Case Note & Summary
The appeal arose from an order dated 13.04.2026, passed by the NCLT, Kochi Bench, concerning the Personal Insolvency Resolution Process (PIRP) initiated against the Appellant, Dr. Badri Prasad, who was acting as a Personal Guarantor. The Appellant challenged the initiation of the PIRP, claiming procedural infirmities and jurisdictional errors. He argued that despite pending appeals against earlier orders, the Respondent, the Resolution Professional, proceeded with the creditors' meeting to vote on the repayment plan he submitted on 28.08.2025. The Appellant contended that the Resolution Professional failed to comply with statutory timelines and procedures, adversely affecting the PIRP's effectiveness. The NCLT had noted procedural lapses in processing the repayment plan, which raised doubts about the Resolution Professional's conduct. The Appellant sought to submit a revised repayment plan after creditors indicated the need for modifications. However, his request for an extension to submit this revised plan was not considered, and the creditors voted on the original plan. The court analyzed whether the Adjudicating Authority had the jurisdiction to allow the submission of a revised plan under Section 114(3) of the Code. It found that the Authority did not adequately consider the Appellant's request for additional time and failed to invoke its jurisdiction to reconvene the creditors' meeting. The court emphasized that the objectives of the Code prioritize resolution over bankruptcy and that denying the Appellant the opportunity to submit a revised plan was contrary to these objectives. Consequently, the court quashed the NCLT's order and allowed the Appellant to submit a revised repayment plan within three weeks, with directions for the creditors to consider it (Paras 1-14).
Headnote
A) Insolvency Law - Personal Insolvency Resolution Process - Right to Submit Revised Repayment Plan - Insolvency and Bankruptcy Code, 2016, Sections 114(3), 121 - The court held that the Adjudicating Authority failed to consider the Appellant's request for an extension to submit a revised repayment plan, which violated the principles of natural justice and the objectives of the Code. The court quashed the previous order and allowed the Appellant to submit a revised plan within three weeks (Paras 12-14).
Issue of Consideration
Whether the provisions under Part III Chapter IV of the Insolvency and Bankruptcy Code, 2016, could be rigidly applied without allowing the Personal Guarantor to submit a revised repayment plan before the creditors' meeting report is finalized.
Final Decision
The court quashed the NCLT's order dated 13.04.2026 and allowed the Appellant to submit a revised repayment plan within three weeks. If submitted, the plan would be considered by the creditors and the NCLT for approval. Failure to comply would revive the effect of the impugned order.
Law Points
- Insolvency and Bankruptcy Code
- 2016
- Personal Insolvency Resolution Process
- repayment plan submission
- creditor's meeting
- natural justice
- procedural compliance
