Holding

A resolution plan approved by the Committee of Creditors and submitted to the Adjudicating Authority is binding and irrevocable as between the CoC and the successful resolution applicant, and the IBC does not permit withdrawal or modification at the behest of the resolution applicant after such submission.

Summary

The Supreme Court considered three appeals where successful resolution applicants sought to withdraw or modify their resolution plans after approval by the Committee of Creditors (CoC) but before approval by the Adjudicating Authority under the Insolvency and Bankruptcy Code (IBC), 2016. The Court held that the IBC does not permit such withdrawals or modifications at the behest of the resolution applicant once the plan has been submitted to the Adjudicating Authority. The Court analyzed the nature of a resolution plan, concluding it is not a pure contract but a statutory product governed by the IBC, and that it is binding and irrevocable between the CoC and the successful resolution applicant. The Court emphasized the importance of timelines and finality in the insolvency process, noting that allowing withdrawals would undermine the objectives of the IBC. The Court dismissed the appeals of Ebix and Seroco, but allowed a one-time relief for Kundan Care under Article 142 of the Constitution due to mutual agreement between the parties.

Issues considered

Whether a successful resolution applicant can withdraw or modify a resolution plan after CoC approval and submission to the Adjudicating Authority.
Whether the NCLT has jurisdiction under Section 60(5) of the IBC to permit such withdrawal/modification.
Whether a resolution plan is a contract or a statutory instrument.
Whether the principle of res judicata barred Ebix's third withdrawal application.
Whether the resolution professional failed in its duty to provide information under Section 29 of the IBC.

Legislation cited

Companies Act, 2013s. 213
Electricity (Supply) Act, 1948s. 43-A
Indian Contract Act, 1872s. 2, s. 32, s. 35, s. 7
Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016s. 30A, s. 36A, s. 36B, s. 36B(4A), s. 37, s. 38, s. 39, s. 39(4), s. 39(5), s. 40A, s. 40B, s. 40C
Insolvency and Bankruptcy Code, 2016s. 10, s. 12, s. 12A, s. 23, s. 25, s. 29, s. 29A, s. 30, s. 31, s. 32A, s. 33, s. 5(26), s. 53, s. 60(5), s. 61, s. 7, s. 74, s. 74(3), s. 9
National Company Law Tribunal Rules, 2016s. 11
Sick Industrial Companies Act, 1985s. 18(3)(b)

Subjects

Insolvency and Bankruptcy CodeResolution PlanWithdrawal of Resolution PlanCommittee of CreditorsCorporate Insolvency Resolution ProcessRes JudicataStatutory ContractAdjudicating AuthorityTimelinesLiquidationArticle 142One-time relief

Judgment

[2021] 14 S.C.R.321 321

EBIX SINGAPORE PRIVATE LIMITED A
v.
COMMITTEE OF CREDITORS OF EDUCOMP SOLUTIONS
LIMITED & ANR.
(Civil Appeal No. 3224 of 2020) B
SEPTEMBER 13, 2021
[DR DHANANJAYA Y. CHANDRACHUD AND
M. R. SHAH, JJ.]
Insolvency and Bankruptcy Code, 2016 – ss.5(26), 7, 9, 10,
C
12, 23, 25, 30, 31, 60(5), 61 & 74(3) – National Company Law
Tribunal Rules, 2016 – r.11 – Insolvency and Bankruptcy Board of
India (Insolvency Resolution Process For Corporate Persons)
regulations, 2016 – regn. 36A, 36B and 39 – Whether withdrawals
or modifications by successful Resolution Applicants are permissible
under IBC – Held: The framework, as it stands, only enables D
withdrawals from the CIRP process by following the procedure
detailed in Section 12A of the IBC and Regulation 30A of the CIRP
Regulations and in the situations recognized in those provisions –
Enabling withdrawals or modifications of the Resolution Plan at
the behest of the successful Resolution Applicant, once it has been
E
submitted to the Adjudicating Authority after due compliance with
the procedural requirements and timelines, would create another
tier of negotiations which will be wholly unregulated by the statute
– Since the 330 days outer limit of the CIRP u/s. 12(3) of the IBC,
including judicial proceedings, can be extended only in exceptional
circumstances, this open-ended process for further negotiations or F
a withdrawal, would have a deleterious impact on the Corporate
Debtor, its creditors, and the economy at large as the liquidation
value depletes with the passage of time – A failed negotiation for
modification after submission, or a withdrawal after approval by
the CoC and submission to the Adjudicating Authority, irrespective
G
of the content of the terms envisaged by the Resolution Plan, when
unregulated by statutory timelines could occur after a lapse of time,
as is the case in the present appeals – Permitting such a course of
action would either result in a down-graded resolution amount of
the Corporate Debtor and/or a delayed liquidation with depreciated
assets which frustrates the core aim of the IBC – If the legislature in H
321
322 SUPREME COURT REPORTS [2021] 14 S.C.R.

A its wisdom, were to recognize the concept of withdrawals or
modifications to a Resolution Plan after it has been submitted to the
Adjudicating Authority, it must specifically provide for a tether under
the IBC and/or the Regulations – These are matters for legislative
policy – In the present framework, even if an impermissible
understanding of equity is imported through the route of residual
B
powers or the terms of the Resolution Plan are interpreted in a
manner that enables the appellants’ desired course of action, it is
wholly unclear on whether a withdrawal of a CoC-approved
Resolution Plan at a later stage of the process would result in the
Adjudicating Authority directing mandatory liquidation of the
C Corporate Debtor – Pertinently, this direction has been otherwise
provided in Section 33(1)(b) of the IBC when an Adjudicating
Authority rejects a Resolution Plan under Section 31 – In this
context, the existing insolvency framework in India provides no
scope for effecting further modifications or withdrawals of CoC-
approved Resolution Plans, at the behest of the successful Resolution
D
Applicant, once the plan has been submitted to the Adjudicating
Authority – A Resolution Applicant, after obtaining the financial
information of the Corporate Debtor through the informational
utilities and perusing the IM, is assumed to have analyzed the risks
in the business of the Corporate Debtor and submitted a considered
E proposal – A submitted Resolution Plan is binding and irrevocable
as between the CoC and the successful Resolution Applicant in terms
of the provisions of the IBC and the CIRP Regulations.
Insolvency and Bankruptcy Code, 2016 – Res judicata –
Applicability of – Held: The prayer for withdrawal of the Resolution
F Plan in the First Withdrawal Application was not substantial and
one that the Court was bound to grant, since it was contingent upon
a re-evaluation, which in itself was contingent upon receiving the
information sought in prayers (i) and (ii) – Since the latter two
contingencies never arose, the NCLT did not apply its mind to the
prayer for withdrawal independently – When it filed the Second
G Withdrawal Application, it was dismissed on a technical ground and
not on its merits – When a revised Third Withdrawal Application
was filed, the NCLT then adjudicated it on its merits and allowed it
– Hence, since the NCLT did not adjudicate Resolution applicant
‘E’ prayer for withdrawal of their Resolution Plan on its merits while
H dismissing the First Withdrawal Application, the opportunity to seek
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the relief was not available to resolution applicant ‘E’ in a real A
sense – Therefore, the finding of the NCLAT on this issue is reversed
and hold that resolution applicant ‘E’ Third Withdrawal Application
was not barred by res judicata.
Disposing of the appeals, the Court
HELD: 1. A reading together of the UNCITRAL Guide and B
the BLRC Report clarifies, in no uncertain terms, that the
procedure designed for the insolvency process is critical for
allocating economic coordination between the parties who partake
in, or are bound by the process. This procedure produces
substantive rights and obligations. For instance, the composition C
of the CoC, the method and percentage of its voting, the timelines
for CIRP, the obligation on the RP to file specific forms after
every stage of the process and the obligation to explain to the
Adjudicating Authority reasons for any deviations from the
timeline while submitting a Resolution Plan, and other such
procedural requirements create a mechanism which tightly D
structures the conduct of all participants in the insolvency
process. This process invariably has an impact on the conduct of
the Resolution Applicant who participates in the process and
consents to be bound by the RFRP and the broader insolvency
framework. An analysis of the framework of the statute and E
regulations provides an insight into the dynamic and
comprehensive nature of the statute. Upholding the procedural
design and sanctity of the process is critical to its functioning.
The interpretative task of the Adjudicating Authority, Appellate
Authority, and even this Court, must be cognizant of, and allied
with that objective. The UNCITRAL Guide has echoed this F
position by noting the interplay between the procedural design
of the insolvency law.
Any claim seeking an exercise of the Adjudicating
Authority’s residuary powers under Section 60(5)(c) of the IBC,
the NCLT’s inherent powers under Rule 11 of the NCLT Rules G
2016 or even the powers of this Court under Article 142 of the
Constitution must be closely scrutinized for broader compliance
with the insolvency framework and its underlying objective. The
adjudicating mechanisms which have been specifically created
by the statute, have a narrowly defined role in the process and H
324 SUPREME COURT REPORTS [2021] 14 S.C.R.

A must be circumspect in granting reliefs that may run counter to
the timeliness and predictability that is central to the IBC. Any
judicial creation of a procedural or substantive remedy that is
not envisaged by the statute would not only violate the principle
of separation of powers, but also run the risk of altering the
delicate coordination that is designed by the IBC framework and
B
have grave implications on the outcome of the CIRP, the economy
of the country and the lives of the workers and other allied parties
who are statutorily bound by the impact of a resolution or
liquidation of a Corporate Debtor. [Paras 97-98][422-D-H; 423-
C-E]
C 2. The IBC provides a roadmap for the entire CIRP in
Chapter II of Part II. This process is tightly regulated to include,
inter alia, timelines of the CIRP specified by Section 12, duties of
the RP to provide adequate information to propose a Resolution
Plan in Section 29 and restrictions on who can be a Resolution
D Applicant in Section 29A.
Once a Resolution Applicant submits a Resolution Plan
under sub-Section (1) of Section 30, the RP must assess whether
it conforms with all the requirements of sub-Section (2). Having
satisfied itself, the RP under sub-Section (3) must then present
E those Resolution Plans to the CoC which fulfill the criteria under
sub- Section (2). The CoC will then proceed to decide on the
approval of the Resolution Plan, with a majority vote of sixty-six
percent, after satisfying itself that the requirements under sub-
Section (4) have been met, including testing the Resolution Plan
for its feasibility and viability. A Resolution Applicant may attend
F this meeting of the CoC under sub-Section (5), but it does not
have a right to vote unless it is also a financial creditor. The
Resolution Plan approved by the CoC under sub-Section (4) is
then placed by the RP before the Adjudicating Authority for its
approval under sub-Section (6).
G Other than the IBC, the process is also regulated by the
CIRP Regulations created under the IBC. Regulation 37 provides
an illustration of the solutions which can be proposed in a
Resolution Plan. Regulation 38 provides for the mandatory
contents of a Resolution Plan, which are similar to the pre-
H conditions mentioned in Section 30(2) of the IBC. Regulation 39
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provides for the process of approval of a Resolution Plan by the A
CoC, and under sub-Regulation (3), the CoC has to evaluate every
Resolution Plan based on an “evaluation matrix” it has come up
with under Regulation 5(ha).
Having briefly taken an overview of the process, we now
understand that there are broadly three stages: (i) the first stage B
is prior to and ends with the approval of the Resolution Plan by
the CoC; (ii) the second stage is the interim period between the
Resolution Plan’s approval by the CoC and before its confirmation
by the Adjudicating Authority; and (iii) the third stage is after the
approval of the Resolution Plan by the Adjudicating Authority. In
the first stage, the relationship between the parties is explicitly C
governed by the provisions of the IBC – such as the right of a
prospective Resolution Applicant to seek the IM and RFRP upon
submission of its EOI, which may have been rejected by the RP
(as it happened in the K’s Appeal). In the third stage, the same
holds true since Section 31(1) makes the Resolution Plan binding D
upon all the stakeholders and its violation will attract a penalty
under Section 74 of the IBC. However, what we are assessing
right now is the interim second stage between both of those. To
understand the relationship of the parties therein, it becomes
important to understand the exact “nature” of the Resolution
Plan after it has been submitted to the Adjudicating Authority E
and before it has been approved under Section 31(1). [Paras 101-
103][424-D; 427-C-H; 428-A-C]
3. The determination of the nature of the Resolution Plan
would help us establish the source of the legal force of the
Resolution Plan – whether it is the statute, i.e., the IBC or the F
law of contract. The insolvency process, as governed by the IBC,
does not merely structure the conduct of all the participants in
the process after finalization and approval of a Resolution Plan
by a CoC, but also the conduct stemming from the very first steps
of inviting prospective Resolution Applicants. The RP, with the G
approval of the CoC62, invites prospective Resolution Applicants
through an RFRP. Once an unconditional EOI has been received
from prospective Resolution Applicants who are otherwise
eligible under Section 29A, the RP prepares an IM as per the
provisions of Section 29 which furnishes all relevant information
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326 SUPREME COURT REPORTS [2021] 14 S.C.R.

A of the Corporate Debtor to enable prospective Resolution
Applicants to make an informed decision, before proposing a
Resolution Plan. As a consequence of the IBC and its regulations,
prospective Resolution Applicants, who are not disqualified under
Section 29A, propose drafts of their Resolution Plans. The RP
examines the Resolution Plan against the contours of Section
B
30(2) and submits only the eligible plans to the CoC63. Prior to
the IBBI (CIRP) (Fourth Amendment) Regulations 2020, which
now requires the CoC to vote on all Plans simultaneously after
recording its deliberations on the feasibility and viability of each
Plan, Regulation 39(3) earlier enabled the CoC to approve a
C Resolution Plan with “such modifications as it deems fit”. This
meant that the prospective Resolution Applicants and the CoC
would indulge in several rounds of negotiations, within a strict
time-frame, to arrive at a mutually agreeable Resolution Plan
which was then subject to voting by the CoC. Subsequent to the
voting, the RP would submit the plan to the Adjudicating Authority
D
along with receipt of the PBG and a compliance certificate in the
form of Form H. Each of the stages detailed above correspond to
several rights and obligations on all parties that are specifically
created by the statute. [Para 105][428-H; 429-A-E]
4. If this court were to hold that CoC-approved Resolution
E Plans are indeed contracts, their provisions would still have to
conform to the statutory provisions of the IBC. However, such
an interpretation would entail that CoC-approved Resolution
Plans are at the intersection of the IBC and the Contract Act.
This would mean that certain principles of contract law, for
F example those relating to discharge, penalties, remedies and
damages would become applicable to CoC- approved Resolution
Plans. For instance, in the United States, plans confirmed by courts
have been characterized as contracts, whose breach can even
give rise to contractual remedies. In In re Hoffinger Indus, Inc65,
a bankruptcy court in Arkansas has held that “a confirmed plan
G should be enforceable and amenable to damages between
contractually bound parties.” Indeed, it has been argued before
us that Resolution Plans should be enforced through the
contractual remedy of specific performance. Further, a
determination that Resolution Plans are contracts in the period
H
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between approval by the CoC and the approval of the Adjudicating A
Authority would require us to analyse whether all elements of
contract formation have been satisfied, including the question of
whether the acceptance of the Resolution Plan by the CoC fulfils
the criteria laid down under Section 7 of the Contract Act or
whether the conditionality of seeking approval from the
B
Adjudicating Authority makes the Resolution Plan a contingent
contract. Our intent of laying down the consequences of our
determination of Resolution Plans as contracts is to highlight the
importance of ascertaining the nature of a CoC-approved
Resolution Plan, prior to its approval by the Adjudicating
Authority. C
The text of the IBC does not specify whether Resolution
Plans at the second stage of the process, i.e., in the intervening
period of submission to and approval by the Adjudicating
Authority, are pure contracts. As noted previously, by
specifications such as eligibility for resolution applicants, the D
contents of the IM and duties of the RP to prospective Resolution
Applicants and statutory procedures on timelines and voting,
strictly govern the insolvency process even prior to the
submission of the Plan to the Adjudicating Authority. The CoC,
who the appellants allege is in the nature of a free contracting
party, is governed by the binding principles of the statute with E
regard to the contents and nature of the statutory plan that it
approves under Section 30(4) and even its own composition.
Section 30(4) provides that the consent of all the members
of the CoC, though a unanimous vote is not required and a sixty-
six per cent vote is sufficient for approval of a resolution plan. F
The constitution of the CoC is based on specific scenarios
envisaged in the statute and accounts for varying compositions,
based on factors such as the nature and quantum of debt owed.
For example, if it comprises of operational creditors alone, the
percentage of debt owed between the operational and financial G
creditors and other such variables impact voting thresholds inter
se members of the CoC. A sixty-six per cent vote of the CoC is
required to approve a Resolution Plan. The dissenting creditors
are deemed to have given their approval and are bound by the
decision of the majority of the CoC. The dissenting creditors are
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328 SUPREME COURT REPORTS [2021] 14 S.C.R.

A bound as a result of the statutory provision and not because they
have actually consented to be parties to such an arrangement.
Other elements governing the Resolution Plan indicate that the
entire process from initiation and leading up to its acceptance by
the CoC takes place within the framework of the IBC. In addition,
the IBC provides penalties for non-compliance with the
B
Resolution Plan after its approval under Section 31 and forfeiture
of the PBG for failing to implement the Resolution Plan or
contributing to the failure of its implementation. The violation of
the terms of the Resolution Plan does not give rise to a claim of
damages, rather it leads to prosecution and imposition of
C punishment under Section 74 of the IBC. On the contrary, a CoC’s
withdrawal of the CIRP under Section 12A is coupled with a
requirement of payment of CIRP costs, but no damages are
statutorily payable to the Resolution Applicant, irrespective of
the stage of the withdrawal.
D The CoC even with the requisite majority, while approving
the Resolution Plan must consider the feasibility and viability of
the Plan and the manner of distribution proposed, which may take
into account the order of priority amongst creditors as laid down
in sub-section (1) of section 53 of the IBC. The CoC cannot
approve a Resolution Plan proposed by an applicant barred under
E Section 29A of the IBC. Regulation 37 and 38 of the CIRP
Regulations govern the contents of a Resolution Plan.
Furthermore, a Resolution Plan, if in compliance with the mandate
of the IBC, cannot be rejected by the Adjudicating Authority and
becomes binding on its approval upon all stakeholders – including
F the Central and State Government, local authorities to whom
statutory dues are owed, operational creditors who were not a
part of the CoC and the workforce of the Corporate Debtor who
would now be governed by a new management. Such features of
a Resolution Plan, where a statute extensively governs the form,
mode, manner and effect of approval distinguishes it from a
G traditional contract, specifically in its ability to bind those who
have not consented to it. In the pure contractual realm, an
agreement binds parties who are privy to the contract. In the
context of a resolution Plan governed by the IBC, the element of
privity becomes inapplicable once the Adjudicating Authority
H confirms the Resolution Plan under Section 31(1) and declares it
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to be binding on all stakeholders, who are not a part of the A
negotiation stage or parties to the Resolution Plan. In fact, a
commentator has noted that the purpose of bankruptcy law is to
actually solve a specific ‘contracting failure’ that accompanies
financial distress. Such a contracting failure arises because
“financial distress involves too many parties with strategic
B
bargaining incentives and too many contingencies for the firm
and its creditors to define a set of rules of every scenario.” Thus,
insolvency law recognizes that parties can take benefit of such
‘incomplete contract’ to hold each other up for their individual
gain. In an attempt to solve the issue of incompleteness and the
hold-up threat, the insolvency law provides procedural protections C
i.e., “the law puts in place guardrails that give the parties room
to bargain while keeping them from taking position that veer
toward extreme hold up. [Paras 107-110][430-C-G; 431-A-H; 432-
A-G]
5. While the above observations were made in the context D
of a scheme that has been sanctioned by the Court, the Resolution
Plan even prior to the approval of the Adjudicating Authority is
binding inter se the CoC and the successful Resolution Applicant.
The Resolution Plan cannot be construed purely as a ‘contract’
governed by the Contract Act, in the period intervening its
acceptance by the CoC and the approval of the Adjudicating E
Authority. Even at that stage, its binding effects are produced by
the IBC framework. The BLRC Report mentions that “[w]hen
75% of the creditors agree on a revival plan, this plan would be
binding on all the remaining creditors”. The BLRC Report also
mentions that, “the RP submits a binding agreement to the F
Adjudicator before the default maximum date”. We have further
discussed the statutory scheme of the IBC in Sections I and J of
this judgement to establish that a Resolution Plan is binding inter
se the CoC and the successful Resolution Applicant. Thus, the
ability of the Resolution Plan to bind those who have not consented
to it, by way a statutory procedure, indicates that it is not a typical G
contract.
The BLRC Report, which furnished the first draft of the
IBC and elaborated on the aims behind the overhaul of the
insolvency regime, refers to a CoC- approved Resolution Plan
H
330 SUPREME COURT REPORTS [2021] 14 S.C.R.

A as a ‘binding contract’ in one instance and refers to it as a ‘binding
agreement’ in other instances. The report also refers to a CoC-
approved Resolution Plan as a ‘financial arrangement’, ‘revival
plan’ or a ‘solution’. The interchangeability of the terms –
‘agreement’, ‘contract’, ‘financial arrangement’, ‘revival plan’ and
‘solution’ indicates that there is no clear intention of the BLRC
B
in characterizing the nature of the Resolution Plan as a contract.
The binding effect of the Resolution Plan has the consequence of
preventing the CoC or the Resolution Applicant to renege from
its terms after the plan has been approved by the CoC through a
voting mechanism. The fleeting mention of a ‘binding contract’
C on one occasion in the BLRC Report (which was a pre- legislative
text that underwent subsequent modifications by the Legislature)
to indicate the binding nature of the Resolution Plan and the finality
of negotiations once it is approved by the CoC, does not establish
the legal nature of the document, especially when it is not
complemented by the text and design of the IBC.
D
Certain stages of the CIRP resemble the stages involved
in the formation of a contract. Echoes of the process involved in
the formation of a contract resonate in the steps antecedent to
the approval of a Resolution Plan such as: (i) the issuance of an
RFRP may be equated to an invitation to offer; (ii) a Resolution
E Plan can be considered as a proposal or offer; and (iii) the approval
by the CoC may be similar to an acceptance of offer. The terms of
the Resolution Plan contain a commercial bargain between the
CoC and Resolution Applicant. There is also an intention to create
legal relations with binding effect. However, it is the structure of
F the IBC which confers legal force on the CoC-approved
Resolution Plan. The validity of the Resolution Plan is not
premised upon the agreement or consent of those bound (although
as a procedural step the IBC requires sixty-six percent votes of
creditors), but upon its compliance with the procedure stipulated
under the IBC. [Paras 112-114][433-D-G; 434-A-F]
G
6. The above observations were in the context of a PPA
entered into under the provisions of Electricity Supply Act 1948.
Section 43-A(1) of the Act stipulated that the generating company
may enter into a contract with the Electricity Board. Thus, the

H
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judgement pre-supposes the existence of a subsisting contract. A
The controversy in the case was whether the PPA could be
characterized as a statutory contract. To say that a Resolution
Plan is a statutory contract, we must first consider whether the
IBC envisages the CoC-approved Resolution Plan as a contract.
There is no provision under the IBC referring to a Resolution
B
Plan as a contract, unlike Section 43-A(1) of the Electricity Supply
Act 1948 which mentions that a contract may be entered into
between the concerned parties. The legal force of a Resolution
Plan arises due to the framework provided under the IBC. The
mechanisms of the IBC provide sufficient guidance on the conduct
of all participants in the process and the binding effect of the C
CoC- approved Resolution Plan is evidenced by the execution of
a PBG furnished by the successful Resolution Applicant, in
compliance with the CIRP Regulations. This PBG is returnable
once the Adjudicating Authority approves the Resolution Plan
under Section 31 and makes it binding on all stakeholders.
D
Therefore, the IBC and its regulations institute sufficient
safeguards to ensure the binding effect of a CoC-approved
Resolution Plan. In our discussion in Sections I and J below, we
further elaborate on the nature of a CoC-approved Resolution
Plan and the code of conduct that is permissible by the statutory
framework. [Para 116][435-G-H; 436-A-D] E
7. The lack of an apparent international consensus on the
issue of whether instruments like CoC-approved Resolution Plans
are contracts, prior to the Court’s sanction, is also attributable
to the peculiarity of the insolvency regime in each jurisdiction.
This Court will have to be wary of transplanting international F
doctrines that are evolved as responses to the specific features
of a jurisdiction’s insolvency regime, without identifying an
analogous framework in our insolvency regime.
The absence of any specific provision in the IBC or the
regulations referring to a CoC-approved Resolution Plan as a G
contract and the lack of clarity in the BLRC report regarding the
nature of such a Resolution Plan, constrains us from arriving at
the conclusion that CoC-approved Resolution Plans will be
governed by the Contract Act and common law principles
governing contracts, save and except for the specific prohibitions
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332 SUPREME COURT REPORTS [2021] 14 S.C.R.

A and deeming fictions under the IBC. Regulation 39(3) of CIRP
regulations, as it stood before the IBBI (CIRP) (Fourth
Amendment) Regulations 2020 and applicable to the three
appellants before us, enabled a framework where a draft
Resolution Plan would involve several rounds of negotiations and
revisions between the Resolution Applicant and the CoC, before
B
it is approved by the latter and submitted to the Adjudicating
Authority. However, this statutorily-enabled room for commercial
negotiation is not enough to over-power the other elements of
regulation that detract from the view that CoC-approved
Resolution Plans are contracts. CoC-approved Resolution Plans,
C before the approval of the Adjudicating Authority under Section
31, are a function and product of the IBC’s mechanisms. Their
validity, nature, legal force and content is regulated by the
procedure laid down under the IBC, and not the Contract Act.
The voting by the CoC also occurs only after the RP has verified
the contents of the Resolution Plan and confirmed that it meets
D
the conditions of the IBC and the regulations therein. The
amended Regulation 39(3) further regulates the conduct of the
CoC on voting on Resolution Plans and has introduced the
requirement of simultaneous voting. The IBBI’s Discussion
Paper issued on 27 August 2021 has invited comments on
E regulating the process on revisions that can be made to resolution
plans submitted to the CoC. These developments bolster the
conclusion that the mechanism prior to submission of a CoC-
approved resolution plan is subject to continuous procedural
scrutiny by the IBC and cannot be considered as a simple
contractual negotiation between two parties. Section J below
F
details how a common law remedies of withdrawal or modification
on account of frustration or force majeure are not applicable to
CoC- approved Resolution Plans owing to the nature of the IBC.
Similarly, the whole host of remedies such as liquidated and
unliquidated damages, restitution, novation and frustration, unless
G specifically provided by the IBC, are not available to a successful
Resolution Applicant whose Plan has been approved by the CoC
and is awaiting the approval of the Adjudicating Authority. The
Insolvency Law Committee Report of February 2020 has
recommended the CIRP process to mandate Resolution Plans to
provide for the apportionment of the profit or loss accrued by the
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Corporate Debtor during the CIRP. These reports are periodically A
commissioned by the parliament to review the functioning of the
Code and suggest amendments. However, if the intention was to
view a CoC- approved Resolution Plan as a contract, the principles
of unjust enrichment would have been sufficient to address the
issue and an amendment may not be considered necessary. A
B
Resolution Applicant, as a third party partaking in the insolvency
regime, seeks to acquire the business of the Corporate Debtor
without the entirety of its debts, statutory liabilities and avoiding
certain transactions with third parties. These benefits are a
function of the coercive mechanisms of the IBC which enable a
third party to acquire the assets of a Corporate Debtor without C
its liabilities, for a negotiated amount of the debt that is owed by
the Corporate Debtor. Typically, resolution amounts envisage
payment of a fraction of debt that is owed to the creditors and the
business is acquired as a going concern with its employees. The
Resolution Plan is drafted in a way that it is implementable in the
D
future and brings about a quietus to the CIRP. Enabling Resolution
Applicants to seek remedies that are not specified by the IBC,
by seeking recourse to the Contract Act would be antithetical to
the IBC’s insolvency regime. The elements of contractual
interpretation can be relied upon to construe the language of the
terms of the Resolution Plan, in the event of a dispute, but not to E
re-fashion and distort the mechanism of the IBC altogether. This
Court in Laxmi Pat Surana v. Union Bank of India has held that
the IBC is a self-contained Code. Thus, importing principles of
any other law or a statute like the Contract Act into the IBC
regime would introduce unnecessary complexity into the working
F
of the IBC and may lead to protracted litigation on considerations
that are alien to the IBC. To give an example, the CoC can forfeit
the PBG furnished by the successful Resolution Applicant under
certain circumstances in terms of the RFRP and Resolution Plan
including, inter alia, on the ground that the Resolution Applicant
has failed to implement the resolution or has contributed to its G
failure. Regulation 36B (4A) of CIRP regulations provides for
the furnishing of such performance security once the plan is
approved by creditors. The Regulations do not provide that the
performance security has to be a reasonable estimate of loss as
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334 SUPREME COURT REPORTS [2021] 14 S.C.R.

