Supreme Court affirms NCLT's power to recall approved resolution plans for material irregularities.
The Supreme Court held that the National Company Law Tribunal (NCLT) retains inherent powers to recall or set aside a resolution plan approved under the Insolvency and Bankruptcy Code, 2016, if material irregularities or fraud are established.
The Court recognized that post-approval judicial review is limited, but where foundational flaws — such as forged documents, non-disclosure of liabilities, or manipulation of bids — come to light, the NCLT must have the authority to revisit its orders to preserve the integrity of the insolvency process.
This decision enhances investor confidence in IBC mechanisms by ensuring that resolution processes remain transparent and accountable. Practitioners must now anticipate scrutiny beyond approval, especially in high-value corporate insolvencies.
