Repayment plan rejection and creditor-approved insolvency costs trigger bankruptcy rights and discharge of the resolution professional.

Where the voting period for a repayment plan is extended at creditors' request, a consequential delay in filing the report may be condoned as part of the approval process. The creditors' majority-approved resolution professional fee and out-of-pocket expenses become payable as insolvency process costs once such approval is recorded. Rejection of the repayment plan triggers the statutory bankruptcy consequence, enabling the creditors to proceed under the bankruptcy framework and bringing the resolution professional's role to an end.

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Issues: (i) Whether the delay of 34 days in submission of the report under Section 112(1) of the Insolvency and Bankruptcy Code, 2016 could be condoned. (ii) Whether the resolution professional's fee and expenses approved by the creditors were payable. (iii) Whether the rejection of the repayment plan entitled the creditors to proceed for bankruptcy and resulted in discharge of the resolution professional.

Issue (i): Whether the delay of 34 days in submission of the report under Section 112(1) of the Insolvency and Bankruptcy Code, 2016 could be condoned.

Analysis: The delay arose because the voting on the repayment plan was extended at the request of creditors, and the report could not be completed within the original timeline due to the extended voting period. The delay was therefore treated as having occurred in the course of the approval process for the repayment plan.

Conclusion: The delay of 34 days was condoned.

Issue (ii): Whether the resolution professional's fee and expenses approved by the creditors were payable.

Analysis: The creditors had approved the resolution professional's fee and out-of-pocket expenses by majority vote. Once such approval was recorded, the amount approved became payable as part of the insolvency process costs.

Conclusion: The resolution professional's fee and expenses of Rs. 6,75,000/- were directed to be paid.

Issue (iii): Whether the rejection of the repayment plan entitled the creditors to proceed for bankruptcy and resulted in discharge of the resolution professional.

Analysis: The repayment plan was rejected by the creditors. Consequent to such rejection, the statutory consequence was that the creditors could move for bankruptcy under Chapter IV, and the resolution professional's role came to an end.

Conclusion: The creditors were entitled to initiate bankruptcy proceedings and the resolution professional stood discharged.

Final Conclusion: The application was allowed and the requested reliefs, including condonation of delay and directions flowing from rejection of the repayment plan, were granted.

Ratio Decidendi: Where the voting period for a repayment plan is extended at the instance of creditors, a consequential delay in filing the report may be condoned, and rejection of the repayment plan triggers the statutory bankruptcy consequence with discharge of the resolution professional.

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