Tribunal blocks four hundred nineteen crore resolution plan despite unanimous committee approval

The National Company Law Tribunal (NCLT) dismissed a resolution plan valued at ₹419.50 crore submitted for a corporate debtor, notwithstanding a hundred percent voting share in favor by the Committee of Creditors (CoC). The adjudicating authority grounded its rejection on the successful resolution applicant's unwillingness to execute pending National Highways Authority of India (NHAI) maintenance obligations. According to the bench, maintaining the highway infrastructure is an indispensable prerequisite for sustaining the concession agreement and keeping the corporate debtor as a going concern.

Under the insolvency framework, resolution plans must comply with regulatory requirements, protect public interest, and ensure all statutory or contractual obligations tied to public assets are honored. The old practice often saw lenders approving plans focused purely on debt haircuts without factoring in mandatory operational liabilities tied to government agencies. The current judicial stance strictly mandates that successful applicants assume all underlying operational duties tied to public infrastructure concessions rather than selectively picking profitable assets.

Insolvency professionals, resolution applicants, and legal advisors must conduct exhaustive due diligence on pending contractual liabilities with public bodies like NHAI before submitting restructuring bids. Practitioners need to factor the cost of infrastructure upkeep and compliance into their financial projections to avoid tribunal rejections. Bottom line: Ensure all operational conditions and public contract requirements are fully integrated into insolvency bids to secure judicial approval.