Every corporate insolvency process is, at its heart, a sale. The company's creditors invite resolution plans from investors and buyers, compare them, negotiate, and approve the one they find best. The NCLT then checks that the plan complies with the law and approves it, after which the plan binds everyone: creditors, employees, government authorities and shareholders.
For a bidder, an insolvent company can be an opportunity to acquire assets, licences and a running business at a fair price, with a clean slate for past liabilities. But the process has its own rules, deadlines and traps. Plans fail because the bidder is ineligible, because the plan does not meet the mandatory requirements of Section 30(2), or because implementation is not thought through. This page explains how the process works from a bidder's side.
हिंदी में सारांश
दिवाला पà¥à¤°à¤•à¥à¤°à¤¿à¤¯à¤¾ में कंपनी को बचाने या खरीदने के लिठनिवेशक "रेज़ोलà¥à¤¯à¥‚शन पà¥à¤²à¤¾à¤¨" देते हैं। रेज़ोलà¥à¤¯à¥‚शन पà¥à¤°à¥‹à¤«à¥‡à¤¶à¤¨à¤² रà¥à¤šà¤¿ पतà¥à¤° (EOI) आमंतà¥à¤°à¤¿à¤¤ करता है, योगà¥à¤¯ आवेदक पà¥à¤²à¤¾à¤¨ जमा करते हैं, और कमेटी ऑफ कà¥à¤°à¥‡à¤¡à¤¿à¤Ÿà¤°à¥à¤¸ (CoC) 66% वोट से पà¥à¤²à¤¾à¤¨ मंज़ूर करती है। फिर NCLT जांच कर अनà¥à¤®à¥‹à¤¦à¤¨ देता है। मंज़ूर पà¥à¤²à¤¾à¤¨ सब पर लागू होता है और पà¥à¤°à¤¾à¤¨à¥‡ दावों से कंपनी को "कà¥à¤²à¥€à¤¨ सà¥à¤²à¥‡à¤Ÿ" मिलती है। 2026 संशोधन से दो-चरण अनà¥à¤®à¥‹à¤¦à¤¨ और संपतà¥à¤¤à¤¿-वार पà¥à¤²à¤¾à¤¨ संà¤à¤µ हà¥à¤ हैं।
Is this your situation?
- You are an investor or company interested in acquiring a business in insolvency
- You have seen a Form G invitation for expressions of interest
- You want to bid for specific assets or a project, not the whole company
- You are a promoter considering a plan for your own company
- Your plan has been submitted and you face objections from creditors or rivals
- Your plan was approved by the committee and is awaiting NCLT approval
How the resolution process runs
Invitation for expressions of interest
The resolution professional publishes Form G inviting expressions of interest, with eligibility criteria approved by the committee of creditors. Prospective applicants submit an expression of interest with supporting documents.
Provisional list and due diligence
The professional prepares a provisional list of eligible applicants, which can be objected to, and then a final list. Eligible applicants get the information memorandum, the evaluation matrix and the request for resolution plans, and access to a data room.
Submission of the plan
Plans are submitted by the deadline with an affidavit of eligibility under Section 29A, an earnest money deposit and the documents required by the request. Plans must contain the mandatory contents set out in the regulations, including the source of funds and the implementation schedule.
Negotiation and challenge
The committee may negotiate with applicants, ask for improved offers, or run a challenge process. Plans are scored against the evaluation matrix.
Committee vote
A plan needs the approval of at least 66% of the voting share of the committee of creditors. The successful applicant then provides a performance security.
NCLT approval and implementation
The resolution professional files the approved plan with the NCLT. The tribunal checks compliance with Section 30(2) and approves or rejects it. Under the 2026 amendment, it must pass an order within 30 days, and it may approve implementation first and the manner of distribution separately.
What every plan must provide
The NCLT will not approve a plan that misses any of these, however attractive the price.
Insolvency costs first
Payment of the insolvency resolution process costs in priority to other debts.
Operational creditors
At least the amount they would receive in liquidation, or the amount they would get if the plan amount were distributed under the Section 53 waterfall, whichever is higher.
Dissenting financial creditors
After the 2026 amendment, not less than the lower of their liquidation value or the amount they would get under the Section 53 waterfall applied to the plan value.
Management and supervision
How the company will be managed after approval and how the plan's implementation will be supervised. The amended Code expects a monitoring committee to be provided for.
