Court/Authority: Supreme Court of India, Civil Appellate Jurisdiction.
Civil Appeal Nos.: 12264‑12266 of 2024.
Judgment Date: 27 May 2026.
Period of Dispute: CIRP admitted 9 Aug 2018; resolution plan approved 10 May 2021; CIRP ended 21 Feb 2023; liquidation vote 5 Jun 2023; NCLAT order dated 29 Oct 2024; Supreme Court appeal decided 27 May 2026.
Parties Involved
Appellant: Sanjay Dave – Member of the suspended board & Successful Resolution Applicant (SRA) of Oracle Home Textiles Ltd.
Respondent No.1: Andhra Bank Ltd (now part of Union Bank of India).
Respondent No.2: Union Bank of India (representative of financial creditors).
Respondent No.3: Liquidator (appointed after liquidation order).
Resolution Professional (RP): Unnamed, acted under the Insolvency and Bankruptcy Code.
Prospective Resolution Applicants (PRA): M/s Faze Three Limited and M/s Munish Kohli & Associates (applications pending before NCLT).
Legal Counsel: Ms. Purti Gupta (appellant), Mr. Gaurav Agrawal (lead counsel for respondent No.1), Ms. Anjali Sharma (counsel for respondent No.3), Adv. A.K. Mishra, Adv. U.C. Nayak, Adv. Rohan Agarwal, Mr. Deena Dayal (representative of Union Bank).
Issues / Allegations / Violations
Whether the Letters of Intent (LoIs) issued by the RP on 23 May 2021, 23 June 2021 and 23 July 2021 were conditional, thereby violating Section 62 of the IBC.
Whether the clause reducing the performance guarantee period from 45 days to 7 days was contrary to the CoC’s earlier resolution.
Whether the forfeiture of the Earnest Money Deposit (EMD) of Rs 1 crore under clause 1.9.4 of the Request for Resolution Plan (RFRP) was unlawful.
Whether the appellant, having been aware of pending applications by PRAs, could insist that his plan be considered without subjecting it to those outcomes.
Whether the CoC’s decision to liquidate the corporate debtor with a 99.61% vote was subject to judicial review.
Findings & Observations
The Court held that the stipulations in the LoIs (subject to pending NCLT orders or PRA applications) did not render the LoIs conditional; they were merely procedural references.
The appellant was present at the 15th CoC meeting (24 Jan 2020) and was fully aware of the pending litigations involving PRAs; therefore, his claim of surprise was rejected.
The NCLAT and NCLT findings that the appellant could not demand exclusion of the pending applications were affirmed.
The Court accepted that the appellant acquiesced to the clauses, including the risk of staff/worker litigation and the performance guarantee timeline, as evidenced by CoC minutes.
The reduction of the performance guarantee period to seven days in the third LoI was justified because the earlier 45‑day extension, granted due to the COVID‑19 pandemic, had already expired.
Clause 1.9.4 of the RFRP expressly permits forfeiture of the EMD for failure to submit the performance guarantee or any other non‑compliance; the RP’s action was therefore lawful.
The CoC’s commercial wisdom in approving liquidation (99.61% vote) is non‑justiciable and cannot be interfered with, per Supreme Court precedents (e.g., Manish Kumar v. Union of India, K. Sashidhar v. Indian Overseas Bank).
The binding nature of a CoC‑approved resolution plan was reiterated, citing Ebix Singapore Pvt Ltd v. Committee of Creditors and Amtek Auto decisions.
Penalties / Settlements / Directions
Forfeiture of EMD: Rs 1 crore was forfeited by the RP on 2 Aug 2021 in accordance with clause 1.9.4 of the RFRP.
No monetary penalty beyond the EMD forfeiture was imposed on the appellant.
Corrective Actions & Future Obligations
The liquidation process is to continue as directed; the liquidator (Respondent No.3) is instructed to proceed with the remaining liquidation steps under the IBC.
All interim orders previously granted are vacated.
No further compliance actions were mandated for the appellant beyond the dismissal of his appeals.
Final Ruling & Enforcement
The Supreme Court dismissed all three appeals (Civil Appeal Nos. 12264‑12266 of 2024) filed by Sanjay Dave.
The NCLAT order dated 29 Oct 2024, which upheld the liquidation of Oracle Home Textiles Ltd., stands affirmed.
All interim orders are vacated; the liquidator is directed to complete the liquidation.
