCC (Civ) 222] , the financial creditors
forming CoC “act on the basis of thorough examination
of the proposed resolution plan and assessment made
by their team of experts. The opinion on the subject-
matter expressed by them after due deliberations in
CoC meetings through voting, as per voting shares, is a
collective business decision.” This Court also observed
in K. Sashidhar [K. Sashidhar v. Indian Overseas Bank
(2019) 12 SCC 150 : (2019) 4 SCC (Civ) 222] that “[t]
here is an intrinsic assumption that financial creditors are
fully informed about the viability of the corporate debtor
and feasibility of the proposed resolution plan.”
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161. These observations read with the observations
in Essar Steel [Essar Steel India Ltd. (CoC) v. Satish
Kumar Gupta (2020) 8 SCC 531 : (2021) 2 SCC (Civ)
443] with reference to the reasons stated in the Report of
Bankruptcy Law Reforms Committee of November 2015,
make it clear that commercial wisdom of CoC is assigned
primacy in CIRP for it represents collective business
decision, which is arrived at after thorough examination
of the proposed resolution plan and assessment made
with involvement of experts by the body of persons who
are most vitally interested in rapid and efficient decision
making. It follows as a necessary corollary that to be worth
its name, the commercial wisdom of CoC would come
into existence and operation only when all the relevant
information is available before it and is duly deliberated
upon by all its members, who have direct and substantial
interest in the survival of corporate debtor and in the
entire CIRP.
162. In light of the aforesaid position of law and its
operation in relation to the decision-making process of
CoC, it needs hardly any emphasis that each and every
aspect relating to the resolution plan, and more particularly
its financial layout, has to be before the CoC before it
could be said to have arrived at a considered decision in
its commercial wisdom.”
42. In view of the above legal position settled by this Court in the fleet
of judgments, it is no more res integra that the legislature has given
paramount importance to the “commercial wisdom” of CoC, and that
the scope of the judicial review by the Adjudicating Authority (NCLT)
is limited to the extent provided under Section 31, and that of the
Appellate Authority (NCLAT) is limited to the extent provided under
sub-section (3) of Section 61 of the IBC. After a RP is approved
by the requisite majority of the CoC, it must pass the muster of
Adjudicating Authority under Section 31(1) of the IBC. Section 31
also makes it abundantly clear that once the RP is approved by the
Adjudicating Authority, after it is satisfied that the RP as approved
by the CoC meets the requirements as referred to in sub-section
(2) of Section 30, it shall be binding on the CD and its employees,
members, creditors, guarantors and stakeholders. The legislature has
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Piramal Capital and Housing Finance Limited (Formerly Known as Dewan Housing
Finance Corporation Limited) v. 63 Moons Technologies Limited & Others

consciously not provided for a ground to challenge the justness of
the “commercial decision” taken by the Financial Creditors, because
one of the dominant purposes of the IBC is revival of the CD and
to make it a running concern.
43. While considering the feasibility and viability of the Prospective
Resolution Plans, the CoC can always suggest a modification
therein and exercise its commercial wisdom. However, once the RP
is approved by the requisite majority of CoC, and when such RP
is placed before the Adjudicating Authority for its approval under
Section 31, the Adjudicating Authority has to only see whether such
RP as approved by the CoC meets the requirements as referred
to in Section 30(2). It is only where the Adjudicating Authority is
satisfied that the RP does not confirm to the requirements of sub-
section (1) of Section 31, it may by an order reject the RP. It is
true that the NCLT has to decide all the questions on law or fact
arising out of or in relation to the insolvency resolution or liquidation
under the residuary jurisdiction vested in NCLT under Section 60(5),
however as held in Essar Steel (supra), such residual jurisdiction
does not in any manner impact Section 30(2) of the Code, which
circumscribes the jurisdiction of the Adjudicating Authority, when it
comes to the confirmation of RP, as has been mandated by Section
31(1) of the Code.
44. Similarly, the scope of interference by the Appellate Authority i.e.,
NCLAT under Section 61 in the Appeals arising out of the order
approving a RP under Section 31, is also very limited and restricted
to the specific grounds mentioned in sub-section (3) of Section 61.
The grounds for filing Appeal under Section 61 have to be confined
to sub-section (3) thereof.
45. Keeping in view the above settled legal position, let us deal with
the three categories of Appeals separately.

(VI) ANALYSIS IN THE FIRST CATEGORY OF APPEALS: -
46. In the First category of Appeals, the impugned order dated
27.01.2022 passed by the NCLAT, in the Company Appeal Nos.
454-455 and 750 of 2021, in relation to the treatment of recoveries
from the Avoidance applications provided in the RP submitted by
the SRA - Piramal Capital, is under challenge. As stated earlier, the
C.A. Nos.1632-1634 of 2022 have been filed by the SRA - Piramal
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Capital, and C.A. Nos.2989-2991 of 2022 have been filed by the
Union of India, challenging the impugned judgment to the extent
the NCLAT modified the RP and the C.A. Nos. 3694-3695 of 2022
have been filed by the 63 Moons to the extent the NCLAT sent
back the RP to CoC for reconsideration. The NCLAT vide the said
impugned order has set aside the term in the RP that permitted the
SRA to appropriate recoveries if any, from Avoidance applications
filed upon Section 66 of the IBC, and sent back the RP to CoC for
reconsideration on that aspect.
47. The NCLAT treating the Appeals at the instance of 63 Moons as
maintainable under Section 61(3) of IBC, observed as under:
“9.113 The appellants, aggrieved persons on account of
illegalities perpetrated in the approved Resolution Plan,
have preferred these appeals, requiring adjudication on
an important question of law. Accordingly, these appeals
have duly urged the requisite ground for Section 61 (3)
of the Code.
9.114 Providing the benefit of the outcome of avoidance
applications to the Resolution Applicant results in unjust
enrichment of Respondent No. 2/RA at the expense of
all the creditors of the Corporate Debtor. Moreover, the
same is vitiated by illegalities and material irregularities,
and the same could not have been cured on the pretext
of the commercial wisdom of CoC.”
48. The NCLAT in the impugned judgment, while acknowledging the
proposition that the commercial wisdom of the CoC is supreme
so far as commercial aspects of the RP is concerned, held that
the said principle is not applicable to the present facts where the
issue of illegality has been raised. According to the NCLAT, the
depositors of DHFL are the rightful beneficiaries, if not owners, of
the monies that have been siphoned off by the Promoters/Directors
of the CD. The NCLAT thereafter taking resort to Regulation 37A of
IBBI (Liquidation Process) Regulations, 2016, observed as under:
“9.109 Regulation 37A of the IBBI (Liquidation Process)
Regulations, 2016 (the “Liquidation Process Regulations”),
which empowers a Liquidator to assign or transfer a not
readily realizable asset during the liquidation of a Corporate
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Piramal Capital and Housing Finance Limited (Formerly Known as Dewan Housing
Finance Corporation Limited) v. 63 Moons Technologies Limited & Others

Debtor. The conspicuous absence of a similar provision
in the CIRP Regulations, which permits assignment or
transfer of recoveries from avoidance transactions to a
resolution applicant, supports the case of the Appellant
that such recoveries cannot be transferred to a resolution
applicant in the CIRP process, which is qualitatively
different and distinct from the liquidation process.”
49. Ultimately, the NCLAT concluded in Para 16-19 as under: -
“16. Therefore, before approving the Resolution Plan, the
Adjudicating Authority was obligated to test the Resolution
Plan in terms of Section 30 (2) of the Code. In the instant
case, the Administrator referred the matter to CoC to
decide on the applicability of the Venus judgement of
Delhi High Court in providing the outcome of avoidance
transactions to the Successful Resolution Applicant.
Adjudicatory power could not have been delegated to the
CoC. The Adjudicating Authority has not taken any decision
about the applicability of the Venus judgement on the
issue of providing the outcome of avoidance transaction
to the resolution applicant. The Adjudicating Authority has
stated that “as far as the claims of avoidance transactions,
CoC has consciously decided that the money realised
through these avoidance transactions would accrue to the
members of the CoC. At the same time, they have also
consciously decided after a lot of deliberations negotiations
that money realised if any under Section 66 of the IBC, i.e.
fraud and fraudulent transactions, CoC has ascribed the
value of lNR one and if any positive money recovery the
same would go to the Resolution Applicant of the Corporate
Debtor.” Therefore, it cannot be considered the findings of
the Adjudicating Authority. The CoC was not empowered to
exercise such Adjudicatory power and decide. Insolvency
Law Committee Report, 2020, specifically provides that
the key aim of providing certain transactions is to avoid
unjust enrichment of some parties in the insolvency at
the cost of all creditors. The underlying policy of such a
proceeding is to prevent unjust enrichment of one party
at the expense of other creditors. Thus, factual factors
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such as the kind of transactions being provided, party
funding the action, assignment of claims, and creditors
affected by transaction or trading may be considered
when deciding on the distribution of recoveries. Thus,
it was recommended that instead of providing anything
prescriptive in this regard, the decision on the treatment
of recoveries might be left to the adjudicating authority.
17. Accordingly, the Adjudicating Authority should have
decided whether the recoveries vested with the corporate
debtor should be applied for the benefit of creditors of
the corporate debtor, the successful resolution applicant
or other stakeholders. In arriving at this decision, the
Adjudicating Authority may take note of the facts and
circumstances of the case and other listed factors.
18. The Respondents have also argued that the possibility
of recovering monies from avoidance transactions is
very low. However, the amount of the actual recovery
that may be made in the future is entirely irrelevant.
Since Respondent No. 2 has ascribed a value of lNR
1 to the avoidance transactions, Respondent No. 2
has not factored in the avoidance transactions in the
Resolution Plan amount. Moreover, there is no material
on record to suggest that the avoidance transactions
have been factored in Respondent No. 2 ‘s Resolution
Plan. Therefore, the oral contention of the Respondents
that the avoidance transactions have been factored in the
Resolution Plan amount is unsupported and not borne out
from the material on record.
19. Therefore, the present appeals ought to be allowed.
The term in the Resolution Plan that permits the Successful
Resolution Applicant to appropriate recoveries, if any, from
avoidance applications filed under Section 66 of the Code
ought to be set aside. The Resolution Plan be sent back
to the CoC for reconsideration on this aspect.”

