The National Company Law Appellate Tribunal held that the jurisdiction of the NCLT and NCLAT while considering the Resolution Plan approved by the Committee of Creditors has a limited jurisdiction.
The Appellate Tribunal observed that the remit of the jurisdiction is to examine whether the Plan is in compliance with section 30, sub-section (2) of the Insolvency and Bankruptcy Code, 2016.
The appellant challenged the order contending that the Resolution Plan does not secure rights of the workmen, which include, but are not limited to continued employment after the Successful Resolution Applicant took over the Corporate Debtor including retiral/ termination benefits.
Further submitting that the Resolution Plan also needs to take care of the provident fund and gratuity to which the workers are entitled and the same have to be paid in full.
The Successful Resolution Applicant submitted that the Resolution Plan fully takes care of the claim of the workmen and the dues of the workmen having been accepted in full and paid in full in the Resolution Plan.
The appellate tribunal found the gratuity and provident fund to be admitted and paid in full in the Resolution Plan. Further observing the Resolution plan’s compliance with provisions of IBC. Thus, finding no ground to interfere with the order of the Adjudicating Authority to approve the Resolution Plan.
Relying on the precedent which held that legislature has not endowed the adjudicating authority with the jurisdiction or authority to analyse or evaluate the commercial decision of CoC much less to enquire into the justness of the rejection of the resolution plan by the dissenting financial creditors.
The legislature has not provided any ground to challenge the “commercial wisdom” of the individual financial creditors or their collective decision before the adjudicating authority which has been a settled principle of law.
The judgment was pronounced by the bench of Justice Ashok Bhushan (Chairperson), Barun Mitra and Arun Baroka (Technical Members)
