REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE/ORIGINAL JURISDICTION

CIVIL APPEAL NO.8430 OF 2018

VIJAY KUMAR JAIN … APPELLANT(S)

VERSUS

STANDARD CHARTERED BANK  & ORS. … RESPONDENT(S)

WITH

WRIT PETITION (CIVIL) NO.1266 OF 2018

J U D G M E N T

R.F. NARIMAN, J.

1. The  present  appeal  arises  out  of  an  Appellate  Tribunal’s

judgment  rejecting  the  appellant’s  prayer  for  directions  to  the

resolution professional to provide all relevant documents including

the  insolvency  resolution  plans  in  question  to  members  of  the

suspended Board of Directors of the corporate debtor in each case

1

so that they may meaningfully participate in meetings held by the

committee of creditors [“CoC”].

2. We  may  take  the  facts  of  Civil  Appeal  No.8430  of  2018.

Ruchi Soya Industries Ltd. – the corporate debtor, was incorporated

on  06.01.1986.  It  is  said  to  be  a  profit-making  company  in  the

business of processing of oil-seeds and refining crude oil for edible

use.  In  September,  2017,  Company Petition  Nos.1371 and 1372

were filed by Standard Chartered Bank Ltd.  and DBS Bank Ltd.,

being financial  creditors  of  the aforesaid  corporate  debtor.  These

two company petitions  were  admitted  on  8th and  15th December,

2017, respectively, by the National Company Law Tribunal [“NCLT”].

One Shri Shailendra Ajmera of Ernst and Young was appointed as

the Interim Resolution Professional in both petitions. The CoC was

constituted  under  Section  21  of  the  Insolvency  and  Bankruptcy

Code, 2016 [“Insolvency Code” or “Code”], and the appellant being

a member of the suspended Board of Directors was given notice

and the agenda for the first CoC meeting held on 12.01.2018, and

was permitted to attend the aforesaid meeting. He alleges, which is

disputed by the respondents, that subsequent meetings of the CoC

were held  in  which he was denied participation.  As  a  result,  the

2

appellant  filed  Miscellaneous  Application  No.518  of  2018  on

07.06.2018 before the NCLT in order that the appellant be allowed to

effectively participate in these meetings. It is stated before us that in

the tenth meeting dated 12.08.2018, the appellant executed a non-

disclosure agreement for sharing resolution plans of the corporate

debtor.  Under  the  said  agreement,  the  appellant  undertook  to

indemnify the resolution professional and keep information that is

received as to the resolution plan strictly confidential.  

3. By  an  order  dated  01.08.2018,  the  NCLT  dismissed  the

application with liberty to the appellant to attend CoC meetings but

not to insist upon being provided information considered confidential

either by the resolution professional or the committee of creditors.

Against this order, the appellant filed an appeal before the Appellate

Tribunal  which  recognized  the  appellant’s  right  to  attend  and

participate in  CoC meetings,  but  denied the appellant’s  prayer  to

access certain  documents,  most  particularly,  the resolution plans.

Thereafter,  an  application  for  modification/clarification  of  the

Appellate  Tribunal’s  order  was  also  dismissed.  Aggrieved  by  the

order  dated  09.08.2018  of  the  Appellate  Tribunal,  the  appellants

have filed the present appeal.  In the meanwhile, on 23.08.2018, the 3

resolution  plan  of  one  Adani  Wilmar  Limited  was  approved  by

majority of 96.86% of the committee of creditors. On 24.08.2018, the

resolution professional submitted its resolution plan, as approved by

the CoC, to the Adjudicating Authority.  On 27.08.2018, this Court,

by an interim order, stated, while issuing notice, that the bids will not

be finalized by the Adjudicating Authority without the leave of this

Court. On 10.09.2018, this Court clarified, in an application filed by

the  resolution  professional,  that  the  Adjudicating  Authority  could

continue with the proceedings but no order could be passed on the

same until this Court adjudicates on the present appeal.  

4. On  behalf  of  the  appellants,  we  have  heard  Shri  Shyam

Divan and Shri Arvind Kumar Gupta. The learned counsel referred to

Sections 24, 25, 29 and 31 of the Code together with Regulations

made thereunder. According to the learned counsel, under Section

24(3), the resolution professional has to give notice of each meeting

of  the  committee  of  creditors  to  the  members  of  the  suspended

Board of  Directors,  and under Regulation 21,  the notice of  these

meetings shall not only contain an agenda of the meetings but shall

also contain copies of all documents relevant to the matters to be

discussed  and  issues  to  be  voted  upon  at  the  meeting.  This 4

necessarily  means that  access  to  the  resolution  plans  and  other

relevant documents under consideration at these meetings must be

supplied  together  with  the  notice  of  the  meeting  to  members  of

suspended Board of Directors. They drew a dichotomy between the

committee of creditors and meetings of the committee of creditors

and stated  that  as  they  are  “participants”  in  the meetings of  the

committee  of  creditors,  albeit  without  voting  rights,  yet,  they  are

persons who, in order to participate effectively, must be given the

necessary documents so that their views can also be considered by

the committee of creditors.  According to them, Section 31(1) of the

Code makes it clear that once the resolution plan is passed by the

Adjudicating Authority,  it  shall  be binding on the corporate debtor

together  with  guarantors  and  other  stakeholders.  This  being  the

case, it is clear that the erstwhile Board of Directors, which consists

of persons who may have given personal guarantees for the debts

owed by the corporate debtor, will be bound by the resolution plan,

and therefore, have a vital stake in what ultimately gets passed by

the committee of creditors. Apart from this, under Section 60(5) of

the Code, such persons have a right to challenge the terms of a

proposed resolution plan before the Tribunal, and under Section 61,

5

may  go  further  against  the  Adjudicating  Authority’s  order  to  the

Appellate Tribunal. They relied upon and referred to the Bankruptcy

Law Committee Report of 2015 to buttress their submissions.  