(i) QUESTIONS:
50. Having regard to the submissions made by the learned counsels
for the parties, and to the findings arrived at by the NCLAT in the
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Finance Corporation Limited) v. 63 Moons Technologies Limited & Others

impugned order, the main question that falls for consideration before
this Court is-
“Whether the RP in question approved by the CoC and
the NCLT was in contravention of the provisions of any
law, for the time being in force, requiring the NCLAT to
exercise its jurisdiction under Section 61 of the IBC?”
51. The ancillary questions to the main question would be-
(i) What are the Applications for Avoidance of transactions
required to be filed by the Resolution Professional in
accordance with Chapter III, and what are the Applications
in respect of Fraudulent trading or Wrongful trading required
to be filed by the Resolution Professional under Section 66
of the IBC?
(ii) What are the mandatory requirements as referred in sub-section
(2) of Section 30 read with Regulation 38 of the Regulations,
2016?
(iii) What is maximization of the value of assets of the Corporate
Debtor?
(iv) Whether the NCLAT should have entertained the Appeals of
the 63 Moons under Section 61 of the Code and interfered
with the commercial wisdom exercised by the CoC?
52. In our opinion, the cumulative answers of the ancillary questions
would answer the main question. Therefore, let us first of all examine
as to what are the Applications required to be filed by the Resolution
Professional, popularly known as the Avoidance Applications?

(ii) AVOIDANCE APPLICATIONS: -
53. One of the duties statutorily cast upon the Resolution Professional
in Clause (j) of sub-section (2) of Section 25 of the Code is that
the Resolution Professional shall file application for Avoidance of
transactions in accordance with Chapter III, if any. Having regard
to the said Chapter III, which pertains to “Liquidation Process,” it
appears that there are three types of Applications that could be filed
by the Resolution Professional for avoidance transactions.
(i) Application for avoidance of Preferential transactions under
Section 43,
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(ii) Application for avoidance of Undervalued transactions under
Section 45 and
(iii) Application for avoidance of Extortionate Credit transactions
under Section 50.
54. Section 26 specifically states that the filing of an Avoidance Application
under Clause (j) of sub-section (2) of Section 25 by the Resolution
Professional shall not affect the proceedings of CIRP. Meaning
thereby, irrespective of the pendency of the Avoidance Applications
filed by the Resolution Professional, the CIRP Proceedings could
be proceeded further.
55. So far as Section 66 is concerned, the same falls under Chapter VI
and it pertains to the “Fraudulent trading or Wrongful trading.”
Sub-section 1 of Section 66 provides that if during the CIRP or a
Liquidation process, it is found that any business of the CD has
been carried on with intent to defraud creditors of the CD or for any
fraudulent purpose, the Adjudicating Authority may on the application
of the Resolution Professional, pass an order that any persons who
were knowingly parties to the carrying on of the business in such
manner, shall be liable to make such contributions to the assets of
the CD, as it may deem fit. From the bare reading of Section 66(1),
it is very much discernible that the said provision pertains to the
“Fraudulent trading or Wrongful trading” in respect of the business
of the CD.
56. Thus, there is a clear distinction between the Avoidance Applications
that may be filed by the Resolution Professional in view of Section
25(2)(j), for avoidance of transactions in accordance with Chapter
III of the Code, and the Applications that may be filed by the
Resolution Professional in respect of the Fraudulent trading or
Wrongful trading under Section 66, which falls under Chapter VI of
the Code. The legislature has consciously kept the Applications in
respect of Fraudulent trading or Wrongful trading falling in Chapter VI,
outside the purview of Section 25(2), which requires the Resolution
Professional to undertake the actions and file applications for the
avoidance of transactions in accordance with Chapter III. Both, the
Avoidance Applications under Chapter III and the Applications in
respect of Fraudulent trading or Wrongful trading under Chapter
VI, operate in different situations. The powers of the Adjudicating
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Piramal Capital and Housing Finance Limited (Formerly Known as Dewan Housing
Finance Corporation Limited) v. 63 Moons Technologies Limited & Others

Authority in respect of the Avoidance Applications filed under Chapter
III and the powers of the Adjudicating Authority in respect of the
Applications pertaining to the Fraudulent and Wrongful trading filed
under Chapter VI, have also been separately circumscribed.
57. In the cases of Preferential transactions as contemplated in Section
43, the Resolution Professional may file an Application, when he is
of the opinion that the CD, at a relevant time, had given a preference
in such transactions, and in such manner as laid down in sub-section
(2), to any persons as referred to in sub-section 4 of Section 43.
The Adjudicating Authority may pass any of the orders as specified
in Clauses (a) to (g) of Section 44, in such Application filed by the
Resolution Professional under Section 43(1).
58. Similarly, in the cases of Undervalued transactions as contemplated
in Section 45, the Resolution Professional may file an Avoidance
Application if he determines that certain transactions were made
during the relevant period prescribed under Section 46 which were
undervalued. In such applications, the Resolution Professional may
pray to declare such transactions as void and to reverse the effect
of such transaction in accordance with Chapter III. The Adjudicating
Authority may pass any of the orders specified in Clauses (a) to (d)
of Section 48 in such Application filed under Section 45(1). He may
also pass orders specified in Clause (i) and (ii) of Section 49, in
respect of the Undervalued transactions referred to in Section 45(2).
59. In case of Extortionate Credit transactions, as contemplated
in Section 50, the Resolution Professional may file Avoidance
Application, where the CD had been a party to an Extortionate
Credit transaction involving the receipt of financial or operational
debt during the period within two years preceding the insolvency
commencement date, and where the terms of such transactions
required exorbitant payments to be made by the CD. In case of such
Extortionate Credit transactions, the Adjudicating Authority may pass
any of the orders specified in Clause (a) to (e) of Section 51. It is
pertinent to note that in all these types of Avoidance Applications
falling under Chapter III, the transactions in question, the properties
involved and the persons with whom such transactions were made,
could be ascertained by the Adjudicating Authority and therefore it is
empowered to pass orders to avoid or set aside such transactions,
under Sections 44, 48, 49 and 51, as the case may be.
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60. However, in cases of “Fraudulent or Wrongful trading” in respect of
the business of the CD as contemplated in Section 66, the properties
and the persons involved may or may not be ascertainable and
therefore the Adjudicating Authority is not empowered to pass
orders to avoid or set aside such transactions, but is empowered
to pass orders to the effect that any persons, who were knowingly
parties to the carrying on of business in such manner, shall be
liable to make such contributions to the assets of the CD, as it
may deem fit. The Adjudicating Authority in such applications may
also direct that the Director of the CD shall be liable to make
such contribution to the assets of the CD as it may deem fit, as
contemplated in Section 66(2). In case of Fraudulent trading or
Wrongful trading, it would be a matter of inquiry to be made by
the Adjudicating Authority as to whether the business of CD was
carried on with intent to defraud creditors of the CD or was carried
on for any fraudulent purpose.
61. In view of the above, the Applications filed in respect of “Fraudulent
and Wrongful trading” carried on by the CD, could not be termed
as “Avoidance Applications” used for the Applications filed under
Sections 43, 45 and 50 to avoid or set aside the Preferential,
Undervalued or Extortionate transactions, as the case may be.
There is clear demarcation of powers of the Adjudicating Authority
to pass orders in the Avoidance Applications filed by the Resolution
Professional under Section 43, 45 and 50 falling under Chapter III
and the Applications filed by the Resolution Professional in respect
of the Fraudulent and Wrongful trading of CD, under Section 66
falling under Chapter VI of the IBC. If the Resolution Professional
has filed common applications under Sections 43, 45, 50 and also
under Section 66, the Adjudicating Authority shall have to distinguish
the same and decide as to which provision would be attracted to
which of the Applications, and then shall exercise the powers and
pass the orders in terms of the provisions of IBC.

