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TMI BlogApproval of resolution plan [ Section 31 ]X X X X Extracts X X X X X X X X Extracts X X X X ..... ent, any State Government or any local authority to whom a debt in respect of the payment of dues arising under any law for the time being in force , such as authorities to whom statutory dues are owed, guarantors and other stakeholders involved in the resolution plan. The Adjudicating Authority shall, before passing an order for approval of resolution plan under this sub-section, satisfy that the resolution plan has provisions for its effective implementation. Rejection of the resolution plan [ Section 31(2) ] Where the Adjudicating Authority is satisfied that the resolution plan does not confirm to the requirements referred to in section 31(1), it may, by an order, reject ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for in such law, whichever is later Provided that where the resolution plan contains a provision for combination, as referred to in section 5 of the Competition Act, 2002 , the resolution applicant shall obtain the approval of the Competition Commission of India under that Act prior to the approval of such resolution plan by the committee of creditors. Relevant Case Law K. Sashidhar Vs. Indian Overseas Bank Ors. - SC Dated 05.02.2019 The legislature has not endowed the AA with the jurisdiction or authority to analyse or evaluate the commercial decision of the CoC much less to enquire into the justness of the rejection of the resolution plan by the dissenting FCs. The disc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rcial decision exercised by CoC of approving the resolution plan or rejecting the same v. The commercial wisdom of CoC is not to be interfered with, excepting the limited scope as provided under Section 30 and section 31 of the IBC, 2016. Jaypee Kensington Boulevard Apartments Welfare Association Ors. Vs. NBCC (India) Ltd. Ors. - SC Dated 24.03.2021 i. The role of CoC is akin to that of a protagonist, giving finality to the process (subject to approval by the AA), who takes the key decisions in its commercial wisdom and the consequences thereof. The power of judicial review in section 31 of the Code is not akin to the power of a superior authority to deal with the merits of the decision of any inferior or su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mishra and Sons Pvt. Ltd. Vs. Edelweiss Asset Reconstruction Company Ltd. Ors. - SC Dated 13.04.2021 Once a resolution plan is approved by the AA under section 31(1) , the claims as provided in the resolution plan shall stand frozen and will be binding on the CD and its employees, members, creditors, including the central government, any state government or any local authority, guarantors, and other stakeholders. On the date of approval of resolution plan by the AA, all such claims, which are not a part of resolution plan, shall stand extinguished and no person will be entitled to initiate or continue any proceedings in respect to a claim, which is not part of the resolution plan. Lalit Kumar Jain Vs. Union of India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nil Jain Vs. Punjab National Bank Ors. - NCLAT dated 24.04.2019 Where the AA has approved a resolution plan that provides for taking over the shares of the promoters, it is not required to comply with the provisions of section 56 and section 57 of the Companies Act, 2013 . The same can be completed at the stage of implementation of the resolution plan. Arcelormittal India Pvt. Ltd. Vs. Abhijit Guhathakurta Ors. - NCLAT order dt. 16.12.2019 The proviso to sub-section 31(4) of Code which relates to obtaining the approval from the CCI under the Competition Act, 2002 , prior to the approval of such resolution plan by the CoC, is directory and not mandatory. Standard Chartered Bank Vs. Satish Ku ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lution plan is not discriminatory as it does not give differential treatment among the same class of FCs merely based on assenting or dissenting FCs. Singh Raj Singh Vs. SRS Meditech Ltd. Ors. - NCLAT Dated 07.10.2020 The law does not enjoin any right or power to challenge the commercial wisdom of the CoC regarding approval of the resolution plan which is undergoing implementation Seroco Lighting Industries Pvt. Ltd. Vs. Ravi Kapoor, RP for Arya Filaments Pvt. Ltd. Ors. - NCLAT Dated 10.12.2020 A successful resolution applicant cannot be permitted to withdraw the approved resolution plan, coupled with the fact in the instant case being the sole RA in the CIRP, which is an MSME and having knowledge ..... X X X X Extracts X X X X X X X X Extracts X X X X
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