Commercial wisdom of Committee of Creditors in approving resolution plans and selecting negotiation processes is non-justiciable.

The Corporate Debtor (CD), Unijules Life Sciences Ltd., was admitted into Corporate Insolvency Resolution Process (CIRP) on 08.03.2019

Following multiple rounds of negotiations, the Committee of Creditors (CoC) approved the resolution plan submitted by S.S. Fabricators and Manufacturers Private Limited (SRA) with a 98.54% majority on 24.05.2025

The Appellants, comprising Unsuccessful Resolution Applicants (URAs) and a Dissenting Financial Creditor (DFC) holding a 1.13% voting share, challenged the approval.

The DFC, Satsai Finlease, had acquired its interest via assignment after the CoC had already approved the plan

The Adjudicating Authority (NCLT, Mumbai) approved the SRA's plan on 13.11.2025, dismissing the objections

The Appellants alleged material irregularities, including an illegal cap on CIRP costs, improper treatment of Employees' Provident Fund (EPF) dues, and unauthorized extensions of e-voting timelines

1. Whether the resolution plan’s provision to cap the SRA’s direct liability for CIRP costs at ₹25 lakhs, with the remainder borne by Secured Financial Creditors, violated Section 30(2)(a) of the IBC

2. Whether the deferment and escrow-based treatment of sub-judice EPF dues (totaling ₹13.89 Cr) constituted a violation of the statutory priority of such dues

3. Whether the extension of the e-voting window beyond the NCLT-mandated deadline of 20.05.2025 (concluding on 23.05.2025) rendered the voting process non-est

4. Whether the CoC was bound to conduct a "Swiss Challenge Mechanism" to ensure value maximization

The court primarily applied Section 30(2) of the IBC, which mandates that a resolution plan must provide for CIRP costs and statutory dues

It relied on the principle of "Commercial Wisdom of the CoC" as established in K. Sashidhar v. Indian Overseas Bank, which limits judicial review to the requirements specified under Section 30(2) and Section 31

The court further applied Regulation 39(1A) of the CIRP Regulations, which prohibits plan modifications after the submission deadline unless permitted by the CoC

Finally, it followed Ashdan Properties Pvt. Ltd. v. Hemant J. Mehta, affirming the CoC's discretion to decide evaluation and negotiation processes, including the rejection of a Swiss Challenge

Regarding CIRP costs, the NCLAT found that the plan provided for costs "at actuals"; the ₹25 lakh cap applied only to the SRA’s immediate funding, with any excess to be deducted from the Secured Financial Creditors' share—an arrangement the CoC accepted

On EPF dues, the Tribunal noted that the liability was sub-judice and the SRA had set aside ₹3.39 Cr in escrow. Since this amount was to be deducted from the Secured Financial Creditors' share and did not prejudice the DFC, the treatment was deemed compliant

Addressing the voting timeline, the court held that while the e-voting extended past 20.05.2025, it concluded within the overall CIRP extension limit of 31.05.2025.

Furthermore, the Appellants' participation in the extended voting without prior protest barred them from challenging it post-facto

Finally, the Tribunal ruled that the CoC was not obligated to adopt a Swiss Challenge or entertain post-deadline bid revisions, as the PRAs had already undergone three rounds of negotiations

It held that the commercial wisdom of a 98.54% majority CoC is paramount and that the plan met all statutory requirements under Section 30(2) of the IBC

The DFC was found to have received more than the liquidation value (which was nil under the waterfall mechanism), and thus lacked grounds for grievance

The court affirmed that judicial interference is only permissible when a plan violates the law, which was not the case here

No costs were awarded