M/s. Tamilnad Mercantile Bank Limited vs Mr. Radhakrishnan Dharmarajan

(Hybrid Mode) 03.02.2026:

The Appellant in the instant appeal is Tamilnad Mercantile Bank Limited, the dissenting Financial Creditor. He has filed the instant appeal being CA(AT)CH)(Ins) No. 23/2026 under Section 61(1) of I & B Code, 2016 (to be referred to as Code hereafter), being aggrieved as against the order dated 25.11.2025 passed by learned adjudicating authority, NCLT, Chennai, in IA(IBC)/2436(CHE)/2024 in IBA/757/2019 by virtue of which, the aforesaid application filed by the Appellant was dismissed.

Brief facts of the case are that the Appellant is a Financial Creditor to Coastal Energen Private Limited. It had provided financial assistance to the said company along with a consortium of banks to set up a thermal power plant of 1200 MW in the district of Thoothukudi, Tamil Nadu. The said company, the corporate debtor was admitted into corporate insolvency resolution process (CIRP) vide order dated 04.02.2022 on the application filed under section 7 of the Code by State Bank of India. Consequently, the Respondent herein, was appointed first as IRP (interim resolution professional) and subsequently as RP (resolution professional). RP initiated action under CIRP, took out the public notice, invited the claims, and after collecting the claims, constituted the committee of creditors (CoC). The Appellant here in has a voting share of 2.20% in the said CoC. The RP invited expression of interest (EoI), shortlisted the prospective resolution applicants (PRA) on basis of the response to EoI, and solicited submission of resolution plans by them. In the process, the resolution plan submitted by Dickey Alternative Investment Trust in consortium with Adani Power Limited was approved with the voting of 97.80% by the CoC on 22.11.2023, in which the Appellant had dissented. On 30.08.2024, the said plan was approved by Ld. Adjudicating Authority and on the same day after the approval of the plan, the RP conducted a joint meeting of all the creditors of the CD, and after that finalised the share amount to be received by each of the Financial Creditors and distributed the entire proceeds under the approved resolution plan to all Financial Creditors within 12 hours of the uploading of the order approving the resolution plan. In the process, the RP remitted a sum of ₹52.78 crore to the account of the Appellant. Aggrieved by the said distribution of the proceeds under the resolution plan, the Appellant on 01.10.2024, filed the application IA/2034/2024 before Ld. Adjudicating Authority, to which RP filed reply on 04.11.2024. After going through the reply of the RP, the Appellant filed another application IA/2436/2024 seeking production of minutes of the monitoring committee and the valuation report on the grounds that they are necessary for adjudication of IA/2034/2024 on 12.12.2024. During the proceedings of the said applications, Ld. Adjudicating Authority on 25.11.2025 passed the impugned order in IA/2436/2024 dismissing the said application, against which he has filed the instant appeal.

The Appellant had contended before the Ld. Adjudicating Authority that on 16^th CoC meeting held on 22.11.2023, the CoC deliberated on the said resolution plans in detail, wherein members specifically asked the Respondent RP to provide details regarding the share of each Financial Creditor, in the event of the creditors choosing to dissent on the resolution plan. However, RP did not provide the specific details as asked for, which could have enabled them to make an informed decision, and instead remarked that dissenting Financial Creditors will get less amount compared to what they will get if they approve the higher value resolution plans. Further, though the resolution plan incorporated the provision that the dissenting Financial Creditors will be entitled to receive the amount that they would have received in accordance with section 53(1) of the code, the exact value payable to him was not made known to him in advance, and that there was discrimination between the assenting and the dissenting Financial Creditors in terms of payment being made. He had further stated that he was paid a sum of Rs. 52.78 crore instead of Rs. 73.17 crore, which he was entitled to. He has alleged that the Respondent RP did not share the minutes of the monitoring committee to him and that he has not obtained a proper valuation of the assets of the CD. He had contended that the valuation reports were essential to understand the method of calculation adopted, which resulted in payment of a lesser amount to him, and therefore, he had prayed for a direction to the Respondent RP to file valuation reports and the minutes of the monitoring committee meetings in the application he had filed.

