Tribunal Upholds CoC-Approved Plan, Dismisses Applicant's Plea for New Resolution Consideration
In a significant ruling, the National Company Law Tribunal (NCLT), Kolkata Bench, has dismissed an application submitted by JVS COMATSCO Industries Private Limited, which sought permission to submit a fresh resolution plan for Incab Industries Limited. The tribunal, comprising Shri Labh Singh, Member (Judicial), and Ms. Rekha Kantilal Shah, Member (Technical), underscored the principle that a Committee of Creditors (CoC)-approved resolution plan cannot be disturbed by parties outside the Corporate Insolvency Resolution Process (CIRP) deliberations.
The applicant, JVS COMATSCO Industries, led by founder Vallabh Lalji Patel, sought to present a resolution plan exceeding the Rs. 545 crore plan approved by Vedanta Industries Limited. However, the tribunal ruled that the applicant lacked the locus standi to challenge the CoC-approved plan, as they were not a participant in the CIRP or the CoC deliberations.
The NCLT's decision cited the Supreme Court's precedent in the Arcelormittal India Pvt. Ltd. case, emphasizing that there is no vested right for a resolution applicant to have its plan approved once the CoC has made its decision. The tribunal also referenced prior judgments to affirm that the CIRP process is not open to collateral challenges from parties outside the process once a plan is approved by the CoC.
The application was dismissed on grounds that any new resolution plan submission at this stage would disrupt the orderly resolution process envisioned under the Insolvency and Bankruptcy Code (IBC). The ruling reinforces the finality of CoC-approved plans, barring any material irregularity or violation of Section 30(2) of the IBC.
Bottom Line:
Insolvency and Bankruptcy Code - Committee of Creditors (CoC)-approved resolution plan cannot be disturbed by permitting a new party, not part of CIRP or CoC deliberations, to submit a fresh resolution plan.
Statutory provision(s): Insolvency and Bankruptcy Code, 2016 Sections 9, 30(2)(e).
Jayanta Banerjee v. Incab Industries Limited, (NCLT)(Kolkata Bench) : Law Finder Doc Id # 2831999