5. As against this, Dr. Abhishek Manu Singhvi, and Mr. Raunak

Dhillon,  appearing on behalf  of  the resolution professional,  relied

strongly on Section 30(3) of the Code and Regulation 39(2) of the

Insolvency and Bankruptcy Board of  India (Insolvency Resolution

Process  for  Corporate  Persons)  Regulations,  2016  [“CIRP

Regulations”] which made it clear that resolution plans were only to

be given to the committee of  creditors for  its consideration.  They

further  argued  that  the  terms  “committee”  and  “participant”  are

differently defined under the Regulations and that participants are

expressly excluded by Regulation 39. They also argued, that if any

of the Regulations go beyond the provisions of the Code, they must

be struck down as ultra vires, as under Section 30(3) of the Code,

the resolution professional  is  required to present  resolution plans

only to the committee of creditors. They relied upon the Notes on

Clauses to Section 24 of the Code, which, according to them, made

it clear that the reason for the participation of the erstwhile Board of

Directors in meetings of the committee of creditors is so that they 6

may give information to assess the financial position of the corporate

debtor.  They are not in the position, therefore, of other creditors,

who may go into merits and demerits of resolution plans as such

resolution plans affect  creditors only and not such persons. They

relied upon this Court’s judgment in  Mobilox Innovations Private

Limited v.  Kirusa Software Private Limited, (2018) 1 SCC 353

[“Mobilox Innovations”], for the proposition that Notes on Clauses

are  important  parliamentary  material  that  may  be  relied  upon  to

understand the object of the Section in question. They also relied

strongly upon Regulation 7(2)(h) of the Insolvency and Bankruptcy

Board of India (Insolvency Professionals) Regulations, 2016, read

with the First Schedule thereto, which made it clear that confidential

information  can  only  be  shared  with  the  consent  of  the  relevant

parties. Further, the confidential information contained in proposed

resolution plans can only be shared with members of the committee

of  creditors  after  receiving  an  undertaking  from  them  under  the

Regulations. They further argued that persons such as the appellant

are not persons aggrieved and since no prejudice is caused to them,

do not have a right to file any application under Section 60(5) of the

7

Code  or  appeals  to  the  Appellate  Tribunal  from  orders  of  the

Adjudicating Authority under Section 61.   

6. Shri Krishnan Venugopal and Shri Nakul Sachdeva, learned

counsel appearing on behalf of the committee of creditors, argued

that  the  expressions  “information  memorandum”  and  “resolution

plan” are separately defined and a specific procedure has been laid

down in the Code and Regulations dealing with them. They cannot

therefore  be  said  to  be  “documents”  within  the  meaning  of

Regulation 21. They also strongly relied upon the Notes on Clauses

and stated that  the role  of  members of  the suspended Board of

Directors is that of information givers and not information seekers.

They  further  relied  upon  the  proviso  to  Section  21(2)  which,

according  to  them,  made  it  clear  that  a  director,  who  is  also  a

financial  creditor,  has  no  right  to  participate  in  a  meeting  of  the

committee  of  creditors.  Thus,  a  harmonious  construction  of  the

various provisions of  the Code would lead to the anomaly that  a

director  simplicitor would  have  the  right  to  get  documents  but  a

director who is a financial creditor would have no such right. They

also  adverted  to  the  expression  “participant”  as  opposed  to  the

expression “committee” and stated that the legislature, in its wisdom,

8

created a differentiation between the two. They also stated that the

confidentiality  requirement  would  be  breached  if  a  copy  of  the

resolution plan were to be given to the members of the suspended

Board of Directors and added that it would be in the interest of some

members of the suspended Board who may attempt to sabotage the

corporate  insolvency  resolution  process,  for  which  reason  also,

resolution plans should be kept hidden from them. They argued that

the  “persons aggrieved”  in  Section 61  would  necessarily  refer  to

persons aggrieved for  the purpose of  Section 60(5)  also,  and as

members of the ex-Board of Directors cannot be said to be persons

aggrieved, they cannot possibly approach the Adjudicating Authority

under Section 60(5) or the Appellate Tribunal under Section 61.  

7. Having heard learned counsel for all parties, it is important to

first  advert  to  the  relevant  provisions  of  the  Code  and  the

Regulations made thereunder. The relevant provisions of the Code

are hereinbelow:

“5.  Definitions.—In  this  Part,  unless  the  context otherwise requires,—

xxx xxx xxx

9

(10)  “information  memorandum”  means  a memorandum  prepared  by  resolution professional  under  sub-section  (1)  of  Section 29; xxx xxx xxx (26)  “resolution plan”  means a plan proposed by resolution applicant for insolvency resolution of the corporate debtor as a going concern in accordance with Part II; xxx xxx xxx”

“21.  Committee  of  creditors.—(1)  The  interim resolution professional shall  after collation of all  claims received against the corporate debtor and determination of  the  financial  position  of  the  corporate  debtor, constitute a committee of creditors. (2) The committee of creditors shall comprise all financial creditors of the corporate debtor:

Provided  that  a  financial  creditor  or  the  authorised representative of the financial creditor referred to in sub- section  (6)  or  sub-section  (6-A)  or  sub-section  (5)  of Section 24, if it is a related party of the corporate debtor, shall not have any right of representation, participation or voting in a meeting of the committee of creditors:

Provided further that the first proviso shall not apply to a  financial  creditor,  regulated  by  a  financial  sector regulator, if it is a related party of the corporate debtor solely on account of conversion or substitution of debt into equity shares or instruments convertible into equity shares, prior to the insolvency commencement date. (3)  Subject  to  sub-sections  (6)  and  (6-A),  where  the corporate  debtor  owes financial  debts  to  two  or  more financial creditors as part of a consortium or agreement, each  such  financial  creditor  shall  be  part  of  the committee of  creditors  and their  voting share shall  be determined on the basis of the financial debts owed to them. (4) Where any person is a financial creditor as well as an operational creditor,—

10

(a) such person shall be a financial creditor to the  extent  of  the  financial  debt  owed  by  the corporate debtor,  and shall  be included in the committee  of  creditors,  with  voting  share proportionate  to  the  extent  of  financial  debts owed to such creditor; (b)  such person shall  be considered to be an operational  creditor  to  the  extent  of  the operational debt owed by the corporate debtor to such creditor.

(5) Where an operational creditor has assigned or legally transferred any operational  debt to a financial  creditor, the  assignee  or  transferee  shall  be  considered  as  an operational creditor to the extent of such assignment or legal transfer. (6)  Where the terms of  the financial  debt extended as part of a consortium arrangement or syndicated facility provide for a single trustee or agent to act for all financial creditors, each financial creditor may—

(a) authorise the trustee or agent to act on his behalf  in  the  committee  of  creditors  to  the extent of his voting share; (b)  represent  himself  in  the  committee  of creditors to the extent of his voting share; (c)  appoint  an  insolvency  professional  (other than the resolution professional) at his own cost to  represent  himself  in  the  committee  of creditors to the extent of his voting share; or (d) exercise his right to vote to the extent of his voting share with one or more financial creditors jointly or severally.

