Supreme Court of India

RAMKRISHNA FORGINGS LIMITEDversusRAVINDRA LOONKAR, RESOLUTION PROFESSION OF ACIL LIMITED & ANR.

Citation: 2023 INSC 1013
Decided: 21 November 2023
Disposal: Appeal(s) allowed
Bench: VIKRAM NATH

Holding

The NCLT exceeded its jurisdiction by ordering a re‑valuation of the corporate debtor's assets; the adjudicating authority may only reject a resolution plan that fails to meet the statutory criteria, not re‑examine the CoC's commercial decision.

Summary

The Supreme Court examined the approval of a resolution plan for ACIL Ltd., where the Committee of Creditors (CoC) had approved a plan with an 88.56% majority after multiple revisions. The National Company Law Tribunal (NCLT) had stayed the plan and ordered a re‑valuation of ACIL's assets by the Official Liquidator, a direction the Court found to be beyond its statutory jurisdiction. The Court held that the Adjudicating Authority's power under Section 31(2) of the Insolvency and Bankruptcy Code (IBC) is limited to rejecting a plan that fails to meet the criteria of Section 31(1), not to re‑evaluate the commercial wisdom of the CoC. It emphasized that the valuation process prescribed under the IBC Regulations had been duly complied with, and no objection was raised to the plan or the valuation reports. Consequently, the Court set aside the NCLT order and the NCLAT judgment, directing the NCLT to approve the plan within three weeks. The decision reaffirmed the primacy of the CoC's commercial judgment and the narrow jurisdiction of the adjudicating authority under the IBC.

Issues considered

The extent of the NCLT's jurisdiction and power to order a re‑valuation of assets after a resolution plan has been approved by the CoC.
Whether the Adjudicating Authority can interfere with the commercial wisdom of the CoC under Section 31(2) of the IBC.
Whether the statutory valuation mechanism under the IBC Regulations suffices, rendering the NCLT's direction to the Official Liquidator ultra vires.
Whether the lack of objections to the valuation and plan precludes judicial intervention.

Legislation cited

Companies Act, 2013s. 408
Income Tax Act, 1961s. 796
Insolvency and Bankruptcy Code, 2016s. 30, s. 31, s. 60(5), s. 62(2)
Insolvency Resolution Process for Corporate Persons Regulations, 2016s. Regulation 27, s. Regulation 35, s. Regulation 38

Subjects

Insolvency and Bankruptcy CodeResolution PlanNCLT jurisdictionCommittee of CreditorsRe‑valuationCommercial wisdomAdjudicating AuthorityAvoidance transaction

Judgment

[2023] 16 S.C.R. 672 : 2023 INSC 1013

CASE DETAILS

RAMKRISHNA FORGINGS LIMITED
v.
RAVINDRA LOONKAR, RESOLUTION PROFESSION OF ACIL
LIMITED & ANR.1
R1 : Ravindra Loonkar, Resolution Profession(al) of ACIL
Limited
R2 : Committee of Creditors of ACIL Ltd.
(Civil Appeal No.1527 of 2022)
NOVEMBER 21, 2023
[VIKRAM NATH AND AHSANUDDIN AMANULLAH, JJ.]
HEADNOTES
Issue for consideration: The moot question involved is the extent
of the jurisdiction and powers of the Adjudicating Authority to go on the
issue of revaluation in the background of the admitted and undisputed
factual position that no objection was raised by any quarter with regard
to any deﬁciency/irregularity, either by the RP or the appellant or the
CoC, in ﬁnally approving the Resolution Plan which was sent to the
Adjudicating Authority-NCLT for approval.
Insolvency and Bankruptcy Code, 2016 – The Adjudicating
Authority-NCLT by order dated 01.09.2021, the application seeking
approval of a Resolution Plan for ACIL or corporate debtor was kept
in abeyance while directing the oﬃcial liquidator (OL) to carry out a
re-valuation of the assets of the corporate debtor and provide exact
ﬁgures/value of the assets and exact value details – NCLAT upheld
the order of the NCLT – Propriety:
Held: If the CoC, including the FC(s) to whom money is due
from the Corporate Debtor, had undertaken repeated negotiations with

1 Cause-title should correctly include ‘Resolution Professional’ instead of ‘Resolution
Profession’
672
RAMKRISHNA FORGINGS LTD v. RAVINDRA LOONKAR, 673
R. P. OF ACIL LTD.

the appellant with regard to the Resolution Plan and thereafter, with a
majority of 88.56% votes, approved the ﬁnal negotiated Resolution Plan
of the appellant, which the RP, in turn, presented to the Adjudicating
Authority-NCLT for approval, unless the same was failing the tests of
the provisions of the Code, especially Sections 30 & 31, no interference
was warranted – It is worthwhile to note that the Adjudicating Authority
has jurisdiction only u/s. 31(2) of the Code, which gives power not to
approve only when the Resolution Plan does not meet the requirement
laid down u/s. 31(1) of the Code, for which a reasoned order is required
to be passed – The NCLT’s jurisdiction and powers as the Adjudicating
Authority under the Code, ﬂow only from the Code and the Regulations
thereunder – The order dated 01.09.2021 by the NCLT cannot withstand
judicial scrutiny, either on facts or in law – Also, the said order is cryptic
and bereft of details – Accordingly, the order dated 01.09.2021 of the
NCLT and impugned judgment of the NCLAT are set aside. [Paras
27,32,34]
LIST OF CITATIONS AND OTHER REFERENCES
Jaypee Kensington Boulevard Apartments Welfare Association v
NBCC (India) Limited (2022) 1 SCC 401; Pratap Technocrats Private
Limited v Monitoring Committee of Reliance Infratel Limited (2021) 10
SCC 623 – relied on.
Maharashtra Seamless Limited v Padmanabhan Venkatesh [2020]
2 SCR 1157:(2020) 11 SCC 467; M K Rajagopalan v Dr Periasamy
Palani Gounder, 2023 SCC OnLine SC 574; M K Rajagopalan v Dr
Periasamy Palani Gounder 2023 SCC OnLine SC 574; K Sashidhar v
Indian Overseas Bank [2019] 3 SCR 845:(2019) 12 SCC 150; Committee
of Creditors of Essar Steel India Ltd. v Satish Kumar Gupta [2019] 16
SCR 275 : (2020) 8 SCC 531; Ebix Singapore (P) Ltd. v Committee of
Creditors of Educomp Solutions Limited 2021 SCC OnLine SC 707;
Vallal RCK v Siva Industries and Holdings Limited 2022 SCC OnLine
SC 717; Arun Kumar Jagatramka v Jindal Steel and Power Limited
[2021] 3 SCR 114:(2021) 7 SCC 474; Kalpraj Dharamshi v Kotak
Investment Advisors Limited [2021] 2 SCR 677: (2021) 10 SCC 401;
Maneka Gandhi v. Union of India : [1978] 2 SCR 621:(1978) 1 SCC
674 SUPREME COURT REPORTS [2023] 16 S.C.R.

