SC Reiterated the Commercial Wisdom of CoC – Courts cannot interfere with approved Resolution Plan except on limited grounds under Sections 30(2) and 61(3) of IBC.
SC – Clarifications provided to SEML were not Modifications of the bid after the bidding process was closed.
SC upheld the CoC approved resolution plan and ruled that clarifications provided to the successful bidder did not modify resolution plan, emphasizing once again that judicial intervention in commercial decisions under IBC is extremely limited.
Supreme Court Reaffirms Doctrine of Commercial Wisdom and Primacy of CoC’s Commercial Wisdom in the Torrent Power Resolution Challenge
Supreme court – Clarifications Not Modifications – Upholds SEML’s Resolution Plan against Torrent Power’s Objections
Supreme Court – IBC Discipline Strengthened and Dissuades Unsuccessful Bidders from Reopening CoC Commercial Decisions
Supreme Court – Commercial Wisdom is Non-Justiciable and Affirms CoC’s Sole Authority in SKS Power Resolution Plan
RP and the CoC – Negotiation Process for approval of the Resolution Plan – Regulation 39(1A) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (for short, “CIRP Regulations
The appeals before us typify the growing strategic use of the judicial system by unsuccessful resolution applicants, who seek to reopen almost every commercial decision under the guise of procedural impropriety. This converts the corporate resolution process into a protracted adversarial contest and erodes the value of the Corporate Debtor. Such an approach incentivises delay, rent-seeking, and strategic obstruction and is fundamentally inconsistent with the economic logic and statutory design of the IBC.
Before parting, we wish to add a few words of caution. The IBC represents a conscious legislative choice to privilege speed, certainty, and creditor-driven decision-making over exhaustive judicial scrutiny. Experience shows that unsuccessful bidders will always try to spin commercial decisions of the CoC as procedurally faulty in order to secure a second shot through litigation by filing.
When commercial decisions taken by the CoC are subjected to expansive judicial scrutiny, resolution timelines lengthen, transaction costs rise, and the going-concern value of the Corporate Debtor erodes. The consequence therefore is not merely delay, but a tangible loss of economic value for all stakeholders.
Judgment dated 27.2.2026 of the Supreme Court in Civil Appeal Nos.11746-11747 of 2024 of Torrent Power Ltd Vs. Ashish Arjunkumar Rathi and others with connected matters
