Whether CoC after having approved a Resolution Plan can seek direction to consider a new Resolution Plan of a third party who was not a part of the CIRP Proceedings, and seek to withdraw their approval after more than 2 years of the approval of the first Resolution Plan – Kalinga Allied Industries India Pvt. Ltd. Vs. CoC (Bindals Sponnge Industries Ltd.) – NCLAT New Delhi
NCLAT held that the existing framework does not provide any scope for effecting any further modifications or withdrawals of the CoC approved Resolution Plan by the SRA or the Creditors. The Adjudicating Authority can interfere only if the Plan is against the provisions of the Code. Once the Plan is submitted to the Adjudicating Authority, it is binding and irrevocable as between the CoC and the SRA in terms of the provisions of the Code. The ‘Maximisation of Value of Assets’ ought to be ‘within the specified timelines’ and if it is not a ‘timebound process’, the entire scope and objective of the Code would fail merely because there is another higher offer made by a third party, the CoC cannot consider another Plan of a third party who did not participate in the CIRP Proceedings. It concluded that once Plan is submitted for approval, it is binding between the CoC and the SRA, unless there is any material irregularity or is against the provisions of Section 30(2) of the Code the Adjudicating Authority cannot, in its limited jurisdiction, interfere.