A is expected of penalty clauses under contract law, rather the
explanation provides that the performance security should be of
“such nature, value, duration and source, as may be specified in
the request for resolution plans with the approval of the
committee, having regard to the nature of resolution plan and
business of the corporate debtor”. Further, in the event that the
B
CoC enters into a settlement with the Corporate Debtor and
withdraws from the CIRP under Section 12A, Regulation 30A
provides for only payment of insolvency costs and not
compensation or damages to Resolution Applicant for investing
time and money in the process. The parties may resort to invoking
C principles of frustration or force majeure to evade implementation
of the Resolution Plan leading to unnecessary litigation. This
Court in Amtek Auto (supra), had curbed a similar attempt by a
successful Resolution Applicant who had relied on a force majeure
clause in its Resolution Plan to seek a direction compelling the
CoC to negotiate a modification to its Resolution Plan. The Court
D
held that there was no scope for negotiations between the parties
once the Resolution Plan has been approved by the CoC. Thus,
contractual principles and common law remedies, which do not
find a tether in the wording or the intent of the IBC, cannot be
imported in the intervening period between the acceptance of
E the CoC and the approval by the Adjudicating Authority. Principles
of contractual construction and interpretation may serve as
interpretive aids, in the event of ambiguity over the terms of a
Resolution Plan. However, remedies that are specific to the
Contract Act cannot be applied, de hors the over-riding principles
of the IBC. [Paras 124-125][440-D-G; 441-A-E; 442-A-G; 443-
F
A-E]
8. The statutory framework governing the CIRP seeks to
create a mechanism for resolving insolvency in an efficient,
comprehensive and timely manner. The IBC provides a detailed
linear process for undertaking CIRP of the Corporate Debtor to
G minimize any delays, uncertainty in procedure and disputes. The
roles and responsibilities of the important actors in the CIRP are
clearly defined under the IBC and its regulations. In Innoventive
Industries Ltd v. ICICI Bank a three judge Bench of this Court
observed that “one of the important objectives of the Code is to
bring the insolvency law in India under a single unified umbrella
H
with the object of speeding up of the insolvency process”.
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Recently, in Gujarat Urja (supra) a three judge Bench of this Court A
observed that a “delay in completion of the insolvency
proceedings would diminish the value of the debtor’s assets and
hamper the prospects of a successful reorganization or liquidation.
For the success of an insolvency regime, it is necessary that
insolvency proceedings are dealt with in a timely, effective and
B
efficient manner”. The stipulation of timelines and a detailed
procedure under the IBC ensures a timely completion of CIRP
and introduces transparency, certainty and predictability in the
insolvency resolution process. The UNCITRAL Guide also states
that the insolvency law of a jurisdiction should be transparent
and predictable. [Para 143][458-G-H; 459-A-C] C
9. Judicial restraint must not only be exercised while
adjudicating upon the constitutionality of the statute relating to
economic policy but also in matters of interpretation of economic
statutes, where the interpretative maneuvers of the Court have
an effect of transgressing into the law-making power of the D
legislature and disturbing the delicate balance of separation of
powers between the legislature and the judiciary. Judicial restraint
must be exercised in such cases as a matter of prudence, since
the court neither has the necessary expertise nor the power to
hold consultations with stakeholders or experts to decide the
direction of economic policy. A court may be inept in laying down E
a detailed procedure for exercise of the power of withdrawal or
modification by a successful Resolution Applicant without
impacting the other procedural steps and the timelines under
the IBC which are sacrosanct. Thus, judicial restraint must be
exercised while intervening in a law governing substantive F
outcomes through procedure, such as the IBC. In this case, if
Resolution Applicants are permitted to seek modifications after
subsequent negotiations or a withdrawal after a submission of a
Resolution Plan to the Adjudicating Authority as a matter of law,
it would dictate the commercial wisdom and bargaining strategies
of all prospective Resolution Applicants who are seeking to G
participate in the process and the successful Resolution
Applicants who may wish to negotiate a better deal, owing to
myriad factors that are peculiar to their own case. The broader
legitimacy of this course of action can be decided by the legislature
alone, since any other course of action would result in a flurry of
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336 SUPREME COURT REPORTS [2021] 14 S.C.R.

A litigation which would cause the delay that the IBC seeks to
disavow.
The IBC is silent on whether a successful Resolution
Applicant can withdraw its Resolution Plan. However, the
statutory framework laid down under the IBC and the CIRP
B Regulations provide a step-by-step procedure which is to be
followed from the initiation of CIRP to the approval by the
Adjudicating Authority. Regulation 40A describes a model-
timeline for the CIRP that accounts for every eventuality that
may arise between the commencement of the CIRP and approval
of the Resolution Plan by the Adjudicating Authority, including
C the different stages for pressing a withdrawal of the CIRP under
Section 12A. Even a modification to the RFRP is envisaged by
the CIRP Rules and is subject to a timeline. The absence of any
exit routes being stipulated under the statute for a successful
Resolution Applicant is indicative of the IBC’s proscription of
D any attempts at withdrawal at its behest. The rule of casus omissus
is an established rule of interpretation, which provides that an
omission in a statute cannot be supplied by judicial construction.
The treatise further discusses that a departure from this
rule is only allowed in cases where words have been accidently
E omitted or the omission has an effect of making any part of the
statute meaningless. Further, only such words can be supplied to
the statute which would have certainly been inserted by the
Parliament, had the omission come to its notice.
In the wake of the COVID-19 pandemic, several
F Resolution Plans remained pending before Adjudicating
Authorities due to the lockdown and significant barriers to
securing a hearing. An Ordinance was swiftly promulgated on 5
June 2020 which imposed a temporary suspension of initiation of
CIRP under Sections 7, 9 and 10 of the IBC for defaults arising
for six months from 25 March 2020 (extendable by one year).
G This was followed by an amendment through the IBC (Second
Amendment) Act 2020 on 23 September 2020 which provided
for a carve-out for the purpose of defaults arising during the
suspended period. The delays on account of the lockdown were
also mitigated by the IBBI (Insolvency Resolution Process for
Corporate Persons) (Third Amendment) Regulations 2020, which
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inserted Regulation 40C on 20 April 2020, with effect from A
29 March 2020, and excluded such delays for the purposes of
adherence to the otherwise strict timeline. Recently, the IBC
(Amendment) Ordinance 2021 was promulgated with effect from
04 April 2021 providing certain directions to preserve businesses
of MSMEs and a fast-track insolvency process. There has been
B
a clamor on behalf of successful Resolution Applicants who no
longer wish to abide by the terms of their submitted Resolution
Plans that are pending approval under Section 31, on account of
the economic slowdown that impacted every business in the
country. However, no legislative relief for enabling withdrawals
or re- negotiations has been provided, in the last eighteen months. C
In the absence of any provision under the IBC allowing for
withdrawal of the Resolution Plan by a successful Resolution
Applicant, vesting the Resolution Applicant with such a relief
through a process of judicial interpretation would be
impermissible. Such a judicial exercise would bring in the evils
D
which the IBC sought to obviate through the back-door.[Paras
146-147][464-D-H; 465-A-D, F; 466-C-H]
10. The approval of the Adjudicating Authority under
Section 31(1) of the IBC has the effect of making the Resolution
Plan binding on all stakeholders. These stakeholders include the
employees of the corporate debtor whose terms of employment E
would be governed by the Resolution Plan, the Central and State
Governments who would receive their tax dues on the basis of
the terms of the Resolution Plan and local authorities to whom
dues are owed. These stakeholders are not direct participants in
the CIRP but are bound by its consequence by virtue of the F
approval of the Resolution Plan, under Section 31(1) of the IBC.
Section 31(1) ensures that the Resolution Plan becomes binding
on all stakeholders after it is approved by the Adjudicating
Authority. The language of Section 31(1) cannot be construed to
mean that a Resolution Plan is indeterminate or open to
withdrawal or modification until it is approved by the Adjudicating G
Authority or that it is not binding between the CoC and the
successful Resolution Applicant. Regulation 39(4) of CIRP
Regulations mandates that the RP should endeavour to submit
the Plan at least fifteen days before the statutory period of the
CIRP under Section 12 is due to expire along with a receipt of a H
338 SUPREME COURT REPORTS [2021] 14 S.C.R.

A PBG and a compliance certificate as Form H. It is pertinent to
note that sub-Section (3) to Section 12 mandates that the CIRP
process, including legal proceedings, must be concluded within
330 days. This three-hundred-and- thirty-day period can be
extended only in exceptional circumstances, if the process is at
near conclusion and serves the object of the IBC, as held by a
B
three judge Bench of this Court in Essar Steel (supra). Therefore,
after accounting for all statutorily envisaged delays which the RP
has to explain in its Form H and otherwise through Regulation
40B, the procedure envisages a fifteen-day window between
submission of Resolution Plan and its approval or rejection by
C the Adjudicating Authority. This clearly indicates that the statute
envisages a certain level of finality before the Resolution Plan is
submitted for approval to the Adjudicating Authority. Even the
CoC is not permitted to approve multiple Resolution Plans or
solicit EOIs after submission of a Resolution Plan to the
Adjudicating Authority, which would possibly be in contemplation
D
if the Resolution Applicant was permitted to withdraw from, or
modify, the Plan after acceptance by the CoC. Regulation 36B(4A)
requires the furnishing of a performance security which will be
forfeited if a Resolution Applicant fails to implement the Plan.
This is collected before the Adjudicating Authority approves the
E Plan. Notably, the regulations also direct forfeiture of the
performance security in case the Resolution Applicant
“contributes to the failure of implementation”, which could
potentially include any attempts at withdrawal of the Plan.
The report of the BLRC also notes that the negotiations in
F the CIRP must be time bound and it envisages that one of the
ways in which the CIRP comes to a close is that the RP is able to
obtain a binding agreement from the CoC. Such a binding
agreement is placed before the Adjudicating Authority, which
orders the closure of the CIRP. If the Adjudicating Authority does
not receive a binding agreement, it can send the Corporate Debtor
G into liquidation. [Paras 150-151][468-F-H; 469-A-G]
11. Regulation 38(3) mandates that a Resolution Plan be
feasible, viable and implementable with specific timelines. A
Resolution Plan whose implementation can be withdrawn at the

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behest of the successful Resolution Applicant, is inherently A
unviable, since open-ended clauses on modifications/withdrawal
would mean that the Plan could fail at an undefined stage, be
uncertain, including after approval by the Adjudicating Authority.
It is inconsistent to postulate, on the one hand, that no withdrawal
or modification is permitted after the approval by the Adjudicating
B
Authority under Section 31, irrespective of the terms of the
Resolution Plan; and on the other hand, to argue that the terms
of the Resolution Plan relating to withdrawal or modification must
be respected, in spite of the CoC’s approval, but prior to the
approval by the Adjudicating Authority. The former position follows
from the intent, object and purpose of the IBC and from Section C
31, and the latter is disavowed by the IBC’s structure and
objective. The IBC does not envisage a dichotomy in the binding
character of the Resolution Plan in relation to a Resolution
Applicant between the stage of approval by the CoC and the
approval of the Adjudicating Authority. The binding nature of a
D
Resolution Plan on a Resolution Applicant, who is the proponent
of the Plan which has been accepted by the CoC cannot remain
indeterminate at the discretion of the Resolution Applicant. The
negotiations between the Resolution Applicant and the CoC are
brought to an end after the CoC’s approval. The only
conditionality that remains is the approval of the Adjudicating E
Authority, which has a limited jurisdiction to confirm or deny the
legal validity of the Resolution Plan in terms of Section 30 (2) of
the IBC. If the requirements of Section 30(2) are satisfied, the
Adjudicating Authority shall confirm the Plan approved by the
CoC under Section 31(1) of the IBC.
F
If the appellants’ claim were to succeed, a clause enabling
a Resolution Applicant to withdraw/seek modification for reasons
such as a ‘Material Adverse Event’ could also be set up by a
Resolution Applicant when it is being prosecuted under Section
74 (3). It was contended before us that Form H, which is a
compliance certificate that is to be submitted by the RP to the G
Adjudicating Authority along with the Resolution Plan, mentions
that the RP can enter details as to whether the Resolution Plan is
subject to any conditionalities under Clause 12. Thus, the
argument goes that this permits the Resolution Applicant to
stipulate in the Resolution Plan certain contingencies under which H
340 SUPREME COURT REPORTS [2021] 14 S.C.R.

A it can withdraw the Plan, for instance if there is an occurrence of
an ‘Material Adverse Event’. A form is subservient to the statute.
The conditionalities contemplated in Form H could be those which
do not strike at the root of the IBC. They can include commercial
conditions and business arrangements with the CoC. However,
conditions for withdrawal or re-negotiation of the Resolution Plan
B
cannot pass the test of ‘viability’ and ‘implementability’ as they
would make the resolution process indeterminate and
unpredictable. A two judge Bench of this Court in K Sashidhar
(supra), while discussing the jurisdiction of the Adjudicating
Authority under Section 31 to evaluate a Resolution Plan, has
C observed that the Resolution Plan should “be an overall credible
plan, capable of achieving timelines specified in the Code
generally, assuring successful revival of the corporate debtor and
disavowing endless speculation”. Section 30(2)(d) of the IBC and
Regulation 38 of the CIRP Regulations also provide that the
Resolution Plan should be implementable. In the absence of
D
specific statutory language allowing for withdrawals or even
modifications by the successful Resolution Applicant, it would be
difficult to imply the existence of such an option based on the
terms of the Resolution Plan, irrespective of, and especially when
they do not form a part of Clause 12 in Form H, as is the case in
E all the three Resolution Plans that are in dispute in this present
appeal. [Paras 153-154][471-B-H; 472-A-F]
12. Regulation 40A envisages a model-time line for the
CIRP. Any deviation from this timeline needs to be specifically
explained by the RP in Clause 10 of Form H. Regulation 40B
F imposes a time-limit on the RP for filing the requisite forms at
different stages of the CIRP, including forms seeking extensions
on account of delays at any stage. The failure to fill these forms
within the stipulated deadline results in disciplinary action against
the RP by the IBBI. Further, as discussed in Section I of the
judgement, various mandatory timelines have been imposed for
G undertaking specific actions under the CIRP. If the legislature
intended to allow withdrawals or subsequent negotiations by
successful Resolution Applicants, it would have prescribed
specific timelines for the exercise of such an option. The
recognition of a power of withdrawal or modification after
H submission of a CoC-approved Resolution Plan, by judicial
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interpretation, will have the effect of disturbing the statutory A
timelines and delaying the CIRP, leading to a depletion in the
value of the assets of a Corporate Debtor in the event of a
potential liquidation. Hence, it is best left to the wisdom of the
legislature, based on the experiences gained from the working
of the enactment, to decide whether the option of modification or
B
withdrawal at the behest of the Resolution Applicant should be
permitted after submission to the Adjudicating Authority; if so,
the conditions and the safeguards subject in which it can be allowed
and the statutory procedure to be adopted for its exercise.
Based on the plain terms of the statute, the Adjudicating
Authority lacks the authority to allow the withdrawal or C
modification of the Resolution Plan by a successful Resolution
Applicant or to give effect to any such clauses in the Resolution
Plan. Unlike Section 18(3)(b) of the erstwhile SICA which vested
the Board for Industrial and Financial Reconstruction with the
power to make modifications to a draft scheme for sick industrial D
companies, the Adjudicating Authority under Section 31(2) of the
IBC can only examine the validity of the plan on the anvil of the
grounds stipulated in Section 30(2) and either approve or reject
the plan. The Adjudicating Authority cannot compel a CoC to
negotiate further with a successful Resolution Applicant. A
rejection by the Adjudicating Authority is followed by a direction E
of mandatory liquidation under Section 33. Section 30(2) does
not envisage setting aside of the Resolution Plan because the
Resolution Applicant is unwilling to execute it, based on terms
of its own Resolution Plan.
Further, no such power can be vested with the Adjudicating F
Authority under its residuary jurisdiction in terms of Section 60
(5)(c). In a decision of a three judge Bench of this Court in Gujarat
Urja (supra), it was held that, “the NCLT’s residuary jurisdiction
[under Section 60(5)(c)] though wide, is nonetheless defined by
the text of the IBC. Specifically, the NCLT cannot do what the G
IBC consciously did not provide it the power to do”. Further, the
court observed that “this Court must adopt an interpretation of
the NCLT’s residuary jurisdiction which comports with the broader
goals of the IBC”. The effect of allowing the Adjudicating
Authority to permit withdrawals of resolution plans that are
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342 SUPREME COURT REPORTS [2021] 14 S.C.R.

A submitted to it, would be to confer it with a power that is not
envisaged by the IBC and defeat the objectives of the statute,
which seeks a timely and predictable insolvency resolution of
Corporate Debtors.
After the amendment to Section 12 in 2019 which mandate
B a 330 days outer-limit for conclusion of the CIRP (which can be
breached only under exceptional circumstances as held in Essar
Steel (supra)), it would be antithetical to the purpose of the IBC
to allow the Adjudicating Authority to use its plenary powers under
Section 60(5)(c) to potentially extend these timelines to enable
the CoC to either issue a fresh RFRP if the Resolution Plan is
C withdrawn by a successful Resolution Applicant or direct further
negotiations with the Resolution Applicant who is seeking a
modification of the plan, whose failure could result in withdrawal
as well. The likely consequence of a withdrawal by a successful
Resolution Applicant after going through the stages of the CIRP
D for nearly 180 days (provided all statutory timelines have been
strictly followed)would inevitably be a delayed liquidation after
the value of the assets has further depreciated. In the event of
intervening delays on account of litigation or otherwise, the delay
would be even more severe. If a CoC, could be compelled by the
Adjudicating Authority to negotiate with the successful
E Resolution Applicant, it would have to resign itself to a commercial
bargain at a much lower value. If Parliament intended to permit
such withdrawals/modifications sought by successful Resolution
Applicants as being beneficial to the economic policy, which it
has sought to pursue while enacting the IBC, it would have
F prescribed timelines for setting the clock-back or directing
immediate liquidation if the withdrawals occur after a certain
period. For instance, under Regulation 36B (5) any modification
to the RFRP or the evaluation matrix is deemed as a fresh issue
of the RFRP and the timeline for submission of Resolution Plan
starts afresh. Parliament has not legislated to provide for the
G eventuality argued by the appellants. [Paras 156-159][475-D-H;
476-A-H; 477-A-D]
13. Before proceeding further, it is important to compare
the reliefs sought by ‘E’ in the First, Second and Third Withdrawal
Applications.
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From the above table, it is clear that the prayers in the A
Second and Third Withdrawal Applications were identical. Further,
prayer (iii) of both corresponds to prayer (iii) of the First
Withdrawal Application, in almost identical terms, while prayer
(ii) was not present in the First Withdrawal Application at all. At
the same time, prayers (i) and (ii) in the First Withdrawal
B
Application have not been repeated in the Second and Third
Withdrawal Applications. However, what is at issue is prayer (iv)
of the First Withdrawal Application and prayer (i) of the Second
and Third Withdrawal Applications. Through the former, ‘E’
sought permission to re-evaluate its Resolution Plan and to
suitably “revise/modify and/or withdraw” it, while through the C
latter, ‘E’ sought permission to withdraw its Resolution Plan. Now
we must analyse whether this would attract the principle of res
judicata. [Para 165][480-C-E]
14. Res judicata cannot apply solely because the issue has
previously come up before the court. The doctrine will apply where D
the issue has been “heard and finally decided” on merits through
a conscious adjudication by the court. In the present case, the
NLCT’s order dismissing the First Withdrawal Application makes
it clear that it had only considered only that part of prayer (iv)
which related to re-evaluation of the Resolution Plan, possibly
because ‘E’ had hoped to re-evaluate the Resolution Plan on the E
basis of the information received as a consequence of prayers (i)
and (ii) and those prayers were rejected since such information
was not available. [Para 171][483-D-F]
15. The prayer for withdrawal of the Resolution Plan in the
First Withdrawal Application was not substantial and one that the F
Court was bound to grant, since it was contingent upon a re-
evaluation, which in itself was contingent upon receiving the
information sought in prayers (i) and (ii). Since the latter two
contingencies never arose, the NCLT did not apply its mind to
the prayer for withdrawal independently. When it filed the Second G
Withdrawal Application, it was dismissed on a technical ground
and not on its merits. When a revised Third Withdrawal
Application was filed, the NCLT then adjudicated it on its merits
and allowed it. Hence, since the NCLT did not adjudicate E’s
prayer for withdrawal of their Resolution Plan on its merits while
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344 SUPREME COURT REPORTS [2021] 14 S.C.R.

A dismissing the First Withdrawal Application, the opportunity to
seek the relief was not available to ‘E’ in a real sense. Therefore,
we reverse the finding of the NCLAT on this issue and hold that
E’s Third Withdrawal Application was not barred by res judicata.
[Para 174][484-G; 485-A-B]
B 16. This submission of ‘E’ cannot be accepted since the
terms of the RFRP or the Resolution Plan relate to the validity of
the Resolution Plan for the period of negotiation with the E-CoC
and not for a period after the Resolution Plan is submitted for the
approval of the Adjudicating Authority. The time which may be
taken before the Adjudicating Authority is an imponderable which
C none of the parties can predict. In fact, this is emphasized by
Clause 1.3.7 of the RFPF which contains a schedule of the
Resolution Plan submission process.
Parties cannot indirectly impose a condition on a judicial
authority to accept or reject its Plan within a specified time period,
D failing which the CIRP process will inevitably come to an end. In
this case, the draft Resolution Plan of ‘E’ was submitted on 29
January 2018 and remained valid for the term of the multiple
rounds of negotiations with the E-CoC, until its submission to
the Adjudicating Authority on 7 March 2018, which was within
E the six-month period envisaged in the Plan.
Even if it were to be assumed, for the sake of argument,
that the term in the submitted Resolution Plan was in the nature
of a qualified offer which would expire after six months of its
submission, failing the imprimatur of the Adjudicating Authority
F under Section 31 which would make it binding on all parties, the
surrounding terms of the RFRP and the subsequent legal
materials including the LOI and the Compliance Certificate (Form
H) under CIRP Regulations make it clear that there was no scope
to resile from the implementation of the Resolution Plan, once it
had been submitted to the Adjudicating Authority, except in the
G event of a rejection. Clause 1.9.3 of the RFRP required ‘E’ to
replace its EMD with a PBG equivalent to ten per cent of the
Resolution Plan value, if it were to be declared as the ‘successful
Resolution Applicant’. This PBG can be invoked under Clause
1.9.5 of the RFRP if the Resolution Applicant fails to implement
H the Resolution Plan. Further, Clause 1.8.4 of the RFRP states
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that “[a] Resolution Plan submitted by a Resolution Respondent A
shall be irrevocable”.
E’s submission that Clause 1.10(l) is applicable only upon
approval of the Adjudicating Authority is not plausible since the
Resolution Plan becomes binding on all stakeholders as a
consequence of the approval under Section 31. The E- RP’s B
argument holds much weight when it is argued that Clause 1.10(l)
cannot be construed to infer that the Adjudicating Authority would
declare ‘E’ as the ‘Successful Resolution Applicant’ once again,
which would then impose the obligation of barring withdrawals
for the first time. E-RP, has also submitted before us that the
validity of the Resolution Plan being six months was not C
mentioned as a specific conditionality in Form H that was
submitted by the E-RP along with the Resolution Plan to the
Adjudicating Authority, which evinces that the six-month validity
was only vis-à- vis the acceptance by the E-CoC.
‘E’ has also tried to argue that its position has changed D
manifestly because of new allegations which have come up in
relation to the financial conduct of Educomp. However, in this
regard, it is pertinent to note Clause 1.3.2 of the RFRP which
directs prospective Resolution Applicants to conduct their own
due diligence. E
‘E’ was responsible for conducting their own due diligence
of Educomp and could not use that as a reason to revise/modify
their approved Resolution Plan. In any event, Section 32A of the
IBC grants immunity to the Corporate Debtor for offences
committed prior to the commencement of CRIP and it cannot be F
prosecuted for such offences from the date the Resolution Plan
has been approved by the Adjudicating Authority under Section
31, if the Resolution Plan results in a change of management or
control of the Corporate Debtor subject to certain conditions.
Thus, in any case even if it is found that there was any G
misconduct in the affairs of Educomp prior the commencement
of the CIRP, ‘E’ will be immune from any prosecution or
punishment in relation to the same. The submission that ‘E’ has
been placed in a prejudicial position due to the initiation of
investigation into the affairs of Educomp by the CBI and SFIO is
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346 SUPREME COURT REPORTS [2021] 14 S.C.R.

A nothing but a red herring since such investigations have no
bearing on ‘E’.
Finally, it is also important to note that no clause of ‘E’ own
Resolution Plans provides them with a right to revise/withdraw
their Resolution Plan after its approval by the E-CoC, but before
B its confirmation by the Adjudication Authority. Clause 9.1 permits
withdrawal in the event the Resolution Plan is not approved in
its entirety by the NCLT, while Clause 9.7 allows for an
amendment for the purposes of implementation of the Resolution
Plan but only when the E-CoC approves it with a seventy-five
per cent vote. Hence, ‘E’ did not have any right under their own
C Resolution Plan to revise/withdraw it.
It is also pertinent to note that ‘E’ did not stop pursuing
their Resolution Plan after the expiry of six months, if the true
import of the commercial bargain was a withdrawal of the
Resolution Plan after six months of its submission. The First
D Withdrawal Application was filed on 10 September 2019, which
was after one year of the alleged expiry of the six-month period.
Therefore, even if the submitted Resolution Plan was considered
as a conditional offer the terms did not enable a withdrawal of the
Resolution Plan in the event that the Adjudicating Authority does
E not approve it under Section 31 within six months of its
submission. [Paras 179-183][487-B-C, E-H; 488-A-B, E-H; 489-
E; 490-G-H; 491-A-D]
17. Section 29 of the IBC places a duty upon the RP to
provide an IM to the Resolution Applicant, containing such
F information which may be relevant to the Resolution Applicant
to draft its Resolution Plan. [Para 186][491-G-H]
18. Under the IBC, there is a duty upon the RP to collect
as much information about the Corporate Debtor as is accurately
possible to do. When such information is communicated through
G an IM to the Resolution Applicant, the RP must be careful to
clarify when its information is not comprehensive and what factors
may cause a change. [Para 189][493-G-H]
19. ‘E’ cannot dispute that E-RP had provided it the
relevant information required under Section 29 to formulate its
Resolution Plan. The issues in relation to financial investigations
H
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into the conduct of Educomp arose when the two articles were A
published by The Wire, both of which were after the Approval
Application had been filed by the E-RP. Further, ‘E’ was aware of
all the proceedings before the NCLT since the various
applications were often listed along with the Approval Application,
in which it continued to appear. Finally, ‘E’ has brought nothing
B
on record to prove that E-RP knew of the SFIO and CBI
investigations before a regulatory disclosure was made by
Educomp. Hence, it cannot be stated that the E-RP had faltered
in its duty to provide relevant information to ‘E’. [Para 191][494-
F-G]
20. During the course of the hearing of the present appeal, C
the compilation of additional documents has been filed by ‘K’.
On 5 July 2021, ‘K’ had addressed a communication to EXIM
Bank and PFCL “seeking a revision/renegotiation of the
resolution amount/financial proposal” of ‘K’ for the resolution of
Astonfield. Responding to the above communication, EXIM Bank D
has addressed a letter dated 12 July 2021 stating that a meeting
was held by “the lenders” (EXIM Bank and PFCL) on 9 July
2021, on a without prejudice basis to deal with the issues raised
by ‘K’ in their letter dated 5 July 2021.
Pursuant to the above exchange of communications, a joint E
request has been made on behalf of ‘K’ and of the A-CoC.
This Court had been informed that EXIM Bank and PFCL
represent 98 per cent of the financial creditors of Astonfeld. In
view of the above agreement which has been arrived at, we deem
it appropriate to exercise our jurisdiction under Article 142 of F
the Constitution of India for a one-time relief and direct that:
(i)The A-CoC shall convene and take a decision on the
proposal submitted by ‘K’ on 5 July 2021, and the response by
EXIM Bank and PFCL dated 12 July 2021;
ii) In the event, that a revised Resolution Plan is agreed G
upon by the A-CoC, it shall be submitted through the A-RP for
the approval of the NCLT within a week thereafter. In the event
that a revised Resolution Plan is not agreed upon, the original
Resolution Plan, as submitted before the NCLT on 15 November
2019, shall prevail; and
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348 SUPREME COURT REPORTS [2021] 14 S.C.R.

A (iii) The NCLT shall dispose of the application with the
revised Resolution Plan expeditiously, and preferably within a
period of two weeks from the date of receipt of an application
from the A-RP for the approval of the revised Resolution Plan.
We clarify that the above directions have been issued in
B view of the submission which has been urged as noted, and shall
not amount to any finding by this Court on the issues raised with
regard to modification or withdrawal of Resolution Plans at the
behest of the Resolution Applicant. [Para 195-197][497-A-B, F-
H; 498-A-C]
C 21. ‘S’ has relied on the terms of its Resolution Plan which
envisage payment to the Arya-CoC by sale of land and building,
and old/unusable/spare plant and machineries to urge that there
has been a frustration of the contract because of the economic
slowdown which must have impacted the value of these assets.
The proposed revised solution envisages a further haircut to the
D Arya- CoC where Rs 1.5 crores less would be paid, over an
extended timeline. There are no terms in the Resolution Plan or
the Form H submitted by Arya-RP that could provide such a
benefit to ‘S’.
Conclusion
E
This Court is cognizant that the extraordinary circumstance
of the COVID- 19 pandemic would have had a significant impact
on the businesses of Corporate Debtors and upon successful
Resolution Applicants whose Plans may not have been sanctioned
by the Adjudicating Authority in time, for myriad reasons. But
F the legislative intent of the statute cannot be overridden by the
Court to render outcomes that can have grave economic
implications which will impact the viability of the IBC.
The residual powers of the Adjudicating Authority under
the IBC cannot be exercised to create procedural remedies which
G have substantive outcomes on the process of insolvency. The
framework, as it stands, only enables withdrawals from the CIRP
process by following the procedure detailed in Section 12A of
the IBC and Regulation 30A of the CIRP Regulations and in the
situations recognized in those provisions. Enabling withdrawals
or modifications of the Resolution Plan at the behest of the
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successful Resolution Applicant, once it has been submitted to A
the Adjudicating Authority after due compliance with the
procedural requirements and timelines, would create another tier
of negotiations which will be wholly unregulated by the statute.
Since the 330 days outer limit of the CIRP under Section 12(3) of
the IBC, including judicial proceedings, can be extended only in
B
exceptional circumstances, this open-ended process for further
negotiations or a withdrawal, would have a deleterious impact on
the Corporate Debtor, its creditors, and the economy at large as
the liquidation value depletes with the passage of time. A failed
negotiation for modification after submission, or a withdrawal after
approval by the CoC and submission to the Adjudicating Authority, C
irrespective of the content of the terms envisaged by the
Resolution Plan, when unregulated by statutory timelines could
occur after a lapse of time, as is the case in the present three
appeals before us. Permitting such a course of action would either
result in a down-graded resolution amount of the Corporate Debtor
D
and/or a delayed liquidation with depreciated assets which
frustrates the core aim of the IBC.
If the legislature in its wisdom, were to recognize the
concept of withdrawals or modifications to a Resolution Plan after
it has been submitted to the Adjudicating Authority, it must
specifically provide for a tether under the IBC and/or the E
Regulations. This tether must be coupled with directions on
narrowly defined grounds on which such actions are permissible
and procedural directions, which may include the timelines in
which they can be proposed, voting requirements and threshold
for approval by the CoC (as the case may be). They must also F
contemplate at which stage the Corporate Debtor may be sent
into liquidation by the Adjudicating Authority or otherwise, in
the event of a failed negotiation for modification and/or withdrawal.
These are matters for legislative policy.
In the present framework, even if an impermissible G
understanding of equity is imported through the route of residual
powers or the terms of the Resolution Plan are interpreted in a
manner that enables the appellants’ desired course of action, it
is wholly unclear on whether a withdrawal of a CoC-approved
Resolution Plan at a later stage of the process would result in the
H
350 SUPREME COURT REPORTS [2021] 14 S.C.R.

