Resolution plan approval requires creditor consent, statutory compliance, and effective implementation before binding stakeholders.
A resolution plan can be approved under section 31(1) of the Insolvency and Bankruptcy Code only if it is approved by the committee of creditors, complies with section 30(2), and contains provisions for effective implementation. The text notes that these requirements were met because the plan received the requisite voting share, the resolution professional certified compliance with the Code, CIRP Regulations and section 29A eligibility, and the plan provided for insolvency resolution process costs, treatment of operational creditors and dissenting financial creditors, monitoring and funding arrangements, and implementation safeguards. It was also noted that the plan did not contravene any law and performance security was furnished. The approved plan became binding on the corporate debtor and stakeholders, and the moratorium ceased to operate.
Issues: Whether the resolution plan approved by the committee of creditors satisfied the requirements of section 31(1) of the Insolvency and Bankruptcy Code, 2016 for approval by the Adjudicating Authority.
Analysis: The application was examined on the touchstone of section 31(1), which requires that the plan be approved by the committee of creditors, comply with section 30(2), and contain provisions for effective implementation. The records showed that the plan was approved by the requisite voting share of the committee of creditors. The resolution professional certified compliance with the Code, the CIRP Regulations, and eligibility under section 29A. The plan provided for payment of insolvency resolution process costs, treatment of operational creditors and dissenting financial creditors, management and supervision through a monitoring committee, implementation safeguards, and funding arrangements. The Tribunal also noted that the plan did not contravene any law and that the performance security had been furnished.
Conclusion: The requirements of section 31(1) were satisfied and the resolution plan was approved.
Final Conclusion: The approved resolution plan became binding on the corporate debtor and its stakeholders, and the moratorium under section 14 ceased to operate.
Ratio Decidendi: A resolution plan may be approved under section 31(1) only if it is duly approved by the committee of creditors, satisfies the mandatory requirements of section 30(2), and provides for effective implementation without contravening the law.
TaxTMI 
AI Drafter ✕
TaxTMI 
