Torrent Power Limited vs. Ashish Arjunkumar Rathi

2026 INSC 206
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NOS.11746-11747 OF 2024

TORRENT POWER LTD. …APPELLANT

VERSUS

ASHISH ARJUNKUMAR RATHI
& OTHERS …RESPONDENTS

WITH
CIVIL APPEAL NOS.11689-11690 OF 2024
CIVIL APPEAL NOS.12994-12995 OF 2024


J U D G M E N T


NAGARATHNA, J.
Preface:
The Insolvency and Bankruptcy Code, 2016 (for short, “IBC”)
marks a fundamental shift in India’s insolvency regime: from a
court-centric model to a creditor-driven process. At its core lies the
Signature Not Verified
doctrine of commercial wisdom: a conscious legislative choice to
Digitally signed by
NEETU SACHDEVA
Date: 2026.02.27
17:00:50 IST
Reason:
vest decisive authority in the Committee of Creditors (for short,
1

“CoC”), comprising financial creditors who bear the economic
consequences of failure.
1.1 The IBC recognises that decisions on viability, valuation,
and acceptable haircuts are inherently commercial, not judicial.
Courts, therefore, do not substitute their assessment for that of the
CoC. The adjudicating authority performs a supervisory role,
ensuring statutory compliance and procedural fairness but
refrains from second-guessing economic bodies, in this case, the
CoC.
1.2 The doctrine of commercial wisdom thus embodies both
institutional discipline and legislative intent: insolvency resolution
must be efficient, market-responsive and guided by those best
placed to evaluate commercial risk.
1.3 With this preface, we now proceed to examine the facts and
issues arising in the present civil appeals.
Introduction:
2. The unsuccessful resolution applicants being aggrieved by
the dismissal of their appeals by the National Company Law
Appellate Tribunal, Principal Bench, New Delhi (for short,
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“NCLAT”), are before this Court by filing the present civil appeals
under Section 62 of the IBC.
2.1 By the impugned order dated 01.10.2024 in Company Appeal
(AT) (Ins) Nos.1621-1622 of 2024, the NCLAT has affirmed the
order dated 13.08.2024 in CP (IB) No.893 (MB) of 2021 passed by
the National Company Law Tribunal, Mumbai Bench-IV (for short,
“NCLT”) which allowed IA No.2794 of 2023 filed by Mr. Ashish
Arjunkumar Rathi, Resolution Professional (for short, “RP”) of SKS
Power Generation (Chhattisgarh) Limited (“Corporate Debtor”) for
approval of the Resolution Plan submitted by Sarda Energy and
Minerals Limited (for sake of convenience, “SEML”). By the same
order, the applications filed by the appellants herein – Torrent
Power Limited (for short, “Torrent”) being IA No.3399 of 2023,
Vantage Point Asset Management Pte. Ltd. (for short, “Vantage”)
being IA No.3336 of 2023, and Jindal Power Limited (for short,
“Jindal”) being Intervention Petition No.40 of 2024 also came to be
rejected by the NCLT.
2.2 By way of this common order, we are disposing of Civil Appeal
Nos.11746-47 of 2024, 11689-90 of 2024, and 12994-95 of 2024
3

preferred by the appellants - Torrent, Vantage, and Jindal
respectively.
Brief Facts:
3. SKS Power Generation (Chhattisgarh) Ltd. is the Corporate
Debtor against whom an application was filed by Bank of Baroda
under Section 7 of the IBC seeking initiation of Corporate
Insolvency Resolution Process (for short, “CIRP”). The same was
admitted by order dated 29.04.2022 passed by the NCLT in
Company Petition (IB) No. 893 of 2021. Respondent No.1 was
appointed as the Interim Resolution Professional (for short, “IRP”)
and he came to be confirmed as the RP by the CoC and
subsequently by the NCLT.
3.1 On 17.07.2022, the RP issued Form-G inviting Expressions
of Interest (for short, “EoIs”) from prospective resolution applicants.
On receipt of the EoIs, the RP issued a Request for Resolution Plan
(for short, “RFRP”), Information Memorandum, and provided
access to the Virtual Data Room of the Corporate Debtor to all
prospective resolution applicants on 12.08.2022. After granting
several extensions, the final date for submission of Resolution
Plans was decided as 30.12.2022. Pursuant thereto, SEML and six
4

other applicants including the appellants herein submitted their
Resolution Plans and negotiations were held from January 2023 to
February 2023.
th
3.2 As its 26 Meeting held on 12.04.2023 and 13.04.2023, the
CoC decided to hold an bidding process amongst the
inter-se
applicants on 19.04.2023. A Process Note dated 13.04.2023 (for
short, “Process Note”) governing the said bidding process was also
issued as per which all the resolution applicants were requested to
submit their revised Resolution Plans by 28.04.2023.
th
3.3 After its 29 meeting on 06.05.2023, the CoC directed the
RP to seek clarifications from the resolution applicants on their
respective Resolution Plans, without any change in commercial
terms as set at the end of the negotiation process on 19.04.2023.
By an email dated 08.05.2023, the resolution applicants were
called upon to submit clarification in the form of an addendum to
their respective Resolution Plans. This was duly submitted by all
the resolution applicants.
st
3.4 On 16.05.2023, the CoC in its 31 Meeting put to vote the
seven Resolution Plans and e-voting was conducted from
28.05.2023 to 08.06.2023. The result of the voting was that the
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Resolution Plan of SEML read together with the addendum dated
10.05.2023 was approved with a 100% vote share. Consequently,
the RP issued a Letter of Intent (for short, “LoI”) to SEML, which
was then called upon to submit a Performance Bank Guarantee
(for short, “PBG”) of Rs.150 crores. SEML unconditionally accepted
the LoI and submitted a PBG of Rs.150 crores.
3.5 On 17.06.2023, the RP filed IA No.2794 of 2023 before the
NCLT seeking approval of the Resolution Plan of SEML as approved
by the CoC. Parallelly, after informing all the other resolution
applicants about the result of the voting, the RP refunded the
Earnest Money Deposits to the other resolution applicants.
3.6 Meanwhile, IA No.2794 of 2023 was heard and reserved for
orders by the NCLT on 10.07.2023. However, on 01.08.2023 and
03.08.2023, interlocutory applications came to be filed by the
appellants - Vantage and Torrent bearing Nos.3336 of 2023 and
3399 of 2023 respectively seeking directions for fresh consideration
of their plans. The NCLT by its common order dated 06.10.2023
partly allowed the application filed by Torrent, dismissed the
application filed by Vantage and remitted the Resolution Plan
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pending approval in IA No.2794 of 2023 to the CoC for its
reconsideration.
th
3.7 Consequently, the CoC held its 34 Meeting on 19.10.2023
in which it again deliberated on all the Resolution Plans and
reiterated its earlier decision in favour of SEML. In the meantime,
the order dated 06.10.2023 passed by the NCLT came to be
appealed by SEML (in CA Nos.1395-07 of 2023) and Vantage (in
CA No.1445 of 2023), while an intervention application (being
Intervention Petition No.40 of 2024) was filed by Jindal before the
NCLAT.
3.8 By a common order dated 10.05.2024, the NCLAT set aside
the order dated 06.10.2023 passed by the NCLT on the ground that
no opportunity was provided to the RP or to the CoC to file a reply
in respect of IA Nos.3336 and 3399 of 2023. Accordingly, the plan
approval application, i.e., IA No. 2794 of 2023 and the two other
applications, i.e. IA No.3336 of 2023 and IA No. 3399 of 2023 were
revived before the NCLT for fresh adjudication. Intervention
Petition No.40 of 2024 filed by Jindal was rejected on the ground
that it did not raise objections before the NCLT.
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3.9 The NCLT by its order dated 13.08.2024 allowed the
application filed by the RP for approval of the Resolution Plan filed
by SEML and rejected IA No.3336 of 2023 and IA No.3399 of 2023.
Hence, the unsuccessful resolution applicants filed appeals before
the NCLAT.
3.10 However, the NCLAT by the impugned order dated
01.10.2024 dismissed the appeals preferred by the unsuccessful
resolution applicants and confirmed the order dated 13.08.2024
passed by the NCLT, holding that the approval of a Resolution Plan
by the CoC on the basis of its commercial wisdom cannot be
interfered with.
3.11 The case of the appellants has remained the same at every
round of litigation including in the present appeals. They
contended that SEML had modified its Resolution Plan after the
negotiation process had concluded and the commercial offers by all
resolution applicants stood frozen. This was firstly, by allegedly
enlarging its commitment towards Bank Guarantees (for short,
“BGs”) of the Corporate Debtor from Rs.103.39 crores to Rs.180.05
crores, and secondly, by purportedly converting a deferred
payment offer of Rs.240 crores into an upfront payment offer.
8

