Whether National Company Law Tribunal or National Company Law Appellate Tribunal has a right to interfere with the decision of Committee of Creditors (CoC). Discuss in view of some decided case law.

The Insolvency and Bankruptcy Code, 2016 has provided the Committee of Creditors (CoC) with exclusive access to negotiations along with the ultimate authority to deal and finalise the business and commercial decisions. Thereby the Committee of creditors is also ended with the mammoth responsibility of evaluating resolution plans and thereafter voting and approving the best resolution plan. Commercial Wisdom of the CoC has been held to be sacrosanct by various judicial precedents. In the case of ' Kalparaj Dharamshi and another vs. Kotak Investment Advisors Ltd. ' and another, the Apex Court observed that the evaluation of proposals to keep the entity as a going concern, including decisions about the sale of business or units, re-structuring of debt etc., are required to be taken by the Committee of the Financial Creditors. The Apex Court further observed that it has been provided, that the choice of the resolution to keep the entity as a going concern will be voted upon by the Committee and there are no constraints on the proposals that the resolution professional can present to the Committee. It was held that the NCLT or the NCLAT cannot interfere with the commercial wisdom of the Committee of Creditors, except within the limited scope under section 30 and 31 of the Code. It was further held that the commercial wisdom of the Committee has been given paramount status without any judicial intervention for ensuring completion of the stated processes within the timelines prescribed by the Code. The court further held that there is an intrinsic assumption that the financial creditors are fully informed about the viability of the corporate debtor and feasibility of the proposed resolution plan. In another notable judgement, the Hon'ble Supreme court in the matter of K. Sashidhar vs. Indian Overseas Bank curtailed the jurisdiction of the NCLT by observing that the NCLT has no jurisdiction and authority to analyse or evaluate the commercial decision of the Committee of Creditors and to enquire into the justness of the rejection of the resolution plan by the dissenting financial creditors. The Hon'ble Supreme Court in M.K. Rajagopalan vs. Dr. Periasamy Palani Gounder had disregarded the technicality of noncompliance of non-publication of Form G and instead assigned primacy to the commercial wisdom of the CoC. Hence, based on the above, NCLT or NCLAT do not have a right to interfere with the decision of CoC.