Resolution Plan cannot be permitted to be withdrawn after approval: NCLAT

Shraddha Buildcon Pvt. Ltd Vs Dhar Textile Mills Ltd (NCLAT Delhi)

NCLAT held that In event the submission of the Appellant is accepted that due to financial difficulty he is unable to implement the plan and he be permitting to go back from the commitments made in the Resolution Plan, it shall have disastrous effect on the entire process undertaken. The IBC is process consists of different steps with a ultimate object of reviving the Corporate Debtor. Permitting Successful Resolution Applicant to withdraw after the Plan has been approved will have serious disastrous effect on whole purpose and object of IBC. On the submission made by Counsel for the Appellant that since he had no financial capacity to implement the plan he should have been allowed to withdraw, the Adjudicating Authority has rightly rejected his application.

It is further submitted that financial in-capacity of the Appellant was due to no fault of the Appellant and it was due to subsequent developments. The above argument also cannot entitle the Appellant to withdraw from an approved Resolution Plan.