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Can a resolution plan, once set aside by the Supreme Court for statutory defects, return to the National Company Law Tribunal without reopening the commercial bargain approved by the Committee of Creditors?
The NCLT, New Delhi, confronted this question in Prabhjit Singh Soni, Resolution Professional of JNC Constructions Pvt. Ltd. v. Gautam Builders with Rapid Contracts Pvt. Ltd. (in Consortium)1. The resolution plan before the Tribunal on 29 July 2026 was not being considered for the first time. It had already been approved by the NCLT in 2020, implemented to a substantial extent, set aside by the Supreme Court in 2024, reconsidered by the CoC and then returned to the Tribunal with an Addendum intended to cure the defects identified by the Supreme Court.
The case is significant because it tests the boundary between two distinct functions under the Insolvency and Bankruptcy Code, 20162. The NCLT must ensure that a resolution plan complies with the Code. At the same time, it cannot replace the commercial judgment of the CoC with its own assessment.
The CIRP of JNC Constructions commenced in May 2019. Homebuyers constituted 96.07% of the CoC’s voting share. Four resolution plans were placed before the CoC, and the plan submitted by Gautam Builders in consortium with Rapid Contracts Pvt. Ltd. was approved with 96.07% voting share. The NCLT approved the plan on 4 August 2020, following which the Successful Resolution Applicant took control of the Corporate Debtor.
Greater Noida Industrial Development Authority (GNIDA), however, challenged the treatment of its claim. Its applications failed before the NCLT and its appeal was dismissed by the NCLAT. The dispute ultimately reached the Supreme Court.
On 12 February 2024, the Supreme Court set aside the approval order. It found that GNIDA had not been served notice of CoC meetings, that the proceedings had effectively continued ex parte against it, and that although GNIDA had submitted a claim and was a secured creditor by operation of law, the resolution plan proceeded on the basis that no claim had been submitted. The Court also found that the plan did not satisfy Section 30(2) of the IBC read with Regulations 37 and 38 of the CIRP Regulations4.
The Supreme Court therefore required the resolution plan to be placed before the CoC again after compliance with the statutory framework. That distinction is central to the 2026 order. The Supreme Court had not rejected the CoC’s commercial choice because another plan might have produced a better recovery. Its intervention arose from defects in statutory compliance.
Following the remand, the CoC was reinstated. GNIDA submitted a revised claim, which was admitted by the Resolution Professional. The Successful Resolution Applicant submitted an Addendum dated 30 April 2024 revising, among other matters, the treatment of GNIDA and Uttar Pradesh Awas Evam Vikas Parishad and certain project-completion obligations.
GNIDA raised objections to the Addendum. Those objections were discussed in the CoC before the revised plan and Addendum were ultimately approved with 96.07% voting share. GNIDA separately challenged the revised arrangement in IA No. 5343/2024, but that challenge was dismissed by the NCLT on 21 November 2025.
A further issue concerned lease rentals payable to GNIDA during the CIRP. The Successful Resolution Applicant undertook that if the Supreme Court were ultimately to hold such lease rentals to constitute CIRP costs, it would bear that liability without passing the burden to homebuyers.
When the plan returned for approval, the NCLT therefore had to determine how far it could go after a Supreme Court remand.
Relying on K. Sashidhar v. Indian Overseas Bank5, the Tribunal reiterated that its jurisdiction under Section 31 is confined to examining the requirements specified under Section 30(2). It may examine, among other matters, payment of insolvency resolution process costs, treatment of operational creditors, management and implementation of the Corporate Debtor and compliance with applicable law.
The Tribunal also relied on Jaypee Kensington Boulevard Apartments Welfare Association v. NBCC (India) Ltd6., where the Supreme Court held that the Adjudicating Authority cannot interfere with the commercial aspects of a CoC-approved plan or substitute commercial terms of its own.
This becomes important in the context of a remand. A Supreme Court direction requiring reconsideration of a resolution plan does not automatically reopen every commercial term for judicial review. The statutory deficiencies identified by the Court must be cured. The affected stakeholders must receive treatment consistent with the Code. But once those defects are addressed and the CoC reconsiderates the corrected plan, the NCLT does not acquire a wider power to decide whether the revised commercial bargain is the best possible one.
The Tribunal accordingly held that only limited judicial review was available under Section 30(2) read with Section 31 and that it could not venture into the commercial aspects of decisions taken by the CoC.
After examining the revised plan, Addendum, clarifications and undertakings, the NCLT found that the plan complied with Section 30(2) read with Regulations 38 and 39 of the CIRP Regulations7 and approved it.
The decision therefore demonstrates the distinction between statutory review and commercial review. Commercial wisdom cannot protect a plan that violates the requirements of the IBC. But once the statutory defect has been cured, judicial scrutiny cannot be used to reconstruct the commercial bargain approved by the creditors.
The JNC Constructions litigation shows that the protection afforded to CoC commercial wisdom is not absolute, but neither does judicial intervention erase it. The Supreme Court was entitled to set aside the original plan because statutory requirements concerning GNIDA’s claim, participation and treatment had not been satisfied. That intervention fell within the domain of legality and compliance, not commercial evaluation. Once those deficiencies were addressed and the corrected plan was reconsidered and approved by the CoC, the NCLT’s jurisdiction again remained confined to Sections 30(2) and 31.
The important proposition emerging from Prabhjit Singh Soni is therefore narrower than the familiar rule that courts should not interfere with commercial wisdom: a judicial remand reopens a resolution plan to the extent necessary to cure the statutory defects identified by the Court, but it does not authorise the NCLT to reopen or rewrite the CoC’s commercial bargain.
Citations
Expositor(s): Adv. Vatsala Pandit