According to the appellants, these changes were introduced by
SEML under the guise of “clarifications” through post-bid
communications between the RP/CoC and SEML, in breach of the
Process Note governing the negotiation process, thus resulting in
discrimination and material irregularity in the resolution process
warranting interference by this Court under Section 63 of the Act.
4. Before we consider the arguments of the appellants, the NCLT
and NCLAT orders may be summarised as under:
NCLT Order:
4.1 After SEML’s Resolution Plan was declared accepted by the
CoC in its 31st meeting dated 16.05.2023, the RP filed an
application being IA No.2794 of 2023 before the NCLT under
Section 30(6) of the IBC, seeking approval of the Resolution Plan in
terms of Section 31(1) thereof.
4.2 Around the same time, on getting to know through
newspaper reports that the Resolution Plan submitted by SEML
was not the highest bid in terms of value, Torrent filed IA No.3399
of 2023 before the NCLT raising specific concerns, inter alia, stating
that “ ...it is not clear how the Second Respondent (SEML) emerged
as the highest bidder and how the Resolution Plan submitted by the
9

Second Respondent (SEML) came to be accepted at all… ”
Accordingly, it prayed for a thorough examination of the process of
selection of SEML as the successful resolution applicant. By its
order dated 06.10.2023, the NCLT partly allowed IA No.3399 of
2023 filed by Torrent and remitted the Resolution Plan of SEML
back to the CoC for reconsideration.
4.3 SEML filed an appeal CA Nos.1395-07 of 2023 before the
NCLAT by assailing the order dated 06.10.2023 on the ground that
it was not given the opportunity to reply by the NCLT before passing
the order. Therefore, by way of its order dated 10.05.2024, the
NCLAT remanded the matter to the NCLT. The NCLT vide order
dated 13.08.2024 rejected IA No.3399 of 2023 filed by Torrent.
Further, it allowed IA No.2794 of 2023 filed by the RP for approval
of SEML’s Resolution Plan as approved and reiterated by the CoC.
4.4 Torrent had contended before the NCLT that the RP and the
CoC selectively permitted SEML to modify its commercial offer after
the conclusion of the negotiation process on 19.04.2023. No other
applicant was entitled to modify its commercial offer after the
conclusion of the negotiation process. However, the RP and the
CoC, under the guise of seeking clarifications by e-mail dated
10

08.05.2024, permitted SEML to modify its commercial offer by - (i)
converting the deferred amount of Rs.240 crores as provided under
its Resolution Plan to an upfront amount; and (ii) increasing the
amount towards infusion of BGs to approximately Rs.180 crores,
when in the Resolution Plan it had only offered to infuse Rs.103.39
crores. Rejecting these contentions raised by Torrent, the NCLT
held that the CoC had deliberated at length upon the feasibility and
viability of the Resolution Plan(s) submitted by all resolution
applicants and the NCLT could not, therefore, undertake any
quantitative analysis apropos the same. It was only after such
examination that the Resolution Plan(s) were put up for voting
during the 31st Meeting of the CoC and the CoC voted in favour of
SEML’s Resolution Plan. Placing reliance on the judgment of this
Court in Committee of Creditors of Essar Steel India Limited
vs. Satish Kumar Gupta, (2020) 8 SCC 531 (“Essar Steel India
Limited”), the NCLT also noted that it cannot interfere on merits
with the commercial decision taken by the CoC and the limited
judicial review available to it is to see that the CoC has taken into
account the fact that the corporate debtor needs to be kept as a
going concern during the insolvency resolution process; that it
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needs to maximise the value of its assets; and that the interests of
all stakeholders including operational creditors have been taken
care of. Once NCLT is satisfied that the CoC has paid attention to
these key features, it must necessarily approve the resolution plan,
other things being equal.
4.5 The NCLT also categorically held that the clarifications
sought by the RP/CoC from SEML did not amount to any
modification in the resolution plan and that no case of
discrimination or perversity in the process was made out since
similar clarifications were sought from all the Resolution
Applicants, including the appellants herein, vide emails dated
08.05.2023. It was further noted that on a conjoint reading of the
terms of Process Note and RFRP, the CoC was empowered to seek
clarifications from one/all resolution applicants and give effect to
its 'commercial wisdom'. That being so, no interference was called
for.
NCLAT Order:
4.6 Aggrieved by the order dated 13.08.2024 passed by the
NCLT, Torrent filed Company Appeal (AT)(Ins) Nos.1621-1622 of
2024 before the NCLAT. By the impugned order dated 01.10.2024,
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the NCLAT dismissed the appeal holding that (i) there was no
modification/deviation by SEML with respect to the treatment of
BGs and the payment of Rs.240 crores as an upfront amount; and
that (ii) the wisdom of the CoC on these aspects could not be
interfered with in any case.
4.7 Dealing first with the contention that SEML’s Resolution
Plan allegedly provided for replacement of BGs to the extent of
Rs.103.39 crores which was only later revised to Rs.180.05 crores,
NCLAT noted that SEML’s Resolution Plan from the inception
provided for replacement of BGs aggregating to Rs.180.05 crores.
While considering the plan, the RP, by email dated 08.05.2023 had
sought a clarification regarding the treatment of the BGs listed at
Item Nos.6 and 7. In response, SEML had clarified on 10.05.2023
that since the BGs at Item Nos.6 and 7 would not continue as per
its proposed Resolution Plan, the corresponding margin money of
Rs.76.71 crores would be returned to the Corporate Debtor on the
transfer date. The NCLAT found that this clarification merely
explained and reaffirmed the existing terms of the Resolution Plan
and did not amount to any modification or enhancement of the
offer. Accordingly, it rejected the contention that the Resolution
13

Plan was limited to Rs.103.39 crores, holding that SEML’s
commitment always extended to the full Rs.180.05 crores.
4.8 As regards the second argument, that SEML was allowed to
convert a deferred payment of Rs.240 crores into an upfront
payment under the guise of a clarification, the NCLAT, upon
examining the Resolution Plan noted that it expressly provided for
a deferred payment of Rs.301.64 crores, whose net present value
(for short, “NPV”) was Rs.240 crores. It observed that as per the
Resolution Plan, the CoC had the option to choose the deferred
payment upfront, and that Rs.240 crores was only the discounted
value of Rs.301.64 crores. The NCLAT noted that SEML merely
clarified that should the CoC opt to receive the amount upfront, no
further discounting would apply, since Rs.240 crores itself already
represented a discounted value. The NCLAT held that this
clarification did not alter the financial offer or permit substitution
of deferred payments with upfront payments. Accordingly, it
rejected the contention that SEML had modified its commercial
proposal, holding that the commercial terms of the Resolution Plan
remained unchanged.