A Adjudicating Authority directing mandatory liquidation of the
Corporate Debtor. Pertinently, this direction has been otherwise
provided in Section 33(1)(b) of the IBC when an Adjudicating
Authority rejects a Resolution Plan under Section 31. In this
context, we hold that the existing insolvency framework in India
provides no scope for effecting further modifications or
B
withdrawals of CoC-approved Resolution Plans, at the behest of
the successful Resolution Applicant, once the plan has been
submitted to the Adjudicating Authority. A Resolution Applicant,
after obtaining the financial information of the Corporate Debtor
through the informational utilities and perusing the IM, is
C assumed to have analyzed the risks in the business of the
Corporate Debtor and submitted a considered proposal. A
submitted Resolution Plan is binding and irrevocable as between
the CoC and the successful Resolution Applicant in terms of the
provisions of the IBC and the CIRP Regulations. In the case of
Kundan Care, since both, the Resolution Applicant and the CoC,
D
have requested for modification of the Resolution Plan because
of the uncertainty over the PPA, cleared by the ruling of this
Court in Gujarat Urja (supra), a one-time relief under Article 142
of the Constitution is provided with the conditions prescribed in
Section K.2.
E It would also be sobering for us to recognize that whilst
this Court has declared the position in law to not enable a
withdrawal or modification to a successful Resolution Applicant
after its submission to the Adjudicating Authority, long delays in
approving the Resolution Plan by the Adjudicating Authority affect
F the subsequent implementation of the plan. These delays, if
systemic and frequent, will have an undeniable impact on the
commercial assessment that the parties undertake during the
course of the negotiation. The thirty-second report of the Ministry
of Corporate Affairs’ Standing Committee on Finance (2020-2021)
on the ‘Implementation of Insolvency and Bankruptcy Code-
G Pitfalls and Solutions’ represented a despondent state of affairs
with regard to pendency of applications before the Adjudicating
Authority.
In its observations, the Report noted that a delay in the
resolution process with more than seventy-one per cent cases
H
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pending for more than 180 days is in deviation of the original A
objective and timeline for CIRP that was envisaged by the IBC.
The delays were attributable to: (i) the NCLT taking considerable
time in admitting CIRPs; (ii) late and unsolicited bids by
Resolution Applicants after the original bidder becomes public
upon passage of the deadline for submission of the Plan; and (iii)
B
multiplicity of litigation and the appellate process to the NCLAT
and the Supreme Court. Such inordinate delays cause commercial
uncertainty, degradation in the value of the Corporate Debtor
and makes the insolvency process inefficient and expensive. We
urge the NCLT and NCLAT to be sensitive to the effect of such
delays on the insolvency resolution process and be cognizant that C
adjournments hamper the efficacy of the judicial process. The
NCLT and the NCLAT should endeavor, on a best effort basis,
to strictly adhere to the timelines stipulated under the IBC and
clear pending resolution plans forthwith. Judicial delay was one
of the major reasons for the failure of the insolvency regime that
D
was in effect prior to the IBC.
In light of the above, the appeals preferred by ‘E’(Civil
Appeal 3224 of 2020) and ‘S’ (Civil Appeal 295 of 2021) stand
dismissed. The parties to the appeal preferred by ‘K’ (Civil Appeal
3560 of 2020) shall abide by the directions issued by this Court
in exercise of its Article 142 powers as a one-time relief, as E
specified in paragraph 196 (Section K.2) of this judgement. [Para
200-206][498-G-H; 499-E-H; 500-A-H; 501-A-E; 502-A-E]
SK Gupta v. KP Jain (1979) 3 SCC 54 : [1979] 2 SCR
1184; India Thermal Power Ltd. v. State of MP (2000) 3
SCC 379 : [2000] 1 SCR 925; CoC of Essar Steel India F
Ltd. v. Satish Kumar Gupta & Ors. (2020) 8 SCC 531 :
[2019] 16 SCR 275; Government of Andhra Pradesh
v. P Laxmi Devi (2008) 4 SCC 720 : [2008] 3 SCR
330; Satyadhyan Ghosal v. Deorajin Debi (1960) 3
SCR 590; Sheodan Singh v. Daryao Kunwar (1966) 3 G
SCR 300; Krishan Lal v. State of J&K (1994) 4 SCC
422 : [1994] 2 SCR 149; Daryao v. State of U.P. (1962)
1 SCR 574; Erach Boman Khavar v. Tukaram Shridhar
Bhat (2013) 15 SCC 655 : [2013] 17 SCR 1055;
Jaswant Singh v. Custodian of Evacuee Property (1985)
3 SCC 648 : [1985] 1 Suppl. SCR 331 – relied on. H
352 SUPREME COURT REPORTS [2021] 14 S.C.R.

A Riya Travel & Tours (India) (P) Ltd. v. C.U. Chengappa
(2001) 9 SCC 512; K Sashidhar v. IOC (2019) 12 SCC
150 : [2019] 3 SCR 845; M/s Embassy Property
Developments Pvt. Ltd. v. State of Karnataka & Ors.
(2020) 13 SCC 308 : [2019] 17 SCR 559; M/s
Innoventive Industries Ltd. v. ICICI Bank & Anr. (2018)
B
1 SCC 407 : [2017] 8 SCR 33; Gujarat Urja Vikas
Nigam Limited v. Amit Gupta (2021) SCC OnLine SC
194; Swiss Ribbons (P) Ltd v. Union of India (2019) 4
SCC 17 : [2019] 3 SCR 535; Nagabhushanammal v. C
Chandikeswaralingam (2016) 4 SCC 434 : [2016] 2
C SCR 19; National Thermal Power Corporation Ltd. v.
Siemens Atkeingesellschaft AIR 2007 SC 1491 : [2007]
3 SCR 399; Haridwar Singh v. Bagun Sumbrui (1973)
3 SCC 889 : [1972] 3 SCR 629; Committee of Creditors
AMTEK Auto Limited Through Corporation Bank v.
Dinkar T Venkatasubramanian & Ors. (2021) 4 SCC
D
457; Kalparaj Dharamshi v. Kotak Investment Advisors
Ltd. (2021) SCC OnLine SC 204; Jaypee Kensington
Boulevard Apartments Welfare Association & Ors. v.
NBCC (India) Ltd. & Ors. (2020) SCC OnLine SC
1192; Ghanashyam Mishra and Sons Private Limited
E through the Authorized Signatory v. Edelweiss Asset
Reconstruction Company Limited through the Director
& Ors. (2021) SCC OnLine SC 313; Laxmi Pat Surana
v. Union Bank of India (2020) SCC OnLine SC 1187;
Arcelor Mittal (India) (P) Ltd. v. Satish Kumar Gupta
(2019) 2 SCC 1 : [2018] 12 SCR 362; Maharashtra
F
Seamless v. Padmanabhan Venkatesh (2020) 11 SCC
467 : [2020] 2 SCR 1157; Innoventive Industries Ltd v.
ICICI Bank (2018) 1 SCC 407 : [2017] 8 SCR 33;
Lokhandwala Kataria Construction (P) Ltd v. Nisus
Finance and Investment Managers LLP (2018) 15 SCC
G 589; Uttara Foods and Feeds (P) Ltd v. Mona
Pharmachem (2018) 15 SCC 587; Brilliant Alloys (P)
Ltd v. S Rajagopal (2018) SCC OnLine SC 3154 –
referred to.
Allied Domecq (Holdings) Ltd v. Allied Domecq First
H Pension Trust Ltd. [2008] Pens. L.R. 425; Reinwood
EBIX SINGAPORE PVT. LTD. v. COMMITTEE OF CREDITORS OF 353
EDUCOMP SOLUTIONS LTD.

Ltd v. L Brown & Sons Ltd. [2008] 1 W.L.R. 696; A
Doleman v. Shaw [2009] Bus. L.R. 1175; Standard Life
Assurance Ltd v. Oak Dedicated Ltd. [2008] EWHC
222 (Comm); Oakley-Smith v. Greenberg [2004]
B.C.C. 81; Tucker v. Gold Fields Mining LCC [2010]
B.C.C. 544; Heis v. Financial Services Compensation
B
Scheme Ltd. [2018] EWCA Civ 1327; Re Rhino
Enterprises Properties Ltd. Schofield v. Smith [2020]
EWHC 2370; Daewoo Singapore Pte Ltd. v. CEL
Tractors Private Limited [2001] 4 SLR 35; Kempe and
Another v. Ambassador Insurance Co. [1998] 1 W.L.R.
271; Caratti v. Hillman [1974] WAR 92; Re C
Shenandoah Realty Partners, L.P. v. Ascend Health
Care, Inc 287 BR 867 – referred to.
Case Law Reference
(2001) 9 SCC 512 referred to Para 82(ii)(c)
D
[2019] 16 SCR 275 relied on Para 82(ii)(h)
[2019] 3 SCR 845 referred to Para 82(v)
[2019] 17 SCR 559 referred to Para 83(ii)
[2017] 8 SCR 33 referred to Para 83(ii)
E
[2019] 3 SCR 535 referred to Para 83(ii)
[2016] 2 SCR 19 referred to Para 85(ix)
[2007] 3 SCR 399 referred to Para 86(i)(a)
[1972] 3 SCR 629 referred to Para 86(iii)(c) F
(2021) 4 SCC 457 referred to Para 91(iv)
[1979] 2 SCR 1184 relied on Para 111
[2000] 1 SCR 925 relied on Para 115
[2018] 12 SCR 362 referred to Para 126 G
[2020] 2 SCR 1157 referred to Para 138
[2017] 8 SCR 33 referred to Para 143
(2018) 15 SCC 589 referred to Para 145
H
354 SUPREME COURT REPORTS [2021] 14 S.C.R.

A (2018) 15 SCC 587 referred to Para 145
[2008] 3 SCR 330 relied on Para 145
[1960] 3 SCR 590 relied on Para 164
[1966] 3 SCR 300 relied on Para 166
B
[1994] 2 SCR 149 relied on Para 168
[1962] 1 SCR 574 relied on Para 169
[2013] 17 SCR 1055 relied on Para 170
C
[1985] 1 Suppl. SCR 331 relied on Para 173
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 3224
of 2020.
From the Judgment and Order dated 29.07.2020 of the National
D Company Law Appellate Tribunal at New Delhi in Company Appeal
(AT) (Insolvency) No.203 of 2020.
With
Civil Appeal No. 3560 of 2020 and Civil Appeal No. 295 of 2021.
E
K. V. Vishwanathan, Ritin Rai, Ramji Srinivasan, Sr. Advs., Rajat
Sehgal, Gautam Swarup, Mrs. Vandana Anand, Mandavya Kapoor,
Karthikeya Jaiswal, Ms. Gunjan Jindal, Prithu Garg, Shailendra Singh,
Ms. Harimohana N, Ankush Bhardwaj, Shivkrit Raj, Vinam Gupta, Advs.
for the appellant.
F
Shyam Divan, Nakul Dewan, V. Giri, Jayant Mehta, Sr. Advs.,
Ms. Misha, Siddhant Kant, Ms. Moulshree Shukla, S. S. Shroff, Atul
Sharma, Abhishek Sharma, Ms. Ashly Cherian, Ms. Anisha Mahajan,
Ms. Harshita Agarwal, Gautam Talukdar, Ms. Pooja Mahajan,
Ms. Mahima Singh, S. Mahajan, Avinash B. Amarnath, Ashish Rana,
G Anurag Singh, Ms. Sonia Dube, Shatadru Chakraborty, Ms. Kanchan
Yadav, Ms. Surbhi Anand, Surya Kapoor for M/s Legal Options, Advs.
for the respondents.

H
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The Judgment of the Court was delivered by A
DR DHANANJAYA Y CHANDRACHUD, J.
This judgment has been divided into sections to facilitate analysis.
Further, a Glossary of defined terms which have been used throughout
the judgment has also been provided. The sections* in the judgment are
as follows: B
Glossary ................................................................................... 5
A Civil Appeal No 3224 of 2020 – the Ebix Appeal .............. 11
A.1 The appeal ................................................................... 11
A.2 Initiation of CIRP ........................................................ 11 C
A.3 Invitation, submission and approval of Resolution
Plan.............................................................................. 12
A.4 Investigations into financial transactions of
Educomp ...................................................................... 15
A.5 Applications for withdrawal of the Resolution Plan .... 20 D
A.6 Orders of NCLT and NCLAT ..................................... 24
A.7 Present status of SFIO and CBI investigation ............ 28
B Civil Appeal No 3560 of 2020 – the Kundan
Care Appeal ........................................................................... 29 E
B.1 The appeal ................................................................... 29
B.2 Initiation of CIRP ........................................................ 30
B.3 Invitation, submission and approval of
Resolution Plan ............................................................ 31
B.4 Astonfield’s dispute with GUVNL .............................. 32 F
B.5 Withdrawal of the Resolution Plan .............................. 35
C Civil Appeal No 295 of 2021 – the Seroco Appeal ............ 43
C.1 The appeal ................................................................... 43
C.2 Initiation of CIRP ........................................................ 44
G
C.3 Submission and Approval of Resolution Plan .............. 44
C.4 Modification of the Resolution Plan ............................ 45

*Ed. Note : The Page Nos. mentioned alongside the respective sections are as per the
Original Judgment. H
356 SUPREME COURT REPORTS [2021] 14 S.C.R.

A D Submissions of counsel in the Ebix Appeal ....................... 48
D.1 Submissions for the appellant ...................................... 48
D.2 Submissions for the first respondent ........................... 56
D.3 Submissions for the second respondent ...................... 64
B E Submissions of counsel in the Kundan Care Appeal .......... 68
E.1 Submissions for the appellant ...................................... 68
E.2 Submissions for the first respondent ........................... 76
E.3 Submissions for the second respondent ...................... 78
C F Submissions of counsel in the Seroco Appeal .................... 80
F.1 Submissions for the appellant ...................................... 80
F.2 Submissions for the second and third respondents ...... 82
G Purpose of a law on insolvency................................... 84
H Nature of a Resolution Plan ........................................ 90
D
I Statutory framework governing the CIRP ................ 115
J Withdrawal of the Resolution Plan by a successful
Resolution Applicant under the IBC .......................... 134
J.1 The absence of a legislative hook or a regulatory
E
tether to enable a withdrawal .................................... 134
J.2 Terms of the Resolution Plan are not sufficient to
effect withdrawals or modifications after its
submission to the Adjudicating Authority .................. 145
F
K Factual Analysis ........................................................ 158
K.1 The Ebix Appeal ........................................................ 158
K.1.1 Res Judicata .............................................................. 159
K.1.2 Analysis of the Resolution Plan of Ebix .................... 167
G
K.1.3 Duties of the RP ....................................................... 175
K.2 The Kundan Care Appeal ......................................... 179
K.3 The Seroco Appeal .................................................... 183
L Conclusion ................................................................. 185
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Glossary A

B

C

D

E

F

G

H
358 SUPREME COURT REPORTS [2021] 14 S.C.R.

A

B

C

D

E

F

G

H
EBIX SINGAPORE PVT. LTD. v. COMMITTEE OF CREDITORS OF 359
EDUCOMP SOLUTIONS LTD. [DR DHANANJAYA Y CHANDRACHUD, J.]

NCLT National Company Law Tribunal A
NSE National Stock Exchange
PBG Performance Bank Guarantee
PFCL Power Finance Corporation Limited
PPA Power Purchase Agreement
Recovery of Debts Due to Banks and Financial Institutions B
Recovery of Debts Act
Act 1993
RFRP Request For Resolution Plan

Rhino Re Rhino Enterprises Properties Ltd. Schofield v Smith
RP Resolution Professional
Securitisation and Reconstruction of Financial Assets and C
SARFAESI
Enforcement of Security Interest Act 2002
SBI State Bank of India
SBI Application CA No 639 (PB) of 2018 - filed by SBI before NCLT

Second Withdrawal CA 1310 (PB) of 2019 in CP (IB) No 101 (PB) of 2017 - filed
Application by Ebix before NCLT
D
Seroco Seroco Lighting Industries Private Limited
Seroco Appeal Civil Appeal No 295 of 2021
SFIO Serious Frauds Investigation Office
SICA Sick Industrial Companies Act 1985
Singapore Act Companies (Amendment) Act 2017 E
Swiss Ribbons Swiss Ribbons (P) Ltd v. Union of India
CA No 1816 (PB) of 2019 in CP (IB) No 101 (PB) of 2017 -
Third Withdrawal Application
filed by Ebix before NCLT
UBIL Union Bank of India Limited
UK Act UK Insolvency Act 1986 F
UNCITRAL Guide UNCITRAL Legislative Guide on Insolvency Laws
Uttara Foods Uttara Foods and Feeds (P) Ltd v. Mona Pharmachem
Company Appeal (AT) (Insolvency) No 203 of 2020 - filed
Withdrawal Appeal
by E-CoC before NCLAT

G
A Civil Appeal No 3224 of 2020 – the Ebix Appeal
A.1 The appeal
1. This judgment arises out of an appeal from a judgment dated
29 July 2020 of the NCLAT. The NCLAT allowed the Withdrawal
H
360 SUPREME COURT REPORTS [2021] 14 S.C.R.

A Appeal1 instituted by the first respondent, E-CoC, under Section 61 of
the IBC against a judgment dated 2 January 2020 of the NCLT at its
Principal Bench in New Delhi.
2. The NCLT allowed the Third Withdrawal Application2 filed by
Ebix under Section 60(5) of the IBC to withdraw its Resolution Plan
B submitted for Educomp. While reversing that order, the NCLAT held
that the application to withdraw from the Resolution Plan could not have
been allowed since: (i) it was barred by res judicata; and (ii) the NCLT
does not have jurisdiction to permit such a withdrawal. The correctness
of the view of the NCLAT comes up for determination in the present
appeal.
C
A.2 Initiation of CIRP
3. On 5 May 2017, Educomp filed a petition3 under Section 10 of
the IBC seeking to initiate voluntary CIRP. The NCLT admitted this
petition on 30 May 2017, and appointed an IRP. Hence, 30 May 2017
D would be taken as the ‘Insolvency Commencement Date’ for the purposes
of Section 5(12) of the IBC.
4. E-CoC was then constituted on 28 June 2017, following which
it appointed Mr Mahender Kumar Khandelwal as the RP for Educomp
on 27 July 2017. This was confirmed by the NCLT on 12 September
E 2017. On 18 September 2017, the E-RP took over information, documents,
reports and records pertaining to Educomp from the IRP.
5. On an application4 of the E-RP, the NCLT by its order dated 13
November 2017 extended the period of the CIRP by 90 days, beginning
from 26 November 2017 till 24 February 2018.
F A.3 Invitation, submission and approval of Resolution Plan
6. In terms of Section 25(2)(h) of the IBC, the E-RP invited EOI
on 18 October 2017 from prospective bidders, investors and lenders.
7. On 10 November 2017, the last date for submission of EOIs
was extended to 17 November 2017. Commencing from 5 December
G 2017, the E-RP provided access to the Virtual Data Room of Educomp

1
Company Appeal (AT) (Insolvency) No 203 of 2020
2
CA No 1816 (PB) of 2019 in CP (IB) No 101 (PB) of 2017
3
CP (IB) No 101 (PB) of 2017
4
H CA No 405(PB) of 2017
EBIX SINGAPORE PVT. LTD. v. COMMITTEE OF CREDITORS OF 361
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to prospective Resolution Applicants who had submitted a confidentiality A
undertaking and made an upfront payment of Rs 5,00,000.
8. On 5 December 2017, the final RFRP was issued in accordance
with Section 25(2)(h) of the IBC. The last date for submission of the
Resolution Plans was 8 January 2018. The RFRP was amended on 17
January 2018 and 20 January 2018 to extend the last date for submission B
to 20 January 2018. On 25 January 20185, the NCLT again extended the
last date for submission of the Resolution Plans until 27 January 2018.
9. By the last date for submission, Resolutions Plans were received
by the E-RP from Ebix and another entity. These were shared with the
E-CoC on 29 January 2018. Following this, both the Applicants were C
invited to give their presentations to the E-CoC on 2 February 2018.
10. Ebix was declared as the successful Resolution Applicant by
the E-CoC on 9 February 2018. Ebix had discussions about its Resolution
Plan with the E-CoC, and submitted a revised Resolution Plan on
19 February 2018, with an addendum on 21 February 2018. D
11. Upon the directions of the E-RP, the E-CoC commenced
e-voting on the Ebix’s Resolution Plan at 7.00 pm on 21 February 2018.
The voting lines were kept open till 7.00 pm on 22 February 2018.
According to the results of the e-voting, in terms of the voting share
percentage: (i) 74.16 per cent members of the E-CoC voted to approve E
the Resolution Plan; (ii) 17.29 per cent members voted to reject the
Resolution Plan; and (iii) the remaining members, having cumulatively
8.55 per cent share, abstained from voting on the Resolution Plan. The
Resolution Plan thus failed to achieve the minimum percentage of 75
per cent, in accordance with Section 30(4) of the IBC (as it stood then).
F
12. A day later on 23 February 2018, one of the members of the
E-CoC (CSEB) informed the E-RP by an email that due to a technical
error, they could not participate in the e-voting process. CSEB had a
voting share of 1.195 per cent in the E-CoC, and wanted its affirmative
vote to be recorded on the Resolution Plan. CSEB’s vote would enhance
the voting share in favour of Ebix’s resolution plan to 75.35 per cent, G
thus meeting the threshold under Section 30(4).
13. The E-RP filed the CSEB Application6 under Section 60(5) to
seek the directions of the NCLT in regard to CSEB’s late vote. NCLT
5
In applications CA No 30 of 2018 and CA No 42 of 2018
6
CA No 160 (PB) of 2018 H
362 SUPREME COURT REPORTS [2021] 14 S.C.R.

A by its order dated 28 February 2018, directed the E-RP to file an
application for approval of Ebix’s Resolution Plan under Section 30(6)
of the IBC, clarifying that the issue of CSEB’s vote would be taken up
together with the application. On 7 March 2018, the E-RP filed the
Approval Application7 seeking NCLT’s approval to Ebix’s Resolution
Plan under Section 30(6).
B
14. On 2 July 2018, Ebix issued a letter to the E-RP to expedite
the CIRP for Educomp. The relevant portions of the letter are extracted
below:
“…we would like to submit that the resolution plan for the Company
C was submitted with an expectation that the resolution process
shall be completed in a time bound manner, and the Resolution
Applicant shall get the management control of the Company before
the start of new academic session in India i.e. April 2018, subject
to being selected as the successful applicant (as per the terms
and conditions provided in the resolution plan), and the approval
D of the plan by the NCLT. This would have provided the Resolution
Applicant with sufficient time to restructure the operations of the
Company.
As you are aware, the operations of the Company are already
under stress and it would be safe to assume that no new contracts/
E customers are coming up. Further, the competitors of the Company
may be trying to take undue advantage of the situation, which
may further erode the business value of the Company and may
make the revival process more difficult.
The above negatively impacts the commercial consideration
F provided by the Resolution Applicant in the resolution plan submitted
for the Company.
As per the clause 7 of the Resolution Plan dated February 19,
2018 submitted by the Resolution Applicant, the terms of the
resolution plan is valid for six months from the date of the submission
G of the plan i.e. August 19th, 2018.
In light the above and fact that delay in completion of the resolution
process is negatively impacting the commercial consideration
offered by the Resolution Applicant in the resolution plan, we
7
H CA No 195 (PB) of 2018
EBIX SINGAPORE PVT. LTD. v. COMMITTEE OF CREDITORS OF 363
EDUCOMP SOLUTIONS LTD. [DR DHANANJAYA Y CHANDRACHUD, J.]

request you to ensure that the resolution process is completed in a A
time bound manner. Otherwise, the Resolution Applicant will be
forced to re- consider or withdraw the resolution plan on expiry
of the term of the plan in order to protect the interest of all its
stakeholders.”
A.4 Investigations into financial transactions of Educomp B
15. On 3 April 2018, an Indian online news publication, The Wire,
published an article titled “How Educomp May Have Subverted the Spirit
of India’s Insolvency and Bankruptcy Process”8. Another article titled
“Educomp’s Insolvency Process Becomes Murkier as Ebix Buys
Smartclass Educational Services” was published by The Wire on 26 April C
20189.
16. The E-RP has stated before this Court that based on these
reports, IFC, a financial creditor of Educomp, filed the IFC Application10
under Section 60(5) of the IBC seeking investigation of the affairs/
transactions of Educomp. On 4 May 2018, when the IFC Application D
came up before the NCLT, along with the CSEB Application and the
Approval Application, it directed the E-RP to file its reply and also directed
IFC to serve a notice on Ebix.
17. Similar applications- Axis Application11 and SBI Application12,
under Section 60(5) of the IBC read with Section 213 of the 2013 Act E
were filed by other financial creditors of Educomp, Axis Bank and SBI,
seeking ‘appropriate directions’ from the NCLT in view of the alleged
irregularities in the conduct of the affairs of Educomp.
18. In the meantime, on 1 August 2018, due to allegations of
financial mismanagement of Educomp between 2014-2018, the MCA F
directed an SFIO investigation13 into its affairs.
8
Manoj Gairola, “How Educomp May Have Subverted the Spirit of India’s Insolvency
and Bankruptcy Process” (The Wire, 3 April 2018) available at <https://thewire.in/
business/how-educomp-may-have-subverted-the-spirit-of-indias-insolvency-and-
bankruptcy-process> accessed on 26 July 2021
9
Manoj Gairola, “Educomp’s Insolvency Process Becomes Murkier as Ebix Buys
Smartclass Educational Services” (The Wire, 26 April 2018) available at <https://
G
thewire.in/business/educomps-insolvency-process-becomes-murkier-as-ebix-buys-
smartclass-educational-services> accessed on 26 July 2021
10
CA No 358 of 2018
11
IA No 448 (PB) of 2018
12
CA No 639 (PB) of 2018
13
Order No 32/2018/SFIO/CL-II H
364 SUPREME COURT REPORTS [2021] 14 S.C.R.

A 19. The NCLT, by its order dated 9 August 2018, dismissed the
applications filed by IFC, Axis and SBI and directed that: (i) the E-RP
shall convene a meeting of the E-CoC within three days to discuss the
subject matter of the applications; and (ii) the E-RP and E-CoC could
move an application before NCLT according to law, if advised to do so
by E-CoC.
B
20. Pursuant to NCLT’s order dated 9 August 2018, the E-CoC
hosted its 13th meeting on 13 August 2018, and a resolution was passed
with a 77.85 per cent vote to appoint an independent agency to conduct
a Special Investigation Audit into the affairs of Educomp. The relevant
terms of the resolution are as follows:
C
“RESOLVED THAT a special investigation audit on the affairs
of the Company be conducted by an independent agency, which
shall be appointed by the Committee of Creditors, for period
beginning from [1st January 2014] to [30th January 2018] having
following scope of work:
D
(i) All the matters/issues (approximate 21 in number) raised
in the Annual Audit Report of the Company for the Financial
Year 2016-17 issued by Haribhakti & Co, basis which adverse
opinion has been issued;

E (ii) Transactions involving alleged deliberate transfer of
business between the Company and SmartClass Educational
Services Private Limited (“SESPL”) prior to the commencement
of the insolvency process of the Company;
(iii) Transactions regarding genuineness of receivables from
F Edusmart Services Private Limited including cross-verification
with payables to Educomp Solutions Limited in the books of
Edusmart Services Private Limited;
(iv) Transactions involving settlement between the Company,
Educomp Learning Hour Private Limited, Vidya Mandir
Classes Limited and ICICI Bank Limited;
G
(v) Transactions relating to impairment with respect to
investment made by the Company in 4 of its subsidiaries;
(vi) Transaction relating to advance received by the Company
from Educomp Raffles Higher Education Limited;
H
EBIX SINGAPORE PVT. LTD. v. COMMITTEE OF CREDITORS OF 365
EDUCOMP SOLUTIONS LTD. [DR DHANANJAYA Y CHANDRACHUD, J.]

(vii) Distribution agreement with Digital Learning Solution A
SDN BHD;
(viii) Transactions referred to in the applications filed by
International Finance Corporation, Axis Bank Limited and
State Bank of India with the Hon’ble National Company Law
Tribunal; and B
(ix) Review of provisions against receivables done by Educomp
Solutions Limited;
(x) All other transactions/points raised in the applications
filed by Axis Bank, IFC and SBI with Hon’ble NCLT;
C
(xi) Any other issue, which the Committee of Creditors may
deem fit
RESOLVED FURTHER THAT the Resolution Professional,
be and is hereby authorized by the Committee of Creditors and
directed to file appropriate application/petition with the Hon’ble D
National Company Law Tribunal, inter alia, seeking consent/order
of the Hon’ble NCLT on the proposed special investigation audit
to be conducted by the independent agency.
RESOLVED FURTHER THAT given the limitations inherent
in the previous audits conducted on the Company, and in order for
E
the said investigation to be comprehensive, the Resolution
Professional, while filing such application/ petition, shall also, as
an additional prayer, seek consent/ order of the Hon’ble NCLT
that SESPL, other group companies of the Company and the
erstwhile customers of the Company, be directed to cooperate
with the independent agency so appointed, or in the alternative, to F
refer the matter to the Central Government to appoint an Inspector
under the Companies Act, 2013 to conduct said investigation.
RESOLVED FURTHER THAT the entire cost of the proposed
investigation (special investigation audit), shall be included in CIRP
Cost and accordingly be paid in terms of the provisions of the G
Insolvency and Bankruptcy Code, 2016 and the relevant
Regulations.
RESOLVED FURTHER THAT, the independent agency to
conduct the special investigation audit, shall be appointed by the
H
366 SUPREME COURT REPORTS [2021] 14 S.C.R.

