Insolvency and Bankruptcy - Law and Practice · Corporate Insolvency Resolution Process

Resolution Plan under IBC: Preparation, Approval and Implementation

Updated 11 October 2026 · Fact-checked

A resolution plan is a proposal by a resolution applicant to revive a corporate debtor, prepared on the basis of the information memorandum. The resolution professional checks it against section 30(2). The committee of creditors approves it by at least 66% of voting share. Then the Adjudicating Authority approves it.

Understand Resolution Plan: Preparation, Approval and Implementation

A corporate insolvency resolution process (CIRP) aims to keep the company alive if it can be saved. The tool for this is the resolution plan. It is a proposal from outside or inside parties on how to pay creditors and run the company afterwards.

The resolution professional (RP) prepares an information memorandum with the key facts about the corporate debtor. Applicants use it to frame their plans. Under section 30(1), a resolution applicant submits the plan to the RP, along with an affidavit stating that he is eligible under section 29A. Section 29A lists persons who are not allowed to bid, for example certain wilful defaulters and persons with overdue accounts. Check the exact list in your study material before you cite a clause.

The RP is a gatekeeper. Under section 30(2), the RP examines each plan to confirm it meets the mandatory conditions. Only compliant plans go to the committee of creditors (CoC) under section 30(3). The CoC then votes on the plan under section 30(4), after considering feasibility and viability and the manner of distribution proposed. The RP submits the approved plan to the Adjudicating Authority under section 30(6).

The applicant may attend the CoC meeting where the plan is considered. The applicant has no vote unless he is also a financial creditor (section 30(5)).

Once the Adjudicating Authority approves the plan, it binds the stakeholders and the plan is implemented. That approval stage is dealt with in section 31 of the Code. The official text supplied for this page covers section 30 only, so for section 31 and the overall time limit of 330 days, learn the rule from your study material and state it without relying on this page for the wording.

Key rules to remember

Submission and affidavit: Resolution applicant → plan + affidavit of eligibility under s.29A → RP (s.30(1)); The plan is prepared on the basis of the information memorandum.
RP's checklist (s.30(2)): (a) CIRP costs paid in priority; (b) operational creditors and dissenting financial creditors protected; (c) management after approval; (d) implementation and supervision; (e) no contravention of law; (f) other Board requirements; The RP must confirm each plan meets all these conditions before placing it before the CoC.
Minimum payment to operational creditors: Payment ≥ higher of (i) liquidation value under s.53, and (ii) amount if plan money were distributed per s.53(1) priority; Section 30(2)(b). The higher of the two is the floor.
Dissenting financial creditors: Payment ≥ amount they would get under s.53(1) in liquidation; Applies to financial creditors who do not vote in favour of the plan. Distribution must be fair and equitable (Explanation 1).
CoC approval: Vote ≥ 66% of voting share of financial creditors (s.30(4)); Earlier it was 75%, reduced to 66% in 2018. The CoC considers feasibility, viability and manner of distribution.
Voting right of applicant: Applicant may attend CoC meeting; votes only if also a financial creditor (s.30(5)); Attendance is not the same as voting.
Route to Adjudicating Authority: RP submits CoC-approved plan to Adjudicating Authority (s.30(6)); The Adjudicating Authority's approval follows under section 31.

How to solve Resolution Plan: Preparation, Approval and Implementation questions

Use this order for any question on the resolution plan. It follows the real sequence of events and keeps your answer in provision, analysis, conclusion form.

1Identify the stage: information memorandum, submission, RP examination, CoC vote or Adjudicating Authority approval.
2Check the applicant: has he filed the affidavit of section 29A eligibility? If a facts-based issue arises, say whether he is eligible.
3Test the plan against section 30(2)(a) to (f) one by one: costs, operational creditors, dissenting financial creditors, management, implementation, legality, Board requirements.
4For payment questions, compute the liquidation figure under section 53 and compare. Operational creditors get the higher of two amounts.
5Apply the vote: compute the percentage of voting share of financial creditors and compare with 66%.
6State who may attend and who may vote at the CoC meeting.
7Conclude clearly: plan complies or not, approved by CoC or not, and what happens next (submission to the Adjudicating Authority).
8Add a practical point such as the RP's duty to place only compliant plans before the CoC.

Quickest way: Checklist and vote test

When to use it: Use when a case-based question gives facts and asks whether a plan is valid or approved.

