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2021 (9) TMI 983 - AT - Insolvency and BankruptcyWithdrawal of resolution plan post approval of the same by the COC - jurisdiction of the Ld. Adjudicating Authority to approve or reject resolution plan - parameters/requirements prescribed under Section 30(2) of the Code fulfilled or not - can resolution applicant can unilaterally seek to withdraw an approved Resolution Plan - process note as mandated under Section 25(2)(h) of the Code - HELD THAT - It is quite clear that the SRA could not have been allowed to withdraw the Resolution Plan after it had been approved by the CoC. The Adjudicating Authority had no jurisdiction to rely on residuary powers of Section 60(5)(c) to entertain the application of SRA. The grounds raised by SRA of delay also are clearly untenable. In the matter of Ebix Singapore 2021 (9) TMI 672 - SUPREME COURT , Hon ble Supreme Court has referred to Section 12 of IBC which stipulates the timeline within which the CIRP is to be completed. Regulation 40A of the CIRP Regulations provides a detailed model timeline for CIRP which accounts for all the procedural eventualities that are permitted by the statute and the Regulations - As observed by the Hon ble Supreme Court, the Resolution Applicant is deemed to be aware of the IBC and its mechanisms. The Resolution Applicant, after obtaining the financial information of the Corporate Debtor through the informational utilities and perusing the IM, is assumed to have analysed the risks in the business of the Corporate Debtor and submitted a considered proposal. After the plan has been approved, the SRA could not be heard making the complaints regarding incomplete information (which here is even otherwise not established) to withdraw from the Resolution Plan. The grievance appears to be made just to raise a petit ground. The judgment in the matter of Ebix Singapore 2021 (9) TMI 672 - SUPREME COURT has been passed by the Hon ble Supreme Court on 13th September, 2021, after the arguments in these Appeals were over. The Hon ble Supreme Court has taken conspectus of the complete law on the subject and although the Learned Counsel for parties have made various submissions whether or not the power under Section 60 of IBC could have been exercised; whether or not the SRA had a good ground to withdraw; whether or not there was mis-information in Information Memorandum, we need not go into these details to burden this judgment with those details as the law is now clear on the issues as involved in the present Appeals. The matter is remitted back to the Adjudicating Authority. Adjudicating Authority is directed to consider the application filed by the Resolution Professional under Section 30/31 of IBC urgently and decide the same within one month - appeal disposed off.
Issues Involved:
1. Whether a resolution applicant can seek withdrawal of a resolution plan post approval by the Committee of Creditors (CoC). 2. Whether the jurisdiction of the Adjudicating Authority is limited to either approval or rejection of the resolution plan once it has been approved by the CoC. 3. Whether the Adjudicating Authority can go beyond the parameters/requirements prescribed under Section 30(2) of the Insolvency and Bankruptcy Code (IBC) when approving or rejecting a resolution plan. 4. Whether a resolution applicant can unilaterally seek to withdraw an approved resolution plan under Section 60(5) of the IBC. 5. Whether the process note under Section 25(2)(h) of the IBC and its terms and conditions become binding on the resolution applicant once they participate in a corporate insolvency resolution process. Detailed Analysis: Issue 1: Withdrawal of Resolution Plan Post CoC Approval The primary question was whether a resolution applicant can withdraw its resolution plan after it has been approved by the CoC. The Adjudicating Authority initially allowed the withdrawal, but this decision was challenged. The Tribunal referred to the Supreme Court judgment in "Ebix Singapore Private Limited vs. Committee of Creditors of Educomp Solutions Limited and Anr." which clarified that the IBC does not provide for the withdrawal of a resolution plan once it has been approved by the CoC. The Supreme Court emphasized that the IBC's framework does not allow for such withdrawals to maintain the process's predictability and timeliness. Issue 2: Jurisdiction of Adjudicating Authority The Tribunal analyzed whether the Adjudicating Authority's jurisdiction is limited to either approving or rejecting the resolution plan as per Section 31 of the IBC. The Supreme Court in the "Ebix Singapore" case clarified that the Adjudicating Authority's role is indeed limited to these actions, and it cannot entertain applications for withdrawal of the resolution plan once approved by the CoC. The Tribunal concluded that the Adjudicating Authority overstepped its jurisdiction by allowing the withdrawal. Issue 3: Parameters for Approval or Rejection The Tribunal examined whether the Adjudicating Authority could go beyond the parameters prescribed under Section 30(2) of the IBC when approving or rejecting a resolution plan. The Supreme Court's guidance in "Ebix Singapore" affirmed that the Adjudicating Authority must adhere strictly to the parameters set out in Section 30(2) and cannot introduce new considerations or allow for withdrawal outside these parameters. Issue 4: Unilateral Withdrawal under Section 60(5) The question of whether a resolution applicant can unilaterally withdraw an approved resolution plan under Section 60(5) of the IBC was also considered. The Tribunal referred to the "Ebix Singapore" judgment, which held that Section 60(5) does not provide a basis for such withdrawals. The Supreme Court underscored that the statutory framework does not contemplate an exit route for resolution applicants once the plan is approved by the CoC. Issue 5: Binding Nature of Process Note The Tribunal reviewed whether the process note under Section 25(2)(h) of the IBC becomes binding on the resolution applicant once they participate in the corporate insolvency resolution process. The Tribunal, guided by the Supreme Court's interpretation, concluded that the process note and its terms are indeed binding once the resolution applicant participates in the process, reinforcing the principle of predictability and finality in the IBC framework. Conclusion: The Tribunal allowed the appeals filed by the CoC and the Resolution Professional, setting aside the Adjudicating Authority's order that permitted the withdrawal of the resolution plan. The Tribunal dismissed the appeal filed by the Successful Resolution Applicant seeking to challenge certain observations in the Adjudicating Authority's order. The matter was remitted back to the Adjudicating Authority to urgently decide on the approval of the resolution plan within one month, and the Performance Bank Guarantee was directed to be kept alive until the Adjudicating Authority's decision. The Tribunal emphasized that the existing insolvency framework does not allow for the withdrawal of a CoC-approved resolution plan by a successful resolution applicant, maintaining the integrity and objectives of the IBC.
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