A Core Committee, comprising of SBI, IDBI Bank, Axis Bank, IFC,
Yes Bank and J&K Bank”
21. The resolution was placed before the NCLT on 20 August
2018, when it was hearing the CSEB Application and the Approval
Application. The NCLT directed the E-RP to file an appropriate
B application. In accordance with the resolution dated 13 August 2018 and
NCLT’s order dated 20 August 2018, the E-RP filed the Investigation
Audit Application14 under Section 60(5) of the IBC seeking directions
from NCLT to carry out the Special Investigation Audit of Educomp.
22. It is stated before us that the Investigation Audit Application
C was heard on 11 September 2018, 20 September 2018, 27 September
2018 and 4 October 2018. On 4 October 2018, while reserving its order
in the Investigation Audit Application, the NCLT also directed the E-RP
to file an affidavit in relation to the transactions carried out by Educomp
under Sections 43, 45, 50 and 66 of the IBC.

D 23. The E-RP states that such an affidavit was filed, stating that
on the basis of the books of account and other relevant material pertaining
to Educomp, no transactions which needed to be avoided under Sections
43, 45, 50 and 66 of the IBC were found. The E-RP also stated that
since the NLCT had not issued specific directions for the conduct of a
Special Investigation Audit, no such audit was conducted.
E
24. This affidavit was listed before the NCLT on 7 December
2018, along with the Approval Application. On 10 January 2019, the
NCLT reserved its orders on the Approval Application.
25. On 12 June 2019, Educomp made a regulatory disclosure to
F the BSE and NSE in relation to the ongoing investigations being conducted
by agencies such as SFIO and CBI. The material parts of the disclosure
read thus:
“This is with reference to your mail dated June 10, 2019, related
to news appeared in the “Business Standard” captioned
“Transactions of debt-ridden Educomp Solutions come under SFIO
G
scanner”.
[…]

14
H CA No 793 (PB) of 2018
EBIX SINGAPORE PVT. LTD. v. COMMITTEE OF CREDITORS OF 367
EDUCOMP SOLUTIONS LTD. [DR DHANANJAYA Y CHANDRACHUD, J.]

3. It is pertinent to note that BDO India LLP carried out transaction A
audit in order to ascertain if there was any preferential,
undervalued, extortionate or fraudulent transactions falling within
the ambit of Section 43, 45, 50 and 66 of the Code. The Transaction
review report was prepared by BDO India LLP in February 2018
which was further circulated and discussed with the CoC. On
B
examination of the BDO Report and other relevant material
available with the Resolution Professional during the CIRP period,
no transaction was found by the Resolution Professional which
was required to be avoided in terms of the said Sections. Further,
the two land transactions as alleged in the Media Report have not
been reported by BDO in their Report and hence, the Resolution C
Professional is not in a position to comment on the same.
As regards allegation in the Media Report that “Suspect
transactions of debt-ridden Educomp Solutions have come under
the lens of Serious Fraud Investigation (SFIO), which is probing
the company for alleged fund-diversion and inflated land deals, D
we would like to clarify that SFIO Investigation into the affairs of
Educomp Solutions Limited is currently ongoing wherein the
Resolution Professional has been supplying the data/ information/
documents to them as and when required however, no such
information has been brought to the notice of the Resolution
Professional as yet. Moreover, the article appears to be based on E
a false, motivated, fabricated data.”
A.5 Applications for withdrawal of the Resolution Plan
26. On 5 July 2019, Ebix filed the First Withdrawal Application 15
under Section 60(5) of the IBC, for the following reliefs: F
“i. Direct that the Ld. Resolution Professional supply a copy of
the Special Investigation Audit to the Resolution Applicant
forthwith;
ii. Direct that the Ld. Resolution Professional supply a copy of
the Certificates under Sections 43, 45, SO and 66 of the Insolvency G
and Bankruptcy Code, 2016 to the Resolution Professional
forthwith;

15
CA 1252 (PB) of 2019 in CP (IB) No 101 (PB) of 2017 H
368 SUPREME COURT REPORTS [2021] 14 S.C.R.

A iii. Withhold approval of the Resolution Plan sanctioned by the
Committee of Creditors of the Corporate Debtor, as filed before
this Hon’ble Tribunal on 11.04.2018, pending detailed consideration
of the same by the Resolution Applicant;
iv. Grant the Resolution Applicant sufficient time to re-
B evaluate its proposals contained in the Resolution Plan, and
also to suitably revise/modify and/or withdraw its Resolution
Plan;”
(emphasis supplied)
Ebix contends that the application was necessitated because: (i)
C the Approval Application had been pending before the NCLT for 17
months, much beyond the period envisaged in the RFRP and its Resolution
Plan; (ii) Educomp’s CIRP had been pending for 26 months, beyond the
statutory period under the IBC; (iii) the tenure of the government
contracts awarded to Educomp, which was crucial to its functioning,
D may have ended, leading to an erosion of its substratum; and (iv) due to
recent media reports, it had misgivings about the management and affairs
of Educomp.
27. On 10 July 2019, the NCLT dismissed the First Withdrawal
Application with the following order:
E “C.A. No. 1252(PB)/2019
This is an application filed by one Ebix Singapore Ptd. Limited
seeking re-valuation of the Resolution Plan submitted by it before
the Resolution Professional.
No ground for considering the prayer sought in the application is
F
made out.
The application is dismissed as such.”
28. Thereafter, Ebix filed the Second Withdrawal Application16
under Section 60(5) of the IBC, seeking the following reliefs:
G “i. Allow the Resolution Applicant to withdraw the Resolution Plan
dated 19.02.2018 (along with the Addendum/Financial Proposal
dated 21.02.2019) submitted by it, and as approved by the
Committee of Creditors;

16
H CA 1310 (PB) of 2019 in CP (IB) No 101 (PB) of 2017
EBIX SINGAPORE PVT. LTD. v. COMMITTEE OF CREDITORS OF 369
EDUCOMP SOLUTIONS LTD. [DR DHANANJAYA Y CHANDRACHUD, J.]

ii. Direct the Ld. Resolution Professional and/or Educomp Solutions A
Limited and the Committee of Creditors to refund the Earnest
Money Deposit of Rs. 2,00,00,000/- furnished by the Resolution
Applicant in respect of the Resolution Plan;
iii. Withhold approval of the Resolution Plan sanctioned by the
Committee of Creditors of the Corporate Debtor, as filed before B
this Hon’ble Tribunal on 07.03.2018 and recorded vide order dated
1.1.04.2018, pending detailed consideration of the same by the
Resolution Applicant;”
While repeating the reasons mentioned in the First Withdrawal
Application, it provided a reason for filing the Second Withdrawal C
Application in the following terms:
“xii. That the present Applicant had also filed an Application dated
05.07.2019 bearing PB/IA/1252/2019 under Section 60(5) of the
Code, seeking revision/revaluation of the Resolution Plan.
However, the same was dismissed by this Hon’ble Tribunal, and D
during the course of hearing in the said Application, this Hon’ble
Court put it to the Resolution Applicant to withdraw the Resolution
Plan by way of a separate Application. The present Application
for withdrawal of the Resolution Plan is being made in pursuance
of the same.”
E
29. On 5 September 2019, the NCLT dismissed the Second
Withdrawal Application with the following order:
“C.A. No. 1310(PB)/2019
In para ‘B (xii)’ under the caption ‘facts of the case’, the following
averments have been made F
[…]
The italic portion of the aforesaid para shows that the prayer for
withdrawal of the Resolution Plan has been made inter alia on the
suggestion of the Court which is neither reflected in the order nor
is born out from any record. Such an averments imputing to the G
Court something which has never been said is condemnable. The
cause of action cannot be based on any such things.
Accordingly, we dismiss this application with liberty to the applicant
to file fresh one on the same cause of action, if so advised.”
H
370 SUPREME COURT REPORTS [2021] 14 S.C.R.

A 30. Thereafter, Ebix filed the Third Withdrawal Application, seeking
the following reliefs:
“i. Allow the Resolution Applicant to withdraw the Resolution Plan
dated 19.02.2018 (along with the Addendum/Financial Proposal
dated 21.02.2019) submitted by it, and as approved by the
B Committee of Creditors;
ii. Direct the Ld. Resolution Professional and/or Educomp Solutions
Limited and the Committee of Creditors to refund the Earnest
Money Deposit of Rs. 2,00,00,000/- furnished by the Resolution
Applicant in respect of the Resolution Plan;
C iii. Withhold approval of the Resolution Plan sanctioned by the
Committee of Creditors of the Corporate Debtor, as filed before
this Hon’ble Tribunal on 07.03.2018 and recorded vid order dated
11.04.2018, pending detailed consideration of the same by the
Resolution Applicant;”
D The earlier applications for withdrawal were referred to:
“xiv. It may be noted that, the present Applicant had also filed an
Application dated 05.07.2019 bearing PB/IA/1252/2019 under
Section 60(5) of the Code, seeking revision/revaluation and/or
withdrawal of the Resolution Plan. The said application was
E dismissed by this Hon’ble Tribunal on the basis that modification/
revaluation of the Resolution Plan could not be permitted. The
Applicant thereafter filed an Application bearing PB/IA/1310/2019
seeking withdrawal of the Resolution Plan simpliciter, which was
dismissed by the Hon’ble Tribunal vide order dated 07.09.2019,
F while granting liberty to file a fresh application seeking withdrawal
of the Resolution Plan.”
The reasons for withdrawal were the same as those in the previous
applications for withdrawal.
31. On 18 September 2019, the NCLT issued notice in the Third
G Withdrawal Application and directed the E-RP to place it before the
E-CoC. The E-RP placed the application before the E-CoC at the
14th meeting on 26 September 2019. The E-CoC resolved not to allow
the application for withdrawal.
A.6 Orders of NCLT and NCLAT
H
EBIX SINGAPORE PVT. LTD. v. COMMITTEE OF CREDITORS OF 371
EDUCOMP SOLUTIONS LTD. [DR DHANANJAYA Y CHANDRACHUD, J.]

32. By its order dated 2 January 2020, NCLT allowed the Third A
Withdrawal Application. The NCLT held that the application for
withdrawal was not barred by res judicata since in the previous
proceeding relating to the First Withdrawal Application, it had not
consciously adjudicated on whether the Resolution Plan could be
withdrawn. The rationale for the order is indicated in the following extract:
B
“11. No doubt there was a prayer for withdrawal of resolution
plan amongst others in CA No.1252 (PB)/2019, the prayer for
revaluation was specifically declined dismissal order dated
10.07.2019. While dismissing CA No.1252(PB)/2019 the
prayer for withdrawal of resolution plan was neither
considered nor was ever dealt with. The issue of withdrawal C
of the resolution plan by the Applicant has never been
considered consciously on merit and/or adjudicated upon
in CA No.1252(PB)/2019.
12. Doctrine of Constructive Res Judicata does not apply
to the issues/points, or any “lis’ between parties that has D
not been decided previously, and despite being pleaded,
has not been considered by a court/tribunal and expressly
dealt with in the order so passed.
13. Even a bare perusal of the Order dated 10.07.2019 would
indicate that the issue of withdrawal of the Resolution Plan by the E
Resolution Applicant was not dealt with on merit and that no
decision has either been passed or attained finality as regards
allowing the party to withdraw the Resolution Plan.
14. It is also pertinent to note here that the Resolution Applicant
had subsequently taken up the prayer for withdrawal of the F
Resolution Plan in the Application bearing CA No.1310 (PB)/2019.
While dealing with the said Application, liberty was given
to the Applicant vide order dated 01.09.2019 to re-file an
application for withdrawal of the Resolution Plan. This
direction further confirms that there was no conscious G
adjudication in CA No.1252(PB)/2019 on the issue of
withdrawal of the resolution plan by the Applicant.”
(emphasis supplied)
The NCLT held that: (i) a Resolution Plan becomes binding after
it is approved by it as the Adjudicating Authority; (ii) under Section 30(2) H
372 SUPREME COURT REPORTS [2021] 14 S.C.R.

A of the IBC, the Adjudicating Authority has the power to examine whether
the Resolution Plan can be effectively enforced and implemented; and
(iii) in the ‘present circumstances’, an unwilling successful Resolution
Applicant would be unable to effectively implement the Resolution Plan.
The relevant parts of the order are extracted below:
B “20. In the instant case the Resolution Plan is still pending before
the Adjudicating Authority for approval. Under the provisions
of Section 31 of the Code, a Resolution Plan becomes
binding only after acceptance of a plan by the Adjudicating
Authority.
C […]
23. Section 30(2)(d) of the Code mandates the Adjudicating
Authority to ensure that there are effective means of enforcement
and implementation of the Resolution Plan. Similarly, the proviso
to sub-section (1) of Section 31 of the Code mandates Adjudicating
D Authority to ensure effective implementation of the resolution plan.
The object. in approval of the resolution plan is to save the
corporate debtor and to put it back on its feet. An unwilling and
reluctant resolution applicant, who has withdrawn his
resolution plan, neither can put the corporate debtor back
to its feet nor the effective implementation of its resolution
E plan can be ensured.
24. No doubt the withdrawal of the resolution plan at this advance
stage has caused great prejudice to the creditors/stake holders
and legal consequences on the withdrawal of the resolution plan
shall follow as per law. The Resolution Professional and CoC are
F free to take action as per law consequent upon withdrawal of the
resolution plan by the resolution applicant including on the issue of
refund of the earnest money deposited by the applicant.
25. Be that as it may compelling an unwilling and reluctant
resolution applicant to implement the plan may lead to
G uncertainty. The object of the Code is to ensure that the Corporate
Debtor keep working as a going concern and to safeguard the
interest of all the stake holders. The provisions of the Code mandate
the Adjudicating Authority to ensure that the successful resolution
applicant starts running the business of the Corporate Debtor
afresh. Besides Court ought not restrict a litigant’s fundamental
H
EBIX SINGAPORE PVT. LTD. v. COMMITTEE OF CREDITORS OF 373
EDUCOMP SOLUTIONS LTD. [DR DHANANJAYA Y CHANDRACHUD, J.]

right to carry on business in its way under Article 19(1)(g) of the A
Constitution. Once the applicant is unwilling and reluctant
and itself has chosen to withdraw its resolution plan, a doubt
arises as to whether the resolution applicant has the
capability to implement the said plan. Uncertainty in the
implementation of the resolution plan cannot also be ruled
B
out.”
(emphasis supplied)
The NCLT also directed that Educomp’s CIRP be extended by a
period of 90 days, commencing from 16 November 2019.
33. As a consequence of its order allowing the Third Withdrawal C
Application, the NCLT also dismissed the Approval Application on
3 January 2020 as being infructuous.
34. E-CoC filed the Withdrawal Appeal assailing NCLT’s order
dated 2 January 2020. On 3 February 2020, the NCLAT stayed the
order dated 2 January 2020. The Approval Appeal17 was also filed by D
the E-CoC under Section 61 of the IBC, assailing NCLT’s order dated 3
January 2020.
35. By its order dated 29 July 2020, NCLAT set aside the order of
the NCLT allowing the withdrawal of the resolution plan. On the issue
of res judicata, the NCLAT held that there being no appeal against the E
order of the Adjudicating Authority rejecting the First Withdrawal
Application, the issue had attained finality. The NCLAT held:
“82…in view of the dismissal of said CA 1252(PB)/2019 by the
Adjudicating Authority and the said order which had attained
finality and more so in the absence of any ‘Appeal’ being filed F
against the said order, then the dismissal order of CA 1252 of
2019 order dated 10.7.2019 binds the 1st Respondent/’Resolution
Applicant’ as an ‘Inter-se’ party.
[…]
84.…the Adjudicating Authority in the particular circumstances G
of the present case has no power to grant /reserve liberty to bring
a fresh application and hence, the subsequent application filed by

17
Company Appeal (AT) (Insolvency) No 587 of 2020 H
374 SUPREME COURT REPORTS [2021] 14 S.C.R.

A the 1st Respondent /’Resolution Applicant is barred by the principle
of ‘Res Judicata’ notwithstanding the liberty to file fresh one.”
On the merits of the application for withdrawal, the NCLAT held
that: (i) once the Resolution Plan was approved by the CoC, the NCLT
did not have jurisdiction to permit its withdrawal; (ii) the Adjudicating
B Authority could not enter upon the wisdom of the decision of the CoC to
approve the Resolution Plan; (iii) the Resolution Applicant had accepted
the conditions of the Resolution Plan and no change could be permitted;
(iv) orders have already been reserved in the Approval Application; (v)
no Special Investigation Audit had been conducted; (vi) Section 32A of
the IBC grants full immunity to the Resolution Applicant from any offences
C committed before the commencement of the CIRP; and (vii) Ebix had
participated in the process from August 2018 to January 2019 when
orders had been reserved on the Approval Application, and hence it
could not claim any right based on delay.
A.7 Present status of SFIO and CBI investigation
D
36. In an email dated 17 February 2020, the E-RP informed the
E-CoC that the CBI conducted a search of the premises of Educomp on
11 February 2020 and seized numerous documents (a list was enclosed
with the email). By another email dated 19 February 2020, the E-RP
informed the E-CoC that CBI had resumed its search for documents at
E Educomp’s office.
37. In the 16th meeting of the E-CoC on 30 March 2020, the E-RP
provided the following updates in relation to the CBI and SFIO
investigations:

F (i) The CBI search at the premises of Educomp on 11 February
2020, was conducted upon a complaint by SBI on behalf of a
consortium of banks;
(ii) Since the initiation of an enquiry by the MCA on 1 August
2018, the SFIO has requisitioned documents/information, which
have been provided;
G
(iii) The last communication from the SFIO was received on 27
February 2020; and
(iv) In response to the grievance of some members of the E-CoC
that the E-RP had only informed them of the investigations at a
H
EBIX SINGAPORE PVT. LTD. v. COMMITTEE OF CREDITORS OF 375
EDUCOMP SOLUTIONS LTD. [DR DHANANJAYA Y CHANDRACHUD, J.]

belatedly, the Chairperson of the E-CoC justified it by stating that A
the communication could only take place once the relevant
investigation was completed. However, for future references, the
Chairperson took note of the suggestion that the E-RP would add
all members of the E-CoC to a WhatsApp group, where real-time
updates could be shared.
B
At the meeting, the E-CoC also passed a resolution with 77.05
per cent majority vote directing the E-RP to invoke and forfeit the EMD
of Rs 2 crores furnished by Ebix in accordance with Clause 1.9.1 of
RFRP. The E-RP issued a letter to IDBI on 1 April 2020 for encashment
of the EMD.
C
38. In the 17th meeting of the E-CoC on 8 May 2020, the E-RP
provided further updates in relation to the CBI and SFIO investigations,
noting that they were still ongoing and no further action was required to
be taken.
39. The E-RP has informed this Court that the last communication D
received from the SFIO was on 4 September 2020. The investigations
by the CBI and SFIO are continuing.
B Civil Appeal No 3560 of 2020 – the Kundan Care Appeal
B.1 The appeal
E
40. This appeal arises under Section 62 of the IBC from a judgment
dated 30 September 2020 of the NCLAT. The NCLAT dismissed an
appeal18 instituted by the appellant, Kundan Care, under Section 61 of
the IBC against an order dated 3 July 2020 of the NCLT.
41. The NCLT had dismissed an application19 filed by Kundan
F
Care under Section 60(5) of the IBC to withdraw its Resolution Plan
submitted for the fourth respondent – Corporate Debtor, Astonfield. In
appeal, the NCLAT upheld the NCLT’s decision, relying on its judgment
impugned in the Ebix Appeal. It held that an application filed by a
Resolution Applicant to withdraw from the Resolution Plan approved by
the CoC could not be allowed since: (i) there was no provision in the G
IBC for it; (ii) the Resolution Plan is enforceable as a contract against
the Resolution Applicant; and (iii) the Resolution Applicant was estopped
from withdrawing.
18
Company Appeal (AT) (Insolvency) No 653 of 2020
19
IA No 1679 of 2019 in CP No (IB)-940 (ND) of 2018 H
376 SUPREME COURT REPORTS [2021] 14 S.C.R.

A 42. The correctness of this view of the NCLAT now comes up
for determination in the present appeal. While issuing notice on
16 November 2020, this Court had directed for an ad-interim stay on
the judgment of the NCLAT, which continues till date.
B.2 Initiation of CIRP
B 43. On 20 November 2018, Astonfield filed a petition20 under
Section 10 of the IBC seeking to initiate voluntary CIRP. The NCLT
admitted this petition on 27 November 2018 and appointed an IRP.
44. A CoC was then constituted, which consisted of the second
and third respondents, EXIM Bank and PFCL. The A-CoC appointed
C the first respondent, Mr Amit Gupta, as the RP and his appointment was
confirmed by the NCLT on 1 February 2019.
B.3 Invitation, submission and approval of Resolution Plan
45. On 20 February 2019, A-RP invited prospective resolution
D applicants to submit their EOIs in accordance with Regulation 36 of the
CIRP Regulations and Form G was also published. Form G was amended
by the A-RP, with due approval from the A-CoC, on 2 May 2019 and
17 May 2019.
46. A-RP received nine EOIs, out of which seven were found to
be eligible. However, Kundan Care did not submit its EOI within the
E
time prescribed by the A-RP, and its belated submission was rejected by
the A-RP.
47. Thereafter, A-RP issued the RFRP on 6 March 2019 to the
prospective Resolution Applicants who had been selected. Further, the
IM was issued on 13 March 2019. Based on this, two Resolution Plans
F
were received by the A-RP on 31 May 2019, which were then discussed
with the A-CoC.
48. In the interim, Kundan Care filed an application21 before the
NCLT challenging the A-RP’s rejection of its belated EOI. A-RP
received the notice of this application on 30 August 2019. By order dated
G 6 September 2019, the NCLT allowed Kundan Care’s application.
Thereafter, it was provided access to the RFRP, IM and other documents
pertaining to Astonfield in the data room.

20
CP No (IB)-940 (ND) of 2018
H 21
CA No 1119 of 2019
EBIX SINGAPORE PVT. LTD. v. COMMITTEE OF CREDITORS OF 377
EDUCOMP SOLUTIONS LTD. [DR DHANANJAYA Y CHANDRACHUD, J.]

49. Kundan Care submitted its Resolution Plan for consideration A
on 16 September 2019. The Resolution Plan was placed before the
A-CoC, which requested Kundan Care to submit a revised proposal.
Kundan Care then submitted an updated draft of its Resolution Plan on
29 October 2019.
50. A-RP then conducted the 17 th meeting of the A-CoC on B
11 November 2019, to discuss the Resolution Plans submitted by Kundan
Care and one more prospective Resolution Applicant (who had also
submitted a revised Resolution Plan after negotiations with the A-CoC).
Thereafter, Kundan Care submitted a revised version of its Resolution
Plan on 12 November 2019, along with an addendum on 13 November
2019. C

51. The A-CoC voted on the Resolution Plans on 14 November
2019, where the Resolution Plan submitted by Kundan Care was approved
with a majority of 99.28 per cent, with 0.72 per cent abstaining. On
15 November 2019, the A-RP issued a Letter of Award to Kundan Care.
Kundan Care also deposited a PBG of Rs 5 Crores with the A-RP/A- D
CoC.
52. A-RP then filed an application22 for approval of the Resolution
Plan under Section 31 of the IBC before the NCLT, along with Form H,
as mandated under the CIRP Regulations. This application is currently
pending adjudication before the NCLT. E

B.4 Astonfield’s dispute with GUVNL
53. Before proceeding further, it is important to discuss the dispute
arising out of Astonfield’s PPA with GUVNL. The PPA was signed on
30 April 2010, came into force in December 2012. and was valid for a F
period of 25 years. Crucially, this PPA was the only agreement entered
into by Astonfield and formed the entirety of its business.
54. When CIRP was initiated against Astonfield, GUVNL issued
a notice of default under Article 9.2.1(e) of the PPA, stating that the
initiation of insolvency was an “event of default”. This was challenged
G
before the NCLT by A-RP23 and EXIM Bank24 through applications
under Section 60(5) of the IBC.

22
CA No 1526 of 2019
23
CA No 700 of 2019
24
CA No 701 of 2019 H
378 SUPREME COURT REPORTS [2021] 14 S.C.R.

A 55. It is important to note that Kundan Care was aware of this
dispute, and made specific references to it in its Resolution Plan. Under
the heading of “PPA Risk”, it noted:
“GUVNL had served notices to terminate the Agreement since
the Company is undergoing the process of Insolvency. However
B as per the Order of the Hon’ble NCLT dated 29 August 2019
(CA) 700/ND/2019 & CA 701/ND/2019) it is concluded that the
Power Purchase Agreement (PPA) is an “instrument” for the
applicability of Section 238 of the IBC, 2016 and clauses 9.2.1 e
read with 9.3.1 of the PPA under reference are inconsistent within
the ambit of Section 238 of/BC, 2016, provisions of/BC, 2016 and
C process initiated under /BC shall have an overriding effect over
the PPA.
Further, the Hon’ble NCLAT vide order dated 15 October 2019
has clearly stated that even in the event of Liquidation of the
Corporate Debtor the appellant, Gujarat Urja Vikas Nigam Limited,
D cannot terminate the Power Purchase Agreement under the Code.
Also, the Liquidator shall ensure that the Corporate Debtor remains
a going concern. It is therefore very evident and clear that the
Power Purchase Agreement cannot be terminated and has to
continue even after the Resolution Plan has been approved by the
E Hon’ble NCLT.”
56. On 29 August 2019, the NCLT allowed the applications and
set aside the notice of default issued by GUVNL. It held that allowing
the termination of the PPA would adversely affect the ‘going concern’
status of Astonfield. However, it held that if Astonfield was to undergo
liquidation subsequently, the termination would be permitted.
F
57. The NCLT’s judgment was challenged by GUVNL in an
appeal25 before the NCLAT. By judgment dated 15 October 2019, the
NCLAT dismissed the appeal and partly upheld the decision of the NCLT,
in as much as it disallowed the termination of the PPA during the CIRP.
However, it reversed the NCLT’s findings and held that even if Astonfield
G were to undergo liquidation, the termination of the PPA would not be
allowed.
58. GUVNL challenged NCLAT’s judgment in the GUVNL
Appeal26 before this Court. When the present appeal was filed by Kundan
25
Company Appeal (AT) Insolvency No 1045 of 2019
H 26
Civil Appeal No 9241 of 2019
EBIX SINGAPORE PVT. LTD. v. COMMITTEE OF CREDITORS OF 379
EDUCOMP SOLUTIONS LTD. [DR DHANANJAYA Y CHANDRACHUD, J.]

Care, the GUVNL Appeal was pending before this Court. However, it A
has been disposed by a judgment dated 8 March 2021, in the following
terms:
“165 Given that the terms used in Section 60(5)(c) are of wide
import, as recognized in a consistent line of authority, we hold that
the NCLT was empowered to restrain the appellant from B
terminating the PPA. However, our decision is premised upon a
recognition of the centrality of the PPA in the present case to the
success of the CIRP, in the factual matrix of this case, since it is
the sole contract for the sale of electricity which was entered into
by the Corporate Debtor. In doing so, we reiterate that the NCLT
would have been empowered to set aside the termination of the C
PPA in this case because the termination took place solely on the
ground of insolvency. The jurisdiction of the NCLT under Section
60(5)(c) of the IBC cannot be invoked in matters where a
termination may take place on grounds unrelated to the insolvency
of the corporate debtor. Even more crucially, it cannot even be D
invoked in the event of a legitimate termination of a contract based
on an ipso facto clause like Article 9.2.1(e) herein, if such
termination will not have the effect of making certain the death of
the corporate debtor. As such, in all future cases, NCLT would
have to be wary of setting aside valid contractual terminations
which would merely dilute the value of the corporate debtor, and E
not push it to its corporate death by virtue of it being the corporate
debtor‘s sole contract (as was the case in this matter‘s unique
factual matrix).”
Hence, this Court held that GUVNL would not be allowed to
terminate its PPA with Astonfield since: (i) the termination was solely F
on account of Astonfield entering into insolvency proceedings; and (ii)
being its sole contract, the PPA’s termination would necessarily result in
the corporate death of Astonfield, which would derail the entire CIRP.
B.5 Withdrawal of the Resolution Plan
G
59. On 17 December 2019, Kundan Care filed an application under
Section 60(5) of the IBC seeking permission of the NCLT to withdraw
its Resolution Plan, which had been previously approved by the A-CoC
and was pending confirmation by the NCLT under Section 31 of the
IBC. In its application, it prayed for the following reliefs:
H
380 SUPREME COURT REPORTS [2021] 14 S.C.R.

A “a) Allow the present application and permit the Applicant to
withdraw its Resolution Plan as submitted and approved by the
CoC on 14.11.2019;
b) Direct that the Performance Bank Guarantee submitted by the
Applicant be cancelled/revoked/returned/refunded to the
B Applicant;”
In its application, Kundan Care stated that there was no bar under
the IBC on it withdrawing its Resolution Plan before it was confirmed
by the NCLT. It sought to withdraw its Resolution Plan on account of
four reasons:
C (i) That there was uncertainty in relation to the PPA with
GUVNL, since the GUVNL Appeal was pending before
this Court. It noted that the PPA was central to the CIRP,
and its termination would affect its Resolution Plan. Further,
it noted that GUVNL had unilaterally refused permission to
D Astonfield to change the solar panels which had been
damaged in the floods of 2017, and had not made any
payments to Astonfield for the electricity being supplied
currently;
(ii) That due to heavy floods in the State of Gujarat during 2019,
E the solar panels and other equipment at the Project Site of
Astonfield had been damaged. Further, it alleged that there
was stagnant water at the Project Site, which continued to
deteriorate them;
(iii) That Astonfield’s insurance claim of Rs 46.40 crores in
F relation to floods in 2017 had been repudiated by the insurer.
Further, it also noted that this may also adversely affect the
claim for the floods in 2019; and
(iv) That the IM issued by A-RP represented that since Astonfield
had not availed the benefit of “Accelerated Depreciation”
under the PPA, hence, it was entitled to a sum of Rs 6.614
G
crores from GUVNL, which was a “Trade Receivable”.
However, it noted that Kundan Care had subsequently
discovered a previous judgment of this Court upon identical
facts, where it was noted that the Project Developer shall
not be entitled to a higher/revised tariff in case of not availing
H “Accelerated Depreciation”.
EBIX SINGAPORE PVT. LTD. v. COMMITTEE OF CREDITORS OF 381
EDUCOMP SOLUTIONS LTD. [DR DHANANJAYA Y CHANDRACHUD, J.]

