The Supreme Court on Wednesday declined to entertain a plea by Manju J Homes India Ltd. seeking a direction to the adjudicating authority to hear its pending application challenging the rejection of its claim before taking up the resolution plan for approval in insolvency proceedings involving Idea Builders Pvt. Ltd. The matter was heard by the bench of Chief Justice Surya Kant and Justice Joymalya Bagchi.
The petitioner sought an expeditious hearing of its application against the rejection of its claim, arguing that approval of the resolution plan without adjudication of the pending application could cause substantial financial prejudice.
During the hearing, the Bench questioned the petitioner’s approach, observing that the resolution plan had already been approved by the Committee of Creditors (CoC) and placed before the adjudicating authority for approval. The Court indicated that objections concerning the treatment of the petitioner’s claim and the determination of liquidation value should be raised at the stage of consideration of the resolution plan.
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“The plan has come up right now. When the plan is being accepted, you make your arguments at the time of acceptance of the plan,” Justice Bagchi observed.
The Bench further reasoned that the petitioner’s contention regarding the incorrect determination of liquidation value, allegedly resulting from the exclusion of its claim from the preparation of the resolution plan, would essentially constitute an objection to the plan itself.
The petitioner’s counsel, however, clarified that the writ petition was not challenging the resolution plan or the liquidation value. Rather, the limited prayer was for a direction to the adjudicating authority to expeditiously decide the pending application challenging the rejection of its claim.
Counsel further argued that the application had remained pending despite repeated adjournments and that the petitioner had already sought an early hearing. It was submitted that the petitioner could suffer financial prejudice to the extent of ₹30–35 crore if the resolution plan were approved before its claim-rejection application was decided.
Emphasising the urgency of the request, counsel submitted that approval of the plan could leave the petitioner with no option but to separately challenge the plan, potentially prolonging the proceedings.
The petitioner reiterated that it was not seeking adjudication of the merits of the resolution plan at that stage, but only a direction to have its pending application heard before the plan was taken up.
However, the Bench observed that objections concerning the petitioner’s claim and its treatment in the resolution process could be raised against the resolution plan when it was considered for approval.