Ebix Singapore Private Limited Vs. Committee of Creditors of Educomp Solutions Limited
Civil Appeal No. 3224 of 2020
The Hon’ble Supreme Court in its landmark judgment dated 13.09.2021 in the matter of Ebix Singapore Private Limited Vs. Committee of Creditors of Educomp Solutions Limited, has held that a Resolution Plan submitted under the provisions of the Insolvency & Bankruptcy Code, 2016 (‘Code’), once approved by the Committee of Creditors, cannot be permitted to be withdrawn at the whims and fancies of the Successful Resolution Applicant.
The rationale of the Judgment lies in the interpretation of Section 31 of the Insolvency Code keeping in mind, the scheme of the Code, since expeditious resolution of debts is the underlying factor for the formulation of a Resolution Plan under the Code.
The implication of this judgment shall be that in case any Successful Resolution Applicant resiles from the Resolution Plan after the approval by the Committee of Creditors, then it shall face both civil consequences such as forfeiture of the Earnest Money Deposit etc. and also penal action as stipulated under the Code.
This Judgment, thus, ensures that Resolution Plans once approved have to be complied with by the Successful Resolution Applicant which shall be in the interests of all the stakeholders.