60. On 6 January 2020, Kundan Care filed an additional affidavit A
outlining the additional costs it would face on account of: (i) deterioration
of the solar panels due to GUVNL unilaterally not permitting their
replacement, thereby leading to additional cost of Rs 30 crores (against
an initial expected cost of Rs 9 crore); (ii) Astonfield’s Plant not
producing electricity at its optimum level, thereby leading to a loss of
B
revenue up to Rs 150 lacs per month; and (iii) CIRP costs on account of
delay in CIRP, thereby leading to a loss of Rs 12 lacs per month (approx.).
It noted:
“5. I say and submit that after submission of the Resolution plan,
the Applicant’s representatives had visited the site again and found
that almost all the solar panels installed at the Project site are C
required to be changed/replaced at a total cost of over INR 30
crores instead of INR 9 crores ascertained by the Applicant at
the time of submission of the Plan.
[…]
D
17. I say and submit that the plant is capable of generating 18133200
KWH/Units of Electricity per annum (11.5 MW * 365 days * 24
hours* 1000 (from MW to KW) * 18% CUF = 18133200 KWH/
Units), when operating at the optimum capacity which would only
be possible after change/replacement of solar panels, inverters
etc. as contemplated in the Resolution Plan. This translates to E
generation revenue of roughly INR 1800 lacs per annum or roughly
INR 150 lacs per month which is being incurred by the Project.
18. I say and submit that in addition to the aforesaid generation
loss, a sum of INR 12 lacs (approx.) is being incurred towards
monthly CIRP cost on account of the delay in the CIR process.” F
61. Thereafter, Kundan Care also filed an application for
impleadment27 in the GUNVL Appeal pending before this Court, along
with an application for directions28 praying, in exercise of this Court’s
jurisdiction under Article 142 of the Constitution of India, for the following
reliefs: G
“a) Set aside/quash the Notice dated 28.03.2019 issued by Gujarat
Urja Vikas Nigam Limited to Astonfield Solar (Gujarat) Private

27
IA No 9679 of 2020
28
IA No 9682 of 2020 H
382 SUPREME COURT REPORTS [2021] 14 S.C.R.

A Limited and declare that the Applicant/Corporate Debtor shall be
free to change/replace the solar panels/modules and other
equipment of the Project, as may be deemed fit by the Applicant/
Corporate Debtor;
b) Declare that the Power Purchase Agreement dated 30.04.2010
B executed between Gujarat Urja Vikas Nigam Limited and
Astonfield Solar (Gujarat) Private Limited shall stand extended
by the period of moratorium declared under IBC during the CIR
Process;
c) In alternate to prayers a) and b), permit the Applicant to withdraw
C its Resolution Plan dated 12.11.2019 and direct that the
Performance Bank Guarantee submitted by the Applicant to the
Committee of Creditors shall stand cancelled/revoked and/or
returned/refunded to the Applicant;”
62. While the GUVNL appeal and its application remained pending,
D on 14 May 2020, Kundan Care requested the NCLT to take up its
application for an early hearing. Following this, the application was listed
on 15 June 2020.
63. On 12 June 2020, A-RP filed its reply to Kundan Care’s
application and additional affidavit, where it opposed the withdrawal of
E the Resolution Plan after its approval by the A-CoC and stated that:
(i) In relation to the ongoing dispute with GUVNL, Kundan
Care was aware of the same when it submitted the
Resolution Plan;
(ii) In relation to the damage to the solar panels, it pointed out
F that the A-RP had informed Kundan Care about the floods
in 2019 and an Operation and Management Agency had
been hired to clear the water at the Project Site, which had
been done;
(iii) In relation to the repudiation of the insurance claim, the
G RFRP or IM never guaranteed that the claim would be
successful. In any case, the A-RP was actively pursuing
the challenge to its repudiation;
(iv) In relation to the “Accelerated Depreciation”, that the same
had been listed as a “doubtful debt” by the A-RP in the IM.
H
EBIX SINGAPORE PVT. LTD. v. COMMITTEE OF CREDITORS OF 383
EDUCOMP SOLUTIONS LTD. [DR DHANANJAYA Y CHANDRACHUD, J.]

Further, in any case, Kundan Care would have done their A
own due diligence surrounding it; and
(v) In relation to Astonfield’s Plant not operating at full capacity,
the IM issued by A-RP noted that the floods in 2017 had
affected the Plant and it may not be able to operate at full
capacity. B
64. Kundan Care filed its rejoinder to the A-RP’s reply on 29
June 2020, in which they argued that the Resolution Plan proposed by
them and approved by the A-CoC, was no longer “feasible” and “viable”
commercially, in accordance with Section 30(2)(d) read with proviso to
Section 31(1) of the IBC, due to the intervening circumstances before C
its confirmation by the NCLT which had materially altered the financial
projections. Hence, the NCLT should allow it to withdraw the Resolution
Plan. In the alternative, Kundan Care proposed re-negotiation of the
Resolution Plan by stating the following:
“55. That Para 78 of the Reply is the Prayer Clause, which is D
wrong and denied. The Prayer Clause of C.A. No. 16798/2019 is
reiterated and reaffirmed. Alternatively, and without prejudice to
the above, it is prayed that the Applicant may be permitted to re-
negotiate the financial proposal with the CoC”
65. The A-CoC also filed its reply to Kundan Care’s application E
on 30 June 2020, where it stated that: (i) NCLT could not adjudicate
upon the application since Kundan Care had filed another application
before this Court in the GUVNL Appeal; and (ii) in any case, Kundan
Care knew of the risks while entering the CIRP and should not be allowed
to withdraw at such a belated stage.
F
66. The NLCT passed an order dated 3 July 2020, by which it
rejected Kundan Care’s application by noting that: (i) it did not have
jurisdiction to permit withdrawal; and (ii) the matter was also sub judice
before this Court by the virtue of Kundan Care’s application in the
GUVNL Appeal. The order stated:
G
“IA 1679/2019
Counsels for the Resolution Applicant, COC and IRP are present.
The Resolution Applicant has prayed to withdraw the resolution
plan which was submitted before this Tribunal after approval of
the COC. After careful consideration of the matter, we are of the H
384 SUPREME COURT REPORTS [2021] 14 S.C.R.

A view that the NCLT has no jurisdiction to permit withdrawal of
the resolution plan which has been placed before the authority
with due approval of the COC. Notwithstanding this fact, it has
been pointed out by the Counsel for the COC that another matter
is subjudiced before the Hon’ble Supreme Court in which inter-
alia a similar request has been made. This has been submitted by
B
the Cotinsel for the COC on page 31 of the reply filed by COC in
response to the application.
Keeping this in view, it will not be appropriate for this Tribunal to
deal with an issue which is already subjudiced before the Hon’ble
Supreme Court. The Application is hereby rejected.”
C
67. In view of the NCLT’s order, Kundan Care made an oral
request for withdrawal of its application to this Court when the GUVNL
Appeal was listed on 20 July 2020. This request was allowed by this
Court.

D 68. Thereafter, the appellant filed an appeal before the NCLAT,
challenging the order dated 3 July 2020 passed by the NCLT. NCLAT
did not issue notice in the appeal, but heard the submissions of all parties
at the stage of admission and directed them to file their written
submissions.

E 69. By the impugned judgment dated 30 September 2020, the
NCLAT dismissed the appeal by Kundan Care, relying on the judgment
impugned in the Ebix Appeal. It noted:
“7. Be it seen that the CIRP process undertaken involves filing of
Expression of Interest by the prospective Resolution Applicants
F which may ultimately manifest in the form of prospective
Resolution Plan after negotiations as regards improvement or
revision in terms of the proposed Resolution Plan. This process is
in the nature of a bidding process where, based on consideration
of the provisions of a Resolution Plan with regard to financial
matrix, capacity of the Resolution Applicant to generate funds,
G infusion of funds, upfront payment, the distribution mechanism
and the period over which the claims of various stake holders are
to be satisfied besides the feasibility and viability of the Resolution
Plan, a Resolution Applicant emerges as the highest bidder (Hl)
eliminating the Resolution Plans of Resolution Applicants, which
are ranked H2 and H3. The approval of a Resolution Plan by the
H
EBIX SINGAPORE PVT. LTD. v. COMMITTEE OF CREDITORS OF 385
EDUCOMP SOLUTIONS LTD. [DR DHANANJAYA Y CHANDRACHUD, J.]

Committee of Creditors with requisite majority has the effect of A
eliminating H2 and H3 from the arena. Though, such approved
Resolution Plan would be binding on the Corporate Debtor and all
stake holders only after the Adjudicating Authority passes an order
under Section 31 of the I&B Code approving the Resolution Plan
submitted by Resolution Professional with the approval of
B
Committee of Creditors in terms of provisions of Section 30(6) of
the I&B Code, it does not follow that the Successful Resolution
Applicant would be at liberty to withdraw the Resolution Plan
duly approved by the Committee of Creditors and laid before the
Adjudicating Authority for approval thereby sabotaging the entire
Corporate Insolvency Resolution Process, which is designed to C
achieve an object. A Resolution Applicant whose Resolution Plan
stands approved by Committee of Creditors cannot be permitted
to alter his position to the detriment of various stake holders after
pushing out all potential rivals during the bidding process. This is
fraught with disastrous consequences for the Corporate Debtor
D
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, more so 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-tum and frustrate the entire exercise of Corporate Insolvency E
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 l&B Code entitling the Successful F
Resolution Applicant to seek withdrawal after its Resolution Plai1
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 G
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
Resolution Plan and the principle of estoppel by conduct would
apply to it; H
386 SUPREME COURT REPORTS [2021] 14 S.C.R.

A (iv) The value of the assets of the Corporate Debtor is bound to
have depleted because of passage of time consumed in Corporate
Insolvency Resolution Process and in the event of Successful
Resolution Applicant being permitted to walk out with impunity,
the Corporate Debtor’s depleting value would leave all stake
holders in a state of devastation.”
B
The NCLAT held that withdrawal of a Resolution Plan by the
Resolution Application after its approval by the CoC cannot be permitted
since: (i) it contravenes the principles of IBC, which require the CIRP to
be conducted in a time-bound manner in order to maximise the value of
the assets of the Corporate Debtor; (ii) permitting Kundan Care to
C withdraw would sabotage the CIRP, where the A-CoC had previously
rejected other prospective Resolution Applicants in favor of Kundan
Care; (iii) there is no specific provision in the IBC for allowing
withdrawal; (iv) the Resolution Plan incorporated contractual terms
binding the Resolution Applicant, and it is not akin to a contract of personal
D service which is legally unenforceable; (v) by the virtue of principle of
estoppel of conduct, Kundan Care is estopped from withdrawing; and
(vi) the withdrawal may lead to the Astonfield’s liquidation, and the value
of its assets were bound to have depleted in the interim.
C Civil Appeal No 295 of 2021 – the Seroco Appeal
E C.1 The appeal
70. This is an appeal under Section 62 of the IBC from an order
dated 10 December 2020 of the NCLAT. By its judgment, the NCLAT
dismissed an appeal29 instituted by Seroco, under Section 61 of the IBC
against an order dated 23 October 2020 of the NCLT.
F
71. The NCLT dismissed an application30 by Seroco under Section
60(5) seeking permission to modify its Resolution Plan submitted for the
Corporate Debtor – Arya Filaments. NCLT relied on the impugned
judgment in the Kundan Care Appeal. Further, it noted that while the
application prayed for a modification of the Resolution Plan, its title was
G “Application for withdrawal under section 60(5) of the Insolvency and
Bankruptcy Code, 2016”.
72. In appeal, the NCLAT partly upheld the NCLT’s decision and
held that Seroco could not be allowed to modify or withdraw the
29
Company Appeal (AT) (Insolvency) No 1054 of 2020
H 30
IA No 96 of 2020 in CP (IB) No 29 of 2018
EBIX SINGAPORE PVT. LTD. v. COMMITTEE OF CREDITORS OF 387
EDUCOMP SOLUTIONS LTD. [DR DHANANJAYA Y CHANDRACHUD, J.]

Resolution Plan approved by the Arya-CoC since: (i) it was the sole A
Resolution Applicant in the CIRP; (ii) Arya Filaments was an MSME;
and (iii) it was aware of Arya Filaments’ financial condition when it
submitted the Resolution Plan. However, it set aside the NCLT’s decision
in relation to the costs imposed on Seroco.
C.2 Initiation of CIRP B
73. The second respondent, Kotak, being a financial creditor of
Arya Filaments, filed a petition31 under Section 7 of the IBC seeking to
initiate CIRP.
74. By an order dated 17 August 2018, the NCLT initiated CIRP
against Arya Filaments and appointed the first respondent, Mr Ravi C
Kapoor, as the IRP. Thereafter, a CoC was constituted, which consisted
of Kotak Mahindra and the third respondent, UBIL. The Arya-CoC
then appointed Mr Ravi Kapoor as the RP.
C.3 Submission and Approval of Resolution Plan
D
75. The Arya-RP thereafter invited Resolutions Plans for Arya
Filaments. Seroco, being a company formed by the former employees
of Arya Filaments, submitted a Resolution Plan on 13 March 2019 where,
inter alia, they offered to pay Rs 6,79,22,000. This was the only
Resolution Plan which was received.
E
76. At its 4th meeting held on 16 April 2019, the Arya-CoC noted
that Seroco’s Resolution Plan needed some improvements and directed
it to submit a revised Plan. Seroco’s revised Resolution Plan was then
approved by the Arya-CoC in its 5th meeting held on 10 May 2019, with
100 per cent approval.
F
77. On or about 15 May 2019, the Arya-RP filed an application32
under Section 30(6) before NCLT for confirmation of the Resolution
Plan. Form H under the CIRP Regulations was filed by way of an
affidavit on 5 June 2020.
C.4 Modification of the Resolution Plan
G
78. On 9 June 2020, Seroco addressed a letter to the Arya-RP
and Arya-CoC highlighting that their Resolution Plan was based on the
economic conditions which prevailed at that time, which had been
31
CP (IB) No 29 of 2018
32
IA No 280 of 2019 in CP (IB) No 29 of 2018 H
388 SUPREME COURT REPORTS [2021] 14 S.C.R.

A significantly altered due to the onset of the COVID-19 pandemic. In
particular, it highlighted that:
(i) The physical condition of Arya Filament’s machinery would
have deteriorated;
(ii) Financial losses must have been suffered by Arya Filaments
B during the COVID-19 pandemic;
(iii) Demand/sale of Arya Filaments’ products must have suffered
during pandemic; and
(iv) Due to the pandemic, the funds of Seroco have also been
C drastically reduced.
It submitted a revised Resolution Plan to be considered by the
Arya-CoC. In the revised Resolution Plan, Seroco offered to pay, inter
alia, an amount of Rs 5,29,22,000. It also requested the Arya-RP and
Arya-CoC to file the revised Resolution Plan before the NCLT, and
D keep the proceedings on the confirmation of the previous Resolution
Plan in abeyance.
79. Thereafter, on 10 July 2020, Seroco filed an application before
the NCLT praying for the following reliefs:
“a) permit the Applicant to revise the Resolution Plan dated
E 13.3.2020 in terms of letter dated 09/06/2020 at Annexure C hereto;
b) direct the Respondent No. 2 to consider the modified resolution
plan as per Letter at Annexure C and vote afresh on the same;
c) direct the Respondent No.1 to provide an updated Information
Memorandum providing financial condition of the Corporate
F Debtor as on 1/07/2020;
d) during the hearing of this Application, stay the implementation,
operation and execution of the Resolution Plan dated 13.3.2020
of the Applicant;”

G It noted that its Resolution Plan was filed eighteen months ago
and was based on an IM published two years previously, following which
the conditions had materially altered. Hence, Seroco stated that while it
was genuinely interested in Arya Filaments, its changed circumstances
meant that it could not pay the entire consideration envisaged in the
Resolution Plan approved by the Arya-CoC earlier.
H
EBIX SINGAPORE PVT. LTD. v. COMMITTEE OF CREDITORS OF 389
EDUCOMP SOLUTIONS LTD. [DR DHANANJAYA Y CHANDRACHUD, J.]

80. Seroco’s application was listed before the bench of the NCLT A
which was hearing the Arya-RP’s application for confirmation of the
Resolution Plan. By a common order on 23 October 2020, the NCLT
allowed the Arya-RP’s application and confirmed Seroco’s Resolution
Plan which had been approved by the Arya-CoC. In relation to Seroco’s
application for modification, it noted:
B
“18. It is the matter of record that the instant application was filed
subsequent to the filling of the above stated IA ie. IA 280 of 2019
filed under Section 30(6) of the IB Code. It is stated by the
Applicant that the Resolution Plan, so submitted by the Applicant,
is based on the Information Memorandum which was published
two years ago. Considering the time of two years and outbreak of C
Covid-19, the Applicant is not aware of the current financial
condition of the Corporate Debtor and is now not in a position to
bear the costs/losses of the Corporate Debtor and hence, is seeking
for withdrawal of the Resolution Plan. This story is not believable
as the Corporate Debtor, being a MSME, has filed the plan D
considering the financial ‘condition of the Corporate Debtor and
have shown his interest to take the Company. Hence, having no
knowledge of the financial condition does not arise at all.
19. It is pertinent to mention herein that in view of the judgement
passed by Hon’ble NCLAT in Kundan Care Products Ltd vs. Mr. E
Amit Gupta Resolution Professional and-Ors (Company Appeal
(AT) (Insolvency) No. 653 of 2020), the Resolution Plan, once
submitted, cannot be withdrawn as there is no provision in the IB
Code which allows withdrawal of an approved Resolution Plan &
the successful Resolution Plan incorporates contractual terms
binding the Resolution Applicant but it is not a contract of personal F
service which may be legally unenforceable.
20. Moreover, there is an ambiguity in the instant application with
regard to the relief sought for, as the title of the application states
“Application for withdrawal under section 60(5) of the Insolvency
and Bankruptcy Code, 2016” whereas the prayer, as stated above, G
has no whisper regarding the withdrawal of the Resolution Plan.”
Hence, it rejected Seroco’s application and imposed costs of Rs
50,000.

H
390 SUPREME COURT REPORTS [2021] 14 S.C.R.

A 81. Seroco filed an appeal against the NCLT’s judgment, which
came to be dismissed by the NCLAT by its impugned order dated
10 December 2020, where it noted:
“2. After hearing learned counsel for the Appellant and having
regard to the Judgments rendered by this Appellate Tribunal holding
B that the Successful Resolution Applicant cannot be permitted to
withdraw the approved Resolution Plan coupled with the fact that
the Appellant in the instant case being the sole Resolution Applicant
in the Corporate Insolvency Resolution Process (CIRP) of the
Corporate Debtor which has been classified as an MSME and
admittedly having knowledge of the financial health of the
C Corporate Debtor as a promoter or a connected person cannot be
permitted to seek revision of the approved Resolution Plan on
that ground which would not be a material irregularity within the
ambit of Section 61(3) of the Insolvency and Bankruptcy Code,
2016. We are of the considered opinion that there is no merit in
D this appeal and the same is liable to be dismissed.”
Considering Arya Filament’s position as an MSME, Seroco being
a company formed by its former employees (who would have been aware
of its financial condition) and also being the sole Resolution Applicant,
the NCLAT refused to permit modification/withdrawal of the Resolution
E Plan.
D Submissions of counsel in the Ebix Appeal
D.1 Submissions for the appellant
82. Mr K V Vishwanathan, learned Senior Counsel appearing on
F behalf of Ebix submitted that a successful Resolution Applicant may be
permitted to withdraw the resolution plan (pending approval of the
Adjudicating Authority), on account of: (a) subsequent developments in
relation to Educomp (which in this case relate to investigations of fraud
and mismanagement during the pre-CIRP period); and (b) due to an
inordinate lapse of time, which has resulted in the complete erosion of
G the fundamental commercial substratum underlying the Resolution Plan.
Further, he argues that the NCLAT did not correctly apply the doctrine
of constructive res judicata. He has made the following submissions:
(i) Ebix is not bound by the Resolution Plan prior to the approval
of the Adjudicating Authority, in terms of the CIRP documents read with
H the scheme of IBC. In this regard, our attention was drawn to:
EBIX SINGAPORE PVT. LTD. v. COMMITTEE OF CREDITORS OF 391
EDUCOMP SOLUTIONS LTD. [DR DHANANJAYA Y CHANDRACHUD, J.]

(a) Section 31(1) of the IBC, which provides that the Resolution A
Plan is “binding…on all stakeholders” only upon approval by
the Adjudicating Authority;
(b) Section 74(3) of the IBC, which provides that a person can
be prosecuted or punished for contravening the Resolution
Plan only after its approval by the Adjudicating Authority; B
(c) The documents underlying the CIRP, i.e., invitation of EOI,
the RFRP, sanction letter and Resolution Plan take effect of
a binding contract only upon the approval of the Adjudicating
Authority and the execution of definitive agreements
thereafter; C
(d) Clause 1.1.6 of the RFRP provides that the Plan submitted
by Ebix will have to be approved by the Adjudicating Authority
and will be binding on all the stakeholders in relation to the
Corporate Debtor and Ebix, only after it has been approved
by the Adjudicating Authority; D
(e) Clause 1.10(1) of the RFRP provides that Ebix shall be
responsible for the implementation and supervision of the
Resolution Plan from the date of approval by the Adjudicating
Authority; and
(f) Clause 2.2.9 of the RFRP provides that Ebix shall, pursuant E
to approval by the Adjudicating Authority, execute definitive
agreements;
(ii) The Resolution Plan constitutes an offer qualified by time and
cannot be enforced against the parties after such a long period of time
has elapsed. In this regard, the following terms of the documents F
underlying the CIRP were highlighted:
(a) Clause 1.1.5 of the RFRP, which invites Resolution Plans
from prospective Resolution Applicants. Further, Clause 1
of the covering letter for submission of the Resolution Plan
provides that Ebix is setting out the offer in relation to the G
insolvency resolution of Educomp;
(b) The Resolution Plan was valid only for six months, since
Clause 1.8.3 of the RFRP invites resolution plans/offers
with a validity of six months;
H
392 SUPREME COURT REPORTS [2021] 14 S.C.R.

A (c) In accordance with the RFRP, Clause 7 of the Resolution
Plan provides that it is valid for a period of six months from
the date of submission. The appellant is a liberty to withdraw
the resolution plan if there is delay of several months beyond
the period of six months. It was emphasized that the
Resolution Plan is a qualified offer which is not open to
B
acceptance for an indefinite period. Reliance was placed
on the decision of this Court in Riya Travel & Tours
(India) (P) Ltd. v. C.U. Chengappa33 to support this
proposition;
(d) The CSEB Application for the approval of the resolution
C plan continues to be pending before the Adjudicating
Authority, while the Approval Appeal is pending before the
Appellate Authority. A period of eighteen months has passed
from the date of submission of the resolution plan (i.e., 19
February 2018) and twenty-seven months from the CIRP
D commencement date. Such severe and inordinate delay is
impermissible under Section 12 of the IBC and justifies the
withdrawal of the Plan;
(e) The delay in the approval was on account of the actions of
members of the E-CoC, who had sought a special audit of
E Educomp due to the concerns relating to mismanagement
of its affairs. Several members had filed applications (IFC,
Axis Bank and SBI) before the Adjudicating Authority in
this regard. The Adjudicating Authority by orders dated 13
August 2018, 20 August 2018 and 31 August 2018 took
cognizance of these applications and directed them to be
F placed before the E-CoC. The E-CoC approved the
Investigation Audit Application filed on its behalf before
the Adjudicating Authority for conducting a special audit by
77.85 per cent votes;
(f) SFIO initiated investigation against Educomp. Ebix became
G aware of the investigation only through disclosures made
to NSE/BSE and regulators on 12 June 2019;
(g) Ebix had sent a notice dated 2 July 2018 to the E-CoC/E-
RP stating that the severe delays in the CIRP have
33
H (2001) 9 SCC 512
EBIX SINGAPORE PVT. LTD. v. COMMITTEE OF CREDITORS OF 393
EDUCOMP SOLUTIONS LTD. [DR DHANANJAYA Y CHANDRACHUD, J.]

prejudiced the commercial considerations underlying the A
Resolution Plan and, in any case, the Resolution Plan was
valid only for six months. It urged the E-CoC/E-RP to
expedite the process for obtaining the Adjudicating
Authority’s approval. Thereafter, Ebix filed the First
Withdrawal Application for seeking information relating to
B
the financial position and other commercial aspects of
Educomp. After the dismissal of the First Withdrawal
Application, the appellant filed the Second and Third
Withdrawal Applications for withdrawal of its Resolution
Plan; and
(h) The above sequence of events shows that Ebix had no role C
to play in the delays plaguing the CIRP of Educomp. Section
12 of the IBC stipulates that the insolvency resolution
process should be completed in 270 days with an outer limit
of 330 days. This Court in CoC of Essar Steel India Ltd.
v. Satish Kumar Gupta & Ors.34 has held that “[i]t is D
only in such exceptional cases that time can be extended,
the general rule being that 330 days is the outer limit within
which resolution of the stressed assets of the corporate
debtor must take place beyond which the corporate debtor
is to be driven into liquidation”;
E
(iii) The events that have taken place subsequent to the submission
of Resolution Plan justify its withdrawal. In this regard, it was urged on
behalf of Ebix that:
(a) The Resolution Plan was based on certain considerations
that were fundamental to the Ebix’s bid for the business of F
Educomp, and were crucial for keeping the business of
Educomp as a going concern. These were the government
contracts and IP driven solutions in the education and health
industries. However, due to the inordinate delay in the
completion of the CIRP, many of the government contracts
may have ended. Further, various technology driven solutions G
and intellectual property owned and operated by Educomp,
which Ebix had sought to acquire, were no longer valid;

34
(2020) 8 SCC 531 H
394 SUPREME COURT REPORTS [2021] 14 S.C.R.

A (b) The E-CoC passed a resolution with 77.85 per cent votes
to conduct a special audit into the affairs of Educomp, which
shows that evidence is available to conclude that the affairs
of the company were mismanaged, which materially affect
the economic considerations underlying the Resolution Plan;
B (c) The affairs of Educomp are also being investigated by the
SFIO and CBI, which provides further evidence that the
affairs of Educomp were severally mismanaged and are
susceptible to criminal investigations;
(d) There has been a lapse of over three years resulting in an
C erosion of vital business prospects of Educomp; and
(e) The implementation and viability of a Resolution Plan is to
be assessed at the time of consideration of such plan by the
competent Court/Tribunal, and not at the time of submission
of the Plan. The subsequent events that have transpired
D after the submission of the Resolution Plan are relevant for
evaluating the commercial viability and the capability to
implement the plan. In the present case, the substratum
forming the basis of the resolution plan has been eroded by
the occurrence of the abovementioned events. Thus, the
successful Resolution Applicant has the right to withdraw
E the Resolution Plan in such circumstances;
(iv) Material information relating to the financial position and affairs
of Ebix was not provided to Ebix after the submission of the Resolution
Plan, as a consequence of which, there is an impairment of a fair process
in the conduct of a commercial transaction. In this context:
F
(a) Section 29(2) of the IBC, provides that all relevant
information should be provided to the Resolution Applicant;
(b) Regulation 36 of the CIRP Regulations provides that the
IM prepared under Section 29 of the IBC should contain
information relating to, inter alia: (1) “assets and
G
liabilities…”; (2) “the latest annual financial statement”;
and (3) details of “…ongoing investigations or proceedings
initiated by Government and statutory authorities”. While
this information is relevant for the preparation of the
Resolution Plan, there is a continuing obligation to disclose
H such information if there is a substantial delay in the CIRP
EBIX SINGAPORE PVT. LTD. v. COMMITTEE OF CREDITORS OF 395
EDUCOMP SOLUTIONS LTD. [DR DHANANJAYA Y CHANDRACHUD, J.]

(beyond the period prescribed under Section 12 of the IBC) A
qua the Corporate Debtor;
(c) The Resolution Applicant’s right to complete and accurate
information relating to the Corporate Debtor has been
recognized under the UNCITRAL Guide. The principle of
“equality of information” to all stakeholders, including the B
resolution applicant, has been underlined in the BLRC
Report; and
(d) The E-CoC/E-RP withheld information relating to
mismanagement of affairs of Educomp between 2014-2018,
and also in relation to the investigation into the affairs of C
Educomp by governmental authorities;
(v) The Adjudicating Authority has the power to permit the
withdrawal of the Resolution Plan. Under Section 31 of the IBC, it has
the power to independently satisfy itself that the “Resolution Plan as
approved by the CoC… meets the requirements as referred to in sub- D
section (2) of Section 30”. Section 30(2)(d) of the IBC provides that the
Adjudicating Authority can assess whether adequate provisions have
been made for the “implementation and supervision of the resolution
plan”. This Court in K Sashidhar v. IOC35 has emphasized that the
Adjudicating Authority has the discretion to reject the Resolution Plan if
it does not conform to the stated requirements of Section 30(2)(d). The E
proviso to Section 31(1) of the IBC expressly prohibits the Adjudicating
Authority from approving a plan that is incapable of being effectively
implemented. The NCLAT, in the impugned judgement, has not considered
whether the exercise of the jurisdiction by the Adjudicating Authority
under Section 31(1) read with Section 30(2)(d) was valid. In the present F
circumstances, the Resolution Plan is no longer capable of being
implemented due to the erosion of the commercial basis of the Resolution
Plan and an inordinate lapse of time;
(vi) The NCLT had good and valid reasons allowing for the
withdrawal of the resolution plan since: G
(a) There was no approval by the E-CoC with the requisite majority
of 75 per cent. When the voting took place on the resolution plan
submitted by the Appellant on 22 February 2018, there was a

35
(2019) 12 SCC 150 H
396 SUPREME COURT REPORTS [2021] 14 S.C.R.

