#Resolution Plan

The Supreme Court held that CoC approval of a resolution plan under IBC creates a binding obligation that cannot be withdrawn, even if the corporate debtor's financial position improves. The Court directed the NCLT to expeditiously decide on plan confirmation and competing OTS applications, reinforcing finality of CoC approval and protecting successful resolution applicants.

The NCLAT Chennai Bench held ESI contributions are trust assets excluded from liquidation estate under IBC Sec 36(4)(a)(i), overturning a plan paying only 1% of the claim and affirming priority for employees' statutory dues in insolvency.

Approval of a resolution plan under IBC extinguishes tax liabilities, requiring refund of pre-deposit and quashing tax recovery orders; this bars authorities from pursuing dues after plan approval, affecting taxpayers and tax departments.

Delhi High Court holds that pre-CIRP customs duties not filed during insolvency are extinguished once the IBC resolution plan is approved, quashing the customs order.

By setting aside a ₹1,885 cr inflated claim and correcting the information memorandum, the NCLAT affirmed that a guarantor can claim subrogation rights under the IBC. The ruling tightens claim valuation standards and protects guarantors in corporate insolvency cases.

The NCLAT affirmed the NCLT’s liquidation order, holding that the Committee of Creditors’ commercial wisdom cannot be judicially reviewed. Consequently, a rejected resolution plan automatically leads to winding-up, affecting all parties in IBC insolvency cases.

NCLAT rules that under RERA, secured creditors' claims in corporate insolvency resolution processes (CIRP) are restricted to unsold units only, prioritizing homebuyers' rights. NOIDA's statutory dues are recognized as secured claims under registered lease deeds, impacting real estate insolvency proceedings.

The Bombay High Court has ruled that Section 32A of the IBC wipes out pre-CIRP attachments made under the MPID Act when a corporate debtor was never named as an accused, affirming the clean slate principle even for properties attached before insolvency. This shields resolution applicants from legacy liabilities, reinforcing the IBC’s intent to restore operational viability without collateral legal entanglements.

Supreme Court rules that subsidiaries functioning as mere alter egos of the corporate debtor justify piercing the corporate veil, enabling resolution plans to proceed without GNIDA’s prior consent if dues are settled. This precedent strengthens creditor rights in real estate insolvency cases by preventing statutory authorities from obstructing CIRP completion.

NCLAT rules that surplus cash flows generated during CIRP, if not explicitly addressed in the approved Resolution Plan, must be distributed among financial creditors as per the Section 53 waterfall mechanism. This binding precedent reinforces the sanctity of statutory distribution over contractual silence in insolvency proceedings.

The Allahabad High Court has ruled that under Section 31 of the IBC, statutory electricity dues arising before the Corporate Insolvency Resolution Process are extinguished as of the Effective Date specified in the approved resolution plan - not the date of NCLT approval. This clarifies that resolution applicants inherit liability only prospectively, reinforcing the clean slate principle and shielding them from legacy dues improperly revived post-resolution.

The NCLAT has ruled that once a homebuyer’s claim is admitted and incorporated into an approved Resolution Plan, the Successful Resolution Applicant must complete document verification before allocating or transferring possession of the unit. This prevents prejudicial third-party encumbrances and upholds the statutory priority of homebuyers under IBC, ensuring resolution outcomes align with the law’s consumer protection intent.

NCLAT reinforces that resolution plans must provide full transparency in the Information Memorandum, including forensic audit details and asset valuation. Failure to disclose unexplained asset depletion or financial irregularities vitiates the plan's commercial wisdom, empowering adjudicating authorities to reject it outright.

NCLAT bars challenges to approved resolution plans through frivolous perjury claims, imposing Rs. 25,000 costs on suspended directors attempting to reopen settled insolvency proceedings. The ruling reinforces finality in IBC resolutions and deters abuse of judicial process.

NCLAT reinforces the primacy of the Committee of Creditors' commercial wisdom under the Insolvency and Bankruptcy Code, holding that the Adjudicating Authority cannot remand a resolution plan unless statutory grounds under Sections 30(2) or 31 are violated. The ruling clarifies the limited scope of judicial review over CoC-approved plans, impacting insolvency practitioners and creditors.