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4.9 Lastly, while examining the limited scope of appellate
interference with an approved resolution plan under the IBC, the
NCLAT upheld that an appeal is maintainable only where there is
a material irregularity in the exercise of powers by the RP/CoC and
that such appellate interference does not extend to the merits of
the commercial decision of the CoC. Noting that the CoC and RP
were fully empowered to ask for any clarification from any or all
resolution applicants as per the RFRP and that the RP acted on
instructions of the CoC in issuing email dated 08.05.2023, it
cannot be said that any irregularity was committed by the RP/CoC.
Accordingly, the NCLAT dismissed the appeals filed by the
unsuccessful resolution applicants.
5. We have heard learned senior counsel and learned counsel
for the respective parties and perused the material on record.
Submissions by the Appellants:
Torrent:
5.1 Dr. Abhishek Manu Singhvi, learned senior counsel
appearing for Torrent advanced the following submissions before
us:
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a) During the CIRP, the RP and the CoC had conducted a
negotiation process (for short, “negotiation process”) with the
resolution applicants on 19.04.2023 in terms of Regulation
39(1A) of the Insolvency and Bankruptcy Board of India
(Insolvency Resolution Process for Corporate Persons)
Regulations, 2016 (for short, “CIRP Regulations”).
b) The Process Note dated 13.04.2023 shared with the resolution
applicants which governed the negotiation process
contemplated an inter-se bidding process to be conducted
amongst the resolution applicants where, in each bidding
round, the resolution applicants were required to submit the
key commercial terms of their resolution plans including the
upfront and deferred components of their proposed offers (“Key
Commercial Terms”).
c) As per Step 6(i) of the Annexure to the Process Note, all
resolution applicants were required to submit a draft
resolution plan by 28.04.2023 incorporating only those figures
of their Key Commercial Terms, as was submitted in their
respective Appendices, at the end of the negotiation process on
19.04.2023. As such, at the end of the negotiation process,
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there was no scope - (i) for modification of the Key Commercial
Terms once the negotiation process had been completed, or (ii)
to insert any additional offer(s) (as a potential inducement) in
the resolution plan submitted on 28.04.2023 which were not
already part of the proposal submitted by such resolution
applicant in Appendix I.
d) Despite the above, SEML was selectively permitted to increase
its commercial offer on two separate occasions leading to
discrimination and material irregularity in the process in terms
of Section 61(3)(1) of the IBC.
e) SEML had provided payment of Rs.40 crores as a deferred
payment in Appendix I submitted on 19.04.2023 at the end of
the negotiation process. However, while submitting its
resolution plan on 28.04.2023 after the end of the negotiation
process, SEML for the first time provided the CoC with the
choice of converting a deferred payment of Rs. 240 crores (as
provided in its Appendix I) to an upfront payment (not
contemplated in Appendix I, when the commercial offer stood
frozen).
17

f) As per the RFRP, (i) all resolution applicants were required to
replace the existing BGs of the Corporate Debtor amounting to
Rs.180.49 crores approximately backed by 100% existing
margin money, i.e., Rs.180.49 crores [ Clause 3.4 (w) of the
RFRP ]; (ii) the existing margin money released upon
replacement of the BGs would form part of the cash balances
of the Corporate Debtor and would be passed on to the CoC
[ Clause 3.4 (x) (A), (B) of the RFRP ); (iii) such existing margin
money passed on to the CoC would not be construed as the
applicant’s contribution into the Corporate Debtor [ Clause
1.4.65 of the RFRP ]; and would therefore not form part of the
upfront offer of the resolution applicant; and (iv) the fresh
infusion of funds by a resolution applicant towards
replacement margin money would only be counted as the
applicant’s contribution into the Corporate Debtor [ Clause
1.4.70 of the RFRP ].
g) SEML had initially proposed to infuse only Rs.103.39 crores
towards BGs listed at Item Nos.1 to 5 in its resolution plan. It
did not provide for any treatment of BGs listed at Item Nos.6
and 7 amounting to approximately Rs.76 crores. However, the
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RP/CoC under the garb of a clarification by email dated
08.05.2023, sought SEML’s response to treatment of the BGs
listed at Item Nos.6 and 7. In response, SEML, by way of email
dated 10.05.2023, under the garb of a clarification, for the first
time proposed to infuse Rs.76 crores towards the BGs listed at
Item Nos.6 and 7, thereby taking its contribution towards the
BGs to approximately Rs.180 crores from the original figure of
Rs.103.39 crores.
h) The CoC’s acceptance of SEML’s revised offer post 19.04.2023
constitutes a clear breach of the binding terms of the Process
Note and RFRP, which expressly prohibited any modification
thereafter.
i) Even from a commercial point of view, Torrent’s overall bid was
Rs.2,000 crores (Rs.1810 crores + Rs.190 crores for CIRP
costs), and the entire amount was proposed to be paid by way
of an upfront cash payment with no deferred payments. Thus,
in Torrent’s plan, the lenders would get almost all their dues
(Rs.1810 crores to be recovered against the admitted financial
creditors’ dues of Rs.1876 crores). Despite this, the CoC
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proceeded to approve SEML’s plan, which raises serious
doubts on the bona fides of the CoC and the RP.

j) In any case, while the CoC’s commercial wisdom is generally
accorded primacy, it is well-settled that such commercial
wisdom must be exercised strictly within the four corners of
the IBC, the CIRP Regulations, and the process prescribed in
the RFRP and the Process Note. Thus, notwithstanding that
the commercial wisdom of the CoC is ordinarily non-
justiciable, this immunity cannot extend to decisions that are
patently capricious, arbitrary, and/or irrational. In the present
case, the CoC’s decision is demonstrably dehors the provisions
of the IBC, the Rules, and in manifest breach of the governing
Process Note and the RFRP.
k) For the foregoing reasons, SEML’s revised offer dated
10.05.2023 is non est in law, and the process, suffering from
manifest irregularity, warrants judicial interference.
Vantage:
5.2 Mr. Kapil Sibal, learned senior counsel appearing for
Vantage advanced the following submissions before us:
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a) Vantage’s Resolution Plan offered the highest upfront payment
of Rs.2191.43 crores with no deferred payment proposed,
making it far superior to other Resolution Plans including
SEML’s Resolution Plan.
b) Vantage being the highest bidder, the CoC could not have
achieved value maximisation of the assets of the Corporate
Debtor by approving SEML’s Resolution Plan.
c) By emails dated 14.06.2023 and 16.06.2023, Vantage revised
its Resolution Plan by further increasing its bids, which would
have led to further value maximisation of the Corporate
Debtor.

d) The purported exercise of commercial wisdom by the CoC is
materially incorrect, arbitrary, and unreasonable.
e) Funds and asset managers across the world and in India
regularly invest in construction projects and assets as financial
investors in order to earn returns, and in turn appoint
operating personnel and management teams which are well-
equipped to manage and operate the asset. The eligibility
criteria as set out under the EoI for the Corporate Debtor
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clearly and categorically stated that resolution applicants can
be strategic investors and/or financial investors which was
duly satisfied by Vantage. Therefore, any adverse inference
against Vantage because it is a fund manager rather than a
power-sector operator, is commercially unsound and contrary
to the IBC, which expressly permits and encourages
participation of such sophisticated financial investors in CIRP.
With the view to demonstrate the rival merits of Vantage’s
proposed plan over SEML’s Resolution Plan, Mr. Sibal drew our
attention to the relevant figures in Vantage’s proposed Resolution
Plan in the tables being part of the compilations.
Jindal:
5.3 The learned counsel appearing for Jindal advanced the
following submissions before us:
a) That upon the conclusion of the bidding process on
19.04.2023, SEML’s offer amounted to Rs.1995 crores whereas
Jindal’s offer on the same date stood at Rs.2003 crores and in
the event, the 10% equity upside offered by Jindal is added,
the said amount would have become Rs.2130.10 crores.
22

b) The objective of the IBC being value maximisation, the CoC’s
decision to approve SEML’s plan is contrary to the IBC and the
CoC cannot hide under the guise of “commercial wisdom” to
escape judicial scrutiny of its decisions.
Submissions by the Respondents:
RP:
6. The learned senior counsel appearing for the RP advanced
the following submissions before us:
th
a) In its 29 meeting dated 06.05.2023, the CoC directed the RP
to seek clarifications from the resolution applicants. Acting on
specific instructions of the CoC, the RP by email dated
08.05.2023 sought clarifications from the appellants - Torrent,
Vantage, Jindal as well as the respondent - SEML on their
respective Resolution Plans. Clarifications having been
solicited from all applicants, no case of discrimination can be
made out.
b) SEML’s Resolution Plan provided that Rs.240 crores would be
paid by SEML to the CoC and two options were provided by
SEML to the CoC to avail the said money. The first of this was
that Rs.240 crores be availed by the CoC in a deferred manner
23