Compliance with law
The plan must not contravene any law in force. Approvals needed under other laws, such as from the Competition Commission or sector regulators, must be addressed.
Feasibility and viability
The committee must be satisfied about feasibility and viability, and the plan must deal with the interests of all stakeholders.
What the 2026 amendment changed for bidders
Several provisions in force from 26 May 2026 matter to resolution applicants:
- Asset-wise plans: the definition of "resolution plan" now expressly allows plans that deal with the company's assets separately, through one or more plans, subject to conditions set by the IBBI. Bidders interested only in a plant, a project or a brand can now participate more cleanly.
- Two-stage approval: the NCLT can approve implementation of the plan first and the manner of distribution among creditors by a separate order within 30 days, on an application with the committee's approval. Distribution disputes no longer need to hold up the takeover.
- Curing defects: before rejecting a plan, the NCLT can allow the committee to fix procedural or non-material defects.
- Clean slate written into law: claims not provided for in the approved plan are extinguished, and government licences, permits and similar rights cannot be suspended or terminated for past defaults during their remaining term if the conditions are met. Claims against former promoters, management and guarantors survive.
- Thirty-day decision: the NCLT must approve or reject a plan within 30 days.
Where a deal needs Competition Commission approval, the Supreme Court has treated the requirement as mandatory (Independent Sugar Corporation v Girish Sriram Juneja, 2025), and the 2026 amendment revisited when that approval must be in hand. We build it into the bid timetable from the start.
Risks bidders should plan for
Eligibility challenges
Rivals and creditors often attack a winning bidder's eligibility under Section 29A. Map your connected persons before you bid. See Section 29A eligibility.
Litigation after approval
Plans are challenged before the NCLAT by dissatisfied creditors, employees or government authorities. Build realistic timelines and conditions into the plan.
Hidden liabilities
The clean slate covers claims against the company that are not in the plan, but not liabilities arising after approval or personal liabilities of former promoters. Due diligence still matters.
Implementation risk
Funding must be committed. Failure to implement can lead to forfeiture of the performance security and, potentially, liquidation.
Commercial wisdom of the committee
The committee's decision on which plan to accept is largely final. In Committee of Creditors of Essar Steel v Satish Kumar Gupta (2019), the Supreme Court held that the tribunal cannot substitute its view for the committee's commercial judgment, though it checks legal compliance.
Time and typical cost
Fees are agreed in writing for each stage and do not depend on whether your plan is selected.
| Stage | Usual time | What it involves |
|---|---|---|
| EOI and eligibility | 2 to 4 weeks | EOI documents, eligibility mapping |
| Due diligence and plan preparation | 4 to 8 weeks | Data room review, financial and legal diligence, drafting |
| Negotiation and voting | 2 to 6 weeks | Revised offers, committee meetings |
| NCLT approval | Order due within 30 days of filing, by law | Hearing; objections from creditors |
| Implementation | As per plan | Monitoring committee, payments, approvals |
Documents a bidder will need
For the expression of interest
- Constitution documents and board resolution
- Net worth or assets under management certificates
- Group structure chart
- Section 29A undertaking
For the plan
- Resolution plan in the format required
- Affidavit of eligibility under Section 29A
- Earnest money deposit
- Proof of source of funds (commitment letters, bank statements)
After approval
- Performance security
- Regulatory approvals required
- Implementation schedule and monitoring arrangements
Bidding for a single plant
Here's a made-up example. A Chandigarh-based food processor wanted one of the three plants owned by a company in insolvency, not the whole business. Before 2026, it would have had to partner with others or bid for everything.
After the amendment allowed asset-wise plans, the committee of creditors decided to invite plans for the plants separately. We helped the processor map its group for Section 29A, review the plant's title and approvals in the data room, and prepare a plan that paid operational creditors at the required minimum and provided a monitoring committee. The plan was approved by the committee and the NCLT approved its implementation, with distribution among lenders settled by a later order.
Mistakes resolution applicants make
- Treating the evaluation matrix as a formality: plans are scored against it. Read it closely and structure your offer to score well on the parameters that carry weight.
- Back-ended payments without security: committees discount deferred payments heavily unless they are secured. Upfront cash usually wins.
- Thin due diligence: the clean slate removes old claims against the company, but not physical problems with assets, missing approvals or title defects.
