NCLAT: CoC Can't Alter Approved Resolution Plans, Protects Dissenting Creditors' Funds

• NCLAT ruled that the Committee of Creditors (CoC) cannot modify an approved resolution plan or reallocate funds of dissenting creditors.
• The decision came in the Reliance Communications Infrastructure Ltd (RCIL) case, dismissing an appeal filed by Bank of Baroda.
• NCLAT stated that CoC's 'commercial wisdom' cannot justify altering the distribution mechanism once a plan is approved.
• Bank of Baroda, an assenting creditor, sought reallocation of the Reliance Bhutan loan proceeds after the plan's initial approval.
• The tribunal upheld NCLT's stance that dissenting financial creditors are entitled to payment as per the original approved plan.

Why It Matters: NCLAT affirms CoC cannot unilaterally change approved resolution plans to reallocate dissenting creditors' funds.