# In the matter of the Karad Urban Cooperative Bank Vs. Swwapnil Bhinghardevay and Ors. Civil Appeal No.2955 OF 2020

> SC judgment dated 2020-09-04. Citation: TCN-2020-SC-00039. The Karad Urban Cooperative Bank Ltd., the financial creditor, initiated insolvency proceedings…

- **Court:** SC
- **Order date:** 4 Sept 2020
- **Citation:** TCN-2020-SC-00039
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/supreme-court-of-india/the-karad-urban-cooperative-bank-vs-swwapnil-bhinghardevay-and-ors-civil-appeal-3dafd3f6

## Summary

### Background

The Karad Urban Cooperative Bank Ltd., the financial creditor, initiated insolvency proceedings against Khandoba Prasanna Sakhar Karkhana Limited, the corporate debtor, under Section 7 of the IBC before the NCLT. The NCLT admitted the application and appointed an Interim Resolution Professional. The Committee of Creditors (CoC) approved a Resolution Plan submitted by M/s. Sai Agro (India) Chemicals. The Director/Promoter of the corporate debtor also submitted a resolution plan, which was rejected by the NCLT. The NCLAT allowed an appeal filed by the Director/Promoter, setting aside the NCLT's approval of the Resolution Plan and remanding the matter back to the NCLT for resubmission before the CoC. The financial creditor and the Resolution Professional appealed against

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## Facts

The Karad Urban Cooperative Bank Ltd. initiated insolvency proceedings against Khandoba Prasanna Sakhar Karkhana Limited. The NCLT admitted the application on 01.01.2018. The CoC approved a resolution plan by M/s. Sai Agro (India) Chemicals. The Director/Promoter of the corporate debtor also submitted a plan, which was rejected by the NCLT on 01.08.2019. The Director/Promoter appealed to the NCLAT, which allowed the appeal on 02.06.2020, setting aside the NCLT's approval and remanding the matter. The NCLAT's decision was based on concerns about the plan's viability, a potential breach of confidentiality regarding liquidation value, the status of an ethanol plant, and a defective advertisement. The Resolution Plan mentioned a liquidation value of Rs. 13.53 crores, while

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## Issues and analysis

### Issue 1: Whether the NCLAT was justified in interfering with the NCLT's approval of the Resolution Plan …

**Ratio:** The commercial wisdom of the Committee of Creditors (CoC) is paramount, and judicial

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**Reasoning:** The Supreme Court relied on precedents like Essar Steel India Ltd. and K. Sashidhar to

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**Interpretation:** The viability and feasibility of a resolution plan are primarily within the

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**Application:** The Court found that the NCLAT erred in substituting its own assessment of

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## Parties

- **Judges:** S. A. B…; A.S. BO…; +1 more
- **Appellants:** The Karad Urban…
- **Respondents:** Khandoba Prasanna…; SWWAPNIL BHINGARDE…

## Timeline

- **2017-09-04 — Application…**: The Karad Urban Cooperative Bank Ltd. filed an application under Section 7 of the IBC…
- **2018-01-01 — Application A…**: NCLT admitted the application and…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 32 — Appeal](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-32)

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