Resolution Plan Modification Post CoC Approval Not Permissible Under IBC: NCLT Mumbai Bench II - 2025-03-12

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NCLT Approves Resolution Plan for Reliance Infrastructure Consulting, Rejects Clarificatory Addendum

Mumbai, March 11, 2025 – The National Company Law Tribunal (NCLT), Mumbai Bench II, presided by Hon’ble Shri K. R. Saji Kumar (Member Judicial) and Hon’ble Shri Anil Raj Chellan (Member Technical), has approved the resolution plan for Reliance Infrastructure Consulting and Engineers Private Limited while firmly rejecting a subsequent “clarificatory addendum” seeking modifications to the originally approved plan. The ruling underscores the established legal principle that resolution plans, once approved by the Committee of Creditors (CoC) and submitted to the Adjudicating Authority, cannot be modified at the behest of the Successful Resolution Applicant (SRA).

Background of the Case

The Corporate Insolvency Resolution Process (CIRP) against Reliance Infrastructure Consulting and Engineers Private Limited was initiated by Axis Trustee Services Limited under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016. Mr. Rohit Ramesh Mehra was appointed as the Resolution Professional (RP). Following a comprehensive process, a resolution plan submitted by Mr. Manoj Kumar Upadhyay was unanimously approved by the CoC on May 17, 2024.

Subsequently, after submitting the plan for approval before the NCLT, the SRA sought to introduce a “clarificatory addendum” on November 8, 2024. This addendum proposed changes to the implementation structure of the resolution plan, including implementing the plan through a different affiliate entity and altering the merger scheme, while maintaining the proposed payouts to stakeholders.

Court's Analysis and Findings

The central issue before the NCLT was whether this clarificatory addendum, approved by the CoC post-submission of the resolution plan, could be considered for approval. The court meticulously examined the provisions of the IBC and relevant case laws, particularly referencing the Supreme Court’s rulings in Ebix Singapore Private Limited v. CoC of Educomp Solutions Limited and SREI Multiple Asset Investment Trust Vision India Fund Vs. Deccan Chronicle Marketeers & Others .

The Tribunal emphasized the Supreme Court's clear stance against allowing modifications or withdrawals of CoC-approved resolution plans once submitted to the Adjudicating Authority. Referring to the Ebix Singapore judgment, the NCLT highlighted:

> “ ...the existing insolvency framework in India provides no scope for effecting further modifications or withdrawals of CoC-approved Resolution Plans, at the behest of the successful Resolution Applicant, once the plan has been submitted to the Adjudicating Authority. ”

The NCLT bench concluded that the “clarificatory addendum,” despite CoC approval, constituted a modification to the resolution plan and could not be legally considered. Therefore, the court resolved to evaluate the original resolution plan, disregarding the addendum.

Resolution Plan Approval and Key Features

Upon evaluating the original resolution plan, the NCLT found it compliant with Section 30(2) of the IBC, which mandates provisions for payment of CIRP costs, operational creditor debts, and the plan's implementation and supervision. The court also acknowledged the “commercial wisdom” of the CoC, citing precedents like K. Sashidhar Vs. Indian Overseas Bank and Ors. , Kalpraj Dharamshi & Anr. Vs. Kotak Investment Advisors Ltd & Anr. , and Committee of Creditors of Essar Steel India Limited through Authorised Signatory Vs. Satish Kumar Gupta and Ors. , which limit the Adjudicating Authority's role to ensuring procedural compliance rather than interfering with the CoC's commercial decisions.

The resolution plan, approved by 100% of the CoC voting share, proposes a total resolution amount of ₹1.05 Crore. Key features of the plan include:

• Payment to Creditors: Secured Financial Creditors will receive ₹83.20 Lakh (0.17% of admitted claims), Unsecured Financial Creditors ₹20.80 Lakh (0.04%), and Operational Creditors ₹50,000 (2.03%).
• Merger: The Corporate Debtor will be merged with ACME Cleantech Solutions Pvt. Ltd., an affiliate of the SRA.
• Upfront Payment: The SRA will infuse ₹3.5 Crore as upfront cash payment.

Decision and Implications

The NCLT Bench II approved the Resolution Plan dated February 20, 2024 (along with the Addendum dated March 26, 2024), effectively from March 11, 2025, making it binding on all stakeholders. The “Clarificatory Addendum” dated November 8, 2024, was explicitly rejected.

This order reinforces the sanctity of the CIRP process timelines and the finality of CoC-approved resolution plans under the IBC. It clarifies that modifications sought after plan submission to the Adjudicating Authority are impermissible, upholding the legislative intent to ensure timely resolution of corporate insolvencies. While certain reliefs and concessions sought in the plan, particularly related to tax waivers and approvals, were not directly granted by the NCLT, the SRA was granted liberty to approach the appropriate authorities for seeking such reliefs. ```