(6-A) Where a financial debt— (a) is in the form of securities or deposits and the  terms  of  the  financial  debt  provide  for appointment  of  a  trustee  or  agent  to  act  as authorised  representative  for  all  the  financial creditors,  such  trustee  or  agent  shall  act  on behalf of such financial creditors; (b) is owed to a class of creditors exceeding the number  as  may  be  specified,  other  than  the

11

creditors  covered  under  clause  (a)  or  sub- section (6),  the interim resolution professional shall  make  an  application  to  the  Adjudicating Authority  along  with  the  list  of  all  financial creditors, containing the name of an insolvency professional,  other  than  the  interim resolution professional,  to  act  as  their  authorised representative  who shall  be appointed  by  the Adjudicating Authority prior to the first meeting of the committee of creditors; (c)  is  represented by a  guardian,  executor  or administrator,  such  person  shall  act  as authorised  representative  on  behalf  of  such financial creditors, and  such  authorised  representative  under clause  (a)  or  clause  (b)  or  clause  (c)  shall attend  the  meetings  of  the  committee  of creditors, and vote on behalf of each financial creditor to the extent of his voting share.

(6-B)  The remuneration payable  to  the authorised representative—

(i) under clauses (a) and (c) of sub-section (6- A),  if  any,  shall  be  as  per  the  terms  of  the financial  debt  or  the  relevant  documentation; and (ii)  under clause (b) of sub-section (6-A) shall be  as  specified  which  shall  form  part  of  the insolvency resolution process costs.

(7) The Board may specify the manner of voting and the determining of  the voting share  in  respect  of  financial debts covered under sub-sections (6) and (6-A). (8)  Save  as  otherwise  provided  in  this  Code,  all decisions of the committee of creditors shall be taken by a vote of not less than fifty-one per cent of voting share of the financial creditors:

Provided that where a corporate debtor does not have any financial creditors, the committee of creditors shall be  constituted  and  shall  comprise  of  such  persons  to exercise  such  functions  in  such  manner  as  may  be specified.

12

(9)  The  committee  of  creditors  shall  have  the  right  to require the resolution professional to furnish any financial information in relation to the corporate debtor at any time during the corporate insolvency resolution process. (10) The resolution professional shall make available any financial  information  so  required  by  the  committee  of creditors under sub-section (9) within a period of seven days of such requisition.”

24.  Meeting  of  committee  of  creditors.—(1)  The members  of  the  committee  of  creditors  may  meet  in person or by such electronic means as may be specified. (2)  All  meetings of  the committee of  creditors shall  be conducted by the resolution professional. (3) The resolution professional shall give notice of each meeting of the committee of creditors to—

(a)  members  of committee  of  creditors, including  the  authorised  representatives referred  to  in  sub-sections  (6)  and  (6-A)  of Section 21 and sub-section (5); (b)  members  of  the  suspended  Board  of Directors  or  the  partners  of  the  corporate persons, as the case may be; (c) operational creditors or their representatives if the amount of their aggregate dues is not less than ten per cent of the debt.

(4)  The  directors,  partners  and  one  representative  of operational  creditors,  as referred to in  sub-section (3), may attend the meetings of committee of creditors, but shall not have any right to vote in such meetings:

Provided  that  the  absence  of  any  such  director, partner or representative of operational creditors, as the case may be, shall  not  invalidate proceedings of  such meeting. (5) Subject to sub-sections (6), (6-A) and (6-B) of Section 21, any creditor who is a member of the committee of creditors may appoint  an insolvency professional other than  the  resolution  professional  to  represent  such creditor in a meeting of the committee of creditors:

13

Provided  that  the  fees  payable  to  such  insolvency professional representing any individual creditor will  be borne by such creditor. (6) Each creditor shall vote in accordance with the voting share assigned to him based on the financial debts owed to such creditor. (7) The resolution professional shall determine the voting share  to  be  assigned  to  each  creditor  in  the  manner specified by the Board. (8) The meetings of the committee of creditors shall be conducted in such manner as may be specified.”

(emphasis supplied)

“25. Duties of resolution professional.—(1) It shall be the duty of the resolution professional to preserve and protect the assets of the corporate debtor, including the continued business operations of the corporate debtor. (2)  For the purposes of  sub-section (1),  the resolution professional  shall  undertake  the  following  actions, namely—

(a)  take immediate  custody and control  of  all the assets of the corporate debtor, including the business records of the corporate debtor; (b) represent and act on behalf of the corporate debtor with third parties, exercise rights for the benefit of the corporate debtor in judicial, quasi- judicial or arbitration proceedings; (c) raise interim finances subject to the approval of the committee of creditors under Section 28; (d)  appoint  accountants,  legal  or  other professionals  in  the  manner  as  specified  by Board; (e) maintain an updated list of claims; (f)  convene  and  attend  all  meetings  of  the committee of creditors; (g)  prepare  the  information  memorandum  in accordance with Section 29; (h) invite prospective resolution applicants, who fulfil such criteria as may be laid down by him

14

with  the  approval  of  committee  of  creditors, having  regard  to  the  complexity  and  scale  of operations  of  the  business  of  the  corporate debtor  and  such  other  conditions  as  may  be specified by the Board, to submit a resolution plan or plans; (i)  present all resolution plans at the meetings of the committee of creditors; (j) file application for avoidance of transactions in accordance with Chapter III, if any; and (k) such other actions as may be specified by the Board.”

(emphasis supplied)

“29.  Preparation  of  information  memorandum.—(1) The resolution professional shall prepare an information memorandum in such form and manner containing such relevant information as may be specified by the Board for formulating a resolution plan. (2)  The  resolution  professional  shall  provide  to  the resolution applicant access to all relevant information in physical  and  electronic  form,  provided  such  resolution applicant undertakes—

(a) to comply with provisions of law for the time being  in  force  relating  to  confidentiality  and insider trading; (b)  to  protect  any  intellectual  property  of  the corporate debtor it may have access to; and (c) not to share relevant information with third parties unless clauses (a) and (b) of this sub- section are complied with.

Explanation.—For  the  purposes  of  this  section, “relevant information” means the information required by the resolution applicant to make the resolution plan for the  corporate  debtor,  which  shall  include  the  financial position of the corporate debtor, all information related to disputes  by  or  against  the  corporate  debtor  and  any other matter pertaining to the corporate debtor as may be specified.”

15

“30. Submission of resolution plan.—(1) A resolution applicant  may  submit  a  resolution  plan  along  with  an affidavit stating that he is eligible under Section 29-A to the resolution professional prepared on the basis of the information memorandum.