248; Innoventive Industries Ltd. v ICICI Bank [2017] 8 SCR 33: (2018)
1 SCC 407; Swiss Ribbons Private Limited v Union of India [2019] 3
SCR 535:(2019) 4 SCC 17; Kranti Associates Private Limited v Masood
Ahmed Khan [2010] 10 SCR 1070 : (2010) 9 SCC 496; Manoj Kumar
Khokhar v State of Rajasthan (2022) 3 SCC 501; Embassy Property
Developments Private Limited v State of Karnataka[2019] 17 SCR 559:
(2020) 13 SCC 308; Gujarat Urja Vikas Nigam Limited v Amit Gupta
(2021) 7 SCC 209 – referred to.
OTHER CASE DETAILS INCLUDING IMPUGNED
ORDER AND APPEARANCES
CIVIL APPELLATE JURISDICTION : Civil Appeal No.1527 of 2022.
From the Judgment and Order dated 19.01.2022 of the National
Company Law Appellate Tribunal in Company Appeal (AT) (Ins) No.845
of 2021.
Appearances:
Shyam Divan, Krishnendu Datta, Sr. Advs., Prateek Kumar, Ms.
Raveena Rai, Ms. Saloni Gupta for M/s. Khaitan & Co., Advs. for the
Appellant.
Tushar Mehta, SG, Balbir Singh, ASG, Kanu Agarwal, Naman Tandon,
Samarvir Singh, Aditya Rathore, Ms. Swarupama Chaturvedi, Saurav
Roy, Ms. Chinmayee Chandra, Arvind Kumar Sharma, Sumant Batra,
Gaurav Arora, Ms. Kritya Sinha, Alok Tripathi, Ms. Ruchi Goyal, Rajesh
Kumar Chaurasia, Rajive R Raj, Sujeet Kumar, Shailendra Kumar Nirmal,
Anurag Jain, Onkar Prasad, Mrs. Soni, Mrs. Manjulika Pal, Advs. for the
Respondents.
JUDGMENT / ORDER OF THE SUPREME COURT

JUDGMENT

AHSANUDDIN AMANULLAH, J.
Heard learned counsel for the parties.
RAMKRISHNA FORGINGS LTD v. RAVINDRA LOONKAR, 675
R. P. OF ACIL LTD.

2. The present appeal under Section 62 2 of the Insolvency and
Bankruptcy Code, 2016 (hereinafter referred to as the “Code”) is directed
against the Judgment dated 19.01.2022 (hereinafter referred to as the
“Impugned Judgment”) passed by the National Company Law Appellate
Tribunal (hereinafter referred to as the “NCLAT”) in Company Appeal (AT)
(Ins) No.845 of 2021 which has upheld the order passed by the Adjudicating
Authority (National Company Law Tribunal3) [hereinafter referred to as the
“Adjudicating Authority-NCLT” or “Adjudicating Authority” or “NCLT”],
Principal Bench dated 01.09.2021 by which the application seeking approval
of a Resolution Plan for ACIL Limited (hereinafter referred to as either
“ACIL” or the “Corporate Debtor”) being I.A. No.1636 of 2019 in CP(IB)
No.170(PB)/2018 (hereinafter referred to as the “Approval Application”)
was kept in abeyance while directing the Oﬃcial Liquidator (hereinafter
referred to as the “OL”) to carry out a re-valuation of the assets of the
Corporate Debtor and to provide exact ﬁgures/value of the assets and exact
valuation details.
BRIEF FACTS:
3. ACIL is a manufacturer of precision engineering and automobile
components, namely crankshafts for tractors, HCVs, LCVs as well as two-
wheelers, as also connecting rods, steering knuckles and hubs. It was the
subject-matter of a Corporate Insolvency Resolution Process (hereinafter
referred to as “CIRP”) which was initiated on an application ﬁled by IDBI
Bank Ltd. Mr. Ravindra Loonkar was appointed as the Interim Resolution
Professional and subsequently conﬁrmed as the Resolution Professional
(hereinafter referred to as the “RP”) by the NCLT under order dated
16.10.2018. Against the total claim ﬁled for about Rupees one thousand

2 ‘62. Appeal to Supreme Court.—(1) Any person aggrieved by an order of the National
Company Law Appellate Tribunal may ﬁle an appeal to the Supreme Court on a
question of law arising out of such order under this Code within forty-ﬁve days from
the date of receipt of such order.
(2) The Supreme Court may, if it is satisﬁed that a person was prevented by suﬃcient
cause from ﬁling an appeal within forty-ﬁve days, allow the appeal to be ﬁled within a
further period not exceeding ﬁfteen days.’
3 The National Company Law Tribunal is a creature of Section 408 of the Companies
Act, 2013. Under Section 60 of the Code, it has been designated as the Adjudicating
Authority for corporate persons.
676 SUPREME COURT REPORTS [2023] 16 S.C.R.

eight hundred and thirty crores, the amount of admitted claim in the CIRP
was Rupees one thousand seven hundred and eighty-two crores.
4. The RP published Expression of Interest on 15.10.2018 which
was subsequently revised on 31.10.2018, 28.01.2019 and 13.02.2019. The
appellant-Resolution Applicant (hereinafter referred to as the “appellant”)
submitted its ﬁrst Resolution Plan on 11.04.2019 providing to pay Rupees
seventy-four crores to all the stakeholders including Rupees sixty-three and
a half crores to Financial Creditors (hereinafter referred to as the “FC(s)”).
After a series of negotiations, the appellant submitted an Addendum to
its Resolution Plan on 21.05.2019 by raising the payment to FC(s) to
Rupees seventy-three crores and eighteen lacs. On and at the request of the
Committee of Creditors (hereinafter referred to as the “CoC”), once again,
the appellant submitted a Revised Plan on 27.05.2019 wherein the total pay-
out was Rupees eighty crores and ﬁfty-ﬁve lacs and the FC(s) were to be paid
Rupees seventy ﬁve crores and forty-two lacs. The ﬁnal Resolution Plan was
submitted on 05.08.2019, in which the ﬁnancial proposal/total pay-out was
increased to Rupees one hundred twenty-nine and a half crores and FC(s)
were to get upfront payment of Rupees eighty crores and forty-four lacs.
This Resolution Plan further provided that proceeds from the monetization
of the land situated at Manesar will go to the FC(s).
5. This ﬁnal Resolution Plan submitted by the Appellant-Resolution
Applicant on 05.08.2019 was ﬁnally approved by the CoC on 14.08.2019 by a
majority of 88.56% votes. In terms of such approval of the Resolution Plan by
the CoC, the RP moved Approval Application under Sections 30(6)4 and 315

4 ‘30. Submission of resolution plan.—
xxx
(6) The resolution professional shall submit the resolution plan as approved by the
committee of creditors to the Adjudicating Authority.’
5 ‘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:
RAMKRISHNA FORGINGS LTD v. RAVINDRA LOONKAR, 677
R. P. OF ACIL LTD.[AHSANUDDIN AMANULLAH, J.]

of the Code seeking approval of the Resolution plan before the Adjudicating
Authority-NCLT on 16.08.2019. In terms of the Resolution Plan, for which
approval was being sought, ACIL would be allowed the beneﬁt of carrying
forward its losses in terms of Section 796 of the Income Tax Act, 1961.

