NCLT Allahabad Holds Operational Creditors Cannot Demand Resolution Plan or Liquidation Value Disclosure Before Section 31 Approval in JAL CIRP

NCLT Allahabad Holds Operational Creditors Cannot Demand Resolution Plan or Liquidation Value Disclosure Before Section 31 Approval in JAL CIRP

Introduction

The Allahabad Bench of the National Company Law Tribunal (NCLT) has held that an operational creditor has no independent right to seek disclosure of the resolution plan or liquidation value at the pre-approval stage under the Insolvency and Bankruptcy Code, 2016. The Tribunal dismissed the application arising from the CIRP of JaiPrakash Associates Limited (JAL), reiterating that the IBC confidentiality framework bars disclosure of the resolution plan to individual operational creditors before approval under Section 31.

Factual Background

The application was filed by SBC Minerals Pvt. Ltd., an operational creditor of JaiPrakash Associates Limited, whose claim of approximately ₹17.68 crore had already been admitted in the CIRP.

The applicant sought:

• disclosure of the liquidation value,
• disclosure of the relevant portions of the resolution plan, and
• a right to be heard in the resolution plan approval proceedings.

The core grievance raised was that without access to the resolution plan, the operational creditor could not verify whether the plan complied with the statutory requirement of providing at least liquidation value to operational creditors under Section 30(2)(b). Notably, the resolution plan for JAL had already been approved on 17 March 2026 in separate proceedings, and the same is presently under challenge before the NCLAT.

Procedural Background

The matter arose during the pendency of the Section 31 approval proceedings in the CIRP of JaiPrakash Associates Limited. The Resolution Professional opposed the plea, contending that the operational creditor had no locus standi to intervene in the plan approval process, particularly when its claim had already been admitted and dealt with in accordance with the Code. The matter was considered by the Allahabad Bench comprising Judicial Member Praveen Gupta and Technical Member Ashish Verma.

Issues

1. Whether an operational creditor can seek disclosure of the resolution plan before approval under Section 31 of the IBC.

2. Whether an operational creditor can demand disclosure of the liquidation value at the pre-approval stage.

3. Whether an operational creditor has a right to participate in or be heard during resolution plan approval proceedings.

Contentions of Parties

The applicant operational creditor argued that disclosure was necessary to verify whether the approved resolution plan complied with the minimum payment safeguard available to operational creditors, namely payment of at least the liquidation value.

It was contended that denial of access would effectively prevent the operational creditor from testing whether the statutory safeguards under Section 30(2) had been followed.

The Resolution Professional, however, opposed the plea and submitted that the IBC framework consciously preserves confidentiality of the resolution plan until approval, and such disclosure is limited only to CoC participants and members under confidentiality undertakings.

It was further argued that the applicant, being merely an operational creditor, had no statutory right either to access the plan or to participate in CoC deliberations or Section 31 approval proceedings.

Reasoning and Analysis

The Tribunal relied upon the NCLAT ruling in Jet Airways, which recognises the confidentiality regime embedded in the insolvency framework. The Bench held that the statutory scheme of the IBC does not contemplate disclosure of the resolution plan to individual operational creditors at the pre-approval stage, and any such direction would run contrary to the confidentiality architecture designed under the Code and the CIRP Regulations.

It was specifically observed that the applicant, being an operational creditor, is neither a member nor a participant in the Committee of Creditors meetings, and therefore cannot assert an enforceable right to access the resolution plan during the pendency of its consideration under Section 31.

On the issue of liquidation value, the Tribunal reiterated that the regulations expressly restrict its disclosure to CoC members subject to confidentiality undertakings, and therefore operational creditors cannot independently demand access to the same. The Bench further held that since the applicant’s claim had already been admitted, no further locus survived to intervene in the commercial decision-making or pre-approval stage of the resolution plan.

Decision

The NCLT Allahabad Bench dismissed the application, holding that operational creditors cannot seek disclosure of the resolution plan or liquidation value at the pre-approval stage, nor can they claim a right to be heard in the Section 31 approval proceedings. The Tribunal reaffirmed that the IBC’s confidentiality regime prevails until plan approval, and operational creditors must await disclosure through the statutory process after approval.

In this case the appellant was represented by Advocate Krishna Dev Vyas and Sumit Agarwal.