KALPRAJ DHARAMSHI SUCCESSFUL RESOLUTION APPLICANT vs. KOTAK INVESTMENT ADVISORS LIMITED

1 REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION  CIVIL APPEAL NOS.2943­2944 OF 2020 KALPRAJ DHARAMSHI & ANR.    ...APPELLANT(S) VERSUS KOTAK INVESTMENT ADVISORS LTD. & ANR.   .... RESPONDENT(S) WITH CIVIL APPEAL NOS.3138­3139 OF 2020 CIVIL APPEAL NO. 2949­2950 OF 2020 CIVIL APPEAL NO. 847­848 /2021 [D.NO.24125 OF 2020] J U D G M E N T   B.R. GAVAI, J.  Signature Not Verified 1. Leave to file Civil Appeal in Diary No. 24125 of Digitally signed by Jayant Kumar Arora Date: 2021.03.10 17:08:36 IST Reason: 2020 is granted.  2 2. All these appeals, assail the judgment and order of the National Company Law Appellate Tribunal, New Delhi (hereinafter referred to as “NCLAT”) dated 5.8.2020, passed in Company Appeal (AT) (Insolvency) Nos. 344­345 of 2020.  3. By the said judgment and order dated 5.8.2020, NCLAT has allowed the appeals filed by Kotak Investment Advisors   Limited   (hereinafter   referred   to   as   “KIAL”), respondent No.1 herein,   aggrieved by two separate orders dated   28.11.2019   passed   by   National   Company   Law Tribunal, Mumbai Bench (hereinafter referred to as “NCLT” or “Adjudicating Authority”) in M.A. No.1039 of 2019 and M.A. No. 691 of 2019.  NCLAT has set aside the said orders passed in the said M.As.  M.A. No.1039 of 2019 was filed by KIAL objecting to grant of approval to the resolution plan submitted by Kalpraj Dharamshi and Rekha Jhunjhunwala, a consortium, (hereinafter referred to as “Kalpraj”), which is appellant in Civil Appeal Nos. 2943­2944 of 2020.   NCLT has rejected the said M.A.   Whereas, M.A. No. 691 of 2019 was   filed   by   the   Resolution   Professional   of   Ricoh   India Limited (hereinafter referred to as “the Corporate Debtor”) 3 for grant of approval to the Resolution Plan submitted by Kalpraj.  NCLT has allowed the said M.A. and approved the resolution plan submitted by Kalpraj.     4. The   facts   in   brief,   giving   rise   to   the   present appeals are as under: The   Corporate   Debtor   filed   an   application   on 29.1.2018 before NCLT under Section 10 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as “I&B Code”)   for   initiation   of   Corporate   Insolvency   Resolution Process   (hereinafter   referred   to   as   “CIRP”)   of   itself   vide Company Petition (IB) No. 156/MB/2018.  NCLT vide order dated   14.5.2018,   admitted   the   Petition   and   directed   the moratorium to commence as prescribed under Section 14 of the  I&B  Code  and directed  certain statutory steps to be taken as a consequence thereof.  Vide the said order dated 14.5.2018, NCLT also appointed Mr. Krishna Chamadia as Interim Resolution Professional to carry out the functions as prescribed under the provisions of the I&B Code.  The said Mr.   Krishna   Chamadia   was   subsequently   confirmed   as Resolution Professional (hereinafter referred to as ‘RP’) by 4 the Committee of Creditors (hereinafter referred to as “CoC”) on 15.6.2018.   RP   vide   notification   dated   9.7.2018   invited expression of interest (hereinafter referred to as “EOI”) to submit   a   resolution   plan   from   interested   resolution applicants, who fulfilled the minimum conditions stipulated in the said document (EOI).     As per the said EOI, if any proposed applicant had any queries or clarifications, it was required to write to RP on or before 31.7.2018.  The EOI was required to be submitted via email on the email address of RP   or   via   post   at   the   address   mentioned   in   the   said invitation on or before 8.8.2018.   On the said date i.e. 9.7.2018, analogously, the first Form ‘G’ also came to be notified.  Vide the said Form ‘G’, the last date prescribed for submission of Resolution Plan was on or before 21.9.2018.  The second Form ‘G’ came to be issued on 24.8.2018, which required the Resolution Plans to be submitted on or before 28.9.2018.   The third Form ‘G’ came to be issued on 28.9.2018, which required the   Resolution   Plans   to   be   submitted   on   or   before 25.10.2018.   The fourth Form ‘G’ came to be issued on 5 9.11.2018,   which   required   the   Resolution   Plans   to   be submitted on or before 13.12.2018.  The fifth and the last Form ‘G’ came to be issued on 11.12.2018, which required the Resolution Plans to be submitted on or before 8.1.2019. KIAL,   the   appellant   before   NCLAT   (respondent No.1   herein)   and   one   Karvy   Data   Management   Systems Limited submitted their Resolution Plans on the last date as stipulated in the last and fifth Form ‘G’ i.e. on 8.1.2019.  One   another   applicant   i.e.   WeP   Solutions   Ltd. submitted its Resolution Plan jointly with one Sattva Real Estate Private Limited (hereinafter referred to as “WeP”) on 13.1.2019.   The appellant in Civil Appeal Nos. 2943­2944 of 2020 i.e. Kalpraj submitted its EOI and Resolution Plan to RP on 27.1.2019.   On 29.1.2019, KIAL sent an email to RP, raising its objection permitting Kalpraj to submit Resolution Plan, beyond the prescribed time limit.   In the meeting of CoC held   on   30.1.2019,   the   Resolution   Plan   of   Kalpraj   was placed before CoC.   In the said meeting, CoC resolved to direct   all   the   applicants   to   submit   revised   plans. Accordingly, an email was sent to KIAL directing it to submit 6 its revised plan.   Accordingly, KIAL submitted its revised plan on 1.2.2019.  By another email dated 10.2.2019, KIAL once again objected to consideration of the plan submitted by Kalpraj.   It is the case of KIAL, that it had received an email on 11.2.2019 from RP, justifying the consideration of plan submitted by Kalpraj and asking it to submit a second revised plan.  However, this is disputed by RP.  However, it is not in dispute, that on 12.2.2019, revised plans were submitted by KIAL as well as Kalpraj.  In the meeting of CoC held on 13/14.2.2019, plan of Kalpraj came to be approved by a majority.   After CoC had approved the plan of Kalpraj, RP applied for approval of the plan before NCLT on 18.2.2019 vide M.A. No. 691 of 2019 in Company Petition (IB) No. 156/MB/2018.  After coming to know about RP applying for approval of the plan of Kalpraj, KIAL filed an application on 14.3.2019 being M.A. No.1039 of 2019, objecting to the plan of Kalpraj.  The objection was on the ground, that RP was not justified in permitting Kalpraj to submit a plan beyond the date prescribed in Form ‘G’ and that the decision of CoC 7 to   approve   the   plan   submitted   by   Kalpraj   was   not   in accordance   with   the   I&B   Code.     Vide   order   dated 28.11.2019,   NCLT   allowed   M.A.   No.691   of   2019   and approved the Resolution Plan of Kalpraj and by a separate order passed on the same day, NCLT rejected M.A. No.1039 of 2019, which was filed by KIAL objecting to the decision of CoC approving the plan submitted by Kalpraj.   Contending, that the procedure followed by NCLT was in breach of the principles of natural justice, KIAL filed a writ petition before the Bombay High Court being Writ Petition (L) No.3621 of 2019, challenging the aforesaid two orders passed by NCLT.   The High Court dismissed the Writ Petition (L) No.3621 of 2019 filed by KIAL by judgment and order dated 28.1.2020, on the ground, that KIAL had an alternate and efficacious remedy of filing an appeal before NCLAT.   KIAL   thereafter   filed   appeals   before   NCLAT   on 18.2.2020.  The appeals were opposed by Kalpraj and also by RP on the ground, that the appeals were filed beyond the limitation   period   prescribed   under   the   I&B   Code   and   as such,   ought  not  to  be  entertained.     However,   vide  order 8 dated   5.8.2020,   NCLAT   did   not   find   favour   with   the objections raised by the respondents before it, with regard to limitation and further found, that the procedure adopted by RP and CoC was in breach of the provisions of the I&B Code and therefore, allowed the appeals filed by KIAL.    Vide the said order, NCLAT, while setting aside both the orders dated 28.11.2019, passed by NCLT, also directed CoC to take a decision afresh, in the light of the directions issued in its order, regarding consideration of the Resolution   Plans,   which   were   submitted   prior   to   the prescribed date as per last Form ‘G’.  This was directed to be done in a period of ten days from the date of the said order. NCLAT   further   directed,   that   if   no   decision   was communicated to the Adjudicating Authority i.e. NCLT and since   the   timeline   for   completion   of   CIRP   had   already expired, the Adjudicating Authority was to pass an order for liquidation of the corporate debtor.   5. Being aggrieved by the aforesaid order passed by NCLAT,  four appeals have been filed before this Court, the details thereof are as under:

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We have heard Shri Mukul Rohatgi, Dr. Abhishek 6. Manu   Singhvi   and   Shri   Pinaki   Mishra,   learned   Senior Counsel   appearing   for   Kalpraj,   Shri   K.V.   Viswanathan, learned Senior Counsel appearing for Deutsche Bank A.G. and   CoC,   Shri   C.A.   Sundaram,   Shri   Gopal   Sankar Narayanan and Shri P.P. Chaudary, learned Senior Counsel 10 appearing   for   Fourth   Dimension   Solutions   Limited,   Shri Shyam Divan, learned Senior Counsel appearing for RP and Shri Neeraj Kishan Kaul, learned Senior Counsel appearing for KIAL. SUBMISSIONS   OF   SHRI   MUKUL   ROHATGI,   LEARNED SENIOR COUNSEL APPEARING ON BEHALF OF KALPRAJ 7. Shri   Mukul   Rohatgi,   learned   Senior   Counsel submitted, that though four Form ‘G’ were issued by RP inviting the Resolution Plans from the prospective resolution applicants,   no   plans   were   received   from   any   of   the prospective   resolution   applicants.   He   submitted,   that   in pursuance   to   the   last   and   fifth   Form   ‘G’   published   on 11.12.2018, only two Resolution Plans were received, that too, on the last date i.e. 8.1.2019.  He submitted, that in the meantime, Kalpraj submitted its plan on 27.1.2019.   He submitted, that in the meeting of CoC held on 30.1.2019, in order   to   achieve   the   object   of   maximization,   all   the applicants   were   asked   to   submit  their   revised   resolution plans.  He submitted, that KIAL without demur, submitted 11 its revised plans not only once but twice.   It is therefore submitted, that having submitted its revised plans twice, KIAL is now estopped from challenging the acceptance of the plan of Kalpraj.  It is submitted, that in the meeting of CoC held on 13/14.2.2019, the plans came to be considered by CoC and CoC by the whopping majority of 84.36% voting rights approved the plan of Kalpraj.  He submitted, that only one creditor i.e. Kotak Mahindra Bank Limited (hereinafter referred to as “Kotak Bank”), which is a holding company of KIAL, having voting rights of 0.97%, voted in favour of KIAL. 8. Relying on the judgment of this Court in the case 1 of  K. Sashidhar  vs.  Indian Overseas Bank & Ors.  , Shri Rohatgi   submitted,   the   opinion   on   the   subject   matter expressed  by  the   creditors  after  due  deliberation  in  CoC meeting through voting, which decision is taken as per the commercial   wisdom,   is   not   justiciable   before   the Adjudicating Authority.    He also relied on the judgment of this Court in the case of  Committee of Creditors of Essar 1 (2019) 12 SCC 150 12 Steel India Limited through Authorised Signatory   vs. 2 Satish Kumar Gupta & Ors. Shri Rohatgi further submitted, that as held by 9.

