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TMI Blog2020 (10) TMI 68X X X X Extracts X X X X X X X X Extracts X X X X ..... ue of similar nature was sub-judice before the Hon ble Apex Court. The sanctity of resolution process has to be maintained and the Resolution Applicant whose Resolution Plan has been approved by Committee of Creditors cannot be permitted to withdraw its Resolution Plan. Provision for submission of a Performance Bank Guarantee by a Resolution Applicant while submitting its Resolution Plan, as required under the amended provisions of IBBI (Insolvency Resolution Process of Corporate Persons) Regulations, 2016 is a step in this direction but may not be deterrent enough to prevent a Successful Resolution Applicant from taking a U-turn - The approved Resolution Plan admittedly does not have a provision which could be treated as a contract of personal service rendering the same unenforceable or of a nature in respect of which specific performance cannot be an appropriate remedy. This feature of the plan also distinguishes it from the one which was the subject matter in the aforestated Appeal decided by this Appellate Tribunal. The Appellant has failed to demonstrate that the impugned order suffers from any legal infirmity - Appeal being devoid of merit is dismissed. - Company App ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tain any provisions to compel specific performance of a Resolution Plan by an unwilling Resolution Applicant and a plea for withdrawal of a plan will have to be accepted, if the plan is found to be unviable, unfit for implementation or is either lacking provisions for its successful implementation or is based on incorrect assumptions. It is further submitted that the Adjudicating Authority has to be satisfied about the feasibility and viability of the Resolution Plan and in the event of these relevant factors found lacking the Adjudicating Authority may reject the Resolution Plan approved by CoC or remit the case to CoC for reconsideration. It is lastly submitted that in the instant case the approved Resolution Plan has been rendered commercially unviable on account of delay in conclusion of CIRP and the Appellant could not be prevented from withdrawing the same. 3. Per contra it is argued on behalf of Respondent No.1 ( Resolution Professional ) that the Appeal is not maintainable in view of the same being squarely covered by the judgment of this Appellate Tribunal rendered in Committee of Creditors of Educomp Solutions Ltd. vs. Ebix Singapore Pte. Ltd. Anr. wherein it was h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Resolution Applicant was pending consideration before the Adjudicating Authority. The Adjudicating Authority was of the view that it had no jurisdiction to permit withdrawal of a Resolution Plan, which had been duly approved by the Committee of Creditors. It has also been influenced by the fact that an issue of similar nature was sub-judice before the Hon ble Apex Court. It is brought to our notice by learned Counsel for Respondent No.1 that the recent decision of this Appellate Tribunal in Committee of Creditors of Educomp Solutions Ltd. Vs. EBIX Singapore Pte Ltd. - Company Appeal (AT) (Insolvency) No.203 of 2020 squarely covers the present case where an Appeal filed against order of Adjudicating Authority permitting withdrawal of Resolution Plan by the Resolution Applicant, which had been approved by the Committee of Creditors on the ground of the Resolution Plan having been rendered commercially unviable on account of lapse of substantial time and inordinate delay in Corporate Insolvency Resolution Process was rejected by this Appellate Tribunal holding that the Adjudicating Authority cannot enter into the arena of the majority decision of the Committee of Creditors and once ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sent such compliant Resolution Plans to the Committee of Creditors for its approval. The Committee of Creditors may approve a Resolution Plan by a vote of not less than 66% of voting share of the Financial Creditors after considering its feasibility and viability, the manner of distribution proposed and other requirements as specified by IBBI. This process is to be concluded within 180 days and in the event of extension granted by the Adjudicating Authority for sufficient reasons, the CIRR period may extend to 270 days with maximum outer limit of 330 days including the period which may have been consumed by the judicial intervention during the CIRP process. It is manifestly clear that I B Code provides for insolvency resolution in a time bound manner, the object sought to be achieved, iner alia, being maximization of value of assets of corporate persons and balancing the interests of all stake holders. Primacy is given to the Committee of Creditors, who are empowered to take a business decision in regard to feasibility and viability of a Resolution Plan based on their commercial wisdom, which is not justiciable as by now well settled by a catena of rulings handed down by the Hon bl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quences for the Corporate Debtor which may be pushed into liquidation as the CIRP period may by then be over thereby setting at naught all possibilities of insolvency resolution and protection of a Corporate Debtor, moreso when it is a going concern. That apart, there is no express provision in the I B Code allowing a Successful Resolution Applicant to stage a U-turn and frustrate the entire exercise of Corporate Insolvency Resolution Process. The argument advanced on behalf of the Appellant that there is no provision in the I B Code compelling specific performance of Resolution Plan by the Successful Resolution Applicant has to be repelled on four major grounds: - (i) There is no provision in the I B Code entitling the Successful Resolution Applicant to seek withdrawal after its Resolution Plan stands approved by the Committee of Creditors with requisite majority; (ii) The successful Resolution Plan incorporates contractual terms binding the Resolution Applicant but it is not a contract of personal service which may be legally unenforceable; (iii) The Resolution Applicant in such case is estopped from wriggling out of the liabilities incurred under the approved Res ..... X X X X Extracts X X X X X X X X Extracts X X X X
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