NCLAT: CoC Cannot Withdraw Resolution Plan Once Approved and Filed Before NCLT; Sets Aside Mumbai NCLT Order in TD Toll Road Case

April 20, 2026 : In a significant ruling under the Insolvency and Bankruptcy Code, 2016, the National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi, has held that a Committee of Creditors (CoC) has no jurisdiction to withdraw a resolution plan once it has been approved and submitted to the adjudicating authority. The appellate tribunal set aside an order of the National Company Law Tribunal (NCLT), Mumbai, which had permitted such withdrawal in the insolvency proceedings of TD Toll Road Pvt. Ltd.

The judgment was delivered by a bench comprising Justice Ashok Bhushan (Chairperson) and Indevar Pandey (Technical Member) in S.M. Kamal Pasha & Anr. v. S. Rajendran, RP of TD Toll Road Pvt. Ltd. & Ors., Company Appeal (AT) (Insolvency) No. 211 of 2026.

Background

The corporate debtor, TD Toll Road Pvt. Ltd., entered Corporate Insolvency Resolution Process (CIRP) on 25 November 2019. The successful resolution applicants’ plan was unanimously approved by the CoC on 7 May 2021, followed by issuance of a Letter of Intent and submission of a performance bank guarantee of ₹8.62 crore. The Resolution Professional (RP) subsequently filed an application before the NCLT on 29 June 2021 seeking approval of the plan.

However, the CIRP proceedings were stayed by the Supreme Court in January 2022 and remained in abeyance until December 2024, when the appeal challenging the insolvency admission was dismissed, allowing parties to raise all contentions before the NCLT.

Following the revival of proceedings, the CoC—citing lapse of time, improved financials of the corporate debtor, and value maximisation—decided to seek withdrawal of the plan approval application. Acting on an oral request by the RP, the NCLT permitted withdrawal on 8 December 2025.

Key Findings of NCLAT

The appellate tribunal overturned the NCLT’s decision, laying down clear principles:

• No Jurisdiction with CoC to Withdraw Plan:
  The NCLAT held that once a resolution plan is approved by the CoC and submitted to the NCLT, the CoC becomes functus officio in respect of that plan and cannot revisit or withdraw it.
• Binding Nature of Approved Plan:
  Relying on Ebix Singapore Pvt. Ltd. v. CoC of Educomp Solutions Ltd., the tribunal reiterated that a CoC-approved plan is binding inter se the CoC and the successful resolution applicant even before NCLT approval.
• Violation of CIRP Regulations:
  The tribunal emphasised that Regulation 18(2) of the CIRP Regulations prohibits the CoC from taking any decision that affects a resolution plan already submitted to the adjudicating authority. The CoC’s decision to withdraw the plan was therefore in clear breach of this mandate.
• Error by NCLT:
  The NCLT erred in allowing withdrawal merely on an oral request by the RP without examining the plan’s feasibility or viability.
• Commercial Wisdom Not Absolute:
  The tribunal clarified that commercial considerations, including improved financial position of the corporate debtor, cannot override statutory constraints and the binding nature of an approved resolution plan.

Distinction from Earlier Cases

The NCLAT distinguished precedents where withdrawal of a resolution plan was permitted, noting that such cases involved breach of obligations by the successful resolution applicant. In the present case, no such breach was alleged.

Outcome

Setting aside the impugned NCLT order dated 08 December 2025, the NCLAT:

• Restored the application for approval of the resolution plan
• Directed the NCLT to consider the plan on merits
• Clarified that other pending applications, including those by the holding company, may also be adjudicated in accordance with law

The appeal was accordingly allowed.