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) After the order of approval under sub-section (1),—
(a) the moratorium order passed by the Adjudicating Authority under Section 14
shall cease to have eﬀect; and
(b) the resolution professional shall forward all records relating to the conduct of
the corporate insolvency resolution process and the resolution plan to the Board to
be recorded on its database.
(4) The resolution applicant shall, pursuant to the resolution plan approved under sub-
section (1), obtain the necessary approval required under any law for the time being
in force within a period of one year from the date of approval of the resolution plan by
the Adjudicating Authority under sub-section (1) or within such period as provided for
in such law, whichever is later:
Provided that where the resolution plan contains a provision for combination, as
referred to in Section 5 of the Competition Act, 2002 (12 of 2003), the resolution
applicant shall obtain the approval of the Competition Commission of India under
that Act prior to the approval of such resolution plan by the committee of creditors.’
6 ‘79. Carry forward and set oﬀ of losses in case of certain companies.—(1)
Notwithstanding anything contained in this Chapter, where a change in shareholding
has taken place during the previous year in the case of a company, not being a
company in which the public are substantially interested, no loss incurred in any year
prior to the previous year shall be carried forward and set oﬀ against the income of
the previous year, unless on the last day of the previous year, the shares of the company
carrying not less than ﬁfty-one per cent. of the voting power were beneﬁcially held by
persons who beneﬁcially held shares of the company carrying not less than ﬁfty-one
per cent. of the voting power on the last day of the year or years in which the loss was
incurred:
Provided that even if the said condition is not satisﬁed in case of an eligible
start up as referred to in Section 80-IAC, the loss incurred in any year prior to the
previous year shall be allowed to be carried forward and set oﬀ against the income
of the previous year if all the shareholders of such company who held shares carrying
voting power on the last day of the year or years in which the loss was incurred,
continue to hold those shares on the last day of such previous year and such loss has
been incurred during the period of ten years beginning from the year in which such
company is incorporated.
(2) Nothing contained in sub-section (1) shall apply,—
(a) to a case where a change in the said voting power and shareholding takes
678 SUPREME COURT REPORTS [2023] 16 S.C.R.

6. This ultimately resulted in the order dated 01.09.2021, by which
the approval of the Resolution Plan was kept in abeyance and the OL was

place in a previous year consequent upon the death of a shareholder or on
account of transfer of shares by way of gift to any relative of the shareholder
making such gift;
(b) to any change in the shareholding of an Indian company which is a subsidiary
of a foreign company as a result of amalgamation or demerger of a foreign
company subject to the condition that ﬁfty-one per cent. shareholders of
amalgamating or demerged foreign company continue to be the shareholders
of the amalgamated or the resulting foreign company;
(c) to a company where a change in the shareholding takes place in a previous year
pursuant to a resolution plan approved under the Insolvency and Bankruptcy
Code, 2016 (31 of 2016), after aﬀording a reasonable opportunity of being
heard to the jurisdictional Principal Commissioner or Commissioner;
(d) to a company, and its subsidiary and the subsidiary of such subsidiary,
where,—
(i) the Tribunal, on an application moved by the Central Government under
Section 241 of the Companies Act, 2013 (18 of 2013), has suspended the Board
of Directors of such company and has appointed new directors nominated by
the Central Government, under Section 242 of the said Act; and
(ii) a change in shareholding of such company, and its subsidiary and the
subsidiary of such subsidiary, has taken place in a previous year pursuant to a
resolution plan approved by the Tribunal under Section 242 of the Companies
Act, 2013 (18 of 2013) after aﬀording a reasonable opportunity of being
heard to the jurisdictional Principal Commissioner or Commissioner.
Explanation.—For the purposes of this section,—
(i) a company shall be a subsidiary of another company, if such other company holds
more than half in nominal value of the equity share capital of the company;
(i-a)“erstwhile public sector company” shall have the same meaning as assigned to
it in clause (ii) of the Explanation to clause (d) of sub-section (1) of Section 72-A;
(i-b) “strategic disinvestment” shall have the same meaning as assigned to it in
clause (iii) of the Explanation to clause (d) of sub-section (1) of Section 72-A;
(ii) “Tribunal” shall have the meaning assigned to it in clause (90) of Section 2 of
the Companies Act, 2013 (18 of 2013).
(e) to a company to the extent that a change in the shareholding has taken place
during the previous year on account of relocation referred to in the Explanation to
clauses (vii-ac) and (vii-ad) of Section 47.
(f) to an erstwhile public sector company subject to the condition that the ultimate
holding company of such company, immediately after the completion of strategic
disinvestment, continues to hold, directly or through its subsidiary or subsidiaries, at
least ﬁfty-one per cent. of the voting power of such company in aggregate.
(3) Notwithstanding anything contained in sub-section (2), if the condition speciﬁed
in clause (f) of the said sub-section is not complied with in any previous year after the
completion of strategic disinvestment, the provisions of sub-section (1) shall apply for
such previous year and subsequent previous years.’
RAMKRISHNA FORGINGS LTD v. RAVINDRA LOONKAR, 679
R. P. OF ACIL LTD.[AHSANUDDIN AMANULLAH, J.]

directed to provide exact ﬁgures/value of assets. The same was carried in
appeal under Section 617 of the Code by the present appellant before the
NCLAT which passed the Impugned Judgment on 19.01.2022, dismissing
the appeal, thereby upholding the order of the NCLT, which is impugned
herein.
SUBMISSIONS ON BEHALF OF THE APPELLANT:
7. Mr. Shyam Divan, learned senior counsel for the appellant submitted
that the Resolution Plan initially submitted by the appellant was negotiated
further on various dates and, ultimately the ﬁnal outcome was the Resolution
Plan submitted on 05.08.2019. This was ﬁnally approved by the CoC through
a majority of 88.56% votes on 14.08.2019, after extensive consideration.
It was submitted that there were 11 revisions in respect of the Resolution
Plan made by the appellant before the ﬁnal version was approved by the
CoC. It was indicated that the ﬁnal Resolution Plan was approximately

7 ‘61. Appeals and Appellate Authority.—(1) Notwithstanding anything to the contrary
contained under the Companies Act, 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) Every appeal under sub-section (1) shall be ﬁled within thirty days before the
National Company Law Appellate Tribunal:
Provided that the National Company Law Appellate Tribunal may allow an appeal to
be ﬁled after the expiry of the said period of thirty days if it is satisﬁed that there was
suﬃcient cause for not ﬁling the appeal but such period shall not exceed ﬁfteen days.
(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;
(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) An appeal against a liquidation order passed under Section 33, or sub-section (4) of
Section 54-L, or sub-section (4) of Section 54-N, may be ﬁled on grounds of material
irregularity or fraud committed in relation to such a liquidation order.
(5) An appeal against an order for initiation of corporate insolvency resolution process
passed under sub-section (2) of Section 54-O, may be ﬁled on grounds of material
irregularity or fraud committed in relation to such an order.’
680 SUPREME COURT REPORTS [2023] 16 S.C.R.

