The unfinished chapter: Post-resolution implementation under IBC

Since its inception, the Insolvency and Bankruptcy Code, 2016 (“IBC”) has fundamentally reshaped India’s credit landscape. However, even as high-profile plans receive judicial approval by the Adjudicating Authority, an inconvenient truth persists. The resolution process does not end with approval. On the contrary, it begins thereafter.

The Code culminates in a resolution plan under Section 31 of the IBC, but it remains largely silent on the practical framework for post-approval execution, supervision, and compliance. This silence has allowed many “resolved” cases to remain functionally unresolved, eroding creditor confidence and delaying true economic revival.

Once a Resolution Plan attains finality under Section 31 of the IBC, the Resolution Professional is required to hand over the management and control of the corporate debtor to the Successful Resolution Applicant (“SRA”). To ensure effective implementation, a Monitoring Committee is constituted in accordance with the procedural framework envisaged under the Code and the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. Although the concept of a Monitoring Committee was initially a creation of the Resolution Plan serving as a transitional mechanism devised by the Committee of Creditors and the Resolution Professional to oversee implementation, subsequent regulatory amendments have formally codified its role within the statutory framework post the emphasis of the Supreme Court on the need for recognition of monitoring committees.

However, in practice, despite this procedural foundation, implementation challenges continue to persist.

1. Disputes continue over asset possession, transfer of licences, and legacy liabilities.

2. Payments and operational transitions are delayed owing to pending litigations or regulatory clearances.

3. Stakeholders face uncertainty in the absence of a dedicated statutory forum for adjudicating post-approval dispute resolution.

The gap in post-resolution implementation has been repeatedly acknowledged by various courts. It has also been progressively addressed through evolving jurisprudence. Judicial forums have demonstrated a growing willingness to interpret the Insolvency and Bankruptcy Code in a manner that strengthens post-approval supervision, empowers Monitoring Committees, and ensures continuity of resolution outcomes. This gradual, case-by-case evolution reflects the judiciary’s constructive role in bridging procedural gaps and reinforcing the Code’s core objective of achieving effective and sustainable resolution.

In Essar Steel India Ltd. v. Satish Kumar Gupta (2019 SCC Online SC 1478), the Supreme Court observed that the Committee of Creditors’ commercial wisdom extends “till the plan’s implementation.”

Similarly, in CoC of Amtek Auto Ltd. (2020 SCC Online NCLAT 289), the NCLAT warned that an SRA’s failure to implement an approved plan could invite liquidation or renewed CIRP.

In a significant turn of events in the Bhushan Power & Steel Limited (BPSL) insolvency proceedings, the Supreme Court, by its judgment dated May 2, 2025, initially set aside the Resolution Plan submitted by JSW Steel Limited and directed the liquidation of the corporate debtor, citing gross procedural irregularities and non-compliance with the mandatory provisions of IBC. The Court observed that the approval process had suffered from material lapses and opacity in adherence to statutory safeguards, thereby rendering the plan unsustainable in law. This ruling, which required the return of approximately ₹19,350 crore already infused by JSW Steel pursuant to the plan’s implementation, momentarily unsettled the insolvency ecosystem, raising concerns over the sanctity and finality of approved resolution plans and the stability of creditor recoveries.

Although the liquidation order was subsequently set aside upon filing of a review petition and the Resolution Plan of JSW Steel reinstated, the case of Bhushan Power & Steel Limited continues to underscore the persistent implementation-stage vulnerabilities in India’s insolvency regime. The post-approval phase, despite being statutorily anchored under Section 31(1) of the IBC and procedurally supported by Regulations 38 and 39(9) of the CIRP Regulations, remains beset with operational ambiguities. Issues relating to asset possession, continuity of licences and contracts, treatment of residual claims, and coordination with enforcement agencies frequently hinder a smooth execution of approved plans.

This experience underlined a systemic gap and that resolution under the IBC is not an event but an evolving process requiring sustained institutional oversight.

The absence of post-approval infrastructure creates three persistent issues:

(i) No defined authority to interpret or modify a plan once approved. NCLTs intervene only when irregularity or fraud is alleged.

(ii) Unclear treatment of post-CIRP obligations, such as taxes or statutory dues accruing before full takeover.

(iii) Weak enforcement - SRAs delaying or renegotiating timelines face little practical consequence, as Section 74 (offence for non-compliance) remains under-enforced.

The consequence is an accountability gap that undercuts the credibility of the resolution ecosystem.

Time-bound implementation milestones

Just as the CIRP has a 330-day statutory limit, post-approval timelines for asset transfer, regulatory clearance, and payment obligations should be codified, subject to limited extensions by reasoned NCLT order.

Transparency through public disclosures

An IBBI-supervised online dashboard for post-resolution progress, including payments made to the various stakeholders in line with the approved plan’s treatment, litigation pending, and milestones achieved would enhance accountability and investor confidence.

Escrow-linked financial control

For large-value resolution plans (particularly in infrastructure and steel) escrow accounts should be utilised, monitored by creditors to ensure timely fund deployment.

After eight years of operation, the IBC has succeeded in delivering time-bound resolutions, but not in ensuring time-bound implementation. A Code that ends at approval but ignores execution risks, undermining its own success.

A truly mature insolvency ecosystem must ensure continuity from resolution to realisation, from courtroom sanction to economic revival. Institutionalising post-resolution accountability is therefore not an optional reform; it is the logical completion of the IBC framework.

The strength of the IBC will ultimately be measured not by the number of plans approved, but by the number of plans fully implemented.

About the author: Kaustubh Nandan Sinha is a General Counsel at Jaypee Infratech Limited.

Disclaimer: The opinions expressed in this article are those of the author(s). The opinions presented do not necessarily reflect the views of Bar & Bench.

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