What is Resolution Plan?
A Resolution Plan is the binding proposal submitted by a resolution applicant during CIRP, setting out how the corporate debtor's debts will be addressed, what creditors will receive, and how the company will be revived. It must be approved by the CoC and the NCLT.
| Meaning | A Resolution Plan is the binding proposal submitted by a resolution applicant during CIRP, setting out how the corporate debtor's debts will be addressed, what creditors will receive, and how the company will be revived. It must be approved by the CoC and the NCLT. |
|---|---|
| Category | Legal & Insolvency |
| Related Laws | IBC 2016, Section 30 |
| Who Uses It | Resolution applicants, CoC, NCLT |
| Why It Matters | Determines the actual recovery to creditors. |
Resolution Plan explained in plain English
A practitioner's view written for borrowers and advisors — not a textbook definition.
A Resolution Plan is the binding proposal submitted by a resolution applicant during CIRP, setting out how the corporate debtor's debts will be addressed, what creditors will receive, and how the company will be revived. It must be approved by the CoC and the NCLT.
In practice, Resolution Plan is used most often by resolution applicants, coc, nclt. Each of them sees the term from a slightly different angle: borrowers care about protection and outcomes, lenders care about classification and recovery, regulators care about consistency and disclosure.
The legal anchor for Resolution Plan is IBC 2016, Section 30. RBI master directions, the SARFAESI Act 2002, the RDB Act 1993 and the IBC 2016 commonly interplay, depending on the loan size, security and stage of stress.
Why does it matter? Determines the actual recovery to creditors. For a stressed borrower, getting this concept right early often saves several months of penal interest, legal cost and credit-score damage.
A real example: Resolution applicant offers ₹450 crore against ₹1,200 crore total admitted claims. The mechanics may look complex, but the underlying logic — the bank wants closure, the borrower wants a fair outcome — is straightforward once the right framework is in place.
If you are facing a situation involving Resolution Plan, the safest first step is a structured case review with a senior ex-banker who has handled comparable matters across banks and ARCs in India.
Where you'll encounter Resolution Plan
Whenever a loan moves from "Standard" to "stressed", Resolution Plan is one of the words that starts appearing in notices, bank emails and lawyers' opinions.
Sanctioning committees, recovery teams and risk officers use Resolution Plan to classify accounts, decide provisioning and approve resolution paths.
Resolution Plan appears in pleadings, securitisation applications, OAs, Section 7/9 petitions and SARFAESI writs as part of the dispute record.
When stressed loans are sold to ARCs or special-situations investors, Resolution Plan is used in term sheets, assignment agreements and due-diligence reports.