Once Resolution Plan Is Approved By CoC & Submitted To Adjudicating Authority For Approval, No Other Plan Can Be Considered By CoC: NCLAT

The NCLAT New Delhi bench of Justice Ashok Bhushan (Judicial Member), Mr. Barun Mitra (Technical Member) and Mr. Arun Baroka (Technical Member) has held that the Resolution Plan even prior to the approval of the Adjudicating Authority is binding inter se the Committee of Creditors (CoC) and the SRA. It also held that the CoC is clearly not entitled to consider any other request for consideration of any Resolution Plan after it has approved the Resolution Plan, which is pending consideration for approval before the Adjudicating Authority. Brief Facts: The International Recreation & Amusement Ltd (corporate debtor) was admitted into insolvency on August 3, 2018. On May 9, 2019, the resolution plan submitted by the HGASApex JV (a joint venture of Hari Global Advisory Services and Parklane Investment and Securities Ltd.) was approved by the CoC. Subsequently, the RP filed an application seeking approval of the Resolution Plan before the Adjudicating. Authority The Appellant herein filed an IA No.4783/2024 in the year 2024, on which notices were issued by Adjudicating Authority on 16.10.2024. The RP filed a reply to IA No.4783/2024. The Adjudicating Authority vide order dated 04.12.2024 rejected IA No.4783 of 2024. Aggrieved by which order this Appeal has been filed. Contentions: The appellant submitted that the Appellant is a Promoter of the CD and is ready to carry out the construction and development of the CD and as a Promoter of the CD has submitted a Resolution Plan to be placed before the CoC for its consideration, which has been rejected by the Adjudicating Authority, relying on judgment of this Tribunal in Dr. Ravi Shankar Vedam vs. Tiffins Barytes Asbestos and Paints Ltd. & Ors (2021), which has no applicability. Per contra, the respondent submitted that the Appellant's claim that it is Promoter of the CD is incorrect. The Appellant claims to have acquired certain shareholding in Appu Ghar Entertainment Pvt. Ltd., which claim to have majority shareholding in IAL and the CD is a subsidiary of IAL. It was also argued that the Appellant has no authority or jurisdiction to submit a new Resolution Plan for resolution of the CD, nor it has any jurisdiction to file an Application and Application filed by the Appellant has rightly been rejected by the Adjudicating Authority. Observations: The tribunal noted that in Ebix Singapore Pvt. Ltd. vs. Committee of Creditors of EducompSolutions Ltd. & Anr. (2022), the Supreme Court held that Resolution Plan even prior to the approval of the Adjudicating Authority is binding inter se the CoC and the SRA. The Apex Court held that “the resolution plan even prior to the approval of the adjudicating authority is binding inter se the CoC and the successful resolution applicant. The resolution plan cannot be construed purely as a “contract” governed by the Contract Act, in the period intervening its acceptance by the CoC and the approval of the adjudicating authority.” The tribunal observed that once a resolution plan is approved by the CoC and it is pending consideration before the Adjudicating Authority, the CoC is not entitled to consider any other Resolution Plan The tribunal concluded that the appellant claiming to be the promoter of the corporate debtor was not entitled to submit a Resolution Plan for consideration. Consequently, the request of the appellant to place the Resolution Plan before the CoC was rightly rejected. Case Title: Parmesh Construction Company Ltd. Versus Pramod Kumar Sharma Case Number: Company Appeal (AT) (Insolvency) No. 149 of 2025 Judgment Date: 11/02/2025 For Appellant : Mr. Gopal Jain, Sr. Advocate and Mr. Vivek Kohli, Sr. Advocate with Mr. Gajanand Kirodimal, Mr. Himanshu Goel, Mr. Rohan Jaitley, Advocates. For Respondent : Mr. Arun Kathpalia, Sr. Advocate with Mr. Abhishek Anand, Mr. Karan Kohli, Ms. Palak Kalra, Mr. Aditya, Advocates for RP. Mr. Abhijeet Sinha, Sr. Advocate with Mr. Nilotpal Shyam, Mr. Avishkar Singhvi, Mr. Auritro Mukherjee, Vivek Kumar Singh, Advocates for SRA. Mr. Keshri Kumar, Advocate. Click Here To Read/Download The Order

Once Resolution Plan Is Approved By CoC & Submitted To Adjudicating Authority For Approval, No Other Plan Can Be Considered By CoC: NCLAT

Mohd Malik Chauhan

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