The Resolution Plan Under the IBC: Approval and Challenge (2026)

Explainer · Insolvency · IBC

Updated for 2026 · Claw Editorial

A resolution plan is the heart of the rescue route under the Insolvency and Bankruptcy Code, 2016 (IBC). It is the proposal that decides whether a company survives, who runs it, and what each creditor recovers. A plan has no force until two gates are cleared: a 66% vote of the Committee of Creditors, and approval by the National Company Law Tribunal (NCLT) under Section 31. This guide explains how a plan is prepared and vetted, how it is voted on, how the NCLT confirms it, and the narrow grounds on which it can be challenged. Last verified October 2026.

01Why the plan is the real contest

Everything in a corporate insolvency builds to one document. The resolution plan decides the recovery for each class of creditor, the future of the company, and the exit for the promoter. This is where the real fight happens.

Because the plan binds everyone once approved, the stakes are high and the grounds to reopen it are narrow. A creditor or an advocate needs to know exactly how a plan clears each gate, and what is left to argue after approval.

02What a resolution plan is

A resolution plan is a proposal to keep a company in insolvency as a going concern. It is submitted by a resolution applicant, often an investor or a rival in the same trade, during the Corporate Insolvency Resolution Process (CIRP).

A plan sets out how the company will be run, how much money comes in, and how that money is shared among the creditors. It must meet the conditions in Section 30(2) of the IBC, which include paying the insolvency process costs, paying operational creditors at least the minimum the law protects, and complying with the law in force.

03From submission to CoC vote

The path from a draft plan to an approved one runs through the RP and the Committee of Creditors (CoC).

1. Vetting: the RP checks that each plan meets Section 30(2). Only compliant plans go to the CoC.
2. Consideration: the CoC studies the plans on their commercial merits, such as the amount offered, the credibility of the applicant, and the chance of revival.
3. Vote: a plan is approved only if it gets at least 66% of the voting share of the financial creditors, under Section 30(4).

The 66% figure is a special majority, lowered from 75% by a 2018 amendment. The NCLAT has treated it as mandatory, so a plan that falls short, even narrowly, is not approved. The voting share is counted on all financial creditors, not just those present and voting.

04NCLT approval under Section 31

A CoC-approved plan is not final until the NCLT confirms it under Section 31. The Tribunal checks that the plan meets the law and the requirements of Section 30(2). It does not sit in judgment over the commercial wisdom of the CoC.

Once approved, the plan binds the company, its creditors, members, employees, guarantors and other stakeholders, and the authorities. This binding effect is the whole point of Section 31: it gives the successful applicant a clean slate, so that old claims not dealt with in the plan are extinguished.

An approved resolution plan under Section 31 binds everyone connected with the company, which is why the Supreme Court treats the plan as giving the successful applicant a fresh start.

05How a plan is challenged

A resolution plan can be challenged, but only on narrow grounds and in a fixed window.

• Appeal to the NCLAT: under Section 61, within 30 days of the order, extendable by up to 15 days for sufficient cause. The grounds in Section 61(3) are limited, for example that the plan breaches the law, or there was a material irregularity in exercise of powers by the RP.
• Appeal to the Supreme Court: under Section 62, on a question of law, within 45 days.

Courts have repeatedly held that the commercial decision of the CoC, such as how much each creditor recovers, is not open to review on merits. The challenge is about legality and process, not about whether a better deal was possible. If no plan clears these gates, the company moves to liquidation.

06Where Claw fits

Claw is an all-in-one legaltech platform for Indian advocates, law firms, and corporate legal teams, combining AI-based case search, an AI legal assistant (Legal GPT), case management, and compliance automation across all Indian courts and tribunals.

A fought-over resolution plan leaves a long paper trail, from the NCLT approval to a Section 61 appeal at the NCLAT and sometimes a Section 62 matter in the Supreme Court. Claw keeps that trail in one place: it follows the cases, orders and hearing dates for a plan across 9,102 courts, benches and forums, so a creditor or counsel can watch a Section 31 approval or a challenge move by the corporate debtor name or the advocate name. For the law behind it, Claw reads across a corpus of 30 crore and more judgments, with Supreme Court authority going back to 1950, and surfaces how benches have read Sections 30, 31 and 61 in under 5 seconds. Case papers you load are kept out of its AI model training.

Set up a free Claw account and track your insolvency matter by party or advocate name. To search the wider body of law, see case search across Indian courts.

07Sources and further reading

• Insolvency and Bankruptcy Board of India (IBC and CIRP regulations): ibbi.gov.in
• India Code (official text of the IBC, 2016): indiacode.nic.in
• NCLAT (appellate orders on plan approval and challenge): nclat.gov.in
• Claw: clawlaw.in

This explainer is general information, not legal advice. The Code and the case law change often, so check the current text and take advice from counsel before you act.

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