3 ,   I&B   Code   is   a   complete   code   in   itself.     He &   Anr. submitted, that Section 61(2) of the I&B Code provides, that the decision of the Adjudicating Authority (i.e. NCLT) may be challenged before NCLAT within 30 days.   He submitted, that an appeal would be tenable within a further period of 15 days, only when NCLAT comes to a satisfaction, that there was a sufficient cause for not filing the appeal within a period of 30 days.  He submitted, that since the I&B Code is a complete Code, neither Section 5 nor Section 14 of the Limitation   Act,   1963   (hereinafter   referred   to   as   “the Limitation Act”) would be applicable.   He submitted, that the judgment of NCLT was delivered on 28.11.2019; certified copies   of   the   same   were   made   available   to   KIAL   on 18.12.2019; and appeals came to be filed on 18.2.2020.  He submitted, even if KIAL was given the benefit of the period 2 (2019) SCC Online SC 1478 3 (2018) 1 SCC 407 13 of 20 days for obtaining the certified copies, still the appeals th ought to have been filed on 65  day from the order of NCLT. st nd It would be somewhere on 1 /2  February, 2020.  However, the appeals were filed on 18.2.2020.  He submitted, that the litigant like KIAL, which has a team of legal experts at its disposal cannot be heard to say, that they were not aware of the   alternate   remedy   and   had   bona   fide   filed   the   writ petition before the High Court.  He submitted, that KIAL is not entitled to the benefit of the exclusion of period between 11.12.2019 i.e. the date of filing of the writ petition and 28.1.2020 i.e. the date of dismissal of the writ petition by the High Court.  He submitted, that provisions of Section 14 of the Limitation Act would not at all be applicable and that NCLAT has totally erred in law, in entertaining the appeals which were  ex facie  beyond limitation. 10. Shri Rohatgi further submitted, that NCLT has approved   the   plan   on   28.11.2019.     He   submitted,   that though appeals were filed by KIAL, there was no stay on the implementation  of   the  resolution  plan  by  Kalpraj  till the impugned   order   was   passed   by   NCLAT   on   5.8.2020, 14 whereunder,   Kalpraj   has   taken   various   steps   for implementation of the Resolution Plan submitted by it.  He submitted,  that  Kalpraj  has   expended  a  total  amount  of Rs.300 crore (approx.)  in the following manner: “i. On 02.12.2019, a Public Announcement in respect of delisting of shares and exit offer to the public shareholders of the Corporate Debtor. ii. On   13.12.2019,   Rs.8,87,01,150/­ (Rupees Eight Crores Eighty­Seven Lakh One Thousand One Hundred and Fifty only) was paid to 668 shareholders in exchange of their shares. iii. On   14.12.2019,   a   Post­offer   public announcement   was   issued   by   the Appellants recording inter alia that the said   consideration   has   been   paid   to public shareholders.  iv. On 20.12.2019, BSE issued a notice in respect   of   discontinuation   of   trading 15 and   delisting   of   equity   shares   of   the Corporate Debtor.  v. On 23.12.2019, debentures worth Rs.21 crores   were   issued   by   the   Corporate Debtor to Appellants. vi. On 27.12.2019, the share capital of the Company   increased   to   INR. 100,00,00,000/­ (Rupees One Hundred Crores only). vii. Minosha   Digital   Solutions   Pvt.   Ltd. merged with the Corporate Debtor with effect from 28.11.2019.  viii. On 27.12.2019, the Appellants replaced the Bank Guarantee issued by Deutsche Bank for INR 136,66,71,090/­ (Rupees One   Hundred   Thirty­Six   Crores   Sixty­ Six   Lakh   Seventy­One   Thousand   and Ninety Only). ix. On   30.12.2019,   the   CIRP   costs amounting   to   INR.2,65,68,000/­ 16 (Rupees   Two   Crores   Sixty­Five   Lakh Sixty­Eight Thousand only) were   paid by the Appellants. x. On   01.01.2020,   the   Appellants   have made   payment   of   INR   19,54,43,411/­ (Rupees   Nineteen   Crores   Fifty­Four Lakh   Forty­Three   Thousand   Four Hundred   and   Eleven)   to   non­related party   operational   creditors   of   the Corporate Debtor. xi. From   01.01.2020   to   03.01.2020,   the Appellants have made Equity infusion of INR 3 crores and an Equity infusion of INR 29 Crores in Company. xii. On   23.01.2020,   Appellants   made payments   to   Ricoh   Company   Limited and   NRG   Group   Limited   (minority shareholder) for the transfer of shares to Appellants. 17 xiii. On 31.01.2020, the Board of directors of   the   Corporate   Debtor   was reconstituted   and   the   Appellants became the owners and stepped into the management   and   control   of   corporate debtor.   It is no more a subsidiary of Ricoh Japan.   xiv. The Appellants are shareholders of the Corporate Debtor which is known by its new name Minosha India Limited. xv. On   03.02.2020,   the   RP   (who   was   the Monitoring   Agent   of   the   Monitoring Committee)   issued   a   communication recording that the approved Resolution Plan has been implemented.  xvi. As on 31.07.2020, a total of 21,90,958 no. of shares held by 809 shareholders have been tendered pursuant to the exit offer   for   a   sum   total   of Rs.10,95,47,900/­.   The said exit offer 18 is   subsisting   till   December   2020,   in accordance   with   the   applicable   SEBI rules and regulations. xvii. Registrar of Companies has only noted and issued a certificate of the change in name   of   the   Corporate   Debtor   from Ricoh   India   Limited   to   Minosha   India Limited.”    11. Shri Rohatgi submitted, that NCLAT has grossly erred in holding, that the order passed by NCLT was in breach of the principles of natural justice on the premise, that the application of KIAL was heard by a single Member, whereas   the   decision   was   signed   by   two   Members.     He submitted,   that   perusal   of   the   record   would   reveal,   that though M.A. No.1039 of 2019 i.e. objection of KIAL to the approval of plan of Kalpraj, was initially listed before the learned   single   Member,   thereafter   the   proceedings   would itself show, that the said application was listed before two learned   Members   on   various   dates   along   with   main application i.e. M.A. No.691 of 2019.  He submitted, that the 19 counsels for KIAL have participated in the said proceedings before   the   Bench   of   two   Members   without   demur.     He submitted, that in any case, both, the application filed by KIAL   as   well   as   the   main   application   filed   by   RP,   were required to be decided together inasmuch as, the issues were interconnected and therefore, they are rightly decided by   the   orders   passed   on   the   same   day.     He   therefore submitted,   that   the   finding   of   NCLAT   with   regard   to violation of the principles of natural justice is without any merit.  12. Shri   Rohatgi   therefore   submitted,   that   the appeals deserve to be allowed, the order of NCLAT be set aside and that of NCLT be restored. SUBMISSIONS   BY   DR.   ABHISHEK   MANU   SINGHVI, LEARNED SENIOR COUNSEL APPEARING FOR KALPRAJ 13.     Dr.   Abhishek   Manu   Singhvi,   learned   Senior Counsel also appeared on behalf of Kalpraj, which is also respondent   in   the   other   appeals.   Dr.   Singhvi   submitted, that KIAL, in the covering letter along with its Resolution Plan dated 8.1.2019, has unequivocally undertaken to waive 20 any and all claims in respect of the Resolution Plan Process. He submitted, that the phrase ‘Resolution Plan Process’ is defined in clause 1.0 of the Process Memorandum which means, “the process set out in this Process Memorandum for submission, evaluation and selection of Resolution Plan and   activities   in   relation   or   incidental   thereto.”     He submitted,   that   in   view   of   unconditional   and   irrevocable acceptance of the terms of the Process Memorandum and having   voluntarily   and   expressly   waived   all   claims   with respect to the Resolution Plan Process, it is not permissible for   KIAL  to   challenge   the   decision  of   CoC  approving   the Resolution Plan of Kalpraj.  He submitted, that clause 10.4 of the Process Memorandum itself provides, that RP was at liberty to receive any Resolution Plan, at any stage of the Resolution Plan Process and examine such Resolution Plan with   the   approval   of   CoC.     Learned   Senior   Counsel submitted, that having chosen to revise its Resolution Plan and   submit   the   same   on   12.2.2019   in   competition   with Kalpraj, KIAL has clearly acquiesced to the consideration of the Resolution Plan of Kalpraj by RP and CoC, even after the 21 prescribed date of 8.1.2019 and has waived all objections to the consideration of such Resolution Plan.   He submitted, that even the holding company of KIAL i.e. Kotak Bank of which   KIAL   is   a   100%   subsidiary   also   agreed   with   CoC counsel’s view, that the Resolution Plan of Kalpraj can be considered.   14. Dr. Singhvi submitted, that the conduct of KIAL is   totally   indefensible.   He   submitted,   that   it   amounts   to taking chances in the process and after having failed there, then to challenge the process.  He submitted, that KIAL had submitted   its   revised   plans   after   knowing,   that   it   was competing with Kalpraj, and only after it was not successful in   the   process   has   chosen   to   challenge   the   same.       He submitted, that the revised Resolution Plan submitted by KIAL   does   not   state,   that   it   is   without   prejudice   to   its contention,   that   the   Resolution   Plans   submitted   after 8.1.2019 ought not to have been considered by RP and CoC. He submitted, that   even if such words were used they would not be significant.  He relied on the judgment of this Court in the case of  Vs.  ITC Ltd.  Blue Coast Hotels Limited & 22 4   Ors.      and   Tarapore   &   Company   vs.   Cochin   Shipyard 5   Ltd., Cochin & Anr.   ,  in this regard . 15. Dr. Singhvi further submitted, that Section 238 of the I&B Code provides, that the provisions of the Code shall have   effect,   notwithstanding   anything   inconsistent therewith contained in any other law for the time being in force.     He   therefore   submitted,   that   the   provisions   as contained in Section 61(2) of the I&B Code, which provides, that an appeal has to be filed within 30 days with a further enhanced period of 15 days, when NCLAT is satisfied, that a sufficient cause existed for not filing the appeal within 30 days,   has   to   be   strictly   construed.     He   relied   on   the judgment of NCLAT in the case of  Kumar Dutta prop. K.D. 6 vs.     and   Trading     Simplex   Infrastructure   Ltd.   Asha 7   Goyal vs. Pharma Traders Pvt. Ltd.    in that regard. Dr. Singhvi further submitted, that this Court in 16. a catena of cases has held, that when under special statutes there is a provision for appeal and a self­contained provision for limitation, no extension would be possible beyond the 4 (2018) 15 SCC 99 5 (1984) 2 SCC 680 (PARA 33) 6 2019 SCC Online NCLAT 575 7 2019 SCC Online NCLAT 150 23 period  of  time  so stipulated.     He relied  on the  following judgments of this Court in this regard.  8 vs. (i) Union of India   Popular Construction Co. ,  (ii) Singh   Enterprises   vs.   Commissioner   of 9 Central Excise, Jamshedpur & Ors. , and  vs. (iii) Chhattisgarh   State   Electricity   Board   Central Electricity Regulatory Commission & 10 Ors. 17. Dr. Singhvi further submitted, that NCLAT in two cases in  vs. Radhika Mehra   Vaayu Infrastructure LLP & 11 Ors.   and   Dhirendra Kumar   vs.   Randstand India Pvt. 12  has held, that the provisions of Section 14 of Ltd. & Anr. the Limitation Act cannot be made applicable to the appeal preferred under Section 67 of the I&B Code. Dr. Singhvi submitted, that in any case, it cannot 18. be said, that filing of the writ petition was a  bona fide  act of KIAL.   He submitted, that KIAL, which was armed with a battery of legal counsel, was very well aware, that it had an alternate   remedy   of   filing   an   appeal   before   NCLAT   and therefore, was not entitled to take an umbrella of Section 14 8 (2001) 8 SCC 470 9 (2008) 3 SCC 70 10 (2010) 5 SCC 23 11 2020 SCC Online NCLAT 532 12 2019 SCC Online NCLAT 444 24 of   the   Limitation   Act.     In   this   regard,   he   relied   on   the judgment of this Court in the case of   Neeraj Jhanji   vs. 13 .    Commissioner of Customs & Central Excise 19. Dr. Singhvi also reiterated the submissions made on behalf of Kalpraj by Shri Mukul Rohatgi, learned Senior Counsel to the effect, that much water has flown after the Resolution Plan was approved by NCLT and also highlighted the various steps taken by Kalpraj for implementation of the Resolution Plan. SUBMISSION   OF   SHRI   K.V.   VISWANATHAN,   LEARNED SENIOR   COUNSEL   APPEARING   ON   BEHALF   OF DEUTSCHE BANK A.G. AND CoC. Shri K.V. Viswanathan, learned Senior Counsel 20. appearing on behalf of Deutsche Bank, which is appellant in one of the appeals and CoC, which is respondent in some of the appeals submitted, that the order passed by NCLAT was not sustainable inasmuch as, CoC was not made a party before NCLAT.  He submitted, that CoC had acted  bona fide only with a view of achieving maximization, by permitting 13(2015) 12 SCC 695 25 Kalpraj   to   participate.     He   submitted,   that   CoC   had approved the Resolution Plan submitted by Kalpraj by a thumping   majority   of   84.36%.     He   submitted,   that   the commercial wisdom of CoC is not open to judicial scrutiny by   the   Adjudicating   Authority,   unless   it   falls   within   the statutory parameters and as such, NCLT has rightly rejected the objection of KIAL and NCLAT has erred in interfering with the same.  He submitted, that no prejudice is caused to KIAL on account of deviation of the procedure, if any.   In this regard, he relied on the judgment of this Court in the 14 case of  vs. G.J. Fernandez   State of Karnataka & Ors. . SUBMISSION OF SHRI SHYAM DIVAN, LEARNED SENIOR COUNSEL APPEARING FOR RP 21. Shri   Shyam   Divan,   learned   Senior   Counsel appearing on behalf of RP submitted, that RP had acted bona   fide   in   order   to   fetch   the   maximum   benefit   to   the Company.  He submitted, that even after the prescribed last date, in view of clause 10.4 of the Process Memorandum, RP was  entitled  to  consider the   plans  received  subsequently 14 (1990) 2 SCC 488 26 with the approval of CoC.   He submitted, that RP therefore had  bona fide  accepted the plan of Kalpraj and not only that but had also given an opportunity to KIAL to submit its revised plans, so as to compete with Kalpraj. Shri Divan also   advanced   the   arguments   on   similar   lines   as   were advanced by the other counsel on the grounds of limitation, acquiescence, etc.    SUBMISSION   OF   SHRI   C.A.   SUNDARAM,   LEARNED SENIOR   COUNSEL   APPEARING   FOR   FOURTH DIMENSION SOLUTIONS LIMITED  Shri   C.A.   Sundaram,   learned   Senior   Counsel 22. appearing   for   Fourth   Dimension   Solutions   Limited, appellant in Civil Appeal D.No.24125 of 2020, which claims to have the highest amount recoverable from the Corporate Debtor submitted, that the said appellant is not concerned with the dispute between the parties, which is the subject matter of consideration in the present appeals.  It is further contended, that the appellants’ dues are subject matter of pending   arbitration   proceeding   between   the   Corporate 27 Debtor and the appellants and is yet to attain finality, so as to liquidate the dues.   It is aggrieved by the direction given in paragraph 39 by NCLT  in its order dated 28.11.2019 in M.A.   No.691   of   2019.     The   learned   Senior   Counsel submitted, that by the said direction it is directed, that the Resolution   Applicant   who   stepped   into   the   shoes   of Corporate   Debtor   subsequent   to   the   approval   of   the Resolution Plan by it, shall not be held responsible for any outstanding statutory dues and other claims for the period before commencement of CIRP.   In the submission of Shri Sundaram,   this   direction   is   prejudicial   to   the   appellant, which is the largest operational creditor entitled to recover an   amount   of   551   crores   (approx..)   from   the   Corporate Debtor.  It is also contended, that the claim of the appellant –   Fourth   Dimension,   though   has   been   shown   in   the information memorandum by RP, it has not been considered by CoC or any of the applicants in their resolution plan.  He relied on the judgment/order dated 16.11.2020 passed by this Court in Civil Appeal No. 2798 of 2020 [ NTPC Ltd. (Simhadri Project)  vs.  Rajiv Chakraborty ] 28 SUBMISSION   OF   SHRI   NEERAJ   KISHAN   KAUL, LEARNED SENIOR COUNSEL APPEARING FOR KIAL 23. Shri Neeraj Kishan Kaul, learned Senior Counsel appearing   on   behalf   of   KIAL,   while   replying   to   the arguments   advanced   on   behalf   of   the   appellants   made manifold submissions.   In   reply   to   the   submission   on   behalf   of   the 24. appellants,   that   the   appeals   filed   by   KIAL  before   NCLAT being   barred   by   limitation,   the   learned   Senior   Counsel submitted, that the arguments advanced were not correct in law and NCLAT has rightly held the appeals to be within limitation.     He   submitted,   that   though   non­exercise   of jurisdiction   by   the   High   Court   under   Article   226   of   the Constitution, in case of availability of alternate remedy is the normal practice, the same is a rule of self­restraint and not hard and fast rule.  It is submitted, that the High Court has wide jurisdiction under Article 226 of the Constitution and in a given case it can entertain a petition under Article 226 in spite of the availability of an alternate and efficacious remedy.  He submitted, that this Court itself in a catena of 29 cases has carved out categories wherein, the High Court is entitled to exercise its jurisdiction under Article 226 in spite of the availability of alternate remedy.  He submitted, that one   such   category   is   where   the   proceedings   challenged before the High Court are proceeded in breach of principles of natural justice.  The learned Senior Counsel has relied on the   following  judgments   of   this  Court  in  support of   this proposition.  (i) vs.   Whirlpool Corporation  Registrar of Trade 15 Marks, Mumbai & Ors. ,  (ii)   vs. Babu Ram Prakash Chandra Maheshwari 16 Antarim Zilla Parishad Muzaffar Nagar ;  and (iii) Nivedita   Sharma   vs.   Cellular   Operators 17 Association of India & Ors . 25. Shri Kaul submitted, that perusal of the record would reveal, that immediately after the filing of application by   RP   before  NCLT  for   approval   of   Resolution   Plans submitted   by   Kalpraj,   KIAL   had   filed   an   application objecting   thereto   being   M.A.   No.1039   of   2019.   He submitted, that perusal of the order­sheet of  NCLT  dated 15 (1998) 8 SCC 1 16 (1969) 1 SCR 518 17 (2011) 14 SCC 337 30 3.7.2019 would reveal, that the application filed by KIAL and one another application being M.A. No.2023 of 2019 were heard by the learned single Member and reserved for orders.  He submitted, that insofar as M.A. No.691 of 2019 is concerned, the order dated 3.7.2019 would show, that the said application was directed to be kept on 23.7.2019 at 2.30 p.m. along with other applications for consideration of resolution plan on its commercial aspect.  The other matters were directed to be kept for hearing on 15.7.2019.   It is further   submitted,   that   when   M.A.   No.691   of   2019   was listed on 23.7.2019, it was directed to be heard on 7.8.2019 at 2.30 p.m.  On 7.8.2019, M.A. No. 691 of 2019 was listed, for   the   first   time,   before   the   Bench   consisting   of   two Members  and on that date the matter came to be adjourned to 26.8.2019.   Again on 26.8.2019, the matter came up before the Division Bench and the Division Bench directed the same to be kept on 6.9.2019.  On 6.9.2019, the Division Bench   adjourned   the   matter   to   17.9.2019   at   2.30   p.m. Again on 17.9.2019, the matter came up before the Division Bench   which   directed   it   to   be   adjourned   to   19.9.2019. 31 Finally, on 19.9.2019, M.A. No.691 of 2019 was heard on Resolution Plan and reserved for orders.   Learned counsel therefore submitted, that it is clear from the record, that M.A. No.1039 of 2019 filed by KIAL, was heard on 3.7.2019 by   the   learned   single   Member   and   reserved   for   orders. However, M.A. No. 691 of 2019 was heard by the Division Bench on 19.9.2019.  Learned counsel therefore submitted, that the orders in M.A. No. 1039 of 2019 could have been passed only by the learned single Member.  However, by two orders passed on even date i.e. 28.11.2019, the Division Bench   rejected   the   application   of   KIAL   and   allowed   the application filed by RP thereby, approving the Resolution Plan submitted by Kalpraj.   26. Learned Senior Counsel submitted, that in this background KIAL was justified in invoking the jurisdiction of   the   High   Court   under   Article   226   of   the   Constitution inasmuch   as,   the   proceedings   conducted   by  NCLT  were totally in breach of the principles of natural justice, as the matter was heard by a single Member whereas, the orders were   passed   by   the   Division   Bench.     Learned   counsel 32 submitted, that the High Court while dismissing the writ petition and relegating KIAL to alternate remedy available in law has passed an elaborate order.  Learned Senior Counsel therefore submitted, that it does not lie in the mouth of the appellants, that KIAL had not approached the High Court bona fide . Learned Senior Counsel submitted, that in view of various judgments delivered by this Court, the High Court could have entertained a petition under Article 226, when the proceedings were conducted in breach of the principles of natural justice.   27. Shri   Kaul,   learned   Senior   Counsel   therefore submitted, that NCLAT was right in law in giving the benefit of the period for which KIAL was  bona fide  prosecuting its writ petition before the Bombay High Court.  Learned Senior Counsel submitted, that if that period is considered, the appeals filed by KIAL are very well within the limitation.   28. Learned   Senior   Counsel   submitted,   that   the purpose   behind   Article   14   of   the   Limitation   Act   is   to advance justice and not to halt justice. He submitted, that Section 14 enables a party to get the benefit of the period for which  it  was   bona  fide   prosecuting   the  remedy  before  a 33 wrong forum.   Learned counsel submitted, that a liberal approach is required to be given to the provisions of Article 14.  Learned counsel relied on the judgments of this Court in   the   case   of   vs. Ketan   V.   Parekh     Special   Director, 18 Directorate   of   Enforcement   &   Anr. ,   M.P.   Steel 19 vs.   and Corporation     Commissioner of   Central Excise Union of India & Ors.  vs.  West Coast Paper Mills Ltd. & 20 Anr.  in this regard.  29. Insofar as the arguments of the appellants with regard to acquiescence and waiver are concerned, learned Senior Counsel submitted, that, at the earliest opportunity, KIAL has objected to Kalpraj submitting its Resolution Plan. He   submitted,   that   on   KIAL   coming   to   know,   that   the Resolution Plan of Kalpraj was accepted beyond 8.1.2019, KIAL objected to it vide email dated 29.1.2019 addressed to RP.     He   submitted,   that  RP   had   replied   to  its   email  on 30.1.2019   and   requested   to   submit   amended   Resolution Plan by 3.00 p.m. on 1.2.2019.  He submitted, that in the said email it is also mentioned, that “CoC reserves the rights 18 (2011) 15 SCC 30 19 (2015) 7 SCC 58 20 (2004) 3 SCC 458 34 to not consider your plan, if received after the said timeline”. He submitted, that accordingly, KIAL had no other option but to submit its revised plan.  30. Learned   Senior   Counsel   submitted,   that   even after   submission   of   the   revised   plan,   KIAL   did   not   hear anything from RP and therefore vide email dated 10.2.2019, addressed to RP, it again raised its objection.     The said email was replied to by RP on 11.2.2019 wherein, RP stated, that the resolution plans submitted after the due date also could be considered, in the spirit of value maximisation of assets of the corporate debtor.   He submitted, that again vide communication dated 11.2.2019, KIAL was required to submit   a   revised   bid,   which   was   submitted   by   it   on 12.2.2019.  Learned counsel therefore submitted, that it is clear   from   the   record,   that   KIAL   had   objected   to   the participation of Kalpraj at the earliest possible opportunity i.e. on 29.1.2019.  Not only that, thereafter KIAL continued to object to the participation of Kalpraj. Revised plans were submitted by KIAL   under compulsion inasmuch as, if it would not have submitted its revised plans, on that ground 35 alone   it   had   to   face   the   risk   of   being   ousted   from consideration.     It   is   therefore   submitted,   that   the contention, that KIAL has acquiesced to the participation of Kalpraj   and   was   therefore   estopped   from   challenging   its participation is without any substance.   Learned counsel submitted,   that   the   contention,   that   KIAL   was   taking chances is also totally incorrect.   It had objected to the participation  of  Kalpraj at the   very  first  opportunity  and continued   to   object   till  CoC  approved   its   plan   and   also thereafter, by way of an application before NCLT objecting to the approval of the Resolution Plan of Kalpraj.   31. Learned   counsel   further   submitted,   that   the contention, that KIAL is a subsidiary of Kotak Bank and that Kotak Bank had also not objected to Kalpraj submitting its  Resolution Plan  and  therefore the  same amounted  to acquiescence is also not correct.  He submitted, that firstly, in the reply filed by RP to the application filed by KIAL in NCLT,  there   is   no   plea   regarding   the   Kotak   Bank’s consensus.  He however submitted, that in any case in view of   the   judgment   of   this   Court   in   the   case   of   Vodafone 36 21 International Holdings BV   vs .   Union of India & Anr. , both KIAL and Kotak Bank are different corporate entities and any act of Kotak Bank cannot bind KIAL. 32. On   merits,   Shri   Kaul   would   submit,   that   the entire process adopted by RP and CoC was contrary to the statutory   provisions,   fair   play   and   transparency.     He submitted, that perusal of the definition of ‘applicant’ in the Process Memorandum in clause 1.0   would show, that for being a resolution applicant, one has to be an applicant who has applied within the prescribed period either under EOI or Form ‘G’.   It is submitted, that since Kalpraj had neither responded within the period prescribed under EOI or any of the Form ‘G’, it could not have been considered to be a resolution   applicant.     He   submitted,   that   the   entire participation of Kalpraj is illegal.  He submitted, that after the   plan   was   submitted   by   KIAL   there   was   a   detailed discussion with RP with regard to the plan submitted by it, wherein entire plan was disclosed, after which  Kalpraj was permitted to step in.   He submitted, that perusal of the Resolution Plan of Kalpraj would reveal, that it is identical 21 (2012) 6 SCC 613 37 with the plans submitted by KIAL, with a little variation to the extent, that in the plan of KIAL the provision made for minority shareholder is Rs.1 crore whereas, in the plan of Kalpraj it is Rs. 50 crore.   He submitted, that the entire conduct of RP as well as  CoC  would reveal, that they had acted in a manner that smacks of favouritism to Kalpraj and were determined to anyhow approve the plan of Kalpraj.  It is   submitted,   that   all   these   aspects   have   been   rightly considered by NCLAT and therefore, the appeals deserve to be dismissed.  33. With   regard   to   the   contention   of   the appellant/Kalpraj,   that   it   has   taken   several   steps   in pursuance of the Resolution Plan, which was approved by NCLT and any interference at this stage would cause great prejudice to many stakeholders, learned counsel submitted, that not much has been done under the Resolution Plan. He submits, in any case, whatever steps have been taken are almost identical with the steps that KIAL would have   taken   inasmuch   as,   the   Resolution   Plan   submitted   by Kalpraj   is   almost   identical   with   the   Resolution   Plan 38 submitted   by   KIAL.     He   submitted,   that   in   any   case, whatever   amount   has   been   spent   by   Kalpraj,   the   same could   be   reimbursed   by   KIAL   and   further   steps   being continued to be taken by KIAL, so as to take the Resolution Plan to the logical end.   34. Insofar as the judgment of NCLAT in the case of 22 vs. Binani Industries Limited     Bank of Baroda & Anr . is   concerned,   learned   counsel   submitted,   that   the   said judgment is totally distinguishable inasmuch as, in the said case both applicants had submitted their plans and revised plans within the stipulated period.   35. In   view   of   the   rival   submissions,   following questions arise for our consideration.  (i) Whether   the   appeals   filed   by   KIAL   before NCLAT were within limitation? (ii) Whether there was waiver and acquiescence by KIAL, so as to estop it from challenging the participation of Kalpraj? (iii) Whether   NCLAT   was   right   in   law   in interfering   with   the   decision   of  CoC  of accepting the resolution plan of Kalpraj? 22 2018 SCC Online NCLAT 565 39 (i)  WHETHER  THE   APPEALS   FILED  BY  KIAL   BEFORE NCLAT WERE WITHIN LIMITATION? For   appreciating   the   rival   contentions   in   this 36. regard, it would be appropriate to refer to Section 29(2) of the Limitation Act, so also the provisions of Section 61 and Section 238A of the I&B Code.   Section 29(2) of the Limitation Act.

