NCLAT 2020 : Withdrawal of a successful Resolution Plan not permitted under IBC, after approved by CoC
NCLAT : The order passed by three judge bench of justice Bansi Lal Bhat, Acting Chairperson, Anant B Singh, Member (judicial) and Alok K Mishra Member (Technical).
Advocates Prithu Garg, Siddharth Mehta appeared for the Kundan Care Products Ltd, Appellants. Advocates Pooja Mahajan, Mahima Singh appeared for the Resolution Professional. Advocate Ashish Rana appeared for CoC.
The Applicant moved an application before the Adjudicating Authority for withdrawal of its Resolution Plan and cancellation/ revocation/ return/ refund of the Performance Bank Guarantee.
The NCLAT after hearing applicant , CoC and Resolution Professional held that,
“Resolution Applicant whose Resolution Plan stands approved by Committee of Creditors cannot be permitted to alter his position to the detriment of various stake holders after pushing out all potential rivals during the bidding process. This is fraught with disastrous consequences for the Corporate Debtor which may be pushed into liquidation as the CIRP period may by then be over thereby setting at naught all possibilities of insolvency resolution and protection of a Corporate Debtor, more so when it is a going concern”.
And appeal was dismissed as there no merit in the appeal.