NCLT can’t allow tweaks in a successful resolution plan: SC
Part of: Prelims and GS II – Important statutory bodies.
Context The Supreme Court on Monday held that the National Company Law Tribunal (NCLT) cannot permit withdrawals or modifications of a successful resolution plan, once it has been submitted to it after due compliance with the procedural requirements and timelines.
Such an open-ended process for further negotiations, would have a negative impact on the corporate debtor, its creditors, and the economy at large as the liquidation value depletes with the passage of time.
Background
The judgment relates to the NCLT’s decision to allow Ebix Singapore Private Limited to withdraw its resolution plan submitted for Educomp Solutions.
The NCLAT had, however, reversed the NCLT order, saying the latter did not have jurisdiction to permit such withdrawal.
The correctness of the NCLAT decision had come up on appeal before the Supreme Court.
