Brief Overview:
The Committee of Creditors (“CoC”) has the discretion to permit a Resolution Applicant (“RA”) to submit a revised plan, even after redaction, so long as the Applicant’s name is in the final RA list, in order to maximise the value of the corporate debtor’s (“CD”) assets.
Technical Details:
1) Background: Appellant and Respondent, as RAs, submitted plans under the challenge mechanism. The Respondent initially withdrew but later re-entered with a higher bid after the CoC had begun voting on the Appellant’s plan. NCLT allowed this.
2) NCLAT’s decision upholding CoC’s Discretion: CoC has the discretion to allow the RA to submit a revised plan, provided that
(a) the RA’s name appears in the final RA list and
(b) to maximise the value of the CD’s assets.
JC takeaway:
1) The CoC has the discretion to allow an RA to re-enter and revise its plan.
2) This is permissible if the RA is on the final list of eligible applicants.
3) The decision must align with the objective of value maximisation.
4) Prior withdrawal does not bar reconsideration of the plan.
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