The NCLT dismissed a ₹7 crore resolution plan, finding it failed to protect statutory entitlements of dissenting creditors under Section 30(2)(b) of the IBC.
NCLT Rejects ₹7 Cr Plan for Not Protecting Dissenting Creditors
The National Company Law Tribunal (NCLT) has ruled against a resolution plan proposing ₹7 crore as it failed to adequately protect the statutory entitlements of dissenting creditors, in violation of Section 30(2)(b) of the Insolvency and Bankruptcy Code (IBC).
The Tribunal noted that a resolution plan must be crafted to safeguard the interests of all creditors, particularly those dissenting from the proposal. The inadequacy of protection offered to dissenting creditors was deemed a critical flaw leading to the rejection of the plan.
This decision serves as a significant warning to practitioners involved in insolvency cases, highlighting the necessity of ensuring that all statutory entitlements of creditors are prioritized and safeguarded in resolution proposals.
Citations
- NCLT Order (2026) 2 NCLT 1
