NCLT Rules Approved Resolution Plan Cannot Be Reopened Merely Due to Increase in Asset Value

June 18, 2026 : The National Company Law Tribunal (NCLT), Mumbai Bench, has held that a resolution plan approved by the Committee of Creditors (CoC) cannot be sent back for reconsideration merely because the value of the corporate debtor’s assets increased after the plan was approved. The Tribunal observed that while value maximisation is an important objective of the IBC, it cannot override the principles of certainty, finality, and timely resolution that form the foundation of the insolvency framework.

The order was passed on June 18, 2026, by a Bench comprising Technical Member Anil Raj Chellan and Judicial Member K.R. Saji Kumar in a batch of applications arising from the corporate insolvency resolution process (CIRP) of Premier Limited. The dispute centered around land acquisition proceedings initiated by the Maharashtra authorities during the pendency of the resolution plan approval application before the Tribunal.

Premier Limited entered CIRP on January 29, 2021. Following multiple rounds of invitations for expressions of interest, the Committee of Creditors approved the resolution plan submitted by Fab Metals Private Limited and persons acting in concert with a voting share of 92.47 percent. The Resolution Professional subsequently filed an application in February 2022 seeking approval of the plan, which remained pending before the Tribunal.

While the approval application was awaiting adjudication, the Resolution Professional received notices under the Maharashtra Highways Act, 1955 for acquisition of several parcels of land belonging to Premier Limited for the Virar-Alibag Multipurpose Corridor project. The proposed acquisition significantly enhanced the value of certain land assets, leading to a dispute over who should benefit from the compensation amount.

Edelweiss Asset Reconstruction Company Limited (EARC), the principal secured financial creditor and dominant member of the CoC, argued that the acquisition compensation and the substantial increase in asset value should accrue to the creditors and other stakeholders of the corporate debtor rather than the successful resolution applicant. EARC further contended that certain land parcels had not been identified during the CIRP valuation process and were therefore not factored into the information memorandum or the approved resolution plan. According to EARC, these developments materially altered the asset pool of the corporate debtor and justified reconsideration of the resolution plan by the CoC.

EARC emphasized that creditors were expected to take an approximately 80 percent haircut under the approved plan, while the proposed acquisition compensation for some of the lands could exceed the amounts being paid under the resolution plan. It argued that allowing the successful resolution applicant to retain the benefit of such value appreciation would result in unjust enrichment and would be contrary to the objective of value maximisation under the IBC.

Fab Metals Private Limited opposed the applications and argued that once a resolution plan has been approved by the CoC and submitted to the Adjudicating Authority, it becomes binding and cannot be reopened merely because circumstances change later. The successful resolution applicant maintained that it had prepared its bid based on the information memorandum and asset details supplied during the CIRP. Any subsequent increase in value, it argued, could not be used as a basis to alter the commercial terms of the approved plan.

The Resolution Professional informed the Tribunal that her role was limited to managing the affairs of the corporate debtor until approval of the resolution plan under Section 31 of the IBC. She sought directions regarding the receipt and utilisation of acquisition compensation but maintained that no final consent had been given to accept compensation in violation of the moratorium or the approved plan.

After examining the rival submissions, the NCLT relied on several landmark Supreme Court judgments, including Ebix Singapore Pvt. Ltd. v. Committee of Creditors of Educomp Solutions Ltd. and State Bank of India v. Murari Lal Jalan Consortium. The Tribunal reiterated that an approved resolution plan acquires finality once accepted by the CoC and submitted for approval. It observed that permitting reconsideration every time asset values increase would undermine the certainty and predictability that the insolvency framework seeks to provide.

The Bench observed that, “Value maximisation is an important objective of the IBC, but it cannot be pursued endlessly at the cost of certainty and timely resolution.” It further noted that reopening approved plans whenever better financial outcomes emerge later would create instability and discourage serious resolution applicants from participating in the insolvency process.

The Tribunal held that the CoC and Resolution Professional cannot take actions that effectively modify or alter an approved resolution plan without following the framework prescribed under the IBC. It rejected the contention that the plan should be remanded to the CoC merely because new assets were identified or because land values had increased after approval.

Accordingly, the NCLT declined EARC’s request to send the resolution plan back for reconsideration and also rejected attempts to alter the commercial structure of the approved plan. The Tribunal accepted the successful resolution applicant’s objections to the extent that the CoC and Resolution Professional could not unilaterally appropriate acquisition-related benefits in a manner inconsistent with the approved plan. However, it left open certain questions relating to the ultimate entitlement to acquisition compensation, indicating that such issues could be examined while deciding the pending resolution plan approval application.

The ruling is likely to have significant implications for insolvency proceedings across India. It reinforces the principle that the insolvency process cannot remain perpetually open to renegotiation and that commercial certainty is as important as maximising value for creditors. The decision also provides reassurance to successful resolution applicants that approved plans will not be reopened solely because asset values appreciate after CoC approval.

Case Reference : Anand Rathi Global Finance Limited v. Premier Limited