Resolution plan rejection under CIRP was unwarranted where repayment, value benchmarks, and creditor treatment were adequately addressed.

Rejection of a resolution plan was examined against objections that it lacked a repayment structure, was conditional, and did not comply with CIRP regulations. The plan was described as providing payment to the unsecured financial creditor and adjustment of the secured creditor's admitted dues by the successful resolution applicant in its own capacity as secured creditor, so absence of a fixed repayment schedule was not treated as fatal. The later pendency of approval proceedings did not make the plan conditional. As the plan also reflected the cause of default and offered value above liquidation value and fair value, rejection was considered unwarranted and liquidation was disfavoured where insolvency resolution remained possible.

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Issues: Whether the rejection of the resolution plan and the consequential direction leading to liquidation were justified on the grounds of absence of repayment structure, alleged conditionality of the plan, and non-compliance with the CIRP regulations.

Analysis: The plan provided for payment to the unsecured financial creditor and adjustment of the secured creditor's admitted dues by the successful resolution applicant in its own capacity as secured creditor. The objection that no fixed repayment schedule was specified was not accepted, as the plan contemplated settlement of the admitted claims through upfront payment and adjustment. The objection that the plan was conditional was also not accepted, since the plan had already been approved by the Committee of Creditors and the later pendency of approval proceedings could not invalidate the proposal. The plan also recorded the cause of default, and the offered value was above the liquidation value and fair value. In these circumstances, rejection of the plan was found unwarranted, particularly when insolvency resolution is preferred over liquidation.

Conclusion: The rejection of the resolution plan was set aside and the resolution plan was approved in favour of the appellant.

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