through the issuance of non-convertible debentures (for short,
“NCDs”) which shall bear coupon interest, meaning that
interest on Rs.240 crores shall be paid from the date of
issuance of NCDs till their redemption. The second option was
that the CoC could opt to take the amount as upfront cash, in
which case only Rs.240 crores would be paid to the CoC.
c) SEML was, inter alia, called upon to confirm if in case of the
second option, the amount of Rs.240 crores will be paid fully
and not be discounted to a lower value. This was only to obviate
any misconception about the offer made by SEML which could
have arisen on account of possible interpretation of the phrase
“discounted amount of Rs.240 crores” as occurring in SEML’s
Resolution Plan.
d) SEML by email dated 10.05.2023 clarified that in case the CoC
opts to avail the second option, Rs.240 crores shall be paid to
the CoC without any discount. As such, no modification of the
Resolution Plan could be said to have occurred.
e) Additionally, as per the Process Note, the evaluation of the
resolution plans was to be carried out on the basis of NPV
[Clause 9v(xii)]. There is no change in NPV offered under the
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first and the second option by SEML as it offered an upfront
payment of Rs.1,553 crores and a deferred payment of Rs.240
crores, payable over three years with a 10% coupon. As a result
of the interest component, SEML’s deferred payments
aggregated to Rs.301.64 crores, payable in instalments at the
end of the second and third years. When discounted as per the
prescribed discount rate, the present value of this aggregate
amount equals Rs.240 crores. Therefore, the clarification did
not lead to enhancement of the commercial offer.
f) As for the contention that SEML had enhanced its offer for
replacement of BGs from Rs.103.39 crores to Rs.180 crores, it
was submitted that SEML’s response did not enhance the offer.
Clause 6.3.14 of SEML's Resolution Plan expressly provided
that margin money aggregating to Rs.180 crores would be
returned to the CoC and utilised for payment to secured
financial creditors. Separately, the Resolution Plan recorded
that SEML would infuse Rs.103.39 crores as fresh funds
towards margin money for BGs listed at Serial Nos.1 to 5.
However, the manner in which the balance margin money of
Rs.76.66 crores, corresponding to BGs at Serial Nos.6 and 7,
25

would be released was not explicitly set out in Clauses 6.3.14
and 6.3.15 of the Resolution Plan.

g) In response, SEML clarified that since the BGs at Serial Nos. 6
and 7 were proposed to be extinguished under its Resolution
Plan, the corresponding margin money of Rs.76.66 crores
would also be released and returned to the CoC for payment to
secured financial creditors. The clarification thus confirmed
that SEML had, at all times, provided for payment of the entire
Rs.180 crores to secured financial creditors, consistent with
the Resolution Plan.
SEML:
6.1 The learned counsel appearing for SEML advanced the
following submissions before us:
a) The appellants are unsuccessful resolution applicants, whose
resolution plans were unanimously rejected by 100% of the
CoC. As such, they have no vested right to claim that their
plans should have been accepted by the CoC.
b) Further, the appellants voluntarily took back their Earnest
Money Deposit after being informed by the RP of the approval
of SEML's Resolution Plan. This shows that the appellants only
26

want to take a chance through litigation, without having any
skin in the game.

c) The present appeals by Torrent must be tested strictly with
reference to Section 61(3) of the IBC, which limits the scope of
challenge to an approved resolution plan before the NCLAT on
the grounds only of - (a) non-compliance with Section 30(2) of
the IBC; or (b) material irregularity in the process by the RP.
d) Admittedly, no grounds for non-compliance with Section 30(2)
of the IBC have been made out or even pleaded in the present
appeal. As regards “material irregularity”, the provision refers
to “material irregularity by the RP”. Hence, it does not cover
matters where the CoC has taken a decision with respect to a
resolution plan in its commercial wisdom, as is the case in the
present matter.
e) In the present matter, the CoC decided to seek clarifications
from all resolution applicants based on the contents of their
respective resolution plans. Further, it was the CoC’s decision
to approve the Resolution Plan of SEML and reject the
resolution plan of all other resolution applicants based on its
assessment of their feasibility and viability thereof. Thus, no
27

material irregularity can be said to have been committed by the
RP.

f) Finally, the CoC has already achieved value maximisation and
has already implemented the Resolution Plan and paid the
amounts to the creditors in terms of the same. In light of the
above, the impugned order ought not to be set aside and the
appeals ought to be outrightly dismissed with heavy costs.
CoC:
6.2 The learned counsel appearing for the CoC advanced the
following submissions before us:
a) SEML had paid the entire payment as required pursuant to its
Resolution Plan on 19.08.2024 itself and its Resolution Plan
stands fully implemented as on date.
b) Further, it has been laid down in a catena of judgements by
this Court that the commercial decision of the CoC to approve
or reject a resolution plan is non-justiciable and that an
unsuccessful resolution applicant has no vested right to have
its resolution plan considered. That being so, the present
appeals are liable to be dismissed in limine .
28

c) Section 62(1) of the IBC provides that any person aggrieved by
an order of the NCLAT may file an appeal to the Supreme Court
on a question of law arising out of such order under the IBC
within forty-five days from the date of receipt of such order.
But the present appeals raise no question of law.
d) The appellate jurisdiction of the NCLAT is extremely
circumscribed under the IBC . One of the grounds set out under
Section 61(3)(ii) of the IBC warranting the NCLAT’s appellate
jurisdiction is if “there has been material irregularity in
exercise of the powers by the RP during the CIRP”. Only a
“material irregularity” by the RP is a ground for appeal. Matters
pertaining to commercial decision-making by the CoC are not
even grounds for appeal before the NCLAT, let alone before the
Supreme Court. In this regard, reliance is placed on the
judgment in Kalparaj Dharamshi vs. Kotak Investment
Advisors Ltd., (2021) 10 SCC 401, wherein it was held that
if the actions of the RP in inviting EOIs after the last date have
the seal of approval of the CoC, then the decision of the CoC
cannot be interfered with.

29


e) The legislature has consciously kept any factual determination
or adjudication on matters pertaining to commercial decision-
making by the CoC outside the scope of Sections 61(3) and 62
of the IBC .
f) In any case, the NCLT and the NCLAT have both given
concurrent findings that there has been no “material
irregularity” in the process. It is trite law that the Supreme
Court would not ordinarily interfere in cases where there are
concurrent findings by the NCLT and the NCLAT vide Essar
Steel India Limited . Therefore, the question of “material
irregularity” cannot be raised afresh now.
g) The RFRP in clause 4.1.8 clearly provided that “ Subject to such
final Resolution Plan of the Resolution Applicant being a
Compliant Resolution Plan, the CoC may vote on one or more of
the Resolution Plan to approve and/or reject such Resolution
Plans. It is made abundantly clear that the CoC is under no
obligation to any of the Resolution Applicants or any other
person to approve a Resolution Plan which has scored the
highest as per the Evaluation Criteria and any Resolution Plan
30

shall be approved solely on the basis of the CoC's commercial
wisdom. ” Therefore, it was always known to each of the
resolution applicants right from inception that the CoC will
approve a resolution plan based on its own commercial wisdom
and further that the CoC shall not be bound to approve any
resolution plan solely for the reason that it quoted the highest
bid.
Issues:
7. Two broad issues arise for our consideration in these appeals
which are as under:
a) Whether the clarifications furnished by SEML pursuant to
queries raised by the RP in relation to the treatment and
replacement of BGs and the option of upfront payment,
resulted in any enhancement or modification of SEML’s
Resolution Plan?
b) Whether, the Resolution Plan having been approved by the
NCLT and the NCLAT and implemented as on date, any
interference is permissible by this Court at this stage in the
instant case?