A shortage in the votes required to achieve the statutory requirement
of 75 per cent of votes in the E-CoC. On 23 February 2018, one
of the financial creditors who was not present at the meeting of
the E-CoC intimated its agreement with the resolution plan and
accordingly the Approval Application was filed on 7 March 2018.
Orders have been reserved on the Approval Application on 10
B
January 2018; and
(b) Fulfilment of the Plan cannot be foisted on an unwilling
Applicant. This view of the NCLT is consistent with the legal
position which vests it with the power to permit a withdrawal
from a resolution plan for good and substantial reasons; and
C
(vii) The doctrine of res judicata does not bar the relief that Ebix
had sought in its Third Withdrawal Application of its Resolution Plan.
The First Withdrawal Application arose from a different cause of action,
namely seeking information and re-evaluation of the financial position of
Educomp due to a lapse of time. The order dated 10 July 2019 passed by
D the Adjudicating Authority in the First Withdrawal Application had only
adjudicated the issue relating to the non-disclosure of information and
material sought by Ebix, and had not considered the relief of withdrawal
of Resolution Plan. This was also confirmed in the express finding of the
Adjudicating Authority in its order dated 2 January 2020, which was
E appealed before the NCLAT.
D.2 Submissions for the first respondent
83. Mr Shyam Divan, learned Senior Counsel appearing on behalf
of E-CoC, has urged the following submissions:

F (i) Ebix submitted its Resolution Plan on 27 January 2018, after
month-long negotiations. Meetings between the E-CoC and
Ebix were conducted on 17 February 2018, 19 February
2018 and 21 February 2018. Addendums were submitted
on 21 February 2018. The mutually approved and negotiated
plan was put to vote, and approved by 75.36 per cent of the
G E-CoC. This constituted a binding contract between Ebix
and the E-CoC;
(ii) The IBC is a complete code as held by this Court in M/s
Embassy Property Developments Pvt. Ltd. v. State of
Karnataka & Ors.36 and M/s Innoventive Industries
H 36
(2020) 13 SCC 308
EBIX SINGAPORE PVT. LTD. v. COMMITTEE OF CREDITORS OF 397
EDUCOMP SOLUTIONS LTD. [DR DHANANJAYA Y CHANDRACHUD, J.]

Ltd. v. ICICI Bank & Anr. 37. It does not envisage A
withdrawals of Resolution Plans after mutual negotiations
between the Resolution Applicant and the CoC, which
culminates into a binding agreement. The Adjudicating
Authority cannot contravene the text to invoke the spirit/
object of the IBC without a conscious statutory prescription,
B
as held by this Court in Gujarat Urja Vikas Nigam
Limited v. Amit Gupta38;
(iii) The basic tenets of any insolvency law are to ensure the
sanctity of the prescribed processes and timelines.
Maximization of the value of assets and resolution of the
Corporate Debtor are the core objectives of the IBC, as C
held by this Court in Swiss Ribbons (P) Ltd v. Union of
India39. Enabling withdrawals, especially at the tail end of
the process, would push financially distressed Corporate
Debtors into liquidation;
(iv) The Specific Relief (Amendment) Act 2018, as is evinced D
from the speech of the Union Minister of Law & Justice
before the Rajya Sabha while introducing the amendments,
shifted the paradigm on contract enforcement in India where
specific performance is now the norm, rather than the
exception; E
(v) The resolution process involves significant public money,
resources and time. Enabling withdrawals would undermine
the goals of predictability and finality, which the legislature
had recognized as the need of the hour in the Rajya Sabha
debates on the IBC; F
(vi) Non-implementation of Resolution Plans after approval from
the Adjudicatory Authority under Section 31 of the IBC,
pertinently on a narrow scope of judicial review, is liable to
criminal prosecution under Section 74(3) of the IBC. This
Court should not allow a successful Resolution Applicant G
to withdraw from a duly concluded contract;

37
(2018) 1 SCC 407
38
2021 SCCOnLine SC 194, para 181
39
(2019) 4 SCC 17, paras 27-28 H
398 SUPREME COURT REPORTS [2021] 14 S.C.R.

A (vii) The consequences of permitting a withdrawal by Ebix would
push Educomp towards liquidation, which would risk
thousands of crores of public monies owed to public sector
banks during the economic crisis caused by the COVID-19
pandemic;
B (viii) Permitting withdrawal of an approved Resolution Plan
would tread on the exclusive domain of the CoC, which
has the power to determine the feasibility and viability of a
Resolution Plan. The mandate of Section 30(2)(d) of the
IBC, which envisages ‘implementation and supervision of
the resolution plan’, would be breached if the Court would
C allow withdrawals by holding that an unwilling Resolution
Applicant would make a Resolution Plan itself un-
implementable;
(ix) The scope of judicial review with the Adjudicatory Authority,
under Section 31 of the IBC, is confined to parameters
D delineated in Section 30(2), which does not envisage the
withdrawal or unwillingness of the Resolution Applicant to
continue with a CoC-approved Resolution Plan. The
Adjudicating Authority, as a creature of the statute, cannot
exercise jurisdiction beyond the scope of the IBC or second-
E guess the commercial wisdom of the CoC, as held by this
Court in Essar Steel (supra), after noting the observations
of this Court in K Sashidhar (supra);
(x) The Supreme Court, in Essar Steel (supra) and K
Sashidhar (supra), has held that the Adjudicating Authority
F cannot trespass upon the majority decision of the CoC,
except on the grounds enumerated under Section 30(2)(a)
to (e) of the IBC;
(xi) The provisions of the RFRP were designed to ensure
predictability and finality. The provisions which elucidated
G this aim were:
(a) Clause 1.13.5, which did not envisage any change or
supplemental information to the Resolution Plan, after the
submission date;
(b) Clause 1.8.4, which stated that a submitted Resolution
H Plan shall be irrevocable; and
EBIX SINGAPORE PVT. LTD. v. COMMITTEE OF CREDITORS OF 399
EDUCOMP SOLUTIONS LTD. [DR DHANANJAYA Y CHANDRACHUD, J.]

(c) Clause 1.10(l), which stipulated that the Resolution A
Applicant will not be permitted to withdraw the Resolution
Plan;
(xii) The RFRP did not envisage six months to be the validity of
the Resolution Plan. Clause 1.8.3, which stipulated a
minimum six-month validity of the Resolution Plan, is B
relatable to the acceptance of the plan by the E-CoC and
not the Adjudicating Authority. This is evident from the
clauses of the RFRP which stipulate that the submitted plan
is irrevocable;
(xiii) The resolution process belies the claim that withdrawals C
were permissible after the six-month period. The process
was delineated in the following terms:
(a) Clause 1.3.1 and 1.3.2 empowers the E-RP to issue an
invitation to prospective resolution applicants, subject
to, inter alia, non-disclosure agreements and D
participation fees;
(b) Clause 1.3.6, read with Clause 1.9.1, enables a party to
submit a Resolution Plan upon payment of an earnest
money deposit of Rs 2 crore. Along with the Resolution
Plan, the Resolution Applicant was required to submit E
an undertaking accepting the terms of the RFRP,
including the minimum six-month period of Resolution
Plan validity;
(c) Clause 1.9.3, read with Clause 1.9.5, ensures that a
CoC approved Resolution Plan becomes a binding F
contract between the E-CoC and Ebix, since the earnest
money deposit needs to be replaced with a performance
guarantee, which is 10 per cent of the Resolution Plan
value. Any violation of the concluded contract, which
would be the approved Resolution Plan in this case,
would give the E-CoC the right to invoke the G
performance guarantee;
(d) The above clauses, in addition to clause 1.8.3, read with
1.9.5, evince that the six-month validity is with respect
of the EMD alone, and is hence only related to a period
until acceptance by the E-CoC; H
400 SUPREME COURT REPORTS [2021] 14 S.C.R.

A (e) The consequence of approval by the Adjudicating
Authority under Section 31 of the IBC is that the parties
enter into definitive binding agreements, the
implementation of the Resolution Plan commences and
the performance guarantee is returned. A Section 31-
approval binds all stakeholders to a concluded contract
B
between the Ebix and the E-CoC;
(f) The CoC or the RP do not have the authority to impose
a time limit on the Adjudicating Authority. Therefore, it
would not be plausible to construe Clause 1.8.3 to
impose a maximum validity period on a Resolution Plan;
C and
(g) In any event, Ebix had waived the term of validity of
the plan being six months by pursuing the plan after six
months, i.e., from August 2018 till reserving of orders
by the Adjudicating Authority in January 2019, and not
D raising any claims till July 2019. Therefore, Ebix is
estopped from raising the plea, after the purported expiry
of the validity period;
(xiv) Clause 1.1.6 of the RFRP, which reiterated Section 31 of
the IBC and states that the Resolution Plan will be binding
E on all stakeholders only after the approval of the Adjudicating
Authority, does not militate against E-CoC’s proposition that
the CoC-approved Resolution Plan is a concluded contract.
This is because:
(a) Section 30(4) of the IBC does not contemplate any
F statutory exit after the approval of the Resolution Plan
by the CoC, which determines its feasibility and viability;
(b) Clause 1.1.6 paraphrases Section 31(1) of the IBC,
which merely makes the Resolution Plan binding on all
other stakeholders. The Adjudicating Authority’s
G approval under Section 31(1) amounts to a ‘super-added
imprimatur’ to the concluded terms between the CoC
and the Successful Resolution Applicant; and
(c) A conjoint reading of Clause 1.1.6, along with Clause
1.8.4, which declares a submitted Resolution Plan to be
H irrevocable, and Clause 1.10(l), which prohibits
EBIX SINGAPORE PVT. LTD. v. COMMITTEE OF CREDITORS OF 401
EDUCOMP SOLUTIONS LTD. [DR DHANANJAYA Y CHANDRACHUD, J.]

withdrawal of a submitted Resolution Plan, belies the A
claim that the Resolution Plan is binding on the
Successful Resolution Applicant only after approval of
the Adjudicating Authority;
(xv) The delay in the resolution process is not attributable to the
E-CoC. It cannot be cited to allow Ebix to withdraw from a B
legally binding plan;
(a) The E-CoC approved the submitted Resolution Plan
within 270 days, and it was promptly filed before the
Adjudicating Authority in March 2018. The orders on
the plan approval were reserved in January 2019 and C
pronounced only in January 2020. The delay cannot be
attributable to the E-CoC or used to withdraw from a
plan which provided a 90 per cent haircut; and
(b) actus curiae neminem gravabit, i.e., the act of Court
shall harm no man, is a settled principle in law; D
(xvi) Ebix’s argument that the substratum or commercial viability
has eroded due to the subsequent circumstances is facetious
since:
(a) Ebix had conducted its own due diligence, in accordance
with the RFRP. Section 29 of the IBC also enabled the E
appellant to access to an IM on Educomp, which would
include all relevant information, including financial
position and pending disputes. Clause 1.13.7 of the
RFRP also stipulates that failure to conduct adequate
due diligence is not a ground to relieve the Resolution F
Applicant from its obligations under a submitted
Resolution Plan;
(b) Ebix continued to be interested in Educomp as late as 1
June 2020, when it addressed a letter stating that the
software licenses for online education, issued by
G
Educomp, have become even more relevant in the
circumstances of the pandemic;
(c) The Investigation Audit Application for investigations
into the affairs of Educomp was filed in May 2018 and
disposed of by August 2018, which was prior to the
H
402 SUPREME COURT REPORTS [2021] 14 S.C.R.

A Adjudicating Authority reserving its orders on the
Resolution Plan. In any event, no such audit by the
Special Investigation Team was undertaken;
(d) According to the information available with the E-CoC,
the E-RP had provided all the information available with
B Educomp regarding the CBI and SFIO investigations,
on a best effort basis. Additionally, Ebix was also
appearing before the NCLT when the E-CoC sought
an investigation into the affairs of Educomp, as recorded
in the order of the NCLT dated 9 August 2018;
C (e) Ebix had evaluated the business and business conduct
of Educomp, before submitting a Resolution Plan worth
Rs 314 crores, against an admitted financial debt worth
Rs 3003 crores. This 90 per cent haircut indicates that
the appellant was aware of the conditions of Educomp;
and
D
(f) In any event, Section 32A of the IBC grants immunity
to a Resolution Applicant from any offences committed
by the Corporate Debtor, prior to the commencement
of the CIRP, and provides certainty that the assets of
the Corporate Debtor, as represented, would be available
E in the same manner as at the time of submission of a
Resolution Plan. Section 25(2)(j) of the IBC empowers
and obligates the RP to file applications for avoidance
of certain transactions, to protect the interests of the
Resolution Applicant; and
F (xvii) The Third Withdrawal Application is barred by res judicata
since the grounds raised by Ebix were rejected by the NCLT
in the First Withdrawal Application on 10 July 2019. The
liberty granted by the NCLT to file a fresh application on 5
September 2019 was with respect to filing a proper pleading
G without defects, and not on merits. This conditional liberty
cannot be construed as a waiver of the objection of res
judicata. In any event, the issue of limited validity of the
approved Resolution Plan and delay of seventeen months,
is barred by the principles of constructive res judicata.

H
EBIX SINGAPORE PVT. LTD. v. COMMITTEE OF CREDITORS OF 403
EDUCOMP SOLUTIONS LTD. [DR DHANANJAYA Y CHANDRACHUD, J.]

84. In the alternative, if Ebix were to succeed before this Court, A
the learned Senior Counsel on behalf of the E-CoC has prayed that this
Court exercise its powers under Article 142 of the Constitution of India,
and extend the limitation period for conducting the insolvency process
by three to four months for a fresh process to be initiated, subject to the
consent of the E-CoC.
B
D.3 Submissions for the second respondent
85. Supporting the submissions of the E-CoC, Mr Nakul Dewan,
learned Senior Counsel, has appeared on behalf of the E-RP. He has
submitted that:
(i) Upon the approval of a Resolution Plan by the CoC, a C
concluded contract comes into existence between the
Resolution Applicant and CoC. Any withdrawal of the
Resolution Plan would violate the concluded contract;
(ii) In the present case, Clauses 1.9.3 and 1.9.5, give the right to
the E-CoC to invoke the PBG submitted by Ebix if it attempts D
to renege from its contractual obligation to implement the
Resolution Plan;
(iii) The withdrawal would also be in violation of the objective of
the IBC, as noted by this Court in Swiss Ribbons (supra),
which is to ensure the revival and continuation of the Corporate E
Debtor. The withdrawal of the Resolution Plan at a belated
stage, would lead to the Corporate Debtor going into
liquidation;
(iv) The withdrawal of a Resolution Plan after its approval by the
CoC is not contemplated by: F
(a) The UNCITRAL Guide, according to which the role of
judicial authorities is limited to approving the Resolution
Plan after ensuring that it was approved by the CoC
properly. It does not envisage that the role of the judicial
authorities would extend to questioning the commercial G
wisdom of the CoC, much less allow for the withdrawal
of the Resolution Plan at the behest of the Resolution
Applicant;
(b) The BLRC Report: (1) notes that the UNCITRAL Guide
was used as a benchmark by Parliament while enacting H
404 SUPREME COURT REPORTS [2021] 14 S.C.R.

A the IBC; (2) opined that the CoC should be the driving
force behind the resolution of the Corporate Debtor; and
(3) does not discuss the withdrawal of a Resolution Plan;
(c) The UK Act does not allow for the withdrawal of a
Resolution Plan and limits the grounds of challenge. In
B Singapore, the Singapore Act allows challenges to the
Resolution Plan, without envisaging withdrawal;
(d) The Resolution Plan is a contract executed under the
aegis of the IBC and hence the statute must be
interpreted so as to further its objectives. Reliance for
C this proposition is placed on the following English
decisions: (1) Allied Domecq (Holdings) Ltd v. Allied
Domecq First Pension Trust Ltd40; (2) Reinwood
Ltd v. L Brown & Sons Ltd41; (3) Doleman v. Shaw42;
and (4) Standard Life Assurance Ltd v. Oak
Dedicated Ltd43; and
D
(e) If the Parliament while enacting the IBC intended to
permit the withdrawal of the Resolution Plan after its
approval by the CoC or NCLT, it would have provided
for such an eventuality. Section 12A was inserted by
amendment for situations involving a withdrawal from
E the CIRP. On the contrary, Section 74 provides for
penalties in case the Resolution Applicant does not
comply with the Resolution Plan;
(v) Ebix’s argument, that the RFRP which provides that the
Resolution Plan must be approved within six months would
F also include its approval by the Adjudicating Authority, is
contrary to the IBC since the parties, through an agreement,
cannot impose a restriction/condition on a judicial authority;
(vi) In any case, Ebix has actively pursued the Resolution Plan
even after the period of six months by communicating with
G the E-CoC/E-RP, arguing in its favor in the Approval
Application and by extending the EMD. The First Withdrawal
40
[2008] Pens. L.R. 425, paras 24 and 38
41
[2008] 1 W.L.R. 696, paras 5 and 11
42
[2009] Bus. L.R. 1175, paras 40 and 56
43
H [2008] EWHC 222 (Comm), para 16
EBIX SINGAPORE PVT. LTD. v. COMMITTEE OF CREDITORS OF 405
EDUCOMP SOLUTIONS LTD. [DR DHANANJAYA Y CHANDRACHUD, J.]

Application was filed only on 5 July 2019, after the expiry of A
nearly one year from the expiry of the period of six months
on 19 August 2018;
(vii) The investigations by the SFIO and CBI were initiated after
the filing of the Approval Application before the NCLT. Since
the E-RP was not aware of any discrepancies or illegalities B
committed by the former management of Educomp,
information about such activities could not have been provided
to intending Resolution Applicants under Section 29 of the
IBC. Section 29 only envisages that the RP will provide
information to prospective Resolution Applicants on a best-
effort basis; C

(viii) Ebix is a professional corporate entity, and through the
express provisions of its own Resolution Plan, has stated
that it has significant previous experience in the revival of
stressed assets. Before submitting its Resolution Plan for
Educomp, Ebix was provided access to the Virtual Data Room D
by the E-RP and conducted its due diligence. Hence, it should
not be allowed to seek a withdrawal, by arguing that certain
facts were not within its knowledge; and
(ix) In view of the decision of this court in Nagabhushanammal
v. C Chandikeswaralingam 44, the Third Withdrawal E
Application was barred by the principles of res judicata since
it sought the same prayer which was raised in the First
Withdrawal Application, and rejected by the NCLT in its order
dated 10 July 2019.
E Submissions of counsel in the Kundan Care Appeal F
E.1 Submissions for the appellant
86. Mr Ramji Srinivasan, learned Senior Counsel appearing on
behalf of Kundan Care, has urged the following submissions:
(i) The IBC vests the Adjudicating Authority with inherent G
powers to direct withdrawal:
(a) Section 60(5)(c) of the IBC vests the Adjudicating
Authority with wide powers and jurisdiction to “entertain

44
(2016) 4 SCC 434, para 15 H
406 SUPREME COURT REPORTS [2021] 14 S.C.R.

A and dispose of any question of law or facts, arising out
of or in relation to” the CIRP. Rule 11 of the NCLT
Rules 2016 also endows the NCLT with inherent powers.
This Court, in Gujarat Urja (supra), has held that
disputes arising in relation to insolvency can be
adjudicated under Section 60(5)(c). Accordingly, the
B
dismissal of Kundan Care’s application on “lack of
jurisdiction” is impermissible. Declining to go into merits
of its application amounts to an impermissible refusal to
exercise jurisdiction, as noted by this Court in National
Thermal Power Corporation Ltd. v. Siemens
C Atkeingesellschaft 45;
(b) The NCLT erred in rejecting Kundan Care’s contention
by confining its jurisdiction to Section 31(1) of the IBC
which specifically deals with approval or rejection of
Resolution Plans;
D (c) The NCLAT incorrectly proceeded on the assumption
that its powers in disposing off Kundan Care’s application
seeking withdrawal were circumscribed by Section 61(3)
of the IBC, which concerns appeals against approval of
a Resolution Plan. Kundan Care sought to invoke
E jurisdiction under Section 61(1) of the IBC which
provides a right of appeal against any order of the NCLT;
(d) The facts and circumstances, on the basis of which the
‘feasibility and viability’ of the Resolution Plan were
approved by the A-CoC in its commercial wisdom, have
F changed. Since the edifice of the A-CoC’s satisfaction
had altered, the NCLT has power to look into the facts
which warrant withdrawal or modification of the
Resolution Plan;
(e) The legislative background of Section 31 of the IBC
G does not contemplate circumstances that could arise after
submission of the Resolution Plan to the Adjudicating
Authority. The UNCITRAL Guide and the BLRC Report
place the viability of the Corporate Debtor at the heart
of the insolvency process. The CIRP mandates interests
45
H AIR 2007 SC 1491, para 5
EBIX SINGAPORE PVT. LTD. v. COMMITTEE OF CREDITORS OF 407
EDUCOMP SOLUTIONS LTD. [DR DHANANJAYA Y CHANDRACHUD, J.]

of stakeholders to be better preserved by reorganization A
than liquidation. The BLRC Report was relied upon by
this Court in K Sashidhar (supra) to propound the
principle of “commercial wisdom of the CoC” which
the Adjudicating Authority cannot interfere with as the
creditors, as the loss-making party in the insolvency, are
B
best placed to determine the terms of the resolution.
However, this principle does not touch upon instances
where there is a conflict between the CoC and the
Resolution Applicant where the latter will prima facie
suffer a loss. The Resolution Applicant has no stake in
the process until their Plan is approved by the NCLT C
and the probability of a complete loss, prior to the
approval of the Plan, is justiciable;
(f) The IBC contemplates strict timelines, and therefore did
not envisage a scenario of withdrawal, prior to approval
of the Resolution Plan under Section 31(1) of the IBC. D
This Court, in Essar Steel (supra), held that the 330-
day outer limit is directory which has resulted in Kundan
Care’s Plan remaining pending before the NCLT for
over a year, resulting in unviability and losses. Therefore,
Section 31 cannot be asserted while adjudicating a plea
for withdrawal or modification of a plan due to E
intervening factors having a material adverse effect in
this case;
(g) Kundan Care’s Resolution Plan was contingent on the
continuance of the PPA with GUVNL. If the
contingency does not arise, the Plan would become F
impossible. This Plan was accepted by the A-CoC on
this contingency. Therefore, disabling withdrawals or
modifications would in fact violate the commercial
wisdom of the A-CoC;
(h) The Resolution Plan has become unviable and impossible G
to implement. If mandatorily implemented, Astonfield is
bound to suffer losses and eventually declare itself
insolvent. These events hinder its effective
implementation and warrant the Plan’s rejection by the
A-CoC since the first proviso of Section 31(1), read with H
408 SUPREME COURT REPORTS [2021] 14 S.C.R.

A Sub-section (2)(d) warrants a determination by the
Adjudicating Authority of the Resolution Plan’s effective
implementation. The determination by the Adjudicating
Authority under Section 31(1) cannot be equated to that
of a rubberstamp where a holistic analysis is precluded;
B (i) BLRC’s Interim Report of February 2015 mentions that
‘viability’ is determined by providing that the cost of
financial arrangement (resolution amount invested by the
Resolution Application) should be lower than the Net
Present Value of future cash flows of the Corporate
Debtor. In Kundan Care’s calculation, the computed Net
C Present Value for future cash flow of Astonfield
demonstrates loss and a potential repeated CIRP; and
(j) The proposition that a Resolution Plan approved by the
CoC cannot be withdrawn or modified under any
circumstance, no matter the extent of impossibility or
D unviability that may have arisen subsequently, is seriously
flawed and is likely to lead to draconian and absurd
consequences. In the event that the basis of the
Resolution Plan is completely eroded, a Resolution
Applicant’s failure to implement the Plan would invite
E penal prosecution under Section 74 of the IBC and a
repeated CIRP. This will discourage prospective
Resolution Applicants from coming forward with their
Plans in the future, thus defeating the very purpose and
object behind the IBC;

F (ii) There is no concluded and binding contract between the
Resolution Applicant and the CoC, prior to approval by the
Adjudicating Authority:
(a) There is no concluded contract between the Resolution
Applicant and the CoC until the NCLT approves of the
G same. Section 7 of the Contract Act requires the
acceptance of offer to be absolute, unconditional and
unqualified. Clauses 1.1.9, 1.2, 1.9.4 and 2.2.6 of the
RFRP record the fact that the Plan would be binding
only after the approval of the Adjudicating Authority;

H
EBIX SINGAPORE PVT. LTD. v. COMMITTEE OF CREDITORS OF 409
EDUCOMP SOLUTIONS LTD. [DR DHANANJAYA Y CHANDRACHUD, J.]

(b) The RFRP is in the nature of an invitation to offer. A
Kundan Care’s Resolution Plan is an offer that is made
in pursuance of the RFRP. A contract is concluded and
becomes binding between the parties, only upon the
communication of its acceptance under Regulation 39(5)
of the CIRP Regulation, after the approval of the
B
Adjudicating Authority under Section 31 of the IBC. It
would be incorrect to term it as a concluded contract,
since it would have unforeseeable public ramifications;
(c) Since there is no concluded contract, withdrawal of an
offer prior to acceptance is a settled principle in contract
law and the Adjudicating Authority can give effect to C
this under Section 60(5) of the IBC;
(d) Arguendo, if there is a concluded contract, it has become
void under Sections 32 and 35 of the Contract Act.
Clause 1.8.3 of the RFRP provided that the Plan must
be valid for not less than six months. On this D
representation, Kundan Care prepared financial
projections on the assumption that they would take over
the project on 1 January 2020 and make it operational
by 1 April 2020. The projections were based on the
continuation of GUVNL’s PPA with Astonfield till 2037. E
Kundan Care even furnished revised projections based
on the assumption that they would be able to take over
the project by 30 September 2020 and make it operational
by 1 January 2021. Owing to this delay, Kundan Care
had noted that its original projections for the year 2038
went from a cumulative profit of Rs 886.53 lakhs to a F
cumulative loss of Rs 760.71 lakhs. The A-RP’s
statement was recorded by the NCLT on 20 February
2020 that Astonfield is incurring a daily loss of Rs 5
lakhs. This takes the cumulative loss of Astonfield to Rs
1647.24 lakhs; G
(e) Sl.No. 5.1 of Kundan Care’s Resolution Plan also clearly
stated that they would be at liberty to withdraw the
Resolution Plan in the event that there is any change in
the information provided in the IM or new information is
available, which constitutes a ‘material adverse change’. H
410 SUPREME COURT REPORTS [2021] 14 S.C.R.

A Kundan Care contends that this was specifically
introduced due to GUVNL’s attempts to terminate the
PPA. The A-CoC was not obligated to accept this
provision in the Plan, but since it has, the provision must
be enforced;
B (f) Withdrawal was necessitated because of uncertainty
over the continuation of the sole contract of Astonfield,
deterioration of the assets of Astonfield owing to the
floods in Gujarat, repudiation of Astonfield’s insurance
claim due to the alleged failure of the A-RP to provide
supporting documents and misrepresentation in respect
C of trade receivables towards non-availing the benefit of
accelerated depreciation; and
(g) Kundan Care had also demonstrated good faith since it
sought to withdraw the Resolution Plan on 17 December
2019, soon after GUVNL Appeal was listed before this
D Court. This interim application for withdrawal was filed
within a month of the A-RP submitting the plan to the
Adjudicating Authority. The NCLAT erred in noting that
this was a ploy on behalf of Kundan Care to frustrate
the CIRP after pushing out all rivals during the bidding
E process;
(iii) Alternatively, the CoC-approved Resolution Plan is a
contingent contract under Section 32 of the Indian
Contract Act:
(a) The contract has become void since the contingency
F of certainty of PPA with GUVNL within a specified
time through approval of the NCLT has become
impossible;
(b) GUVNL’s Appeal against the continuation of the
PPA, resolved by this Court in Gujarat Urja
G (supra), compounded by the COVID-19 pandemic
and the lockdown, is primarily responsible for the
delay in the conclusion of the CIRP. The delay, as
of 14 July 2021, in concluding the CIRP is 608 days.
The CIRP costs (Rs 12 lakhs per month approx.)
are also increasing, which have to be borne entirely
H
EBIX SINGAPORE PVT. LTD. v. COMMITTEE OF CREDITORS OF 411
EDUCOMP SOLUTIONS LTD. [DR DHANANJAYA Y CHANDRACHUD, J.]

by Kundan Care. The NCLT should have A
considered the alternative prayer of permission to
re-negotiate the financial proposal with the CIRP;
(c) The A-CoC’s approval through voting constitutes
‘provisional acceptance of offer’, as was held
analogously by this Court in Haridwar Singh v. B
Bagun Sumbrui46 which held that the contract
was not concluded in the absence of the
confirmation by the Government of the conditional
acceptance by the Divisional Forest Officer. A
statutory reading of Resolution Plans as contingent
contracts under Section 7 and 32 of the Contract C
Act would align with the intention of the IBC in
attracting investors to make offers as conditional
acceptance of the Plan, until it becomes binding
upon approval under Section 31(1) of the IBC; and
(d) Only section 31(1) of the IBC makes the Resolution D
Plan binding on all stakeholders, including the
Resolution Applicant and the CoC. This view is
bolstered by the fact that criminal sanctions for
non-implementation on a Resolution Applicant under
Section 74(2) of the IBC are applicable only after E
approval of the Resolution Plan under Section 31(1).
Regulation 36-A(7)(f) of the CIRP Regulations also
states that the refundable deposit can be forfeited
only in case of discovery of any false information
or record by the prospective Resolution Applicant.
Regulation 36-B(4A) also states that the non- F
refundable deposit shall be forfeited only on failure
to perform after approval of the Plan under Section
31 of the IBC. The impugned judgement’s effect
is to make it binding prior to the Adjudicating
Authority’s approval which does violence to the G
unambiguous language of S.31(1). This is further
supported by the provisions of the IBC as noted by
this Court in ArcelorMittal India Private

46
(1973) 3 SCC 889 H
412 SUPREME COURT REPORTS [2021] 14 S.C.R.

