# In the matter of Vallal RCK Vs. M/s. Siva Industries and Holdings Ltd. and Ors., Civil Appeal Nos. 1811-­1812 of 2022

> SC judgment dated 2022-06-03. Citation: TCN-2022-SC-00041. The appeals challenge the NCLAT's judgment dismissing appeals against NCLT orders. IDBI Bank…

- **Court:** SC
- **Order date:** 3 Jun 2022
- **Citation:** TCN-2022-SC-00041
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/supreme-court-of-india/vallal-rck-vs-ms-siva-industries-and-holdings-ltd-and-ors-civil-appeal-nos-1811-907d6214

## Summary

### Background

The appeals challenge the NCLAT's judgment dismissing appeals against NCLT orders. IDBI Bank initiated CIRP against M/s Siva Industries and Holdings Limited (Corporate Debtor) under Section 7 of IBC. The NCLT admitted the application on July 4, 2019. A resolution plan by M/s Royal Partners Investment Fund Limited received only 60.90% votes, failing to meet the 66% requirement. The RP filed an application for liquidation. The appellant, promoter of the Corporate Debtor, proposed a one-time settlement plan. The CoC initially rejected the plan but later approved it with over 90% voting share after IARCL approved it. The NCLT rejected the withdrawal of CIRP and initiated liquidation, deeming the settlement plan a 'Business Restructuring Plan' not covered under Section 12A

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## Facts

IDBI Bank initiated Corporate Insolvency Resolution Process (CIRP) against M/s Siva Industries and Holdings Limited (Corporate Debtor) under Section 7 of the Insolvency and Bankruptcy Code (IBC). The National Company Law Tribunal (NCLT) admitted the application on July 4, 2019, leading to the commencement of CIRP. A resolution plan submitted by M/s Royal Partners Investment Fund Limited failed to secure the required 66% votes from the Committee of Creditors (CoC), receiving only 60.90%. The Resolution Professional (RP) then filed an application for liquidation. The appellant, being the promoter of the Corporate Debtor, proposed a one-time settlement plan. The CoC initially rejected the settlement plan, but later approved it with a voting majority of 94.23% after

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## Issues and analysis

### Issue 1: Whether the adjudicating authority (NCLT) or the appellate authority (NCLAT) can sit in an appeal …

**Ratio:** The commercial wisdom of the CoC has been given paramount status without any judicial

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**Reasoning:** The Supreme Court has consistently held that the commercial wisdom of the CoC is

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**Interpretation:** Section 12A of the IBC allows withdrawal of CIRP with the approval of 90% of

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**Application:** In this case, the CoC approved the settlement plan with a 94.23% majority. The

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## Parties

- **Judges:** B.R. G…; HIMA K…
- **Appellants:** VALLAL…
- **Respondents:** M/s. Siva…

## Timeline

- **2019-07-04 — NCLT Admits Ap…**: The NCLT admitted IDBI Bank's application under Section 7 of the IBC for initiation of…
- **2020-05-08 — RP Files Liquidation…**: The RP filed an application under Section 33(1)(a) of the IBC seeking initiation of…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 7 — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-7)

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