40

41

37. Perusal of the aforesaid would reveal, that though the provisions of the Limitation Act, as far as may be, would apply to the proceedings or appeals before the Adjudicating Authority, NCLAT, the Debt Recovery Tribunal or the Debt Recovery Appellate Tribunal, where a period of limitation for initiation of proceedings is provided under any special or local   law,   different   from   the   period   prescribed   by   the 42 Schedule, the provisions of Section 3 shall apply, as if such period were the period prescribed by the Schedule.  It would further   reveal,   that   for   the   purpose   of   determining   any period   of   limitation   prescribed   for   any   suit,   appeal   or application   by   any   special   or   local   law,   the   provisions contained in sections 4 to 24 (inclusive), shall apply only in so far, and to the extent to which, they are not expressly excluded by such special or local law.   An appeal is provided before NCLAT under sub­ 38. section   (1) of Section 61 of the I&B Code to any person, who is aggrieved by the order of the Adjudicating Authority. Sub­section (2) of Section 61 of the I&B Code provides, that every   appeal   under   sub­section   (1)   shall   be   filed   within thirty   days   before   NCLAT.     The   proviso   thereto   further provides, that NCLAT 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. However, such period shall not exceed fifteen days.   39. Since   there   is   a   period   different   from   the   one which is prescribed by the Schedule to the Limitation Act, the limitation for an appeal would be governed by Section 43 61 of the I&B Code, which is a special statute.  As such, an appeal will have to be preferred within a period of thirty days from the date on which the order was passed by NCLT. However,   if   NCLAT   is   satisfied,   that   there   was   sufficient cause for not filing the appeal within a period of thirty days, it may allow an appeal to be filed within a further period of fifteen   days.     As   such,   the   normal   period   of   limitation prescribed   under   the   I&B   Code   is   thirty   days,   with   a provision for allowing the filing of an appeal within a further period of fifteen days, if NCLAT is satisfied, that there was a sufficient cause for not filing the appeal within thirty days.   40. In the present case, the dates are not in dispute. The judgment of NCLT is dated 28.11.2019.  As such, as per Section 61(2) of the I&B Code, the appeal was required to be filed on or prior to 28.12.2019.  The appeal could have been filed within a further period of fifteen days, if NCLAT was satisfied, that there was sufficient cause for not filing the appeal within a period of thirty days.   As such, the said period would come to an end on 12.1.2020.   The certified copy of the impugned judgment of NCLT was made available 44 on   18.12.2019.     If   the   allowance   for   the   said   period   is granted, the appeal should have been preferred on or prior to 2.2.2020.   However, in the present case, the appeal is filed   on   18.2.2020.     It   is   also   not   in   dispute,   that immediately after the order was passed on 28.11.2019 by NCLT, KIAL preferred a writ petition being Writ Petition (L) No. 3621 of 2019 before the Division Bench of the Bombay High Court on 11.12.2019. The said writ petition came to be dismissed on 28.1.2020 on the ground, that KIAL had an alternate and efficacious remedy available under Section 61 of   the   I&B   Code   and   as   such,   it   was   relegated   to   the alternate remedy available in law.   41. It   is   strenuously   urged   on   behalf   of   all   the appellants except Fourth Dimension Solutions Ltd., that the I&B Code is a complete code in itself, which also provides for a period of limitation and as such, Section 14 of the Limitation Act would not be available to KIAL.   On the contrary, it is urged on behalf of KIAL, 42. that since the order passed by NCLT was passed in utter breach of the principles of natural justice, it had  bona fide filed a writ petition before the Division Bench of the Bombay 45 High Court.  It is urged, that by an elaborate order the writ petition came to be dismissed, on the ground of availability of   alternate   remedy.     It   is   therefore   urged,   that   the provisions of Section 14 or at least the principles laid down therein,   would   be   available   to   KIAL   and   as   such,   the appeals, as filed will have to be held to be within limitation. 43. Therefore,   the   crucial   question,   that   arises   for consideration, is as to whether the provisions of Section 14 of the Limitation Act or the principles laid down therein would be available to KIAL for exclusion of the period during which   it   was   prosecuting   the   writ   petition   before   the Division Bench of the Bombay High Court.   44. It will be relevant to refer to Section 14 of the Limitation Act. “ 14. Exclusion of time of proceeding bona   fide   in   court   without jurisdiction . —(1) In computing the period of limitation for any suit the time during which the plaintiff has been prosecuting with   due   diligence   another   civil proceeding,   whether   in   a   court   of   first instance or of appeal or revision, against the   defendant   shall   be   excluded,   where the proceeding relates to the same matter in issue and is prosecuted in good faith in 46

47 (c)   misjoinder   of   parties   or   of causes of action shall be deemed to be a cause of a like nature with defect of jurisdiction.” 45. The conditions that are required to be fulfilled for invoking the provisions of Section 14 of the Limitation Act have been succinctly spelt out in various judgments of this Court   including   the   one   in   Consolidated   Engineering Enterprises   vs.   Principal   Secretary,   Irrigation 23 , which read thus: Department and others

23 (2008) 7 SCC 169 48 ( 4 )   The   earlier   proceeding   and   the latter   proceeding   must   relate   to   the same matter in issue; and ( 5 )   Both   the   proceedings   are   in   a court.” 46. Perusal of the aforesaid conditions would make it amply clear, that one of the conditions that is required to be fulfilled is that both the proceedings are in a court.   The question as to whether the provisions of Section 14 of the Limitation Act would also be applicable to the quasi­judicial forums as against the court, fell for consideration before this Court in the case of   (supra). M.P. Steel Corporation   This   Court   after   an   elaborate   survey   of   the   various judgments of this Court, including judgment in the cases of Bharat Bank Ltd., Delhi   vs.   Employees of the Bharat 24 ,  vs. Bank Ltd., Delhi Town Municipal Council, Athani  Presiding   Officer,   Labour     Courts,   Hubli   and   others 25 ,   vs. etc. Nityananda   M.   Joshi   and   others     Life 26 Insurance   Corporation   of   India   and   others , vs. Commissioner of Sales Tax. U.P., Lucknow     Parson 24 AIR 1950 SC 188 = 1950 SCR 459 25 (1969) 1 SCC 873 26 (1969) 2 SCC 199 49 27 Tools   and   Plants,   Kanpur ,   Kerala   State   Electricity 28 Board, Trivandrum  vs.  T.P. Kunhaliumma ,  Officer on vs. Special Duty (Land Acquisition) and another     Shah 29 Manilal   Chandulal   and   others   and   Consolidated   (supra)   held,   that   the   word Engineering   Enterprises

words  “civil proceedings”.  It  was  therefore  held,  that  the Limitation   Act   including   Section   14   would   not   apply   to appeals filed before a quasi­judicial Tribunal.  It was held, that since the appeal as mentioned in Section 128 of the Customs Act is not before a Court, the provisions of Section

Consolidated Engineering Enterprises  (supra), have been elaborately discussed in the judgment of this Court in the

refrain   from   burdening   the   present   judgment   by reproducing the observations made in those judgments.    27 (1975) 4 SCC 22 28 (1976) 4 SCC 634 29 (1996) 9 SCC 414 50

further observed, that the judgment of this Court in the

judgments nor the aforesaid decisions were pointed out to the Court and therefore, the said judgment in the case of

the   proposition,   that   the   Limitation   Act   would   apply   to

including Section 14 would not apply to appeals filed before

“…. However, this does not conclude the issue.   There   is   authority   for   the proposition that  even  where  Section 14 may not apply, the principles on which Section   14   is   based,   being   principles which   advance   the   cause   of   justice, would nevertheless apply. We must never forget, as stated in  Bhudan Singh  v.  Nabi Bux  [(1969) 2 SCC 481 : (1970) 2 SCR 10] 30 (1976) 4 SCC 464 51

52

53

54

55

Thus, this Court relying on the earlier judgments 50.

32 Iric Sohan and others , and  Consolidated Engineering   (supra) observed, that the object of enacting Enterprises the   legislation   is   to   advance   public   welfare.     The   entire legislative process is influenced by considerations of justice 31 (1969) 2 SCC 481 32 (2009) 12 SCC 175 56 and reason. Justice and reason constitute the great general legislative intent in every piece of legislation.   It has been held   by   this   Court,   that   in   the   absence   of   some   other indication that the harsh or ridiculous effect was actually intended by the legislature, there is little reason to believe, that   it   represents   the   legislative   intent.     It   is   further observed, that the provisions contained in Sections 5 and 14 of the Limitation Act are meant for grant of relief, where

(supra), it has been observed, that while considering the provisions   of   Section   14   of   the   Limitation   Act,   proper approach will have to be adopted and the provisions will have to be interpreted, so as to advance the cause of justice, rather than abort the proceedings.   It has been observed, that an element of mistake is inherent in the invocation of 57 Section 14.   The section, in fact, is intended to provide a relief   against   the   bar   of   limitation   in   cases   of   mistaken remedy or selection of a wrong forum.  It has been observed, that  the  legislature   has   enacted  Section 14  to  exempt a

has been held, that the equity underlying Section 14 should be  applied  to  its  fullest  extent  and  time  taken  diligently pursuing a remedy, in a wrong court, should be excluded. It could thus be seen, that this Court has in unequivocal

litigates   before   a   wrong   forum,   he   would   be   entitled   for

prosecuting   such   a   wrong   remedy.     Though   strictly,   the provisions of Section 14 of the Limitation Act would not be applicable   to   the   proceedings   before   a   quasi­judicial Tribunal,   however,   the   principles   underlying   the   same would be applicable i.e. the proper approach will have to be of advancing the cause of justice, rather than to abort the proceedings.  58 52. An   argument   similar   to   the   one   which   is advanced before us, that since the Code is a complete Code in itself, the  limitation as provided  only under  the Code would govern the field and would exclude the application of provisions of Section 14 of the Limitation Act was made in

considering this objection, this Court observed thus:  However,   it   remains   to   consider “42. whether  Shri  Sanghi  is  right in stating that Section 128 is a complete code by itself   which   necessarily   excludes   the application of Section 14 of the Limitation Act.   For   this   proposition   he   relied strongly   on  Parson   Tools  [(1975)   4   SCC 22 : 1975 SCC (Tax) 185 : (1975) 3 SCR 743]   which   has   been   discussed hereinabove.   As   has   already   been stated,  Parson  Tools  [(1975) 4   SCC   22   : 1975 SCC (Tax) 185 : (1975) 3 SCR 743] was   a   judgment   which   turned   on   the three features mentioned in the said case. Unlike the U.P. Sales Tax Act, there is no provision   in   the   Customs   Act   which enables a party to invoke suo motu the appellate   power   and   grant   relief   to   a person who institutes an appeal out of time in an appropriate case. Also, Section 10 of the U.P. Sales Tax Act dealt with the filing of a revision petition after a first appeal had already been rejected, and not 59