(2)  The  resolution  professional  shall  examine  each resolution  plan  received  by  him  to  confirm  that  each resolution plan—

(a)  provides  for  the  payment  of  insolvency resolution process costs in a manner specified by the Board in priority to the payment of other debts of the corporate debtor; (b)  provides  for  the  payment  of  the  debts  of operational creditors in such manner as may be specified by the Board which shall not be less than the amount to be paid to the operational creditors  in  the  event  of  a  liquidation  of  the corporate debtor under Section 53; (c) provides for the management of the affairs of  the  corporate  debtor  after  approval  of  the resolution plan; (d)  the implementation and supervision of  the resolution plan; (e) does not contravene any of the provisions of the law for the time being in force; (f) conforms to such other requirements as may be specified by the Board.

Explanation.—For the purposes of clause (e), if  any approval  of  shareholders  is  required  under  the Companies Act, 2013 (18 of 2013) or any other law for the time being in force for the implementation of actions under  the  resolution  plan,  such  approval  shall  be deemed  to  have  been  given  and  it  shall  not  be  a contravention of that Act or law. (3)  The  resolution  professional  shall  present  to  the committee of  creditors  for  its  approval  such resolution plans which  confirm the  conditions  referred  to  in  sub- section (2). (4) The committee of creditors may approve a resolution plan by a vote of not less than sixty-six per cent of voting

16

share  of  the  financial  creditors,  after  considering  its feasibility and viability, and such other requirements as may be specified by the Board:

Provided  that  the  committee  of  creditors  shall  not approve  a  resolution  plan,  submitted  before  the commencement of the Insolvency and Bankruptcy Code (Amendment)  Ordinance,  2017,  where  the  resolution applicant  is  ineligible  under  Section  29-A  and  may require  the  resolution  professional  to  invite  a  fresh resolution  plan  where  no  other  resolution  plan  is available with it:

Provided further  that  where the resolution applicant referred to in the first proviso is ineligible under clause (c)  of  Section  29-A,  the  resolution  applicant  shall  be allowed by the committee of creditors such period, not exceeding  thirty  days,  to  make  payment  of  overdue amounts in accordance with the proviso to clause (c) of Section 29-A:

Provided also that nothing in the second proviso shall be construed as extension of period for the purposes of the  proviso  to  sub-section  (3)  of  Section  12,  and  the corporate  insolvency  resolution  process  shall  be completed within the period specified in that sub-section.

Provided also that the eligibility criteria in Section 29-A as  amended  by  the  Insolvency  and  Bankruptcy  Code (Amendment)  Ordinance,  2018  (Ord.  6  of  2018)  shall apply to the resolution applicant who has not submitted resolution plan as on the date of commencement of the Insolvency  and  Bankruptcy  Code  (Amendment) Ordinance, 2018. (5) The resolution applicant may attend the meeting of the committee of creditors in which the resolution plan of the applicant is considered:

Provided that the resolution applicant shall not have a right to vote at the meeting of the committee of creditors unless  such  resolution  applicant  is  also  a  financial creditor. (6)  The  resolution  professional  shall  submit  the resolution  plan  as  approved  by  the  committee  of creditors to the Adjudicating Authority.”

17

“31.  Approval  of  resolution  plan.—(1)  If  the Adjudicating Authority is satisfied that the resolution plan as approved by the committee of  creditors under sub- section  (4)  of  Section  30  meets  the  requirements  as referred to in sub-section (2) of Section 30, it  shall  by order approve the resolution plan which shall be binding on the corporate debtor  and its  employees,  members, creditors,  guarantors and other stakeholders involved in the resolution plan:

Provided that the Adjudicating Authority shall, before passing an order for approval of  resolution plan under this  sub-section,  satisfy  that  the  resolution  plan  has provisions for its effective implementation. (2) Where the Adjudicating Authority is satisfied that the resolution plan does not [conform] to the requirements referred to in sub-section (1), it may, by an order, reject the resolution plan. (3) After the order of approval under sub-section (1),—

(a)  the  moratorium  order  passed  by  the Adjudicating  Authority  under  Section  14  shall cease to have effect; and (b) the resolution professional shall forward all records relating to the conduct of the corporate insolvency  resolution  process  and  the resolution plan to the Board to be recorded on its database.

(4)  The  resolution  applicant  shall,  pursuant  to  the resolution plan approved under  sub-section (1),  obtain the necessary approval required under any law for the time being in force within a period of one year from the date  of  approval  of  the  resolution  plan  by  the Adjudicating  Authority  under  sub-section  (1)  or  within such period as provided for  in  such law,  whichever  is later:

Provided  that  where  the  resolution  plan  contains  a provision for combination, as referred to in Section 5 of the Competition Act,  2002 (12 of  2003),  the resolution applicant  shall  obtain  the  approval  of  the  Competition

18

Commission of India under that Act prior to the approval of such resolution plan by the committee of creditors.”

(emphasis supplied)

“60. Adjudicating Authority for corporate persons.— xxx xxx xxx (5) Notwithstanding anything to the contrary contained

in any other law for the time being in force, the National Company Law Tribunal shall have jurisdiction to entertain or dispose of—

(a) any application or proceeding by or against the corporate debtor or corporate person; (b) any claim made by or against the corporate debtor or corporate person, including claims by or  against  any  of  its  subsidiaries  situated  in India; and (c) any question of priorities or any question of law or facts, arising out of or in relation to the insolvency resolution or liquidation proceedings of  the  corporate  debtor  or  corporate  person under this Code. xxx xxx xxx”

“61.  Appeals  and  Appellate  Authority.—(1) Notwithstanding anything to the contrary contained under the  Companies  Act,  2013  (18  of  2013),  any  person aggrieved  by  the  order  of  the  Adjudicating  Authority under  this  part  may  prefer  an  appeal  to  the  National Company Law Appellate Tribunal. xxx xxx xxx”

“62.  Appeal  to  Supreme  Court.—(1)  Any  person aggrieved  by  an  order  of  the  National  Company  Law Appellate Tribunal  may file  an appeal  to  the Supreme Court  on  a  question  of  law  arising  out  of  such  order under this Code within forty-five days from the date of receipt of such order. xxx xxx xxx”

19

The relevant  provisions of  the Insolvency and Bankruptcy Board of

India  (Insolvency  Resolution  Process  for  Corporate  Persons)

Regulations, 2016 read as under:

“2. Definitions.— (1) In these Regulations,  unless the context otherwise requires—

xxx xxx xxx (d) “committee” means a committee of creditors established under Section 21; xxx xxx xxx (l)  “participant”  means  a  person  entitled  to attend  a  meeting  of  the  committee  under Section 24 or any other person authorised by the committee to attend the meeting; xxx xxx xxx”

“19.  Notice  for  meetings  of  the  committee.—  (1) Subject to this Regulation, a meeting of the committee shall be called by giving not less than five days' notice in writing to every participant, at the address it has provided to the resolution professional  and such notice may be sent by hand delivery, or by post but in any event,  be served  on  every  participant  by  electronic  means  in accordance with Regulation 20. (2)  The committee may reduce the notice  period from five days to such other period of not less than twenty- four hours, as it deems fit: Provided that the committee may reduce the period to such  other  period  of  not  less  than  forty-eight  hours  if there is an authorised representative.”

