Resolution plan compliance under the Insolvency Code binds all stakeholders and can extinguish pre-CIRP claims and encumbrances.

A resolution plan approved by the Committee of Creditors with the requisite majority, and certified by the Resolution Professional as compliant with section 30(2) of the Insolvency and Bankruptcy Code and the CIRP Regulations, was sanctioned because it treated secured, unsecured and operational creditors, covered insolvency resolution costs, and was found feasible and viable. Once approved under section 31, the plan became binding on the corporate debtor and all stakeholders, and the order granted reliefs to the extent recorded, including extinguishment of pre-CIRP liabilities, contingent or unconfirmed dues, and pre-plan encumbrances, while preserving the role of competent authorities for statutory permissions and approvals. The moratorium ceased and the CIRP came to an end in terms of the approved plan.

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Issues: (i) Whether the resolution plan, having been approved by the Committee of Creditors, satisfied the requirements of the Insolvency and Bankruptcy Code, 2016 and the CIRP Regulations for approval by the Adjudicating Authority. (ii) Whether the reliefs and concessions sought in the resolution plan, including extinguishment of pre-CIRP liabilities and encumbrances, could be granted to give effect to the approved plan.

Issue (i): Whether the resolution plan, having been approved by the Committee of Creditors, satisfied the requirements of the Insolvency and Bankruptcy Code, 2016 and the CIRP Regulations for approval by the Adjudicating Authority.

Analysis: The plan had been approved by the Committee of Creditors with 95.23% voting share. The Resolution Professional certified compliance with the mandatory requirements under section 30(2) of the Insolvency and Bankruptcy Code, 2016 and the relevant CIRP Regulations. The plan provided treatment for the secured, unsecured and operational creditors, covered insolvency resolution process costs, contained implementation measures, and was found to be feasible and viable. The requisite affidavit under section 29A was also placed on record.

Conclusion: The resolution plan complied with the statutory requirements and was approved.

Issue (ii): Whether the reliefs and concessions sought in the resolution plan, including extinguishment of pre-CIRP liabilities and encumbrances, could be granted to give effect to the approved plan.

Analysis: The approved plan was made binding on the corporate debtor and all stakeholders under section 31 of the Insolvency and Bankruptcy Code, 2016. The order granted reliefs to the extent that claims of creditors and other stakeholders, including governmental and statutory claims, contingent or unconfirmed dues, and pre-plan encumbrances, stood extinguished after compliance with the plan. The order also permitted the successful resolution applicant to approach the concerned authorities for necessary permissions, tax-related reliefs, and other approvals under the applicable law, while preserving statutory decision-making by the competent authorities.

Conclusion: The requested reliefs were allowed to the extent recorded in the order, and the approved plan was given binding effect.

Final Conclusion: The corporate debtor's resolution plan was sanctioned, became effective from the date of the order, and the moratorium ceased accordingly, bringing the insolvency resolution process to a close in terms of the approved plan.

Ratio Decidendi: A resolution plan approved by the requisite majority of the Committee of Creditors and certified as compliant with section 30(2) may be sanctioned if it is feasible, viable, and consistent with the Code and CIRP Regulations, and once approved under section 31 it binds all stakeholders and can extinguish pre-CIRP claims and encumbrances to the extent provided in the plan.

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