31

Analysis and Findings:
7.1 At the outset, it is to be noted that an appeal to this Court
under Section 62 of the IBC is available only on a question of law.
Section 62 is extracted as under for immediate reference:
“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.”

7.2 Further, an appeal provided under Section 61 of the IBC
before the NCLAT is available only on the following five grounds:
“61. Appeals and Appellate Authority.
xxx
(3) In 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;
32

(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.”

8. A perusal of the material placed on record in the present case
would reveal that the appeal before the NCLAT does not fit into any
of the aforesaid criteria. The only semblance of a ground invoked
by the appellants is that of “material irregularity” in the exercise of
powers by the RP under Section 61(3)(ii) of the IBC. However, in
our view, this ground is also not made out in the present case. It is
an admitted fact that in the present case, the RP has acted strictly
on the instructions of the CoC. During the evaluation of the
Resolution Plans submitted by the resolution applicants, the CoC
identified certain ambiguities and directed the RP to seek
clarifications from all the resolution applicants. Pursuant to the
CoC’s directions, the RP issued email dated 08.05.2023 seeking
clarifications from all the resolution applicants including SEML on
certain specific aspects each resolution applicant and
vis-à-vis
plan. The RP did not take any independent or unilateral decision;
he merely communicated the CoC’s queries and placed all
33

responses including that of SEML dated 10.05.2023 before the CoC
for its consideration.
8.1 Where the RP acts on the instructions of the CoC, such
conduct cannot, by any stretch of imagination, be characterised as
a “material irregularity” within the meaning of Section 61(3)(ii). To
hold otherwise would be to conflate the statutorily distinct roles of
the RP and the CoC and to indirectly subject decisions of the CoC
to judicial review, contrary to the scheme of the IBC.
8.2 Having observed thus, since an appeal before the NCLAT
itself was not made out on any of the grounds under Section 61(3),
we find that the appeals before this Court on a conjoint reading of
Sections 61 and 62 are also not tenable since no question of law
pertaining to any of the five grounds specified in Section 61 of the
IBC arises for our consideration.
8.3 In addition, as the respondents have also pointed out, this
is a case arising out of concurrent findings. It is settled law that
when a concurrent view has been taken by two adjudicating
authorities, unless it is found that such a view was in ignorance of
the mandatory statutory provisions or was based on irrelevant
considerations or was ex-facie arbitrary or perverse, an interference
34

by this Court would not be permissible. In the present case, the
findings on all the issues are concurrent. As held by this Court in
Kalyani Transco vs. Bhushan Power & Steel Ltd., 2025 SCC
OnLine SC 2093 (“Kalyani Transco”):
“94. It can thus be seen that this court has taken a view
that when a concurrent view has been taken by two
Adjudicating Authorities provided under the special
statute, unless it is found that such a view was in
ignorance of the mandatory statutory provisions or was
based on extraneous consideration or was ex facie
arbitrary or illegal, an interference would not be
warranted.”
(underlining by us)
9. Although these appeals could be dismissed at the threshold
only on the basis of the concurrent findings of the NCLT and the
NCLAT and non-application of Section 62 of the IBC, we
nonetheless proceed to examine the contentions advanced on their
merits.
9.1 As already noted above, the two main grounds of attack
against the approval of the Resolution Plan pertain to the alleged
modification of the commercial offer by SEML by (i) increasing the
amount towards infusion in the BGs to approximately Rs.180.05
crores, when in the Resolution Plan, SEML had offered to infuse
only Rs.103.39 crores; and (ii) converting the deferred amount of
35

Rs.240 crores to an upfront amount. We will proceed to test both
the arguments.
A. Increase in amount towards infusion in BGs:
10. In order to consider this argument, we need to turn to the
email dated 08.05.2023, which was sent by the RP to SEML. The
entire email is extracted below for immediate reference:
“Dear Resolution Applicant,
This is with reference to the Resolution Plan submitted by
you on April 28, 2023 ("Resolution Plan") in the corporate
insolvency resolution process of SKS Power Generation
(Chhattisgarh) Limited. While the Resolution Plan is being
reviewed and evaluated by the Resolution Professional
("RP") and the Committee of Creditors ("CoC") alongwith
their respective advisors, we request you to kindly provide
necessary clarifications to the points attached in this
email, to enable a comprehensive evaluation of the
Resolution Plan.
Clarifications sought
1. We note that under clause 6.3.14 of the Resolution
Plan, the Resolution Applicant has provided that the
margin money of INR 180.05 crore provided against bank
guarantees will be returned by the relevant issuing bank
to the Corporate Debtor on the Transfer Date and utilised
for payment to the Secured Finance Creditors or in the
manner decided by the CoC. Further, as per clause 6.3.15
of the Resolution Plan, the Resolution Applicant has
undertaken to infuse INR 103.39 crore as part of Initial
Infusion Amount for utilising towards providing 100%
margin money for the Relevant BGs (as defined in the
Resolution Plan). The Margin Money Replacement Amount
(as defined in the Resolution Plan) is proposed to be
utilised for replacement/renewal/securing of the Relevant
36

BGs. It is further clarified in the Resolution Plan that in
the event any Relevant BG is encashed and paid out to the
beneficiary by the relevant issuing bank, then Margin
Money Replacement Amount corresponding to such
encashment shall be utilised for making payment to the
Secured Financial Creditors or to creditors as decided by
the CoC, on the Transfer Date.
In this regard please clarify the following:
(i) Will the Resolution Applicant replace all the BGs that
are secured by the margin money of INR 180.05 crore since
such amount of INR 180.05 Crores is sought to be
returned to the Corporate Debtor on the Transfer Date and
utilised for making payment to the Secured Financial
Creditors or to creditors as decided by the CoC under
clause 6.3.14 of the Resolution Plan?
(ii) In case the Resolution Applicant will not replace all the
BGs as above that are currently secured by margin money
of INR 180.05 crore, then what will be the treatment of the
bank guarantees at Item Nos. 6 and 7 of Annexure 3 which
are currently secured by margin money of INR 76. 66
crore? The treatment of the aforesaid BGs is not clear from
the Resolution Plan. Further, please clarify the treatment
of the underlying margin money, if it is not released by the
relevant issuing banks.
(iii) If the Relevant BGs are invoked prior to the Transfer
Date and the existing margin money securing such
Relevant BGs is utilised to adjust against the invoked
amount, will the Resolution Applicant still pay the
difference between INR 103.39 Crores and such utilised
margin money on the Transfer Date to make payments as
envisaged under the Resolution Plan?
(iv) Please clarify the treatment of the Exclusive Marin
Money (as defined in the RFRP) proposed under the
Resolution Plan which is required to be provided as per
clause 3.4(x)(A) & (C) of the RFRP?
(v) Whether the release of the margin money is being
sought before arranging for infusion of the fresh margin
37

money for the Relevant BGs? Please clarify that the
replacement of the bank guarantees will be undertaken in
a manner which does not leave the issuing bank's
exposure unsecured for any moment prior to, on or after
the Transfer Date for the following categories of BG:
i. BGs of INR 103.39 Crores - defined as Relevant BGs
ii. BGs of INR 76.61 Crores (with specific mention of
exclusive margin)
(vi) There seems to be an error in calculation of Annexure
3 viz aggregate of PGCIL/ SECL/ Rajasthan PPA is INR
103.83 Cr. Please clarify.
2. Are "Litigation Recovery" and "Litigation Benefits"
intended to be used inter-changeably? If not please clarify
the usage in the last sentence of Clause 6 3.4(a).
3. Clause 6 3. 4(b) provides that the Litigation Recovery
received by the Corporate Debtor after the Insolvency
Commencement Date shall not be construed as part of the
Surplus Cash. Further, the Litigation Recovery is proposed
to be paid after the Transfer Date as per Clause 6.3.4(d)
Accordingly, please clarify whether the Litigation Recovery
is also included within Clause 6.5 12.
4. Clause 6.3.5 (j) of the Resolution Plan stipulates that
the treatment in relation to Avoidance Benefits shall come
into effect only when the RA is provided with a copy of the
pleadings filed by the RP in relation to the Avoidance
Transaction Litigations and that RA has reserved the right
(in consultation with the CoC) to retain the Avoidance
Benefits fdr the benefit of the Corporate Debtor (and not
for Secured Financial Creditors) if in its reasonable opinion
the Avoidance Benefits are necessary for operations of the
Corporate Debtor. This is inconsistent with Clause 6.3.
5(a). In this regard, as also informed earlier, the pleadings
in relation to Avoidance Transaction litigation were already
made available in the Data Room to all the resolution
applicant [VDR Ref No. 12_CIRP/Avoidance Application
and 13_Additional Data/ Additional Date_27 April 2023/
38

