NCLAT Upholds CoC's Resolution Plan: No Alteration Allowed

The NCLAT has determined that the Committee of Creditors (CoC) cannot alter a resolution plan after approval, affirming the decision in the Reliance Communications Infrastructure Ltd case involving Bank of Baroda and dissenting creditors. It emphasized the sanctity of the approved financial layout against later modifications.

The National Company Law Appellate Tribunal (NCLAT) has ruled that the Committee of Creditors (CoC) cannot modify an approved resolution plan to reallocate funds to dissenting creditors. This stands as a crucial decision in the matter involving Reliance Communications Infrastructure Ltd (RCIL).

Dismissing an appeal by the Bank of Baroda, the tribunal underscored that once a resolution plan is approved by the CoC, it cannot undergo alterations. The ruling came after a contentious debate over financial distributions approved in a meeting with 67.97% vote share.

The judgment reaffirmed the binding nature of such plans, preventing changes after approval. The NCLAT emphasized adherence to initial agreements, reinforcing the fiduciary responsibilities within financial restructurings, and dismissed challenges to this framework posed by some CoC members like the Bank of Baroda.

(With inputs from agencies.)