NCLT Mumbai Greenlights Reliance Retail’s ₹171.38 Crore Resolution Plan for Future Supply Chain Solutions Ltd., Emphasizing CoC’s Commercial Supremacy Under IBC
NCLT Mumbai Greenlights Reliance Retail’s ₹171.38 Crore Resolution Plan for Future Supply Chain Solutions Ltd., Emphasizing CoC’s Commercial Supremacy Under IBC
Introduction
The National Company Law Tribunal (NCLT), Mumbai Bench, comprising Judicial Member Lakshmi Gurung and Technical Member Hariharan Neelakanta Iyer, approved the ₹171 crore resolution plan submitted by Reliance Retail Ventures Limited (RRVL) for Future Supply Chain Solutions Limited (FSCSL) under Section 31(1) of the Insolvency and Bankruptcy Code, 2016. The Tribunal held that the resolution plan complied with all requirements under Section 30(2) of the Code and emphasized that the commercial wisdom of the Committee of Creditors (CoC) is paramount and binding.
Factual Background
The Corporate Insolvency Resolution Process (CIRP) against Future Supply Chain Solutions Limited, a Kishore Biyani-led Future Group company, was initiated on January 5, 2023, following a petition under Section 9 of the IBC filed by DHL Ecommerce (India) Pvt. Ltd. for non-payment of dues. Mr. Rajan Rawat was appointed as the Interim Resolution Professional (IRP) and was later confirmed as the Resolution Professional (RP). During the CIRP, multiple extensions were granted, the latest being on September 30, 2024, owing to the complexity of the process and the reconstitution of the CoC.
Procedural Background
The Committee of Creditors (CoC) was constituted on February 10, 2023, and admitted total claims amounting to ₹155.16 crore. After extensive deliberations, the resolution plan submitted by RRVL was approved with 91.76% voting share during the 37th CoC meeting. The average fair value and liquidation value of the corporate debtor were determined to be ₹170.69 crore and ₹133.35 crore, respectively. RRVL’s plan offered ₹171.38 crore, exceeding both the fair and liquidation values.
Issues
1. Whether the resolution plan submitted by Reliance Retail complied with the requirements of Section 30(2) of the IBC and related regulations.
2. Whether the conditional clauses in the resolution plan affected its implementability.
3. Whether the NCLT should grant automatic approvals or concessions sought by the Successful Resolution Applicant (SRA).
Contentions of the Parties
Resolution Professional (RP): The RP submitted that all statutory compliances under the IBC and CIRP Regulations, 2016, had been fulfilled. It was further stated that clarifications sought by the Tribunal concerning CIRP cost payments, employee benefit contributions, and the conditional nature of the plan were duly addressed. The RP confirmed through an affidavit dated August 2, 2024, that the plan had been made “unconditional and absolute.”
Successful Resolution Applicant (Reliance Retail Ventures Limited): Counsel for RRVL argued that the resolution plan was commercially viable and provided value maximization for all stakeholders. It was further submitted that the plan included a clear payment structure, compliance with all statutory dues, and an upfront payment schedule in accordance with Section 30(2) and Regulation 38 of the IBBI (CIRP) Regulations.
Reasoning and Analysis
The Tribunal observed that the resolution plan met all statutory requirements under Section 30(2) of the Code. It reiterated the settled principle that the commercial wisdom of the CoC is non-justiciable unless there is a clear contravention of law. The Bench took note of the affidavits and clarifications filed by the RP and RRVL, confirming that all conditions had been satisfied.
The NCLT further directed that CIRP costs, payments to assenting and dissenting financial creditors, and operational creditors be made on the Effective Date. The Bench clarified that no automatic exemptions from stamp duty, taxes, or regulatory approvals were granted, and the SRA must comply with applicable laws by approaching competent authorities. Additionally, the Tribunal referred to the Supreme Court’s decision in Ghanshyam Mishra & Sons Pvt. Ltd. v. Edelweiss ARC, reiterating that all claims not forming part of the approved resolution plan shall stand extinguished upon approval.
Implications
The decision reinforces the principle that commercial wisdom of the CoC prevails in insolvency proceedings and that resolution applicants cannot claim automatic statutory exemptions. It also underscores the NCLT’s role as a limited reviewer, ensuring statutory compliance without interfering with the CoC’s commercial decision-making. The approval of RRVL’s plan marks a significant step toward the revival of the Future Group’s logistics arm, while ensuring creditor recoveries aligned with the IBC framework.
Order
The Tribunal approved the ₹171.38 crore resolution plan submitted by Reliance Retail Ventures Limited, directing that:
- The moratorium under Section 14 stands lifted from the date of the order.
- The Resolution Professional shall hand over all records and premises to the SRA.
- A Monitoring Committee comprising the RP, two nominees from financial creditors, and two nominees from the SRA shall oversee implementation until completion.
- The Resolution Plan along with all affidavits, clarifications, and annexures shall form part of the order.
In this case the RP was represented by Mr. Nausher Kohli with Mr. Dhananjay Sud and Ms. Jyoti Dubey, Advocates. Meanwhile the SRA was represented by Mr. Madhav Kanoria, Ms. Surbhi Pareek and Mr. Jayesh Karnawat and Mr. Karthika Sanjay, Advocates.