60

61 principle   of   Section   14   which   is   a principle based on advancing the cause of justice would certainly apply to exclude time   taken   in   prosecuting   proceedings which   are   bona   fide   and   with   due diligence pursued, which ultimately end without a decision on the merits of the case.” 53. Perusal of the aforesaid would therefore reveal, that the Court has clearly rejected the objection raised by

raised relying on the judgment of this Court in the case of

that the time during which the applicant was prosecuting such application before the wrong court can be excluded, provided the proceeding in the wrong court was prosecuted

on the ground, that the period provided for filing a revision under the U.P. Sales Tax Act was sufficiently long period of 18 months, beyond which it was the policy of the legislature not   to   extend   limitation   any   further.     Relying   on   the 62 Consolidated   Engineering   Enterprises   (supra),   it   has been   observed,   that   there   is   a   vital   distinction   between extending   time   and   condoning   delay.     It   was   further observed, that like Section 34 of the Arbitration Act, the period provided in Section 128 of the Customs Act did not lay down a long period for preferring an appeal.   As such, it would be unduly harsh to exclude the principles contained in   Section   14   of   the   Limitation   Act.       Relying   on   (supra)   it   was Consolidated   Engineering   Enterprises observed, that there is a difference between exclusion of a certain period altogether under principles of Section 14 and condoning the  delay. It has  been observed,  that  when a certain   period   is   excluded   by   applying   the   principles contained in Section 14, there is no delay to be attributed to the   appellant   and   the   limitation   period   provided   by   the statute concerned, continues to be the stated period and not more than the stated period.  It was therefore held, that the principle   of   section   14,   which   is   a   principle   based   on advancing   the   cause   of   justice   would   certainly   apply   to exclude time taken in prosecuting proceedings which are 63

immediately   after   NCLT   pronounced   its   judgment   on 28.11.2019 and even before the certified copy was made available on 18.12.2019, KIAL had filed writ petition before the   Division   Bench   of   the   Bombay   High   Court   on 11.12.2019   on   the   principal   ground,   that   the   procedure followed by NCLT was  in breach of  principles  of natural justice.  Such a ground could be legitimately pursued before a writ court.  In that sense, it was not a  proceeding before a

dated   28.1.2020,   passed   by   the   Division   Bench   of   the Bombay High Court, which dismissed the writ petition on the ground of availability of alternate and equally efficacious remedy would reveal, that the said writ petition was hotly contested between the parties and by an order running into 32 pages, the Division Bench of the Bombay High Court dismissed the petition relegating the petitioner therein (i.e. KIAL) to avail of an alternate remedy available in law.   64

reveal, that the petitioner (i.e. KIAL) has specifically averred

65

56. It could therefore be seen, that the petitioner ­ KIAL has specifically stated, that though the application of the petitioner was heard by a Member (Judicial), the order was   passed   by   a   Division   Bench   consisting   of   Member (Judicial) as well as Member (Technical).   Perusal of the grounds would further reveal, that a specific ground has been taken, that the procedure adopted by NCLT was in

the Memo of the writ petition, which reads thus:

66

58. It could thus clearly be seen, that the petitioner therein i.e.  KIAL has specifically stated, that though it had an alternate remedy of filing an appeal before NCLAT, since the petition was not just about the merits of the impugned order, but also in respect of functioning of the Tribunal the petitioner was invoking the writ jurisdiction of the Court.  By now, it is a settled principle of law, that non­ 59. exercise of jurisdiction by the High Court under Article 226 of the Constitution is not a hard and fast rule, but a rule of

observed thus: “It is a well­established proposition of law that when an alternative and equally effi­ cacious remedy is open to a litigant he should be required to pursue that remedy and not to invoke the special jurisdiction of the High Court to issue a prerogative writ.   It   is   true   that   the   existence   of   a statutory remedy does not affect the ju­ 67 risdiction  of   the   High  Court  to  issue   a writ.   But,   as   observed   by   this   Court in  Rashid Ahmed v. The Municipal Board, Kairana [(1950) SCR 566] , "the existence of an adequate legal remedy is a thing to be taken into consideration in the matter of granting writs" and where such a rem­ edy exists it will be a sound exercise of discretion to refuse to interfere in a writ petition   unless   there   are   good   grounds therefore. But it should be remembered that the rule of exhaustion of statutory remedies before a writ is granted is a rule of self imposed limitation, a rule of policy, and discretion rather than a rule of law and   the   court   may   therefore   in   excep­ tional cases issue a writ such as a writ of certiorari   notwithstanding   the   fact   that the statutory remedies have not been ex­ hausted.” 60. This Court further laid down two well recognized exceptions to the doctrine with regard to the exhaustion of statutory remedies, which reads thus:  “There   are   at   least   two   well­recognised exceptions to .the doctrine with regard to the exhaustion of statutory remedies. In the   first   place,   it   is   well­settled   that where proceedings are taken before a Tri­ bunal under a provision of law, which is ultra vires, it is open to a party aggrieved thereby   to   move   the   High   Court   un­ der  Art. 226  for issuing appropriate writs for   quashing   them   on   the   ground   that 68 they are incompetent, without his being obliged   to   wait   until   those   proceedings run their full course.­­(See the decisions of this Court in Carl Still G.m.b. H. v. The State   of   Bihar  [ A.I.R.   1961   S.C.   1615] and  The Bengal Immunity Co. Ltd. v. The State Bihar  [(1955) 2 S.C.R. 603]. In the second place, the doctrine has no appli­ cation in a case where the impugned or­ der   has   been   made   in   violation   of   the principles   of   natural   justice   (See   The State   of   Uttar   Pradesh   v.   Mohammad Nooh  [(1958) S.C.R. 595].” 61. It   has   been   clearly   held,   that   when   the

the jurisdiction or when they are in breach of principles of natural justice, the party would be entitled to invoke the jurisdiction   of   the   High   Court   under   Article   226   of   the

 Under   Article   226   of   the “15. Constitution,   the   High   Court,   having regard   to   the   facts   of   the   case,   has   a discretion to entertain or not to entertain a writ petition. But the High Court has imposed   upon   itself   certain   restrictions one of which is that if an effective and efficacious remedy is available, the High Court   would   not   normally   exercise   its jurisdiction.   But   the   alternative   remedy 69 has been consistently held by this Court not to operate as a bar in at least three contingencies,   namely,   where   the   writ petition   has   been   filed   for   the enforcement of any of the Fundamental Rights   or   where   there   has   been   a violation of the principle of natural justice or   where   the   order   or   proceedings   are wholly without jurisdiction or the vires of an Act is challenged. There is a plethora of case­law on this point but to cut down this circle of forensic whirlpool, we would rely   on   some   old   decisions   of   the evolutionary era of the constitutional law as they still hold the field.” A   similar   view   has   been   reiterated   in   the 63.

would reveal, that it was the specific case of KIAL, that its application, objecting to the application of RP for approval of the   resolution   plan   was   heard   by   a   Member   (Judicial), whereas, the final orders were passed by a Bench consisting of   Member   (Judicial)   and   Member   (Technical).     It   has specifically averred, that though an alternate remedy was available to it, it was invoking the jurisdiction of the High Court since the question involved was also with regard to 70 the   manner   in   which   the   jurisdiction   was   exercised   by

prosecuting the proceedings before the High Court in good faith.   Perusal of the dates referred to herein above would also   reveal,   that   KIAL   was   prosecuting   the   proceedings before the High Court with due diligence.  Even before the availability of the certified copy, it had knocked the doors of the High Court.  The matter before the High Court was hotly contested and ultimately, the petition was dismissed by an elaborate judgment relegating KIAL to the alternate remedy available to it in law.  As such, the conditions which enable a   party   to   invoke   the   provisions   of   Section   14   of   the Limitation Act are very much available to KIAL.     If the

writ petition before the High Court and that too with due diligence,   is   excluded   applying   the   principles   underlying Section 14 of the Limitation Act, the appeals filed before NCLAT would be very much within the limitation.  We find, that KIAL would be entitled to exclusion of the period during 71

this Court was considering the question as to whether the provisions of Section 5 of the Limitation Act are applicable to an application challenging an award under Section 34 of the   Arbitration   and   Conciliation   Act,   1996   (hereinafter referred to as “the Arbitration Act”).   This Court observed thus:

72 force, in matters governed by this Part, no   judicial   authority   shall   intervene except where so provided in this Part.’ ” 67. It must be noticed, that the judgment in the case

this Court by a Bench consisting of three Judges in the case of  Consolidated Engineering Enterprises  (supra) wherein, the question with regard to applicability of Section 14 of the

Court   was  an   enterprise   engaged   in   civil   engineering construction   as   well   as   development   of   infrastructure.  It entered   into   an   agreement   with   the   respondent   for construction of earthen bund, head sluices and the draft channel of the Y.G. Gudda tank. A dispute arose between the parties and therefore, the appellant invoked arbitration Clause 51 of the agreement.  The dispute was referred to the sole   arbitrator   who   passed   his   award   in   favour   of   the appellant.     Feeling   aggrieved   by   the   said   award,   the 73 respondents preferred an application to set aside the said award as provided by Section 34 of the Arbitration Act in the   Court   of   the   Civil   Judge   (Senior   Division), Ramanagaram,   Bangalore   Rural   District,   Bangalore. However,   it   was   realised   by   the   respondents,   that   an application for setting aside the award should have been filed before the Principal District Judge, Bangalore District (Rural).   As   such,   an   application   was   preferred   by   the respondents   in   the   Court   of   the   Civil   Judge   (Senior Division),   Ramanagaram   with   a   request   to   transfer   the application made for setting aside the award to the Court of the Principal District Judge (Rural), Bangalore. 68. The Civil Judge (Senior Division), Ramanagaram passed   an   order   directing   return   of   the   suit   records   for presentation   before   the   proper   court.   The   respondents therefore collected the papers from the Court of the Civil Judge (Senior Division), Ramanagaram and presented the same in the Court of the Principal District Judge, Bangalore (Rural).  The District Court framed a preliminary issue, as to whether the suit was barred by the limitation under Section 74 34(3) of the Arbitration Act. The District Judge held, the application for setting aside the award to be time­barred. The respondents invoked the appellate jurisdiction of the High Court of Karnataka at Bangalore.  The Division Bench of the Karnataka High Court held, that the District Judge, Bangalore had committed an error in holding, that Section 14 of the Limitation Act was not applicable to an application submitted under Section 34 of the Act.   It was therefore held, that the time taken during which the respondents had been prosecuting in the Court of the Civil Judge (Senior Division), Ramanagaram was excludable.  Feeling aggrieved, the appellant had approached 69. this   Court.     Panchal,   J.   speaking   for   himself   and Balakrishna, C.J. (as their Lordships then were) observed thus: “27.  The contention that in view of the decision of the Division Bench of this Court in  Union of India  v.  Popular Construction Co.  [(2001) 8 SCC 470] the Court should hold that the provisions of   Section   14   of   the   Limitation   Act would not apply to an application filed under Section 34 of the Act, is devoid 75 of substance. In the said decision what is   held   is   that   Section   5   of   the Limitation Act is not applicable to an application   challenging   an   award under  Section 34 of  the  Act.  Section 29(2)   of   the   Limitation   Act   inter   alia provides that where any special or local law prescribes, for any application, a period of limitation different from the period prescribed by the Schedule, the provisions contained in Sections 4 to 24 shall apply only insofar as, and to the   extent   to   which,   they   are   not expressly excluded by such special or local   law.   On   introspection,   the Division Bench of this Court held that the   provisions   of   Section   5   of   the Limitation Act are not applicable to an application challenging an award. This decision cannot be construed to mean as ruling that the provisions of Section 14 of the Limitation Act are also not applicable   to   an   application challenging an award under Section 34 of the Act. As noticed earlier, in the Act of 1996, there is no express provision excluding application of the provisions of Section 14 of the Limitation Act to an application filed under Section 34 of the Act for challenging an award. 28.  Further,   there   is   fundamental distinction between the discretion to be exercised   under   Section   5   of   the Limitation   Act   and   exclusion   of   the time provided in Section 14 of the said Act.   The   power   to   excuse   delay   and 76 grant   an   extension   of   time   under Section   5   is   discretionary   whereas under Section 14, exclusion of time is mandatory, if the requisite conditions are satisfied. Section 5 is broader in its sweep   than   Section   14   in   the   sense that   a   number   of   widely   different reasons   can   be   advanced   and established   to   show   that   there   was sufficient cause in not filing the appeal or   the   application   within   time.   The ingredients in respect of Sections 5 and 14 are different. The effect of Section 14 is that in order to ascertain what is the date of expiration of the “prescribed period”,   the   days   excluded   from operating by way of limitation, have to be   added   to   what   is   primarily   the period of limitation prescribed. Having regard   to   all   these   principles,   it   is difficult   to   hold   that   the   decision in  Popular   Construction   Co.  [(2001)   8 SCC 470] rules that the provisions of Section 14 of the Limitation Act would not apply to an application challenging an award under Section 34 of the Act.” This Court clearly held, that the decision in the 70.

construed to mean as a ruling, that provisions of Section 14 of   the   Limitation   Act   are   also   not   applicable   to   an application challenging an award under Section 34 of the 77 Act.  It has been held, that in the Arbitration Act, there is no express provision excluding application of the provisions of Section 14 of the Limitation Act to an application filed under Section 34 of the Arbitration Act for challenging the award. It   has   further   been   found,   that   there   is   fundamental distinction   between   the   discretion   to   be   exercised   under Section 5 of the Limitation Act and exclusion of the time provided in Section 14 of the said Act.  It was held, that the power to excuse delay and grant an extension of time under Section   5   is   discretionary,   whereas   under   Section   14, exclusion of time is mandatory, if the requisite conditions are satisfied.  It held, that the effect of Section 14 is that in order   to   ascertain   what   is   the   date   of   expiration   of   the “prescribed period”, the days excluded from operating by way of limitation, have to be added to what is primarily the period of limitation prescribed.  71. Raveendran, J. (as His Lordship then was) in his concurring judgment observed thus: “54.  On   the   other   hand,   Section   14 contained in Part III of the Limitation Act does not relate to extension of the period of limitation, but relates to exclusion of 78 certain   period   while   computing   the period of limitation. Neither sub­section (3) of Section 34 of the AC Act nor any other provision of the AC Act exclude the applicability   of   Section   14   of   the Limitation   Act   to   applications   under Section 34(1) of the AC Act. Nor will the proviso   to   Section   34(3)   exclude   the application of Section 14, as Section 14 is not a provision for extension of period of limitation, but for exclusion of certain period   while   computing   the   period   of limitation. Having regard to Section 29(2) of the Limitation Act, Section 14 of that Act will be applicable to an application under Section 34(1) of the AC Act. Even when there is cause to apply Section 14, the   limitation   period   continues   to   be three   months   and   not   more,   but   in computing the limitation period of three months for the application under Section 34(1)   of   the   AC   Act,   the   time   during which   the   applicant   was   prosecuting such application before the wrong court is excluded, provided the proceeding in the   wrong   court   was   prosecuted   bona fide,   with   due   diligence.  Western Builders  [(2006)   6   SCC   239]   therefore lays down the correct legal position.” In paragraph 57, Raveendran, J. also observed, 72.

not consider the applicability of Section 14 of the Limitation Act to an application under Section 34 of the Arbitration Act.   79 73. As such, in view of the judgment of three Judges Bench   of   this   Court   in   the   case   of   Consolidated Engineering   Enterprises   (supra),  the   reliance   placed  by

question   raised   was   with   regard   to   applicability   of   the provisions of Section 5 of the Limitation Act to an appeal

Again, the said judgment deals with applicability of Section 5 and not of Section 14 of the Limitation Act and therefore

for the appellants on the judgment of this Court in the case

33 Hongo India Private Limited and another , would also not help the appellants inasmuch as, the question, that fell for consideration there was, with regard to the applicability

33 (2009) 5 SCC 791 80 provided under Section 35­H(1) of the unamended Central

further   inasmuch   as,   again   the   question,   that   fell   for consideration was, with regard to applicability of Section 5

would also not be applicable to the facts of the present case inasmuch   as,   the   said   judgment   also   considered   the applicability of Section 5 of the Limitation Act to an appeal

present case.   In the said case, the petitioner had initially 34 (2018) 3 SCC 41 81 filed a writ petition before the Delhi High Court against the order­in­original passed by the Commissioner of Customs, Kanpur.  Delhi High Court converted the writ petition into a statutory   appeal  under   the   Customs   Act,   1962   by   order dated   9­11­2009.   On   9­9­2010   the   Revenue   raised   an objection about the territorial jurisdiction of that Court. On 5­1­2012 the petitioner withdrew the appeal with liberty to approach   the   jurisdictional   High   Court   and   then   filed   a statutory appeal before the Allahabad High Court after a delay of 697 days.  It will be relevant to refer to the following

