CoC under commercial wisdom can decide not to conduct third valuation even in case of significantly different between two estimates | There is no specific bar under IBC that a Creditor cannot claim its remaining debt from Guarantor which has not been recovered from Corporate Debtor – Hemant Shantilal Shah Vs. Care Office Equipment Ltd. and Ors. – NCLAT New Delhi
In the present facts of the case, the CoC after deliberations decided in the 6th CoC meeting that a third valuer would require to be appointed only if there was gulf of a difference in the stock valuation figures estimated by the two appointed valuers, while the 7th CoC meeting after noticing the valuation reports of the two valuers decided against the appointment of the third valuer. This position was later confirmed by the CoC.
Hon’ble NCLAT held that that being the considered business decision of the CoC, the supremacy of the commercial wisdom cannot be questioned by the Appellants. In fine, we do not find any infirmity in the conduct of the valuation exercise.
Further, held that when the CoC in its wisdom has approved the resolution plan which provided for the continued rights of the Financial Creditor against the personal guarantor and did away with the subrogation rights of the personal guarantors, the contention of the Appellant that the liability of the personal guarantors should stand extinguished, not being in sync with the commercial wisdom of the CoC, is clearly devoid of merit.