Case Law Details
Ashok Dattatray Atre Vs State Bank of India (NCLAT Delhi)
n the case of Ashok Dattatray Atre vs. State Bank of India, the National Company Law Appellate Tribunal (NCLAT) in Delhi deliberated on whether an extension of time for payment under a resolution plan constituted a modification of the plan or a withdrawal from it. The issue arose in response to a submission by the State Bank of India (SBI) that the resolution plan, once approved, could not be modified or withdrawn, citing the precedent set by the Supreme Court in Ebix Singapore Pvt. Ltd. vs. Committee of Creditors of Educomp Solutions Ltd.
The Supreme Court’s decision in Ebix Singapore addressed an application by the Resolution Applicant (RA) to withdraw the resolution plan, which the Court rejected, emphasizing that once a plan is approved, both the RA and the Committee of Creditors (CoC) are bound by it. The NCLAT referred to its own judgment in Tricounty Premier Hearing Service Inc. vs. State Bank of India, where it was held that an extension of time for payment under a resolution plan does not constitute a modification of the plan.
In Tricounty case, the NCLAT observed that the residual powers of the Adjudicating Authority under the Insolvency and Bankruptcy Code (IBC) cannot be used to create procedural remedies with substantive outcomes on the insolvency process. The court emphasized that the existing insolvency framework in India provides no scope for further modifications or withdrawals of CoC-approved resolution plans once they are submitted to the Adjudicating Authority.
In Ashok Dattatray Atre vs. State Bank of India, the NCLAT further clarified that the prayer for an extension of time to comply with financial commitments as per the resolution plan does not amount to modification of the plan. The Adjudicating Authority has the jurisdiction to grant such extensions without requiring the concurrence of the CoC. Therefore, the NCLAT concluded that the Adjudicating Authority’s view that granting an extension of the timeline constitutes modification of the resolution plan was incorrect.
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