(iii) Mandatory Requirements of Section 30(2) of the IBC and
Regulation 38 of Regulations, 2016
62. After having elaborated upon the Avoidance Applications, let us see
what are the mandatory requirements, a Resolution Professional
is required to confirm on the receipt of the RPs submitted by the
PRAs. As per sub-section (1) of Section 30, a RA may submit a
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Piramal Capital and Housing Finance Limited (Formerly Known as Dewan Housing
Finance Corporation Limited) v. 63 Moons Technologies Limited & Others

RP along with an affidavit stating that he is eligible under Section
29(A), to the Resolution Professional prepared on the basis of
the information memorandum. On the receipt of RPs from the
eligible RAs, the Resolution Professional has to examine each RP
to confirm that each RP provides for the payment of Insolvency
Resolution Process cost in the manner specified by the Board in
priority to the payment of other debts of the CD, and provides for
the payment of debts of operational creditors in such manner as
may be prescribed by the Board, as required under sub-section
(2) of Section 30. The Resolution Professional has also to confirm
that each RP provides for the management of the affairs of CD
after the approval of the RP; the implementation and supervision
of the RP; and also that the plan does not contravene any of the
provisions of the law for the time being in force, and such other
requirements specified by the Board. The other mandatory contents
of a RP have been specified in Regulation 38 of the Regulations,
2016.
63. The Resolution Professional, in view of sub-section (3) of Section
30 has to present to the CoC for its approval such RPs which
confirm the conditions referred to in sub-section (2) thereof. Sub-
Section (4) of Section 30 states that the CoC may approve the RP
by a vote of not less than 66% of the voting share of the Financial
Creditors, after considering its feasibility and viability, the manner
of distribution proposed, which may take into account the order
of priority amongst Creditors as laid down in sub-section (1) of
Section 53, including the priority and value of the security interest
of a secured creditor, and such other requirements as may be
specified by the Board.
64. The Resolution Professional then has to submit the RP as approved
by the requisite number of votes of CoC to the Adjudicating Authority.
In view of sub-section (1) of Section 31, if the Adjudicating Authority
is satisfied that the RP approved by the CoC under sub-section (4)
of Section 30 meets the requirements as referred to in sub-section
(2) of Section 30, it shall by an order approve the RP, which shall be
binding on the CD and its employees, members, creditors, statutory
authorities, guarantors and stakeholders involved in the RP. Where
the Adjudicating Authority is satisfied that the RP does not confirm
to the requirements referred to in sub-section (1) of Section 31, it
may, by an order reject the RP.
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65. Thus, the entire process right from the submission of RPs by the
PRAs till the final approval/rejection of the Plan by the Adjudicating
Authority has been duly prescribed, which is mandatory in nature. If
there is any non-compliance of the mandatory requirements stated
in Section 30(2) of IBC, readwith Regulation 38 of the Regulations,
2016, the Adjudicating Authority is empowered to reject the plan
as envisaged in sub-section (2) of Section 31. If however, the
plan approved by the CoC as per Section 30(4), meets with the
requirements under Section 30(2), the Adjudicating Authority has
to approve such plan under Section 31(1), which would be binding
to all the stakeholders as stated therein.

(iv) Maximization of the value of the assets of the Corporate
Debtor
66. Much emphasis was laid, during the course of the arguments, for
the maximization of the value of the assets of the CD. It hardly
needs to be emphasized that in CIRP, the role of the CoC is that of
a protagonist, who takes the key decisions in its commercial wisdom
and also takes the consequences thereof. It cannot be gainsaid
that the decisions of CoC must reflect the fact that it has taken
into account the maximization of the value of the assets of the CD,
and that the interest of all the stakeholders has been adequately
balanced. However, “What is maximization of the assets” has not
been defined in the Code though stated in the Preamble. Of course,
it has been referred in Regulation 37 of the Regulations, 2016,
which states that RPs shall provide for the measures as may be
necessary for insolvency resolution of the CD, for maximization of
the value of its assets, which may include the measures as provided
in Clauses (a) to (l) thereof. Since the Preamble of IBC envisages
“maximization of the value of the assets of the Corporate Debtor,”
and to promote entrepreneurship, the measures necessary for
maximization of assets stated in Regulation 37, amongst others, will
have to be taken into consideration by the CoC while considering
the proposed RPs for approval.
67. As observed in K. Sashidhar (supra), the Financial Creditors forming
CoC, act on the basis of thorough examination of the proposed
RPs and the assessment made by their team of experts. The entire
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Piramal Capital and Housing Finance Limited (Formerly Known as Dewan Housing
Finance Corporation Limited) v. 63 Moons Technologies Limited & Others

process has to be carried out in an absolutely transparent manner,
and each and every aspect relating to the RP, and more particularly
its financial layout and the measures proposed for maximization of
the value of the assets of the CD, has to be placed before the CoC.
The CoC, if after considering such measures for maximization of
the value of the assets of the CD as proposed by the RA in the RP
submitted by it, and considering the feasibility, viability and such other
requirements as mandated in the IBC and in the Regulations, 2016,
approves the plan with the requisite number of votes as required
under Section 30(4), after exercising its commercial wisdom, then
the scope of judicial review by the Adjudicating Authority under
Section 31 will be limited only to the extent of satisfying itself about
the compliance of the requirements of Section 30(2). The judicial
review by the Appellate Authority under Section 61 in the appeal
against the order of Adjudicating Authority approving the plan, is
further limited to the grounds mentioned in Clauses (i) to (v) specified
in sub-section (3) of Section 61.
(v) Whether the NCLAT should have entertained the appeals
filed by the 63 Moons under Section 61 of the Code and
tinkered with the Resolution Plan approved by the CoC
and the NCLT? –
68. Keeping in view, the above discussed legal position, let us examine
the facts of the case to decide whether the Appellate Authority i.e.
NCLAT should have entertained the appeals at the instance of 63
Moons, and interfered with the RP approved by the CoC and NCLT,
by tinkering with the isolated clauses of the approved RP which
pertained to the treatment of recoveries from the Applications under
Section 66 of IBC.
69. As stated earlier, based on the Audit Reports of GT, the auditors
appointed by the Administrator to carry out the Transaction
Audit and to unearth the transactions that could be avoided/set
aside under the IBC, the Administrator had filed the Applications
before the NCLT regarding the Preferential, Undervalued and
Extortionate Transactions seeking to avoid/set aside the same
under Sections 43 to 51 and 66 of IBC. The summary of these
Applications referred to by the NCLAT in the impugned order is
reproduced hereunder: -
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I. 1st Application filed on August 30 2020, under
Section 60 (5) & 66 of the Code. The Application is
in respect of the investigation and observations of
the transaction auditor, filed by the Administrator in
respect of disbursements made by DHFL to certain
entities, referred to as the Bandra Books Entities,
under Section 60(5) and Section 66 of the Code
on August 30, 2020, against Kapil Wadhawan,
Dheeraj Wadhawan, Township Developers India
Ltd, Wadhawan Holdings Private Limited, Dheeraj
Township Developers Private Limited, Wadhawan
Consolidated Holdings Pvt. Ltd., Wadhawan Global
Hotels & Resorts Pvt. Ltd, Wadhawan Lifestyle Retail
Pvt. Ltd. and certain other entities. The amount
involved therein is Rs. 17,394 crores.
II. 2nd Application was filed on September 27 2020,
under Section 60 (5) & 66 of the Code. The
Application is about certain irregularities in loan
disbursements towards the development of SRA
projects undertaken by DHFL in the past. The amount
involved therein is Rs. 12,705.53 crores.
III. 3rd Application was filed on October 5 2020, under
Sections 45, 46, 49, 60(5) and 66 of the Code. The
Application is in relation to the undervalued and
fraudulent nature of certain agreements entered into
by the Company at the time the Company sold its
stake in Pramercia Life Insurance Limited to DHFL
Investments Limited and certain ICDs given by the
DHFL to ICD entities. The amount involved therein
is Rs. 2, 150.84 crores.
IV. 4th, 5th and 6th Applications filed in December
2020 - The Applications are about:
a. Disbursement to specific entities in the form of
loans against property and utilisation of the same
towards premature redemption of certain NCDs,
undertaken by DHFL in the past under Sections 43,
45 and 66 of the Code - as Application “A”.
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Piramal Capital and Housing Finance Limited (Formerly Known as Dewan Housing
Finance Corporation Limited) v. 63 Moons Technologies Limited & Others

b. Diversion of excess funds from the account of
DHFL for purchase of NAPHA Building under Section
66 of the Code as Application “B”.
c. Fraudulent and undervalued advancement of
ICDs by DHFL to certain entities in the past and
the subsequent creation of a pledge over the non-
convertible debentures issued by DHFL under
Sections 45 and 66 of the Code - as Application “C”.
A copy of the letter dated December 13, 2020,
issued by Respondent No. I to Stock Exchange
summarising the said transaction is annexed with
Appeal Paper book. The amount involved therein
is Rs.1,058.32 crores.
V. 7th Application filed on February 3 2021, under
Sections 45, 60 (5) and 66 of the Code - The
Application is about disbursement made to certain
entities as developer loans and loans against
property. The amount involved therein is Rs. 4,793.36
crores.
VI. 8th Application was filed on February 20 2021,
under Section 45, 60 (5) and 66 of the Code.
The Application is in relation to irregularities in
disbursements of Other Large Product Loan (OLPL)
by the DHFL in the past. The amount involved therein
is Rs. 6,182.11 crores.

The details of the Avoidance applications in the tabular
chart are mentioned below:
Rs. Crores (Approx)

Sr. Avoidance Reference Section Principal Interest + Total
No. Application (in Notional (in
date Crores) amount Crores)

1. 30.08.2020 Bandra Books 60(5) 14046 3348 17394
and 66

2. 27.09.2020 SRA Loans 60(5) 10980 1726 12706
and 66
414 [2025] 4 S.C.R.

