The National Company Law Appellate Tribunal has reaffirmed that once a resolution plan is approved under the Insolvency and Bankruptcy Code, 2016, its terms become binding and immune to collateral challenges, even by public authorities claiming secured creditor status. This judgment underscores the primacy of finality in insolvency proceedings and the limits of re-litigating creditor classifications after plan approval.
Background & Facts
The Dispute
The dispute arose from the Corporate Insolvency Resolution Process (CIRP) of M/s Swati Health and Education Services Private Limited, a corporate debtor that had leased 20,000 sq. mtrs of land from Greater Noida Industrial Development Authority (GNIDA) under a lease deed dated 26.06.2013. GNIDA, as the lessor, claimed unpaid lease rent, premium, additional compensation, and penalties totaling ₹21.42 crores. The Resolution Professional admitted only ₹18.25 crores of this claim. The approved resolution plan, dated 15.11.2022, proposed to pay GNIDA ₹6.79 crores as an operational creditor, which GNIDA contested, asserting it was a secured creditor under Section 3(30) of the IBC and Section 13A of the Uttar Pradesh Industrial Area Development Act, 1976.
Key Facts
- GNIDA leased land to the corporate debtor on 26.06.2013 under a lease deed with payment obligations
- Corporate debtor defaulted on lease payments, prompting GNIDA to issue default and show cause notices
- CIRP was initiated on 04.03.2022 upon petition by financial creditor Eclear Leasing and Finance Private Limited under Section 7 of the IBC
- GNIDA filed a claim of ₹21.42 crores with the Resolution Professional; only ₹18.25 crores were admitted
- The Resolution Plan, approved by the Committee of Creditors on 24.11.2022 and by the Adjudicating Authority on 24.08.2023, allocated ₹6.79 crores to GNIDA
- GNIDA challenged the plan through I.A. No. 2551/2023, which was dismissed on 24.08.2023
- GNIDA filed Company Appeal (AT) No. 284/2024 against the approval order, which was dismissed on 21.02.2024 for delay beyond the 15-day condonation limit under Section 61(2) proviso
- The SRA deposited ₹6.79 crores in an escrow account as per the plan, but GNIDA refused to issue challans or accept payment
- On 02.04.2024, the Adjudicating Authority directed GNIDA to accept the escrowed amount within three days
- GNIDA filed I.A. No. 3918/2024 seeking recall of the 02.04.2024 order; it was dismissed on 03.10.2024
- GNIDA appealed the 03.10.2024 order as CA (AT) (Ins.) No. 320/2025; dismissed on 10.03.2025
- Civil Appeal No. 7473/2025 filed before the Supreme Court was dismissed on 14.07.2025
- The SRA filed I.A. No. 2364/2026 seeking clarification that payment to financial creditors was conditional on GNIDA’s cooperation
Procedural History
- 26.06.2013: Lease deed executed between GNIDA and Swati Health and Education Services Private Limited
- 04.03.2022: CIRP initiated by NCLT under Section 7 of IBC
- 24.11.2022: Committee of Creditors approved Resolution Plan
- 24.08.2023: Adjudicating Authority approved Resolution Plan; dismissed GNIDA’s I.A. No. 2551/2023
- 21.02.2024: NCLAT dismissed CA (AT) No. 284/2024 for delay
- 02.04.2024: NCLT directed GNIDA to accept ₹6.79 crores from escrow account
- 03.10.2024: NCLT dismissed I.A. No. 3918/2024 (recall petition) and allowed I.A. No. 2233/2024 (SRA’s compliance petition)
- 10.03.2025: NCLAT dismissed CA (AT) No. 320/2025 against 03.10.2024 order
- 14.07.2025: Supreme Court dismissed Civil Appeal No. 7473/2025
- 20.03.2026: NCLAT heard arguments on implementation delays; noted GNIDA’s willingness to withdraw funds upon challan issuance
- 21.04.2026: NCLAT heard SRA’s I.A. No. 2364/2026 seeking clarification on payment conditions
- 29.05.2026: NCLAT delivered judgment in CA (AT) (Ins.) No. 322/2025
The Parties' Positions
For the Appellant (GNIDA)
GNIDA contended that it was a secured operational creditor under Section 3(30) and Section 3(31) of the IBC, relying on Greater Noida Industrial Development Authority v. Prabhjot Singh Soni (Civil Appeal Nos. 7590-7591 of 2023), wherein the Supreme Court recognized GNIDA’s first charge over the leased premises under Section 13A of the UP Industrial Area Development Act, 1976. It argued that the ₹6.79 crore payout was grossly inadequate and that the resolution plan should have been revised to reflect its secured status.
For the Respondents (SRA, RP, Financial Creditor)
The SRA, Resolution Professional, and Financial Creditor argued that the resolution plan had attained finality under Section 31 of the IBC. They emphasized that GNIDA had ample opportunity to challenge the plan within the statutory window and failed to do so. The SRA had deposited the approved amount in escrow, complied with timelines, and sought only the necessary cooperation from GNIDA to complete implementation.
