Approved Resolution Plan Cannot Be Modified Even If Plan Allows It: NCLT Mumbai

The tribunal said that once a plan receives statutory approval under Section 31 of the Code, it attains finality and becomes binding on all stakeholders, including the successful resolution applicant, which cannot be reopened on contractual grounds.

“At this stage, no modification can be proposed to the CoC or approved by the Adjudicating Authority after approval of the Resolution Plan. In light of the established legal framework, it is our considered view that even if a clause allowing for modification of the Resolution Plan is included within the Plan itself, it would not permit the Adjudicating Authority or stakeholders to modify or amend the Resolution Plan post approval by the Adjudicating Authority.”, the tribunal observed.

A coram of Judicial Member K. R. Saji Kumar and Technical Member Anil Raj Chellan said that the insolvency framework does not recognise any mechanism for post-approval modification of a resolution plan. It said doing so would defeat the object of time-bound resolution.

The case relates to High Ground Enterprises Pvt Ltd which was admitted into CIRP on February 17, 2023, on a petition filed by Tata Capital Financial Services. Shanti G.D. Ispat had emerged as the successful resolution applicant, and its plan was unanimously approved by the committee of creditors on December 5, 2023.

Following approval of the plan, the applicant deposited the CIRP costs on October 1, 2024. However, during meetings of the monitoring committee held in November 2024, the applicant raised objections regarding the actual area of the debtor's sole immovable asset and sought a proportionate reduction in its payment obligations by relying on an adjustment clause in the resolution plan.

Rejecting the plea, the tribunal held that allegations relating to asset description or valuation, raised after approval, cannot be used as a basis to renegotiate or dilute the approved plan. It relied on Ebix Singapore Private Limited v. Committee of Creditors of Educomp Solutions Ltd (2022) and reiterated that withdrawal or modification of an approved plan is impermissible.

Holding that no fraud or jurisdictional error was established to justify recall, the tribunal dismissed the application.

For Applicant: Advocates Shyam Kapadia, Vidit Divya Kumat

For RP: Advocate Aniruth Purusothaman G

For Respondents: Advocates Himanshu Vidhani, Shloka Dikshit, Ricky Sampat, UC Nayak i/b Chandhiok & Mahajan, MV Kini Law Firm