48% higher as compared to the pay-out under the initial Resolution Plan
submitted by the appellant. At this juncture, it was also pointed out that the
RP had also got two reports prepared by two approved/registered valuers:
(a) BDO India LLP’s Report dated 11.02.2019 with regard to assets of
ACIL which indicated fair market value to be Rupees one hundred thirty-
ﬁve crores and ten lacs with liquidation value as Rupees one hundred eight
crores and ﬁfty-seven lacs; whereas the Report of (b) Adroit Technical
Services Limited dated 14.02.2019 indicated fair market value of Rupees
one hundred twenty-ﬁve crores and eighty-ﬁve lacs and liquidation value
of Rupees ninety-four crores and eighty-seven lacs. Thus, it was submitted
that after taking care of all the statutory procedural requirements and on
the basis of such reports and proper examination of the materials on record
and having exercised its commercial wisdom, the CoC-approved Resolution
Plan was put up before the NCLT for approval, but the NCLT, exceeding its
jurisdiction and without ascertaining any reason for such course of action,
passed the direction for revaluation.
8. Learned senior counsel in this connection submitted that there
was no occasion for the NCLT to embark upon a totally alien procedure
of getting the OL involved in such valuation, for which a mechanism
is already provided under the Code and which, as per him, was strictly
adhered to in the present case. It was contended that the NCLT had limited
power of judicial review given the supremacy of the CoC under the Code.
At best, learned senior counsel contended, that it could have disapproved
the Resolution Plan on cogent ground(s) relevant for doing so after testing
whether it complies with the requirements of Section 30(2) of the Code, but
it could not have acquired jurisdiction, where no such residuary or equity
based jurisdiction is available under the Code by interfering with the CoC’s
decision without pointing out any non-conformity with the provisions of
the Code and the Regulations thereunder. For such proposition, he relied
upon the decision of this Court in Pratap Technocrats Private Limited v
Monitoring Committee of Reliance Infratel Limited, (2021) 10 SCC 623,
the relevant being at Paragraphs 25, 26 and 44, where it has been held that
the jurisdiction conferred upon the Adjudicating Authority-NCLT in regard
to the approval of a Resolution Plan is statutorily structured by Sub-Section
1(1) of Section 31 of the Code and such jurisdiction is limited to determine
whether the requirements which are speciﬁed in Sub-Section (2) of Section
RAMKRISHNA FORGINGS LTD v. RAVINDRA LOONKAR, 681
R. P. OF ACIL LTD.[AHSANUDDIN AMANULLAH, J.]

30 of the Code have been fulﬁlled. Further, it has been explained that such
jurisdiction which is statutorily deﬁned, recognised and conferred, cannot
be equated with the jurisdiction in equity that operates independently of the
provisions of the statute for the reason that the Adjudicating Authority-NCLT,
which is a body owing its existence to the Code, must abide by the nature
and extent of its jurisdiction as deﬁned therein. Regarding the appointment
of the OL for getting valuation of the assets, the stand of Mr. Divan was
that it was not in line with the Code and the Regulations made thereunder.
9. It was further canvassed by learned senior counsel that the Code
provides for a mechanism for carrying out valuation of the assets of a
Corporate Debtor in form of the Insolvency and Bankruptcy Board of India
(Insolvency Resolution Process for Corporate Persons) Regulations, 2016
(hereinafter referred to as the “CIRP Regulations”), particularly Regulations
278 and 359 thereof, inasmuch as Regulation 27 provides that the RP shall

8 ‘27. Appointment of Professionals.—(1) The resolution professional shall, within
seven days of his appointment but not later than forty-seventh day from the insolvency
commencement date, appoint two registered valuers to determine the fair value and
the liquidation value of the corporate debtor in accordance with Regulation 35.
(2) The interim resolution professional or the resolution professional, as the case may
be, may appoint any professional, in addition to registered valuers under sub-regulation
(1), to assist him in discharge of his duties in conduct of the corporate insolvency
resolution process, if he is of the opinion that the services of such professional are
required and such services are not available with the corporate debtor.
(3) The interim resolution professional or the resolution professional, as the case
may be, shall appoint a professional under this regulation on an arm’s length basis
following an objective and transparent process: Provided that the following persons
shall not be appointed, namely—
(a) a relative of the resolution professional;
(b) a related party of the corporate debtor;
(c) an auditor of the corporate debtor at any time during the period of ﬁve years
preceding the insolvency commencement date;
(d) a partner or director of the insolvency professional entity of which the
resolution professional is a partner or director.
(4) The invoice for fee and other expenses incurred by a professional appointed under
this regulation shall be raised in the name of the professional and be paid directly into
the bank account of such professional.’
9 ‘35. Fair value and Liquidation value.—(1) Fair value and liquidation value shall be
determined in the following manner—
(a) the two registered valuers appointed under Regulation 27 shall submit to the
resolution professional an estimate of the fair value and of the liquidation value
computed in accordance with internationally accepted valuation standards, after
682 SUPREME COURT REPORTS [2023] 16 S.C.R.

appoint two registered valuers to determine the fair value and liquidation
value of the Corporate Debtor whereas Regulation 35 provides that the
two valuers shall submit the fair value and liquidation value to the RP after
physical veriﬁcation of the inventory and ﬁxed assets of the Corporate
Debtor and further provides that if the estimates shown by the two valuers are
signiﬁcantly diﬀerent, or upon a proposal from the CoC, the RP may appoint
a third registered valuer for valuation of the assets of the Corporate Debtor.
10. Another aspect which learned senior counsel drew the Court’s
attention to was the fact that the NCLT’s observations in its order dated
01.09.2021 observing that the amount oﬀered by the appellant was very
close to the fair value of the assets of the Corporate Debtor was a non-
issue and an uncalled for observation since such fair value of the assets of
the Corporate Debtor was never available to the appellant at the time of
submitting its ﬁrst Resolution Plan. Thus, learned senior counsel submitted
that the premise of the appellant’s oﬀered amount being in close proximity
to the fair value of the assets was inherently erroneous and without basis