Avoidance Application]. Accordingly, please clarify the
treatment of Avoidance Benefits.
5. We note that Clause 2.2.7 deals with furnishing of a
report by the Interim Accounting Agency (IAC).
Responsibilities of IAC are yet to be defined. The CoC
cannot vote on the terms/ obligations of the IAC.
Monitoring committee may take up this responsibility.
Please clarify that furnishing of the report by IAC is not a
prerequisite to distribution of plan amounts and
determination of CIRP costs.
6. Clause 6.3.2(b) states that Resolution Applicant will pay
a "discounted amount of INR 240 Cr" to the CoC, in case
CoC wishes to obtain the deferred portion of INR 240 Cr
upfront. Please clarify whether Resolution Applicant is
offering a value lower than INR 240 Cr (i.e. INR 240 Cr
discounted to a lower value), if the option to obtain the
value upfront is exercised.
7. We note that Clause 6.4.8 states that Monitoring
Committee (MC) will pay costs incurred during the
monitoring period as and when they fall due during the
monitoring period. Please clarify that this is subject to
Clause 6.2. 7.
8. In Clause 6.4.9, all dues relating to employees are
sought to be extinguished. Gratuity of continuing
employees which may fall due after takeover, but relate to
prior period, cannot be extinguished. Please clarify that
gratuity and other similar obligations that fall after the
Insolvency commencement date shall not be extinguished.
9. We note that Clause 7.3.2 stipulates that the RP shall
inform of expiring licenses to the Resolution Applicant on
transfer date. Please clarify that such responsibility will be
that of the Monitoring Committee, of which the Resolution
Applicant will be a part.
10. In Clause 9.2.6, please clarify that the Monitoring
Committee will be bound to take actions on a reasonable
efforts basis, as provided in Clause 9.2.1.
39

11. Clause 12.3 states that if any court sets aside or
unilaterally modifies the plan resulting into an increased
financial outlay, the amounts paid till then shall be
returned to the Resolution Applicant. Please clarify that, if
the adjudicating authority orders a payment over and
above the plan value and the RA was present and was
heard during the proceedings (i.e. not unilaterally), the
clause cannot operate.
We request you to kindly provide the necessary
clarification to the aforesaid queries by way of an
addendum to the Resolution Plan at the earliest but no
later than 11:59 p.m. IST of the 9th day of May 2023 by
way of an email to irp.skspower@gmail.com, to enable the
CoC and the RP to evaluate the Resolution Plan and
complete the CIRP within the timelines prescribed under
the Insolvency and Bankruptcy Code, 2016 (Code). Please
note that the clarifications must be provided by way of an
addendum to the Resolution Plan submitted by you on
April 28, 2023. The addendum may contain necessary
consequential changes (if any) pursuant to the points
raised on your Resolution Plan.
The aforesaid clarifications are necessary and
important for the complete assessment of the feasibility
and viability as well as commercial acceptability of each of
the resolution plans and to bring about clarity and
uniformity in the assessment to the resolution plans in
order to arrive at a considered decision, in accordance with
the provisions of the Code and the regulations thereunder.
This communication has been issued without
prejudice to the rights of the CoC and the Resolution
Professional to undertake all actions permissible under
law and the RFRP to achieve the objectives of the Code.”
(underlining by us)

10.1 We may now notice the reply to the queries as given by the
SEML by its email dated 10.05.2023:
40

“ Response :
In our Resolution Plan, it is proposed that the entire
Margin Money will be utilised for payment to Secured
Financial Creditors. In our Resolution Plan, we had
proposed continuation of certain Bank Guarantees listed
in Annexure 3 (except BGs listed in point 6 and 7) to
ensure going concern status of the Corporate Debtor and
had accordingly provided for replacement of the Margin
Money with respect to such BGs. In respect of BGs listed
in point 6 and 7 of Annexure 3 since the underlying
liabilities of the Corporate Debtor towards the beneficiaries
(for which Remaining BGs have been given) would be
extinguished under the Resolution Plan, such BGs will not
be continued. We clarify that the corresponding Margin
Money (of INR 76.61 crs.) is therefore also sought to be
returned to the Corporate Debtor for further payment to
the Secured Financial Creditors as per the Resolution
Plan.
However, to provide assurance to the issuing banks, we
clarify that all BGs listed in Annexure 3 will be secured by
100% Margin Money at all times. Therefore, pending the
cancellation, expiry, release of BGs listed in point 6 and 7
of Annexure 3, we will be providing replacement Margin
Money to the issuing banks on the Transfer Date.
If any of the BGs listed in point 6 and 7 of Annexure 3 are
invoked prior to the Transfer Date then the equivalent
Margin Money of such invoked BGs shall be paid by the
Resolution Applicant which shall be utilised to make
payment to the Secured Financial Creditors or in the
manner as decided by the CoC, on the Transfer Date.
In case any of the BGs listed in point 6 and 7 of Annexure
3 are live or uninvoked as on the Transfer Date, the
Resolution Applicant shall provide replacement margin
money to the issuing banks on the Transfer Date which
shall be utilised for replacement/ renewal/securing of the
Remaining BGs and the relevant Margin Money shall be
returned by the issuing banks to Corporate Debtor which
Margin Money shall be utilised for the purposes of
41

payment to the Secured Financial Creditors or in the
manner as decided by the CoC, on the Transfer Date.
Notwithstanding anything to contrary, the benefit relating
to the Exclusive Margin Money (as defined in the RFRP)
shall be provided to the State Bank of India in accordance
with the terms of the RFRP.
The aforesaid clarification and rectification of calculation
errors are provided in the Addendum to the Resolution
Plan.”
(underlining by us)

10.2 The relevant clauses of the Resolution Plan dealing with
replacement of BGs, as referenced by the RP and SEML in the
above emails, are 6.3.13 to 6.3.15. These are as under:
“ Bank Guarantees:
6.3.13. The Resolution Applicant understands that there
are bank guarantees issued by various banks as listed in
Annexure 3 (such bank guarantees, the "BGs"). All BGS
are secured against 100% Margin Money.
6.3.14. The Margin Money of INR 180.05 Crores provided
against the BGs will be returned by the relevant issuing
bank to the Corporate Debtor on the Transfer Date and
utilized for making payment to the Secured Financial
Creditors or in the manner decided by the CoC. It is
clarified that in the event any BG is returned prior to the
Transfer Date, the Margin Money provided against such
BGs shall be returned by the relevant issuing bank to the
account of the Corporate Debtor prior to the Transfer Date
for purposes of payment to the Secured Financial
Creditors or to creditors as decided by the CoC, on the
Transfer Date.
6.3.15. In order to maintain the going concern status of
the Corporate Debtor and secure the continuity of the BGs,
the Resolution Applicant shall provide 100% margin
42

money to the relevant issuing banks towards the BGs
listed at Item No. 1 - Item No. 5 of Annexure 3 ("Relevant
BGs") on the Transfer Date. For such purpose, the
Resolution Applicant shall infuse INR 103.39 Crores
("Margin Money Replacement Amount") in the Escrow
Account (as a part of Initial Infusion Amount) which shall
be utilised to provide such margins towards the Relevant
BGs. It is clarified that the Margin Money Replacement
Amount shall be utilised for replacement/renewal/
securing of the Relevant BGs. It is further clarified that in
the event any Relevant BG is encashed and paid out to the
beneficiary by the relevant issuing bank, the Margin
Money Replacement Amount corresponding to such
encashment shall be utilised for making payment to the
Secured Financial Creditors or to creditors as decided by
the CoC on the Transfer Date.”
(underlining by us)
10.3 Clause 6.3.13 refers to Annexure 3, which contains the
details of BGs from Serial Nos.1 to 7. Annexure 3 is extracted
below:
“ANNEXURE 3:
BANK GUARANTEES (as on 28 FEBRUARY, 2023)

