# In the matter of Gail India Ltd. Vs. Ajay Joshi RP of Alok Industries Ltd. & Ors. Company Appeal (AT) (Ins.) 492 of 2019

> NCLAT judgment dated 2021-10-04. Citation: TCN-2021-NCLAT-00076. The case involves an appeal against an order dated 08.03.2019 passed by the Adjudicating…

- **Court:** NCLAT
- **Order date:** 4 Oct 2021
- **Citation:** TCN-2021-NCLAT-00076
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/gail-india-ltd-vs-ajay-joshi-rp-of-alok-industries-ltd-ors-company-appeal-cf71f468

## Summary

### Background

The case involves an appeal against an order dated 08.03.2019 passed by the Adjudicating Authority (National Company Law Tribunal, Ahmedabad Bench) in I.A. No.41 of 2019 in I.A. 259 of 2018 in CP(IB) No.48 of 2017. The appeal was filed by Gail India Ltd., an operational creditor of Alok Industries Ltd., challenging the approval of a resolution plan that allegedly discriminated against operational creditors with dues exceeding Rs. 3 lakhs.

## Facts

Alok Industries Ltd. underwent Corporate Insolvency Resolution Process (CIRP) initiated by State Bank of India. Gail India Ltd., an operational creditor, had a claim of Rs. 506.60 crores, which was rejected by the Resolution Professional. The Resolution Plan approved by the Committee of Creditors (CoC) provided 100% payment to operational creditors with dues less than Rs. 3 lakhs, while offering 'Nil' to those with higher dues, including Gail India Ltd. Gail India Ltd. challenged this discriminatory treatment, arguing that it violated the principles of equality and fairness. The Resolution Plan was approved by the Adjudicating Authority. Gail India Ltd. had a 'Gas Sale Agreement' with Alok Industries, but the dues were related to 'take or pay obligation', not actual

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## Issues and analysis

### Issue 1: Whether the resolution plan unfairly discriminates against operational creditors with dues …

**Ratio:** The principle of equitable treatment requires that similarly situated creditors should be

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**Reasoning:** The NCLAT reasoned that the CoC has the commercial wisdom to determine the distribution

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**Interpretation:** The IBC allows for some flexibility in the treatment of operational creditors,

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**Application:** In this case, the NCLAT found that the resolution plan's differential treatment

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## Parties

- **Judges:** M. Venu…; Ashok Kumar…
- **Appellants:** Gail Indi…
- **Respondents:** Alok Industries…; Ajay J…

## Timeline

- **2017-01-01 — CP(IB) No.48…**: CP(IB) No.48 of 2017…
- **2017-07-18 — Section 7 App…**: Application filed by the State Bank of India as per Section 7 of the ‘I&B' Code through…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 61(1) — Appeals and Appellate Authority](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-61)

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