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3. 05.10.2020 DIL Transaction 45, 46, 49, 1740 125 1865
60(5) & 66
228 58 286

4. 12.12.2020 LAP Loans 43, 45 592 56 648
and 66

5. 12.12.2020 NAPHA 66 330 330
Properties

6. 12.12.2020 ICD 45 and 66 71 9 80

7. 03.02.2020 DLAP Loans 45, 4793 766 5559
60(5) & 66

8. 20.02.2021 OLPL Loans 45, 60(5) 5382 800 6182
& 66

Total filed Total 38161 6889 45050
figures in
crores

70. As transpiring from the voluminous documents produced on record
by the learned counsels for the parties, it appears that during the
course of meetings of CoC, the PRAs had submitted various RPs,
amongst which a RP dated 16.10.2020, was submitted by the
Piramal Capital bidding for Group A assets under Option II offering
15,000 crores plus an amount of 10% for FD Holders. Then, a RP
dated 09.11.2020 was submitted bidding for Group A assets under
Option II offering bid amount of Rs.23,700 crores. Another RP dated
17.11.2020 was submitted bidding for Group A assets under Option
II offering bid amount of Rs.27,500 crores. RP dated 14.12.2020 was
submitted bidding for the entire assets under Option I offering bid
amount of Rs.34,950 crores, and bidding for Group A assets under
Option II offering bid amount of Rs.27,200 crores. Lastly, Piramal
Capital presented the RP dated 22.12.2020 bidding for the entire
assets under Option I for Rs. 37,250 crores, or for Group A assets
under Option II bidding for Rs.27,200 crores. The treatment of
Avoidance transactions under the Resolution Plan dated 22.12.2020
was as under: -
“Re: Treatment of avoidance transactions under the
Resolution Plan.
(xxxi) As regards avoidance transactions, the Resolution
Plan provided as follows, in line with the RFRP dated 16
September 2020:
[2025] 4 S.C.R. 415

Piramal Capital and Housing Finance Limited (Formerly Known as Dewan Housing
Finance Corporation Limited) v. 63 Moons Technologies Limited & Others

“2.13. Treatment of preferential transactions, undervalued
transactions, extortionate transactions and fraudulent
trading.
2.13.1. The Administrator shall submit, to the CoC,
details of the transactions avoided or set aside by the
NCLT in terms of Section 43, 45, 47, 49, and 50 of the
IBC (Avoidance Transactions), if any, observed, found or
determined by him and the orders, if any, of the NCLT in
respect of such transactions.
2.13.2. The Resolution Applicant intends to pursue,
on a best-efforts basis, the application(s) filed by the
Administrator before the NCLT in respect of these
Avoidance Transactions. Any positive monetary recovery
received by the Company as a result of orders passed in
relation to the Avoidance Transactions shall be distributed,
net of costs and expenses (including taxes), to the
Financial Creditors pro rata to the extent the Financial
Debt for Financial Creditors, provided that, the CoC may
in its discretion adopt a different manner of distribution
(which may take into account the order of priority amongst
Financial Creditors as laid down in section 53(1) of section
of the IBC and such decision of the CoC shall be accepted
by the Resolution Applicant, subject to there being no
change in the Total Resolution Amount.
2.13.3. The Resolution Applicant ascribes value of INR
1 in respect of any transactions that may be avoided/
set aside by the NCLT in terms of section 66 of the IBC.
Accordingly, any positive recovery as a result of reversal
of transactions avoided or set aside by the NCLT in terms
of section 66 of the IBC would accrue to the sole benefit
of the Resolution Applicant. All the costs and expenses
incurred or to be incurred towards litigation pertaining
to section 66 of the IBC shall be to the account of the
Resolution Applicant."
71. The Chart juxtaposing the Provisions of RFRP dated 16.9.2020 and
the Provisions of the RP dated 22.12.2020 in respect of treatment of
avoidance transactions produced at Annexure-A/7 in C.A. No.1632-
1634 of 2022 may be reproduced as under:-
416 [2025] 4 S.C.R.

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Provisions of the RFRP Provisions of the Resolution
dated 16 September 2020 Plan
3.13.2.[…] 2.13.1. The Administrator shall
submit to the CoC, details of the
… (w) In the event any
transactions avoided or set aside
transaction is avoided/set
by the NCLT in terms of Section
aside by the Adjudicating
43, 45, 47, 49 and 50 of the IBC
Authority in terms of Sections
(Avoidance Transactions), if any,
43,45,47,49,50 of the IBC, and
observed, found or determined
any amount is received by the
by him and the orders, if any,
Administrator or the Resolution
of the NCLT in respect of such
Applicant/Corporate Debtor
transactions.
(as the case may be) in
accordance with such decision 2.13.2. The Resolution Applicant
of the Adjudicating Authority, intends to pursue, on a best
such sums shall be for the efforts basis, the application(s)
benefit of the CoC and shall filed by the Administrator before
be a pass through amount to the NCLT in respect of these
the creditors, subject to clause Avoidance Transactions. Any
(x) below. positive monetary recovery
received by the Company as a
result of orders passed in relation
to the Avoidance Transactions
shall be distributed, net of costs
and expenses (including taxes), to
the Financial Creditors pro rata to
the extent the Financial Debt for
Financial Creditors, provided that,
the CoC may in its discretion adopt
a different manner of distribution
(which may take into account
the order of priority amongst
Financial Creditors as laid down
in Section 53(1) of the IBC) and
such decision of the CoC shall
be accepted by the Resolution
Applicant, subject to there being
no change in the Total Resolution
Amount.
[2025] 4 S.C.R. 417

Piramal Capital and Housing Finance Limited (Formerly Known as Dewan Housing
Finance Corporation Limited) v. 63 Moons Technologies Limited & Others

3.13.2. […] 2.13.3. The Resolution Applicant
ascribes value of INR 1 in respect
…(x) In respect of any
of any transactions that may be
transactions that may be
avoided/set aside by the NCLT
avoided/set aside by the
in terms of Section 66 of the
Adjudicating Authority in
IBC. Accordingly, any positive
terms of Section 66 of the
recovery as a result of reversal of
IBC, the Resolution Applicant
transactions avoided or set aside
shall ascribe a value under
by the NCLT in terms of Section 66
the Resolution Plan to any
of the IBC would accrue to the sole
recoveries that are likely to
benefit of the Resolution Applicant.
be made in respect of such
All the costs and expenses incurred
transactions and shall propose
or to be incurred towards litigation
the manner of continuing and
pertaining to Section 66 of the
dealing with any legal action
IBC shall be to the account of the
initiated and the proposed
Resolution Applicant.
manner of treatment of any
proceeds arising therefrom
which the CoC may evaluate
as per its discretion.

72. As stated hereinabove, the CoC approved the RP submitted by
the Piramal Capital under Option I for the entire assets of the CD
offering aggregate amount of Rs.37,250 crores, by majority with
93.65% votes.
73. As can be seen from the record, the 18th Meeting of CoC was convened
on 24.12.2020-25.12.2020, and all legally Compliant RPs received
by the Administrator were presented for consideration and were put
to vote during the voting window 30.12.2020 - 15.01.2021. The NCD
Holder - 63 Moons also voted in favour of the RP within its class of
Debenture Holders, and the RP was approved by a majority of 98.94%
votes of the Debenture Holders. The Authorized Representative of
the class of Debenture Holders (M/s. Catalyst Trusteeship Limited)
also voted in favour of the RP before the CoC. As a result thereof,
the RP was approved by the majority of CoC with 93.65% votes
exercising their commercial wisdom. It is also very pertinent to note
that the said 18th meeting of CoC was attended not only by the
Financial Creditors and the Administrator/Resolution Professional, but
418 [2025] 4 S.C.R.

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also by the representatives of the Financial Creditors, the Advisory
Committee of the Administrator, the Legal Counsels of CoC, 29A
Consultants, Valuers etc.
74. When the Administrator/Resolution Professional filed an application
being I.A. No.449 of 2021 (Plan Approval Application) before the
NCLT seeking approval under Section 31 of IBC on 24.02.2021,
the 63 Moons filed an I.A. being No. 623 of 2021 on 05.03.2021,
challenging the provisions of RP which provided that the Recoveries
under Section 66 would go to the benefit of SRA. The NCLT vide
order dated 07.06.2021 granted its approval to the Plan Approval
Application filed by the Administrator, and by separate order dismissed
the I.A. No. 623 of 2021 filed by the 63 Moons, holding that the CoC
comprising of 77 Financial Creditors had decided in its commercial
wisdom to give away the Section 66 Recoveries to the SRA after a
hard bargain in exchange of a lumpsum resolution amount of INR
37,250 crores.
75. The NCLAT however entertained the Appeals at the instance of the
Appellants – 63 Moons and Roopjyot Engineering Private on the
ground that the SRA could not have appropriated the Recoveries
from the Avoidance Applications under Section 66 IBC, and that
the NCLT while approving the RP had not decided whether the
recoveries in respect of the Avoidance transactions vested with the
CD, should be applied for the benefit of the Creditors of CD, SRA
or other Stakeholders. In our opinion, such an approach on the part
of NCLAT was not only ex facie fallacious and erroneous but also in
utter disregard of the legal position settled by this Court in catena
of decisions.
76. It is interesting to note that the Appellants before the NCLAT, i.e. – 63
Moons Technologies Limited, Roopjyot Engineering Private Limited,
Magico Exports and Consultants Limited, Richmond Traders Private
Limited and Sunshine Fibre Private Limited, were the NCD Holders,
belonging to different sub-classes. They were represented in CoC
by a Debenture Trustee – M/s. Catalyst Trusteeship Private Limited
(CTPL). The details of these NCD Holders including their Voting
Pattern and Payout were submitted in tabular form before the Court
by the learned counsel appearing for the SRA, which is reproduced
as under: -
[2025] 4 S.C.R. 419

