Resolution-applicant consortium changes do not violate CIRP rules where the consortium remains eligible and no statutory bar is shown.

Regulation 39(1B) of the CIRP Regulations does not prohibit the addition of a new member to an already eligible resolution-applicant consortium once the consortium is in the final list of prospective resolution applicants. Section 3(23) of the Insolvency and Bankruptcy Code treats a consortium differently from an individual "person", and the Code contains no separate bar against such internal change where the resolution plan itself is not a fresh submission by an outsider. The Committee of Creditors retains the primary role in evaluating resolution plans, and absent statutory violation or demonstrated prejudice, the consideration of the plan is not to be interfered with.

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Issues: Whether induction of an additional member into an existing resolution-applicant consortium after inclusion in the final list of prospective resolution applicants violates the CIRP Regulations and vitiates consideration of the resolution plan.

Analysis: Regulation 39(1B) bars consideration of a resolution plan received from a person not in the final list of prospective resolution applicants. The expression "person" in Section 3(23) of the Insolvency and Bankruptcy Code, 2016 does not include a consortium as such, and the Code does not create a separate prohibition on addition of a member to an already participating consortium. The consortium had already participated in the process through its lead member, the plan remained the same, and no objection was raised by the lead member. The decision-making process for evaluation and comparison of resolution plans lies within the domain of the Committee of Creditors, and the material placed did not show any statutory violation or prejudice warranting interference.

Conclusion: The induction of the additional consortium member was not illegal, Regulation 39(1B) was not attracted, and no interference with the impugned order was called for.

Final Conclusion: The appeal failed and the order permitting consideration of the resolution plan was upheld.

Ratio Decidendi: Regulation 39(1B) cannot be invoked to prohibit the addition of a member to an already eligible resolution-applicant consortium where the consortium was already in the final list, the plan itself was not a new submission by an outsider, and no statutory bar or illegality is shown.

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