“21.  Contents  of  the  notice  for  meeting.—(1)  The notice shall inform the participants of the venue, the time and date of the meeting and of the option available to them to participate through video conferencing or other audio and visual means, and shall  also provide all  the

20

necessary  information  to  enable  participation  through video conferencing or other audio and visual means. (2)  The  notice  of  the  meeting  shall  provide  that  a participant may attend and vote in the meeting either in person or through an authorised representative:

Provided  that  such  participant  shall  inform  the resolution professional, in advance of the meeting, of the identity of the authorised representative who will attend and vote at the meeting on its behalf. (3) The notice of the meeting shall contain the following —

(i) a list of the matters to be discussed at the meeting; (ii) a list of the issues to be voted upon at the meeting; and (iii)  copies  of  all  documents  relevant  to  the matters to be discussed and the issues to be voted upon at the meeting.

(4) The notice of the meeting shall— (a) state the process and manner for voting by electronic  means  and  the  time  schedule, including the time period during which the votes may be cast; (b)  provide  the  login  ID  and  the  details  of  a facility for generating password and for keeping security and casting of vote in a secure manner; and (c)  provide contact  details  of  the person who will  address  the  queries  connected  with  the electronic voting.

(emphasis supplied)

“24.  Conduct  of  meeting.—  (1)  The  resolution professional shall act as the chairperson of the meeting of the committee. (2) At the commencement of a meeting, the resolution professional shall take a roll call when every participant attending through video conferencing or other audio and visual means shall state, for the record, the following,—

21

(a) his name; (b) whether he is attending in the capacity of a member  of  the  committee  or  any  other participant; (c)  whether  he  is  representing  a  member  or group of members; (d) the location from where he is participating; (e) that he has received the agenda and all the relevant material for the meeting; and (f)  that  no one other than him is attending or has access to the proceedings of the meeting at the location of that person.

(3)  After  the  roll  call,  the  resolution  professional  shall inform the participants of the names of all persons who are present for the meeting and confirm if the required quorum is complete. (4)  The  resolution  professional  shall  ensure  that  the required quorum is present throughout the meeting. (5)  From  the  commencement  of  the  meeting  till  its conclusion,  no  person  other  than  the  participants  and any  other  person  whose  presence  is  required  by  the resolution  professional  shall  be  allowed access  to  the place where meeting is held or to the video conferencing or other audio and visual facility, without the permission of the resolution professional. (6) The resolution professional shall ensure that minutes are made in relation to each meeting of the committee and such minutes  shall  disclose the particulars  of  the participants who attended the meeting in person, through video conferencing, or other audio and visual means. (7) The resolution professional shall circulate the minutes of  the  meeting  to  all  participants  by  electronic  means within forty eight hours of the said meeting.”

(emphasis supplied)

“35. Fair value and Liquidation value.—(1)  Fair value and liquidation value shall be determined in the following manner—

(a) the two registered valuers appointed under Regulation  27  shall  submit  to  the  resolution

22

professional an estimate of the fair  value and the  liquidation  value  computed  in  accordance with  internationally  accepted  valuation standards,  after  physical  verification  of  the inventory  and  fixed  assets  of  the  corporate debtor; (b)  if  in  the  opinion  of  the  resolution professional, the two estimates of a value are significantly  different,  he may appoint  another registered valuer who shall submit an estimate computed in the same manner; and (c)  the  average  of  the  two  closest  estimates shall  be  considered  the  fair  value  or  the liquidation value, as the case may be.

(2)  After  the receipt  of  resolution plans in  accordance with  the  Code  and  these  regulations,  the  resolution professional  shall  provide  the  fair  value  and  the liquidation value to every member of  the committee in electronic  form,  on  receiving  an  undertaking  from  the member to the effect that such member shall  maintain confidentiality of the fair value and the liquidation value and shall not use such values to cause an undue gain or undue loss to itself or any other person and comply with the requirements under sub-section (2) of Section 29. (3)  The  resolution  professional  and  registered  valuers shall  maintain  confidentiality  of  the  fair  value  and  the liquidation value.”

“36. Information memorandum.— (1) Subject  to sub- regulation  (4),  the  resolution  professional  shall  submit the information memorandum in electronic form to each member  of  the  committee  within  two  weeks  of  his appointment, but not later than fifty-fourth day from the insolvency commencement date, whichever is earlier. (2)  The  information  memorandum  shall  contain  the following details of the corporate debtor—

(a) assets and liabilities, with such description, as on the insolvency commencement date, as

23

are  generally  necessary  for  ascertaining  their values. Explanation.- “Description” includes the details such as date of acquisition, cost of acquisition, remaining  useful  life,  identification  number, depreciation  charged,  book  value,  and  any other relevant details.  (b) the latest annual financial statements; (c) audited financial statements of the corporate debtor  for  the  last  two  financial  years  and provisional financial statements for the current financial year made up to a date not earlier than fourteen days from the date of the application; (d)  a list  of creditors containing the names of creditors,  the  amounts  claimed  by  them,  the amount of their claims admitted and the security interest, if any, in respect of such claims; (e)  particulars  of  a  debt  due  from  or  to  the corporate debtor with respect to related parties; (f) details of guarantees that have been given in relation to the debts of the corporate debtor by other  persons,  specifying  which  of  the guarantors is a related party; (g) the names and addresses of the members or partners holding at least one per cent stake in the corporate debtor along with the size of stake; (h)  details  of  all  material  litigation  and  an ongoing investigation or proceeding initiated by Government and statutory authorities; (i) the number of workers and employees and liabilities of the corporate debtor towards them; and (j)  [* * *] (k) [* * *] (l)  other  information,  which  the  resolution professional deems relevant to the committee.

(3)  A  member  of  the  committee  may  request  the resolution  professional  for  further  information  of  the nature  described  in  this  Regulation and  the  resolution

24

professional  shall  provide  such  information  to  all members within reasonable time if such information has a bearing on the resolution plan. (4)  The  resolution  professional  shall  share  the information memorandum after receiving an undertaking from a member of the committee to the effect that such member  or  resolution  applicant  shall  maintain confidentiality of the information and shall not use such information  to  cause  an  undue  gain  or  undue loss  to itself  or  any  other  person  and  comply  with  the requirements under sub-section (2) of Section 29.”

