Resolution plan compliance under insolvency law: tribunal scrutiny remains limited to statutory requirements and creditor-approved commercial terms.

A resolution plan approved by the Committee of Creditors was found to satisfy the Insolvency and Bankruptcy Code and CIRP Regulations because it provided for priority payment of insolvency resolution process costs, treatment of operational and financial creditors, management and implementation arrangements, supervision of implementation, and conformity with the statutory framework. The Tribunal reiterated that scrutiny under Section 31 is limited to compliance with Section 30(2), that it cannot replace the Committee of Creditors' commercial assessment, and that a sanctioned plan operates on a fresh slate and binds all stakeholders. The plan was therefore liable to be approved.

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Issues: Whether the resolution plan approved by the Committee of Creditors satisfied the requirements of the Insolvency and Bankruptcy Code, 2016 and the CIRP Regulations and was liable to be approved by the Tribunal.

Analysis: The plan had been approved by the Committee of Creditors with 100% voting share after verification of eligibility and compliance under the statutory framework. The plan provided for payment of insolvency resolution process costs in priority, treatment of operational and financial creditors, management and implementation arrangements, supervision of implementation, and a declaration of conformity with the Code and the Regulations. The Tribunal also relied on the settled principles that its scrutiny under Section 31 is confined to the requirements of Section 30(2), that it cannot substitute its own commercial assessment for that of the Committee of Creditors, and that an approved resolution plan operates on a fresh slate and binds all stakeholders once sanctioned.

Conclusion: The resolution plan complied with Section 30(2), was not contrary to Section 29A, and was liable to be approved.

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