Piramal Capital and Housing Finance Limited (Formerly Known as Dewan Housing
Finance Corporation Limited) v. 63 Moons Technologies Limited & Others

Creditor Share in Voting Payout Other
CoC Pattern Information
63 Moons 0.2% Voted in Received No other
favour of the about 40% of justification
Belonged Held NCDs
Plan. their admitted provided
to the of face value
claims for voting in
class: INR 200 As a class,
without any favour of the
Catalyst Crores. these NCD
protest or plan
Trusteeship holders
demur.
Limited approved the
(Secured plan by 98.94
Public % majority.
Issue – 2)
Roopjyot & Less than Abstained Received They did not
Ors. .01% from voting. payments raise any
under the grievance
Belonged Held NCDs As a class,
Resolution before the
to the of purchase these NCD
Plan without CoC or the
class: value INR holders
any protest or NCLT and
Catalyst 49.4 Crores. approved the
demur. challenged
Trusteeship plan by 94.67
the Resolution
Limited % majority
Plan for the
(Secured
first time only
Public
before the
Issue – I)
NCLAT.

77. As can be seen from the above table, the said Appellants’ respective
classes had voted overwhelmingly in favour of the RP of SRA. Neither
the 63 Moons nor Roopjyot & Ors. had voted against the RP nor
any justification was offered by them for not voting against the RP.
Under the circumstances the said Appellants – NCD Holders before
the NCLAT were bound by the decision of their classes in approving
the RP, and were estopped from raising any objection against the
RP approved by the CoC. Indubitably, as per sub-section 3A of
Section 25A, the Authorized Representative under sub-section 6A of
Section 21 has a right to cast his vote on behalf of all the Financial
Creditors he represents, in accordance with the decision taken by a
vote of more than 50% of voting share of the Financial Creditors he
represents, who have cast their vote. The vote cast by the Authorized
Representative of the class of Financial Creditors, is a vote on behalf
of each Financial Creditor to the extent of his voting share. Once
the said process is carried out and the Authorized Representative
is handed down a particular decision by the requisite majority of
420 [2025] 4 S.C.R.

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voting share, he has to vote accordingly, and his vote would bind
all the Financial Creditors he represented. The individual Financial
Creditor would thereafter be estopped from raising objection against
the decision taken by the majority of the Financial Creditors. As
observed in Jaypee Kensington Boulevard Apartments Welfare
Association & Others vs. NBCC (India) Limited & Others,10 in
the larger benefit and for common good, the democratic principles
of the determinative role of the opinion of majority have been duly
incorporated in the scheme of the Code, particularly in the provisions
relating to voting on RP and binding nature of the vote of Authorized
Representative, on the entire class of the Financial Creditors he
represents. If the finality and binding force is not provided to the
votes cast by the Authorized Representatives of a class of Financial
Creditors, a plan of resolution involving large number of parties may
never fructify. In the instant case, the vote cast by the Authorized
Representative - M/s. Catalyst Trusteeship on behalf of the class of
Financial Creditors he represented, was binding on the 63 Moons
and other Appellants before the NCLAT, and therefore they were
estopped from raising any objection before the NCLT or NCLAT
against the RP approved by the requisite majority of CoC.
78. The NCLAT has also erroneously placed reliance on the decision
of the Single Bench of the Delhi High Court in Venus Recruiter
(supra). Apart from the fact that the said judgment of Single Bench
was set aside by the Division of the said High Court in LPA No.
37 of 2021 (Tata Steel BSL Limited vs. Venus Recruiter Private
Limited and Others) decided on 13.01.2023, the whole reliance
on the said decision was thoroughly misconceived and misplaced.
In the said case, the question for consideration was whether an
Avoidance Application under Section 43 of IBC could survive after
the approval of RP. The question of considering the treatment of the
proceeds of the Avoidance Applications was not involved as involved
in the instant case.
79. The reliance on the Regulation 37A of the Liquidation Regulations
by the NCLAT was also thoroughly misplaced for holding that the
said Regulation empowered a Liquidator to assign or transfer a
non-realisable asset during the liquidation of a CD, however such

10 2021 SCC Online SC 253 (Para. 424)
[2025] 4 S.C.R. 421

Piramal Capital and Housing Finance Limited (Formerly Known as Dewan Housing
Finance Corporation Limited) v. 63 Moons Technologies Limited & Others

provision is absent in CIRP Regulations, 2016. In our opinion,
when Section 26 specifically states that the filing of an Avoidance
Application under Section 25(2)(j) by the Resolution Professional
shall not affect the proceedings of CIRP, and when the Regulation
37(a) of the CIRP Regulations 2016 also permits a provision to be
made in the RP for transfer of all or part of the assets of Corporate
Debtor to one or more persons, the reference of Regulation 37A of
Liquidation Process Regulations in the impugned order was absolutely
unwarranted and ex-facie fallacious.
80. Similarly, the NCLAT has also misdirected itself by relying on the
foreign texts and jurisprudence, which could not be made applicable
to the insolvency regime of India. Apart from the fact that such
foreign texts and precedents relied upon by the NCLAT merely
indicated that the proceeds from the Avoidance Applications may
be for the benefit of the creditors in a situation when the RP does
not deal with its treatment, it is well settled by this Court that the
Court should be wary of transplanting international doctrines, which
might have been evolved as responses to the specific needs of the
jurisdictional regimes.
81. The submission, with regard to the notional value of INR 1 ascribed
to Section 66 Applications under the RP, made by the learned
counsel appearing for the Respondents in the Appeals filed by the
Piramal Capital deserves to be considered only for its rejection. As
transpiring from the record of the case, notional valuation of Section
66 Applications was made in response to the provision of RFRP
issued by the Administrator. In the valuation reports submitted by the
Valuers appointed by the Administrator, NIL value was ascribed to
the Avoidance Applications filed by the Administrator, and accordingly
the other compliant RAs had also ascribed NIL value to the said
Applications. However, according to the SRA, since clause 3.13.2(x) of
RFRP required the RAs to ascribe a value to Section 66 applications
and then propose a manner of treatment of recoveries from such
applications, the SRA had ascribed INR 1 as a notional valuation of
the applications under Section 66.
82. In our opinion, having regard to the Fraudulent trading and Wrongful
trading allegedly made by the DHFL, any guess work done by the
compliant RAs would have been a wild guess due to the uncertainties
in recovery of the amount involved in such Fraudulent and Wrongful
trading. The value of INR 1 being notional and the CoC having
422 [2025] 4 S.C.R.

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considered the fact that the potential recoveries from the Section
66 Applications was very uncertain had taken conscious decision
in accepting the said clause in the RP submitted by the SRA. The
relevant Clause 2.13.2 of RP provided that any positive monetary
recovery received by the company (SRA) as a result of the orders
passed in relation to avoidance transactions shall be distributed, net
of costs and expenses (including taxes), to the Financial Creditors
pro rata to the extent the financial debt for the Financial Creditors
provided that the CoC may in its discretion adopt a different manner
of distribution. Therefore, while ascribing a notional value of INR 1
to the Applications under Section 66, the SRA had agreed for the
distribution of the recoveries that may be made under the Avoidance
Applications filed under Sections 43, 45, 47, 49 and 50 for the benefit
of the CoC.
83. During the course of hearing of these Appeals also, the learned
Senior Advocate Mr. Abhishek Manu Singhvi for the SRA and the
learned Senior Advocate Mr. Tushar Mehta appearing for the CoC
had stated in no uncertain terms that the benefit of avoiding/setting
aside of any transaction under Sections 43, 45, 47, 49 and 50 shall
enure to the benefit of the Creditors of DHFL, whereas any recovery
under Section 66 would be for the benefit of Piramal Capital. As
discussed earlier, the SRA had raised its offer to the extent of
Rs.37,250 crores, which had factored the potential recoveries from
Section 66 Applications. Thus, the RP approved by the CoC was an
outcome of the commercial bargain struck between the SRA and the
CoC after several rounds of negotiations and deliberations. The said
plan approved by the CoC was also further approved by the NCLT
under Section 31(1) of IBC. In absence of any perversity, that was
palpable on the face of the approved RP, and the CoC having taken
a firm commercial decision with regard to the impugned clause of
RP by voting overwhelmingly in favour of the RP, the NCLAT ought
not to have interfered with the said clause of RP approved by the
CoC and the NCLT.
84. As per the legislative intent and as per the broad contours of the
provisions of IBC, the commercial wisdom of CoC has been given
the prominent status, with the least judicial intervention, for ensuring
the completion of Resolution Process within the prescribed timelines.
As stated earlier, in Essar Steel (supra), this Court after discussing
earlier judgments had observed that what is left to the majority decision
[2025] 4 S.C.R. 423

