Supreme Court reserves judgment on creditor panel's plan withdrawal powers

The Supreme Court of India reserved judgment on a critical question regarding the Committee of Creditors' (CoC) powers under the Insolvency and Bankruptcy Code (IBC) following arguments from both sides on whether an approved resolution plan can be withdrawn when circumstances materially change. Indian Bank argued that creditors should retain the flexibility to reconsider and potentially withdraw an approved plan if unforeseen developments significantly alter the commercial viability or feasibility of the resolution strategy. The bank contended that such a provision would protect creditor interests in dynamic business environments where conditions can shift rapidly between approval and implementation stages. The resolution applicant countered that the IBC framework does not permit withdrawal of an approved plan, asserting that such restrictions are essential to provide certainty and finality once a resolution receives creditor approval. The applicant warned that allowing withdrawals after approval would create instability in the resolution process and undermine confidence in the insolvency mechanism. The court's decision will have significant implications for how resolution plans are managed under India's insolvency regime and the extent to which creditor committees can modify previously endorsed strategies during the implementation phase.