The Supreme Court ruled that once the Committee of Creditors approves a resolution plan, the Successful Resolution Applicant must adhere to its terms without renegotiation. This decision reinforces the commercial wisdom of the Committee.
Supreme Court Ruling on Resolution Plans
The Supreme Court of India has delivered a significant ruling regarding the roles of the Committee of Creditors and the Successful Resolution Applicant (SRA) in insolvency proceedings. The Court held that once a resolution plan is approved by the Committee of Creditors, the SRA cannot reopen negotiations and must implement the plan as approved.
The ruling underscores the importance of adhering to the commercial wisdom exercised by the Committee of Creditors, asserting that once decisions are made, parties must respect the achieved consensus. The court emphasized that the integrity of the resolution process is paramount, and reopening negotiations would undermine this principle.
This decision clarifies expectations for all parties involved in the insolvency process and establishes a clear framework within which resolution plans should be executed.
Practitioners in insolvency and corporate law should take note of this ruling, as it reinforces the binding nature of approved resolution plans and the necessity for careful negotiation prior to approval.
Citations
- Insolvency and Bankruptcy Code (2016)
- Civil Appeal No. XXX of 2026
