Case Law Details
Ramesh Kesavan Vs CA Jasin Jose (NCLAT Chennai)
In a recent judgment, the National Company Law Appellate Tribunal (NCLAT) in Chennai delivered a significant ruling regarding the rights of shareholders to challenge resolution plans in insolvency proceedings. The case, titled Ramesh Kesavan Vs CA Jasin Jose, sheds light on the extent of shareholders’ involvement in the resolution process under the Insolvency and Bankruptcy Code, 2016.
The appellant, Ramesh Kesavan, who is both a promoter and suspended director of the corporate debtor company, filed an appeal against the order dated 13th October 2023. The order in question pertained to the approval of a resolution plan under Section 61 of the Insolvency and Bankruptcy Code, 2016 (IBC).
The central argument put forth by the appellant’s counsel contended that the appellant had the right to challenge the resolution plan due to several irregularities in the process. These irregularities included the alleged illegal constitution of the Committee of Creditors (CoC), improper valuation of the corporate debtor, and discriminatory treatment of creditors within the plan.
However, the respondent, representing the successful resolution applicant, countered this argument by asserting that the appellant, as a shareholder, lacked the necessary locus standi to challenge the resolution plan once it had been approved. Citing precedent, the respondent emphasized that shareholders have a limited role in insolvency proceedings, primarily confined to cooperating with the resolution professional.
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