- Ignoring regulatory approvals: sector approvals and competition approval can take time. Build them into the timetable and the plan's conditions.
- Underestimating litigation risk: approved plans are often challenged. Make sure your funding and conditions can survive a few months of appeals.
- Late eligibility checks: a Section 29A problem discovered after the plan is chosen wastes everyone's time and can cost the earnest money.
Key documents in the bidding process
| Document | What it is |
|---|---|
| Form G | The invitation for expressions of interest, with eligibility criteria |
| Information memorandum | The resolution professional's summary of the company's assets, liabilities and operations |
| Evaluation matrix | The scoring criteria the committee will use to compare plans |
| Request for resolution plans (RFRP) | The detailed terms for submitting plans, including timelines and deposits |
| Section 29A affidavit | The applicant's sworn statement of eligibility |
| Performance security | Security provided by the successful applicant to guarantee implementation |
| Monitoring committee | The body that supervises implementation of the approved plan |
Checklist for a prospective bidder
- Read Form G and the eligibility criteria set by the CoC
- Confirm your eligibility under Section 29A, including connected persons
- Arrange the earnest money deposit or bank guarantee
- Sign the confidentiality undertaking to get the information memorandum
- Carry out due diligence on assets, liabilities and pending cases
- Check approvals needed for implementation (CCI, sectoral regulators, FEMA)
- Prepare a business plan and funding commitments
- Plan how you will handle employees, suppliers and customers on takeover
Implementation after approval
Approval is not the end. The successful applicant must pay creditors on the plan's schedule, take over management, and obtain the approvals and licences needed to run the business. A monitoring committee, often including the resolution professional and CoC representatives, usually oversees implementation. Failure to implement can lead the CoC or any affected person to apply to the NCLT, and in serious cases to liquidation under Section 33(3).
The moratorium itself ends when the NCLT approves the plan, so the new owner relies on the plan's terms and the approval order, not on the moratorium, for protection against old claims. The clean slate principle, confirmed in Ghanashyam Mishra and Sons v Edelweiss ARC (2021), means claims not included in the plan are extinguished, including government dues not claimed in the process. See committee of creditors and objections to a plan.
A smaller bidder wins a contest
Here's a made-up example. Three bidders competed for a Mohali pharmaceutical company in CIRP. The highest bid was from a large group, but it depended on CCI approval that could take months. A smaller Delhi company offered slightly less but could pay upfront and needed no CCI approval.
The CoC weighed certainty against value and approved the smaller company's plan. Because of the certainty of payment, creditors received their money within 60 days of NCLT approval. The large group objected that it had made the higher bid, but the NCLT held that the CoC's decision was a matter of commercial wisdom and approved the plan.
Frequently Asked Questions
Who can submit a resolution plan?
Any person who meets the eligibility criteria set by the committee and is not barred under Section 29A, including individuals, companies, funds and, if eligible, promoters.
What vote is needed to approve a plan?
At least 66% of the voting share of the committee of creditors.
Can I bid only for some assets of the company?
After the 2026 amendment, resolution plans may deal with assets separately, subject to IBBI conditions and the committee's process.
What happens to old liabilities after my plan is approved?
Claims not included in the approved plan are extinguished, and licences cannot be cancelled for past defaults if conditions are met. Claims against former promoters and guarantors are not affected.
Can the NCLT change the price or terms of my plan?
No. The NCLT checks legal compliance. It does not rewrite the commercial terms, though it can send a plan back to the committee or allow it to cure defects.
What if my plan is challenged after approval?
Appeals go to the NCLAT, which is now required to decide IBC appeals within three months.
Do I need Competition Commission approval?
If the acquisition is a notifiable combination, yes. The Supreme Court has treated this as mandatory, so plan it early.
How are your fees decided?
By the size of the deal and the work involved, agreed in writing for each stage. They do not depend on the result.
Considering a Bid?
Share the Form G or the target's details. We will check eligibility, review the process documents and help you prepare a compliant plan.
This page gives general information about the law as it stood when it was last reviewed. It is not legal advice on your case and does not promise any result. IBC rules and NCLT procedures change often, so outcomes depend on your own documents, dates and facts.
Need help with Resolution Plans - For Bidders and Investors?
Send us the notice, the petition or the order. We will tell you where you stand, which bench hears it and the date the next step is due, in plain words.
