New Delhi, Jan. 6 -- The National Company Law Appellate Tribunal (NCLAT) at Delhi has reiterated that an insolvency court cannot add new conditions to a resolution plan approved by lenders. It set aside a direction that required 5 percent equity of the corporate debtor to be reserved for public shareholders.

Tribunal Finds Clause Had No Basis in Approved Plan

A bench of Judicial Member Justice N. Seshasayee and Technical Member Arun Baroka held that the clause had found its way into the order without any basis in the approved resolution plan. The tribunal observed that such an insertion materially alters the nature of the plan and cannot be sustained.

"This wrong or inadvertent insertion of a clause in the resolution plan changes the c...