This judgment does not itself approve or reject the resolution plan, and it does not decide the holding company's one-time settlement application. Both applications remain pending before the NCLT, which must decide them together, and the Court's observations beyond the binding nature of the plan are expressly prima facie only.
- Case
- Bank of India & Ors. v. S.M. Kamal Pasha & Ors.
- Court
- Supreme Court of India
- Decision
- Citation
- 2026 INSC 1154
- Bench
- J. B. Pardiwala; K. Vinod Chandran
- Judgment by
- K. Vinod Chandran
- Case numbers
- Civil Appeal No. 12045 of 2026
- Outcome
- Final judgment disposing of Civil Appeal No. 12045 of 2026, declining to interfere with the NCLAT order and directing the NCLT to decide the pending applications together expeditiously.
No withdrawal after approval: the plan binds both sides
On 26 October 2026, a Bench of Justices J. B. Pardiwala and K. Vinod Chandran held that a Committee of Creditors (CoC) cannot seek withdrawal of a resolution plan it has approved once the plan is placed before the Adjudicating Authority, the National Company Law Tribunal (NCLT), for confirmation.
The Court declined to interfere with the order of the National Company Law Appellate Tribunal (NCLAT), which had held that the CoC has no jurisdiction to withdraw its approval of the plan. It directed the NCLT to take up together, and decide as expeditiously as possible, the application for confirmation of the plan and the holding company's application for a one-time settlement that would bring the insolvency proceedings to an end.
A plan approved, then a change of mind as the debtor recovered
The dispute concerned a corporate debtor whose business of toll collection on National Highway 45 had suffered during the Covid-19 pandemic. The CoC approved a resolution plan put forward by a consortium, referred to as the successful resolution applicant, with a resolution amount of Rs 172.55 crore at a time when the debtor had an opening balance of Rs 30 crore.
The resolution professional, on the CoC's unanimous approval, then applied to the NCLT to withdraw the plan. The plea was that the debtor's financial position had improved considerably while the resolution professional was in management, so that by the time an earlier round of litigation ended, the opening balance had risen to Rs 165 crore, and the successful applicant would enjoy a windfall gain by bringing in far less than the plan stipulated. The erstwhile promoters' holding company supported withdrawal on different grounds, seeking closure of the insolvency proceedings through a one-time settlement with creditors, while the CoC sought a fresh invitation for expressions of interest.
What the tribunals below had decided
The NCLT had allowed the withdrawal application filed by the resolution professional on the CoC's unanimous approval. The NCLAT reversed that approach, holding that the withdrawal application violated the Insolvency and Bankruptcy Code, 2016, relying principally on Ebix Singapore (P) Ltd. v. Committee of Creditors of Educomp Solutions Ltd. and on State Bank of India v. Consortium of Murari Lal Jalan and Florian Fritsch.
The NCLAT held that the CoC has no jurisdiction to decide on withdrawal of the resolution plan, revived the resolution professional's application for confirmation of the plan for consideration by the NCLT, and directed that the holding company's application also be considered, with the successful applicant permitted to raise its contentions.
Ebix applies to the committee as much as to the applicant
The Court held that the dictum in Ebix applies squarely to the CoC as well as to the successful resolution applicant. In Ebix, the Court had held that a resolution plan, even before approval by the Adjudicating Authority, is binding inter se the CoC and the successful applicant, and that the plan cannot be treated as a pure contract governed by the Contract Act in the period between its acceptance by the CoC and its approval by the Adjudicating Authority, because its binding effect is produced by the IBC framework.
The Court added that the insolvency framework provides no scope for effecting modifications or withdrawals of CoC-approved resolution plans at the behest of the successful applicant, and it provides no such framework at the behest of the CoC either. Reading Sections 30 and 31 together, it held that withdrawal of an application can only take place until the CoC approves the plan; once the plan is placed before the Adjudicating Authority, there can be no withdrawal either of the application or of the approved resolution plan.
The Court also addressed Section 12A, which permits withdrawal of an insolvency application with 90 per cent CoC voting share. It held that the legislative scheme does not permit Section 12A to be read in isolation, and that the provision cannot be used to withdraw a plan after CoC approval. Separately, it noted that the CoC's continued existence until a plan is implemented, recognised in Kalyani Transco, does not detract from the binding nature of an approved plan: the CoC may decide matters other than those affecting the plan submitted before the Adjudicating Authority.
What the tribunal must now decide, and what it must check
The Court directed that the NCLT's consideration of the plan must be with satisfaction that the plan meets the requirements of Section 30(2) of the Code, as mandated by Section 31(1), after verifying the debtor's financial position as of now together with the cash balance juxtaposed with the terms of the plan. Improved profitability alone cannot be a reason to refuse approval if the plan meets Section 30(2).
The Court also noted the asymmetry the Code creates: if the CoC withdraws under Section 12A, the consequence is only payment of insolvency costs, whereas a successful applicant that fails to implement an approved plan faces forfeiture of its performance bank guarantee and prosecution under Section 74. In this case, the successful applicant's guarantee had been furnished long ago and was being continued at considerable expense.
BANTHRY ANALYSISFor law students: why symmetry matters in insolvency
The doctrinal core is symmetry. Ebix first bound the successful applicant to its approved plan; this judgment completes the circle by binding the creditors' committee to the same plan. If only one side were bound, the plan would be an option rather than a commitment, and whichever side the market moved in favour of could walk away.
Note the limit the Court itself drew. It decided the binding-nature question finally, but its remarks on the merits, including on the debtor's improved finances and the competing settlement plea, are prima facie only. The NCLT still has to test the plan against Section 30(2) on current figures. That is the difference between a precedent on jurisdiction and a decision on approval.
READING PROMPTSQuestions for a closer reading
- At which stage of the insolvency process did the withdrawal question arise, and why does that stage matter under Ebix?
- Why did the Court reject the argument that the committee's improved bargaining position, after the debtor's finances improved, justified withdrawal?
- What two applications must the NCLT now decide together, and what test must plan approval satisfy?