A Limited v. Satish Kumar Gupta 47 , that
disapproval by the CoC of a Plan on the grounds
of Section 29A of the IBC is still appealable by the
Resolution Applicant before the NCLT, and
therefore an approved Plan by CoC can still be
replaced by another Plan which has been able to
B
satisfy the criteria under section 29A before the
NCLT. In other words, a Plan approved by the
CoC does not result in a concluded contract because
it is replaceable by another party.
87. In the course of the final stage of the hearings, Kundan Care
C submitted that it had mutually negotiated a settlement with A-RP/A-
CoC and requested the exercise of this Court’s powers under Article
142 of the Constitution of India for a one-time relief of modification,
which would enable them to arrive at a mutually acceptable modification
to the Resolution Plan.
D E. 2 Submissions for the first respondent
88. Mr Nakul Dewan, learned Senior Counsel appeared on behalf
of the A-RP in the Kundan Care Appeal. He has also appeared on behalf
of the E-RP in the Ebix Appeal, both being collectively disposed of by
this judgement. He has made the following submissions, in addition to
E the arguments recorded above in the Ebix Appeal:
(i) There is no direct provision with respect to withdrawal of a
Resolution Plan under the IBC by a Resolution Applicant,
once approved by the CoC. Consequently, the Adjudicating
or Appellate Authority has no jurisdiction to direct
F withdrawals or modification of Resolution Plans;
(ii) Section 12 of the IBC provides for a time bound period of
180 days extendable up to 330 days for the completion of
the CIRP. Permitting the Resolution Applicant to withdraw
the Resolution Plan after the approval of the CoC sets at
G naught the entire time period subsumed in negotiating and
voting upon a Resolution Plan;
(iii) Kundan Care was permitted to submit its Resolution Plan
in spite of a failure to submit an EOI in time. Kundan Care

47
H Civil Appeal No. 9402 of 2018
EBIX SINGAPORE PVT. LTD. v. COMMITTEE OF CREDITORS OF 413
EDUCOMP SOLUTIONS LTD. [DR DHANANJAYA Y CHANDRACHUD, J.]

was aware of the pending litigation regarding the A
continuance of the PPA with GUVNL and had negotiated
with the A-CoC on that basis. Yet, Kundan Care filed an
application to withdraw its Plan within a month of its
approval and filing before the Adjudicating Authority. The
plea of withdrawal is an opportunistic tactic for re-
B
negotiation;
(iv) Clause 1.8.4 of the RFRP stated that a submitted Resolution
Plan shall be irrevocable. The format of the cover letter
annexed to the RFRP also makes statements on the binding
effect of the submission and its irrevocability. The LOI issued
by Kundan Care also states that the Resolution Applicant C
will not be permitted to withdraw;
(v) Clause 1.6.2 of the RFRP explicitly stated that any
‘Condition Precedents’ to the Plan had to be set out, for the
CoC to specifically consider. Any walk-away conditions also
had to be conspicuously set out with a heading, and under a D
consolidated paragraph. Sl. No.5.1 of the Resolution Plan
was not set out in this format, which clearly evinces that it
is being deployed as an afterthought to evade the
consequences of a submitted Resolution Plan. In any event,
none of the claims of Kundan Care constitute a material E
adverse change that they did not account for, after perusing
the IM;
(vi) Sl.No. 5.1 of Kundan Care’s Resolution Plan was not
introduced as a condition precedent to the Resolution Plan.
Sl.No. 12 of the Form H, that is required to be mandatorily F
submitted by the RP to the Adjudicating Authority, as per
Regulation 39(4) of the CIRP Regulations expressly
stipulates ‘Conditionalities’ that need to be specified, for
the benefit of the Adjudicating Authority. Attempts at
subsequent modification and withdrawal are not supported
by the Resolution Plan, the RFRP or the provisions of the G
IBC;
(vii) The CIRP costs currently stand at Rs 2.5 crore which
Kundan Care had committed to paying in full. As of 26 July
2021, the unpaid CIRP cost is Rs 1.66 crores which would
H
414 SUPREME COURT REPORTS [2021] 14 S.C.R.

A probably be payable from the pending insurance claim. A
table detailing the financial health of Astonfield for the last
three years was also annexed, to bolster the claim that
financial health has improved and profits can still be
generated; and
B (viii) The delay in approval of the Resolution Plan by the
Adjudicating Authority is an imponderable which cannot be
used to resile from a binding contract. The delay is also not
attributable to the A-RP or the A-CoC.
E.3 Submissions for the second respondent
C 89. Mr V Giri, learned Senior Counsel appearing for EXIM Bank
on behalf of the A-CoC, has made the following submissions:
(i) A Resolution Plan approved by the CoC is submitted by the
RP to the NCLT under Section 30(6) of the IBC. Once the
NCLT is satisfied that the Resolution Plan complies with
D the requirements of Section 30(2), it grants its approval to
the Plan, which becomes binding on all the stakeholders
involved in the Resolution Plan. Thus, in the above scheme
of things, IBC does not contemplate withdrawal of
Resolution Plan once it has been approved by the CoC;
E (ii) The penal provision under Section 74(3) is applicable to a
successful Resolution Applicant as it is a stakeholder in the
CIRP. The existence of a penal provision indicates that the
legislature intended to deter and discourage withdrawals of
Resolution Plans;
F (iii) CIRP is a time bound process of 180 days, which can be
further extended up to 330 days. If a successful Resolution
Applicant is allowed to withdraw its Resolution Plan, it will
set the clock back on the time spent on receiving the
Resolution Plan, evaluating it under Section 30(2) of the
IBC, putting it to vote before the CoC and finally obtaining
G
its approval from the Adjudicating Authority;
(iv) Withdrawal of the Resolution Plan at this stage would result
in the failure of the CIRP and Astonfield will go into
liquidation. IBC envisages liquidation as the last resort;
H
EBIX SINGAPORE PVT. LTD. v. COMMITTEE OF CREDITORS OF 415
EDUCOMP SOLUTIONS LTD. [DR DHANANJAYA Y CHANDRACHUD, J.]

(v) The process of issuing the RFRP and proposal of a A
Resolution Plan, and its subsequent approval by the CoC is
statutorily mandated. The formats of the documents
underlying the CIRP process are also provided by the statute
and the Regulations made thereunder. There is some room
for maneuverability provided to the parties to negotiate the
B
terms of the documents, however, that does not make any
difference to the statutorily prescribed nature of the
documents; and
(vi) The approval of the Resolution Plan under Section 30(3) of
the IBC by the CoC creates a binding contract between
the CoC and the successful Resolution Applicant because: C

(a) The proposed Resolution Plan has been approved by
the CoC and has been further submitted before the
NCLT by the RP;
(b) A Resolution Applicant is aware of the conditions D
stipulated under the IM and conducts its own due
diligence. It is given an opportunity to raise queries on
the information that is provided in the IM. Thus, once
the Resolution Applicant decides to submit a Resolution
Plan and a substantial time and effort is spent by the
RP and the CoC in the process of finalizing and E
approving a Resolution Plan, it cannot simply withdraw
the Resolution Plan without being subjected to
necessary consequences;
(c) The approval of the plan by the CoC indicates the ad
idem between the parties to enter into a contract. The F
resulting contract is conditional only upon the approval
by the NCLT;
(d) Pursuant to the approval of the Resolution Plan by the
CoC, the CoC issues an unconditional LOI to the
successful Resolution Applicant stating that it has been G
selected as the successful Resolution Applicant subject
to the approval of the NCLT. The successful Resolution
Applicant accepts the LOI and submits a PBG. The
successful Resolution Applicant is required to state that
the LOI is “accepted unconditionally”. It is only after
H
416 SUPREME COURT REPORTS [2021] 14 S.C.R.

A the LOI is unconditionally accepted by the successful
Resolution Applicant and the PBG is furnished, that
the RP makes an application to the NCLT for approval
of the Resolution Plan; and
(e) Contracting parties cannot renege on their promise to
B perform the contract without facing any consequences.
F Submissions of counsel in the Seroco Appeal
F.1 Submissions for the appellant
90. Mr Tirth Nayak has made the following submissions on behalf
C of Seroco:
(i) The Resolution Plan was submitted on the basis of
information that was provided under the IM issued by the
Arya-RP in August 2018. Over 18 months have passed since
the Resolution Plan was submitted. The inordinate delay in
D the approval of the Resolution Plan by the NCLT, along
with the outbreak of COVID-19 pandemic, has substantially
affected the valuation of Arya Filaments, apart from
impacting its business operations and financial position.
Thus, Seroco is entitled to re-evaluate and modify the
Resolution Plan based on such considerations;
E
(ii) The delay cannot be attributed to Seroco;
(iii) The value of assets and the working capital funds of Arya
Filaments have plummeted due to the losses that have
occurred in the past eighteen months rendering the
implementation of the current Resolution Plan impossible,
F
thereby making it necessary to modify the Plan to suit the
current circumstances;
(iv) Seroco was not made aware of the updated financial status
of Arya Filaments. It will be unjust if it is made to abide by
a Resolution Plan that was submitted eighteen months ago
G based on the IM that was issued over twenty-four months
ago;
(v) Clause 5.3.2. of the BLRC Report provides that the “RP
must provide the most updated information about the entity
as accurate as is reasonably possible to this range of solution
H
EBIX SINGAPORE PVT. LTD. v. COMMITTEE OF CREDITORS OF 417
EDUCOMP SOLUTIONS LTD. [DR DHANANJAYA Y CHANDRACHUD, J.]

providers. In order to do this, the RP has to be able to verify A
claims to liabilities as well as the assets disclosed by the
entity. The RP has the power to appoint whatever outside
resources that she may require in order to carry out this
task including accounting and consulting services…”.
Seroco cannot be expected to make a huge investment in
B
Arya Filaments without being given information on its current
financial status;
(vi) Seroco is genuinely interested in investing in Arya Filaments,
however, due to the change in circumstances, it is incapable
of paying the entire consideration as was stipulated under
the current Resolution Plan; and C

(vii) A Resolution Plan is an offer under Section 2(a) of the
Contract Act. The Resolution Applicant becomes bound by
the offer only if the Resolution Plan is approved by the
NCLT. At present, the Plan is still under the consideration
of the NCLT. Thus, Seroco can withdraw or seek D
modification of the Plan.
F.2 Submissions for the second and third respondents
91. Mr Jayant Mehta appearing on behalf of the Arya-CoC,
consisting of Kotak and UBIL, has supported the arguments of the E- E
CoC and A-CoC. He has urged the following additional submissions:
(i) There is no scope for modification of a Resolution Plan,
once it has been submitted by the RP to the Adjudicating
Authority, after voting by the CoC. The only ground sought
by Seroco for modification of the submitted Resolution Plan F
here is the exigency that has arisen due to the pandemic.
This is evinced from the fact that the application for
modification was made within 2 months of the outbreak of
the pandemic;
(ii) The Resolution Plan of Seroco was approved by the Arya-
G
CoC on 10 May 2019 and submitted to the Adjudicating
Authority for approval on 14 May 2019. When Seroco filed
their application before the NCLT for modification of the
Resolution Plan, Kotak and UBIL, by their emails dated 13
July 2020 and 17 July 2020 respectively, had informed the
Arya-RP that they record their disapproval for any such H
418 SUPREME COURT REPORTS [2021] 14 S.C.R.

A attempts at modification of the Resolution Plan which sought
to reduce the resolution amount payable to secured creditors
by Rs 1.5 crore;
(iii) There has been no material change in the assets or valuation
of Arya Filaments. Seventy-five per cent of the funds were
B to be generated by Seroco by the sale of the Arya Filament’s
assets; and
(iv) The following authorities were cited to elucidate on the
power of the Adjudicating Authority, which is tightly
circumscribed by the IBC, and designed to uphold the
C commercial wisdom of the CoC: K Sashidhar48 (supra),
Essar Steel49 (supra), Committee of Creditors AMTEK
Auto Limited Through Corporation Bank v. Dinkar
T Venkatasubramanian & Ors.50, Kalparaj Dharamshi
v. Kotak Investment Advisors Ltd. 51 , Jaypee
Kensington Boulevard Apartments Welfare
D Association & Ors. v. NBCC (India) Ltd. & Ors. 52
and Ghanashyam Mishra and Sons Private Limited
through the Authorized Signatory v. Edelweiss Asset
Reconstruction Company Limited through the
Director & Ors.53 An appeal under Section 61(3) of IBC,
E is therefore not maintainable for a Resolution Applicant
seeking modification of its approved Resolution Plan.
The Adjudicating Authority in allowing any such modification,
cannot do indirectly, what the statute does not permit it to do directly.
92. The rival submissions in the three appeals shall now be
F considered.
G Purpose of a law on insolvency
93. An examination of the raison d’etre of the IBC must
necessarily precede its analytical interpretation. A purposive interpretation
of the statute, as is argued by the contesting parties, cannot be evinced
G
48
Paras 52-58, 62, 68, 65
49
Paras 65, 67, 69 and 88
50
(2021) 4 SCC 457
51
2021 SCC OnLine SC 204, para 143
52
2020 SCC OnLine SC 1192, para 170
53
H 2021 SCC OnLine SC 313, paras 55-57, 67, 77
EBIX SINGAPORE PVT. LTD. v. COMMITTEE OF CREDITORS OF 419
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without examining the aims and objectives of the legislation. The IBC A
was introduced as a water-shed moment for insolvency law in India that
consolidated processes under several disparate statutes such as the 2013
Act, SICA, SARFAESI, Recovery of Debts Act, Presidency Towns
Insolvency Act 1909 and the Provincial Insolvency Act 1920, into a single
code. A comprehensive and time-bound framework was introduced with
B
smooth transitions between reorganization and liquidation, with an aim
to inter alia maximize the value of assets of all persons and balance the
interest of all stakeholders54.
94. Before we analyse the framework of the statute, the
UNCITRAL Guide, which was instructive for the Indian experience on
drafting the IBC55, provides some critical guidance on what an insolvency C
law represents. Notably, the UNCITRAL Guide explicitly refrains from
prescribing mandates for the specific choices (procedural or substantive)
that an insolvency law should provide. Instead, it clarifies that each
jurisdiction evolves its own insolvency regime based on its social, political
and economic goals. It notes56: D
“15. Since an insolvency regime cannot fully protect the interests
of all parties, some of the key policy choices to be made when
designing an insolvency law relate to defining the broad goals of
the law (rescuing businesses in financial difficulty, protecting
employment, protecting the interests of creditors, encouraging the E
development of an entrepreneurial class) and achieving the desired
balance between the specific objectives identified above.
Insolvency laws achieve that balance by reapportioning the
risks of insolvency in a way that suits a State’s economic,
social and political goals. As such, an insolvency law can
have widespread effects in the broader economy….. F

[…]
17. There is no universal solution to the design of an
insolvency law because States vary significantly in their
54
Statement of Objects and Reasons, IBC, 2016
G
55
3.3.1, The report of the Bankruptcy Law Reforms Committee Volume I: Rationale
and Design (November 2015), available at < https://ibbi.gov.in/BLRCReport Vol1_
04112015.pdf > accessed on 20 August 2021
56
Pgs 14-16 of the UNCITRAL Legislative Guide to an Insolvency Law, available at <
https://uncitral.un.org/sites/uncitral.un.org/files/media-documents/uncitral/en/05-
80722_ebook.pdf > accessed on 20 August 2021 H
420 SUPREME COURT REPORTS [2021] 14 S.C.R.

A needs, as do their laws on other issues of key importance
to insolvency, such as security interests, property and
contract rights, remedies and enforcement procedures.
Although there may be no universal solution, most insolvency laws
address the range of issues raised by the key objectives discussed
above, albeit with different emphasis and focus. Some laws favour
B
stronger recognition and enforcement of creditor rights and
commercial bargains in insolvency and give creditors more control
over the conduct of insolvency proceedings than the debtor
(sometimes referred to as “creditor-friendly” regimes). Other laws
lean towards giving the debtor more control over the proceedings
C (referred to as “debtor-friendly” regimes), while yet others seek
to strike a balance in the middle…..” (emphasis supplied)
95. With this legislative guidance from international law, the BLRC
was commissioned by the Government of India for submitting a report
with recommendations of reforms for the existing regime and a draft of
D the proposed Insolvency and Bankruptcy Code. In November 2015, the
BLRC Report published its report in two volumes, with the first volume57
delineating the rationale and the second volume providing the design of
the proposed legislation.
96. The BLRC report noted that the insolvency regime was due
E for a major overhaul as the recovery rates in India were among the
lowest in the world58 and a revamped, coherent code was envisaged
with speed and predictability woven into its underlying design to ensure
higher recovery rates and immediate liquidation, in the event of a failed
resolution. As noted by this Court in Essar Steel (supra), the insolvency
regime in India was overhauled after the provisions of SICA, SARFAESI
F and Recovery of Debts Act, in spite of providing for expeditious
determination, were used by defaulting companies to enjoy extended
moratorium periods and failure to enforce timelines meant legal
proceedings would drag on for years and not result in recovery of stressed
assets59. Similarly, in its observation on “Speed is of Essence”, the BLRC
G report elaborated the commercial purpose of a revamped insolvency
regime in the following terms60:

57
supra note 55
58
Executive Summary, BLRC Report, supra note 55
59
Para 118, Essar Steel (supra)
60
H Executive Summary, BLRC Report, supra note 55
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“Speed is of essence for the working of the bankruptcy code, for A
two reasons. First, while the “calm period” can help keep an
organisation afloat, without the full clarity of ownership and control,
significant decisions cannot be made. Without effective leadership,
the firm will tend to atrophy and fail. The longer the delay, the
more likely it is that liquidation will be the only answer. Second,
B
the liquidation value tends to go down with time as many assets
suffer from a high economic rate of depreciation.
From the viewpoint of creditors, a good realisation can generally
be obtained if the firm is sold as a going concern. Hence, when
delays induce liquidation, there is value destruction. Further, even
in liquidation, the realisation is lower when there are delays. Hence, C
delays cause value destruction. Thus, achieving a high recovery
rate is primarily about identifying and combating the sources of
delay.”
In identifying the sources of delay, adjudicating mechanisms were
identified as one of the two important sources of delay which need to be D
equipped with the right resources. In order to respond to the rapid changes
in the economy, the BLRC report recommended the formation of an
IBBI which would function as a regulator and formulate regulations that
dynamically detail the procedural norms of the working of the IBC with
the necessary immediacy. It is also important for this Court, as a E
constitutional authority which determines questions of law concerning
the IBC framework, to note that a rapid liquidation may sometimes be
preferable to a protracted CIRP. This sentiment was stressed in the
BLRC Report, in its concluding statement in the Executive Summary,
which noted:
F
“Conclusion
The failure of some business plans is integral to the process of the
market economy. When business failure takes place, the best
outcome for society is to have a rapid re-negotiation between the
financiers, to finance the going concern using a new arrangement G
of liabilities and with a new management team. If this cannot be
done, the best outcome for society is a rapid liquidation. When
such arrangements can be put into place, the market process of
creative destruction will work smoothly, with greater competitive
vigor and greater competition.
H
422 SUPREME COURT REPORTS [2021] 14 S.C.R.

A India is in the process of laying the foundations of a mature market
economy. This involves well drafted modern laws, that replace
the laws of the preceding 100 years, and high performance
organisations which enforce these new laws. The Committee has
endeavored to provide one critical building block of this process,
with a modern insolvency and bankruptcy code, and the design of
B
associated institutional infrastructure which reduces delays and
transaction costs.
We hope that the implementation of this report will increase GDP
growth in India by fostering the emergence of a modern credit
market, and particularly the corporate bond market. GDP growth
C will accelerate when more credit is available to new firms including
firms which lack tangible capital. While many other things need
to be done in achieving a sound system of finance and firms, this
is one critical building block of that edifice.”
97. A reading together of the UNCITRAL Guide and the BLRC
D Report clarifies, in no uncertain terms, that the procedure designed for
the insolvency process is critical for allocating economic coordination
between the parties who partake in, or are bound by the process. This
procedure produces substantive rights and obligations. For instance, the
composition of the CoC, the method and percentage of its voting, the
E timelines for CIRP, the obligation on the RP to file specific forms after
every stage of the process and the obligation to explain to the Adjudicating
Authority reasons for any deviations from the timeline while submitting
a Resolution Plan, and other such procedural requirements create a
mechanism which tightly structures the conduct of all participants in the
insolvency process. This process invariably has an impact on the conduct
F of the Resolution Applicant who participates in the process and consents
to be bound by the RFRP and the broader insolvency framework. An
analysis of the framework of the statute and regulations provides an
insight into the dynamic and comprehensive nature of the statute.
Upholding the procedural design and sanctity of the process is critical to
G its functioning. The interpretative task of the Adjudicating Authority,
Appellate Authority, and even this Court, must be cognizant of, and allied
with that objective. The UNCITRAL Guide has echoed this position by
noting the interplay between the procedural design of the insolvency law
and the corresponding institutional infrastructure by observing61:
61
H page 20, UNCITRAL Guide, supra note 56
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“27. While the institutional framework is not discussed in any detail A
in the Legislative Guide, some of the issues are touched upon
below. Notwithstanding the variety of substantive issues that must
be resolved, insolvency laws are highly procedural in nature. The
design of the procedural rules plays a critical role in determining
how roles are to be allocated between the various participants, in
B
particular in terms of decision-making. To the extent that the
insolvency law places considerable responsibility upon the
institutional infrastructure to make key decisions, it is essential
that that infrastructure be sufficiently developed to enable the
required decisions to be made.”
98. Any claim seeking an exercise of the Adjudicating Authority’s C
residuary powers under Section 60(5)(c) of the IBC, the NCLT’s inherent
powers under Rule 11 of the NCLT Rules 2016 or even the powers of
this Court under Article 142 of the Constitution must be closely scrutinized
for broader compliance with the insolvency framework and its underlying
objective. The adjudicating mechanisms which have been specifically D
created by the statute, have a narrowly defined role in the process and
must be circumspect in granting reliefs that may run counter to the
timeliness and predictability that is central to the IBC. Any judicial creation
of a procedural or substantive remedy that is not envisaged by the statute
would not only violate the principle of separation of powers, but also run
the risk of altering the delicate coordination that is designed by the IBC E
framework and have grave implications on the outcome of the CIRP,
the economy of the country and the lives of the workers and other allied
parties who are statutorily bound by the impact of a resolution or
liquidation of a Corporate Debtor.
H Nature of a Resolution Plan F

99. Before we advert to whether withdrawals or modifications by
successful Resolution Applicants are permissible under the IBC, we must
begin by understanding the nature of a Resolution Plan. “Resolution Plan”
has been defined in Section 5(26) of the IBC in the following terms:
G
“(26) “resolution plan” means a plan proposed by resolution
applicant for insolvency resolution of the corporate debtor as a
going concern in accordance with Part II;
Explanation.—For the removal of doubts, it is hereby clarified
that a resolution plan may include provisions for the restructuring
H
424 SUPREME COURT REPORTS [2021] 14 S.C.R.

A of the corporate debtor, including by way of merger, amalgamation
and demerger;”
The Explanation to the provision was added by the Insolvency
and Bankruptcy Code (Amendment) Act 2019. Further, the term
“Resolution Applicant” was substituted for “any person” by the
B Insolvency and Bankruptcy Code (Amendment) Act 2018.
100. The term “Resolution Applicant” has been defined in Section
5(25) of the IBC as follows:
“(25) “resolution applicant” means a person, who individually or
jointly with any other person, submits a resolution plan to the
C resolution professional pursuant to the invitation made under clause
(h) of sub-section (2) of Section 25 or pursuant to Section 54-K,
as the case may be”
101. The IBC provides a roadmap for the entire CIRP in Chapter
II of Part II. This process is tightly regulated to include, inter alia,
D timelines of the CIRP specified by Section 12, duties of the RP to provide
adequate information to propose a Resolution Plan in Section 29 and
restrictions on who can be a Resolution Applicant in Section 29A.
Thereafter, Section 30 provides for the submission of a Resolution Plan,
and it reads as follows:
E “30. Submission of resolution plan.—(1) A resolution applicant
may submit a resolution plan along with an affidavit stating that
he is eligible under Section 29-A to the resolution professional
prepared on the basis of the information memorandum.
(2) The resolution professional shall examine each resolution plan
F received by him to confirm that each resolution plan—
(a) provides for the payment of insolvency resolution process costs
in a manner specified by the Board in priority to the payment of
other debts of the corporate debtor;
(b) provides for the payment of debts of operational creditors in
G such manner as may be specified by the Board which shall not be
less than—
(i) the amount to be paid to such creditors in the event of a liquidation
of the corporate debtor under Section 53; or

H
EBIX SINGAPORE PVT. LTD. v. COMMITTEE OF CREDITORS OF 425
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(ii) the amount that would have been paid to such creditors, if the A
amount to be distributed under the resolution plan had been
distributed in accordance with the order of priority in sub-section
(1) of Section 53,
whichever is higher, and provides for the payment of debts of
financial creditors, who do not vote in favour of the resolution B
plan, in such manner as may be specified by the Board, which
shall not be less than the amount to be paid to such creditors in
accordance with sub-section (1) of Section 53 in the event of a
liquidation of the corporate debtor.
Explanation 1.—For the removal of doubts, it is hereby clarified C
that a distribution in accordance with the provisions of this clause
shall be fair and equitable to such creditors.
Explanation 2.—For the purposes of this clause, it is hereby
declared that on and from the date of commencement of the
Insolvency and Bankruptcy Code (Amendment) Act, 2019, the D
provisions of this clause shall also apply to the corporate insolvency
resolution process of a corporate debtor—
(i) where a resolution plan has not been approved or rejected by
the Adjudicating Authority;
(ii) where an appeal has been preferred under Section 61 or Section E
62 or such an appeal is not time barred under any provision of law
for the time being in force; or
(iii) where a legal proceeding has been initiated in any court against
the decision of the Adjudicating Authority in respect of a resolution
plan; F
(c) provides for the management of the affairs of the corporate
debtor after approval of the resolution plan;
(d) the implementation and supervision of the resolution plan;
(e) does not contravene any of the provisions of the law for the G
time being in force;
(f) conforms to such other requirements as may be specified by
the Board.
Explanation.—For the purposes of clause (e), if any approval of
shareholders is required under the Companies Act, 2013 (18 of H
426 SUPREME COURT REPORTS [2021] 14 S.C.R.

A 2013) or any other law for the time being in force for the
implementation of actions under the resolution plan, such approval
shall be deemed to have been given and it shall not be a
contravention of that Act or law.
(3) The resolution professional shall present to the committee of
B creditors for its approval such resolution plans which confirm the
conditions referred to in sub-section (2).
(4) The committee of creditors may approve a resolution plan by
a vote of not less than sixty-six per cent of voting share of the
financial creditors, after considering its feasibility and viability the
C manner of distribution proposed, which may take into account the
order of priority amongst creditors as laid down in sub-section (1)
of Section 53, including the priority and value of the security interest
of a secured creditor, and such other requirements as may be
specified by the Board:

D Provided that the committee of creditors shall not approve a
resolution plan, submitted before the commencement of the
Insolvency and Bankruptcy Code (Amendment) Ordinance, 2017,
where the resolution applicant is ineligible under Section 29-A
and may require the resolution professional to invite a fresh
resolution plan where no other resolution plan is available with it:
E
Provided further that where the resolution applicant referred to in
the first proviso is ineligible under clause (c) of Section 29-A, the
resolution applicant shall be allowed by the committee of creditors
such period, not exceeding thirty days, to make payment of overdue
amounts in accordance with the proviso to clause (c) of Section
F 29-A:
Provided also that nothing in the second proviso shall be construed
as extension of period for the purposes of the proviso to sub-
section (3) of Section 12, and the corporate insolvency resolution
process shall be completed within the period specified in that sub-
G section.
Provided also that the eligibility criteria in Section 29-A as amended
by the Insolvency and Bankruptcy Code (Amendment) Ordinance,
2018 (Ord. 6 of 2018) shall apply to the resolution applicant who
has not submitted resolution plan as on the date of commencement
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EBIX SINGAPORE PVT. LTD. v. COMMITTEE OF CREDITORS OF 427
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of the Insolvency and Bankruptcy Code (Amendment) Ordinance, A
2018.
(5) The resolution applicant may attend the meeting of the
committee of creditors in which the resolution plan of the applicant
is considered:
Provided that the resolution applicant shall not have a right to vote B
at the meeting of the committee of creditors unless such resolution
applicant is also a financial creditor.
(6) The resolution professional shall submit the resolution plan as
approved by the committee of creditors to the Adjudicating
Authority.” C

Once a Resolution Applicant submits a Resolution Plan under sub-
Section (1) of Section 30, the RP must assess whether it conforms with
all the requirements of sub-Section (2). Having satisfied itself, the RP
under sub-Section (3) must then present those Resolution Plans to the
CoC which fulfill the criteria under sub-Section (2). The CoC will then D
proceed to decide on the approval of the Resolution Plan, with a majority
vote of sixty-six percent, after satisfying itself that the requirements
under sub-Section (4) have been met, including testing the Resolution
Plan for its feasibility and viability. A Resolution Applicant may attend
this meeting of the CoC under sub-Section (5), but it does not have a E
right to vote unless it is also a financial creditor. The Resolution Plan
approved by the CoC under sub-Section (4) is then placed by the RP
before the Adjudicating Authority for its approval under sub-Section (6).
102. Other than the IBC, the process is also regulated by the
CIRP Regulations created under the IBC. Regulation 37 provides an F
illustration of the solutions which can be proposed in a Resolution Plan.
Regulation 38 provides for the mandatory contents of a Resolution Plan,
which are similar to the pre-conditions mentioned in Section 30(2) of the
IBC. Regulation 39 provides for the process of approval of a Resolution
Plan by the CoC, and under sub-Regulation (3), the CoC has to evaluate
every Resolution Plan based on an “evaluation matrix” it has come up G
with under Regulation 5(ha).
103. Having briefly taken an overview of the process, we now
understand that there are broadly three stages: (i) the first stage is prior
to and ends with the approval of the Resolution Plan by the CoC; (ii) the
H
428 SUPREME COURT REPORTS [2021] 14 S.C.R.