Relief Sought
GNIDA sought:
- Setting aside of the order dated 03.10.2024 dismissing I.A. No. 3918/2024
- Direction to treat its claim as secured creditor and revise the resolution plan payout
- Stay of CIRP proceedings pending resolution
- Rejection of SRA’s I.A. No. 2364/2026
The Legal Issue
The central question was whether a public authority, even if recognized as a secured operational creditor under Greater Noida Industrial Development Authority v. Prabhjot Singh Soni, can challenge the quantification of its payout under an approved resolution plan after the statutory appeal period has expired and the plan has attained finality under Section 31 of the Insolvency and Bankruptcy Code, 2016.
Arguments Presented
For the Appellant
GNIDA relied on the Supreme Court’s judgment in Greater Noida Industrial Development Authority v. Prabhjot Singh Soni to assert its secured creditor status. It argued that the ₹6.79 crore payout was arbitrary and violated the principle of equitable treatment under the IBC. It contended that the Adjudicating Authority erred in not directing the Committee of Creditors to reconsider its claim, and that the resolution plan’s approval did not extinguish its statutory right to a higher recovery.
For the Respondent
The SRA and Resolution Professional countered that the resolution plan was approved by the Committee of Creditors and the Adjudicating Authority after full consideration of all claims. GNIDA had filed a challenge within the statutory period but failed due to delay. The Supreme Court’s dismissal of its civil appeal confirmed the finality of the plan. Section 31 of the IBC bars any post-approval modification of claims, and reopening the plan would undermine the entire insolvency framework.
The Court's Analysis
The NCLAT conducted a rigorous analysis of the statutory framework under the IBC, particularly Section 31, which states that a resolution plan, once approved, is binding on all stakeholders and cannot be modified except under the limited conditions specified in the Code. The Tribunal emphasized that the approval of the resolution plan on 24.08.2023 was not merely procedural but a conclusive determination of creditor entitlements.
"The resolution plan approved by the Adjudicating Authority on 24.08.2023 has attained finality, and any challenge to the quantum of payment to GNIDA was required to be raised within the statutory period under Section 61. The Appellant’s failure to do so cannot be remedied by successive applications and appeals."
The Tribunal distinguished between the recognition of GNIDA’s secured status under state law and the binding nature of the resolution plan under the IBC. While Greater Noida Industrial Development Authority v. Prabhjot Singh Soni established GNIDA’s legal entitlement as a secured creditor, it did not override the statutory finality of the resolution plan. The Court held that the IBC’s objective of time-bound resolution takes precedence over individual creditor claims once the plan is approved.
The NCLAT further noted that GNIDA had pursued multiple avenues - Company Appeal, recall applications, and even a civil appeal to the Supreme Court - all of which were dismissed. The Tribunal concluded that the present appeal was a re-agitation of the same issues, barred by the doctrine of res judicata and constructive res judicata.
The Court also found that GNIDA’s refusal to issue challans or cooperate with the SRA was deliberately obstructing implementation, contrary to the spirit of the IBC. The SRA had fulfilled all obligations under the plan, including depositing the approved amount in escrow and incurring CIRP costs.
The Verdict
The appeal was dismissed. The NCLAT held that the resolution plan approved on 24.08.2023 is final and binding under Section 31 of the IBC. GNIDA is entitled only to the amount of ₹6.79 crores as stipulated in the plan. The Appellant is directed to immediately issue the requisite challan and accept the escrowed amount of ₹6.79 crores, along with accrued interest. GNIDA is also directed to cooperate fully with the SRA in obtaining approvals and transferring possession of the corporate assets. A cost of ₹1 lakh is imposed on GNIDA to be deposited in the PM Cares Fund. All pending interlocutory applications are disposed of.
What This Means For Similar Cases
Finality of Resolution Plans Is Absolute
- Practitioners must treat approved resolution plans as conclusive on creditor entitlements, regardless of subsequent judicial recognition of secured status
- Post-approval challenges based on new legal interpretations or statutory rights are barred under Section 31
- Any attempt to reopen a plan after the statutory appeal window closes will be dismissed as an abuse of process
Public Authorities Are Not Exempt from IBC Timelines
- Even government entities like GNIDA must comply with the strict timelines under Section 61
- Delay in filing appeals, even for public interest reasons, will not be condoned beyond the 15-day limit
- Litigation tactics aimed at delaying implementation will attract costs and adverse findings
Cooperation Is a Legal Obligation, Not a Discretion
- Creditors must facilitate implementation of approved plans by issuing necessary documents, NOCs, and receipts
- Refusal to cooperate, even if the amount is disputed, constitutes obstruction under the IBC
- Non-cooperation may result in cost imposition and contempt proceedings
