Approved resolution plans cannot be withdrawn for later encumbrance concerns where prior charges and asset transfer terms already govern.

An approved resolution plan could not be withdrawn merely because the resolution applicant later raised concerns about additional liabilities and encumbrances, since the plan had already been approved, part consideration was paid, and a bank guarantee was furnished, with no material concealment shown. The Tribunal also noted that the plan contemplated transfer of assets and leasehold rights free from encumbrances in favour of the lenders in the Committee of Creditors, and applied the principle that a subsequent charge holder cannot proceed without redeeming a prior charge. It therefore rejected withdrawal, granted only a limited clarification consistent with the plan, and refused broader modification of rights over the charged properties.

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Issues: (i) Whether the resolution applicant was entitled to withdraw from the approved resolution plan. (ii) Whether a clarification was required regarding the effect of prior and subsequent charges over the leased properties and the encumbrances affecting implementation of the resolution plan.

Issue (i): Whether the resolution applicant was entitled to withdraw from the approved resolution plan.

Analysis: The resolution plan had already been approved, the resolution applicant had deposited part of the consideration and furnished a bank guarantee, and the record did not disclose any material concealment justifying withdrawal. The applications were filed after approval of the plan, and the Tribunal found that the existence of alleged additional liabilities did not justify permitting the applicant to back out of the approved process.

Conclusion: The resolution applicant was not entitled to withdraw from the approved resolution plan.

Issue (ii): Whether a clarification was required regarding the effect of prior and subsequent charges over the leased properties and the encumbrances affecting implementation of the resolution plan.

Analysis: The resolution plan itself contemplated transfer of assets and leasehold rights to the resolution applicant free from encumbrances charged to the lenders forming part of the Committee of Creditors. The Tribunal also relied on the rule that a subsequent mortgagee or charge holder cannot proceed against the property without redeeming the prior charge, and noted that the charge particulars would determine the status of the competing interests. On that basis, it held that the plan already contained the necessary terms and only a limited clarification, consistent with the plan, was warranted.

Conclusion: The Tribunal granted clarification consistent with the resolution plan and declined any broader modification of rights over the charged properties.

Final Conclusion: The applications were disposed of with clarification, while the request to withdraw from the resolution plan was rejected.

Ratio Decidendi: A resolution applicant cannot withdraw from an approved resolution plan merely because of later-discovered encumbrance concerns, where the plan already addresses transfer of assets and the law recognises the priority of prior charges over subsequent encumbrances.

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