Ebix Singapore Pvt. Ltd. Vs. Committee of Creditors of Educomp Solutions Ltd. (2021) SCC OnLine SC 707
This Judgment of the Hon’ble Supreme Court of India is of great significance since it has in detail given the sanctity of a Resolution Plan as also deals with the aspect as to whether the successful Resolution Applicant is entitled to wriggle out of a Resolution Plan. It may be mentioned that the Hon’ble Supreme Court has considered the various aspects including the UNCITRAL Guide as also the report of the BLRC submitted in the year 2015 whereinafter the Insolvency & Bankruptcy Code was introduced to consolidate the processes under several disparage such as Companies Act,2013, SICA, SARFAESI, Recovery of Debts Act, Presidency Towns Insolvency Act, 1909 and the Provincial Insolvency Act, 1920 into a single Code. Hon’ble Supreme Court had considered the aspect that the commercial purpose of a revamped insolvency regime as enshrined in the BLRC Report was to ensure the expeditious working of the Bankruptcy Code. The Hon’ble Supreme Court accordingly while giving the sanctity to the provisions of a Resolution Plan, which has to be drawn within the timeframe and has to be approved in timelines as per the essence of the Insolvency & Bankruptcy Code, 2016 (IBC)has held that a Plan once approved cannot be rethought or wriggled out by the successful Resolution Applicant. Hon’ble Court had further held that IBC being an economic legislation, the Court should further proceed with caution in introducing any element in the Insolvency process that may lead to unpredictability, delay and complexity not contemplated by the legislature. The Judgment of the Hon’ble Supreme Court is accordingly having a large-scale effect since it had laid to rest the aspect of any attempt to wriggle out of a Plan, which is approved by the Committee of Creditors in exercise of their commercial wisdom and has to be approved by the NCLT in terms of Section 31 of the Insolvency & Bankruptcy Code, 2016.
The Hon’ble Supreme Court had further noted that the Resolution Applicant was aware about the aspect of financial irregularities qua the concerned Company viz. the Corporate Debtor, it cannot subsequently take a plea of the financial irregularities qua that particular Company and seek an attempt to wriggle out of the Resolution Plan.
The Judgment of the Hon’ble Supreme Court is thus of great importance to ensure the timely resolution of the debts of a financially unviable entity which is undergoing a Corporate Insolvency Resolution Process under the provisions of the Insolvency & Bankruptcy Code.