New Delhi: The Supreme Court has held that, after a Committee of Creditors (CoC) has approved a resolution plan under the Insolvency and Bankruptcy Code, 2016, it cannot seek withdrawal of the plan before the NCLT on the ground that the corporate debtor’s finances have since improved.
A Bench of Justice J.B. Pardiwala and Justice K. Vinod Chandran held that the principle in Ebix Singapore (P) Ltd. v. Committee of Creditors of Educomp Solutions Ltd., which bars the successful resolution applicant from withdrawing or modifying a CoC-approved plan, “applies squarely to the CoC too”. It left the NCLT to decide the pending applications on confirmation of the plan and on a settlement offer by the promoter’s holding company.
In Bank of India & Ors. v. S.M. Kamal Pasha & Ors. (2026 INSC 1154), the six-member CoC, with Bank of India as the Section 7 applicant, had approved a plan by a consortium for a toll-road corporate debtor, for a resolution amount of Rs. 172.55 crore. The NCLT had allowed the Resolution Professional’s application, supported unanimously by the CoC, to withdraw the plan, but the NCLAT, relying on Ebix Singapore (2022) 2 SCC 401 and State Bank of India v. Consortium of Murari Lal Jalan (2025) 4 SCC 354, held that the CoC has no jurisdiction to withdraw. It revived the application for confirmation of the plan and directed the holding company’s application, IA No. 1679 of 2025, to be considered.
Senior Advocate Gopal Sankaranarayanan, for the CoC members, argued that when the plan was approved the corporate debtor’s business had been hit by Covid-19 with an opening balance of Rs. 30 crore, but by the time of this Court’s dismissal of the earlier SLP the balance had risen to Rs. 165 crore, giving the resolution applicant a windfall and defeating maximisation of value. He relied on Kalyani Transco v. Bhushan Power & Steel Ltd. (2026) 6 SCC 431. Senior Advocate Nidhesh Gupta, for the resolution applicant, argued that the plan binds the CoC, that improvement had been contemplated in the plan, and that the CoC’s change of stance was opportunism and not commercial wisdom. The holding company, through Senior Advocate Nikhil Nayyar, supported a one-time settlement ending the CIRP.
The Court reviewed Ebix Singapore, which held that a plan is binding inter se the CoC and the resolution applicant from CoC approval, with binding effects derived from the IBC framework and not the law of contract. It also recorded that the IBC provides for forfeiture of the performance bank guarantee and prosecution under Section 74 for non-implementation, whereas withdrawal under Section 12-A attracts only CIRP costs and no damages. Though Ebix concerned withdrawal by the applicant, the Court said its dictum applies equally to the CoC, since the insolvency framework gives no scope for modification or withdrawal of a CoC-approved plan at the behest of either.
On Section 12-A and Regulation 30-A, the Court noted that, read alone, Section 12-A seems to give wide scope to withdraw with 90 per cent CoC approval, but held that it cannot be read in isolation from Sections 30 and 31. Following the stages identified in Glas Trust Co. LLC v. Byju Raveendran (2024), it held:
“[T]he withdrawal of an application can only be till the CoC approves the plan and after it is placed before the Adjudicating Authority, there can be no withdrawal either of the application or the approved Resolution Plan.”
The Court also relied on Section 30(2), including Explanations I and II, which require the plan to ensure creditors get at least the liquidation amount and a fair and equitable distribution, to be examined by the NCLT before approval under Section 31(1).
Kalyani Transco, the Court clarified, did not change this. That decision recognised that the CoC continues to have a vital interest in the plan until implementation and does not become functus officio on approval, but that did not detract from the binding nature of an approved plan.
The Court acknowledged that the NCLT cannot second-guess the CoC’s commercial wisdom, but noted the resolution applicant’s contention that the upturn was foreseen in the plan and would have accrued to it, and that the CoC’s change of stance was “shortsighted opportunism”. It declined to interfere with the NCLAT order, which found that the CoC had no jurisdiction to withdraw but required all contentions of the resolution applicant and the holding company to be considered.
The Court directed the NCLT to take up both applications together and decide them expeditiously, after verifying the corporate debtor’s present financial position and cash balance against the plan, and made it clear that “[t]he improved profitability alone cannot be a reason to refuse approval if the Resolution Plan meets the requirements under sub-section (2) of Section 30.”
Apart from the binding nature of the plan vis-a-vis the CoC and the resolution applicant, its observations are only prima facie. The appeal was disposed of.
Appearances:
For the Appellants (CoC members): Mr. Gopal Sankaranarayanan, Senior Advocate.
For the Successful Resolution Applicant (Respondent Nos. 1 & 2): Mr. Nidhesh Gupta, Senior Advocate.
For Respondent No. 4 (holding company): Mr. Nikhil Nayyar, Senior Advocate.
Case Title: Bank of India & Ors. vs. S.M. Kamal Pasha & Ors., Civil Appeal No. 12045 of 2026, 2026 INSC 1154
