Resolution plan modification barred under the Insolvency and Bankruptcy Code; belated fraud challenge did not unsettle approval.

Under Section 31 of the Insolvency and Bankruptcy Code, the Adjudicating Authority has a binary role: it may approve a resolution plan if the Section 30 requirements are met, or reject it if they are not. It cannot rewrite an approved plan or add fresh substantive conditions after Committee of Creditors approval, so the modification inserted in the approval order was impermissible and was set aside. A belated challenge alleging fraud, suppression and disputed MSME status was not allowed to disturb the approval, because the relevant materials were already before the Adjudicating Authority and the issue had not been timely assailed.

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Issues: (i) Whether the Adjudicating Authority could modify an approved resolution plan while exercising powers under the Insolvency and Bankruptcy Code, 2016. (ii) Whether the challenge to the resolution plan on the ground of alleged fraud and suppression regarding MSME status and related facts justified interference in appeal.

Issue (i): Whether the Adjudicating Authority could modify an approved resolution plan while exercising powers under the Insolvency and Bankruptcy Code, 2016.

Analysis: Section 31 of the Insolvency and Bankruptcy Code, 2016 contemplates a binary choice for the Adjudicating Authority: approve the resolution plan if it satisfies the requirements of Section 30, or reject it if it does not. Once the Committee of Creditors has approved the plan in its commercial wisdom, the Adjudicating Authority is not empowered to rewrite its terms or add a fresh condition. The modification inserted in paragraph 15 of the approval order therefore travelled beyond the statutory mandate.

Conclusion: The modification made to the resolution plan was impermissible and could not stand.

Issue (ii): Whether the challenge to the resolution plan on the ground of alleged fraud and suppression regarding MSME status and related facts justified interference in appeal.

Analysis: The challenge based on alleged fraud, suppression of facts, and disputed MSME status was raised belatedly. The materials on the basis of which the allegation was made were already before the Adjudicating Authority, and an earlier application raising the MSME issue had not been assailed. The appeal on this aspect did not warrant appellate interference, particularly when the resolution plan had already been processed and approved in the insolvency framework.

Conclusion: The fraud-based challenge was rejected and the appeal against approval of the resolution plan failed.

Final Conclusion: The appellate tribunal preserved the resolution plan approval but set aside the impermissible modification inserted by the Adjudicating Authority, while refusing to disturb the rejection of the separate fraud-based challenge.

Ratio Decidendi: Under Section 31 of the Insolvency and Bankruptcy Code, 2016, the Adjudicating Authority may approve or reject a resolution plan that satisfies the statutory requirements, but it cannot alter the plan by adding new substantive conditions.

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