Approval of resolution plan

(1) If the Adjudicating Authority is satisfied that the resolution plan as approved by the committee of creditors under sub- section (4) of section 30 meets the requirements as referred to in sub-section (2) of section 30, it shall by order approve the resolution plan which shall be binding on the corporate debtor and its employees, members, creditors, including the Central Government, any State Government or any local authority to whom a debt in respect of the payment of dues arising under any law for the time being in force, such as authorities to whom statutory dues are owed, guarantors and other stakeholders involved in the resolution plan.100 98 Subs. by Act No. 6 of 2026, sec. 18(a)(iii) (w.e.f. 26-05-2026). 99 Sub-section (4) was earlier substituted/amended by Act No. 8 of 2018 and Act No. 26 of 2018/2019. Words “and record reasons for its approval” ins. by Act No. 6 of 2026, sec. 18(b) (w.e.f. 26-05-2026). 100 Words beginning with “including the Central Government” inserted by Act No. 26 of 2019, sec. 7 (w.e.f. 16-8-2019).

Provided that the Adjudicating Authority shall, before passing an order for approval of resolution plan under this sub-section, satisfy that the resolution plan has provisions for its effective implementation.101 Provided further that the Adjudicating Authority may, on an application made by the resolution professional, with the approval of the committee of creditors, by a vote of not less than sixty-six per cent. of the voting share, in such form and manner, and subject to such conditions as may be specified, first approve the implementation of the resolution plan and thereafter approve the manner of distribution provided therein within a period of thirty days from the date of approval of implementation of such resolution plan.102 (2) Where the Adjudicating Authority is satisfied that the resolution plan does not confirm to the requirements referred to in sub-section (1), it may, by an order, reject the resolution plan. Provided that the Adjudicating Authority may, before rejecting the resolution plan, give notice to the committee of creditors to rectify any defects in the resolution plan.103 (2A) The Adjudicating Authority shall pass an order under sub-section (1) or (2), within a period of thirty days from the date of receipt of the resolution plan: Provided that if the Adjudicating Authority has not passed an order within such period, it shall record the reasons for such delay in writing.104 (3) After the order of approval under sub-section (1), - (a) the moratorium order passed by the Adjudicating Authority under section 14 shall cease to have effect; and (b) the resolution professional shall forward all records relating to the conduct of the corporate insolvency resolution process and the resolution plan to the Board to be recorded on its database. (4) The resolution applicant shall, pursuant to the resolution plan approved under sub-section (1), obtain the necessary approval required under any law for the time being in force within a period of one year from the date of approval of the resolution plan by the Adjudicating Authority under sub-section (1) or within such period as provided for in such law, whichever is later: Provided that where the resolution plan contains a provision for combination, as referred to in section 5 of the Competition Act, 2002, the resolution applicant shall obtain the approval of the Competition Commission of India under that Act before the resolution plan is submitted to the Adjudicating Authority under sub-section (6) of section 30.105 (5) Notwithstanding anything contained in any other law for the time being in force and subject to sub-section (6), where a resolution plan has been approved under sub-section (1), a licence, permit, registration, quota, concession, clearances or a similar grant or right given by the Central Government, State Government, local authority, sectoral regulator or any other authority constituted under any other law for the time being in force, associated with such resolution plan, shall not be suspended or terminated during the subsistence of the remaining period of such grants or rights, if the corporate debtor or, if applicable, the person whose resolution plan is approved under sub-section (1), complies with the obligations in respect of the remaining period of such grants or rights. (6) Where the Adjudicating Authority approves the resolution plan under sub-section (1),–– (a) unless otherwise provided in the resolution plan, any claim, against the corporate debtor and its assets under any other law for the time being in force, prior to the date of approval, shall be extinguished; and (b) no proceedings shall be continued or instituted against the corporate debtor or its assets on the basis of such claims, including proceedings for assessment of the claims. Explanation I.––For the purposes of this section, it is hereby clarified that nothing in this section shall affect a claim or any proceeding in respect of a person who was a promoter or in the management or control of the corporate debtor, a guarantor of the corporate debtor or any person having a joint liability or a joint and several liability with the corporate debtor, as the case may be. Explanation II.––For the purposes of this section, it is hereby clarified that if a person has a joint liability or a joint and several liability with the corporate debtor for payment of debt owed to a creditor before the approval 101 Proviso inserted by Act No. 26 of 2018, sec. 24 (w.e.f. 6-6-2018). 102 Inserted by Act No. 6 of 2026, sec. 19(a) (w.e.f. 26-5-2026). 103 Inserted by Act No. 6 of 2026, sec. 19(b) (w.e.f. 26-5-2026). 104 Sub-section (2A) inserted by Act No. 6 of 2026, sec. 19(c) (w.e.f. 26-5-2026). 105 Sub-section (4) inserted by Act No. 26 of 2018, sec. 24 (w.e.f. 6-6-2018). In its proviso, the words “prior to the approval of such resolution plan by the committee of creditors” substituted by Act No. 6 of 2026, sec. 19(d), with the words “before the resolution plan is submitted to the Adjudicating Authority under sub-section (6) of section 30” (w.e.f. 26-5-2026).

of resolution plan, and such person makes a payment for such debt after the approval of the resolution plan, then any right of such person to be indemnified by the corporate debtor shall be extinguished. Explanation III.—For the removal of doubts, it is hereby clarified that the provisions of sub-sections (5) and (6) shall be deemed to apply to the resolution plan that is approved under sub-section (1), on and from the date of commencement of this Code, except for matters that have attained finality under this Code.106