Case Law Details
Hem Singh Bharana Vs Pawan Doot Estate Private Limited Through Sh. Darshan Singh (Resolution Professional) (NCLAT Delhi)
In a recent decision by the National Company Law Appellate Tribunal (NCLAT) in the case of Hem Singh Bharana Vs Pawan Doot Estate Private Limited, an important precedent has been set regarding the withdrawal or alteration of a resolution plan after its approval by the Committee of Creditors (CoC). The case sheds light on the statutory framework of the Insolvency and Bankruptcy Code (IBC) and clarifies the limitations imposed on resolution applicants, particularly ex-promoters, in altering the course of insolvency proceedings post-approval of a resolution plan.
The appellant, an ex-promoter of the corporate debtor, challenged an order passed by the National Company Law Tribunal (NCLT), New Delhi Bench, which dismissed their application to defer the approval of a resolution plan submitted by the resolution professional (RP). The appellant sought to keep the proceedings in abeyance based on a revised settlement proposal under Section 12A of the IBC.
The key issue at hand was whether a settlement proposal, particularly one submitted by an ex-promoter, could be entertained after the CoC had already approved a resolution plan and the RP had filed an application for its approval before the NCLT.
The appellant argued that the CoC’s approval of a resolution plan does not preclude them from considering a better financial proposal, such as the settlement proposal under Section 12A. They contended that the CoC’s commercial wisdom should prevail, and they should be allowed to withdraw or modify the approved plan.
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