“37. Resolution plan.— A resolution plan shall provide for the measures, as may be necessary, for insolvency resolution  of  the  corporate  debtor  for  maximization  of value  of  its  assets,  including  but  not  limited  to  the following—

(a)  transfer  of  all  or  part  of  the assets of  the corporate debtor to one or more persons; (b)  sale  of  all  or  part  of  the  assets  whether subject to any security interest or not; (c) the substantial acquisition of shares of the corporate debtor, or the merger or consolidation of  the  corporate  debtor  with  one  or  more persons; (ca)  cancellation or  delisting of  any shares of the corporate debtor, if applicable; (d)  satisfaction or  modification of  any security interest; (e) curing or waiving of any breach of the terms of any debt due from the corporate debtor; (f)  reduction  in  the  amount  payable  to  the creditors; (g) extension of a maturity date or a change in interest rate or other terms of a debt due from the corporate debtor; (h) amendment of the constitutional documents of the corporate debtor; (i)  issuance  of  securities  of  the  corporate debtor,  for  cash,  property,  securities,  or  in

25

exchange  for  claims  or  interests,  or  other appropriate purpose;  (j)  change  in  portfolio  of  goods  or  services produced or rendered by the corporate debtor; (k) change in technology used by the corporate debtor; and (l)  obtaining  necessary  approvals  from  the Central  and  State  Governments  and  other authorities.”

(emphasis supplied)

“38. Mandatory contents of the resolution plan.— (1) The  amount  due  to  the  operational  creditors  under  a resolution plan shall  be given priority  in  payment  over financial creditors. (1-A) A resolution plan shall  include a statement as to how it  has dealt  with the interests of  all  stakeholders, including financial creditors and operational creditors, of the corporate debtor. (2) A resolution plan shall provide:

(a) the term of the plan and its implementation schedule; (b) the management and control of the business of the corporate debtor during its term; and (c)  adequate  means  for  supervising  its implementation.

(3) A resolution plan shall demonstrate that: (a) it addresses the cause of default; (b) it is feasible and viable;  (c)  it  has  provisions  for  its  effective implementation; (d) it has provisions for approvals required and the timeline for the same; and (e) the resolution applicant has the capability to implement the resolution plan.”

“39.  Approval  of  resolution  plan.—(1)  A prospective resolution applicant in the final list may submit resolution plan or  plans in  accordance with  the Code and these regulations  to  the  resolution  professional  electronically

26

within the time given in the request for resolution plans under regulation 36B along with:

(a) And affidavit stating that it is eligible under section 29A to submit resolution plans; and (b) [***] (c) An undertaking by the prospective resolution applicant  that  every  information  and  records provided in connection with or in the resolution plan is true and correct and discovery of false information and record at any time will  render the  applicant  ineligible  to  continue  in  the corporate insolvency resolution process, forfeit any refundable deposit, and attract penal action under the Code.

(1A) A resolution plan which does not comply with the provisions of sub-regulation (1) shall be rejected. (2)  The  resolution  professional  shall  submit  to  the committee  all  resolution  plans  which  comply  with  the requirements  of  the  Code  and  regulations  made thereunder  along  with  the  details  of  following transactions,  if  any,  observed,  found or determined by him:—

(a) preferential transactions under Section 43; (b) undervalued transactions under Section 45; (c)  extortionate  credit  transactions  under Section 50; and (d) fraudulent transactions under Section 66, and  the  orders,  if  any,  of  the  adjudicating authority in respect of such transactions.

(3)  The  committee  shall  evaluate  the  resolution  plans received  under  sub-regulation  (1)  strictly  as  per  the evaluation matrix to identify the best resolution plan and may approve it with such modifications as it deems fit: Provided that the committee shall record the reasons for approving or rejecting a resolution plan. (4) The resolution professional shall endeavour to submit the  resolution  plan  approved by  the  committee  to  the Adjudicating  Authority  at  least  fifteen  days  before  the maximum period for completion of corporate insolvency

27

resolution  process  under  section  12,  along  with  a compliance certificate in Form H of the Schedule. (5)  The  resolution  professional  shall  forthwith  send  a copy of the order of the Adjudicating Authority approving or rejecting a resolution plan to the participants and the resolution applicant. (6) A provision in a resolution plan which would otherwise require the consent of the members or partners of the corporate debtor, as the case may be, under the terms of the  constitutional  documents  of  the  corporate  debtor, shareholders'  agreement,  joint  venture  agreement  or other  document  of  a  similar  nature,  shall  take  effect notwithstanding  that  such  consent  has  not  been obtained. (7) No proceedings shall be initiated against the interim resolution professional or the resolution professional, as the case may be, for any actions of the corporate debtor, prior to the insolvency commencement date. (8) A person in charge of the management or control of the business and operations of the corporate debtor after a  resolution  plan  is  approved  by  the  Adjudicating Authority,  may make an application to the Adjudicating Authority for an order seeking the assistance of the local district  administration  in  implementing  the  terms  of  a resolution plan.”

The relevant  provisions of  the Insolvency and Bankruptcy Board of

India (Insolvency Professionals) Regulations, 2016 read as under:

“7. Certificate of registration.— xxx xxx xxx (2) The registration shall be subject to the conditions that the insolvency professional shall—

xxx xxx xxx (h) abide by the Code of Conduct specified in the First Schedule to these Regulations; and

28

xxx xxx xxx”

“FIRST SCHEDULE [Under Regulation, 7(2)(h)]

CODE OF CONDUCT FOR INSOLVENCY PROFESSIONALS

xxx xxx xxx Confidentiality. 21.  An  insolvency  professional  must  ensure  that confidentiality  of  the  information  relating  to  the insolvency resolution process, liquidation or bankruptcy process, as the case may be, is maintained at all times. However, this shall not prevent him from disclosing any information with the consent  of  the relevant  parties or required by law. xxx xxx xxx”

8. The  statutory  scheme  of  the  Code,  insofar  as  the  former

members of the Board of Directors are concerned, is as follows:

A committee of creditors is first constituted under Section 21

consisting only of all the financial creditors of the corporate debtor.

