CoC cannot alter plan to reallocate funds of dissenting crditors: NCLAT

AFTER IT IS APPROVED

- OUR CORRESPONDENT

The Committee of Creditors (CoC) cannot modify or alter a resolution plan for reallocation of funds of dissenting creditors, after it is approved, insolvency appellate tribunal NCLAT has said.

Dismissing an appeal by Bank of Baroda in the Reliance Communications Infrastructure Ltd (RCIL) matter, a two-member NCLAT bench said the assenting members of the committee cannot alter the financial layout once the bids have been approved.

"It is true that the CoC with commercial wisdom can take a decision regarding different aspects of the plan, including manner of distribution, but once the commercial wisdom has been exercised by approving the resolution plan in meeting, the modification of the said distribution mechanism, which is impermissible, cannot be saved in the name of commercial wisdom of the CoC," said NCLAT.