Approved resolution plan binds dissenting creditors and bars inconsistent recovery against guarantors' and promoters' assets.

An approved resolution plan that expressly extinguishes encumbrances, security interests and attachments over promoters' and guarantors' assets is binding on dissenting financial creditors. Where the plan settles claims and provides for release of covered assets, recovery or attachment proceedings inconsistent with that plan cannot continue in respect of the resolved debt. The tribunal held that restrictive observations limiting release only to mortgaged or specifically identified properties were contrary to the plan language and its finality, and set those observations aside while leaving the rest of the order intact.

---

---

Issues: Whether the approved resolution plan extinguished the rights of dissenting financial creditors against personal guarantors and third-party securities, and whether the observations restricting release of guarantor properties and continued recovery/attachment were sustainable.

Analysis: The resolution plan expressly provided that all encumbrances, security interests, liens and attachments over the assets of erstwhile promoters, directors and guarantors, whether charged or not charged, would stand irrevocably released, and that claims and related enforcement would stand settled and extinguished. The plan had already been upheld in earlier proceedings, and the challenge to that approval had failed before the Supreme Court. In that backdrop, the continued reliance on attachments under the Maharashtra Co-operative Societies Act, 1960 for recovery of dues already dealt with in the CIRP was inconsistent with the binding effect of the approved plan. The observations that only mortgaged properties or properties specifically identified in the plan could be released were contrary to the width of the plan language and to the finality attached to the earlier approval.

Conclusion: The observations in paragraphs 55 to 57 were unsustainable and were set aside; the approved resolution plan was held to release the covered assets and to bar further recovery action against the guarantors and promoters in respect of the resolved debt.

Final Conclusion: The appeal succeeded to the extent of deleting the impugned restrictive observations, while leaving the remainder of the order intact, and the respondents were bound to act in accordance with the approved resolution plan.

Ratio Decidendi: An approved resolution plan that expressly extinguishes encumbrances, security interests and attachments over promoters' and guarantors' assets is binding on dissenting financial creditors, and recovery proceedings inconsistent with that plan cannot be continued in respect of the resolved debt.

---