“3.  The very filing of writ petition by the petitioner in the Delhi High Court against the order­in­original passed by the Com­ missioner of Customs, Kanpur indicates that the petitioner took a chance in ap­ proaching the High Court at Delhi which had no territorial jurisdiction in the mat­ ter. We are satisfied that filing of the writ petition or for that matter, appeal before the Delhi High Court was not at all bona fide. We are in agreement with the obser­ vations   made   by   the   Allahabad   High Court   in   the   impugned   order   [ Neeraj Jhanji  v.  CCE & Customs , Custom Appeal Defective   16   of   2012,   order   dated   6­8­ 2012   (All)]   .   The   Allahabad   High   Court has rightly dismissed the petitioner's ap­ 82 plication of condonation of delay and con­ sequently the appeal as time barred.” It is thus clear, that this Court found, that the 79. petitioner therein had adopted tactics of taking chances by approaching High Court of Delhi, which had no territorial jurisdiction.   As such, it was found, that neither the writ petition nor the appeal before the Delhi High Court could be construed to be a   bona fide.    It was further noticed, that there   was   an   inordinate   delay   of   697   days.     I t   is   thus apparent, that the petitioner therein had not satisfied the necessary conditions for applicability of Section 14.   80. In the present case, as already discussed herein above, the petitioner was   prosecuting his remedy bona fide before the High Court and that too with due diligence.  As such, the said judgment also would be of no avail to the case of the appellants.   81. The judgment of this Court in the case of  Ketan

question, that arose for consideration in the said case was with regard to applicability of Section 14 of the Limitation Act to an  Appeal from Order  of an Appellate Tribunal as 83 provided   under   Section   35   of   the   Foreign   Exchange Management Act, 1999.   This Court relying on the earlier judgment   in   the   case   of   Consolidated   Engineering   (supra)   and   vs. Enterprises State   of   Goa   Western 35 Builders   held,   that   Section   14   can   be   invoked   in   an appropriate case for exclusion of the time, during which the aggrieved person may have prosecuted with due diligence a remedy before a wrong forum. However, on facts and on the averments made in the pleadings, this Court came to the conclusion,   that   there   was   not   even   a   whisper   in   the applications   filed   by   the   appellants,   that   they   had   been prosecuting remedy before a wrong forum i.e. the Delhi High Court   with   due   diligence   and   in   good   faith.     It   will   be relevant   to   refer   to   the   following   paragraphs   of   the   said judgment.  “32.  There is another reason why the benefit of Section 14 of the Limitation Act cannot be extended to the appellants. All of them are well conversant with various statutory   provisions   including   FEMA. One   of   them   was   declared   a   notified person under Section 3(2) of the Special 35 (2006) 6 SCC 239 84 Court   (Trial   of   Offences   Relating   to Transactions in Securities) Act, 1992 and several   civil   and   criminal   cases   are pending against him. The very fact that they   had   engaged   a   group   of   eminent advocates  to  present their  cause before the Delhi and the Bombay High Courts shows that they have the assistance of legal  experts   and   this   seems   to   be   the reason why they invoked the jurisdiction of the Delhi High Court and not of the Bombay High Court despite the fact that they are residents of Bombay and have been contesting other matters including the   proceedings   pending   before   the Special Court at Bombay. It also appears that   the   appellants   were   sure   that keeping in view their past conduct, the Bombay   High   Court   may   not   interfere with the order of the Appellate Tribunal. Therefore, they took a chance before the Delhi   High   Court   and   succeeded   in persuading  the   learned  Single  Judge of the   Court   to   entertain   their   prayer   for stay   of   further   proceedings   before   the Appellate Tribunal. The promptness with which   the   learned   Senior   Counsel appearing   for   the   appellant,   Kartik   K. Parekh   made   a   statement   before   the Delhi High Court on 7­11­2007 that the writ   petition   may   be   converted   into   an appeal   and   considered   on   merits   is   a clear   indication   of   the   appellant's unwillingness to avail remedy before the High Court i.e. the Bombay High Court which   had   the   exclusive   jurisdiction   to 85 entertain an appeal under Section 35 of the Act. 33.  It is not possible to believe that as on 7­11­2007,   the   appellants   and   their advocates were not aware of the judgment of   this   Court   in  Ambica Industries  v.  CCE  [(2007)   6   SCC   769] whereby dismissal of the writ petition by the Delhi High Court on the ground of lack   of   territorial   jurisdiction   was confirmed and it was observed that the parties cannot be allowed to indulge in forum   shopping.   It   has   not   at   all surprised   us   that   after   having   made   a prayer   that   the   writ   petitions   filed   by them be treated as appeals under Section 35,   two   of   the   appellants   filed applications for recall of that order. No doubt, the learned Single Judge accepted their   prayer   and   the   Division   Bench confirmed the order of the learned Single Judge   but   the   manner   in   which   the appellants prosecuted the writ petitions before   the   Delhi   High   Court   leaves   no room   for   doubt   that   they   had   done   so with   the   sole   object   of   delaying compliance   with   the   direction   given   by the Appellate Tribunal and by no stretch of imagination it can be said that they were bona fide prosecuting remedy before a wrong forum. Rather, there was total absence of good faith, which is sine qua non   for   invoking   Section   14   of   the Limitation Act.” 86 82. It is thus clear, that the appellants therein were indulging   into   a   practice   of   taking   chances.     They   had approached   Delhi   High   Court,   which   totally   lacked territorial   jurisdiction   and   had   not   approached   Bombay High Court though they were residents of Bombay and had been   contesting   other   matters   including   the   proceedings pending before the Special Court at Bombay.   It has been observed, that keeping in view their past conduct, Bombay High Court might not have interfered with the order of the Appellate   Tribunal.   Therefore,   they   took   a   chance   before Delhi High Court and succeeded in persuading the learned Single Judge of that Court to entertain their prayer for stay of further proceedings before the Appellate Tribunal. This Court further observed, that the promptness with which the statement was made on behalf of the appellants, that the writ petition may be converted into an appeal was a clear indication of the appellant's unwillingness to avail remedy before the High Court of Bombay which had the exclusive jurisdiction to entertain an appeal under Section 35 of the Act. 87 83. In the present case, the facts are totally contrary. KIAL had approached the High Court of Bombay making a specific   grievance,   that   NCLT   had   adopted   a   procedure which was in breach of the principles of natural justice. It is specifically mentioned in the writ petition, that though an alternate remedy was available to it, it was approaching the High Court since the issue with regard to functioning of NCLT also fell for consideration.     The proceedings before the High Court were hotly contested and by an elaborate judgment,   the   High   Court   dismissed   the   writ   petition relegating the petitioner therein i.e.  KIAL  to an alternate remedy available in law.   It is thus apparently clear, that KIAL  was   bona fide   prosecuting a remedy before the High Court in good faith and with due diligence.  In a given case, the   High   Court   could   have   exercised   jurisdiction   under Article 226 of the Constitution inasmuch as, the grievance was regarding procedure followed by NCLT to be in breach of principles of natural justice.  That would come within the limited   area   earmarked   by   this   Court   for   exercise   of 88 extraordinary   jurisdiction   under   Article   226   despite availability of an alternate remedy.   This Court recently in the judgment of  84. Embassy Property Developments Pvt. Ltd.  vs.  State of Karnataka 36 had an occasion to consider a similar issue. and Others   We find it apposite to refer to the question framed by this Court, which reads thus: “i)  Whether   the   High   Court   ought   to interfere,   under   Article   226/227   of   the Constitution, with an order passed by the National   Company   Law   Tribunal   in   a proceeding   under   the   Insolvency   and Bankruptcy   Code,   2016,   ignoring   the availability   of   a   statutory   remedy   of appeal   to   the   National   Company   Law Appellate Tribunal and if so, under what circumstances.” 85. It will also be apposite to reproduce the answer given by this Court. “47. Therefore, in fine, our answer to the first question would be that NCLT did not have   jurisdiction   to   entertain   an application   against   the   Government   of Karnataka   for   a   direction   to   execute Supplemental   Lease   Deeds   for   the extension   of   the   mining   lease.     Since NCLT chose to exercise a jurisdiction not vested   in   it   in   law,   the   High   Court   of 36 2019 SCC Online 1542 89 Karnataka   was   justified   in   entertaining the writ petition, on the basis that NCLT was coram non judice.”   We therefore have no hesitation to hold, that KIAL was entitled to extension of the period during which it was bona fide  prosecuting a remedy before the High Court with due diligence.  (ii)     WHETHER   THERE   WAS   WAIVER   AND ACQUIESCENCE  BY KIAL  SO AS TO ESTOP IT FROM CHALLENGING THE PARTICIPATION OF KALPRAJ? 86. It   is   strenuously   urged   on   behalf   of   the appellants,   that   under   clause   10.4   of   the   Process Memorandum, if any Resolution Plan is received by RP from any eligible applicant(s) at any stage of the Resolution Plan Process, RP is free to examine any resolution plan with the approval of CoC and the applicant will not have any right to object to the submission or consideration of such plan.  It is further   submitted,   that   even   under   clause   11.2   of   the Process Memorandum, RP or CoC, at their sole discretion, may request for additional information/documents and/or seek clarification from the resolution applicant after the due 90 date for submission of the plan.     It is further submitted, that delay in submission of additional information and/or documents   sought   by   RP,   CoC   or   the   Process   Manager would entitle RP, CoC or the Process Manager to reject the resolution plan.   87. It was further submitted by the appellants, that KIAL , in a letter submitted along with the resolution plan to RP, had expressly waived any and all claims with respect to the Resolution Plan Process.   Not only that, but   KIAL   had submitted   its   revised   plans   twice   after   Kalpraj   was permitted to participate in the proceedings.  It is therefore submitted,   that   since   KIAL   had   expressly   waived   all   its claims   and   had   also   submitted   its   revised   plans,   after Kalpraj entered into the fray, it was not entitled to raise any grievance.   It is submitted, that the principles of waiver and acquiescence are squarely applicable in the present case. It was also submitted on behalf of the appellants, that the revised plans, submitted by   KIAL,   were submitted without mentioning, that it was without prejudice and as such, it was not entitled to make any grievance on that count.   91 88. It   is   submitted,   that   the   approach   adopted   by KIAL  amounted to taking chances, as after having failed in the process, challenging the same would not be permissible th in law.  It is also contended that during the 12  meeting of CoC, Kotak Bank, of which  KIAL  is a 100% subsidiary, also agreed with CoC counsel’s view, that Kalpraj’s resolution plan can be considered.  It could thus be seen, that the main thrust of the 89. arguments advanced on behalf of the appellants with regard to waiver and acquiescence is on two grounds, viz., (i) clause 10.4 of the Process Memorandum read with paragraph 5(b) of the covering letter for submission of resolution plan by KIAL,   and   (ii)   participation   of   KIAL   in   the   process   after Kalpraj was permitted to participate in the process.  90. We   may   refer   to   clause   10.4   of   the   Process Memorandum and paragraph 5(b) of the covering letter for submission of resolution plan by  KIAL , which read thus: Clause 10.4 of the Process Memorandum “if any Resolution Plan is received by the   Resolution   professional   from   any eligible Applicant(s) at any stage of the Resolution   Plan   Process,   the Resolution professional  shall be free to 92 examine such Resolution Plan with the approval of the Committee of Creditors and the Applicant(s) will not have any right   to   object   to   submission   or consideration of such plan.”

“5.  We further represent and confirm as follows: (a) ….. (b) Acceptance   We   hereby   unconditionally   and irrevocably agree and accept the terms of the Process Memorandum and that the   decision   made   by   the  CoC, Resolution   professional   and/or   the Adjudicating   Authority   in   respect   of any matter with respect to, or arising out of, the Process Memorandum and the   Resolution   Plan   Process   shall   be binding on us.   We hereby expressly waive any and all claims in respect of the Resolution Plan Process.” 91. On the basis of clause 10.4, it is sought to be urged, that even if the Resolution Plan is received by RP from any eligible applicant(s) at any stage of the Resolution Plan Process, RP was free to examine such Resolution Plan with the approval of CoC and the applicant(s) will not have 93 any right to object to submission or consideration of such plan. 92. On the basis of paragraph 5(b) of the covering letter for submission of resolution plan by  KIAL, it is sought to be urged, that KIAL had unconditionally and irrevocably agreed and accepted the terms of the Process Memorandum and the decision made by CoC, RP and/or the Adjudicating Authority in respect of any matter with respect to, or arising out of,  the Process Memorandum and the Resolution Plan

agreed to surrender all and any of its claim in respect of the Resolution Plan Process.  It is sought to be urged, that this stipulation amounts to a concluded contract between the parties   and   having   waived   its   all   claims,   KIAL   is   not permitted in law to challenge the participation of Kalpraj in

paragraphs 89 and 90 of the judgment of this Court in the

94

37 another .   “89.  Should   then   our   courts   not advance with the times? Should they still   continue   to   cling   to   outmoded concepts   and   outworn   ideologies? Should   we   not   adjust   our   thinking caps to match the fashion of the day? Should all jurisprudential development pass us by, leaving us floundering in the sloughs of 19th century theories? Should the strong be permitted to push the weak to the wall? Should they be allowed   to   ride   roughshod   over   the weak? Should the courts sit back and watch   supinely   while   the   strong trample   underfoot   the   rights   of   the weak? We have a Constitution for our country. Our judges are bound by their oath to “uphold the Constitution and the   laws”.   The   Constitution   was enacted to secure to all the citizens of this   country   social   and   economic justice. Article 14 of the Constitution guarantees   to   all   persons   equality before the law and the equal protection of   the   laws.   The   principle   deducible from the above discussions on this part of the case is in consonance with right and reason, intended to secure social and economic justice and conforms to the   mandate   of   the   great   equality clause in Article 14. This principle is 37 (1986) 3 SCC 156 95 that   the   courts   will   not   enforce   and will, when called upon to do so, strike down   an   unfair   and   unreasonable contract,   or   an   unfair   and unreasonable   clause   in   a   contract, entered into between parties who are not   equal   in   bargaining   power.   It   is difficult to give an exhaustive list of all bargains   of   this   type.   No   court   can visualize the different situations which can arise in the affairs of men. One can only attempt to give some illustrations. For instance, the above principle will apply   where   the   inequality   of bargaining power is the result of the great   disparity   in   the   economic strength of the contracting parties. It will apply where the inequality is the result of circumstances, whether of the creation  of  the  parties  or  not.   It will apply to situations in which the weaker party is in a position in which he can obtain goods or services or means of livelihood only upon the terms imposed by   the   stronger   party   or   go   without them.   It   will   also   apply   where   a man   has   no   choice,   or   rather   no meaningful choice, but to give his assent to a contract or to sign on the dotted line in a  prescribed or standard form or to accept a set of rules   as   part   of   the   contract, however   unfair,   unreasonable   and unconscionable   a   clause   in   that contract  or  form  or rules  may  be. This principle, however, will not apply where   the   bargaining   power   of   the 96 contracting parties is equal or almost equal.   This   principle   may   not   apply where   both   parties   are   businessmen and   the   contract   is   a   commercial transaction. In today's complex world of   giant   corporations   with   their   vast infrastructural organizations and with the State through its instrumentalities and agencies entering into almost every branch   of   industry   and   commerce, there can be myriad situations which result   in   unfair   and   unreasonable bargains   between   parties   possessing wholly   disproportionate   and   unequal bargaining   power.   These   cases   can neither   be   enumerated   nor   fully illustrated. The court must judge each case   on   its   own   facts   and circumstances.” [emphasis supplied] 94. This   Court   has   held,   that   the   courts   will   not enforce and will, when called upon to do so, strike down an unfair   and   unreasonable   contract,   or   an   unfair   and unreasonable   clause   in   a   contract,   entered   into   between parties who are not equal in bargaining power.  It has been held,  that  this  principle will  apply where  a man  has no choice,   or   rather   no   meaningful   choice,   but   to   give   his assent   to   a   contract   or   to   sign   on   the   dotted   line   in   a 97 prescribed or standard form or to accept a set of rules as part   of   the   contract,   however   unfair,   unreasonable   and unconscionable a clause in that contract or form or rules may be.  Applying the said principles to the facts of the 95. present case, KIAL had no choice than to accept the terms of the contract.  Paragraph 5(b) of the letter is a part of a

the   party   desiring   to   participate   in   the   Resolution   Plan Process has no other option, than to sign the dotted lines. Hence, the parties cannot be said to have equal bargaining power and the applicants have no other choice than to sign

that it will accept all the decisions made by CoC, RP and/or the Adjudicating Authority and that the decisions taken will be binding on it.   It also requires the applicant, to sign on the document thereby, providing expressly waiving any and all claims with respect to the Resolution Plan Process.   In 98 turn, it provides for a party to agree to a stipulation, that even   if   RP   or   CoC   acts   in   any   manner,   which   is   not permissible in law, still the resolution applicant would be bound by such a decision and shall waive any or all its

