Can the CoC Reopen the Resolution Process After Approving a Resolution Plan? NCLAT Clarifies in Vasu Buildcon v. Kashi Viswanathan Sivaraman
Introduction
The National Company Law Appellate Tribunal (NCLAT), in Vasu Buildcon v. Kashi Viswanathan Sivaraman, RP of IVR Prime IT SEZ Pvt. Ltd., [(2026) inclaw.in1171 NCLAT] decided on 27 October 2026, examined an important question under the Insolvency and Bankruptcy Code, 2016 (IBC): Can the Committee of Creditors (CoC) initiate a fresh resolution process after previously approving a resolution plan with 100% voting share? The Tribunal answered in the affirmative, but its reasoning makes an important distinction between approval by the CoC and approval by the Adjudicating Authority.
Background
The CIRP of IVR Prime IT SEZ commenced in September 2019. Vasu Buildcon’s resolution plan was approved unanimously by the CoC, with a proposed resolution value of approximately 41.63 crore. However, before the NCLT could approve the plan under Section 31, the Supreme Court delivered its judgment in GNIDA v. Prabhjit Singh Soni. Consequently, based on that judgment the NCLT remitted the plan to the CoC for reconsideration in light of the changed legal position concerning Noida Authority’s claim.
Following the remand, Vasu Buildcon submitted a revised resolution plan valued at approximately 228.26 crore. However, the CoC raised concerns regarding the funding arrangements, conditional bank commitments, non-submission of the performance bank guarantee, absence of updated financial statements and the applicant’s financial capacity to execute the project. The revised plan ultimately received no votes in favour and failed to secure the statutory 66% majority required under Section 30(4).
The suspended management subsequently proposed a settlement under Section 12A. This proposal also failed, receiving 84.86% votes against it, whereas 90% approval was required. Following the failure of both proposals, the CoC unanimously decided to publish a fresh Form-G inviting expressions of interest.
The principal argument of Vasu Buildcon was that the remand order was limited to reconsidering Noida Authority’s status and did not authorise the CoC to reopen the entire commercial evaluation. It also relied on Ebix Singapore Pvt. Ltd. v. Committee of Creditors of Educomp Solutions Ltd., emphasising finality and certainty in the CIRP process.
Rejecting this argument, the NCLAT highlighted that approval under Section 30(4) by the CoC is distinct from approval under Section 31 by the Adjudicating Authority. Since the original plan had never received Section 31 approval and was subsequently remitted for reconsideration, Vasu Buildcon could not claim an indefeasible right to its approval. The revised plan had to be independently examined for feasibility and viability. The Tribunal also clarified that the remand order did not compel the CoC to continue with the same resolution applicant indefinitely.
Importantly, the Tribunal distinguished Ebix Singapore, observing that it concerned withdrawal or modification of a CoC-approved plan by a successful resolution applicant, whereas the present case involved a revised plan failing to obtain the statutory voting threshold after remand.
The Tribunal further examined Regulation 36A and held that there was no statutory prohibition against issuing a fresh Form-G in the circumstances. Relying on Ashdan Properties Pvt. Ltd. v. Mamta Binani, it recognised that an earlier resolution process does not create an absolute bar against inviting fresh expressions of interest.
Another significant aspect concerned allegations of fraudulent assignment of claims by thirteen homebuyers. The Tribunal examined Regulation 28 of the CIRP Regulations and observed that the assignments were intimated to the RP between 18 and 27 December 2024, after the relevant CoC meetings and voting had commenced or concluded. Their subsequent recognition in May 2026 could not retrospectively alter the composition of the CoC at the time of voting. The Tribunal also noted that even excluding the disputed votes, the fresh Form-G proposal would have secured 92.15% of the overall CoC voting share. It therefore rejected the allegations of fraud and material irregularity.
Key Takeaways from the Judgment
Ultimately, both appeals and the intervention applications were dismissed. The decision reinforces an important principle: CoC approval does not automatically translate into an indefeasible right to obtain approval of a resolution plan under Section 31. It also clarifies that commercial wisdom is not entirely beyond judicial scrutiny, but courts and tribunals will not substitute their assessment where the CoC has acted within the statutory framework. Most importantly, the judgment recognises that when both a revised resolution plan and a Section 12A settlement fail, inviting fresh resolution applicants may be a legitimate alternative to liquidation. This makes the ruling particularly relevant to resolution professionals, resolution applicants and financial creditors dealing with prolonged CIRP proceedings.
