Sanjay Dave v. Andhra Bank: CoC-approved resolution plans bar SRA renegotiation

The facts in brief

Andhra Bank (now merged into Union Bank of India), as a financial creditor of the corporate debtor (Oracle Home Textiles Ltd.) in the Corporate Insolvency Resolution Process, had backed a resolution plan submitted by Sanjay Dave, the Successful Resolution Applicant. The Committee of Creditors approved the plan on 10 May 2021 with a 99.90% voting share — well above the requisite majority under section 30(4) of the Insolvency and Bankruptcy Code, 2016 — and the National Company Law Tribunal confirmed it under section 31.

Post-approval, the SRA sought to renegotiate certain commercial terms. The dispute centred on working-capital arrangements and the creditor-payout schedule. The SRA's case was that its Letter of Intent had been issued subject to conditionalities flagged at the bidding stage — including an "as-is-where-is" qualification — and that subsequent due-diligence had revealed grounds to revisit the commercial terms. The financial creditors took the position that the LoI was a binding commercial commitment and that the approved plan, once confirmed under section 31, was incapable of unilateral variation.

The National Company Law Appellate Tribunal, in an order dated 2024, accommodated the SRA. It directed the CoC to take a fresh decision on the proposed modifications, effectively reopening the commercial terms after CoC approval and section 31 confirmation. Andhra Bank and the CoC appealed to the Supreme Court under section 62 of the IBC, contending that the NCLAT order subverted the binding effect of an approved resolution plan and the institutional discipline of the Code.

The matter came before a two-judge bench of K.V. Viswanathan and Vipul M. Pancholi JJ. Civil Appeal Nos. 12264-12266 of 2024 were heard and disposed of on 27 May 2026.

The IBC's architecture of finality

The IBC is built on the premise that commercial decisions of the Committee of Creditors are final, time-bound, and not subject to merits-review by courts or tribunals. The architecture rests on several interlocking provisions. Section 30(2) prescribes the requirements that a resolution plan must satisfy. Section 30(4) sets the requisite-majority threshold for CoC approval. Section 31 confirms the approved plan and makes it binding on the corporate debtor, its creditors, employees, members, and other stakeholders. Section 33 prescribes the liquidation pathway when a plan is not approved or — critically — when an approved plan is not implemented.

What the architecture does not contemplate is a post-approval renegotiation phase. The Code's timelines, the CoC's commercial wisdom, and the implementation discipline of the SRA are designed to interlock. If any link fails, the consequence is liquidation, not a do-over.

The Court drew on this institutional logic to explain why the SRA's request for renegotiation was constitutionally incompatible with the Code:

The framing is striking. The Court did not treat the SRA's request as merely a contractual question. It treated it as a threat to the structural integrity of the entire statute. Permitting one SRA to renegotiate is, on this view, permitting every future SRA to bid optimistically and walk back commercially — converting a finality framework into a soft-touch settlement regime.

The Letter of Intent question

A central plank of the SRA's case was that its LoI contained conditionalities that survived CoC approval. The argument ran: the LoI was issued at the bidding stage, the conditionalities were known to the CoC at the time of approval, and the SRA's subsequent due-diligence had crystallised the basis for invoking those conditionalities. The Court rejected the argument squarely.

The Letter of Intent, the Court held, is a binding commercial commitment. It is not an in-principle indication open to post-CoC reopening. Whatever conditionalities exist must be priced into the bid and the plan. Once the CoC has applied its commercial wisdom and approved the plan, the SRA is bound to implement it — full stop. The Court was prepared to permit minor clarifications or non-material modifications with CoC consent, but a unilateral renegotiation initiated by the SRA was held to be barred outright.

This reading closes a soft spot in CIRP practice. Counsel for SRAs have increasingly tried to draft LoIs with elaborate qualifications — "subject to satisfactory due-diligence", "subject to verification of receivables", "as-is-where-is with reservation of rights" — and then to invoke those qualifications after winning the bid. The Court's holding tells SRAs that post-CoC qualifications are not enforceable retreats; they are at best material for the next bid in a fresh process if liquidation follows.

The doctrinal lineage

Sanjay Dave fits neatly into the Court's existing line on the sanctity of CoC commercial wisdom. The foundational authority is Committee of Creditors of Essar Steel India Ltd. v. Satish Kumar Gupta (2020) 8 SCC 531, where the Court held that the commercial wisdom of the CoC is not justiciable on merits and that the adjudicating authority's scope of review is confined to the section 30(2) parameters. K. Sashidhar v. Indian Overseas Bank (2019) 12 SCC 150 had earlier set the tone — the CoC's commercial assessment is final and is not amenable to merits-review.

