Resolution plan once submitted before NCLT under IBC can't be modified or withdrawn: Supreme Court

The Supreme Court on Monday held that CoC approved resolution plan submitted to the National Company Law Tribunal (NCLT) cannot be modified or withdrawn as it would create another tier of negotiations, which will be wholly unregulated by the statute.

The top court said that a submitted Resolution Plan is binding and irrevocable as between the Committee of Creditors (CoC) and the successful Resolution applicant in terms of the provisions of the IBC and the CIRP Regulations. It quoted a report of the Parliamentary standing committee on finance which stated that 71 percent cases are pending for more than 180 days before NCLT and added this is in deviation from the original objective and timeline of Corporate Insolvency Resolution Proceedings (CIRP) envisaged by IBC.

Urging the NCLT and NCLAT to be sensitive to the effect of such delays on the insolvency resolution process, the top court said, Judicial delay was one of the major reasons for the failure of the insolvency regime that was in effect prior to the Insolvency and Bankruptcy Code (IBC). We cannot let the present insolvency regime meet the same fate.