Resolution plan timing, extinguishment of pre-CIRP dues, and differential creditor treatment upheld under the Insolvency Code.

Section 12 of the Insolvency and Bankruptcy Code, 2016 was treated as directory rather than an inflexible bar, so consideration of the resolution plan after the original 330-day period did not by itself invalidate approval. Pre-CIRP electricity dues not preserved in the approved plan stood extinguished on approval, and the IBC's overriding effect meant supply regulations requiring past dues could not defeat the plan. Section 30(2)(b) was satisfied because operational creditors received at least the liquidation benchmark; differential recovery between operational and financial creditors was permissible, and lower percentage payment to operational creditors did not by itself make the plan unfair or inequitable.

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Issues: (i) Whether consideration of the resolution plan after expiry of the 330-day period vitiated its approval; (ii) Whether the appellant could insist on unpaid pre-CIRP electricity dues and whether the plan contravened the electricity supply regulations and Section 30(2)(e) of the Insolvency and Bankruptcy Code, 2016; (iii) Whether the resolution plan satisfied Section 30(2)(b) of the Insolvency and Bankruptcy Code, 2016 and provided fair and equitable treatment to the operational creditor.

Issue (i): Whether consideration of the resolution plan after expiry of the 330-day period vitiated its approval?

Analysis: The timeline under Section 12 of the Insolvency and Bankruptcy Code, 2016 is not an inflexible mandate in all cases. The delay in placing and considering the plan had already been the subject of earlier orders and appeals arising from the same CIRP, and the objections to extension and consideration beyond the initial period had been rejected. The approval process therefore could not be invalidated merely because the plan was considered after the original outer limit.

Conclusion: The challenge on the ground of expiry of 330 days failed.

Issue (ii): Whether the appellant could insist on unpaid pre-CIRP electricity dues and whether the plan contravened the electricity supply regulations and Section 30(2)(e) of the Insolvency and Bankruptcy Code, 2016?

Analysis: Once a resolution plan is approved, pre-CIRP claims not preserved in the plan stand extinguished. The electricity supply regulations requiring clearance of past dues for a fresh connection could not prevail over the resolution process because the Insolvency and Bankruptcy Code, 2016 has overriding effect under Section 238. The approved plan directing restoration of supply on receipt of the earmarked amount was therefore not contrary to law, and the obligation to reconnect followed from the binding plan.

Conclusion: The appellant could not enforce its pre-CIRP dues outside the approved plan, and no contravention of law was made out.

Issue (iii): Whether the resolution plan satisfied Section 30(2)(b) of the Insolvency and Bankruptcy Code, 2016 and provided fair and equitable treatment to the operational creditor?

Analysis: Section 30(2)(b) requires payment to operational creditors at least to the liquidation benchmark. Fair and equitable treatment does not require identical percentage recovery for financial and operational creditors. Differential payment between classes is permissible so long as the statutory minimum is met. The plan disclosed a much smaller percentage payout to operational creditors than to financial creditors, but that disparity by itself did not amount to illegality or inequity under the Code.

Conclusion: The plan complied with Section 30(2)(b) and was not invalid merely because operational creditors received a lower percentage than financial creditors.

Final Conclusion: The approved resolution plan was upheld in full, the statutory objections were rejected, and no ground was found to interfere with the approval of the plan.

Ratio Decidendi: An approved resolution plan cannot be invalidated merely because it is considered after the original timeline, because pre-CIRP claims not included in the plan stand extinguished on approval, and differential treatment between creditor classes is permissible if the Code's minimum requirements are satisfied.

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