physical veriﬁcation of the inventory and ﬁxed assets of the corporate debtor;
(b) if the two estimates of a value in an asset class are signiﬁcantly diﬀerent, or
on receipt of a proposal to appoint a third registered valuer from the committee of
creditors, the resolution professional may appoint a third registered valuer for an
asset class for submitting an estimate of the value computed in the manner provided
in clause (a).
Explanation.—For the purpose of clause (b),
(i) “asset class” means the deﬁnition provided under the Companies (Registered
Valuers and Valuation) Rules, 2017;
(ii) “signiﬁcantly diﬀerent” means a diﬀerence of twenty-ﬁve per cent in liquidation
value under an asset class and the same shall be calculated as (L1-L2)/L1, where,
L1= higher valuation of liquidation value
L2= lower valuation of liquidation value.
(c) the average of the two closest estimates of a value shall be considered the fair
value or the liquidation value, as the case may be.
(2) After the receipt of resolution plans in accordance with the Code and these
regulations, the resolution professional shall provide the fair value and the liquidation
value to every member of the committee in electronic form, on receiving an undertaking
from the member to the eﬀect that such member shall maintain conﬁdentiality of the
fair value and the liquidation value and shall not use such values to cause an undue
gain or undue loss to itself or any other person and comply with the requirements
under sub-section (2) of Section 29.
(3) The resolution professional and registered valuers shall maintain conﬁdentiality of
the fair value and the liquidation value.’
RAMKRISHNA FORGINGS LTD v. RAVINDRA LOONKAR, 683
R. P. OF ACIL LTD.[AHSANUDDIN AMANULLAH, J.]

and the decision to refer it to the OL based on such sole factor is obviously
and equally without any basis and ﬁt to be set aside.
11. It was submitted that this Court has held, in Maharashtra Seamless
Limited v Padmanabhan Venkatesh, (2020) 11 SCC 467, the relevant being
at Paragraphs 27 to 29, that aspects related to the valuation of the Corporate
Debtor are not open to judicial scrutiny by the NCLT as the object behind
such valuation process is to assist the CoC in taking a proper decision in
respect of a Resolution Plan and the valuation conducted in respect of the
assets of the Corporate Debtor and it has further been indicated that the
Adjudicating Authority-NCLT can approve a Resolution Plan even when it
is below the liquidation value and that there is no provision under the Code
which states that a resolution applicant’s bid must match the liquidation value
as the liquidation value is determined merely to assist the CoC in taking a
decision on the Resolution Plan.
12. On the same proposition, learned senior counsel referred to M K
Rajagopalan v Dr Periasamy Palani Gounder, 2023 SCC OnLine SC
574, the relevant being at Paragraphs 167, 168 and 169, holding that when
the CoC was fully satisﬁed with the valuation conducted in respect of the
Corporate Debtor and had endorsed the same, then it was unnecessary and
unjustiﬁable on the part of the NCLAT to presume irregularities in the
Resolution Plan and interfere therewith.
13. It was submitted that the RP in statutory form had certiﬁed that
the Resolution Plan received from the appellant complied with all the
provisions of the Code and the Regulations and did not contravene any
provisions of law.
14. It was contended that the ﬁnding of the NCLAT that an avoidance
transaction of approximately Rupees one thousand crores had come to
light and the present case justiﬁes its interference since ﬁgures of crores
are involved, could not have been an issue as it has no bearing in the
instant case and ought not to have been considered by the NCLAT. It was
submitted that safeguard against avoidance transaction and its impact
upon a Corporate Debtor’s CIRP has been provided in the Code and
the Regulations as also expounded in judicial precedents. In this regard,
684 SUPREME COURT REPORTS [2023] 16 S.C.R.

attention was drawn to Section 2610 of the Code which provides that ﬁling
of avoidance application(s) by the RP shall not aﬀect the CIRP proceedings.
It was further stated that Regulation 38(2)(d)11, CIRP Regulations has been
recently introduced through the Insolvency and Bankruptcy Board of India
(Insolvency Resolution Process for Corporate Persons) (Second Amendment)
Regulations, 2022 (hereinafter referred to as the “2022 Amendment”) with
eﬀect from 14.06.2022 which requires, for all Resolution Plans submitted
to the Adjudicating Authority on or after the 2022 Amendment to provide
for treatment of avoidance applications post-approval of a Resolution Plan,
along with the manner in which the proceeds from such proceedings will
be distributed. It was contended that even though in the present case, the
approval application has been ﬁled by the RP prior to the 2022 Amendment,
the Resolution Plan provides for the treatment of proceeds generated through
avoidance applications and states that all amounts received by ACIL pursuant
to any avoidance transaction shall be payable to the FC(s) and no avoidance
pay-out amounts shall be payable by the Corporate Debtor, which in the
present case would mean that avoidance transaction of approximately
Rupees one thousand crores will not aﬀect the ongoing CIRP, in view of the
Resolution Plan providing a clear way for its treatment. In this connection,
learned senior counsel referred to the decision by a Division Bench of the
High Court of Delhi in Tata Steel BSL Limited v Venus Recruiter Pvt. Ltd.,
2023 SCC OnLine Del 155, Paragraph 91 whereof says that when any kind

10 ‘26. Application for avoidance of transactions not to aﬀect proceedings.—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 the corporate insolvency
resolution process.’
11 ‘38. Mandatory contents of the resolution plan.—
xxx
(2) A resolution plan shall provide:
xxx
(d) provides for the manner in which proceedings in respect of avoidance transactions,
if any, under Chapter III or fraudulent or wrongful trading under Chapter VI of Part II
of the Code, will be pursued after the approval of the resolution plan and the manner
in which the proceeds, if any, from such proceedings shall be distributed:
Provided that this clause shall not apply to any resolution plan that has been submitted
to the Adjudicating Authority under sub-section (6) of Section 30 on or before the
date of commencement of the Insolvency and Bankruptcy Board of India (Insolvency
Resolution Process for Corporate Persons) (Second Amendment) Regulations, 2022.’
RAMKRISHNA FORGINGS LTD v. RAVINDRA LOONKAR, 685
R. P. OF ACIL LTD.[AHSANUDDIN AMANULLAH, J.]