43

10.4 What emerges from the above can be further analysed
thus: The Resolution Plan of SEML (in clause 6.3.14) itself provided
that “ ... The Margin Money of Rs.180.05 crores provided against the
BGs will be returned by the relevant issuing bank to the Corporate
Debtor on the Transfer Date and utilized for making payment to the
Secured Financial Creditors or in the manner decided by the CoC .”
Therefore, the Resolution Plan, from its inception, contemplated
that the entire margin money of Rs.180.05 crores lying with the
issuing banks would ultimately flow to the CoC for payment to
secured financial creditors. Clause 6.3.14 leaves no ambiguity on
this aspect - irrespective of whether the BGs were continued or
discontinued, the margin money backing those guarantees was to
44

be returned to the Corporate Debtor on the transfer date and
utilised as directed by the CoC.
10.5 The confusion arose in the mind of the CoC when under its
Resolution Plan, SEML proposed to continue BGs aggregating to
Rs.103.39 crores (Serial Nos.1 to 5) and accordingly undertook to
infuse fresh funds to replace the margin money backing those
guarantees. At the same time, though, it proposed to discontinue
the remaining BGs aggregating to Rs.76.61 crores (Serial Nos.6 and
7), as the liabilities underlying these were proposed to be
extinguished under the Resolution Plan.
10.6 We note that Rs.103.39 crores did not represent the “extent
of SEML’s offer” in relation to BGs. Rather, it represented the
incremental funding requirement arising from SEML’s decision to
continue certain BGs. Continuing a guarantee necessarily requires
substitution of collateral; discontinuing it does not. The Plan
therefore required fresh infusion only for those guarantees which
were to be continued. The remaining guarantees, aggregating to
Rs.76.61 crores, stood on a different footing. SEML proposed
extinguishment of liabilities underlying these guarantees. Once the
liabilities were extinguished, the guarantees would inevitably be
45

cancelled, and the margin money backing them would be released.
That margin money, like the rest, was already earmarked for the
CoC.
10.7 The real issue, therefore, was not whether the CoC would
receive Rs.76.61 crores, but how and when. Since SEML did not
intend to replace BGs amounting to Rs.76.61 crores, the CoC
asked what would happen to the BGs at Serial Nos.6 and 7 and
what would happen to the margin money backing those
guarantees. Accordingly, on 10.05.2023, SEML clarified that the
margin money of Rs.76.61 crores relating to the BGs at Serial Nos.6
and 7 was also to be returned to the CoC and paid to the secured
financial creditors, exactly as provided in the Resolution Plan. At
the same time, SEML clarified that until those BGs were cancelled,
expired, or released, the issuing banks would continue to have live
obligations under the guarantees. To ensure that the issuing banks
were not left unsecured during this period, SEML stated that it
would provide replacement margin money so that all BGs would
remain backed by 100% margin money at all times. What is
relevant is that in any event, upon the release of the BGs, the
underlying margin money, i.e., Rs.76.61 crores was to be passed
46

on to the CoC together with Rs.103.39 crores. All that the
clarification did was address the issuing banks’ interim exposure
pending formal return of these BGs. This did not result in any
increase in payment to the CoC. The payment to the CoC was
Rs.180.49 crores before clarification and remained Rs.180.49
crores even after the clarification.
10.8 Therefore, we do not find any force in the appellants’
contention that SEML had enhanced its offer for replacement of
BGs from Rs.103.39 crores to Rs.180 crores. The contention is
wholly erroneous and is not accepted by us.
B. Increase in Upfront Amount:
11. The second attack against SEML is that by way of the same
clarification dated 10.05.2023, it increased the deferred amount
payable under its Resolution Plan even as other resolution
applicants were not given a similar opportunity to do so.
We may note paragraph 6 of the email dated 08.05.2023 by
which the CoC sought clarifications from SEML extracted above:
“6. Clause 6.3.2.(b) states that Resolution Applicant will
pay a "discounted amount of INR 240 Cr" to the CoC, in
case CoC wishes to obtain the deferred portion of INR 240
Cr upfront. Please clarify whether Resolution Applicant is
offering a value lower than INR 240 Cr (i.e. INR 240 Cr
47

discounted to a lower value), if the option to obtain the
value upfront is exercised.”

We now notice Clause 6.3.2(b) (referred above):
“6.3.2 (b) Secured Financial Creditors shall be issued
NCDs by the Corporate Debtor for an amount equal to
Deferred Amount (INR 240 Crores). The NCDs will be
unsecured and issued in 2 different series of INR 120
Crore, being Series A & B. The NCDs will carry a coupon
(Interest on Deferred Amount) and shall be redeemed as
per the terms set out in Annexure 5. In the event CoC does
not propose to subscribe to the NCDs on the Transfer Date,
the Resolution Applicant shall pay a discounted amount of
INR 240 Crore to the Secured Financial Creditors on the
Transfer Date, in lieu of the Deferred Amount ("Deferred
Amount Compensation"), The CoC shall inform the
Resolution Applicant regarding its decision to subscribe to
the NCDs or opt for discounted payment in lieu of the
Deferred Amount to the Resolution Applicant in the LoI to
be issued to the Resolution Applicant upon approval of its
Resolution Plan. It is clarified that in case the CoC decides
to take the Deferred Amount Compensation, no NCDs shall
be issued and no Interest on the Deferred Amount shall be
payable to the Secured Financial Creditors:”

The reply of SEML with regard to the query is as follows:
“No. The value of INR 240 crores is the discounted value of
deferred payment (which includes principal amount of
NCDs i.e. INR 240 Crore plus interest on such NCDs). If
CoC exercises the option to obtain the value upfront, then
the RA will pay INR 240 Crores upfront i.e. the principal
amount of NCDs.”

11.1 What transpired as extracted above is simple: SEML
proposed to issue NCDs at a face value of Rs.240 crores with a
coupon rate of 10%. However, it also gave the CoC the option to
48

either - (i) take the NCDs, i.e., Rs.240 crores with 10% coupon
(which comes to a total of Rs.301.64 crores over three years); or (ii)
take Rs.240 crores upfront.
11.2 The RP specifically sought SEML’s response in relation to
clause 6.3.2.(b) of its Resolution Plan, “
...which stated that
Resolution Applicant will pay a "discounted amount of Rs.240 Cr" to
the CoC, in case CoC wishes to obtain the deferred portion of Rs.240
Cr upfront. Please clarify whether Resolution Applicant is offering a
value lower than Rs.240 Cr (i.e. Rs.240 Cr discounted to a lower
value), if the option to obtain the value upfront is exercised.” Thus,
the question to SEML was, whether, it would provide a further
discount on Rs.240 crores in the event of the CoC choosing the
upfront payment option.
11.3 On 10.05.2023, SEML clarified that Rs.240 crores is in fact
the discounted value of the deferred payment. Quite clearly, SEML
had not converted Rs.240 crores deferred into Rs.240 crores
upfront as argued by the appellants. Instead, it gave the CoC an
option to either take Rs.301.64 crores over time (Rs.240 crores +
10% over three years) or take a discounted amount of Rs.240 crores
upfront (i.e., the present day value/NPV of Rs.301.64 crores). It
49

was the CoC's choice to either take a higher value later or take its
present value upfront. Hence, it is obvious that there was no
change made to SEML’s Resolution Plan through its clarification.
Commercial Wisdom of the CoC Paramount:
12. Having concluded that neither of the issues raised by the
appellants establishes any modification of the Resolution Plan or
any material irregularity in the conduct of the RP, the challenge
stands stripped of its factual foundation. What remains is, in
substance, a challenge to the commercial decision taken by the
CoC. The IBC leaves no scope for judicial intervention even here.
12.1 It has been the consistent view of this Court that the
commercial wisdom of the CoC cannot be interfered with by the
NCLT, the NCLAT or this Court as was held in K. Sashidhar vs.
Indian Overseas Bank, (2019) 12 SCC 150 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
percent 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
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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, 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.
xxx
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
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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.”
(Underlining by us)

