TaxTMI 
TaxTMI 
TaxTMI 
Approval of resolution plan [ Section 31 ]
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.... * the payment of dues arising under any law for the time being in force, such as authorities to whom statutory dues are owed, guarantors and * other stakeholders involved in the resolution plan. * The Adjudicating Authority shall, before passing an order for approval of resolution plan under this sub-section, satisfy that the resolution plan has provisions for its effective implementation. * Rejection of the resolution plan [ Section 31(2) ] * Where the Adjudicating Authority is satisfied that the resolution plan does not confirm to the requirements referred to in section 31(1), it may, by an order, reject the resolution plan. * Consequences of approval [ Section 31(3) ] * After the order of approval under section 31(1),- * (....
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....ior to the approval of such resolution plan by the committee of creditors. Relevant Case Law * K. Sashidhar Vs. Indian Overseas Bank &Ors. - SC Dated 05.02.2019 * The legislature has not endowed the AA with the jurisdiction or authority to analyse or evaluate the commercial decision of the CoC much less to enquire into the justness of the rejection of the resolution plan by the dissenting FCs. The discretion of the AA is circumscribed by section 31 to scrutiny of resolution plan 'as approved' by the requisite percent of voting share of FCs. * Committee of Creditors of AMTEK Auto Limited through Corporation Bank Vs. Dinkar T Venkatasubramanian & Ors. - SC Dated 23.02.2021 * To assert that there is any scope for negotiations and di....
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.... * i. The role of CoC is akin to that of a protagonist, giving finality to the process (subject to approval by the AA), who takes the key decisions in its commercial wisdom and the consequences thereof. The power of judicial review in section 31 of the Code is not akin to the power of a superior authority to deal with the merits of the decision of any inferior or subordinate authority. The AA has limited jurisdiction in the matter of approval of a resolution plan, which is well defined and circumscribed by sections 30(2) and section 31 read with the parameters delineated by the SC in its various judgments. Within its limited jurisdiction, if the AA finds any shortcoming in the resolution plan vis-à-vis the specified parameters, it wo....
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....arantors, and other stakeholders. On the date of approval of resolution plan by the AA, all such claims, which are not a part of resolution plan, shall stand extinguished and no person will be entitled to initiate or continue any proceedings in respect to a claim, which is not part of the resolution plan. * Lalit Kumar Jain Vs. Union of India & Ors. - SC Dated 21.05.2021 * The sanction of a resolution plan and finality imparted to It by section 31 does not per se operate as a discharge of the guarantor's liability. * Ebix Singapore Pvt. Ltd. Vs. Committee of Creditors of Educomp Solutions Ltd. & Anr. - SC Dated 13.09.2021 * The existing insolvency framework in India provides no scope for effecting further modifications or withdrawal....
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....2019 * The proviso to sub-section 31(4) of Code which relates to obtaining the approval from the CCI under the Competition Act, 2002, prior to the approval of such resolution plan by the CoC, is directory and not mandatory. * Standard Chartered Bank Vs. Satish Kumar Gupta, R.P. of Essar Steel Ltd. & Ors. [CA (AT) (Ins.) No. 242 of 2019 and other appeals] NCLAT order dt. 04.07.2019 * The FCs and OCs whose claims have been decided by the AA or the NCLAT, such decision being final is binding on all such FCs and OCs in terms of section 31 of the Code. Their total claims stand satisfied and, therefore, they cannot avail any remedy under section 60(6) of the Code. * MSTC Ltd. Vs. Adhunik Metalliks Ltd. & Ors. - NCLAT Dated 15.03.2019 * ....
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.... * A successful resolution applicant cannot be permitted to withdraw the approved resolution plan, coupled with the fact in the instant case being the sole RA in the CIRP, which is an MSME and having knowledge of the financial health of the CD as a promoter or as a connected person cannot be permitted to seek revision of the approved plan, on the ground which would not be a material irregularity within the ambit of section 61(3) of the Code. * Deputy Commissioner, CGST Kalol, Gujrat Vs. Gopala Polyplast Ltd. [CA (AT) (Ins.) No. 477 of 2021] NCLAT Dated 16.07.2021 * Sufficiency or insufficiency of the amount in a resolution plan is a matter of commercial decision of the CoC and it would not be appropriate on the part of NCLAT to interfe....