Piramal Capital and Housing Finance Limited (Formerly Known as Dewan Housing
Finance Corporation Limited) v. 63 Moons Technologies Limited & Others

of the CoC is the “feasibility and viability” of a RP, which obviously
takes into account all aspects of the plan, including the manner of
distribution of funds among the various classes of Creditors. The
legislature has consciously not provided for a ground to challenge
the justness of the commercial decision expressed by the Financial
Creditors – be it to approve or reject the RP. Similar view is taken
by the Three Judge Bench in Ghanashyam Mishra (supra) to the
effect that the legislature has given paramount importance to the
commercial wisdom of the CoC and the scope of judicial review by the
Adjudicating Authority is limited to the extent provided under Section
31 and by the Appellate Authority limited to the extent provided under
sub-section (3) of Section 61 of IBC.
85. The NCLAT therefore has clearly transgressed its jurisdiction under
Section 61 IBC, by interfering with the clause pertaining to the
treatment to the recoveries from the Fraudulent and Wrongful trading
under Section 66.
86. It appears that the Administrator has filed common applications under
Sections 43, 45 and 50 falling under Chapter III and the Applications
pertaining to Fraudulent and Wrongful trading under Section 66 falling
under Chapter VI before the NCLT. The Administrator, as such should
have mentioned in the Applications the specific provisions under
which such Applications were filed, however non-mentioning or wrong
mentioning of provision of law in the Applications would not take
away the jurisdiction of the NCLT in deciding the said Applications,
as the NCLT being the Adjudicating Authority is competent and has
jurisdiction to decide all such Applications. It is well settled proposition
of law laid down by a Three-Judge Bench of this Court in N. Mani
v/s Sangeetha Theatre,11 that if an authority has a power under
the law, merely because while exercising that power, the source
of power is not specifically referred to or a reference is made to a
wrong provision of law, that by itself would not vitiate the exercise
of power, so long as the power exists and can be traced to a source
available in law. We have already elaborately discussed about the
scope and powers of NCLT to pass orders in Avoidance Applications
as circumscribed in Sections 44, 48, 49 and 51 and the powers
of the NCLT to pass orders in the applications filed under Section

11 (2004) 12 SCC 278
424 [2025] 4 S.C.R.

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66. Hence, it is directed, for the sake of clarity, that the NCLT shall
decide each of the Applications filed by the Administrator and pending
before it after considering the relevant provisions applicable to such
Applications, and shall pass the orders accordingly in terms of the
provisions contained in Sections 44, 48, 49 and 51 falling under
Chapter III and in terms of provisions contained in Section 66 falling
under Chapter VI, as the case may be.
87. In view of the aforesaid discussion and findings, all the Appeals in
this category deserve to be allowed by setting aside the impugned
order dated 27.01.2022 passed by the NCLAT and restoring the order
dated 07.06.2021 passed by the NCLT in the Plan Approval Order.

(VII) ANALYSIS IN THE SECOND CATEGORY OF APPEALS
88. The Second category of Appeals cover the Appeals filed by several
Fixed Deposit Holders and one Non-Convertible Debenture Holder of
the CD, challenging the RP dated 22.12.2020. The details of the said
Appellants and the impugned judgments may be stated as under: -
(1) Raghu KS and Ors. vs. Piramal Capital & Housing Finance
Limited & Ors. (Diary No.6037 of 2022): This Civil Appeal has
been filed by 41 individual FD Holders challenging the judgment
dated 07.02.2022 passed by the NCLAT in Company Appeal
No. 538 of 2021. PCHFL is Respondent No.1 in this appeal.
(2) Vinay Kumar Mittal & Ors. vs. Dewan Housing Finance
Corporation Ltd. & Ors. (Civil Appeal No.2413-2415 of 2022)
(“V.K. Mittal”): These appeals have been filed by 14 individual
FD Holders challenging the common judgment dated 27.01.2022
passed by the NCLAT in Company Appeal Nos.506, 507 and
516 of 2021. PCHFL is Respondent No.6 in these Appeals.
(3) Uttar Pradesh State Power Sector Employees Trust vs. Dewan
Housing Finance Corporation Ltd. & Anr. (Civil Appeal No.2396
of 2022): The Appellant in this Appeal was a FD Holder of the
CD and has challenged the common judgment dated 27.01.2022
passed by the NCLAT in Company Appeal Nos.759, 760 of
2021. PCHFL is Respondent No.1 in this Appeal.
(4) Uttar Pradesh State Power Corporation Contributory Provident
Fund Trust vs. Dewan Housing Finance Corporation Limited
and Anr. (Civil Appeal No.2402 of 2022): The Appellant herein
[2025] 4 S.C.R. 425

Piramal Capital and Housing Finance Limited (Formerly Known as Dewan Housing
Finance Corporation Limited) v. 63 Moons Technologies Limited & Others

was a FD Holder of the CD and has challenged the common
judgment dated 27.01.2022 passed by the NCLAT in Company
Appeal Nos.759, 760 of 2021. PCHFL is Respondent No.1 in
this Appeal.
(5) Senbagha Vivek A. & Anr. vs. Dewan Housing Finance
Corporation Ltd. & Anr. (Civil Appeal No.8123-8125 of 2022):
The Appellants herein were two individual FD Holders of the CD
and have challenged the common judgment dated 27.01.2022
passed by the NCLAT in Company Appeal Nos. 506, 507 and
516 of 2021. PCHFL is Respondent No.6 in this Appeal.
(6) THDC India Limited Employee Fund vs. The Administrator,
Dewan Housing Finance Corporation Ltd. (Civil Appeal No.6286
of 2022): Insofar as this Appeal is concerned, the Appellant
herein (“THDC”) represents NCD Holders of the CD. THDC has
challenged the judgment dated 04.02.2022 passed by the NCLAT
in Company Appeal No.90 of 2022. In the CoC, the appellant’s
class voted in favour of the RP. THDC did not raise any objection
against the RP before the NCLT and filed the Appeal directly
before the NCLAT against the order dated 07.06.2021 approving
the Resolution Plan (“Plan Approval Order”).
89. Leave granted in the Diary No.6037 of 2022.
90. The facts have already been narrated while dealing with the First
Category of Appeals, and therefore are not repeated here. Suffice
it to state that the CD was admitted into CIRP on 03.12.2019. The
Piramal Capital had submitted the RP, which came to be approved
by a majority of 93.65% of the CoC of the CD. The aggregate claim
of FD Holders as a class was INR 5,375 Crore and their voting
share was about 6.18%. The CoC in its 18th Meeting had passed
two Resolutions which were placed for voting, one for approval of
RP and second for approval of the Distribution mechanism for the
disbursal of the total resolution amount amongst the creditors. The
Distribution mechanism was approved by the majority of 86.95% of
CoC. Under the Distribution mechanism, it was provided as under: -
(i) FD Holders having an admitted claim of upto INR 2 lakhs were
to be repaid their entire deposit amount; and
(ii) FD Holders having an admitted claim of more than INR 2
lakhs would receive an amount equivalent to liquidation value
426 [2025] 4 S.C.R.

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of security created for the benefit of the Depositors for the
additional aggregate claim above INR 2 lakhs.
91. Some of the FD Holders including the Appellants in this second
category of Appeals, challenged the said RP before the NCLT on
the ground that the RP had failed to provide for full repayment of
their deposits.
92. The NCLT on 07.06.2021 approved the said RP by passing the Plan
Approval Order. The NCLT also passed a separate order disposing
of the Applications filed by the FD Holders recommending that CoC
may reconsider the distribution of resolution amount keeping in view
the interest of the FD Holders and other small investors. In the light
of the said order, the CoC in its 20th Meeting put to vote a Resolution
for maintaining parity between the FD Holders and other Secured
Creditors. The said Resolution was rejected by approximately 89%
of CoC. The aggrieved Appellants – FD Holders filed the Appeals
before the NCLAT challenging the FD Holders order dated 07.06.2021,
on the ground that the treatment to the FD Holders violated their
rights under the RBI Act and NHB Act to receive full payment of their
deposits. The NCLAT vide the impugned orders dismissed all the
Appeals against which the present set of Appeals have been filed.

(i) WHETHER THE RESOLUTION PLAN VIOLATED THE
PROVISIONS OF RBI ACT OR NHB ACT?
93. The bone of contention raised by the learned Counsels for the
Appellants – FD Holders in this set of Appeals was that the Distribution
mechanism contained in the RP was in violation of Section 36(A)
of NHB Act and Section 45(QA) of RBI Act, in as much as the FD
Holders were entitled to the full payment of their deposits, in view
of the said provisions. In this regard, it may be noted that the NHB
Act has been enacted to establish a Bank to be known as “National
Housing Bank” to operate as a principal agency to promote housing
finance institutions both at local and regional levels and to provide
financial and other support to such institutions and for the matters
connected therewith or incidental thereto. As per Section 2(d) of the
said NHB Act, “Housing Finance Institution” includes every institution,
whether incorporated or not, which primarily transacts or has any one
of the principal objects, the transacting of the business of providing
finance for housing, whether directly or indirectly. The Chapter V of
the said NHB Act incorporates the provisions relating to the “Housing
[2025] 4 S.C.R. 427

Piramal Capital and Housing Finance Limited (Formerly Known as Dewan Housing
Finance Corporation Limited) v. 63 Moons Technologies Limited & Others