of beneﬁt is acquired from the adjudication on avoidance application and the
Resolution Plan is silent on the treatment of such applications, such beneﬁt
must be given to the creditors of the Corporate Debtor.
15. Learned senior counsel submitted that the commercial wisdom
of the CoC has been held to be supreme in K Sashidhar v Indian
Overseas Bank, (2019) 12 SCC 150, the relevant being at Paragraphs
52, 59 & 64 and Committee of Creditors of Essar Steel India Ltd. v
Satish Kumar Gupta (2020) 8 SCC 531. Further, reliance was placed
on the decision in Ebix Singapore (P) Ltd. v Committee of Creditors of
Educomp Solutions Limited, 2021 SCC OnLine SC 707, holding that
the Adjudicating Authority under Section 31(2) of the Code can only
examine the validity of the Resolution Plan on the anvil of the stipulation
in Section 30(2) of the Code and either approve or reject the Resolution
Plan but cannot compel the CoC to negotiate further with a successful
Resolution Applicant and also that the Adjudicating Authority is duty
bound to ensure the completion of CIRP within the prescribed timeline
of 330 days under the Code.
16. As far as the reference in the Impugned Judgment by the NCLAT,
that interference was justiﬁed since “ﬁgures of crores” are involved, learned
senior counsel submitted that it has no basis in the Code or law, as it does
not provide for diﬀerential treatment to a Resolution Plan, based on the
quantum of the ﬁgure involved in the Corporate Debtor’s insolvency.
17. With regard to the OL being given the chance of coming up with
re-valuation, the stand taken by learned senior counsel was that the OL is
created by the Companies Act, 2013 and is not contemplated under the
Code which provides a speciﬁc mechanism for valuation to be conducted
in respect of the assets of a Corporate Debtor under the CIRP Regulations,
speciﬁcally Regulations 27 and 35, as noted hereinabove.
18. Learned senior counsel submitted that even if for the sake of
argument, it may be accepted that the NCLT can exercise discretion in rare
cases and order for re-valuation, in the present case, the same cannot be
justiﬁed as absolutely no reason has even been indicated by the NCLT or
the NCLAT for undertaking such exercise in respect of the assets of the
Corporate Debtor, which is arbitrary and unjustiﬁed.
686 SUPREME COURT REPORTS [2023] 16 S.C.R.

19. It was submitted that there was no objection from any quarter, much
less any stakeholder, with respect to the valuation of the Corporate Debtor
and also the appellant’s Resolution Plan and most importantly, no material
was placed on record before the NCLT or NCLAT to justify interference in
the CoC’s commercial wisdom.
SUBMISSIONS ON BEHALF OF THE RESPONDENTS:
20. Learned counsel for the respondents supported the contentions of
the appellant, advanced by Mr. Divan.
ASSISTANCE BY THE SOLICITOR GENERAL AND THE
ADDITIONAL SOLICITOR GENERAL FOR THE UNION OF INDIA:
21. In the present case, although the RP and CoC were arrayed as
respondents but having regard to the issues raised, this Court by order dated
05.05.202212 had requested the learned Solicitor General, Mr. Tushar Mehta
to assist. In terms thereof, he has ﬁled written submissions. Mr. Balbir Singh,
learned Additional Solicitor General has also assisted this Court.
22. In sum, the written note deals with the legal aspects and the ﬁnal
stand is that the Adjudicating Authority-NCLT would have no jurisdiction
or power to sit in appeal over the commercial wisdom of the CoC and
interference would be warranted only when the NCLT or the Appellate
Authority (viz. NCLAT) finds the decision of the CoC to be wholly
capricious, arbitrary, irrational and dehors the provisions in the Code or
the Regulations.
23. For such proposition, he relied upon the decision in Vallal RCK
v Siva Industries and Holdings Limited, 2022 SCC OnLine SC 717, the
relevant being at Paragraph 24, with regard to the binding and ﬁnal nature
of the Resolution plan after due approval by the CoC.

12 The Order is as below:
‘Having regard to the issues involved, we have requested Mr. Tushar Mehta, learned
Solicitor General to assist the Court in this matter. The relevant papers may be
supplied to the oﬃce of the learned Solicitor General within two days.
The matter may be listed on the next date while showing name of Mr. Arvind Kumar
Sharma, learned counsel assisting the learned Solicitor General.
List the matter on 18.05.2022.
Short notes on the submissions may be ﬁled in advance.’
RAMKRISHNA FORGINGS LTD v. RAVINDRA LOONKAR, 687
R. P. OF ACIL LTD.[AHSANUDDIN AMANULLAH, J.]

24. Mr. Singh also referred to Arun Kumar Jagatramka v Jindal Steel
and Power Limited, (2021) 7 SCC 474, the relevant being Paragraph 95,
holding that the need for judicial intervention or innovation from NCLT
and NCLAT should be kept at its bare minimum and should not disturb
the foundational principle of the Code. He also referred to Committee of
Creditors of Essar Steel India Ltd. (supra), where at Paragraph 69, it has
been observed that a harmonious reading of Sections 31(1) & 60(5) of the
Code would lead to the result that the residual jurisdiction of the NCLT
under Section 60(5)(c) of the Code 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-NCLT outside Section 30(2) of
the Code, when it comes to a Resolution Plan pending adjudication.
25. However, it was also pointed out that in cases which warrant
interference, to contend that the Adjudicating Authority-NCLT has no
jurisdiction to decide any dispute with respect to valuation and take remedial
steps to correct an erroneous valuation exercise would not be the correct
proposition in view of the powers conferred under Section 60(5) of the Code.
26. With regard to the impact of pendency of avoidance applications
on the approval of the Resolution Plan, the stand was that it has no bearing
on the approval by the NCLT of the Resolution Plan approved by the CoC
as it has been provided in the Resolution Plan that proceeds of avoidance
transactions, if any, will go to the FC(s) and thus, on this score, the Resolution
Applicant (appellant) will not be beneﬁtted as it is the FC(s) who will get
the beneﬁt of such realisation. As regards the uncertainty of Plot/Site No.GH
38 (Land) in Sector 1, IMT Manesar, Haryana, which was allotted by the
Haryana State Industrial and Infrastructure Development Corporation to the
Corporate Debtor, it was submitted that the Resolution Plan itself provisions
that proceeds from monetisation thereof will go to the FC(s).
ANALYSIS, REASONING AND CONCLUSION:
27. Having considered the matter in depth, the Court is unable to
uphold the decisions rendered by the Adjudicating Authority-NCLT as also
the NCLAT. The moot question involved is the extent of the jurisdiction and
powers of the Adjudicating Authority to go on the issue of revaluation in the
background of the admitted and undisputed factual position that no objection
was raised by any quarter with regard to any deﬁciency/irregularity, either
688 SUPREME COURT REPORTS [2023] 16 S.C.R.

