NCLAT Allows Appeal, Approves Resolution Plan for Appellant: Held NCLT Overstepped by Interfering in CoC’s Commercial Wisdom

The National Company Law Appellate Tribunal (NCLAT) has allowed an appeal and approved a resolution plan that was previously rejected by the National Company Law Tribunal (NCLT). The NCLAT held that the NCLT had overstepped its jurisdiction by interfering in the "commercial wisdom" of the Committee of Creditors (CoC). The CoC, representing the financial creditors, had approved the resolution plan with the requisite majority. However, the NCLT had rejected it on certain grounds. The NCLAT, reinforcing the principles laid down by the Supreme Court, stated that the role of the adjudicating authority is to ensure that the resolution plan complies with the law, not to substitute its own business judgment for that of the creditors. This ruling is a significant affirmation of the supremacy of the CoC's commercial decision-making power in the insolvency resolution process.