Finance Institutions.” Section 28 thereof states that in this Chapter the
term ‘deposit’ shall have the meaning assigned to it in Section 45-I
of the RBI Act. Further Section 36(A) of the NHB Act empowers the
Officer authorized by the Central Government, to direct the housing
finance institution, which fails to repay any deposit accepted by it
in accordance with the terms and conditions of deposit, to make
repayment of such deposit or part thereof, if he is satisfied that it is
necessary to do so to safeguard the interest of the housing finance
institution, the depositors or in the public interest.
94. The RBI Act has been enacted to regulate the issue of Bank notes
and the keeping of reserves with a view to securing monetary stability
in India and generally to operate the currency and credit system of
the country to regulate to its advantage. The Chapter III(B) of the
RBI Act incorporates the “Provisions relating to the Non-Banking
Institutions receiving deposits and financial institutions.” Section
45-I(bb) defines “Deposit” and Section 45-I(f) defines “Non-Banking
Financial Company.” Section 45(QA) empowers the Company Law
Board (CLB) to direct by order, the Non-Banking Financial Company
which has failed to repay the deposit accepted by it in accordance
with the terms and conditions of such deposit, to make repayment of
such deposit or part thereof, if the CLB is satisfied that it is necessary
to do so to safeguard the interest of the company, the depositors or
in the public interest.
95. It is not disputed that the CD – DHFL being a Housing Finance
Institution and Non-Banking Financial Company, was governed by
the NHB Act and RBI Act, however pertinently, neither Section 36(A)
of NHB Act nor Section 45 (QA) of RBI Act mandates full payment
of the deposits of the FD Holders, as sought to be contended by the
learned counsels for the Appellants. Both the Sections 36(A) of NHB
Act and 45(QA) of the RBI Act containing almost similar provisions,
require the Housing Finance Institution or the Non-Banking Financial
Company, as the case may be, to repay the deposits accepted by it
in accordance with the terms and conditions of such deposit, however
from the bare reading of the said provisions it clearly transpires that
in case of non-payment of such deposits, the authorized officer or
the CLB as the case may be on being satisfied that it is necessary
to safeguard the interest of the company, or of the depositors in
the public interest may direct such institution or the company to
make repayment of such deposit or part thereof. None of the said
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provisions mandates full payment of deposits or confers any right
upon the depositors to have full payment of such deposits. There is
also nothing on record to suggest that any authorized officer under
the NHB Act or the CLB under the RBI Act has passed any order
to make full payment of deposits to the Appellants. Hence, it could
not be said, by any stretch of imagination, that the RP in question,
providing for the Distribution mechanism, was contrary to any of the
provisions of the RBI Act or of the NHB Act.
96. It is also pertinent to note that the Appellants – FD Holders were
represented in the CoC by their Authorized Representative - Ms.
Charu Desai and the NCD Holders were represented in the CoC by
their Authorized Representative - M/s. Catalyst Trusteeship Limited,
as permitted under Section 21 (6A) (b) of IBC readwith Regulation 16
(A) of the CIRP Regulations, 2016. Such Authorized Representatives
are entitled to attend the meetings and vote in the CoC on behalf
of the Group of Creditors that they represent, in accordance with
the prior instructions they would have received from their respective
groups. It is true that in the instant case, the FD Holders, as a class,
had voted against the RP and the Distribution mechanism, and were
thus classified as the “Dissenting Financial Creditors.” However, the
said Distribution mechanism was approved by a majority of 86.95%
of CoC. The Appellants – FD Holders therefore had filed applications
before the NCLT. The NCLT vide the order dated 07.06.2021 approved
the RP by passing Plan Approval Order, and by separate order
disposed of the Applications filed by the FD Holders, recommending
the CoC to reconsider the Distribution mechanism in the interest of
various creditors viz. Public Depositors, FD Holders, NCD Holders,
Small Investors, EPF Trust etc.
97. As stated earlier, the CoC rejected the said recommendation by
approximately 89% of the CoC in its 20th Meeting, which decision
came to be challenged before the NCLAT. The NCLAT also vide
the impugned order dismissed the same by holding inter alia that
the Administrator was under no obligation to ensure full payment
of deposits to the FD Holders under the RBI Act or the NHB Act,
and that the decision about the payments to the creditors fell within
the commercial wisdom of CoC which was not amenable to judicial
review, subject to fair and equitable play. We do not find any legal
infirmity in the said impugned order passed by the NCLAT. We have
already discussed in detail about the scope of judicial review by the
[2025] 4 S.C.R. 429

Piramal Capital and Housing Finance Limited (Formerly Known as Dewan Housing
Finance Corporation Limited) v. 63 Moons Technologies Limited & Others

NCLT under Section 31 and by NCLAT under Section 61 of the IBC,
and the legal position settled by this Court in catena of decisions.
Hence, the same is not reiterated herein.
98. We also do not find any substance in the submissions made by the
learned counsels for the Appellants that the RP violated Rule 5(d)
(i) of the Financial Service Providers and Application to Adjudicating
Authority Rules, 2019 (FSP Rules). In this regard, it may be noted
that the said Rule 5(d)(i) states that “the Resolution Plan shall include
a statement explaining how the Resolution Applicant satisfies or
intends to satisfy the requirements of engaging in the business of the
Financial Service Provider, as per laws for the time being in force.”
The learned Counsel appearing for the SRA – Piramal Capital had
drawn the attention of the Court to the comprehensive statement
included in “Part B – Business Plan” of the RP to the effect that the
SRA had the expertise and experience in the financial sector and
the ability to carry out the business of the CD as a Financial Service
Provider. Such being the compliance of the said Rule 5(d)(i) of FSP
Rules, it could not be said that there was any violation of any law
for the time being in force as contemplated in Section 30(2)(e) of
IBC and as sought to be contended by the learned counsels for the
Appellants – FD Holders.
99. In that view of the matter, all the Appeals filed by the Appellants in
this Second Category of Appeals being devoid of merits deserve to
be dismissed.

(VIII) ANALYSIS IN THE THIRD CATEGORY OF APPEALS
100. In this Third category, following Appeals are covered: -
(1) The Civil Appeal Nos. 1707-1712 of 2022 have been filed by
the ex-promoter Kapil Wadhawan challenging the impugned
judgment and order dated 14.02.2022 in Company Appeal No.
539 of 2021 passed by the NCLAT, dismissing the Appellants
challenge to the RP of Piramal Capital, which was approved
by the NCLT vide order dated 07.06.2021.
(2) The Appellant Kapil Wadhawan has also challenged the
common impugned judgment and order dated 27.01.2022 in
Company Appeal No. 785 of 2020 and 674 of 2021 passed by
the NCLAT holding that the Appellant, though was erstwhile
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Director, Promoter, Shareholder and Guarantor of DHFL, had
no right to a copy of RP approved by the CoC.
(3) The Appellant Kapil Wadhawan has also challenged the common
impugned judgment and order dated 27.01.2022 in Company
Appeal Nos. 370, 376-377 and 393 of 2021 passed by the
NCLAT, whereby the NCLAT has set aside the order dated
19.05.2021 passed by the NCLT directing the CoC to consider
and vote on 2nd Settlement Proposal of KW of the Appellant.
(4) The Civil Appeal No. 2567 of 2022 has been filed by another ex-
promoter Dheeraj Wadhawan challenging the common impugned
judgment and order dated 27.01.2022 in Company Appeal No.
785 of 2020 and 647 of 2021 passed by the NCLAT, holding
that the erstwhile Director, Promoter, Shareholder and Guarantor
of DHFL was not entitled to participate in the meeting of CoC.
(5) The Civil Appeal Nos. 2987-2988 of 2022 have been filed by the
SRA – Piramal Capital challenging the impugned judgment and
order dated 27.01.2022 in Company Appeal No. 785 of 2020
and 647 of 2021 passed by the NCLAT, in which it has been
held that the erstwhile Directors who had vacated the offices
were not entitled to share any document, however the copy of
RP after the approval from Adjudicating Authority cannot be
treated as a confidential document, and therefore a certified
copy may be issued to the erstwhile Directors as per the Rules.
101. The core issue raised by learned Senior Counsel Mr. Kapil Sibal
appearing for the erstwhile Directors KW and DW was that the
Resolution Professional, that is the Administrator in this case, and
the CoC had not undertaken any efforts for value maximization of
DHFL’s assets and businesses, which is the underlying object of
the IBC. According to him the Appellants – Ex-Promoters/ Directors
were kept out of the entire CIRP proceedings and were not given
any opportunity to participate in the said proceedings under the guise
that the entire Board of Directors of DHFL was superseded under
the RBI Act, and therefore the Ex-Directors did not have any right,
which suspended Directors would have under the IBC. Mr. Sibal had
strenuously taken the Court to the voluminous record and raised all
possible issues, with regard to the Clause in question, with regard
to the treatment to Recoveries under the Applications filed under
Section 66 of the Code and the permissibility of ascribing INR 1
[2025] 4 S.C.R. 431

