The Supreme Court upheld liquidation of a company, stating that a Successful Resolution Applicant cannot claim a Letter of Intent was conditional to evade a CoC-approved resolution plan.
Supreme Court on CoC-Approved Plans and Letters of Intent
The Supreme Court of India has affirmed that a Successful Resolution Applicant cannot evade compliance with a Committee of Creditors (CoC)-approved resolution plan by asserting that the associated Letter of Intent was conditional. The Court's decision reinforces the binding nature of resolution plans approved under the IBC framework.
This ruling clarifies the parameters surrounding Letters of Intent in insolvency matters, highlighting the necessity for resolution applicants to adhere strictly to the terms approved by the CoC, irrespective of subsequent claims regarding conditionality.
Legal practitioners involved in insolvency proceedings must heed this ruling and ensure that parties comply with CoC-approved plans to avoid liquidation and other severe consequences arising from non-compliance.
Citations
- Insolvency and Bankruptcy Code (2026) 1 SCC 987
