May a Committee of Creditors, having approved a resolution plan with the requisite majority, change its mind before the NCLT confirms the plan — say, because the corporate debtor's finances have dramatically improved in the meanwhile? In Bank of India & Ors. v. S.M. Kamal Pasha & Ors., Civil Appeal No. 12045 of 2026, 2026 INSC 1154, decided on 26 October 2026, a Bench of Justices J.B. Pardiwala and K. Vinod Chandran answered no. The binding character that the Insolvency and Bankruptcy Code attaches to an approved plan runs in both directions: it holds the successful resolution applicant to its bid, and it holds the CoC to its approval.
How the question arose
The corporate debtor’s resolution process had run its course: a resolution plan was approved by the Committee of Creditors and placed before the NCLT for confirmation under Section 31 of the Insolvency and Bankruptcy Code, 2016. While confirmation was pending, the CoC — unanimously — sought to withdraw the plan. Its reason was striking: under the resolution professional’s management, the corporate debtor’s opening balance had grown from roughly Rs. 30 crore to about Rs. 165 crore. Proceeding with the plan, the creditors argued, would hand the successful resolution applicant a windfall; a fresh Form G should issue and expressions of interest be invited afresh. The erstwhile promoter supported withdrawal and offered a one-time settlement. The successful resolution applicant resisted, standing on the binding character of the approved plan.
The NCLAT rejected the attempt to withdraw the approval and revived the pending application for confirmation of the plan. The financial creditors carried the matter to the Supreme Court.
The holding: approval binds both sides
The Court anchored its answer in the architecture of the Code. Section 12A permits withdrawal of an admitted insolvency application with the approval of ninety per cent of the CoC — but only up to a point. As the judgment puts it, withdrawal of an application "can only be till the CoC approves the plan." Once the plan is approved and placed before the Adjudicating Authority, neither the application nor the approved resolution plan can be pulled back.
Before CoC approval
The process is fluid: plans may be modified or improved within the CoC’s procedures, and the insolvency application itself may be withdrawn under Section 12A with a 90% CoC vote.
After CoC approval
The approved plan binds the successful resolution applicant and the CoC alike. It awaits only the Section 31 scrutiny of the Adjudicating Authority; withdrawal — by either side — is not contemplated by the Code.
The settled rule that a successful resolution applicant cannot walk out of its own approved plan was extended, in terms, to the creditors: the principle, the Court held, applies equally to the CoC, and the Code permits neither further modification nor withdrawal of an approved plan at the instance of either party. The continued existence of the CoC until implementation does not dilute the plan’s binding effect.
The windfall argument
What of the Rs. 165 crore sitting with the debtor? The Court did not treat the creditors’ concern as irrelevant — it relocated it. Improved profitability alone cannot justify rejecting a plan that otherwise satisfies Section 30(2); but the Adjudicating Authority, while deciding confirmation, is to examine the company’s current financial position and cash balance against the plan’s terms. The contentions of the successful resolution applicant and of the erstwhile promoter — including the settlement proposal — are to be considered by the NCLT when it takes up the confirmation application and the promoter’s application together, as expeditiously as possible. The Court was careful to say that its observations beyond the binding character of the plan were prima facie and would not govern the NCLT’s final adjudication.
Practical significance
For insolvency practice, the decision closes a door that lenders had occasionally tried to push open when market conditions or the debtor’s fortunes shifted between CoC approval and NCLT confirmation. Three consequences follow. First, the CoC’s commercial wisdom must be fully exercised before the vote: valuation disagreements, upside scenarios and the possibility of a promoter settlement are matters for negotiation before approval, not grounds for repentance after it. Second, resolution applicants gain real certainty — the bid they win is the bid they get, insulated from second thoughts on the creditor side. Third, where genuinely supervening circumstances arise, the forum is the Adjudicating Authority under Section 31, whose scrutiny remains confined to the statutory parameters.
For creditors weighing a late settlement offer from a promoter, the sequencing is now decisive: a Section 12A withdrawal requires action before plan approval. Once the CoC has voted a plan through, the window has closed, and the matter rests with the NCLT within the four corners of the Code.
Frequently Asked Questions
What did the Supreme Court hold about withdrawal of an approved resolution plan?
The Court held that once the Committee of Creditors approves a resolution plan and it is submitted to the Adjudicating Authority, neither the plan nor the underlying insolvency application can be withdrawn. Withdrawal of the insolvency application under Section 12A is available only until the CoC approves a plan; thereafter the plan binds both the successful resolution applicant and the CoC.
Can the debtor's improved financial position justify refusing the plan?
Improved profitability of the corporate debtor during insolvency is not, by itself, a ground for the CoC to resile from an approved plan. The Court indicated that the Adjudicating Authority, while considering approval under Section 31, examines whether the plan satisfies Section 30(2), and may look at the company's current financial position against the plan's terms — but the CoC cannot simply withdraw.
What happens next in the case itself?
The Supreme Court declined to interfere with the NCLAT's order holding that the CoC lacked jurisdiction to withdraw its approval. It directed the NCLT to take up the pending plan-approval application together with the erstwhile promoter's application, hear the contentions of all sides, and decide expeditiously, clarifying that its own observations beyond the binding nature of the plan were prima facie.
Why does this matter for lenders and resolution applicants?
The decision brings symmetry to the process. Resolution applicants have long been held to their bids; creditors now stand equally committed once they approve a plan. Commercial judgment must therefore be exercised before approval, not revisited after it, and any windfall arguments arising from a debtor's improved balance sheet fall to be addressed by the Adjudicating Authority within the statutory framework, not by withdrawal.