Resolution plan reflecting higher of twelve months' entitlement or unsecured creditors' payout satisfies Section 30(2)(b).

The Corporate Insolvency Resolution Process (CIRP) of Rolta India Limited commenced on 19.01.2023.

The Appellants, being ex-employees, had their claims admitted and were categorized as Operational Creditors.

On 22.04.2024, the Committee of Creditors (CoC) approved a Resolution Plan by Ashdan Properties Private Limited with 100% voting share.

During the approval proceedings before the Adjudicating Authority (NCLT Mumbai), an intervention petition was filed by some employees, resulting in an order on 05.12.2025 stating that the plan provides for employee dues at the higher of: (i) 12 months’ entitlement, or (ii) the percentage payable to unsecured financial creditors.

The Adjudicating Authority subsequently approved the Resolution Plan on 15.12.2025.

The Appellants challenged this approval, alleging they received only ~9% of their 12 months' salary, which they claimed violated the NCLT’s previous order and Section 30(2)(b) of the IBC.

Whether the Resolution Plan’s payout to the employees violated the undertaking/order dated 05.12.2025 passed by the Adjudicating Authority.

Whether the Resolution Plan complied with the mandatory requirements for payment to Operational Creditors under Section 30(2)(b) of the IBC.

The court primarily applied Section 30(2)(b) of the Insolvency and Bankruptcy Code (IBC), 2016, which mandates that the payment to operational creditors shall not be less than the amount they would receive in a liquidation scenario under the Section 53 waterfall mechanism.

The court also applied the principle of "fair and equitable" distribution as clarified in Explanation 1 to Section 30(2)(b).

Furthermore, it emphasized that the commercial wisdom of the CoC in approving a plan is subject only to the limited judicial review of ensuring compliance with statutory requirements.

The Tribunal noted that the total Resolution Plan outlay was ₹900 Crore, whereas the admitted claims of secured financial creditors far exceeded this amount, resulting in a "nil" liquidation value for operational creditors.

Regarding the Appellants' reliance on the order dated 05.12.2025, the Court found that the plan earmarked ₹1 Crore for employees, which equated to a higher percentage of their claims compared to the 0.96% payout allocated to unsecured financial creditors.

Since the employees received more than the percentage assigned to unsecured financial creditors, the "higher of the two" condition stipulated in the 05.12.2025 order was satisfied.

The Court reasoned that because the Appellants were receiving more than their liquidation value (which was zero), the plan was in full compliance with the statutory floor set by Section 30(2)(b).

The Court answered both issues in the affirmative regarding the plan's validity, concluding that the Appellants had no legal grievance since their payout exceeded both the liquidation value and the percentage paid to unsecured financial creditors.

The Appeal was dismissed for lack of merit.