by the RP or the appellant or the CoC, in ﬁnally approving the Resolution
Plan which was sent to the Adjudicating Authority-NCLT for approval.
Further, the statutory requirement of the RP involving two approved valuers
for giving reports apropos fair market value and liquidation value was duly
complied with and the ﬁgures in both reports were not at great variance.
Signiﬁcantly, the same were then put up before the CoC, which is the
decision-maker and in the driver’s seat, so to say, of the Corporate Debtor.
K Sashidhar (supra) and Committee of Creditors of Essar Steel India Ltd.
(supra) are clear authorities that the CoC’s decision is not to be subjected
to unnecessary judicial scrutiny and intervention. This came to be reiterated
in Maharashtra Seamless Limited (supra), which also emphasised that the
CoC’s commercial analysis ought not to be qualitatively examined and the
direction therein of the NCLAT to direct the successful Resolution Applicant
to enhance its fund ﬂow was disapproved of by this Court. Thus, if the CoC,
including the FC(s) to whom money is due from the Corporate Debtor,
had undertaken repeated negotiations with the appellant with regard to the
Resolution Plan and thereafter, with a majority of 88.56% votes, approved
the ﬁnal negotiated Resolution Plan of the appellant, which the RP, in turn,
presented to the Adjudicating Authority-NCLT for approval, unless the
same was failing the tests of the provisions of the Code, especially Sections
30 & 31, no interference was warranted. In Kalpraj Dharamshi v Kotak
Investment Advisors Limited, (2021) 10 SCC 401, the Court concluded
that ‘… in view of the paramount importance given to the decision of CoC,
which is to be taken on the basis of “commercial wisdom”, Nclat was not
correct in law in interfering with the commercial decision taken by CoC by
a thumping majority of 84.36%.’
28. In Pratap Technocrats Private Limited (supra), the Court, after
considering the relevant case-laws, pointed out that the Indian Legislature
had departed from foreign insolvency regimes, as under:
‘44. These decisions have laid down that the jurisdiction of the
adjudicating authority and the appellate authority cannot extend
into entering upon merits of a business decision made by a requisite
majority of the CoC in its commercial wisdom. Nor is there a residual
equity based jurisdiction in the adjudicating authority or the appellate
authority to interfere in this decision, so long as it is otherwise in
RAMKRISHNA FORGINGS LTD v. RAVINDRA LOONKAR, 689
R. P. OF ACIL LTD.[AHSANUDDIN AMANULLAH, J.]

conformity with the provisions of IBC and the Regulations under
the enactment.
45. Certain foreign jurisdictions allow resolution/reorganisation
plans to be challenged on grounds of fairness and equity. One of
the grounds under which a company voluntary arrangement can be
challenged under the United Kingdom’s Insolvency Act, 1986 is that
it unfairly prejudices the interests of a creditor of the company 13.
The United States’ Bankruptcy Code provides that if a restructuring
plan has to clamp down on a dissenting class of creditors, one of the
conditions that it should satisfy is that it does not unfairly discriminate,
and is fair and equitable14. However, under the Indian insolvency
regime, it appears that a conscious choice has been made by the
legislature to not confer any independent equity based jurisdiction
on the adjudicating authority other than the statutory requirements
laid down under sub-section (2) of Section 30 IBC.
46. An eﬀort was made by Mr Dushyant Dave, learned Senior Counsel,
to persuade this Court to read the guarantees of fair procedure and
non-arbitrariness as emanating from the decision of this Court in
Maneka Gandhi v. Union of India [Maneka Gandhi v. Union of India,
(1978) 1 SCC 248] into the provisions of IBC. IBC, in our view,
is a complete code in itself. It deﬁnes what is fair and equitable
treatment by constituting a comprehensive framework within which
the actors partake in the insolvency process. The process envisaged
by IBC is a direct representation of certain economic goals of the
Indian economy. It is enacted after due deliberation in Parliament

13 [“6. Challenge of decisions.—(1) Subject to this section, an application to the court
may be made, by any of the persons speciﬁed below, on one or both of the following
grounds, namely—(a) that a voluntary arrangement which has eﬀect under Section
4-A unfairly prejudices the interests of a creditor, member or contributory of the
company;(b) that there has been some material irregularity at or in relation to the
meeting of the company, or in relation to the relevant qualifying decision procedure.”]
14 [“1129. Conﬁrmation of a Plan***(b)(1) Notwithstanding Section 510(a) of this title,
if all of the applicable requirements of sub-section (a) of this section other than para
(8) are met with respect to a plan, the court, on request of the proponent of the plan,
shall conﬁrm the plan notwithstanding the requirements of such paragraph if the plan
does not discriminate unfairly, and is fair and equitable, with respect to each class of
claims or interests that is impaired under, and has not accepted, the plan.”]
690 SUPREME COURT REPORTS [2023] 16 S.C.R.

and accords rights and obligations that are strictly regulated and
coordinated by the statute and its regulations. To argue that a
residuary jurisdiction must be exercised to alter the delicate economic
coordination that is envisaged by the statute would do violence on its
purpose and would be an impermissible exercise of the adjudicating
authority’s power of judicial review.
The UNCITRAL, in its Legislative Guide on Insolvency Law, has
succinctly prefaced its recommendations in the following terms
[Available at <https://uncitral.un.org/sites/uncitral.un.org/ﬁles/media-
documents/uncitral/en/05-80722_ebook.pdf> last accessed 6-8-2021,
pp. 14-15.] :
“C. Balancing the goals and key objectives of an insolvency law
15. Since an insolvency regime cannot fully protect the interests of
all parties, some of the key policy choices to be made when designing
an insolvency law relate to deﬁning the broad goals of the law
(rescuing businesses in ﬁnancial diﬃculty, protecting employment,
protecting the interests of creditors, encouraging the development of
an entrepreneurial class) and achieving the desired balance between
the speciﬁc objectives identiﬁed above. Insolvency laws achieve that
balance by reapportioning the risks of insolvency in a way that suits
a State’s economic, social and political goals. As such, an insolvency
law can have widespread eﬀects in the broader economy.”
47. Hence, once the requirements of IBC have been fulﬁlled, the
adjudicating authority and the appellate authority are duty-bound
to abide by the discipline of the statutory provisions. It needs no
emphasis that neither the adjudicating authority nor the appellate
authority have an unchartered jurisdiction in equity. The jurisdiction
arises within and as a product of a statutory framework.’
(emphasis supplied)
29. In the case at hand, we ﬁnd that there was no occasion before the
Adjudicating Authority-NCLT to be swayed only on the per se ground that
the hair-cut would be about 94.25% and that it was not convinced that the
fair value of the assets have been projected in proper manner as the bid of the
appellant was very close to the fair value of the assets of ACIL. Ordering re-
RAMKRISHNA FORGINGS LTD v. RAVINDRA LOONKAR, 691
R. P. OF ACIL LTD.[AHSANUDDIN AMANULLAH, J.]

