Case at a Glance
The Committee of Creditors of a toll-road company on National Highway 45 approved a Rs 172.55 crore resolution plan when the company had an opening balance of about Rs 30 crore. By the time litigation ended, the balance had risen to about Rs 165 crore, and the CoC sought to withdraw its approval and invite fresh bids, calling the plan a windfall for the resolution applicant. The NCLT allowed this, the NCLAT reversed, and the Supreme Court upheld the NCLAT: once the plan is approved and placed before the adjudicating authority, the CoC cannot withdraw it. The NCLT must now decide confirmation, along with the promoter’s one-time settlement proposal, under Sections 30(2) and 31.
The corporate debtor runs toll collection on National Highway 45, and its business suffered during the Covid-19 pandemic. Bank of India was the Section 7 financial creditor; the appellants are six members of the Committee of Creditors. A consortium (the first and second respondents) emerged as the successful resolution applicant with a plan of Rs 172.55 crore, submitted when the debtor’s opening balance was about Rs 30 crore. By the time the Supreme Court dismissed an SLP filed by the erstwhile promoter, that balance had grown to about Rs 165 crore.
The CoC, through the Resolution Professional and by a unanimous vote, sought to withdraw the approved plan and issue a fresh Form G, while the debtor’s holding company offered a one-time settlement and sought closure of the insolvency process. The NCLT allowed the withdrawal. The NCLAT reversed, held that the CoC had no jurisdiction to withdraw its approval, revived the plan-confirmation application (IA No. 1505 of 2021) and directed consideration of the holding company’s OTS application (IA No. 1679 of 2025).
The Key Question Before the Court
Can a Committee of Creditors withdraw its approval of a resolution plan, after the plan is placed before the NCLT, on the ground that the corporate debtor’s financial position has since improved?
Ebix, Section 12A and the binding approved plan
Justice K. Vinod Chandran, writing for the Bench, relied on Ebix Singapore (P) Ltd. v. Committee of Creditors of Educomp Solutions Ltd., (2021) 09 SC CK 0020, (2022) 2 SCC 401, which held that “The resolution plan cannot be construed purely as a ‘contract’ governed by the Contract Act” and that the “existing insolvency framework in India provides no scope for effecting further modifications or withdrawals”. Reading Section 12A with Regulation 30A, the Court held that “withdrawal of an application can only be till the CoC approves the plan,” and once the plan is placed before the adjudicating authority “there can be no withdrawal either of the application or the approved Resolution Plan.” Kalyani Transco v. Bhushan Power & Steel Ltd., (2026) 6 SCC 431 recognises the CoC’s continuing interest until implementation, but that does not detract from the plan’s binding nature.
On the windfall argument, the Court noted that the delay here flowed from its own stay, and that the resolution applicant’s charge of ‘shortsighted opportunism’ could not be ignored. It held that “The improved profitability alone cannot be a reason to refuse approval if the Resolution Plan meets the requirements” of Section 30(2). The NCLT, under Section 31(1), must still be satisfied that the plan complies with Section 30(2) — including fair and equitable distribution — with reference to the debtor’s current financial position and cash balance. The Court clarified that, apart from the binding nature of the plan, “we have only made prima facie observations which need not govern the final adjudication by the NCLT.”
What the Court Actually Held
- A CoC cannot withdraw its approval of a resolution plan once the plan has been approved and placed before the adjudicating authority; Section 12A withdrawal is available only until the CoC approves the plan.
- The approved plan binds the CoC and the successful resolution applicant pending the NCLT’s decision; improved profitability alone is not a reason to refuse approval if the plan meets Section 30(2).
- The NCLT must consider the plan-confirmation application and the holding company’s OTS application together and decide them expeditiously, verifying compliance with Section 30(2) against the debtor’s current financial position.
- The NCLAT order was not interfered with and the appeal was disposed of, with all contentions of the resolution applicant and holding company kept open.
Why This Judgment Matters
- It brings certainty for resolution applicants: once lenders approve and file a plan, they cannot walk away because the debtor’s fortunes improve.
- It applies Ebix Singapore from the creditors’ side, confirming that withdrawal is barred for CoCs as well as applicants.
- It keeps the NCLT’s Section 31 scrutiny alive, so current finances still matter at the confirmation stage.
What Should Advocates Take Away From the Judgment?
For Lenders and CoCs
- Weigh likely changes in the debtor’s finances before voting; approval is effectively irrevocable once placed before the NCLT.
- Concerns about fairness of distribution can be raised at the Section 31 confirmation stage.
For Resolution Applicants and Counsel
- Cite this ruling and Ebix to resist post-approval withdrawal by the CoC.
- Expect the NCLT to examine the debtor’s current cash position against the plan’s terms.
- Note that only the binding-nature finding is final; the Court’s other observations are prima facie.
Key Takeaways
- Section 12A withdrawal is available only until the CoC approves the plan.
- After the plan is placed before the NCLT, neither the application nor the plan can be withdrawn.
- Improved profitability alone cannot defeat approval of a Section 30(2)-compliant plan.
- The NCLT must decide confirmation and the OTS proposal together, expeditiously.
Frequently Asked Questions
Can a Committee of Creditors withdraw an approved resolution plan under the IBC?
Not after the plan has been approved and placed before the NCLT. The Court held that withdrawal under Section 12A can be sought only until the CoC approves the plan.
What if the corporate debtor’s finances improve after the plan is approved?
Improved profitability alone cannot be a reason to refuse approval if the plan meets Section 30(2). However, the NCLT must assess compliance with reference to the debtor’s current financial position and cash balance.
What happens to the promoter’s one-time settlement offer?
The NCLT has been directed to consider it together with the plan-confirmation application and decide both expeditiously, with all contentions open.
Conclusion
The judgment protects the integrity of the insolvency process: a resolution plan approved by creditors and placed before the tribunal is not a draft to be reopened whenever the numbers change. At the same time, the Supreme Court has preserved the NCLT’s duty to test the plan against Section 30(2) on today’s figures, leaving room for fairness without permitting second thoughts.
Practical takeaway: CoCs should treat plan approval as final once filed before the NCLT; arguments about windfalls belong in the Section 31 confirmation hearing, not in a withdrawal application.
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