Tribunal Affirms CoC's Commercial Wisdom, Dismissing Union Bank's Plea for Inclusion of Delayed Expressions of Interest
The National Company Law Tribunal (NCLT), Indore Bench, has dismissed an application filed by Union Bank of India, seeking the inclusion of four Expressions of Interest (EOIs) submitted after the stipulated timeline in the insolvency process of JSM Devcons India Pvt. Ltd. The Tribunal, comprising Shri Brajendra Mani Tripathi and Shri Man Mohan Gupta, upheld the paramount importance of the commercial wisdom of the Committee of Creditors (CoC) in its decision dated July 17, 2026.
The Union Bank of India, the sole secured financial creditor holding a 23.95% voting share in the CoC, argued that the late EOIs from four entities should be considered to maximize value and enhance competition. However, the CoC had previously declined to include these EOIs, citing procedural timelines and took a vote resulting in 74.89% dissent against including the late submissions.
The NCLT emphasized that the CoC's decision, taken by the requisite majority, is not open to interference unless it contravenes the objectives of the Insolvency and Bankruptcy Code, 2016. The Tribunal noted that while procedural timelines in Regulation 36A of the CIRP Regulations are crucial for maintaining discipline, the CoC's decision to reject the belated EOIs was within its rights and aligned with its commercial judgment.
Union Bank's contention that the rejection of late EOIs could potentially undermine value recovery was dismissed by the Tribunal, which stated that the commercial interest considered is that of all creditors, not an individual creditor alone. The Tribunal further highlighted that the four entities whose EOIs were rejected did not approach the Tribunal, thus questioning the bank's locus standi in advocating their inclusion.
The NCLT's decision underscores the autonomy of the CoC in the insolvency resolution process, reinforcing the principle that its commercial wisdom should prevail unless there is a clear violation of the statutory objectives of the Code.
Bottom Line :
Insolvency and Bankruptcy Code, 2016 - Committee of Creditors (CoC) has paramount commercial wisdom to decide on inclusion of prospective resolution applicants - Tribunal cannot interfere in decisions made by CoC unless in contravention of the Code.
Statutory provision(s):
Insolvency and Bankruptcy Code, 2016 Sections 25(2)(h), 30, 31, 60(5); Regulation 36A of CIRP Regulations
Union Bank of India v. Chaya Gupta, (NCLT)(Indore Bench) : Law Finder Doc id # 2965186
