Legal Analysis: Sanjay Dave vs. Andhra Bank Ltd. & Ors

Citation: 2026 INSC 580
Court: Supreme Court of India
Bench: Division Bench comprising Justice K.V. Viswanathan and Justice Vipul M. Pancholi
Judgment Author: Justice K.V. Viswanathan
Date of Decision: May 27, 2026
Nature of Judgment: Civil Appeals under Section 62 of the Insolvency and Bankruptcy Code, 2016 (IBC) against the judgment of the National Company Law Appellate Tribunal (NCLAT), which had dismissed the appellant’s appeals challenging the rejection of his resolution plan and the decision of the Committee of Creditors (CoC) to liquidate the corporate debtor.

Synopsis of the Judgment
The appellant was the promoter/director of the corporate debtor (Oracle Home Textiles Limited) and submitted a resolution plan which was approved by the CoC with 99.90% voting. However, disputes arose over the terms of the Letter of Intent (LoI) issued by the Resolution Professional (RP). The appellant claimed the LoI was conditional (subject to pending litigation and outcome of third‑party applications) and also objected to a clause requiring him to bear the risk of staff‑related claims. He also argued that the time for submitting a performance guarantee was reduced from 45 days to 7 days. The RP forfeited the Earnest Money Deposit (EMD) of Rs.1 crore when the appellant did not accept the LoI. The NCLT dismissed the appellant’s applications and allowed the RP’s application for liquidation. The NCLAT affirmed. The Supreme Court dismissed the appeals, holding that the appellant had full knowledge of the pending litigations and had participated in CoC meetings where these conditions were discussed; he had expressly agreed to the risk‑bearing clause; the reduction of time for performance guarantee was justified as the COVID‑19 relaxation period had expired; and the appellant could not be allowed to approbate and reprobate. The Court reaffirmed that once a resolution plan is approved by the CoC, the successful resolution applicant cannot negotiate further or withdraw, and the CoC’s commercial wisdom to liquidate under Section 33 is not subject to judicial review.

1. Basic Information of the Judgment

• Case Title: Sanjay Dave vs. Andhra Bank Ltd. & Ors.

• Civil Appeal Nos.: 12264-12266 of 2024

• Bench: Justice K.V. Viswanathan and Justice Vipul M. Pancholi (Division Bench)

• Judgment Author: Justice K.V. Viswanathan

• Date of Decision: May 27, 2026

• Citation: 2026 INSC 580

• Appeal From: Judgment dated 29.10.2024 passed by the National Company Law Appellate Tribunal (NCLAT), New Delhi in Company Appeal (AT)(INS) Nos. 1128, 1131 and 1134 of 2024.

2. Legal Framework

Laws and Provisions Involved:

• Insolvency and Bankruptcy Code, 2016 (IBC): Section 12 (CIRP period), Section 30 (submission of resolution plan), Section 31 (approval of resolution plan by adjudicating authority), Section 33 (initiation of liquidation – CoC may decide to liquidate any time before confirmation of resolution plan), Section 62 (appeal to Supreme Court from NCLAT orders).

• IBC (Insolvency and Resolution Process for Corporate Persons) Regulations, 2016: Regulation 36B (Request for Resolution Plan – RFRP).

• Indian Contract Act, 1872: Principles of acquiescence, estoppel, and approbation and reprobation.

Key Precedents Cited and Applied:

• Ebix Singapore Private Limited v. Committee of Creditors of Educomp Solutions Limited and Another (2022) – A resolution plan approved by the CoC is binding and irrevocable as between the CoC and the successful resolution applicant; no further negotiations are permitted after approval; the successful resolution applicant cannot withdraw or modify the plan at its will.

• K. Sashidhar v. Indian Overseas Bank (2019) – The commercial wisdom of the CoC is paramount and not subject to judicial review, except for ensuring compliance with Section 30(2) IBC. The adjudicating authority cannot evaluate the justness of the CoC’s decision.

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