Section 30 IBC: Contents of a Resolution Plan

The resolution plan is the instrument through which an insolvent company is rescued. It sets out who will take over the business, how much creditors will be paid and when, how the company will be managed, and how the plan will be implemented. Section 30 and Regulation 38 lay down what every plan must contain, leaving the commercial terms to negotiation between bidders and the committee of creditors. This note explains the mandatory contents, the approval process and the usual components of a plan.

1. What a Resolution Plan Is

• Section 5(26). A resolution plan means a plan proposed by a resolution applicant for insolvency resolution of the corporate debtor as a going concern in accordance with Part II.
• Explanation, 2019. A resolution plan may include provisions for the restructuring of the corporate debtor, including by way of merger, amalgamation and demerger.
• Resolution applicant, section 5(25). A person who, individually or jointly with others, submits a resolution plan to the resolution professional pursuant to the invitation under section 25(2)(h)

Figure 1: From submission to the NCLT

2. Submission, Section 30(1)

A resolution applicant may submit a plan, along with an affidavit stating that it is eligible under section 29A, to the resolution professional, prepared on the basis of the information memorandum. The applicant must also comply with the request for resolution plans, including the evaluation matrix and the performance security (Topic 35).

3. Mandatory Contents, Section 30(2)

Figure 2: What every plan must provide

• (a) Process costs. Payment of insolvency resolution process costs in priority to the repayment of other debts of the corporate debtor (Topic 31)
• (b) Minimum payments. Payment to operational creditors of at least the higher of their liquidation share and the amount they would receive if the plan's payout were distributed under section 53(1); and to financial creditors who do not vote in favour of the plan, a minimum which, after the 2026 Amendment, is the lower of their liquidation share and their share under the section 53(1) order (Topic 41)
• (c) Management. Provision for the management of the affairs of the corporate debtor after approval of the plan.
• (d) Implementation. Provision for the implementation and supervision of the plan.
• (e) Legality. That the plan does not contravene any of the provisions of the law for the time being in force.
• (f) Regulations. That it conforms to such other requirements as may be specified by the IBBI.
• Deemed shareholder approval. An Explanation added in 2019 provides that, if any approval of shareholders is required under the Companies Act or any other law for implementing actions under the plan, it is deemed to have been given, so shareholders cannot block a plan.

4. Regulation 38

Figure 3: Additional requirements of the CIRP Regulations

• Interests of stakeholders. Regulation 38(1A) requires a plan to state how it has dealt with the interests of all stakeholders, including financial and operational creditors, a requirement noted by the Supreme Court in Swiss Ribbons (2019)
• Viability and feasibility. Regulation 38(3) requires a plan to show that it addresses the cause of default, is feasible and viable, has provisions for its effective implementation and for obtaining approvals, and that the applicant has the capability to implement it.
• Monitoring committee. Under the 2025 amendments, the committee must consider constituting a monitoring committee to supervise implementation, which reports to the NCLT quarterly.

5. Examination and Approval

• Section 30(3). The resolution professional presents to the committee of creditors those plans which conform to section 30(2), after examining them and the eligibility of the applicants.
• Section 30(4). The committee may approve a plan by a vote of not less than 66 per cent of the voting share of the financial creditors, after considering its feasibility and viability, the manner of distribution proposed, which may take into account the order of priority among creditors under section 53(1) including the priority and value of security interests, and other requirements specified by the Board.
• Ineligible applicants. The committee cannot approve a plan submitted by a person ineligible under section 29A (Topic 38)
• Section 30(5). The resolution applicant may attend the meeting of the committee at which its plan is considered, but has no vote unless it is a financial creditor.
• Section 30(6). The resolution professional submits the approved plan to the NCLT, which decides under section 31 (Topic 42)
• Commercial wisdom. The committee's choice of plan and its terms are not open to review by the NCLT beyond the statutory requirements (Topic 28)

6. Usual Components of a Plan

• Payments. Upfront cash payments, deferred payments, conversion of debt into equity or new debt instruments, and the treatment of each class of creditors.
• Business plan. The applicant's strategy for reviving the business, capital expenditure, working capital and sources of funding.
• Corporate actions. Reduction or cancellation of existing share capital, issue of new shares to the applicant, change of directors, and any merger or demerger.
• Avoidance recoveries. How recoveries from avoidance applications will be shared, whether retained by creditors or passed to the applicant.
• Reliefs and concessions. Plans often seek waivers from government authorities; the NCLT can approve the plan, but reliefs that depend on statutory discretion of other authorities remain for those authorities to grant, unless they follow from the Code itself.

7. Frequently Asked Questions

Can shareholders of the corporate debtor block a resolution plan?

No. Since 2019, any shareholder approval required for actions under the plan is deemed to have been given, under the Explanation to section 30(2).

Can a resolution plan provide for a merger with the resolution applicant?

Yes. The Explanation to section 5(26), added in 2019, expressly allows a plan to provide for restructuring, including merger, amalgamation and demerger.

Who examines whether a plan complies with section 30(2)?

The resolution professional first examines each plan and presents only compliant plans to the committee. The NCLT then checks compliance again before approving the plan under section 31.

8. Related Topics

• Topic 28: Commercial Wisdom of the CoC. Limited review of plans.
• Topic 41: Treatment of Operational and Dissenting Creditors. The statutory minimums.
• Topic 42: Section 31. Approval and the clean slate.