valuation of the assets, by the OL, Ministry of Corporate Aﬀairs, Government
of India, in-charge of the particular area, cannot be justiﬁed. As explained
in Innoventive Industries Ltd. v ICICI Bank, (2018) 1 SCC 407 and Swiss
Ribbons Private Limited v Union of India, (2019) 4 SCC 17, the Code was
speciﬁcally introduced by Parliament for ensuring quick and time-bound
resolution of insolvency of corporate entities in ﬁnancial trouble, by ﬁrst
attempting to revive the Corporate Debtor, failure whereof would entail
liquidation of the Corporate Debtor’s assets, and no unnecessary impediment
should be created to delay or derail the CIRP. In the present case, both the
NCLT and NCLAT erred to fully recognise that under the Resolution Plan,
the Corporate Debtor was set to be revived and not liquidated. Thus, the
minimum mandatory component in the Resolution Plan was only a reﬂection
of the actual money, including upfront payment, which would go towards
the FC(s). As discussed previously, the ﬁnal Resolution Plan provided for
the monetization proceeds of the land as also the avoidance amounts to go
to the FC(s) of the Corporate Debtor.
30. At this juncture, it also cannot be lost sight of that it is for the FC(s)
who constitute the CoC to take a call, one way or the other. Stricto sensu,
it is now well-settled that it is well within the CoC’s domain as to how to
deal with the entire debt of the Corporate Debtor. In this background, if
after repeated negotiations, a Resolution Plan is submitted, as was done by
the appellant (Resolution Applicant), including the ﬁnancial component
which includes the actual and minimum upfront payments, and has been
approved by the CoC with a majority vote of 88.56%, such commercial
wisdom was not required to be called into question or casually interfered
with. Surprisingly, the discussion in both orders is wanting, except for the
diﬀerence in the ﬁgure of the total outstanding dues and the amount of money
which the appellant was to put up initially for taking over the Corporate
Debtor, for this Court to understand as to what other reasons, grounded
in the Code’s provisions, compelled the Adjudicating Authority-NCLT to
embark upon the novel path of ordering revaluation by the OL. At the cost
of repetition, nobody had moved before the NCLT or raised any objection
challenging the Resolution Plan pending approval. Even the NCLAT has
only indicated that when “ﬁgures of crores” are emerging stage-wise, “then
there is no harm to look at the Expert opinion”, which the Adjudicating
Authority-NCLT in this case has asked for.
692 SUPREME COURT REPORTS [2023] 16 S.C.R.

31. It is worthwhile to note that the Adjudicating Authority has
jurisdiction only under Section 31(2) of the Code, which gives power not
to approve only when the Resolution Plan does not meet the requirement
laid down under Section 31(1) of the Code, for which a reasoned order is
required to be passed. We may state that the NCLT’s jurisdiction and powers
as the Adjudicating Authority under the Code, ﬂow only from the Code
and the Regulations thereunder. It has been held in Jaypee Kensington
Boulevard Apartments Welfare Association v NBCC (India) Limited,
(2022) 1 SCC 401:
‘273.1. The adjudicating authority has limited jurisdiction in the
matter of approval of a resolution plan, which is well-deﬁned
and circumscribed by Sections 30(2) and 31 of the Code. In the
adjudicatory process concerning a resolution plan under IBC,
there is no scope for interference with the commercial aspects of
the decision of the CoC; and there is no scope for substituting any
commercial term of the resolution plan approved by the Committee
of Creditors. If, within its limited jurisdiction, the adjudicating
authority ﬁnds any shortcoming in the resolution plan vis-à-vis the
speciﬁed parameters, it would only send the resolution plan back to
the Committee of Creditors, for re-submission after satisfying the
parameters delineated by the Code and exposited by this Court.’
(emphasis supplied)
32. From the assistance rendered and the judicial precedents brought
to notice, it is clear that the order dated 01.09.2021 by the NCLT cannot
withstand judicial scrutiny, either on facts or in law. There may have been
a situation where due to glaring facts, an order of the nature impugned
herein could be left untouched and this Court would have refrained from
interference, but only if detailed reasoning, disclosing the facts for being
persuaded to embark on such path, were discernible in the order dated
01.09.2021, which unfortunately is cryptic and bereft of detail. Recording
of reasons, and not just reasons but cogent reasons, for orders is a duty on
Courts and Tribunals. In the recent past, from Kranti Associates Private
Limited v Masood Ahmed Khan, (2010) 9 SCC 496 to Manoj Kumar
Khokhar v State of Rajasthan, (2022) 3 SCC 501, the clear position in
law is that a Court or even a quasi-judicial authority has a duty to record
RAMKRISHNA FORGINGS LTD v. RAVINDRA LOONKAR, 693
R. P. OF ACIL LTD.[AHSANUDDIN AMANULLAH, J.]

reasons for its decision. Needless to add, ‘Reason is the heartbeat of every
conclusion. Without the same, it becomes lifeless.’15 That apart, the order
of the NCLT dated 01.09.2021 suﬀers from a jurisdictional error, as in the
facts that prevailed, it was not entitled to pass the direction that it did.
33. Under the circumstances, while this Court could have adopted
the course of remanding the matter back to the NCLT for fresh/de novo
consideration, but being conscious of the fact that such course would impede
quick resolution as the CIRP is in a stalemate right from 01.09.2021 and
after having applied our minds to the factual aspects also, we do not ﬁnd that
remand for consideration afresh, now, would serve the purpose of justice
or aid the objects of the Code.
34. Accordingly, and for all the reasons afore-stated, this appeal
stands allowed. The order dated 01.09.2021 of the NCLT and the Impugned
Judgment dated 19.01.2022 of the NCLAT are set aside. The NCLT will pass
appropriate orders in terms of this judgment, on the Approval Application,
being I.A. No.1636 of 2019 in CP(IB) No.170(PB)/2018, within three weeks
from the date of production of a copy of this judgment. Pending avoidance
application(s) on the ﬁle of the NCLT in connection herewith shall proceed
on their own merits, but with expedition. No order as to costs.
35. Insofar as the pending Interlocutory Applications herein are
concerned, they are dealt with below:
a. I.A. No.25463/2022: Does not survive in view of the decision
in the appeal; disposed of.
b. I.A. No.25464/2022: Does not survive in view of the decision
in the appeal; disposed of.
c. I.A. No.185233/2022: Wrongly shown as pending in the
ordersheet; already disposed of vide order dated 17.04.2023.
36. Insofar as Mr. Singh’s submissions that this Court may not exclude
from the NCLT’s ambit any power to direct re-valuation, we have given our
anxious thought to the same. Our view is that while certainty in law and
legal principles is the obvious aim, the law is to be applied in the context

15 Raj Kishore Jha v State of Bihar, (2003) 11 SCC 519.
694 SUPREME COURT REPORTS [2023] 16 S.C.R.

of the facts. If a matter where the facts are stark comes to light, the same
would have to necessarily be dealt with by the NCLT within the four corners
of the Code itself, having due regard to the extant circumstances. It is for
the NCLT to exercise power strictly within the domain permitted by the
Code. In this behalf, one may peruse the decisions in Embassy Property
Developments Private Limited v State of Karnataka, (2020) 13 SCC 308
and Gujarat Urja Vikas Nigam Limited v Amit Gupta, (2021) 7 SCC 209.

Headnotes prepared by: Appeal allowed.
Ankit Gyan

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