The decision as to whether the Corporate Debtor is to be revived or not is essentially a business decision and hence should be left to the CoC – SAJ Housing Pvt. Ltd. Vs. Ms. Priyanka Chouhan Liquidator – NCLAT New Delhi
September 4, 2023
Hon'ble NCLAT held that: (i) Though the concept of time value of money has not been expressly defined in the IBC, ordinarily understood, time value of money is not only a regular or timely return received for the duration for which the amount is disbursed as an amount in addition to the principal, but also covers any other form of benefit or value accruing to the creditor as a return for providing money for a long duration. (ii) In the statutory framework of the IBC, there is only limited review available which can be exercised by the Adjudicating Authority without trespassing upon the business decision of the majority of the CoC. The decision as to whether the Corporate Debtor is to be revived or not is essentially a business decision and hence should be left to the CoC so long as it musters more than 66% vote share. And it is here that primacy of the commercial wisdom of the CoC comes into play. (iii) There can be no fetters on the commercial wisdom of the CoC. The supremacy of commercial wisdom of the CoC has been reaffirmed time and again by the Hon’ble Supreme Court. It is not for the Adjudicating Authority to consider or evaluate on merits the rationale underlying the commercial decision of the CoC.