The Respondent in his reply to this application had stated that the application is not maintainable, that the Appellant himself had attended the joint lenders meeting, and in the said meeting, SBI was appointed to represent the Financial Creditors as a class in the monitoring committee, and the minutes of the monitoring committee meetings could have been obtained by the Appellant from SBI itself. He had stated that insofar as the valuation reports are concerned, sharing the valuation details are to be done in compliance with the provisions of the Code and the regulations made thereunder. He had further stated that in compliance of the provisions of Regulation 35 of IBBI (insolvency resolution process for corporate persons) regulations, 2016 as it then existed during the CIRP process, he had shared the liquidation value of the CD with all the members of CoC including the Appellant after obtaining confidentiality undertakings from them and at that point of time, the Appellant never raised any concern or objection. He had categorically recorded in the minutes of 16^th CoC meeting that the dissenting creditors will get a lesser amount, because the resolution plan value being Rs. 3335.52 crore, excluding CIRP cost, was much higher than the average liquidation value of the CD, which was Rs. 2410.33 crore and that, despite knowing this, the Appellant in its commercial wisdom chose to dissent.

Learned Adjudicating Authority took up for consideration, both the applications filed by the Appellant, that is IA/2034/2024 and IA/2436/2024 and after hearing both sides, passed the impugned order as extracted below::

The Appellant before this appellate tribunal has contended that denial of access to valuation report by the impugned order renders the determination of the share to be paid to him, arbitrary and legally unsustainable, and it ignores the settled principle that there must be procedural fairness and transparency for adjudication of post-approval disputes relating to implementation of the resolution plan, that it is a violation of natural justice and hence the impugned order is bad in law. He has further submitted that Ld. Adjudicating Authority failed to realise that valuation reports were sought for by him, not to reopen or renegotiate the resolution plan, but solely to test the legality and correctness of the nature of distribution of the resolution plan amount, that Ld. Adjudicating Authority, failed to prevent discrimination within the same class of Financial Creditors, contrary to the prescription of the code, and that it failed to exercise its residuary jurisdiction under section 60(5) of the code to call for essential documents necessary for effective adjudication of IA/2034/2024, thereby rendering the adjudicatory process meaningless.

It is to be noted that the application IA/2034/2024 praying for payment of an additional Rs.20.23 crore from the resolution plan amount is still under consideration before Ld. Adjudicating Authority. The main grievance of the Appellant is that he has been paid Rs.52.78 crore instead of Rs.73.17 crore which he is entitled to in accordance with section 53(1) as provided under section 30(2) of Code as per his calculations. It will not be necessary for us to delve into his contentions in this regard, as that is still under adjudication before Ld. Adjudicating Authority and orders are yet to be passed. The order under challenge is the one where his prayer for providing the valuation reports to him has been rejected on the grounds that the valuation reports in full are not to be shared by the RP, in accordance with the provisions of Regulation 35 of IBBI (Liquidation Process) regulations as it existed prior to 15.02.2024. The said provisions are extracted hereunder: -

Regulation 35: Fair value and Liquidation value.

Admittedly, the legislature had consciously provided for that only the liquidation value in summary form is to be provided to the members of the CoC and not the full valuation reports. Accordingly, the RP has acted and it cannot be said that he has acted against the provision of the Code. Further the order of the Adjudicating Authority holding the action of the RP as correct cannot be faulted.

Further, the Appellant admittedly had not contested the liquidation value as provided to him during the CIRP period and never questioned the valuation process. In that context, his attempt to seek the full set of valuation reports by portraying the valuation process as vitiated and defective resulting in undervaluation appears to be an afterthought. The Appellant has contended that he should have been provided with the valuation reports on the grounds of natural justice and fair play. But he has not been able to demonstrate before Ld. Adjudicating Authority that there was unfair play and justice has been denied to him, while denying him access to the full set of valuation reports in violation of the provisions of the Code. In any case it is still open for him to agitate his grievances regarding payment of a lesser amount than what he was entitled for as IA/2034/2024 is still under consideration before Ld. Adjudicating Authority.

In view of our observations as above, we are of the view that the impugned order does not merit any interference at our hands. The appeal is accordingly dismissed.

All pending Interlocutory Applications, if any, will stand closed.

[Justice N. Seshasayee] Member (Judicial) [Jatindranath Swain] Member (Technical)