Under Section 31 of the IBC, 2016, a resolution plan approved by the Committee of Creditors and sanctioned by the Adjudicating Authority is BINDING on:

Section 31(1) of the IBC provides that upon approval of the resolution plan sanctioned by the Adjudicating Authority, the plan is BINDING on the corporate debtor and its EMPLOYEES, MEMBERS, CREDITORS - including the GUARANTORS of the corporate debtor's debts - and on other stakeholders involved in the resolution. Binding guarantors is a notable feature, ensuring that the discharge under the plan does not prejudice the creditor's claims against guarantors in the manner specified. The binding nature gives the plan finality and enforceability against the entire stakeholder class. This is why plan approval is the pivot of the CIRP.