# In the matter of Rahul Khilnani & Anr. Vs. Atul Kumar Jain & Ors., Company Appeal (AT)(Insolvency)No.586 of 2021

> NCLAT judgment dated 2022-09-23. Citation: TCN-2022-NCLAT-00187. The appeal challenges the order dated April 8, 2021, passed by the National Company Law…

- **Court:** NCLAT
- **Order date:** 23 Sept 2022
- **Citation:** TCN-2022-NCLAT-00187
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/rahul-khilnani-anr-vs-atul-kumar-jain-ors-company-appeal-71034692

## Summary

### Background

The appeal challenges the order dated April 8, 2021, passed by the National Company Law Tribunal (NCLT), New Delhi, Court – V, in IA No. 641/2021 in IB 2413(ND)/2019, which dismissed the application filed by the Appellants objecting to the Resolution Plan. The Appellants, being Operational Creditors, objected to the plan because only 2% of their claims were admitted, while the workman and other statutory dues were paid 100%. The CIRP was initiated on February 18, 2020, and the Appellants filed their claims for Rs. 11,05,850 on March 14, 2020. The Resolution Applicant was directed to provide details on January 7, 2021.

## Facts

The Appellants, Rahul Khilnani and H&R Enterprises, are Operational Creditors who filed claims for Rs. 11,05,850 in the CIRP of an unspecified Corporate Debtor. The CIRP was initiated on February 18, 2020. The Appellants objected to the Resolution Plan approved by the Committee of Creditors (CoC) because it allocated only 2% of their claims while prioritizing other dues. The Resolution Plan was approved by the CoC with 100% voting shares. The liquidation value of the Corporate Debtor was Rs. 308.14 lakhs, while the resolution applicant offered Rs. 655.21 lakhs. The Operational Creditors were not given notice of the CoC meetings, nor were they shared the Resolution Plan. The RP stated that the 82% Voting Right Member, Mr. Maheshwari, had raised objections but also

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## Issues and analysis

### Issue 1: Whether the Adjudicating Authority erred in approving the Resolution Plan that allocated only 2% of …

**Ratio:** The Commercial Wisdom of the Committee of Creditors (CoC) is paramount and

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**Reasoning:** The court relied on precedents emphasizing that neither the NCLT nor the NCLAT has the

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**Interpretation:** The court interpreted the scope of judicial review in insolvency matters as

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**Application:** The court applied the principle of deference to the CoC's commercial wisdom to

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## Parties

- **Judges:** Anant Bijay…; Shreesha…; +1 more
- **Appellants:** Rahul Khi…
- **Respondents:** Sh. Atul Kumar…

## Timeline

- **2020-02-18 — CIRP Init…**: Corporate Insolvency Resolution…
- **2020-03-14 — Claim Subm…**: Operational Creditors filed…

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