Can a Resolution Plan Survive the Death of Its Applicant? NCLAT Clarifies
Arun Kumar Singh v. Genius Exports Pvt. Ltd. through Liquidator & Anr. — (2026) ibclaw.in 1040
What happens to a resolution plan when the resolution applicant dies after the Committee of Creditors (“CoC”) has approved the plan but before the Adjudicating Authority grants its approval under Section 31 of the Insolvency and Bankruptcy Code, 2016 (“IBC”)? More importantly, does such an event justify immediate liquidation of the corporate debtor?
The National Company Law Appellate Tribunal (“NCLAT”), Arun Kumar Singh v. Genius Exports Pvt. Ltd. Through Liquidator and Anr., , decided on 9 September 2026, has addressed this previously unregulated situation. The Tribunal held that the death of a resolution applicant does not, by itself, render an approved resolution plan incapable of implementation or provide an independent ground for liquidation. The decision seeks to preserve the objective of the IBC to facilitate resolution and continuation of the corporate debtor as a going concern.
Background
The Corporate Debtor, Genius Exports Pvt. Ltd., was undergoing CIRP when the CoC, comprising a sole operational creditor, approved the resolution plan submitted by an individual, Mr. Digvijay Nath Tripathi, on 22 May 2022. The Resolution Professional thereafter approached the Adjudicating Authority for approval of the plan under Section 31.
While the application remained pending, Mr. Tripathi died on 3 September 2024. Subsequently, the suspended director of the Corporate Debtor and the operational creditor arrived at a settlement. The CoC consequently resolved to withdraw the CIRP and authorised the Resolution Professional to file an application under Section 12A. The Adjudicating Authority nevertheless rejected the resolution plan on the ground that the obligations of a resolution applicant were neither transferable nor heritable. Treating the plan as having become unimplementable, it ordered liquidation under Section 33(1) and dismissed the pending Section 12A application as infructuous.
The operational creditor and the Resolution Professional challenged these orders before the NCLAT.
Death Does Not Automatically Terminate the Resolution Process
The NCLAT observed that the IBC and its regulations are silent on the death of a natural-person resolution applicant after CoC approval but before Section 31 approval, describing this as a “blind spot” in the insolvency framework.
The Tribunal rejected the view that a resolution applicant holds an “office” whose obligations necessarily end upon death. Relying on Ebix Singapore Pvt. Ltd. v. CoC of Educomp Solutions Ltd. 2021 SCC OnLine SC 707, it noted that a resolution plan is a product of the statutory insolvency process and not a conventional contract. CoC approval therefore does not create an absolute, heritable right in favour of the resolution applicant.
However, the absence of such a heritable right does not mean that the resolution plan must automatically fail. The Tribunal instead adopted a pragmatic approach, focusing on whether the plan can still be implemented within the framework and objectives of the IBC.
A Three-Tier Approach
The Tribunal laid down a sequential approach for dealing with the death of a resolution applicant.
First, the Request for Resolution Plan (“RFRP”) should be examined. If it expressly provides for the death or incapacity of a resolution applicant, those provisions would govern.
Second, if the RFRP is silent, the terms of the resolution plan should be examined to determine whether the contingency has been addressed.
Third, where both documents are silent, the Adjudicating Authority may exercise its inherent powers under Rule 11 to direct the CoC to reconsider whether the plan can be sustained.
This reconsideration is not automatic acceptance of the deceased applicant’s heirs. If an heir seeks to continue with the plan, the heir must satisfy the same substantive requirements that applied to the original applicant, including possessing the requisite knowledge, skill and experience, satisfying the requirements of Section 29A and demonstrating willingness and capacity to implement the plan. The CoC may also reconsider previously submitted plans as part of this exercise. The underlying consideration is therefore not succession to a “right” in the resolution plan, but whether the existing resolution proposal can still serve the statutory objective of resolving the Corporate Debtor as a going concern.
Liquidation Cannot Be Imposed on a Ground Not Found in Section 33(1)
The NCLAT also examined whether the death of the resolution applicant could justify liquidation under Section 33(1).
It held that the provision does not contemplate the death of a resolution applicant as an independent trigger for liquidation. The Adjudicating Authority could not effectively create an additional ground for liquidation by treating the plan as unimplementable solely because its maker had died. The Tribunal therefore set aside the liquidation order and revived the CIRP.
This is significant because the decision reinforces the distinction between an unsuccessful resolution process and a procedural contingency for which the Code provides no express mechanism. The latter cannot, without more, be converted into a statutory ground for liquidation.
Section 12A: An Existing Exit Route Cannot Be Ignored
The NCLAT further found that liquidation should not have been ordered while a Section 12A application remained pending.
In the present case, the sole CoC member had reached a settlement with the suspended director and had itself resolved to pursue withdrawal of the CIRP. The NCLAT held that the Adjudicating Authority ought to have considered that statutory exit route rather than treating the application as infructuous merely because liquidation had been ordered. The Tribunal consequently directed that the Section 12A application be considered in accordance with law.
Implications for Insolvency Practice
The decision clarifies that the death of a natural-person resolution applicant does not automatically terminate a CoC-approved resolution plan. The key consideration is whether the plan can still be implemented in accordance with the IBC.
For Resolution Professionals and CoCs, the decision underscores the need to address contingencies such as death, incapacity and succession in the RFRP and resolution plan. More broadly, the ruling reinforces that liquidation should not be treated as an automatic consequence of an unforeseen contingency where the resolution process can still be preserved.