The closer analogue is Ebix Singapore Pte. Ltd. v. Committee of Creditors of Educomp Solutions Ltd. (2022) 2 SCC 401. There the Court held that a resolution applicant cannot unilaterally withdraw an approved resolution plan. The Code does not contemplate a withdrawal mechanism for the SRA once the plan has been approved by the CoC and is pending NCLT confirmation. Ebix established the proposition that the SRA cannot exit the plan; Sanjay Dave extends the proposition to its logical sibling — the SRA cannot rewrite the plan either.

The line is internally coherent. The Court is constructing a one-way door: once you bid, once the CoC approves, once the NCLT confirms, the only options are implementation or liquidation. There is no third door marked "renegotiation".

The section 60(5) and section 62 dimensions

A subsidiary question that practitioners will revisit is the scope of section 60(5) — the NCLT's residuary jurisdiction. SRAs and CoCs have sometimes invoked section 60(5) to seek post-approval modifications. The Court's reasoning in Sanjay Dave clarifies that section 60(5) is not a vehicle for unilateral SRA modifications. Whatever the residuary jurisdiction may catch, it does not catch a request to walk back commercial terms after the section 31 stage.

The procedural pathway also matters. The appeals were filed under section 62 — the statutory route from the NCLAT to the Supreme Court. The Court's willingness to entertain the appeals and to set aside the NCLAT direction signals that the apex court will police NCLAT accommodations of SRA modification applications carefully going forward.

Trajectory: what comes next

The judgment will sharply discipline post-CoC SRA conduct across pending and future CIRPs. Resolution applicants will need to front-load all due-diligence and conditionality into their bids and the plan itself, because any post-approval retreat now carries the risk of forfeiture and section 33 liquidation. Expect counsel for SRAs to draft plans with elaborate built-in contingency clauses — earn-out structures, milestone-tied payments, conditions precedent baked into the plan terms themselves — rather than relying on LoI flexibility that the Court has now shut down.

The NCLAT will need to recalibrate. Its 2024 order — directing the CoC to take a fresh decision on the proposed modifications — represented an accommodating approach that the Supreme Court has now told it cannot take. Pending NCLAT matters where SRAs have sought post-approval modifications will need to be revisited in the light of Sanjay Dave.

The judgment also has implications for the post-2026 IBC amendments tightening the section 12A withdrawal route and the project-wise CIRP framework for real estate. The architectural discipline that Sanjay Dave enforces — that the Code's finality must be respected at each stage — runs across these amendments as a common thread. Expect courts and tribunals to read Sanjay Dave together with the amendments as expressing a coherent legislative and judicial vision of CIRP discipline.

For corporate debtors and CoCs, the practical lesson is that an approved plan is now genuinely binding. If the SRA fails to implement, the Code's section 33 liquidation pathway must be invoked — there is no soft-landing renegotiation option. CoCs will need to act with that clarity; SRAs will need to bid with that clarity.

Related on Valkya

• Committee of Creditors of Essar Steel v. Satish Kumar Gupta: the commercial wisdom doctrine
• Ebix Singapore v. CoC of Educomp Solutions: no unilateral withdrawal of resolution plan
• K. Sashidhar v. Indian Overseas Bank: CoC decisions are not justiciable on merits
• Insolvency and Bankruptcy Code 2016: the practitioner read

Sources

1. Verdictum case page — Sanjay Dave v. Andhra Bank Ltd. (2026 INSC 580): https://www.verdictum.in/supreme-court/sanjay-dave-v-andhra-bank-ltd-2026-insc-580-successful-resolution-applicant-coc-1614911
2. LiveLaw — Sanjay Dave v. Andhra Bank Ltd. judgment page (2026 LiveLaw (SC) 562): https://www.livelaw.in/sc-judgments/2026-livelaw-sc-562-sanjay-dave-vs-andhra-bank-ltd-ors-536080
3. Advocatekhoj — judgment summary and civil-appeal docket reference: https://www.advocatekhoj.com/library/judgments/announcement.php?WID=20430
4. Committee of Creditors of Essar Steel India Ltd. v. Satish Kumar Gupta (2020) 8 SCC 531
5. Ebix Singapore Pte. Ltd. v. Committee of Creditors of Educomp Solutions Ltd. (2022) 2 SCC 401
6. K. Sashidhar v. Indian Overseas Bank (2019) 12 SCC 150