12.2 Similarly, in Kalyani Transco, decided on 26.09.2025, a
three-Judge Bench of this Court held as follows:
“179. It can thus be seen that this Court has held that the
legislature purposefully did not include a means to
challenge the commercial wisdom exercised by the CoC.
This makes a challenge to the same non – justiciable. It
has been further held that a challenge cannot be raised
against the decision making of the CoC unless and until
the grounds for challenge as given in the Code are
satisfied. Any interference in the paramount objective of
the CoC of exercising its commercial wisdom would
amount to the Court rewriting the law and going against
the very objectives of the IBC.
180. We are therefore of the opinion that in the present
matter as well, the CoC exercised its commercial wisdom
while approving the Resolution Plan whereby the Appellant
– Jaldhi was classified as a contingent creditor and such a
decision is deemed to be non – justiciable by this Court in
view of K. Sashidhar (supra) which has been subsequently
followed in a catena of judgments. The NCLT, and the
NCLAT have also approved the Resolution Plan, and in
light of the settled principle of law, we find no question of
law being raised by the Appellant – Jaldhi and therefore,
the appeal filed by it is liable to be dismissed.”
(underlining by us)

12.3 We note the observations in Essar Steel India Limited ,
clarifying that once the NCLT is satisfied that the CoC has applied
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its mind to the statutory requirements spelt out in sub-section (2)
of Section 30 it must necessarily pass the resolution plan, as
under:

(Underlining by us)
12.4 We also note the observations in Pratap Technocrats
Private Ltd. vs. Monitoring Committee of Reliance Infratel
Limited , (2021) 10 SCC 623 wherein this Court categorically held
as follows:
“29. The jurisdiction which has been conferred upon the
adjudicating authority in regard to the approval of a
resolution plan is statutorily structured by sub-section (1)
of Section 31. The jurisdiction is limited to determining
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44. …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 conformity with the
provisions of IBC and the Regulations under the
enactment.”
(Underlining by us)

12.5 The issue is no longer res integra, the law having been
settled that the commercial wisdom of the CoC enjoys primacy and
cannot be supplanted by judicial review. Neither the NCLT, nor the
NCLAT nor even this Court is empowered to substitute its
assessment in place of the commercial decision arrived at by a
requisite majority of the CoC.
13. The appeals before us typify the growing strategic use of the
judicial system by unsuccessful resolution applicants, who seek to
reopen almost every commercial decision under the guise of
procedural impropriety. This converts the corporate resolution
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process into a protracted adversarial contest and erodes the value
of the Corporate Debtor. Such an approach incentivises delay,
rent-seeking, and strategic obstruction and is fundamentally
inconsistent with the economic logic and statutory design of the
IBC.

13.1 In the present case, the Resolution Plan stands approved by
both the NCLT and the NCLAT and has since been implemented,
leaving absolutely no scope for intervention by this Court.

13.2 In view of the foregoing, we do not find any merit in the
appeals. With the above observations, these appeals are dismissed.
Therefore, t he Impugned Judgment dated 01.10.2024 passed by
the NCLAT is affirmed.

14. Before parting, we wish to add a few words of caution. The
IBC represents a conscious legislative choice to privilege speed,
certainty, and creditor-driven decision-making over exhaustive
judicial scrutiny. Experience shows that unsuccessful bidders will
always try to spin commercial decisions of the CoC as procedurally
faulty in order to secure a second shot through litigation by filing
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applications or making representations. However, courts need to
remain vigilant against any temptation to expand the scope of
review beyond the narrow boundaries prescribed by the IBC.

14.1 From an ex post perspective, e xcessive judicial review in the
CIRP carries significant economic costs that run counter to the
objects of IBC. The IBC is premised on the recognition that delay
and uncertainty are value-destructive in distressed situations.
When commercial decisions taken by the CoC are subjected to
expansive judicial scrutiny, resolution timelines lengthen,
transaction costs rise, and the going-concern value of the
Corporate Debtor erodes. The consequence therefore is not merely
delay, but a tangible loss of economic value for all stakeholders.

14.2 From an ex ante perspective also, the expectation of
expansive judicial review distorts incentives for future bidders.
Future resolution applicants may price legal uncertainty into their
bids, either by discounting their offers or by refraining from
participation in the CIRP altogether. This will weaken competition
in the resolution process and reduce recoveries for creditors.

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14.3 Excessive review also encourages strategic litigation.
Stakeholders with little to no economic interest in the Corporate
Debtor may resort to litigation as a bargaining tool to delay
implementation of the Resolution Plan or extract concessions,
thereby converting the insolvency process into an adversarial
contest. Such conduct takes the process away from its objective of
value maximisation.

14.4 This Court, in Swiss Ribbons Private Ltd. vs. Union of
India, (2019) 4 SCC 17 , underlined that the IBC prioritises time-
bound reorganisation to maximise asset value, revive corporate
debtors as going concerns, and ultimately strengthen credit
markets.

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28. It can thus be seen that the primary focus of the
legislation is to ensure revival and continuation of the
corporate debtor by protecting the corporate debtor from
its own management and from a corporate death by
liquidation. The Code is thus a beneficial legislation which
puts the corporate debtor back on its feet, not being a mere
recovery legislation for creditors. The interests of the
corporate debtor have, therefore, been bifurcated and
separated from that of its promoters/those who are in
management. Thus, the resolution process is not
adversarial to the corporate debtor but, in fact, protective
of its interests. The moratorium imposed by Section 14 is
in the interest of the corporate debtor itself, thereby
preserving the assets of the corporate debtor during the
resolution process. The timelines within which the
resolution process is to take place again protects the
corporate debtor's assets from further dilution, and also
protects all its creditors and workers by seeing that the
resolution process goes through as fast as possible so that
another management can, through its entrepreneurial
skills, resuscitate the corporate debtor to achieve all these
ends.
(Underlining by us)

14.5 From an institutional design point of view, the law must
secure three interdependent economic freedoms viz. entry into the
market, continuation of business operations under conditions of
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competitive neutrality, and exit from the market. While easy entry
and operation enable risk-taking and value creation, exit performs
a critical function too by ensuring that failure, an inevitable by-
product of risk taking, is resolved efficiently rather than postponed
indefinitely. An efficient insolvency resolution system performs an
important allocative function: it preserves viable firms through
timely reorganisation while ensuring swift liquidation and exit of
non-viable businesses. Where insolvency laws are tardily enforced,
viable firms are driven into failure, and non-viable firms are
permitted to persist.
14.6 For the longest time under Indian law, the freedom of exit
remained under-institutionalised. The enactment of the IBC was a
decisive correction of this imbalance by introducing a predictable
and time-bound mechanism for insolvency resolution. While
predictability allows market participants to form stable
expectations about enforcement outcomes, finality curtails
strategic delay and rent-seeking, ensuring timely deployment of
capital and labour into more productive use.
14.7 Predictability and finality are thus essential to
maintaining a robust insolvency regime. Judicial intervention
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beyond the narrow statutory confines undermines both
predictability and finality. Recognising this, the IBC deliberately
confines judicial review to strict statutory compliance under
Sections 30(2) and 61(3). Respecting these limits will preserve the
economic sense of the IBC and ensure that insolvency remains a
predictable, time-bound, and market-driven process.
15. With the above observations, the impugned judgment dated
01.10.2024 passed by the NCLAT is affirmed and consequently, the
appeals are dismissed. We however refrain from imposing costs.

……………………………………..J.
(B.V. NAGARATHNA)



……………………………………..J.
(R. MAHADEVAN)
NEW DELHI;
FEBRUARY 27, 2026.
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