Resolution Plan Approval Extinguishes All Claims Under IBC Section 31(1), Court Rejects Challenge to Protect Corporate Revival Process

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Full Text of the Document

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....The Tribunal dismissed the application challenging extinguishment of claims under an approved resolution plan. The Tri emphasized that IBC's primary objective is revival of the Corporate Debtor through time-bound restructuring, not liquidation. Once a resolution plan is approved by the CoC based on their commercial wisdom regarding feasibility and viability, the Adjudicating Authority cannot direct changes contingent on future arbitration proceedings. Under Section 31(1), an approved resolution plan freezes all claims and binds all stakeholders including the Corporate Debtor, creditors, governments, and guarantors. Consequently, the Applicant's prayer that their claim should not be extinguished was deemed legally untenable and rejected.....