KALPRAJ DHARAMSHI & ANR. versus KOTAK INVESTMENT ADVISORS LTD. & ANR.

KALPRAJ DHARAMSHI & ANR. versus KOTAK INVESTMENT ADVISORS LTD. & ANR.

The Supreme Court held that the principles underlying Section 14 of the Limitation Act apply to exclude the period during which KIAL bona fide and with due diligence prosecuted a writ petition before the High Court, so the appeals before NCLAT were within limitation; however NCLAT erred in interfering with the commercial decision of the Committee of Creditors (taken by an 84.36% majority) approving the resolution plan, since such commercial wisdom is not ordinarily reviewable beyond the limited statutory grounds under Sections 30 and 31 of the I&B Code; NCLAT’s order dated 05.08.2020 was quashed and NCLT orders dated 28.11.2019 restoring approval of Kalpraj’s resolution plan were maintained.

Parties
Successful Resolution Applicant; Appellant in Civil Appeal Nos.2943 2944 of 2020: Kalpraj Dharamshi & Rekha Jhunjhunwala; Resolution Applicant; Respondent No.1 in Some Appeals; Appellant Before NCLAT: Kotak Investment Advisors Ltd.; Financial Creditor; Appellant in Civil Appeal Nos.3138 3139 of 2020: Deutsche Bank AG; Erstwhile Resolution Professional of Ricoh India Ltd.; Appellant in Civil Appeal Nos.2949 2950 of 2020: Krishna Chamadia; Operational Creditor; Appellant in Diary No.24125 of 2020: Fourth Dimension Solutions Limited
Jurisdiction
India
Judgment Date
10 March 2021
Procedural Posture
Civil Appeal / Appeal in the Supreme Court Against NCLAT Order Dated 05.08.2020 (challenges to NCLAT Setting Aside NCLT Orders Dated 28.11.2019)
Outcome
Appeals allowed in part; NCLAT order dated 05.08.2020 quashed and set aside; NCLT orders dated 28.11.2019 restored and maintained
Legal Topics
Applicability of Section 14 Limitation Act Principles to Proceedings Before Quasi Judicial Tribunals, Limitation for Appeals Under Section 61 IBC, Justiciability and Judicial Review of Committee of Creditors' Commercial Decisions, Waiver and Acquiescence, Natural Justice and Jurisdiction of Nclt/high Court, Process Memorandum Clauses and Bidder Obligations
Insolvency and Bankruptcy Limitation Administrative Law Constitutional Law (article 226) Company Law Commercial Law Applicability of Section 14 Limitation Act Principles to Proceedings Before Quasi Judicial Tribunals Limitation for Appeals Under Section 61 IBC +4 more

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Parties

Kalpraj Dharamshi & Rekha Jhunjhunwala

Successful Resolution Applicant; Appellant in Civil Appeal Nos.2943 2944 of 2020

Kotak Investment Advisors Ltd.

Resolution Applicant; Respondent No.1 in Some Appeals; Appellant Before NCLAT

Deutsche Bank AG

Financial Creditor; Appellant in Civil Appeal Nos.3138 3139 of 2020

Krishna Chamadia

Erstwhile Resolution Professional of Ricoh India Ltd.; Appellant in Civil Appeal Nos.2949 2950 of 2020

Fourth Dimension Solutions Limited

Operational Creditor; Appellant in Diary No.24125 of 2020

Procedural Posture

Civil Appeal / Appeal in the Supreme Court Against NCLAT Order Dated 05.08.2020 (challenges to NCLAT Setting Aside NCLT Orders Dated 28.11.2019)

Legal Issues

  1. 1 Whether the period during which KIAL prosecuted a writ petition in the High Court can be excluded under the principles of Section 14 of the Limitation Act for purposes of appeals under Section 61 of the IBC
  2. 2 Whether KIAL by participating after a revised-bid process and by signing the covering letter waived or acquiesced such as to estop it from challenging acceptance of a belated resolution plan
  3. 3 Whether NCLAT was justified in interfering with the Committee of Creditors' (CoC) commercial decision to approve a resolution plan

Ratio Decidendi

The Supreme Court held that the principles underlying Section 14 of the Limitation Act apply to exclude the period during which KIAL bona fide and with due diligence prosecuted a writ petition before the High Court, so the appeals before NCLAT were within limitation; however NCLAT erred in interfering with the commercial decision of the Committee of Creditors (taken by an 84.36% majority) approving the resolution plan, since such commercial wisdom is not ordinarily reviewable beyond the limited statutory grounds under Sections 30 and 31 of the I&B Code; NCLAT’s order dated 05.08.2020 was quashed and NCLT orders dated 28.11.2019 restoring approval of Kalpraj’s resolution plan were maintained.

Court Disposition

Appeals allowed in part; NCLAT order dated 05.08.2020 quashed and set aside; NCLT orders dated 28.11.2019 restored and maintained

Orders

  • Order of NCLAT dated 05.08.2020 quashed and set aside
  • Orders of NCLT dated 28.11.2019 approving the resolution plan of Kalpraj restored and maintained