Under  Section  24,  all  meetings  of  this  committee  are  to  be

conducted by the resolution professional  who,  however,  does not

happen to be part of this committee. Section 24(3)(b) is important in

that, the resolution professional has to give notice of each and every

meeting of the committee of creditors, inter alia, to members of the

suspended Board of Directors. Like operational creditors who may

29

attend  and  participate  in  such  meetings,  provided  the  aggregate

dues owing to them are not less than ten per cent of the total debt,

both such operational creditors and erstwhile members of the Board

of Directors have no vote. Section 25(2)(f) and (i) are also important

in that, once the resolution professional convenes meetings of the

committee of creditors, he is to present all resolution plans at these

meetings.  Under  Section  30,  the  resolution  professional  shall

examine each  resolution plan  received  by  him in  which  he must

confirm, inter alia, that such plan provides for the repayment of the

debts  of  operational  creditors  which  shall  not  be  less  than  the

amount to be paid to them in the event of liquidation of the corporate

debtor. This plan is then submitted to the Adjudicating Authority if it

is approved by the requisite majority of the committee of creditors.

The Adjudicating Authority under Section 31(1), if satisfied that the

plan passes muster, shall then, by order, approve such plan, which

shall be binding on all stakeholders involved in the resolution plan,

including guarantors.

9. This statutory scheme, therefore, makes it clear that though

the erstwhile Board of Directors are not members of the committee

of creditors, yet, they have a right to participate in each and every 30

meeting held by the committee of creditors, and also have a right to

discuss  along  with  members  of  the  committee  of  creditors  all

resolution plans that are presented at such meetings under Section

25(2)(i). It cannot be gainsaid that operational creditors, who may

participate in such meetings but  have no right  to vote,  are vitally

interested in such resolution plans, and must be furnished copies of

such plans beforehand if  they are to participate effectively  in  the

meeting of the committee of creditors. This is for the reason that

under Section 30(2)(b), repayment of their debts is an important part

of the resolution plan  qua them on which they must comment. So

the first important thing to notice is that even though persons such

as  operational  creditors  have  no  right  to  vote  but  are  only

participants  in  meetings  of  the  committee  of  creditors,  yet,  they

would certainly have a right  to be given a copy of  the resolution

plans before such meetings are held so that  they may effectively

comment on the same to safeguard their interest.

10. However, it was argued before us that the Notes on Clauses

to Section 24 make it clear that the erstwhile members of the Board

of  Directors  are  participants  in  these  meetings  only  so  that  the

committee  of  creditors  and  the  resolution  professional  may  seek

31

information from them. The Notes on Clauses, heavily relied upon

by learned counsel for the respondents, read as follows:

“Clause 24 prescribes the modalities for the meeting of the committee of creditors. The meetings are conducted by the resolution professional and may be attended by the members of  the board directors or  partners of  the corporate  debtor.  This  gives  an  opportunity  for  the committee of creditors and the resolution professional to seek  information  that  they  may  require  to  assess  the financial position of the corporate debtor and prepare a resolution plan.”

(emphasis supplied)

11. This Court in Mobilox Innovations (supra) stated:

“27. The  notes  on  clauses  annexed  to  the  Bill  are extremely important and read as follows……”

xxx xxx xxx

“38. It is, thus, clear that so far as an operational creditor is concerned, a demand notice of an unpaid operational debt or  copy of  an invoice demanding payment of  the amount  involved  must  be  delivered  in  the  prescribed form. The corporate debtor is then given a period of 10 days from the receipt of the demand notice or copy of the invoice to bring to the notice of the operational creditor the existence of a dispute, if any. We have also seen the notes  on  clauses  annexed  to  the  Insolvency  and Bankruptcy  Bill  of  2015,  in  which  “the  existence  of  a dispute” alone is mentioned. Even otherwise, the word “and” occurring in Section 8(2)(a) must be read as “or” keeping in mind the legislative intent and the fact that an anomalous  situation  would  arise  if  it  is  not  read  as “or”……”

32

12. There is no doubt whatsoever that Notes on Clauses are an

important aid to the construction of Sections of the Code as they

show  what  the  Drafting  Committee  had  in  mind  when  such

provisions were  drafted.  However,  a  closer  look at  the Notes  on

Clause 24 makes it  clear that the third sentence of the Notes on

Clause 24 is itself problematic. First and foremost, it speaks of the

resolution  professional  seeking  information.  The  resolution

professional  does  not  seek  information  at  a  meeting  of  the

committee of creditors, which is what Section 24 is all about. The

resolution  professional  only  seeks  information  from  the  erstwhile

Board of Directors under Section 29 before preparing an information

memorandum,  which  then  includes  the  financial  position  of  the

corporate debtor and information relating to disputes by or against

the corporate debtor etc. All this has nothing to do with Section 24 of

the Code which deals with meetings of the committee of creditors.

Secondly, the resolution professional does not prepare a resolution

plan as is mentioned in the Notes on Clause 24; he only prepares an

information  memorandum  which  is  to  be  given  to  the  resolution

applicants who then submit their resolution plans under Section 30

of the Code. The committee of creditors, in turn, gets information so

33

that they can assess the financial position of the corporate debtor

from various sources  before they meet. It  is,  therefore, difficult  to

understand the Notes on Clause 24. Even assuming that the Notes

on Clause 24 may be read as being a one-way street  by  which

erstwhile  members  of  the  Board of  Directors  are  only  to  provide

information, we find that Section 31(1) of the Code would make it

clear that such members of the erstwhile Board of Directors, who

are often guarantors, are vitally interested in a resolution plan as

such resolution plan then binds them. Such plan may scale down

the debt of the principal debtor, resulting in scaling down the debt of

the guarantor as well, or it may not. The resolution plan may also

scale down certain debts and not others, leaving guarantors of the

latter kind of debts exposed for the entire amount of the debt. The

Regulations  also  make  it  clear  that  these  persons  are  vitally

interested  in  resolution  plans  as  they  affect  them.  Thus,  under

Regulation  36  of  the  CIRP  Regulations,  the  information

memorandum that is given to each member of the CoC and to any

potential resolution applicant, will contain details of guarantees that

have been given in relation to the debts of the corporate debtor (see

Regulation 36(2)(f) of the CIRP Regulations). Also, under Regulation

34

37(d) of  the CIRP Regulations,  a resolution plan may provide for

satisfaction or modification of any security interest. Security interest

is defined by Section 3(31) of the Code as follows:

“3.  Definitions.—In  this  Code,  unless  the  context otherwise requires,—

xxx xxx xxx (31)  “security  interest”  means  right,  title  or interest or a claim to property, created in favour of,  or  provided  for  a  secured  creditor  by  a transaction  which  secures  payment  or performance  of  an  obligation  and  includes mortgage,  charge,  hypothecation,  assignment and encumbrance or  any  other  agreement  or arrangement securing payment or performance of any obligation of any person:

Provided  that  security  interest  shall  not  include  a performance guarantee; xxx xxx xxx”

This would certainly include a guarantor who may be a member of

the erstwhile Board of Directors. Further, under Regulation 37(1)(f),

a resolution plan may provide for reduction in the amount payable to

the creditors, which again vitally impacts the rights of a guarantor.