followed in various judgments of this Court including the

observed, that the principle laid down therein may not apply where both parties are businessmen and the contract is a commercial transaction.   In the first   place, RP and the resolution applicant cannot be said to be the contracting parties having equal bargaining power.   Secondly, since RP functions under the I&B Code for discharging the duties bestowed   upon   him   and   assisting   the   process   for finalization of resolution plan for survival of the Corporate 38 (2020) 6 SCC 438 99 Debtor, it cannot be said that it is a purely commercial transaction between RP and the resolution applicant.     98. It may be argued, that the judgment in the case

which was an instrumentality of State within the meaning of Article 12 of the Constitution.  However, recently, this Court

term of contract between a builder and a flat purchaser observed thus:  “6.8.  A term of a contract will not be final and binding if it is shown that the flat purchasers had no option but to sign on the dotted line, on a contract framed by the builder. The contractual terms of the agreement dated 8­5­2012 are   ex   facie   one­sided,   unfair   and unreasonable.   The   incorporation   of such   one­sided   clauses   in   an agreement constitutes an unfair trade practice   as   per   Section   2(1)( r )   of   the Consumer Protection Act, 1986 since it adopts unfair methods or practices for the purpose of selling the flats by the builder.” 39 (2019) 5 SCC 725 100 99. We see no reason, as to why the said principle should not be applicable when RP and CoC are acting under

bound by such unconscionable clause in the letter, which is

and acquiescence, is based upon the participation of KIAL in the Resolution Plan Process after Kalpraj was permitted

reads thus: “1471.  Waiver .—Waiver   is   the abandonment of a right in such a way that the other party is entitled to plead the abandonment by way of confession and avoidance if the right is thereafter asserted, and is either express or implied from conduct. … A person who is entitled to rely on a stipulation,   existing   for   his   benefit 101 alone, in a contract or of a statutory provision,   may   waive   it,   and   allow the   contract   or   transaction   to proceed as though the stipulation or provision   did   not   exist.   Waiver   of this   kind   depends   upon   consent, and the fact that the other party has acted   on   it   is   sufficient consideration. … It seems that, in general, where one   party   has,   by   his   words   or conduct,   made   to   the   other   a promise   or   assurance   which   was intended to affect the legal relations between   them   and   to   be   acted   on accordingly,   then,   once   the   other party has taken him at his word and acted   on   it,   so   as   to   alter   his position,   the   party   who   gave   the promise   or   assurance   cannot afterwards   be   allowed   to   revert   to the previous legal relationship as if no such promise or assurance had been   made   by   him,   but   he   must accept their legal relations subject to the   qualification   which   he   has himself so introduced, even though it is not supported in point of law by any consideration.’ (See  Halsbury's   Laws   of   England , 4th Edn., Para 1471.)” 103. In  Halsbury's   Laws   of   England ,   Vol.   16(2),   4th Edn., Para 907, it is stated: “The expression ‘waiver’ may, in law, bear different  meanings.  The primary 102 meaning   has   been   said   to   be   the abandonment of a right in such a way that the other party is entitled to plead the abandonment by way of confession and avoidance if the right is thereafter asserted,   and   is   either   express   or implied   from   conduct.   It   may   arise from  a  party  making  an  election,   for example whether or not to exercise a contractual right… Waiver may also be by   virtue   of   equitable   or   promissory estoppel; unlike waiver arising from an election,   no   question   arises   of   any particular knowledge on the part of the person making the representation, and the estoppel may be suspensory only… Where the waiver is not express, it may be   implied   from   conduct   which   is inconsistent   with   the   continuance   of the right, without the need for writing or   for   consideration   moving   from,   or detriment to, the party who benefits by the waiver, but mere acts of indulgence will not amount to waiver; nor may a party benefit from the waiver unless he has altered his position in reliance on it.” 104. For considering, as to whether a party has waived its rights or not, it will be relevant to consider the conduct of   a   party.     For   establishing   waiver,   it   will   have   to   be established, that a party expressly or by its conduct acted in a manner, which is inconsistent with the continuance of its rights.     However,   the   mere   acts   of   indulgence   will   not 103 amount to waiver.  A party claiming waiver would also not be   entitled   to   claim   the   benefit   of   waiver,   unless   it   has altered its position in reliance on the same.  

professional misconduct by a Tribunal of Three Members. The matter was argued before the High Court.  An objection was taken before the High Court, that one of the members had appeared on behalf of the complainant and therefore, he   was   disqualified   from   acting   as   a   member   of   the Tribunal.   A question arose before this Court, that since such   an   objection   was   not   taken   before   the   Tribunal,

“It is  true  that waiver  cannot always   and   in   every   case   be inferred merely from the failure of the   party   to   take   the   objection. Waiver can be inferred only if and after   it  is   shown   that   the   party knew about the relevant facts and was aware of his right to take the objection in question. As Sir John Romilly,   M.R.,   has   observed in   v.   [(1861)   30 Vyvyan Vyvyan Beav  65,  74 :  54  ER  813,  817] 40 1957 SCR 575 = AIR 1957 SC 425 104 “waiver   or   acquiescence,   like election,   presupposes   that   the person   to   be   bound   is   fully cognizant of his rights, and, that being   so,   he   neglects   to   enforce them,   or   chooses   one   benefit instead of another, either, but not both, of which he might claim”.  106. It has been held, that a waiver cannot always and in every case be inferred merely from the failure of the party to take the objection. Waiver can be inferred, only if and after it is shown that the party knew about the relevant facts and was aware of his right to take the objection in question.   The   waiver   or   acquiescence,   like   election, presupposes, that the person to be bound is fully cognizant of his rights, and that being so, he neglects to enforce them, or chooses one benefit instead of another.  107. As such, for applying the principle of waiver, it will have to be established, that though a party was aware about the relevant facts and the right to take an objection, he has neglected to take such an objection. 108. In   the   case   of   Krishna   Bahadur   vs.   Purna 41 , the appellant was appointed in the Theatre and others post of messenger­cum­bearer in the establishment of the 41 (2004) 8 SCC 229 105 respondent.  A disciplinary proceeding was initiated against him wherein, he was found guilty and he was dismissed from   service.     The   Industrial   Tribunal   set   aside   the dismissal   with   full   back   wages   and   compensation.     The appellant was permitted to join  his duties but back wages were not paid.  He was again retrenched from services and a sum of Rs.9,030/­ was paid as retrenchment compensation, which   the   appellant   was   said   to   have   received   under protest.  A trade union took the cause of the appellant , inter alia ,  on the ground of contravention of Section 25­G of the Industrial  Disputes  Act,   1947,   so  also   on  the  ground   of insufficiency  of   the   amount  of  compensation  paid   to  the appellant in terms of Section 25­F(b) thereof.   An industrial dispute   was   raised   before   the   Assistant   Labour Commissioner,   which   failed,   whereupon   the   Industrial Tribunal   was   approached   by   the   appellant.     In   the meantime,   the   appellant   had   also   initiated   a   proceeding under Section 33­C(2) of the Industrial Disputes Act, 1947 which ended in an amicable settlement, according to which, 106 the appellant agreed to receive a sum of Rs.39,000/­ as full and final settlement.  109. However, in the proceedings initiated by the trade union, the retrenchment was held to be illegal and he was directed to be deemed to be in continuous service with all benefits.  A writ petition was filed by the respondent before the High Court.  The said writ petition was dismissed by the single judge of the High Court, upholding the findings of the Tribunal.   In an appeal before the Division bench, a plea was taken for the first time, that the workman had accepted the amount paid by the employer and as such, it amounted to waiver by the workman.  The Division Bench allowed the appeal and set aside the award passed by the Tribunal and the judgment and order passed by the single judge.  Setting aside   the   judgment   of   the   Division   Bench,   this   Court observed thus:   The principle of waiver although is “9. akin to the principle of  estoppel; the difference between the two, however, is that whereas estoppel is not a cause of action; it is a rule of evidence; waiver is contractual   and   may   constitute   a 107 cause   of   action;   it   is   an   agreement between the parties and a party fully knowing of its rights has agreed not to assert a right for a consideration. 10.  A right can be waived by the party for whose benefit certain requirements or conditions had been provided for by a statute subject to the condition that no public interest is involved therein. Whenever waiver is pleaded it is for the party pleading the same to show that an   agreement   waiving   the   right   in consideration   of   some   compromise came   into   being.   Statutory   right, however,   may   also   be   waived   by   his conduct.” 110. This Court has thus held, that the   principle of waiver although is akin to the principle of estoppel; estoppel is not a cause of action and is a rule of evidence, whereas waiver is contractual and may constitute a cause of action. It is an agreement between the parties and a party fully knowing of its rights has agreed not to assert a right for a consideration. It is further held, that whenever waiver is pleaded, it is for the party pleading the same to show that an agreement waiving the right in consideration of some compromise came into being.   108 111. This Court in the case of   State of Punjab   vs. 42 Davinder   Pal   Singh   Bhullar   and   others   had   an occasion to consider an issue, as to when an issue of bias was not raised by the party at the earliest possible, if it is aware of it and knows its right to raise the said issue, would it amount to waiver or not. This Court while considering the earlier judgments observed thus:

42 (2011) 14 SCC 770 109

110

111

112

112. Thus, for constituting acquiescence or waiver it must   be   established,   that   though   a   party   knows   the material facts and is conscious of his legal rights in a given matter, but fails to assert its rights at the earliest possible opportunity,   it   creates   an   effective   bar   of   waiver   against him.   Whereas, acquiescence would be a conduct where a party is sitting by, when another is invading his rights.  The 113 acquiescence must be such as to lead to the inference of a licence sufficient to create a new right in the defendant. Waiver   is   an   intentional   relinquishment   of   a   right.   It involves conscious abandonment of an existing legal right, advantage, benefit, claim or privilege.  It is an agreement not to assert a right. There can be no waiver unless the person who is said to have waived, is fully informed as to his rights and with full knowledge about the same, he intentionally abandons them. 113. In   the   case   of   Galada   power   and vs.   Telecommunication limited   United India Insurance 43 Company   Limited   and   another ,   this   Court   had   an occasion to consider the question, as to whether the insurer has waived its right on the basis of claim hit by clause relating to duration.  114. On the facts, holding, that the case was a case of waiver, this Court observed thus: “18.  In   the   instant   case,   the   insurer was   in   custody   of   the   policy.   It   had prescribed   the   clause   relating   to duration.   It   was   very   much   aware 43 (2016) 14 SCC 161 114 about the stipulation made in Clauses 5(3)   to   5(5),   but   despite   the stipulations   therein,   it   appointed   a surveyor.   Additionally,   as   has   been stated   earlier,   in   the   letter   of repudiation,   it   only   stated   that   the claim lodged by the  insured was not falling   under   the   purview   of   transit loss.   Thus,   by   positive   action,   the insurer has waived its right to advance the   plea   that   the   claim   was   not entertainable   because   conditions enumerated   in   duration   clause   were not   satisfied.   In   our   considered opinion,   the   National   Commission could not have placed reliance on the said terms to come to the conclusion that   there   was   no   policy   cover   in existence and that the risks stood not covered after delivery of goods to the consignee.”  In the background of this legal position, we will 115. have to examine, as to whether the conduct of  KIAL  can be said   to   be   of   such   a   nature,   which   would   amount   to acquiescence or waiver.  116. The   dates   are   not   in   dispute.     As   per   the invitation of EOI   published on 9.7.2018, the last date for submission of EOI was 8.8.2018.   The first Form ‘G’ was also issued on 9.7.2018, according to which, the last date for submission of resolution plan was 21.9.2018.   KIAL  had 115 submitted its EOI on 7.8.2018.  First Process Memorandum was  issued  on  17.8.2018.    However,  since  there was  no response, four more Form ‘G’ were issued on various dates. The   last   of   such   Form   ‘G’   was   issued   on   11.12.2018, according to which the last date for submission of resolution plan was 8.1.2019.   KIAL  submitted its resolution  plan on 8.1.2019.   Subsequently, Kalpraj submitted its resolution plan on 27.1.2019.   On   KIAL   coming   to   know   about   the   same,   on 117. 29.1.2019   itself,   it   had   sent   an   email   protesting   to   RP against   acceptance   of   belated   resolution   plan   of   Kalpraj. The said email dated 29.1.2019 sent by   KIAL   to RP reads thus: “As you are aware, that the last date for   submission   of   the   bids   for   Ricoh th India Limited, under the CIRP was 8 January, 2019.  Consequently, we duly submitted   our   bid   (along   with   the requisite Bid Bond Guarantee) within the said time.   However, we are given to   understand   that   you   have   been receiving and accepting the bids even after the said date, when no extension of time (filing of Form ‘G’) was notified. This severely jeopardises our position and is against the spirit of the code, 116 especially   when   our   Resolution   Plan was   opened   immediately   (along   with the   commercials)   and   subsequently, even discussed at length in the meeting th of   15   January,   2019,   which   was attended by various stakeholders.  In this light, we would request you to share with us the requisite notification (Form G) towards extension of time for bid   submission   at   the   earliest. However,   in   the   event,   such   a notification   has   not   been   made,   it would   only   be   logical   that   all   plans th submitted   after   8   January,   2019 should be held invalid, more so when our plan has now been opened. We look forward to your confirmation on the above.” It   could   therefore   be   seen,   that   immediately 118. within a day of the submission of the plan by Kalpraj,  KIAL objected to the acceptance of its plan after 8.1.2019, when no   extension   of   time   for   the   same   was   notified.     It   is specifically   stated,   that   the   said   severely   jeopardized   its position and was against the spirit of the Code, especially when KIAL’s resolution plan was opened immediately and discussed at length with various stakeholders.    KIAL   has therefore   requested   for   sharing   the   requisite   information 117 providing for extension of time for bid submission.   It is further stated, that in the event no such notification was issued, all plans submitted after 8.1.2019 should be held to be invalid.   119. After the said email was addressed by KIAL to RP, it received an email from RP on 30.1.2019.  It is stated in the   said   email   dated   30.1.2019,   that   subsequent   to   the resolution plan submitted on 8.1.2019, CoC’s representative and   RP   had   a   detailed   discussion   with   its   team   on   the changes required to be made in the resolution plan. Vide the   said   email   dated   30.1.2019,   KIAL   was   requested   to submit the amended resolution plan by 3 p.m. on 1.2.2019. On 1.2.2019, left with no choice,  KIAL  submitted its revised resolution plan.   120. On  10.2.2019,   KIAL   sent another  email to RP, which reads thus: “It has been quite sometime, since we sought from you on your decision to accept   another   resolution   plan   well after   the   expiry   of   the   deadline   for submission of the same.   As pointed out earlier, such an action, after   opening   of   our   bid   and   having detailed discussions on the same is not 118 only   prejudicial   to   our   interests   but also against the spirit of the IBC code.  The code provides equal treatment to all   potential   resolution   applicants within the framework of law and fixes personal   responsibilities   upon   COC members   and   RPs   in   the   event instances   of   discrimination   or departure from the established law are found.   We would request a quick response to our query from you on the subject.” In the said email dated 10.2.2019 sent by  KIAL , it 121. was stated, that it has been quite sometime, that it had sought   a   response   from   RP   on   his   decision   to   accept another resolution plan well after the expiry of the deadline for submission of the same.  It was reiterated, that such an action,   after   opening   of   the   bids   and   having   detailed discussions   on   the   same   was   not   only   prejudicial   to   its interest   but   against   the   spirit  of   the   I&B   Code.     It  was reiterated, that the I&B Code, provides equal treatment to all potential resolution applicants within the framework of law and fixes personal responsibilities upon CoC members 119 and   RPs   in   the   event   of   instances   of   discrimination   or departure from the established law.    Perusal of the record would reveal, that RP had 122. replied to KIAL by email dated 11.2.2019. It was stated in the   said   email,   that   his   act   of   acceptance   of resolution   plans, submitted after the due date, was under the overall supervision of CoC and as per the opinion given by  CoC’s legal counsel and RP’s legal counsel.  It was also submitted, that this was in the spirit of value maximisation of assets of the Corporate Debtor.  It   is   in   dispute,   as   to   whether   RP   had   again 123. directed KIAL and Kalpraj vide email dated 11.2.2019 to submit revised plan.   It is asserted on behalf of the KIAL, that such email was received by it, whereas it is denied by RP.  In any event, it is not in dispute, that both KIAL and Kalpraj submitted their revised plans on 12.2.2019.   124. On 13/14.2.2019, the resolution plan of Kalpraj was accepted by CoC.  On 18.2.2019, RP filed M.A. No.691 of 2019 before NCLT for approval of the resolution plan of Kalpraj.   KIAL  filed its M.A. No. 1039 of 2019 on 14.3.2019 120 before the Adjudicating Authority objecting to the approval of resolution plan of Kalpraj. It   could   thus   be   clearly   seen,   that   KIAL   had 125. raised its objection immediately after the Kalpraj submitted its resolution plan.  Not only that, but, it had also reiterated its   objection   to   the   participation   of   Kalpraj.     Insofar   as, submission of amended plans is concerned, it had no other option than to submit its revised plan.  This is specifically so in view of clause 11.2, which reads thus: “11.2 No change or supplemental information   to   the Resolution   Plan   shall   be accepted   after   the Resolution   Plan   Due   Date, unless   agreed   otherwise   by the  Resolution   Professional (in   consultation   with   the Committee   of   Creditors). The   Resolution   Professional or the CoC may, at their sole discretion,   request   for additional information/document and/or   seek   clarifications from a Resolution Applicant after   the   Resolution   Plan Due   Date.     Delay   in submission   of   additional information   and/or documents   sought   by   the Resolution   Professional,   the 121 CoC or the Process Manager shall   make   the   Resolution Plan liable for rejection.”  126. It is thus clear that, had   KIAL   not responded to the email of RP and submitted its revised plan, it had to run the risk of being out of fray.   127. Dr. Singhvi, learned Senior Counsel appearing on behalf of Kalpraj relied on the judgment of this Court in the case of   ITC Limited   vs.   Blue Coast Hotels Limited and (supra), wherein it is held, that even if a debtor has others    used the word “without prejudice” it has no significance. However, in the said case, the debtor had acknowledged the debt even after action was initiated under the Act and even after payment of a smaller sum.  In this background, it was held,   that   the   words   “without   prejudice”   would   have   no significance.  As such, the said case would not be applicable to the facts of the present case.   128. Reliance placed on the judgment of this Court in the case of  Tarapore and Company  (supra) would also not be of any assistance to the case of the appellants.  It will be 122 relevant to refer to the following observations of this Court in the said case. “Apart   from   the   technical   meaning which   the   expression   “without prejudice” carries depending upon the context   in   which   it   is   used,   in   the present case on a proper reading of the correspondence and  in  the setting  in which the term is used, it only means that the respondent reserved to itself the   right   to   contend   before   the arbitrator that a dispute raised or the claim made by the contractor was not covered by the arbitration clause. No other meaning can be assigned to it. An  action  taken  without  prejudice  to one's   right   cannot   necessarily   mean that the entire action can be ignored by the party taking the same.” That leaves us with the last submission in this 129. regard made on behalf of the appellants.   It is submitted, th that Kotak Bank had participated in the 12  meeting of CoC dated 13.1.2019 and agreed to consider resolution plan of Kalpraj in view of clause 10.4 of the Process Memorandum. It is submitted, that  KIAL  was a 100% subsidiary of Kotak Bank and as such, its agreement to consider the resolution plan of Kalpraj would amount to waiver and acquiescence by  KIAL . 123 130. This question has been squarely answered by this Court in the case of  Vodafone International Holdings BV 44 .    It will be apposite to vs. Union of India and another refer to the following observation of this Court: “ 257.  The legal relationship between a holding company and WOS is that they are two distinct legal persons and the holding company does not own the assets of  the  subsidiary  and, in law, the management of the business of the subsidiary   also   vests   in   its   Board   of Directors.   In  Bacha   F. Guzdar  v.  CIT  [AIR 1955 SC 74] , this Court   held   that   shareholders'   only right is to get dividend if and when the company declares it, to participate in the liquidation proceeds and to vote at the   shareholders'   meeting.   Refer   also to  Carew   and   Co.   Ltd.  v.  Union   of India  [(1975) 2 SCC 791] and  Carrasco Investments   Ltd.  v.  Directorate   of Enforcement  [(1994) 79 Comp Cas 631 (Del)] .” 131. In view of the aforesaid observation, the objection in this regard deserves to be rejected.   132. Taking into consideration the fact, that  KIAL  had objected to participation of any other applicant submitting plan after the due date as per the last Form ‘G’ and also 44 (2012) 6 SCC 613 124 reiterated its objection, we are of the considered view, that it cannot be held, that having participated by submitting the revised plans,  KIAL  is estopped from challenging the process on the ground of acquiescence and waiver.   Merely because, the revised plans are not submitted with the words “without prejudice”, in our view, would not make any difference.   As already discussed hereinabove,   KIAL   had no other option than to submit its revised plans in view of clause 11.2 of the Process Memorandum.  Inasmuch as, had it not responded, it had  to run the  risk of  being out of  fray.   As  already discussed hereinabove, the conduct of the party is relevant for considering, whether it can be held, that a case is made out of waiver or acquiescence.   133. None of the appellants have been in a position to establish, that  KIAL  had given up/surrendered its rights to take   recourse   to   the   legal   remedies.     In   any   case,   the appellants had also not been in a position to establish, that on account of any such waiver or acquiescence any of the appellants had altered their position to their detriment.    125 134. As such, it cannot be held, that KIAL had waived or acquiesced its rights to challenge the decision of RP or CoC.      (iii) WHETHER   NCLAT   WAS   RIGHT   IN   LAW   IN INTERFERING   WITH   THE   DECISION   OF  COC  OF ACCEPTING THE RESOLUTION PLAN OF KALPRAJ? 135. For deciding the said issue, it will be apposite to refer to Section 30 and 31 of the I&B Code, which read thus:

