In Brief
The Supreme Court upheld the mandatory requirement that a resolution plan under the Insolvency and Bankruptcy Code, 2016 must be approved by at least 75% voting share of financial creditors. Where plans by Kamineni Steel & Power India Pvt. Ltd. and Innoventive Industries Ltd. received less than 75% approval (66.57% and 55.73% respectively), the Court held they were deemed rejected. The Court ruled that neither adjudicating authorities nor appellate authorities have jurisdiction to review or overturn the commercial decisions of creditors, which are non-justiciable. An amendment reducing the threshold to 66% (effective 6th June 2018) was held to have prospective effect only, not retrospective application to these pre-amendment decisions. With no alternative plans submitted within the 270-day statutory period, liquidation was the inevitable consequence.
The lawyer headnote and full judgment text are available to registered users.