Approved Resolution Plan explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
A resolution applicant that wins and then has second thoughts has no exit. The NCLAT in the Educomp Solutions matter, affirmed by the Supreme Court, held the plan binds the applicant from the moment the committee approves it.
CoC of Educomp Solutions Ltd. v. Ebix Singapore Pte. Ltd.
The NCLAT held, and the Supreme Court affirmed, that:
- once the resolution plan is approved by the CoC and submitted to the Adjudicating Authority, the successful resolution applicant cannot withdraw or modify the resolution plan;
- the plan, even prior to approval by the Adjudicating Authority, is binding inter se the CoC and the successful resolution applicant; and
- the Adjudicating Authority, after approval of the plan by the CoC, has no jurisdiction to entertain or to permit withdrawal of the plan.
It was noteworthy, the Tribunal observed, that even an unavoidable situation like Covid-19 was not allowed as a ground for a resolution applicant to seek withdrawal.
The whole process is built on the plan being reliable. Creditors vote on it, the corporate debtor's fate is decided by it, employees and suppliers make decisions on the strength of it, and the statutory clock keeps running throughout.
If a successful applicant could withdraw whenever the acquisition became less attractive — a market turn, a fall in the asset's value, a pandemic — then the process would restart with much of the 330 days gone, the business further degraded and the recovery lower. The irrevocability is what makes the bid worth voting on.
The one opening left is consensual: if the CoC is willing to renegotiate, the courts have given liberty to allow that. The applicant cannot walk away, but the parties together may agree to revisit terms.
When it is not the approved resolution plan the applicant submitted
In Tarini Steel Company Pvt. Ltd. v. Trinity Auto Components Ltd. & Anr., an appeal was filed against an order of the Adjudicating Authority approving a resolution plan with certain modifications. The appellant contended that the Adjudicating Authority has no jurisdiction to make any modification to the resolution plan after it was approved by the CoC.
Without expressing any opinion on that question, the NCLAT gave the appellant liberty to withdraw the resolution plan if it was not satisfied with the amendment made — in which case the Adjudicating Authority would allow the withdrawal and proceed with liquidation.
The two decisions are consistent. An applicant is bound to the plan it submitted. It is not bound to a different plan written into the order by the tribunal — but the consequence of declining that different plan is liquidation, not a renegotiation.
The same rule applies to a liquidation bid
M/s Visisth Services Ltd v. SV Ramani & Ors. (NCLAT, AT Insolvency No. 896 of 2020) arose from liquidation proceedings where the appellant sought to withdraw its bid after acceptance and recover the EMD, claiming its offer had been conditional and that it had been misled about the liabilities attached to the assets.
The NCLAT held that by paying the EMD and accepting the bid, the successful bidder cannot say that it was not a concluded contract. The bidder is bound by the terms and conditions of the bid document, and no communication to the liquidator stating that it is a conditional offer is sustainable — otherwise the liquidation process would be a never-ending one, defeating the scope and objective of the Code.
Finality across the process
The point at which an approved resolution plan becomes irrevocable is earlier than most applicants assume:
| Stage | Can the applicant or bidder exit? |
|---|---|
| Before the CoC votes | Yes, on the terms of the process document |
| After CoC approval, before the AA order | No — binding inter se CoC and applicant |
| After the AA order | No — the AA has no jurisdiction to permit withdrawal |
| Where the AA modifies the plan | Liberty to withdraw, with liquidation following |
| Liquidation bid after EMD paid and bid accepted | No — a concluded contract |
| CoC willing to renegotiate | Permitted by liberty of the court |
Practical points for a resolution applicant
- Complete diligence before the committee votes; afterwards there is no unilateral exit.
- Price the risk of market movement into the plan — an approved resolution plan carries it.
- Where the tribunal modifies the plan, decide promptly; the alternative on offer is liquidation.
- In a liquidation sale, do not treat a covering letter as making an offer conditional.
Common mistakes
- Assuming an approved resolution plan binds only once the Adjudicating Authority has confirmed it.
- Seeking withdrawal on force majeure grounds.
- Treating an EMD as an option fee rather than part of a concluded contract.
- Expecting the Adjudicating Authority to permit a withdrawal the committee has not agreed to.