126 ( i )   the   amount   to   be   paid   to   such creditors in the event of a liquida­ tion of the corporate debtor under Section 53; or ( ii ) the amount that would have been paid   to   such   creditors,   if   the amount   to   be   distributed   under the resolution plan had been dis­ tributed   in   accordance   with   the order of priority in sub­section (1) of Section 53, whichever is higher, and provides for the   payment   of   debts   of   financial creditors, who do not vote in favour of the resolution plan, in such man­ ner   as   may   be   specified   by   the Board, which shall not be less than the amount to be paid to such credi­ tors in accordance with sub­section (1) of Section 53 in the event of a liq­ uidation of the corporate debtor. Explanation  1.—For the removal of doubts, it is hereby clarified that a distribution in accordance with the provisions of this clause shall be fair and equitable to such creditors. Explanation  2.—For   the   purposes of this clause, it is hereby declared that on and from the date of com­ mencement   of   the   Insolvency   and Bankruptcy Code (Amendment) Act, 2019,   the   provisions   of   this   clause shall also apply to the corporate in­ solvency resolution process of a cor­ porate debtor— 127 ( i ) where a resolution plan has not been approved or rejected by the Adjudicating Authority; ( ii )  where   an   appeal  has   been  pre­ ferred under Section 61 or Section 62 or such an appeal is not time barred under any provision of law for the time being in force; or ( iii )   where   a   legal   proceeding   has been initiated in any court against the   decision   of   the   Adjudicating Authority in respect of  a resolu­ tion plan;] ( c ) provides for the management of the affairs of the corporate debtor after approval of the resolution plan; ( d ) the implementation and supervision of the resolution plan; ( e ) does not contravene any of the pro­ visions of the law for the time being in force; ( f ) conforms to such other requirements as may be specified by the Board. Explanation .—For the purposes of clause ( e ),   if   any   approval   of   shareholders   is   re­ quired under the Companies Act, 2013 (18 of 2013) or any other law for the time being in force for the implementation of actions under the resolution plan, such approval shall be deemed to have been given and it shall not be a contravention of that Act or law. (3)   The   resolution   professional   shall present to the committee of creditors for its approval such resolution plans which con­ 128 firm the conditions referred to in sub­section (2). (4)   The   committee   of   creditors   may   ap­ prove a resolution plan by a vote of not less than sixty­six per cent of voting share of the financial creditors, after considering its feasi­ bility and viability, the manner of distribu­ tion proposed, which may take into account the   order   of   priority   amongst   creditors   as laid down in sub­section (1) of Section 53, including the priority and value of the secu­ rity interest of a secured creditor] and such other requirements as may be specified by the Board: Provided that the committee of creditors shall not approve a resolution plan, submit­ ted before the commencement of the Insol­ vency   and   Bankruptcy   Code   (Amendment) Ordinance, 2017, where the resolution appli­ cant   is   ineligible   under   Section   29­A   and may require the resolution professional to in­ vite a fresh resolution plan where no other resolution plan is available with it: Provided further that where the resolution applicant referred to in the first proviso is in­ eligible under clause ( ) of Section 29­A, the c resolution applicant shall be allowed by the committee of creditors such period, not ex­ ceeding   thirty   days,   to   make   payment   of overdue   amounts   in   accordance   with   the proviso to clause ( c ) of Section 29­A: Provided also that nothing in the second proviso shall be construed as extension of period for the purposes of the proviso to sub­ section (3) of Section 12, and the corporate insolvency resolution process shall be com­ 129 pleted   within   the   period   specified   in   that sub­section.] Provided also that the eligibility criteria in Section 29­A as amended by the Insolvency and   Bankruptcy   Code   (Amendment)   Ordi­ nance, 2018 (Ord. 6 of 2018) shall apply to the resolution applicant who has not submit­ ted resolution plan as on the date of com­ mencement   of   the   Insolvency   and   Bank­ ruptcy Code (Amendment) Ordinance, 2018. (5)   The   resolution   applicant   may   attend the meeting of the committee of creditors in which the resolution plan of the applicant is considered: Provided   that   the   resolution   applicant shall not have a right to vote at the meeting of   the   committee   of   creditors   unless   such resolution applicant is also a financial credi­ tor. (6) The resolution professional shall sub­ mit the resolution plan as approved by the committee   of   creditors   to   the   Adjudicating Authority. 31. Approval of resolution plan . —(1) If the Adjudicating Authority is satisfied that the resolution plan as approved by the com­ mittee of creditors under sub­section (4) of Section   30   meets   the   requirements   as   re­ ferred to in sub­section (2) of Section 30, it shall by order approve the resolution plan which   shall   be   binding   on   the   corporate debtor and its employees, members, credi­ tors, including the Central Government, any State Government or any local authority to 130

131 sub­section (1) or within such period as pro­ vided for in such law, whichever is later: Provided   that   where   the   resolution   plan contains a provision for combination, as re­ ferred 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.” 136. The   aforesaid   provisions   have   been   recently considered in three judgments of this Court. The first one, being in the case of  K. Sashidhar  (supra), to which one of us   (A.M.   Khanwilkar,   J.)   was   a   party,   and   two   other judgments, delivered by three Judges Bench of this Court, in the cases of   Committee of Creditors of Essar Steel India Limited through Authorised Signatory  (supra) and vs.   Maharashtra   Seamless   Limited   Padmanabhan 45 Venkatesh and others . 137. This   Court   in   the   case   of   Committee   of Creditors   of   Essar   Steel   India   Limited   through (supra)  has   set   out   the   relevant Authorised   Signatory   45 (2020) 11 SCC 467 132 extracts   from   the   Bankruptcy   Law   Reforms   Committee (BLRC) Report of 2015, which read thus:

