COMMITTEE OF CREDITORS HAS THE AUTHORITY TO NEGOTIATE AND CALL FOR A HIGHER BID; NCLAT PERMITS ANOTHER ROUND OF BIDDING. The NCLAT noted that the purpose of inserting Regulation 39(1A) was to reduce the delay caused by the submission of the final Resolution Plan and to limit the number of revisions that can be made to the Resolution Plan. As a result of the insertion, the Resolution Professional may either permit the Resolution Applicant to modify its Plan, but not more than once, or use a 'Challenge Mechanism' to permit the Resolution Applicant to improve the plan. NCLAT opined that following the conclusion of the Challenge Mechanism under Regulation 39(1A) (b), the CoC retains the authority to negotiate with one or more Resolution Applicants, or to nullify the Resolution Process and reissue RFRP. Regulation 39(1A) cannot be interpreted as limiting the CoC's ability to consider, deliberate, and engage in additional talks with Resolution Applicants whose resolutions are received after the conclusion of the Challenge Mechanism With a team of Commercial Law experts, Reddy & Reddy Law Firm has extensive experience and involvement in commercial disputes, including Insolvency Proceedings. We are regularly involved in representations before NCLT, NCLAT, DRT and other commercial tribunals in India.