The National Company Law Appellate Tribunal (NCLAT) in the case Shardha Buildcon Pvt. Ltd v. The Dhar Textile Mills Ltd, the bench comprising of Justice Ashok Bhushan and Justice Mr. Barun Mitra observed and has dismissed the appeal filed by the Resolution Applicant seeking permission to withdraw its resolution plan and held that allowing withdrawal of a resolution plan will be having serious disastrous effect on the whole purpose of the Insolvency & Bankruptcy Code, 2016.
Before the NCLAT, the appellant filled an appeal against the order dated 21.07.2022 passed by NCLT Indore which relying upon the judgment of Supreme Court in the case Ebix v. Educomp dismissed the application filed by the Appellant wherein seeking for the withdrawal of the resolution plan.
The Appellant contended that the judgement of Ebix is not applicable as the same deals with the cases where the Corporate Debtor has undergone changes but in the present case, wherein the Appellant is seeking withdrawal due to the financial difficulty that is being faced by the Appellant.
The argument of the Appellant was rejected by the bench and has held that even if the Appellant is allowed to withdraw from the plan due to financial difficulty and the same will be amounting to go back from the commitment made in the resolution plan which is not permissible.
The bench observed that the IBC is process consists of different steps with a ultimate object of reviving the Corporate Debtor. Thus, permitting Successful Resolution Applicant to withdraw after the Plan has been approved will have serious disastrous effect on whole purpose and object of IBC.
Accordingly, the NCLAT bench dismissed the appeal filed by the Appellant and has upheld the order of NCLT, Indore.