Insolvency and Bankruptcy Code, 2016 – s. 62 – On facts and to justify withdrawal, it was submitted that in the instant case, the successful resolution applicants were prevented, and were handicapped because of lack of information or rather fraud on the part of the resolution professional – Propriety:
Held: The Supreme Court in Ebix Singapore Private Limited, has inter alia held that the resolution applicant cannot withdraw or modify the resolution plan, after the same is approved by the Committee of Creditors – It is immaterial that post approval by the Committee of Creditors, there is consideration under Section 31(1) of the Code by the adjudicating authority for final approval – The judgment in Ebix Singapore Private Limited elaborates and sets out several reasons why the resolution applicant cannot be permitted to withdraw or modify the resolution plan after approval by the Committee of Creditors, and before an order under Section 31(1) of the Code is passed – These reasons include delay, consequences of the delay and the uncertainty and complexities that would arise in the Corporate Insolvency Resolution Process, which are unacceptable and not contemplated in law – Even the terms of the resolution plan, will not permit withdrawal or modification in the absence of a statutory provision, that allow withdrawal or amendment in the resolution plan after approval by the Committee of Creditors – The reasons or grounds taken by the successful resolution applicants in the instant case do not qualify and cannot be treated as a fraud on the part of the resolution professional – This is not a case where misinformation or wrong information was given to the resolution applicants – The impugned judgment dated 07.02.2020 passed by the NCLAT, upholding the order passed by the NCLT, dated 27.09.2019 is set aside – The resolution plan, as submitted by the successful resolution applicants is approved. [Paras 4, 5, 8, 17]
Insolvency and Bankruptcy Code, 2016 – Resolution Plan – Preparation of:
Held: Resolution plans are not prepared and submitted by lay persons – They are submitted after the financial statements and data are examined by domain and financial experts, who scan, appraise evaluate the material as available for its usefulness, with caution and scepticism – Inadequacies and paltriness of data are accounted and chronicled for valuations and the risk involved – It is rather strange to argue that the superspecialists and financial experts were gullible and misunderstood the details, figures or data – The assumption is that the resolution applicant would submit the revival/resolution plan specifying the monetary amount and other obligations, after in-depth analysis of the fiscal and commercial viability of the corporate debtor – Pointing out the ambiguities or lack of specific details or data, post acceptance of the resolution plan by the Committee of Creditors, should be rejected, except in an egregious case were data and facts are fudged or concealed – Absence or ambiguity of details and particulars should put the parties to caution, and it is for them to ascertain details, and exercise discretion to submit or not submit resolution plan. [Para 15]
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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