CIRP surplus cash remains distributable under the insolvency waterfall when the resolution plan is silent on that surplus.

Surplus cash flow generated during CIRP did not vest in the successful resolution applicant because the resolution plan did not expressly transfer that surplus and the cited vesting, going-concern and claim-extinguishment clauses did not cover it. In the absence of a specific plan provision, the surplus retained its character as CIRP-period value and remained part of the insolvency estate. The adjudicating authority was therefore justified in directing distribution under the statutory waterfall mechanism, and that direction was not treated as a modification of the approved resolution plan.

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Issues: (i) Whether the surplus cash flow generated during the corporate insolvency resolution process, before approval and implementation of the resolution plan, vested in the successful resolution applicant. (ii) Whether, in the absence of an express clause in the resolution plan dealing with such surplus, the adjudicating authority could direct distribution of the amount under the statutory waterfall mechanism.

Issue (i): Whether the surplus cash flow generated during the corporate insolvency resolution process, before approval and implementation of the resolution plan, vested in the successful resolution applicant.

Analysis: The surplus was generated during the CIRP while the corporate debtor was managed by the resolution professional and not by the successful resolution applicant. The resolution plan was read as a commercial arrangement confined to assets, liabilities, and values identified and accounted for in the plan. The clauses relied upon by the appellant concerning vesting of assets, going-concern transfer, and extinguishment of claims did not expressly cover CIRP-generated surplus. The reference to surplus cash flow in the plan only enabled foreclosure of dues and did not create any proprietary right in favour of the resolution applicant. The surplus therefore retained the character of CIRP-period value and did not become an accretion vesting in the appellant by implication.

Conclusion: The surplus cash flow did not vest in the successful resolution applicant and was not payable to it.

Issue (ii): Whether, in the absence of an express clause in the resolution plan dealing with such surplus, the adjudicating authority could direct distribution of the amount under the statutory waterfall mechanism.

Analysis: The approved resolution plan was silent on the treatment of CIRP-generated surplus, and no provision in the plan transferred that surplus to the resolution applicant. In that situation, the statutory framework governed distribution of assets forming part of the insolvency estate. The direction for distribution under Section 53 did not amount to modification of the approved resolution plan, because the order dealt only with a matter not contemplated by the plan. The authorities relied upon by the appellant were distinguished as they concerned extinguishment of claims or facts involving assets already contemplated by the resolution process.

Conclusion: The adjudicating authority was justified in directing distribution of the surplus under the statutory waterfall mechanism.

Final Conclusion: The appeal failed, and the direction to distribute the CIRP-generated surplus among stakeholders was upheld as consistent with the insolvency framework and the approved resolution plan's silence on that surplus.

Ratio Decidendi: Surplus generated during CIRP, if not expressly dealt with in the approved resolution plan, remains part of the insolvency estate and is to be distributed under the Code rather than impliedly vesting in the successful resolution applicant.

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