133 will be invited to all meetings. The voting of the creditors committee will be by ma­ jority,  where the   majority  requires  more than 75 per cent of the vote by weight. * No prescriptions on solutions to resolve the insolvency The choice of the solution to keep the en­ tity as a going concern will be voted on by the creditors committee. There are no con­ straints on the proposals that the resolu­ tion professional can present to the credi­ tors   committee .   Other   than   the   majority vote of the creditors committee, the reso­ lution professional needs to confirm to the Adjudicator   that  the   final   solution   com­ plies with three additional requirements. The first is that the solution must explic­ itly require the repayment of any interim finance and costs of the insolvency resolu­ tion   process   will   be   paid   in   priority   to other payments.  Secondly, the plan must explicitly include payment to all creditors not   on   the   creditors   committee,   within   a reasonable period after the solution is im­ plemented . Lastly, the plan should comply with existing laws governing the actions of the   entity   while   implementing   the   solu­ tions. * 5.3.1. Steps at the start of the IRP * 4. Creation of the creditors committee The creditors committee will have the power to decide the final solution by ma­ 134 jority vote in the negotiations. The major­ ity vote requires more than or equal to 75 per   cent   of   the   creditors   committee   by weight of the total financial liabilities.  The majority vote will also involve a cram down option on any dissenting creditors once the majority vote is obtained . … The   Committee   deliberated   on   who should   be   on   the   creditors   committee, given the power of the creditors committee to ultimately keep the entity as a going concern or liquidate it.  The Committee rea­ soned that members of the creditors com­ mittee have to be creditors both with the capability to assess viability, as well as to be willing to modify terms of existing liabil­ ities in negotiations. Typically, operational creditors are neither able to decide on mat­ ters regarding the insolvency of the entity, nor willing to take the risk of postponing payments   for   better   future   prospects   for the entity. The Committee concluded that, for the process to be rapid and efficient, the   Code   will   provide   that   the   creditors committee should be restricted to only the financial creditors . 5.3.3.   Obtaining   the   resolution   to   insol­ vency in the IRP The   Committee   is   of   the   opinion   that there should be freedom permitted to the overall   market   to   propose   solutions   on keeping   the   entity   as   a   going   concern . Since the manner and the type of possible solutions are specific to the time and envi­ ronment in which the insolvency becomes visible, it is expected to evolve over time, 135 and with the development of the market. The Code will be open to all forms of solu­ tions for keeping the entity going without prejudice,   within   the   rest   of   the   con­ straints of the IRP.  Therefore, how the in­ solvency is to be resolved will not be pre­ scribed in the Code . There will be no re­ striction in the Code on possible ways in which the business model of the entity,  or its   financial   model ,   or   both,   can   be changed so as to keep the entity as a go­ ing concern.  The Code will not state that the entity is to be revived, or the debt is to be restructured, or the entity is to be liqui­ dated. This decision will come from the de­ liberations of the creditors committee in re­ sponse   to   the  solutions   proposed   by the market .” 138. It is thus clear, that the Committee was of the view,   that   for   deciding   key   economic   question   in   the bankruptcy   process,   the   only   one   correct   forum   for evaluating such possibilities, and making a decision was, a creditors   committee,   wherein   all   financial   creditors   have votes in proportion to the magnitude of debt that they hold. The BLRC has observed, that laws in India in the past have brought arms of the Government (legislature, executive or judiciary) into the question of bankruptcy process. This has been  strictly   avoided   by   the   Committee   and   it  has   been 136 provided,   that   the   decision   with   regard   to   appropriate disposition   of   a   defaulting   firm,   which   is   a   business decision, should only be made by the creditors.  It has been observed, that the evaluation of proposals to keep the entity as a going concern, including decisions about the sale of business or units, restructuring of debt, etc., are required to be taken by the Committee of the Financial Creditors.   It has been provided, that the choice of the solution to keep the entity as a going concern will be voted upon by CoC and there are no constraints on the proposals that the resolution professional can present to CoC.     The requirements, that the   resolution   professional   needs   to   confirm   to   the Adjudicator, are:  (i) that   the   solution   must   explicitly   require   the repayment of any interim finance and costs of the insolvency   resolution   process   will   be   paid   in priority to other payments;  (ii) that the plan must explicitly include payment to all   creditors   not   on   the   creditors   committee, within a reasonable period after the solution is implemented; and lastly  137 (iii) the   plan   should   comply   with   existing   laws governing   the   actions   of   the   entity   while implementing the solutions.   139. The Committee also expressed the opinion, that there should be freedom permitted to the overall market, to propose solutions on keeping the entity as a going concern. The   Committee   opined,   that   the   details   as   to   how   the insolvency is to be resolved or as to how the entity is to be revived, or the debt is to be restructured will not be provided in the I&B Code but such a decision will come from the deliberations of CoC in response to the solutions proposed by the market. 140. This Court in the case of   (supra) K. Sashidhar   observed thus: “32.  Having   heard   the   learned   counsel   for the parties, the moot question is about the sequel of the approval of the resolution plan by CoC of the respective corporate debtor, namely, KS&PIPL and IIL, by a vote of less than seventy­five per cent of voting share of the financial creditors; and about the cor­ rectness of the view taken by N CLAT  that the percentage  of voting share of  the  financial creditors specified in Section 30(4) of the I&B Code is mandatory.   Further, is it open to the adjudicating authority/appellate au­ 138 thority to reckon any other factor other than specified in Sections 30(2) or 61(3) of   the   I&B   Code   as   the   case   may   be which, according to the resolution appli­ cant   and   the   stakeholders   supporting the resolution plan, may be relevant?” (emphasis supplied) 141. After considering the judgment of this Court in the   case   of   Arcelormittal   India   Private 46  vs.    and   the Limited Satish  Kumar  Gupta  and others relevant   provisions   of   the   I&B   Code,   this   court   further observed in  K. Sashidhar  (supra) thus:   As   aforesaid,   upon   receipt   of   a   “re­ “52. jected” resolution plan the adjudicating au­ thority (NCLT) is not expected to do anything more; but is obligated to initiate liquidation process under Section 33(1) of the I&B Code. The legislature has not endowed the adjudi­ cating authority (NCLT) with the jurisdiction or authority to analyse or evaluate the com­ mercial decision of CoC much less to enquire into the justness of the rejection of the reso­ lution plan by the dissenting financial credi­ tors.   From   the   legislative   history   and   the background in which the I&B Code has been enacted, it is noticed that a completely new approach has been adopted for speeding up the recovery of the debt due from the de­ faulting   companies.   In   the   new   approach, there is a calm period followed by a swift res­ 46 (2019) 2 SCC 1 139 olution process to be completed within 270 days (outer limit) failing which, initiation of liquidation process has been made inevitable and   mandatory.   In   the   earlier   regime,   the corporate debtor could indefinitely continue to enjoy the protection given under Section 22   of   the   Sick   Industrial   Companies   Act, 1985 or under other such enactments which has now been forsaken.   Besides, the com­ mercial   wisdom   of   CoC  has   been   given paramount   status   without   any   judicial intervention, for ensuring completion of the stated processes within the timelines prescribed by the I&B Code. There is an intrinsic assumption that financial cred­ itors are fully informed about the viabil­ ity of the corporate debtor and feasibility of the proposed resolution plan. They act on the basis of thorough examination of the proposed resolution plan and assess­ ment made by their team of experts. The opinion on the subject­matter expressed by them after due deliberations in CoC meetings   through   voting,   as   per   voting shares, is a collective business decision. The legislature, consciously, has not pro­ vided any ground to challenge the “com­ mercial wisdom” of the individual finan­ cial creditors or their collective decision before the adjudicating authority. That is made non­justiciable.” (emphasis supplied) 142. This Court has held, that it is   not open to the Adjudicating Authority or Appellate Authority to reckon any 140 other factor other than specified in Sections 30(2)  or 61(3) of   the   I&B   Code.     It   has   further   been   held,   that   the commercial   wisdom   of  CoC  has   been   given   paramount status   without   any   judicial   intervention   for   ensuring completion   of   the   stated   processes   within   the   timelines prescribed   by   the   I&B   Code.     This   Court   thus,   in unequivocal   terms,   held,   that   there   is   an   intrinsic assumption,   that   financial   creditors   are   fully   informed about the viability of the corporate debtor and feasibility of the   proposed   resolution   plan.   They   act   on   the   basis   of thorough examination of the proposed resolution plan and assessment made by their team of experts.     It has been held,   that   the   opinion   expressed   by   CoC   after   due deliberations in the meetings through voting, as per voting shares, is a collective business decision. It has been held, that   the   legislature   has   consciously   not   provided   any ground   to   challenge   the   “commercial   wisdom”   of   the individual   financial   creditors   or   their   collective   decision before the Adjudicating Authority and that the decision of CoC’s ‘commercial wisdom’ is made non­justiciable. 141 143. This Court in  Committee of Creditors of Essar Steel   India   Limited   through   Authorised   Signatory (supra) after referring to the judgment of this  Court in the case of  K. Sashidhar  (supra)  observed thus: “64.  Thus, what is left to the majority deci­ sion   of   the   Committee   of   Creditors   is   the “feasibility and viability” of a resolution plan, which obviously takes into account all as­ pects of the plan, including the manner of distribution   of   funds   among   the   various classes of creditors. As an example, take the case of a resolution plan which does not pro­ vide for payment of electricity dues. It is cer­ tainly open to the Committee of Creditors to suggest a modification to the prospective res­ olution applicant to the effect that such dues ought to be paid in full, so that the carrying on of the business of the corporate debtor does  not become  impossible  for  want of   a most basic and essential element for the car­ rying on of such business, namely, electric­ ity. This may, in turn, be accepted by the resolution applicant with a consequent mod­ ification as to distribution of funds, payment being   provided   to  a  certain  type   of  opera­ tional creditor, namely, the electricity distri­ bution company, out of upfront payment of­ fered   by  the   proposed  resolution  applicant which may also result in a consequent re­ duction of amounts payable to other finan­ cial and operational creditors.   What is im­ portant is that it is the commercial wis­ dom of this majority of creditors which is to determine, through negotiation with 142 the prospective resolution applicant, as to how and in what manner the corpo­ rate resolution process is to take place.” (emphasis supplied) 144. This Court held, that  what is left to the majority decision   of   CoC   is   the   “feasibility   and   viability”   of   a resolution plan, which is required to take into account all aspects of the plan, including the manner of distribution of funds among the various classes of creditors. It has further been held, that CoC is entitled to suggest a modification to the prospective resolution applicant, so that carrying on the business   of   the   Corporate   Debtor   does   not   become impossible, which suggestion may, in turn, be accepted by the resolution applicant with a consequent modification as to distribution of funds, etc.  It has been held, that what is important   is,   the   commercial   wisdom   of   the   majority   of creditors, which is to determine, through negotiation with the prospective resolution applicant, as to how and in what manner the corporate resolution process is to take place. 145. The   view   taken   in   the   case   of   K.   Sashidhar (supra) and  Committee of Creditors of Essar Steel India 143 Limited through Authorised Signatory  (supra) has been reiterated by another three Judges Bench of this Court in the case of  (supra). Maharashtra Seamless Limited  146. In all the aforesaid three judgments of this Court, the   scope   of   jurisdiction   of   the   Adjudicating   Authority (NCLT) and the Appellate Authority (NCLAT) has also been elaborately   considered.   It   will   be   relevant   to   refer   to paragraph 55 of the judgment in the case of  K. Sashidhar (supra), which reads thus: “55.  Whereas, the discretion of the adjudi­ cating authority (NCLT) is circumscribed by Section 31 limited to scrutiny of the resolu­ tion plan “as approved” by the requisite per cent   of   voting   share   of   financial   creditors. Even in that enquiry, the grounds on which the adjudicating authority can reject the res­ olution plan is in reference to matters speci­ fied   in   Section   30(2),   when   the   resolution plan does not conform to the stated require­ ments.   Reverting   to   Section   30(2),   the   en­ quiry to be done is in respect of whether the resolution plan provides: ( i ) the payment of insolvency   resolution   process   costs   in   a specified   manner   in   priority   to   the   repay­ ment of other debts of the corporate debtor, ( ii ) the repayment of the debts of operational creditors in prescribed manner, ( ) the man­ iii agement   of   the   affairs   of   the   corporate debtor, ( iv ) the implementation and supervi­ sion of the resolution plan, ( v ) does not con­ 144 travene 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 estab­ lished 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 regu­ lating   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 capabil­ ity   of   the   resolution   applicant  to  translate the projected plan into a reality. The resolu­ tion   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 do­ main of the financial creditors who are called upon to vote on the resolution plan under Section 30(4) of the I&B Code.” 147. It   has   been   held,   that   in   an   enquiry   under Section   31,   the   limited   enquiry   that   the   Adjudicating Authority is permitted is, as to whether the resolution plan provides:   145 (i) the payment of insolvency resolution process costs in a specified manner in priority to the repayment of other debts of the corporate debtor,  (ii) the repayment of the debts of operational creditors in prescribed manner,  the   management   of   the   affairs   of   the   corporate (iii) debtor,  the   implementation   and   supervision   of   the (iv) resolution plan,  the plan does not contravene any of the provisions (v) of the law for the time being in force, conforms   to   such   other   requirements   as   may   be (vi) specified by the Board.  148. It will be further relevant to refer to the following observations of this Court in  K. Sashidhar  (supra): 57.  …Indubitably,   the   remedy   of   appeal including the width of jurisdiction of the ap­ pellate authority and the grounds of appeal, is a creature of statute.   The provisions in­ vesting   jurisdiction   and   authority   in CLAT NCLT   or N  as   noticed   earlier,   have not made the commercial decision exer­ cised by CoC of not approving the resolu­ tion plan or rejecting the same, justicia­ ble. This position is reinforced from the limited grounds specified for instituting an appeal that too against an order “ap­ proving a resolution plan” under Section 146 31.  First, that the approved resolution plan is in contravention of the provisions of any law for the time being in force. Second, there has been material irregularity in exercise of powers “by the resolution professional” dur­ ing the corporate insolvency resolution pe­ riod.   Third,   the   debts   owed   to   operational creditors have not been provided for in the resolution   plan   in   the   prescribed   manner. Fourth, the insolvency resolution plan costs have not been provided for repayment in pri­ ority to all other debts. Fifth, the resolution plan does not comply with any other criteria specified   by   the   Board.   Significantly,   the matters   or   grounds—be   it   under   Section 30(2) or under Section 61(3) of the I&B Code —are   regarding   testing   the   validity   of   the “approved” resolution plan by CoC; and not for approving the resolution plan which has been disapproved or deemed to have been re­ jected by CoC in exercise of its business de­ cision.” [emphasis supplied] It   will   therefore   be   clear,   that   this   Court,   in 149. unequivocal terms, held, that the appeal is a creature of statute and that the statute has not invested jurisdiction and authority  either with NCLT or  NCLAT, to review the commercial   decision   exercised   by   CoC   of   approving   the resolution plan or rejecting the same.    147 150. The   position   is   clarified   by   the   following observations in paragraph 59 of the judgment in the case of (supra), which reads thus: K. Sashidhar  “59.  In  our  view,  neither   the  adjudicating authority (NCLT) nor the appellate authority (N CLAT ) has been endowed with the jurisdic­ tion  to  reverse   the   commercial  wisdom   of the dissenting financial creditors and that too on the specious ground that it is only an opinion   of   the   minority   financial creditors…..” This Court in  151. Committee of Creditors of Essar Steel   India   Limited   through   Authorised   Signatory (supra)  after   reproducing   certain   paragraphs   in   K. (supra) observed thus: Sashidhar  “Thus,   it   is   clear   that   the   limited judicial review available, which can in no   circumstance   trespass   upon   a business decision of the majority of the Committee   of   Creditors,   has   to   be within the four corners of Section 30(2) of the Code, insofar as the Adjudicating Authority is concerned, and Section 32 read   with   Section   61(3)   of   the   Code, insofar   as   the   Appellate   Tribunal   is concerned,   the   parameters   of   such review  having   been  clearly   laid   down in  K. Sashidhar ” 148 152. It can thus be seen, that this Court has clarified, that the limited  judicial review, which is available, can in no circumstance trespass upon a business decision arrived at by the majority of CoC. 153. In the case of   Maharashtra Seamless Limited (supra), NCLT had approved the plan of appellant therein with regard to CIRP of United Seamless Tubulaar (P) Ltd.  In appeal, NCLAT directed, that the appellant therein should increase   upfront   payment   to   Rs.597.54   crore   to   the “financial   creditors”,   “operational   creditors”   and   other creditors   by   paying   an   additional   amount   of   Rs.120.54 crore.     NCLAT   further   directed,   that   in   the   event   the “resolution applicant” failed to undertake the payment of additional amount of Rs.120.54 crore in addition to Rs.477 crore and deposit the said amount in escrow account within 30 days, the order of approval of the ‘resolution plan’ was to be treated to be set aside.   While allowing the appeal and setting aside the directions of NCLAT, this Court observed thus: “  The   appellate   authority   has,   in   our 30. opinion, proceeded on equitable perception 149 rather than commercial wisdom. On the face of it, release of assets at a value 20% below its liquidation value arrived at by the valuers seems inequitable. Here, we feel the Court ought to cede ground to the commercial wis­ dom of the creditors rather than assess the resolution plan on the basis of quantitative analysis. Such is the scheme of the Code. Section 31(1) of the Code lays down in clear terms that for final approval of a resolution plan,   the   adjudicating  authority  has   to  be satisfied that the requirement of sub­section (2) of Section 30 of the Code has been com­ plied with. The proviso to Section 31(1) of the Code stipulates the other point on which an adjudicating   authority   has   to   be   satisfied. That factor is that the resolution plan has provisions for its implementation. The scope of interference by the adjudicating authority in limited judicial review has been laid down in  Essar Steel  [ Essar Steel India Ltd. Commit­ tee   of   Creditors  v.  Satish   Kumar   Gupta , (2020)   8   SCC   531]   ,   the   relevant   passage (para 54) of which we have reproduced in earlier   part   of   this   judgment.   The   case   of MSL in their appeal is that they want to run the company and infuse more funds. In such circumstances, we do not think the appellate authority ought to have interfered with the order of the adjudicating authority in direct­ ing the successful resolution applicant to en­ hance their fund inflow upfront.” This Court observed, that the Court  ought to cede 154. ground to the commercial wisdom of the creditors rather than assess the resolution plan on the basis of quantitative 150 analysis.     This   Court   clearly   held,   that   the   appellate authority ought not to have interfered with the order of the adjudicating authority by directing the successful resolution applicant to enhance their fund inflow upfront.   155. It   would   thus   be   clear,   that   the   legislative scheme, as interpreted by various decisions of this Court, is unambiguous.  The commercial wisdom of CoC is not to be interfered   with,   excepting   the   limited   scope   as   provided under Sections 30 and 31 of the I&B Code. 156. No doubt, it is sought to be urged, that since there   has   been   a   material   irregularity   in   exercise   of   the powers by RP, NCLAT was justified in view of the provisions of clause (ii) of sub­section (3) of Section 61 of the I&B Code to interfere with the exercise of power by RP.   However, it could   be   seen,   that   all   actions   of   RP   have   the   seal   of approval of CoC.  No doubt, it was possible for RP to have issued another Form ‘G’, in the event he found, that the proposals received by it prior to the date specified in last Form ‘G’ could not be accepted.   However, it has been the consistent stand of RP as well as CoC, that all actions of RP, 151 including acceptance of resolution plans of Kalpraj after the due date,  albeit  before the expiry of timeline specified by the I&B   Code   for   completion   of   the   process,   have   been consciously approved by CoC.   It is to be noted, that the decision of CoC is taken by a thumping majority of 84.36%. The only creditor voted in favour of   KIAL   is Kotak Bank, which is a holding company of KIAL, having voting rights of 0.97%.  We are of the considered view, 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%.   It is further to be noted, that after the resolution 157. plan   of   Kalpraj   was   approved   by   NCLT   on   28.11.2019, Kalpraj   had   begun   implementing   the   resolution   plan. NCLAT had heard the appeals on 27.2.2020 and reserved the same for orders.  It is not in dispute, that there was no stay   granted   by   NCLAT,   while   reserving   the   matters   for orders.  After a gap of five months and eight days, NCLAT passed the final order on 5.8.2020.  It could thus be seen, 152 that   for   a   long   period,   there   was   no   restraint   on implementation of the resolution plan of Kalpraj, which was duly approved by NCLT.  It is the case of Kalpraj, RP, CoC and Deutsche Bank, that during the said period, various steps   have   been   taken   by   Kalpraj   by   spending   a   huge amount for implementation of the plan.   No doubt, this is sought to be disputed by KIAL.  However, we do not find it necessary to go into that aspect of the matter in light of our conclusion, that NCLAT acted in excess of jurisdiction in interfering with the conscious commercial decision of CoC.  158. It is also pointed out, that in pursuance of the order dated 5.8.2020 passed by NCLAT, CoC has approved the resolution plan of KIAL on 13.8.2020.   However, since we  have  already  held,  that  the  decision of  NCLAT  dated 5.8.2020 does not stand the scrutiny of law, it must follow, that the subsequent approval of the resolution plan of KIAL by CoC becomes non­est in law.  For, it was only to abide by the directions of NCLAT.   We are of the view that nothing would turn on it.   The decision of CoC dated 13/14.2.2019 is   a   decision,   which   has   been   taken   in   exercise   of   its 153 ‘commercial wisdom’.   As such, we hold, that the decision taken   by  CoC  dated   13/14.2.2019,   which   is   taken   in accordance with its ‘commercial wisdom’ and which is duly approved by NCLT, will prevail.   Further, NCLAT was not justified   in   interfering   with   the   stated   decision   taken   by CoC.  159. In   that   view   of   the   matter,   we   find,   that   Civil Appeal Nos. 2943­2944 of 2020 filed by Kalpraj; Civil Appeal Nos. 2949­2950 of 2020 filed by RP and Civil Appeal Nos. 3138­3139 of 2020 filed by Deutsche Bank deserve to be allowed.   It is ordered accordingly.   The order passed by NCLAT dated 5.8.2020 is quashed and set aside and the orders passed by NCLT dated 28.11.2019 are restored and maintained.  160. Insofar as, the Civil Appeals arising out of D.No. 24125 of 2020 filed by Fourth Dimension Solutions Limited are concerned, it is submitted, that the appeal preferred by it against the order of NCLT is still pending before NCLAT. Without going into the merits of the rival contentions of the parties, we direct NCLAT to decide the appeal of Fourth 154 Dimension   Solutions   Limited   in   accordance   with   law,   as expeditiously as possible, and in any case, within a period of two months from today.   As such, all appeals are disposed of in view of the 161. above and pending applications, if any, shall stand disposed of.  …….…....................., J.                              [A.M. KHANWILKAR] …….…....................., J.                                                  [B.R. GAVAI] …….…....................., J.                                              [KRISHNA MURARI] NEW DELHI; MARCH 10, 2021