Ministry of Corporate on October 25, 2017 clarifies that approval from shareholders/ members is not required for a resolution process at any stage during the process for its consideration as laid down u/s 30 and 31 of the Insolvency and Bankruptcy Code, 2016 (IBC). The ministry further states that Sec. 30 and 31 of the Code outlines the detailed procedure from the time of receipt of resolution plan by the resolution professional to its approval by NCLT.
NCLT further highlights that Sec. 30 (2) (e) of the IBC mandates that the resolution plan is considered and approved by the creditors and NCLT should be compliant with the provision of applicable law and hence legally implementable.
As per the Sec. 31 (1) of IBC, the resolution plan approved by NCLT is binding on the corporate debtor as well as its employees, members, creditors, guarantors and other stakeholders involved in the resolution plan. MCA further pointed out that the clauses from Insolvency and Bankruptcy Code, 2015 (Bill) which states that “ Therefore, if a plan requires stakeholder to do or not to certain actions for the successful implementation of a plan, it shall be binding on all the affected parties who shall be bound to undertake the actions set out in the plan.”
MCA also clarifies that the approval of shareholders/ members is required for the implementation of resolution plan which should also be required under the Companies Act, 2013. In case, where the resolution plan is not considered under the IBC then it is deemed that it is approved by the Adjudicating authority.
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