Repayment plan reconsideration is discretionary under insolvency law; rejection stood where creditor voting support was insufficient.

A repayment plan proposed by a personal guarantor was rejected by the Committee of Creditors because it failed to secure the required voting support, with the main creditor holding 71.22% voting share voting against it. Under section 114(1) of the Insolvency and Bankruptcy Code, the Adjudicating Authority must act on the creditors' meeting report, while section 114(3) gives only a discretionary power to seek reconsideration if the record justifies modification. That discretion is not automatic. On these facts, the Adjudicating Authority was not bound to direct reconsideration of the plan, and acceptance of the rejection required no interference.

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Issues: Whether the Adjudicating Authority was bound to direct reconsideration of the repayment plan under section 114(3) of the Insolvency and Bankruptcy Code, 2016, after the Committee of Creditors rejected the plan by the requisite voting majority.

Analysis: The repayment plan proposed by the personal guarantor was for a sum far below the admitted dues of the financial creditor. The plan was placed before the Committee of Creditors and was rejected by the creditor holding 71.22% voting share, and the plan did not secure the minimum required voting support. Section 114(1) requires the Adjudicating Authority to act on the basis of the report of the meeting of creditors, while section 114(3) confers only an enabling discretion to direct reconsideration where the Authority forms an opinion that modification is required. Such power is not automatic and can be exercised only when the record discloses sufficient circumstances justifying modification.

Conclusion: The Adjudicating Authority was not obliged to direct reconsideration of the repayment plan, and no interference with the order accepting the rejection of the plan was warranted.

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