The Supreme Courts 3 May judgment, in MK Rajagopalan v Dr Periasamy Palani Gounder & Anr, shows insolvency resolution plans must be approved by a committee of creditors before being put to an adjudicating authority.
The court upheld an order by the National Company Law Appellate Tribunal (NCLAT) that the successful resolution applicant was ineligible in terms of section 88 of the Indian Trust Act, 1882 (advantage gained by fiduciary). The applicant had been pursuing two resolution plans, one in his individual capacity and the other in the capacity of managing trustee of the trust.
A division bench of the Supreme Court also held that the principles of respecting the commercial wisdom of a committee of creditors could not be over-expa…
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