NCLT Kochi Rejects CoC-Approved Resolution Plans for Statutory Non-Compliance, Sends Back for Reconsideration

April 8, 2026 : The National Company Law Tribunal (NCLT), Kochi Bench, has reiterated that approval of a resolution plan by the Committee of Creditors (CoC) is not binding on the Adjudicating Authority where the plan fails to meet the mandatory requirements under the Insolvency and Bankruptcy Code, 2016 (IBC).

In a detailed order dated April 8, 2026, the Bench comprising Judicial Member Shri Vinay Goel declined to approve project-wise resolution plans relating to the “Nova Castle” and “Sanctuary” projects of M/s Samson and Sons Builders and Developers Private Limited. The Tribunal instead remitted the plans back to the CoC for reconsideration and directed submission of compliant revised plans.

The applications were filed by Resolution Professional K. Parameswaran Nair under Sections 30(6) and 31(1) of the IBC, seeking approval of plans submitted by apartment owners’ associations for specific real estate projects. While the CoC had approved these plans with a 71.30% voting share, the Tribunal found significant legal deficiencies.

The corporate insolvency resolution process (CIRP) against the company had commenced on November 3, 2021. The corporate debtor, a real estate developer, had multiple stalled and incomplete projects and had been non-operational since 2016. Due to limited response to the initial expression of interest, the CoC permitted both holistic and project-wise resolution plans under Regulation 37(m) of the CIRP Regulations.

Upon scrutiny, the Tribunal held that the plans failed to comply with Section 30(2) of the IBC. It noted that the plans were conditional and lacked certainty, did not provide for full and upfront payment of CIRP costs, and failed to clearly allocate responsibility for statutory approvals and licenses. Further, the plans inadequately addressed encumbrances, pending litigations, and liabilities attached to the assets. Conditional payments proposed to creditors were also viewed as a significant defect rendering the plans legally untenable.

Reaffirming settled legal principles, the Tribunal relied on the Supreme Court’s ruling in Committee of Creditors of Essar Steel India Ltd. v. Satish Kumar Gupta to emphasise that judicial review is limited but must remain within the framework of Section 30(2). It also cited Lamba Exports Pvt. Ltd. v. Dhir Global Industries Pvt. Ltd. to clarify that the commercial wisdom of the CoC is not immune from scrutiny where statutory non-compliance exists.

Further reliance was placed on Greater Noida Industrial Development Authority v. Prabhjit Singh Soni, wherein it was held that any material non-compliance with statutory provisions or CIRP Regulations renders a resolution plan unsustainable and liable to be set aside.

Despite rejecting the plans, the Tribunal adopted a balanced approach by declining to order liquidation. It noted that the case involved real estate projects affecting numerous homebuyers and that liquidation at this stage would undermine value maximisation, contrary to the objectives of the IBC.

Accordingly, the Tribunal directed the Resolution Professional to place revised, compliant plans before the CoC. The CoC has been instructed to reconsider such plans strictly in accordance with the IBC and applicable regulations, after which they may be resubmitted for approval.

Case Title: In re M/s Samson and Sons Builders and Developers Private Limited
Case No.: IA (IBC)(Plan)/03/KOB/2024 & IA (IBC)(Plan)/05/KOB/2024 in CP(IB)/05/KOB/2021
Coram: Shri Vinay Goel (Member Judicial)