Resolution Plan Approved by 83% Creditors Legal Position Explained
When a resolution plan gets 83% approval from the Committee of Creditors (CoC), can a single homebuyer oppose it later? The focus keyphrase — Resolution Plan Approved by 83% Creditors — clarifies this question in light of recent case laws under the Insolvency and Bankruptcy Code (IBC).
What Does IBC Say About Resolution Plan Approval?
Under the IBC:
- Section 30(4): A resolution plan must be approved by at least 66% voting share of the CoC.
- Once approved, the plan is binding on all stakeholders, including dissenting creditors and homebuyers.
- Section 60(5): NCLT has jurisdiction over insolvency matters but cannot interfere once the plan is approved per the IBC framework.
Recent Case Law: Homebuyer Challenge Rejected
Key Precedent:
- Vineet Kumar & Anr vs M/s AMR Infrastructures Ltd. (NCLAT, 2024)
- The National Company Law Appellate Tribunal (NCLAT) held that a lone homebuyer cannot reopen or challenge a resolution plan approved by the CoC with the required majority.
Why?
- IBC promotes timely resolution.
- Allowing individual challenges defeats the purpose of collective decision-making.
Legal Basis:
- Section 31(1) IBC: Binding effect of approved plans.
- Supreme Court in Essar Steel (2020): Limited judicial review once CoC approves a plan in compliance with IBC.
What Should Homebuyers Do?
- Attend CoC meetings (through Authorised Representatives).
- Raise concerns before plan approval, not after.
- Seek updates from Insolvency Professionals (IP).
Resolution Plan Approved by 83% Creditors: Key Points
| Point | Explanation |
|---|---|
| Required Majority | Minimum 66% CoC approval |
| Binding Nature | Binding on all creditors incl. homebuyers |
| NCLT Role | Limited to compliance check |
| No Fresh Challenge | After approval, lone dissent cannot reopen it |
| Remedy | Seek remedy before plan is finalised |
Expert View: Practical Tip
“Homebuyers must actively engage in the CoC process through their representative. Delayed objections weaken legal standing later.” — Tax & IBC Experts, Efiletax
Summary
Resolution Plan Approved by 83% Creditors: Once approved under IBC, it binds all stakeholders. A single homebuyer cannot challenge it under Section 60(5). NCLAT and Supreme Court back this principle to ensure timely resolution.
FAQs
Q1: Can a homebuyer approach Supreme Court after plan approval?
Only on limited grounds like fraud or non-compliance with mandatory procedures.
Q2: What is the remedy for dissatisfied homebuyers?
Raise objections during CoC discussions, not after NCLT approval.
Q3: Is 83% approval enough?
Yes, as it crosses the statutory 66% threshold.