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CS Professional · Insolvency and Bankruptcy - Law and Practice · Adjudication and Appeals for Corporate Persons

Sunrise Textiles Ltd's resolution plan was approved by the NCLT, Mumbai under section 31 on 1 March. Its operational creditor, Kiran Dyes, believes the plan does not provide for its dues in the manner specified by the Board. Which statement is correct about its appeal to the NCLAT?

Kiran Dyes may appeal to the NCLAT under section 61, because section 61(3)(iii) permits an appeal against an approved resolution plan where operational creditors' debts have not been provided for in the manner specified by the Board. Any aggrieved person may appeal.

  1. AIt may appeal under section 61 on the ground that operational creditor debts were not provided for in the manner specified by the BoardCorrect
  2. BIt may appeal only on the ground of fraud by the resolution professional
  3. CIt cannot appeal because only financial creditors may challenge an approved plan
  4. DIt must first apply to the NCLT for review and appeal only if the review is rejected

Explanation

Section 61(3)(iii) lists non-provision for operational creditor debts in the manner specified by the Board as a ground of appeal against a plan approval order. Section 61(1) lets any aggrieved person appeal, so the right is not confined to financial creditors. The fraud-only ground belongs to liquidation orders, not plan approvals.

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