NCLT Bengaluru Bench: Resolution Plan Approval Process Must Not Lead to Endless CIRP
In a recent ruling, the National Company Law Tribunal (NCLT) Bengaluru Bench addressed the case of Parag Finlease Pvt. Ltd. vs. Mr. Ratnakar Shetty, the Resolution Professional (RP) of Unishire Lifestyle Dwellings LLP. The tribunal emphasized that the mere fact that the Adjudicating Authority has not yet approved a Resolution Plan does not imply that the plan can go back and forth, potentially leading to an endless Corporate Insolvency Resolution Process (CIRP).
The case highlighted concerns that allowing Resolution Plans to oscillate without finality could result in the reopening of the entire issue, creating uncertainty and prolonging the insolvency process. The NCLT Bengaluru Bench stressed the importance of maintaining a structured and decisive approach to the approval process to prevent the CIRP from becoming an indefinite and unending procedure.
This ruling underscores the need for clarity and efficiency in the resolution process, ensuring that stakeholders are not subjected to prolonged uncertainty and delays. It emphasizes the significance of a timely and conclusive resolution to insolvency proceedings, balancing the interests of all parties involved while upholding the integrity of the insolvency framework.
