In Brief
Appu Hotels Limited underwent corporate insolvency resolution after defaults to financial creditors. The Committee of Creditors approved M.K. Rajagopalan's resolution plan with 87.39% voting share, but the NCLAT reversed this on multiple grounds. The Supreme Court upheld the reversal on two critical grounds: the applicant's ineligibility (as managing trustee of an ineligible charitable trust, he could not act as its alter ego to gain personal benefit, violating the Trusts Act; and his conflicting interest as director of MGM Healthcare while proposing to convert corporate property into hospital); and procedural defect (the revised plan was filed directly to NCLT after CoC approval without being re-voted when financial layout materially changed). The Court rejected NCLAT's findings on valuation, Form G publication, and related party discrimination. It left open for reconsideration the settlement offer subsequently approved by CoC with 100% voting in October 2022, directing the trial court to examine its justification.
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