Submission of Approved Resolution Plans to the NCLT
Once a Resolution Plan has been approved by the Committee of Creditors (CoC), the next crucial step in the Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code (IBC), 2016, is its formal submission to the National Company Law Tribunal (NCLT) for final approval. This stage is critical as it marks the transition from the CoC's decision-making to the NCLT's judicial oversight, ensuring the plan's legality and compliance.
The Process of Submission
The Insolvency Professional (IP), acting as the Resolution Professional (RP), is responsible for filing the approved Resolution Plan with the NCLT. This submission is typically made through a formal application, often referred to as Form 'G' or a similar prescribed format, accompanied by all necessary supporting documents. The objective is to present the plan to the Adjudicating Authority (NCLT) for its consideration and final sanction.
The Insolvency Professional (IP), acting as the Resolution Professional (RP).
Key Considerations for NCLT Approval
The NCLT's decision to approve a Resolution Plan hinges on several critical factors. These are designed to ensure that the resolution process leads to a sustainable outcome for the corporate debtor and its stakeholders.
| Factor | NCLT's Scrutiny | Importance |
|---|---|---|
| Compliance with IBC | Ensures adherence to Section 30(2) and other relevant provisions. | Mandatory for plan approval. |
| Feasibility and Viability | Assesses the practical implementation and long-term sustainability of the plan. | Crucial for the corporate debtor's revival. |
| Fairness to Stakeholders | Verifies equitable treatment of all classes of creditors and other stakeholders. | Prevents preferential treatment. |
| Legality | Confirms the plan does not violate any other applicable laws. | Ensures the plan is lawful. |
The NCLT's approval is the final judicial stamp that breathes life into the approved Resolution Plan, marking the end of the CIRP and the commencement of the resolution implementation phase.
Potential Outcomes of NCLT Review
The NCLT has a few options when reviewing the submitted Resolution Plan:
Loading diagram...
If the NCLT finds the plan satisfactory and compliant, it will pass an order sanctioning the Resolution Plan. This sanctioning order is binding on all stakeholders, including the corporate debtor, its employees, creditors, and guarantors. If the NCLT finds the plan to be non-compliant, unfair, or unfeasible, it may reject the plan. In such cases, the IBC typically mandates that the corporate debtor proceeds to liquidation. The NCLT may also direct the RP to seek modifications from the CoC if minor issues are identified.
Significance of NCLT Approval
The NCLT's approval is the culmination of the resolution process. It signifies that a viable path forward has been identified and legally validated for the distressed company. This approval provides certainty to the successful resolution applicant, creditors, and other stakeholders, paving the way for the implementation of the plan and the potential revival of the corporate debtor.
Learning Resources
The official and complete text of the Insolvency and Bankruptcy Code, 2016, essential for understanding the legal framework governing resolution plans.
Access to various regulations framed by IBBI, including those related to the Corporate Insolvency Resolution Process, which detail the procedures for plan submission and approval.
The official portal for the NCLT, providing access to case information, orders, judgments, and procedural guidelines relevant to plan approvals.
An insightful blog post that breaks down the IBC process, including the stages of resolution plan submission and NCLT approval, in an accessible manner.
This article discusses recent changes and important judicial pronouncements impacting the IBC, which can affect the submission and approval of resolution plans.
A guide to the procedural aspects of filing and litigating before the NCLT, offering practical insights into the submission process.
An analysis of significant court decisions that have shaped the interpretation and application of resolution plan provisions under the IBC.
A video tutorial explaining the entire CIRP, including the critical step of submitting the approved resolution plan to the NCLT for final approval.
This video elaborates on the powers and functions of the NCLT, particularly its role in adjudicating and approving resolution plans.
A general overview of the IBC, providing context and background information on its objectives and key provisions, including the resolution process.