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Ajay Gupta vs. Pramod Kumar Sharma

Civil Appeal · 2022 INSC 236Decided 25 Feb 2022
Civil Appeal No. 1385 of 2022
Dinesh Maheshwari · Vikram Nath

Background

In the corporate insolvency resolution process (CIRP) of a company, B.B. Foods Pvt. Ltd., there were two competing resolution applicants: a consortium led by the appellant, Ajay Gupta, and a rival applicant. After the Committee of Creditors (CoC) raised concerns about certain defects in his plan, the appellant submitted an affidavit proposing changes, including reducing the plan's implementation timeline from 180 to 90 days. The National Company Law Tribunal (NCLT) allowed his proposed change but, to keep a "level playing field," also allowed the rival applicant to modify its own plan; the rival's plan was ultimately approved by the CoC, and the NCLAT (appellate tribunal) upheld this outcome, prompting Gupta's appeal to the Supreme Court.

Decision Breakdown

The appellant argued that his affidavit was merely a clarification, not a substantive "modification" of his resolution plan, so the other applicant should not have been permitted to also revise its plan. The Supreme Court disagreed, holding that changing the plan's timeline from 180 to 90 days was clearly a modification of a key term, regardless of how the appellant characterized it, and that having sought and obtained this benefit himself, he could not object to the same fairness being extended to his competitor. The Court also noted that any disclosure of his plan's terms to the rival was a consequence of his own choice to raise the issue before the tribunal, not any fault of the resolution professional or CoC. It further observed that the successful rival applicant was not even a party to this appeal, so no order could be passed against its interests in any event. The appeal was dismissed, with the matter left open for further processing before the NCLT.

Lesson Learnt

In competitive processes like insolvency resolution, a party that seeks a procedural or substantive concession from an adjudicating authority cannot object when the same authority extends an equivalent, fairness-based concession to its competitor: "level playing field" cuts both ways.

Official source (sci.gov.in)View Judgment (PDF)

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