Case Details

Case Name: IA(IBC)/379/KOB/2025 IN CP(IBC)/22/KOB/2024

Parties: Dr. Ayyappan Nair Raghavan Pillai (Applicant) vs. Committee of Creditors of Attukal Devi Institute of Medical Sciences Limited (Respondent No.1), Rajmohan R. - Resolution Professional (Respondent No.2), Attukal Devi Institute of Medical Sciences Limited (Respondent No.3), Dr. M Ayyappan (Additional Respondent No.4)

Court/Authority: National Company Law Tribunal (NCLT), Kochi Bench

Presiding Officer: Hon'ble Member (Judicial) Shri. Vinay Goel

Date of Institution: 01.10.2025

Order Delivered on: 25.05.2026

Parties Involved

Petitioner/Applicant: Dr. Ayyappan Nair Raghavan Pillai, an admitted Financial Creditor, former director, and shareholder of the Corporate Debtor (Attukal Devi Institute of Medical Sciences Limited), who also initiated the Corporate Insolvency Resolution Process (CIRP).

Respondent No.1: Committee of Creditors (CoC) of Attukal Devi Institute of Medical Sciences Limited, represented by the Managing Director of Dhanlaxmi Bank Limited.

Respondent No.2: Rajmohan R., the Resolution Professional (RP) appointed for the CIRP.

Respondent No.3: Attukal Devi Institute of Medical Sciences Limited (the Corporate Debtor), represented by its Resolution Professional.

Respondent No.4: Dr. M. Ayyappan, the Successful Resolution Applicant whose plan was approved by the CoC.

Sole Financial Creditor: Dhanlaxmi Bank Limited, holding 100% voting share in the CoC.

Issues / Allegations / Violations

The Applicant challenged the CoC's approval of the resolution plan submitted by Dr. M. Ayyappan (Plan B) in the 16th CoC meeting held on 26.02.2025 (later clarified as 15.09.2025 in the RP's submission). The key allegations were:

  • The approval process was arbitrary, discriminatory, mala fide, and violative of the Insolvency and Bankruptcy Code (IBC), 2016 and CIRP Regulations.
  • The CoC ignored its own Evaluation Matrix, where the Applicant's plan (Plan A) scored 50/100 (Rank 1) and Dr. Ayyappan's plan scored 31/100 (Rank 2).
  • Dr. M. Ayyappan was permitted to revise and enhance his plan value by introducing an additional ₹50 lakhs after submission, a similar opportunity was denied to the Applicant.
  • The approved Plan B was contingent and speculative, especially regarding a critical lease dispute with the Attukal Bhagavathy Temple Trust (ABTT), lacking a clear relocation plan.
  • Plan B provided discriminatory treatment to creditors: It proposed Nil payment to the Applicant's admitted unsecured financial debt of ₹2.87 Cr, offered a conditional ₹50 L payment to ABTT (contingent on a 10-year lease renewal), and allocated ₹78.39 L to "current suppliers" who had not filed claims, while offering Nil to admitted Operational Creditors.
  • Plan B provided for a contingent liability of ₹1.36 Cr for EPFO dues, a claim which had been rejected by the RP and was barred by moratorium.
  • The Applicant questioned Dr. M. Ayyappan's "proven track record," citing ongoing CBI proceedings and criminal charges against him from his tenure at HLL, arguing this should have negatively impacted his evaluation.
  • The Applicant alleged the RP failed to ensure a fair process and permitted deviations that altered the competitive landscape.

Findings & Observations

The NCLT's key findings, based on legal precedents and documents, were:

  • The commercial wisdom of the CoC is paramount. The Evaluation Matrix is only a guiding tool and does not confer a vested right on the highest-scoring applicant to have their plan approved. The CoC is entitled to consider broader commercial factors like feasibility, viability, implementation capability, financial strength, and long-term sustainability.
  • The CoC, with its 100% voting share, approved Dr. Ayyappan's plan after deliberations over multiple meetings, considering factors like his managerial experience, proposed resolution of the ABTT lease dispute, financial backing, and perceived long-term sustainability.
  • The CoC expressed concerns that a substantial portion of the Applicant's financial outlay was directed towards settling his own dues, raising questions about the plan's overall revival potential for the corporate debtor.
  • The Tribunal found no material irregularity, arbitrariness, or statutory violation in the conduct of the CIRP or the CoC's decision-making process. It noted that opportunities for clarifications were extended to all resolution applicants, including the Applicant.
  • The allegation of permitting post-submission enhancements was addressed. The Tribunal noted the CoC/RP's submission that the additional ₹50 lakhs discussed was treated as a "/clarification/" for feasibility and not incorporated into the Evaluation Matrix as a revised plan value.
  • The issue of Dr. M. Ayyappan's eligibility was deemed settled as he was found not disqualified under Section 29A of the IBC. The ongoing CBI cases were considered irrelevant for eligibility under this section.
  • The Tribunal cited the NCLAT judgment in Vedanta Ltd. v. Bhuvan Madan (2026) to emphasize that a higher score or plan value does not mandate approval and that the CoC's commercial decision cannot be interfered with without evidence of material illegality.

Penalties / Settlements / Directions

This application did not pertain to the approval of a resolution plan but challenged the process of its selection. Therefore, no penalties or settlements were imposed in this order. The financial implications of the approved resolution plan (Plan B) are:

  • CIRP Costs: ₹6,00,000 (full payment upfront).
  • Secured Financial Creditor (Dhanlaxmi Bank): ₹5,60,000 (full payment).
  • Unsecured Financial Creditor (Applicant): Nil (his admitted claim of ₹2.87 Cr is not provided for).
  • Operational Creditor (ABTT): A conditional payment of ₹50,00,000, contingent upon signing a 10-year lease renewal. Litigation with ABTT would continue.
  • Other Operational Creditors: ₹78,39,000 allocated to "current suppliers" who had not filed claims, while Nil is allocated to admitted Operational Creditors.
  • EPFO Dues: A contingent provision of ₹1.36 Cr for a claim that was rejected and is under moratorium.
  • Infusion: ₹68 L for working capital buffer and ₹850 L for facility upgrade (described as vague and contingent by the Applicant).

Corrective Actions & Future Obligations

The Tribunal's order did not prescribe any corrective actions as the application was dismissed. The future obligation is for the RP to proceed with the application for approval of the resolution plan (IA(IBC)(PLAN)/6/KOB/2025) filed under Section 30(6) of the IBC. The CoC had also approved the constitution of a Monitoring Committee to supervise the implementation of the approved resolution plan.

Final Ruling & Enforcement

  • The Adjudicating Authority dismissed the application (IA(IBC)/379/KOB/2025).
  • The commercial decision of the CoC to approve the resolution plan of Dr. M. Ayyappan was upheld.
  • No interference was warranted under Section 60(5) of the IBC as no material irregularity or illegality was found.
  • The Tribunal explicitly clarified that this order does not express any view on the merits, feasibility, viability, or legal compliance of the approved resolution plan itself. These aspects are to be examined independently in the pending plan approval application (IA(IBC)(PLAN)/6/KOB/2025) under Section 31 of the IBC.
  • The file was consigned to records.