# In the matter of Ferro Alloys Corporation Limited IA (IB) No. 175-CTB-2019 Connected with TP No. 42-CTB-2019 Arising out of CP (IB) No. 251-KB-2017

> NCLT judgment dated 2020-01-30. Citation: TCN-2020-NCLT-02133. The case involves an application filed under Section 60(5) of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 30 Jan 2020
- **Citation:** TCN-2020-NCLT-02133
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/ferro-alloys-corporation-limited-ia-ib-no-175-ctb-2019-connected-with-tp-no-42-c-9308f684

## Summary

### Background

The case involves an application filed under Section 60(5) of the Insolvency and Bankruptcy Code, 2016, read with Rule 11 of the NCLT Rules, by Rai Bahadur Shree Ram and Company Pvt. Ltd., a shareholder of the Corporate Debtor, Ferro Alloys Corporation Limited. The applicant sought a direction to the Committee of Creditors to reconsider a settlement proposal and reject the approval of the Resolution Plan of Sterlite Power Transmission Ltd. (STPL). The applicant argued that their settlement proposal was superior to the approved Resolution Plan. The 3rd respondent, REC Ltd., a financial creditor with a 91% voting share, rejected the settlement proposals. The Corporate Insolvency Resolution Process (CIRP) commenced on July 6, 2017, and the Resolution Plan was approved by

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## Facts

Rai Bahadur Shree Ram and Company Pvt. Ltd., a shareholder of Ferro Alloys Corporation Limited (the Corporate Debtor), filed an application seeking directions to the Committee of Creditors (CoC) to reconsider their settlement proposal and reject the approved Resolution Plan of Sterlite Power Transmission Ltd. (STPL). The applicant argued that their settlement proposal was superior. REC Ltd., the 3rd respondent and a financial creditor holding 91% of the voting share in the CoC, had rejected the settlement proposal. The Corporate Insolvency Resolution Process (CIRP) had commenced on July 6, 2017, and the Resolution Plan was approved by the CoC on November 14, 2019. The Corporate Debtor had submitted two settlement proposals, one on 07.09.2016 and another on 04.04.2018,

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## Issues and analysis

### Issue 1: Whether the Adjudicating Authority can direct the Committee of Creditors to reconsider a settlement …

**Ratio:** The Adjudicating Authority cannot interfere with the commercial wisdom of the Committee

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**Reasoning:** The court reasoned that the Committee of Creditors is in the best position to evaluate

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**Interpretation:** This interprets the scope of the Adjudicating Authority's power in interfering

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**Application:** The court applied this principle to the facts of the case, noting that the

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## Parties

- **Judges:** Sucharit…; Satya Ranjan…
- **Appellants:** Rai Bahadur Shree…
- **Respondents:** Ferro Alloys…; Bhuvan…

## Timeline

- **2017-07-06 — Commencement…**: The Corporate Insolvency…
- **2019-11-07 — Settlement Proposal…**: The applicant submitted a…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 60(5) — Adjudicating Authority for corporate persons](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-60)

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