Last but not least,  a resolution plan which has been approved or

rejected by an order of the Adjudicating Authority, has to be sent to

“participants” which would include members of the erstwhile Board

of  Directors  –  vide Regulation  39(5)  of  the  CIRP  Regulations.

Obviously, such copy can only be sent to participants because they 35

are vitally  interested in  the outcome of  such resolution plan,  and

may,  as  persons  aggrieved,  file  an  appeal  from the  Adjudicating

Authority’s order to the Appellate Tribunal under Section 61 of the

Code. Quite apart from this, Section 60(5)(c) is also very wide, and a

member of the erstwhile Board of Directors also has an independent

right to approach the Adjudicating Authority, which must then hear

such person before it is satisfied that such resolution plan can pass

muster under Section 31 of the Code.  

13. It is also important to note that every participant is entitled to

a notice of every meeting of the committee of creditors.  Such notice

of meeting must contain an agenda of the meeting, together with the

copies of all documents relevant for matters to be discussed and the

issues to be voted upon at the meeting  vide Regulation 21(3)(iii).

Obviously,  resolution plans are “matters to be discussed” at  such

meetings,  and  the  erstwhile  Board  of  Directors  are  “participants”

who will discuss these issues. The expression “documents” is a wide

expression which would certainly include resolution plans.

14. Under Regulation 24(2)(e), the resolution professional has to

take  a  roll  call  of  every  participant  attending  through  video

36

conferencing or other audio and visual means, and must state for

the  record  that  such  person  has  received  the  agenda  and  all

relevant material for the meeting which would include the resolution

plan to be discussed at such meeting. Regulation 35 makes it clear

that  the  resolution  professional  shall  provide  fair  value  and

liquidation value to every member of the committee only after receipt

of  resolution  plans in  accordance  with  the  Code  [see regulation

35(2)].  Also,  under  Regulation  38(1)(a),  a  resolution  plan  shall

include a statement as to how it has dealt with the interest of all

stakeholders,  and  under  sub-clause  3(a),  a  resolution  plan  shall

demonstrate that it addresses the cause of default. This Regulation

also, therefore, recognizes the vital interest of the erstwhile Board of

Directors in a resolution plan together with the cause of default. It is

here that the erstwhile directors can represent to the committee of

creditors  that  the  cause  of  default  is  not  due  to  the  erstwhile

management, but due to other factors which may be beyond their

control,  which have led to non-payment of the debt.  Therefore,  a

combined reading of the Code as well as the Regulations leads to

the conclusion that  members of  the erstwhile  Board of  Directors,

being vitally interested in resolution plans that may be discussed at

37

meetings of  the committee of  creditors,  must be given a copy of

such plans as part of “documents” that have to be furnished along

with the notice of such meetings.

15. As a result of the aforesaid discussion, the arguments of the

respondents that “committee” and “participant” are used differently,

which would lead to the result  that  resolution plans need not  be

furnished to the erstwhile members of the Board of Directors, must

be  rejected.  Equally,  the  Regulations,  far  from going  beyond the

Code, flesh out the true intention of the Code that is achieved by

reading the plain language of the Sections that have already been

adverted to.  So far  as  confidential  information is  concerned,  it  is

clear that the resolution professional can take an undertaking from

members of the erstwhile Board of Directors, as has been taken in

the facts of the present case, to maintain confidentiality. The source

of this power is Regulation 7(2)(h) of the Insolvency and Bankruptcy

Board of India (Insolvency Professionals) Regulations, 2016, read

with paragraph 21 of the First Schedule thereto. This can be in the

form  of  a  non-disclosure  agreement  in  which  the  resolution

professional  can  be  indemnified  in  case  information  is  not  kept

strictly confidential. 38

16. The argument on behalf of the committee of creditors based

on the proviso to Section 21(2) is also misconceived. The proviso to

Section 21(2) clarifies that a director who is also a financial creditor

who is a related party of the corporate debtor shall  not have any

right of representation, participation, or voting in a meeting of the

committee  of  creditors.  Directors,  simplicitor,  are  not  the  subject

matter of the proviso to Section 21(2), but only directors who are

related parties of the corporate debtor. It is only such persons who

do not have any right of representation, participation, or voting in a

meeting of the committee of creditors. Therefore, the contention that

a  director  simplicitor would  have  the  right  to  get  documents  as

against a director who is a financial creditor is not an argument that

is based on the proviso to Section 21(2), correctly read, as it refers

only to a financial creditor who is a related party of the corporate

debtor. For this reason, this argument also must be rejected.  

17. We may also mention in  passing that  the Bankruptcy Law

Committee Report of November, 2015 stated:

“II.  The  Code  will  enable  symmetry  of  information between creditors and debtors.

39

5. The law must ensure that information that is essential for the insolvency and the bankruptcy resolution process is created and available when it is required. 6. The law must ensure that access to this information is made available to all  creditors to the enterprise, either directly or through the regulated professional. 7. The law must enable access to this information to third parties  who  can  participate  in  the  resolution  process, through the regulated professional.”

Paragraph II (7) correctly reflects the reason for Section 24(3)(b) of

the Code.  

18. We may indicate that the time that has been utilized in these

proceedings  must  be  excluded  from the  period  of  the  resolution

process of the corporate debtor as has been held in  Arcelormittal

India Private Limited v. Satish Kumar Gupta & Ors., Civil Appeal

Nos. 9402-9405/2018 [decided on 04.10.2018] (at paragraph 83). In

each  of  these  cases,  the  appellants  will  be  given  copies  of  all

resolution plans submitted to the CoC within a period of two weeks

from the date of this judgment. The resolution applicant in each of

these  cases  will  then  convene a  meeting  of  the  CoC within  two

weeks thereafter, which will  include the appellants as participants.

The CoC will  then  deliberate  on  the  resolution  plans  afresh  and

either  reject  them or  approve of  them with the requisite  majority,

40

after  which,  the  further  procedure  detailed  in  the  Code  and  the

Regulations will  be followed. For all  these reasons, we are of the

view that the petition and appeal must be allowed and the NCLAT

judgment set aside.

……………………J. (R.F. Nariman)

……………………J. (Navin Sinha)

New Delhi; January 31, 2019

41