Write 'Section 30(2) checklist' and tick each item against the facts.
Spot the single defect the question plants: missing affidavit, low operational creditor payment, no priority for CIRP costs, or vote below 66%.
Do the one calculation needed: voting percentage, or liquidation entitlement versus plan payment.
Write the conclusion in one line and name the next step.

Common mistakes in Resolution Plan: Preparation, Approval and Implementation

Stating the CoC approval threshold as 75%.
Older books and notes still carry the original figure.
Fix: Write 'not less than sixty-six per cent of voting share of the financial creditors' under section 30(4).
Letting the resolution applicant vote at the CoC meeting.
Students confuse the right to attend with the right to vote.
Fix: The applicant may attend but votes only if he is also a financial creditor (section 30(5)).
Saying operational creditors must get only the liquidation value.
The two-limb test in section 30(2)(b) is read quickly.
Fix: They must receive not less than the higher of the liquidation amount and the amount under the section 53(1) distribution of plan money.
Thinking the CoC itself checks compliance with section 30(2).
The CoC is seen as the decision maker for everything.
Fix: The RP examines and confirms compliance first. Only conforming plans are presented to the CoC under section 30(3).
Counting votes of all creditors, including operational creditors, for plan approval.
Mixing up creditor classes.
Fix: Voting share is that of financial creditors in the CoC. Use only their voting share in the calculation.
Forgetting the section 29A affidavit.
Students focus on the plan content and skip submission requirements.
Fix: Mention the affidavit of eligibility in section 30(1) whenever you discuss submission.

Worked examples

Example 1

The CoC of Sundaram Textiles Ltd has financial creditors with voting shares: Bank A 40%, Bank B 28%, Financial Institution C 20%, Debenture trustee D 12%. A resolution plan is put to vote. A and C vote in favour; B and D vote against. Is the plan approved by the CoC?

Show the solution

Provision: section 30(4) requires approval by a vote of not less than 66% of the voting share of the financial creditors.
Facts: votes in favour are A 40% + C 20% = 60%.
Analysis: 60% is below 66%.
Conclusion: the shortfall is 6 percentage points, so the threshold is not met.

Answer: The plan is not approved by the CoC because it has only 60% of voting share against the required 66%.

Example 2

In the CIRP of Kaveri Steels Ltd, a resolution plan offers operational creditors ₹6,00,000. On liquidation under section 53 they would get ₹4,00,000. If the plan's total amount were distributed in the section 53(1) order of priority, they would get ₹7,50,000. Does the plan satisfy section 30(2)(b) for operational creditors?

Show the solution

Provision: operational creditors must get not less than the higher of (i) the liquidation amount under section 53 and (ii) the amount if the plan money were distributed per section 53(1) priority.
Amount (i) = ₹4,00,000. Amount (ii) = ₹7,50,000.
The higher is ₹7,50,000.
The plan offers ₹6,00,000, which is less than ₹7,50,000. The shortfall is ₹1,50,000.
Conclusion: the plan does not conform, so the RP should not present it to the CoC under section 30(3) until it is corrected.

Answer: The plan does not satisfy section 30(2)(b) because ₹6,00,000 is less than the required minimum of ₹7,50,000.

Exam tips

Write the section number with each condition: 30(1) submission, 30(2) RP check, 30(3) presentation, 30(4) CoC vote, 30(5) applicant, 30(6) submission to the Adjudicating Authority.
In case questions, find the one defect first and build your analysis around it.
Show your arithmetic for voting share and creditor payments. Marks go for method.
Keep section 31 and the 330-day limit for the end of the answer and state them from your study material, as this page's official text covers section 30 only.
Close with a practical point, such as the RP's gatekeeping duty or the role of the affidavit.

Practice questions from Corporate Insolvency Resolution Process

Resolution Plan: Preparation, Approval and Implementation: frequently asked questions

What vote is needed to approve a resolution plan under IBC?

The CoC must approve by a vote of not less than 66% of the voting share of the financial creditors under section 30(4). It considers feasibility, viability and the manner of distribution before voting.

Who checks whether a resolution plan meets the legal conditions?

The resolution professional. Under section 30(2) the RP examines each plan against the listed conditions. Only plans that conform are presented to the CoC.

Can the resolution applicant vote at the CoC meeting?

No, unless the applicant is also a financial creditor. The applicant may attend the meeting where the plan is considered (section 30(5)).

What is the time limit for completing CIRP?

The overall limit is 330 days including extensions and litigation time, as taught in your study material. This page's source text does not cover that provision, so confirm the exact wording from section 12 and the study material.