Lenders can't reject entire IBC plan if doubts raised on some parts - NCLAT
This story was originally published at 18:50 IST on 30 September 2025
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NEW DELHI – The National Company Law Appellate Tribunal has held that the committee of creditors of a debt-ridden company cannot vote to reject the entire resolution plan if it was sent back to them by the National Company Law Tribunal only on specific queries. The appellate tribunal allowed Exclusive Motors Pvt. Ltd.'s plea for a vote on its resolution plan for MK Overseas Pvt. Ltd. solely on the basis of queries raised by NCLT, rather than the entire resolution plan.
The appellate tribunal said, according to the Supreme Court's 2020 verdict, that the National Company Law Tribunal has the jurisdiction to either approve or reject the plan and call for a revised plan, but the entire plan cannot be sent back to the lenders' panel for reconsideration. The appellate tribunal directed the Delhi bench of NCLT to reconsider the matter afresh, taking into account the law laid down by the Supreme Court.
In 2019, the Delhi NCLT admitted a petition to initiate insolvency proceedings against MK Overseas. In 2020, the committee of creditors of the debt-ridden company approved the plan by Exclusive Motors. At that time, the committee of creditors comprised of Venus India Asset Finance, HDFC Bank, Yes Bank, Drip Capital and Mayoga Investments.
The Delhi NCLT remitted the resolution plan back to the committee of creditors for reconsideration and addressing certain queries. However, in the meantime, some members of the committee of creditors had assigned their debts, and the new committee of creditors comprised J.C. Flowers Asset Reconstruction Company, Standard Capital Markets, Dirp Capital and Mayoga Investments.
Exclusive Capital gave a revised resolution plan answering the shortcomings identified by the Delhi tribunal. However, the new committee of creditors rejected the resolution plan without providing any reasons. Thereafter, Exclusive Capital filed an application before the Delhi NCLT seeking a re-voting on its resolution plan solely on the basis of the queries sent by the tribunal, rather than on the entire plan. This application was dismissed by the Delhi NCLT on the grounds that the new committee of creditors had the jurisdiction to reconsider the entire plan, rather than considering the issues related to remand. End
Reported by Surya Tripathi
Edited by Saji George Titus
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