The commercial wisdom of the Creditors Committee under the Insolvency and Bankruptcy Code enjoys full immunity from court interference, Solicitor General of India Tushar Mehta told the appeals tribunal on Wednesday national company law.
Mehta was arguing on behalf of the creditors committee of Videocon Industries Ltd., which is seeking to restart the bidding process for the insolvent company.
“It is up to the CoC to verify the feasibility and viability of a resolution plan. If a plan is not viable, then the committee can reconsider its decision,” Mehta argued before NCLAT.
The request was first raised in September when the CoC filed an affidavit with NCLAT requesting its permission to publish an expression of interest for Videocon group entities involved in oil and gas, electronics. consumer, home appliances, telecommunications and real estate, among others.
It was two months after the Mumbai National Company Law Tribunal approved Twin Star Technologies Ltd.’s plan. which implied a 95% haircut for financial creditors. Twin Star is a wholly owned subsidiary of Volcan Investments Ltd., based in the United Kingdom. Volcan is a parent company of the large Indian listed commodities company Vedanta Ltd. and owns other interests in the Vedanta Resources group founded by Anil Agarwal.
The court’s decision was ultimately stayed by NCLAT on July 19, after dissident financial creditors – Bank of Maharashtra and IDBI – moved the appeal body.
Mehta told NCLAT on Wednesday that maximizing the value of the debtor company’s assets was one of IBC’s main features. And so the committee cannot avoid that.