Piramal Capital and Housing Finance Limited (Formerly Known as Dewan Housing
Finance Corporation Limited) v. 63 Moons Technologies Limited & Others

towards such transactions etc. In short, Mr. Sibal had vehemently
challenged the commercial wisdom exercised by the CoC while
approving the plan.
102. We have already discussed and dealt with, in the earlier part of
this judgment, all the said issues including the scope of judicial
review by the NCLT and NCLAT over the commercial wisdom
exercised by the CoC, and also examined the legality of the clause
in the RP with regard to the treatment of Recoveries from the
Avoidance Applications. We have also examined in detail the issue
with regard to the maximization of the value of assets of the CD.
Hence, the same are not dealt with in this set of Appeals. Suffice
it to say that when majority of the creditors in their wisdom, and
after negotiations with the PRA as to how and in what manner the
Corporate Resolution Process should be undertaken, had explored
the feasibility and viability of the RP, while approving the same,
and when the said Plan was also approved by the NCLT, the
NCLAT ought not to have tinkered with a Clause of the said Plan
with regard to the treatment of Recoveries from the Applications
under Section 66 of the IBC.
103. So far as the right of the Ex-Directors/ Promoters to participate in
the Meetings of CoC and right to get the copy of RP approved by
the CoC is concerned, it may be noted that the RBI in exercise
of its powers conferred under Section 45-IE (1) of RBI Act had
superseded the Board of Directors of DHFL, on being satisfied that
the DHFL had conducted its affairs detrimental to the interest of its
depositors and creditors. The RBI, therefore, had appointed one Shri
R. Subramaniakumar – Ex-MD and CEO of the Indian Overseas
Bank vide communication dated 20.11.2019. The RBI thereafter, on
29.11.2019, had filed a Company Petition under Section 227 read
with Section 239 (2) (zk) of IBC before the NCLT for initiating CIRP
proceedings.
104. It may be noted that as per sub-section (4) of Section 45 – (IE) of
the RBI Act, on passing of the order of supersession of the Board
of Directors of a Non-Banking Financial Company (DHFL), the
Chairman, Managing Director and other Directors have to vacate
their offices from the date of supersession of the Board of Directors,
and then all the powers, functions and duties, which are required to
be exercised by them under the provisions of RBI Act or any other
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law for the time being in force, have to be exercised and discharged
by the Administrator appointed by the RBI, till the Board of Directors
of such company is reconstituted.
105. Thus, by virtue of the said provision contained in Section 45-IE and
by virtue of the order passed by the RBI thereunder, the Board of
Directors of DHFL had stood superseded and their offices also stood
vacated on the appointment of the Administrator. Thereafter, on the
initiation of CIRP and on the appointment of an Interim Resolution
Professional by the Adjudicating Authority, the management of
the affairs of the CD had stood vested in the Interim Resolution
Professional (the Administrator in this case) and the powers of the
Board of Directors of the CD had stood suspended in view of Section
17(1)(b) of the IBC.
106. It may be noted that this is one of the rare cases where the Board
of Directors had first stood superseded under the RBI Act, and then
the Directors of the CD - DHFL had stood suspended under the IBC.
As such, in our opinion, the legal effects in both the situations would
be different, as the “Supersession” of the Board of Directors is very
much different from the “Suspension” of the Directors. In common
parlance also the use of the word “Supersession” has a different
connotation than that of the word “Suspension.” As per the Black’s
Law Dictionary (11th Edition) the word, “Supersede” means to annul,
make void or repeal; and the word “Suspend” means to interrupt,
postpone, defer, or to temporarily keep a person from performing a
function or occupying an office. Thus, the effect of Supersession is
permanent in nature, whereas the effect of Suspension is temporary
in nature.
107. It is true that as per Section 24 of IBC, the Resolution Professional
is required to give a notice of each of the meetings of the CoC to
the members of the suspended Board of Directors, alongwith the
members of CoC including the Authorized Representatives and the
Operational Creditors or their representatives. However, as per sub-
section 4 of Section 24, though the Directors of suspended Board
of Directors have a right to attend the meetings of CoC, they do
not have any right to vote in such meetings. Meaning thereby, such
suspended Directors would have a right only to receive the notice
of meetings of CoC and to attend the same, but would not have the
right to vote in the meetings.
[2025] 4 S.C.R. 433

Piramal Capital and Housing Finance Limited (Formerly Known as Dewan Housing
Finance Corporation Limited) v. 63 Moons Technologies Limited & Others

108. This Court in Vijay Kumar Jain vs. Standard Chartered Bank and
Others,12 while recognizing the rights of the members of the erstwhile
Board of Directors to receive a copy of RPs, that may be discussed
in the meetings of CoC, has observed as under: -
“21. Under Regulation 24(2)(e), the resolution professional
has to take a roll call of every participant attending through
videoconferencing or other audio and visual means, and
must state for the record that such person has received
the agenda and all relevant material for the meeting which
would include the resolution plan to be discussed at such
meeting. Regulation 35 makes it clear that the resolution
professional shall provide fair value and liquidation value
to every member of the committee only after receipt
of resolution plans in accordance with the Code [see
Regulation 35(2)]. Also, under Regulation 38(1-A), a
resolution plan shall include a statement as to how it has
dealt with the interest of all stakeholders, and under sub-
regulation (3)(a), a resolution plan shall demonstrate that
it addresses the cause of default. This Regulation also,
therefore, recognises the vital interest of the erstwhile
Board of Directors in a resolution plan together with the
cause of default. It is here that the erstwhile Directors can
represent to the Committee of Creditors that the cause
of default is not due to the erstwhile management, but
due to other factors which may be beyond their control,
which have led to non-payment of the debt. Therefore, a
combined reading of the Code as well as the Regulations
leads to the conclusion that members of the erstwhile
Board of Directors, being vitally interested in resolution
plans that may be discussed at meetings of the Committee
of Creditors, must be given a copy of such plans as part
of “documents” that have to be furnished along with the
notice of such meetings.”
109. In the instant case, however, it deserves to be noted that the
RBI having superseded the Board of Directors and appointed the
Administrator, the Appellants – Ex-Directors had deemed to have

12 (2019) 20 SCC 455
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vacated their offices. They having been arrested in connection with
the criminal proceedings filed against them, were in the judicial
custody all throughout the CIRP proceedings. The said Administrator
having initiated the CIRP proceedings, was thereafter continued by
the CoC as the Resolution Professional to conduct the CIRP under
the provisions contained in the IBC. Under the circumstances, the
Appellants – KW and DW, who were the Directors of DHFL at the
relevant time, having deemed to have vacated their offices on the
supersession of the Board of Directors under the RBI Act, could not
have claimed any right to attend the meetings of CoC or to participate
in the CIRP proceedings initiated under the IBC, which right otherwise
would have been available to the Directors suspended under the IBC.
In absence of any specific provision in the IBC or the Regulations
2016, they, as the members of the superseded Board of Directors,
could not have made any claim to have a copy of proposed RPs
submitted by the PRAs during the CIRP proceedings. Nonetheless,
pertinently the RP after having been approved by the NCLT under
Section 31 of IBC, would become a “Public Document” within the
meaning of Section 74 of the Indian Evidence Act, and therefore,
they would be entitled to get, at the most, a certified copy of the
approved RP.
110. In that view of the matter, we do not find any merits in the Appeals
filed by the Appellants in this Third Category of Appeals.

(IX) CONCLUSION
111. The upshot of the above discussion and findings is as follows: -
(1) The impugned judgment and order dated 27.01.2022 passed
by the NCLAT in Company Appeal Nos. 454-455 and 750 of
2021 is set aside, and the judgment and order dated 07.06.2021
passed by the Adjudicating Authority/ NCLT granting its approval
to the Plan Approval Application, and thereby approving the
Resolution Plan, is upheld. However, it is clarified and directed
that the NCLT shall decide the Avoidance Applications filed
by the Administrator under Section 43, 45, and 50, and shall
separately decide the Applications under Section 66, and it
shall pass the orders in accordance with the powers conferred
upon it under Section 44, 48, 49, 50, and under Section 66, as
the case may be. The recoveries/benefits that may follow from
[2025] 4 S.C.R. 435

Piramal Capital and Housing Finance Limited (Formerly Known as Dewan Housing
Finance Corporation Limited) v. 63 Moons Technologies Limited & Others

such Applications shall be appropriated in favour of the CoC in
case of Avoidance Applications under Section 43, 45 and 50,
and in favour of SRA-Piramal Capital in case of Applications
under Section 66 of IBC.
(2) The Civil Appeal Nos. 1632-1634 of 2022 filed by the Piramal
Capital and Housing Finance Limited and the Civil Appeal
Nos. 2989-2991 of 2022 filed by the Union Bank of India stand
allowed.
(3) The Civil Appeal Nos. 3694-3695 of 2022 filed by 63 Moons
Technologies Limited stands disposed of.
(4) The Appeal arising out of D. No. 6037 of 2022 filed by Raghu
K.S. & Others, Civil Appeal Nos. 2413-2415 of 2022 filed by
Vinay Kumar Mittal & Others, Civil Appeal No. 2396 of 2022
filed by Uttar Pradesh State Power Sector Employees Trust and
Civil Appeal No. 2402 of 2022 filed by Uttar Pradesh State
Power Corporation Contributory Provident Fund Trust, Civil
Appeal Nos. 8123-8125 of 2022 filed by Senbagha Vivek A
& Another and Civil Appeal No. 6286 of 2022 filed by THDC
India Limited Employee Provident Fund are dismissed.
(5) The Civil Appeal Nos. 1707-1712 of 2022 filed by Kapil
Wadhawan, Civil Appeal No. 2567 of 2022 filed by Dheeraj
Wadhawan and Civil Appeal Nos. 2987-2988 of 2022 filed by
Piramal Capital and Housing Finance Limited are dismissed.

Result of the case: Appeals disposed of.

†
Headnotes prepared by: Nidhi Jain