A second stage is the interim period between the Resolution Plan’s approval
by the CoC and before its confirmation by the Adjudicating Authority;
and (iii) the third stage is after the approval of the Resolution Plan by the
Adjudicating Authority. In the first stage, the relationship between the
parties is explicitly governed by the provisions of the IBC – such as the
right of a prospective Resolution Applicant to seek the IM and RFRP
B
upon submission of its EOI, which may have been rejected by the RP
(as it happened in the Kundan Care Appeal). In the third stage, the same
holds true since Section 31(1) makes the Resolution Plan binding upon
all the stakeholders and its violation will attract a penalty under Section
74 of the IBC. However, what we are assessing right now is the interim
C second stage between both of those. To understand the relationship of
the parties therein, it becomes important to understand the exact “nature”
of the Resolution Plan after it has been submitted to the Adjudicating
Authority and before it has been approved under Section 31(1).
104. To summarize the arguments of the parties, the appellants
D have argued that Resolution Plans are in the nature of an offer, which
becomes binding as a concluded contract only once the Adjudicating
Authority has approved the Resolution Plan. Section 7 of the Contract
Act requires the acceptance of offer to be absolute, unconditional and
unqualified. Since the approval by the CoC is effectively conditional
upon the confirmation of the Plan by the Adjudicating Authority, it cannot
E be said that there is absolute acceptance of the Resolution Plan.
Alternatively, it has been argued that Resolution Plans approved by the
CoC are contingent contracts, whose enforceability is conditional upon
the approval of the Adjudicating Authority in accordance with Section
32 of the Contract Act. The Respondents (RPs and the CoCs) have
F argued that a concluded contract comes into being when the Resolution
Plan is approved by the CoC and a successful Resolution Applicant
cannot renege from their contractual obligation to implement the
Resolution Plan. In furtherance of this argument, Mr Shyam Divan
appearing for the E-CoC made a reference to the Specific Relief
(Amendment) Act 2018, which has brought a change to the regime on
G contract enforcement in India by making specific performance the norm
rather than the exception.
105. The determination of the nature of the Resolution Plan would
help us establish the source of the legal force of the Resolution Plan –
whether it is the statute, i.e., the IBC or the law of contract. The
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insolvency process, as governed by the IBC, does not merely structure A
the conduct of all the participants in the process after finalization and
approval of a Resolution Plan by a CoC, but also the conduct stemming
from the very first steps of inviting prospective Resolution Applicants.
The RP, with the approval of the CoC62, invites prospective Resolution
Applicants through an RFRP. Once an unconditional EOI has been
B
received from prospective Resolution Applicants who are otherwise
eligible under Section 29A, the RP prepares an IM as per the provisions
of Section 29 which furnishes all relevant information of the Corporate
Debtor to enable prospective Resolution Applicants to make an informed
decision, before proposing a Resolution Plan. As a consequence of the
IBC and its regulations, prospective Resolution Applicants, who are not C
disqualified under Section 29A, propose drafts of their Resolution Plans.
The RP examines the Resolution Plan against the contours of Section
30(2) and submits only the eligible plans to the CoC63. Prior to the IBBI
(CIRP) (Fourth Amendment) Regulations 2020, which now requires the
CoC to vote on all Plans simultaneously after recording its deliberations
D
on the feasibility and viability of each Plan, Regulation 39(3) earlier
enabled the CoC to approve a Resolution Plan with “such modifications
as it deems fit”. This meant that the prospective Resolution Applicants
and the CoC would indulge in several rounds of negotiations, within a
strict time-frame, to arrive at a mutually agreeable Resolution Plan which
was then subject to voting by the CoC. Subsequent to the voting, the RP E
would submit the plan to the Adjudicating Authority along with receipt of
the PBG and a compliance certificate in the form of Form H. Each of
the stages detailed above correspond to several rights and obligations on
all parties that are specifically created by the statute.
106. Since the interpretation of the IBBI (CIRP)(Fourth F
Amendment) Regulations 2020 and the impact on the Resolution
Applicants and the CoC to negotiate the terms of the Resolution Plan is
not before this Court and the present appeal essentially seeks to determine
the nature of the Resolution Plan after its approval by the CoC and prior
to its approval by the Adjudicating Authority, this Court will proceed to
determine of the nature of such a Plan, on the assumption of the law as G
it stood then, i.e., Regulation 39(3) which directed that “[t]he committee
shall evaluate the resolution plans received under sub-regulation (1) strictly
as per the evaluation matrix to identify the best resolution plan and may
62
Section 25(2)(h), IBC
63
Regulation 39(2), CIRP Regulations H
430 SUPREME COURT REPORTS [2021] 14 S.C.R.

A approve it with such modifications as it deems fit”64. This power of the
CoC to suggest modifications invariably entailed an element of negotiation
with the Resolution Applicants, who would make suitable revisions and
re-submit their Resolution Plans. The scope of a commercial bargain
with the Resolution Applicants evinces a sense of a negotiated agreement
that is arrived between the parties, which resembles an exercise of
B
contractual freedom by the CoC and the Resolution Applicant.
107. If this court were to hold that CoC-approved Resolution Plans
are indeed contracts, their provisions would still have to conform to the
statutory provisions of the IBC. However, such an interpretation would
entail that CoC-approved Resolution Plans are at the intersection of the
C IBC and the Contract Act. This would mean that certain principles of
contract law, for example those relating to discharge, penalties, remedies
and damages would become applicable to CoC-approved Resolution
Plans. For instance, in the United States, plans confirmed by courts have
been characterized as contracts, whose breach can even give rise to
D contractual remedies. In In re Hoffinger Indus, Inc65, a bankruptcy
court in Arkansas has held that “a confirmed plan should be enforceable
and amenable to damages between contractually bound parties.” Indeed,
it has been argued before us that Resolution Plans should be enforced
through the contractual remedy of specific performance. Further, a
determination that Resolution Plans are contracts in the period between
E approval by the CoC and the approval of the Adjudicating Authority
would require us to analyse whether all elements of contract formation
have been satisfied, including the question of whether the acceptance of
the Resolution Plan by the CoC fulfils the criteria laid down under Section
7 of the Contract Act or whether the conditionality of seeking approval
F from the Adjudicating Authority makes the Resolution Plan a contingent
contract. Our intent of laying down the consequences of our determination
of Resolution Plans as contracts is to highlight the importance of
ascertaining the nature of a CoC-approved Resolution Plan, prior to its
approval by the Adjudicating Authority.
G 108. The text of the IBC does not specify whether Resolution
Plans at the second stage of the process, i.e., in the intervening period of

64
As substituted by the Notification No. IBBI/2018-19/GN/REG031, dated 3rd July,
2018 (w.e.f. 04-07-2018). Prior to this substitution, Regulation 39(3) stated “the
committee may approve any resolution plan with such modifications as it deems fit.”
65
H 327 B.R. 389 (Bankr. E.D. Ark. 2005), United States Bankruptcy Court, E.D. Arkansas
EBIX SINGAPORE PVT. LTD. v. COMMITTEE OF CREDITORS OF 431
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submission to and approval by the Adjudicating Authority, are pure A
contracts. As noted previously, by specifications such as eligibility for
resolution applicants, the contents of the IM and duties of the RP to
prospective Resolution Applicants and statutory procedures on timelines
and voting, strictly govern the insolvency process even prior to the
submission of the Plan to the Adjudicating Authority. The CoC, who the
B
appellants allege is in the nature of a free contracting party, is governed
by the binding principles of the statute with regard to the contents and
nature of the statutory plan that it approves under Section 30(4) and
even its own composition.
109. Section 30(4) provides that the consent of all the members
of the CoC, though a unanimous vote is not required and a sixty-six per C
cent vote is sufficient for approval of a resolution plan. The constitution
of the CoC is based on specific scenarios envisaged in the statute and
accounts for varying compositions, based on factors such as the nature
and quantum of debt owed. For example, if it comprises of operational
creditors alone, the percentage of debt owed between the operational D
and financial creditors and other such variables impact voting thresholds
inter se members of the CoC. A sixty-six per cent vote of the CoC is
required to approve a Resolution Plan. The dissenting creditors are
deemed to have given their approval and are bound by the decision of
the majority of the CoC. The dissenting creditors are bound as a result
of the statutory provision and not because they have actually consented E
to be parties to such an arrangement. Other elements governing the
Resolution Plan indicate that the entire process from initiation and leading
up to its acceptance by the CoC takes place within the framework of
the IBC. In addition, the IBC provides penalties for non-compliance
with the Resolution Plan after its approval under Section 31 and forfeiture F
of the PBG for failing to implement the Resolution Plan or contributing
to the failure of its implementation. The violation of the terms of the
Resolution Plan does not give rise to a claim of damages, rather it leads
to prosecution and imposition of punishment under Section 74 of the
IBC. On the contrary, a CoC’s withdrawal of the CIRP under Section
12A is coupled with a requirement of payment of CIRP costs, but no G
damages are statutorily payable to the Resolution Applicant, irrespective
of the stage of the withdrawal.
110. The CoC even with the requisite majority, while approving
the Resolution Plan must consider the feasibility and viability of the Plan
H
432 SUPREME COURT REPORTS [2021] 14 S.C.R.

A and the manner of distribution proposed, which may take into account
the order of priority amongst creditors as laid down in sub-section (1) of
section 53 of the IBC. The CoC cannot approve a Resolution Plan
proposed by an applicant barred under Section 29A of the IBC. Regulation
37 and 38 of the CIRP Regulations govern the contents of a Resolution
Plan. Furthermore, a Resolution Plan, if in compliance with the mandate
B
of the IBC, cannot be rejected by the Adjudicating Authority and becomes
binding on its approval upon all stakeholders – including the Central and
State Government, local authorities to whom statutory dues are owed,
operational creditors who were not a part of the CoC and the workforce
of the Corporate Debtor who would now be governed by a new
C management. Such features of a Resolution Plan, where a statute
extensively governs the form, mode, manner and effect of approval
distinguishes it from a traditional contract, specifically in its ability to
bind those who have not consented to it. In the pure contractual realm,
an agreement binds parties who are privy to the contract. In the context
of a resolution Plan governed by the IBC, the element of privity becomes
D
inapplicable once the Adjudicating Authority confirms the Resolution Plan
under Section 31(1) and declares it to be binding on all stakeholders,
who are not a part of the negotiation stage or parties to the Resolution
Plan. In fact, a commentator has noted that the purpose of bankruptcy
law is to actually solve a specific ‘contracting failure’ that accompanies
E financial distress. Such a contracting failure arises because “financial
distress involves too many parties with strategic bargaining incentives
and too many contingencies for the firm and its creditors to define a set
of rules of every scenario.” Thus, insolvency law recognizes that parties
can take benefit of such ‘incomplete contract’ to hold each other up for
their individual gain. In an attempt to solve the issue of incompleteness
F
and the hold-up threat, the insolvency law provides procedural protections
i.e., “the law puts in place guardrails that give the parties room to bargain
while keeping them from taking position that veer toward extreme hold
up”66.
111. It may be useful to refer to how this Court has analyzed
G instruments that are analogous to a Resolution Plan. In SK Gupta v. KP
Jain 67, this Court while discussing the nature of compromise or
66
Anthony J. Casey, ‘Chapter 11’s Renegotiation Framework and the Purpose of
Corporate Bankruptcy’, Columbia Law Review Vol 120 No 7, available at <https://
columbialawreview.org/content/chapter-11s-renegotiation-framework-and-the-purpose-
of-corporate-bankruptcy/> accessed on 5 September 2021
H 67
(1979) 3 SCC 54
EBIX SINGAPORE PVT. LTD. v. COMMITTEE OF CREDITORS OF 433
EDUCOMP SOLUTIONS LTD. [DR DHANANJAYA Y CHANDRACHUD, J.]

arrangements entered between a company and its creditors or members A
observed that such a compromise or arrangement once sanctioned by
the court is not merely an agreement between parties because it binds
even dissenting creditors or members through statutory force. This Court
made the following observations:
“12…The scheme when sanctioned does not merely operate B
as an agreement between the parties but has statutory force
and is binding not only on the company but even dissenting creditors
or members, as the case may be. The effect of the sanctioned
scheme is “to supply by recourse to the procedure thereby
prescribed the absence of that individual agreement by every
member of the class to be bound by the scheme which would C
otherwise be necessary to give it validity” [see J.K. (Bombay)
Pvt. Ltd. v. New Kaiser-i-Hind Spg. & Wvg. Co. Ltd. [AIR 1970
SC 1041 : (1969) 2 SCR 866, 891 : (1970) 40 Com Cas 689] ]..”
(emphasis supplied)
D
112. While the above observations were made in the context of a
scheme that has been sanctioned by the Court, the Resolution Plan even
prior to the approval of the Adjudicating Authority is binding inter se the
CoC and the successful Resolution Applicant. The Resolution Plan cannot
be construed purely as a ‘contract’ governed by the Contract Act, in the
period intervening its acceptance by the CoC and the approval of the E
Adjudicating Authority. Even at that stage, its binding effects are produced
by the IBC framework. The BLRC Report mentions that “[w]hen 75%
of the creditors agree on a revival plan, this plan would be binding on all
the remaining creditors”68. The BLRC Report also mentions that, “the
RP submits a binding agreement to the Adjudicator before the default F
maximum date”69. We have further discussed the statutory scheme of
the IBC in Sections I and J of this judgement to establish that a Resolution
Plan is binding inter se the CoC and the successful Resolution Applicant.
Thus, the ability of the Resolution Plan to bind those who have not
consented to it, by way a statutory procedure, indicates that it is not a
typical contract. G
113. The BLRC Report, which furnished the first draft of the
IBC and elaborated on the aims behind the overhaul of the insolvency

68
Page 13, BLRC Report, supra note 55
69
Page 92, BLRC Report, supra note 55 H
434 SUPREME COURT REPORTS [2021] 14 S.C.R.

A regime, refers to a CoC-approved Resolution Plan as a ‘binding contract’
in one instance and refers to it as a ‘binding agreement’ in other instances.
The report also refers to a CoC-approved Resolution Plan as a ‘financial
arrangement’70, ‘revival plan’71 or a ‘solution’72. The interchangeability
of the terms – ‘agreement’, ‘contract’, ‘financial arrangement’, ‘revival
plan’ and ‘solution’ indicates that there is no clear intention of the BLRC
B
in characterizing the nature of the Resolution Plan as a contract. The
binding effect of the Resolution Plan has the consequence of preventing
the CoC or the Resolution Applicant to renege from its terms after the
plan has been approved by the CoC through a voting mechanism. The
fleeting mention of a ‘binding contract’ on one occasion in the BLRC
C Report (which was a pre-legislative text that underwent subsequent
modifications by the Legislature) to indicate the binding nature of the
Resolution Plan and the finality of negotiations once it is approved by the
CoC, does not establish the legal nature of the document, especially
when it is not complemented by the text and design of the IBC.
D 114. Certain stages of the CIRP resemble the stages involved in
the formation of a contract. Echoes of the process involved in the
formation of a contract resonate in the steps antecedent to the approval
of a Resolution Plan such as: (i) the issuance of an RFRP may be equated
to an invitation to offer; (ii) a Resolution Plan can be considered as a
proposal or offer; and (iii) the approval by the CoC may be similar to an
E acceptance of offer. The terms of the Resolution Plan contain a
commercial bargain between the CoC and Resolution Applicant. There
is also an intention to create legal relations with binding effect. However,
it is the structure of the IBC which confers legal force on the CoC-
approved Resolution Plan. The validity of the Resolution Plan is not
F premised upon the agreement or consent of those bound (although as a
procedural step the IBC requires sixty-six percent votes of creditors),
but upon its compliance with the procedure stipulated under the IBC.
115. It was argued for the E-RP that a Resolution Plan is a contract
executed in furtherance of a statutory regime under the IBC. A question
G arises whether a Resolution Plan can be classified as a ‘statutory
contract’. This Court has defined a statutory contract in India Thermal
Power Ltd. v. State of MP73 in the following terms:
70
Page 21, BLRC Report, supra note 55
71
Page 13, BLRC Report, supra note 55
72
Pages 21, 75 and 126, BLRC Report, supra note 55
H 73
(2000) 3 SCC 379
EBIX SINGAPORE PVT. LTD. v. COMMITTEE OF CREDITORS OF 435
EDUCOMP SOLUTIONS LTD. [DR DHANANJAYA Y CHANDRACHUD, J.]

“11. Section 43 empowers the Electricity Board to enter into an A
arrangement for purchase of electricity on such terms as may be
agreed. Section 43-A(1) provides that a generating company
may enter into a contract for the sale of electricity generated
by it with the Electricity Board. As regards the determination
of tariff for the sale of electricity by a generating company to the
B
Board, Section 43(1)(2) provides that the tariff shall be determined
in accordance with the norms regarding operation and plant-load
factor as may be laid down by the authority and in accordance
with the rates of depreciation and reasonable return and such
other factors as may be determined from time to time by the
Central Government by a notification in the Official Gazette. These C
provisions clearly indicate that the agreement can be on such terms
as may be agreed by the parties except that the tariff is to be
determined in accordance with the provision contained in Section
43-A(2) and notifications issued thereunder. Merely because a
contract is entered into in exercise of an enabling power
D
conferred by a statute that by itself cannot render the
contract a statutory contract. If entering into a contract
containing the prescribed terms and conditions is a must
under the statute then that contract becomes a statutory
contract. If a contract incorporates certain terms and
conditions in it which are statutory then the said contract E
to that extent is statutory. A contract may contain certain
other terms and conditions which may not be of a statutory
character and which have been incorporated therein as a
result of mutual agreement between the parties. Therefore,
the PPAs can be regarded as statutory only to the extent that
F
they contain provisions regarding determination of tariff and other
statutory requirements of Section 43-A(2)…”
(emphasis supplied)
116. The above observations were in the context of a PPA entered
into under the provisions of Electricity Supply Act 1948. Section 43- G
A(1) of the Act stipulated that the generating company may enter into a
contract with the Electricity Board. Thus, the judgement pre-supposes
the existence of a subsisting contract. The controversy in the case was
whether the PPA could be characterized as a statutory contract. To say
that a Resolution Plan is a statutory contract, we must first consider
H
436 SUPREME COURT REPORTS [2021] 14 S.C.R.

A whether the IBC envisages the CoC-approved Resolution Plan as a
contract. There is no provision under the IBC referring to a Resolution
Plan as a contract, unlike Section 43-A(1) of the Electricity Supply Act
1948 which mentions that a contract may be entered into between the
concerned parties. The legal force of a Resolution Plan arises due to the
framework provided under the IBC. The mechanisms of the IBC provide
B
sufficient guidance on the conduct of all participants in the process and
the binding effect of the CoC-approved Resolution Plan is evidenced by
the execution of a PBG furnished by the successful Resolution Applicant,
in compliance with the CIRP Regulations. This PBG is returnable once
the Adjudicating Authority approves the Resolution Plan under Section
C 31 and makes it binding on all stakeholders. Therefore, the IBC and its
regulations institute sufficient safeguards to ensure the binding effect of
a CoC-approved Resolution Plan. In our discussion in Sections I and J
below, we further elaborate on the nature of a CoC-approved Resolution
Plan and the code of conduct that is permissible by the statutory
framework.
D
117. While insolvency regimes are specific to each jurisdiction, it
may be useful to analyze how Resolution Plans or similar instruments
are characterized in foreign jurisdictions.
118. Certain precedents from other jurisdictions have been cited
E by Mr Nakul Devan for the E-RP, to argue that contracts entered into, in
furtherance of a statutory regime have to be interpreted in accordance
with the objective and intent of the concerned statute. It has been
submitted that the Resolution Plan is one variety of such a statutory
contract. However, since we have arrived at the decision that Resolution
Plans are not statutory contracts, it is not required for us to analyze
F whether terms of the Resolution Plan can be given effect to, as terms of
a contract, as long as they further the statutory objective. It is also
important to note that India adopts a unique insolvency framework where
third-parties have the right to participate in an insolvency regime and
acquire the Corporate Debtor as a going concern. In several jurisdictions,
G the insolvency arrangements are between the debtor and the creditors,
which has a closer resemblance to ‘repayment plans’ by corporate debtors,
as envisaged by the IBC under Section 105 and broadly prescribed under
Chapter III as opposed to ‘resolution plans’ that are not proposed by
debtors. In any event, an analysis of such arrangements is detailed below.

H
EBIX SINGAPORE PVT. LTD. v. COMMITTEE OF CREDITORS OF 437
EDUCOMP SOLUTIONS LTD. [DR DHANANJAYA Y CHANDRACHUD, J.]

119. In the United Kingdom, the UK Act allows the directors, A
administrator or liquidator of a company to propose a company voluntary
arrangement or a ‘CVA’ (similar to Section 10 of the IBC), which has to
be approved by creditors having seventy-five per cent of the vote share.
Section 5(2)(b)74 of the UK Act provides that once the CVA is approved,
the company and the creditors are bound by it. Professor Roy Goode in
B
his authoritative treatise Principles of Corporate Insolvency Law75
observes that, “[t]he wording of s.5(2)(b), discussed below, has led the
courts to characterise the relationship between the parties to a CVA as
essentially contractual in nature and its scope and effect are determined
by its terms, which fall to be interpreted by application of the ordinary
principles of contractual interpretation.” In some judgements of the Court C
of Appeal, English Courts have held that a CVA creates a contractual
obligation76, is a statutory contract77, or has a contractual effect and is
subject to ordinary principles of interpretation applying to contracts 78.
However, the position on this issue is not completely settled. In a recent
decision of the High Court of Justice79, it was held that the CVA is not a
D
contract. Crucially the court made the following observations:
“83. Further, and as noted by Mr Pymont QC in SHB Realisations
Ltd, a voluntary arrangement is not formed or analysed as a
contract. Certain legal principles applicable to contracts, for
example their interpretation, are applied to voluntary
arrangements; that is no less true of other instruments E
which are not contracts. Other principles of contract law,
for example those relating to penalties, are not applicable
to voluntary arrangements. Mr Pymont QC concluded that a
voluntary arrangement is not a contract. Characterising a CVA
as a hypothetical agreement or by reference to a statutory F
74
5 …(2) The voluntary arrangement— (b) binds every person who in accordance with
the rules — (i) was entitled to vote in the qualifying decision procedure by which the
creditors’ decision to approve the voluntary arrangement was made, or (ii) would have
been so entitled if he had had notice of it — as if he were a party to the voluntary
arrangement.”
75
Roy Goode, Principles of Corporate Insolvency Law (5 th edn., Sweet and Maxwell,
2018)
G
76
Re TBL Realisations Plc, Oakley-Smith v Greenberg, [2004] B.C.C. 81 (Court of
Appeal)
77
Tucker v Gold Fields Mining LCC, [2010] B.C.C. 544 (Court of Appeal)
78
Heis v Financial Services Compensation Scheme Ltd, [2018] EWCA Civ 1327 (Court
of Appeal)
79
Re Rhino Enterprises Properties Ltd. Schofield v Smith [2020] EWHC 2370 (Ch). H
438 SUPREME COURT REPORTS [2021] 14 S.C.R.

A hypothesis neatly and accurately makes clear that a CVA is
different from, and is not in fact, a contract.”
(emphasis supplied)
120. In Singapore, under Section 210 (3AA and 3AB) of the
Singapore Act, a compromise or arrangement between the company
B and its creditors becomes binding when the requisite majority of creditors
agree to it and it is approved by the court. The Singapore Court of Appeal
has referred to such a scheme of arrangement as a ‘contractual
scheme’80. Subsequently, a controversy arose before the Singapore Court
of Appeal on whether a scheme can be substantially amended after it
C has been approved by the court. The court observed that the answer to
this question depends upon the nature of schemes of arrangement;
whether the schemes derived their efficacy from the order of the court
or the statute. The court observed that under the English approach81, a
scheme approved by the majority of the creditors derives its efficacy
from the statute and is a statutory contract. Thus, the court has a limited
D jurisdiction and cannot make substantial alterations to such a scheme.
However, the court noted that in Australia, the scheme operates as an
order of the court. The court held that its previous decision which referred
to a scheme of arrangement as a ‘contractual scheme’ does not mean
that in Singapore such schemes are considered as statutory contracts.
E The court chose to follow the Australian approach holding that a scheme
takes effect as an order of the court and like any other court order, it can
be altered, in certain circumstances. The court observed:
“66. ….We would also add, in respect of the latter concern, that a
court order is in no way less binding than a statutory contract on
F the parties to a scheme of arrangement, and it is trite law as well
as common sense that a court order cannot be altered at will by
the parties who are subject to the order….”
121. In Australia, as noted above, the scheme of arrangement
operates as a court order82. The Supreme Court of New South Wales,
G rejecting the English approach of characterizing schemes (different from
CVAs) as statutory contracts, observed:

80
Daewoo Singapore Pte Ltd v CEL Tractors Private Limited, [2001] 4 SLR 35 (Court
of Appeal)
81
Kempe and Another v. Ambassador Insurance Co., [1998] 1 W.L.R. 271
82
H Caratti v Hillman [1974] WAR 92 (Supreme Court of Wester Australia)
EBIX SINGAPORE PVT. LTD. v. COMMITTEE OF CREDITORS OF 439
EDUCOMP SOLUTIONS LTD. [DR DHANANJAYA Y CHANDRACHUD, J.]

“46.. A
[….]
(b) In Australia, [the] authorities [namely, Hill v Anderson Meat
Industries Ltd [1971] 1 NSWLR 868, Caratti and Bond Corp
Holdings Ltd v Western Australia (1992) 7 ACSR 472] establish
that an approved scheme does indeed derive its force from the B
court order, [and] not from the antecedent resolutions of members
and creditors.”
122. Under the United States Bankruptcy Code, a restructuring
plan becomes binding once it is confirmed by the court in terms of Section
1141. There are decisions of the bankruptcy courts in the United States C
which indicate that such restructuring plans are characterized as
contracts83.It has been held that a confirmed plan is binding on the debtor
and the plan proponent and has the same effect as contract84. However,
commentators have noted that the United States Bankruptcy Code’s,
“embrace of a contractual paradigm is somewhat inconsistent…Both D
bankruptcy courts and the Code itself are far more sympathetic to ex
post than to ex ante contracting”85. It has been further observed that,
“there are a few provisions in the Bankruptcy Code inviting parties to
“otherwise agree” by contract and in some contexts the Code explicitly
overrides ex ante contracts”, these include provisions of the Code
overriding ipso facto clauses in pre-bankruptcy contracts which stipulate E
that a necessary condition of default is filing of an insolvency or
bankruptcy petition86.
123. The above discussion indicates the law in other jurisdictions,
irrespective of differing frameworks, is not completely settled on whether
instruments akin to Resolution Plans are pure contracts. To recapitulate, F
in the United Kingdom, while schemes of arrangement are characterized
as statutory contracts, the law on CVAs, which are similar to the
insolvency process initiated under Section 10 of the IBC, is not clear
83
In re Hoffinger Indus, Inc, 327 B.R. 389 (Bankr. E.D. Ark. 2005), United States
Bankruptcy Court, E.D. Arkansas G
84
In Re Shenandoah Realty Partners, L.P. v. Ascend Health Care, Inc, 287 BR 867 (US
Bankruptcy Court, WD)
85
David Skeel and George Triantis, ‘Bankruptcy’s Uneasy Shift to a Contractual
Paradigm’, Faculty Scholarship at Penn Law, (2018), available at <https://
scholarship.law.upenn.edu/cgi/viewcontent.cgi? article = 2993 & context = faculty _
scholarship > accessed on 5 September 2021
86
Ibid. H
440 SUPREME COURT REPORTS [2021] 14 S.C.R.

A with the High Court of Justice noting that it is not a contract87, even
though principles of interpretation applicable to contracts may be used
for constructing the language of such CVAs. In Singapore, the English
approach of denoting schemes as statutory contracts was rejected and
it was held that the schemes operate as orders of court. A similar position
was taken under the Australian law. The Singapore and Australian courts
B
specifically indicate that schemes are more than mere contracts with a
“super-added imprimatur” by a court, rather they envisage an active
role to be played by court in supervising the schemes to the extent of
making substantial alterations to it, if required. In the United States,
restructuring plans have been equated to contracts, but as noted above
C there has been some inconsistency in relation to upholding the contractual
bargain.
124. The lack of an apparent international consensus on the issue
of whether instruments like CoC-approved Resolution Plans are
contracts, prior to the Court’s sanction, is also attributable to the peculiarity
D of the insolvency regime in each jurisdiction. This Court will have to be
wary of transplanting international doctrines that are evolved as responses
to the specific features of a jurisdiction’s insolvency regime, without
identifying an analogous framework in our insolvency regime.
125. The absence of any specific provision in the IBC or the
E regulations referring to a CoC-approved Resolution Plan as a contract
and the lack of clarity in the BLRC report regarding the nature of such
a Resolution Plan, constrains us from arriving at the conclusion that
CoC-approved Resolution Plans will be governed by the Contract Act
and common law principles governing contracts, save and except for
the specific prohibitions and deeming fictions under the IBC. Regulation
F 39(3) of CIRP regulations, as it stood before the IBBI (CIRP) (Fourth
Amendment) Regulations 2020 and applicable to the three appellants
before us, enabled a framework where a draft Resolution Plan would
involve several rounds of negotiations and revisions between the
Resolution Applicant and the CoC, before it is approved by the latter and
G submitted to the Adjudicating Authority88. However, this statutorily-
87
Rhino supra note 78
88
“(3) The committee shall evaluate the resolution plans received under sub-regulation
(1) strictly as per the evaluation matrix to identify the best resolution plan and may
approve it with such modifications as it deems fit:
Provided that the committee shall record its deliberations on the feasibility and viability
H of the resolution plans’’
EBIX SINGAPORE PVT. LTD. v. COMMITTEE OF CREDITORS OF 441
EDUCOMP SOLUTIONS LTD. [DR DHANANJAYA Y CHANDRACHUD, J.]

enabled room for commercial negotiation is not enough to over-power A
the other elements of regulation that detract from the view that CoC-
approved Resolution Plans are contracts. CoC-approved Resolution Plans,
before the approval of the Adjudicating Authority under Section 31, are
a function and product of the IBC’s mechanisms. Their validity, nature,
legal force and content is regulated by the procedure laid down under
B
the IBC, and not the Contract Act. The voting by the CoC also occurs
only after the RP has verified the contents of the Resolution Plan and
confirmed that it meets the conditions of the IBC and the regulations
therein. The amended Regulation 39(3)89 further regulates the conduct
of the CoC on voting on Resolution Plans and has introduced the
requirement of simultaneous voting. The IBBI’s Discussion Paper issued C
on 27 August 2021 has invited comments on regulating the process on
revisions that can be made to resolution plans submitted to the CoC90.
These developments bolster the conclusion that the mechanism prior to
submission of a CoC-approved resolution plan is subject to continuous
procedural scrutiny by the IBC and cannot be considered as a simple
D
contractual negotiation between two parties. Section J below details how
a common law remedies of withdrawal or modification on account of
frustration or force majeure are not applicable to CoC-approved
Resolution Plans owing to the nature of the IBC. Similarly, the whole
host of remedies such as liquidated and unliquidated damages, restitution,
novation and frustration, unless specifically provided by the IBC, are not E
available to a successful Resolution Applicant whose Plan has been
approved by the CoC and is awaiting the approval of the Adjudicating
Authority. The Insolvency Law Committee Report of February 2020
89
“39….(3)The committee shall-(a) evaluate the resolution plans received under sub-
regulation (2) as per evaluation matrix; (b) record its deliberations on the feasibility and
viability of each resolution plan; and (c) vote on all such resolution plans simultaneously. F
(3A) Where only one resolution plan is put to vote, it shall be considered approved if
it receives requisite votes.
(3B) Where two or more resolution plans are put to vote simultaneously, the resolution
plan, which receives the highest votes, but not less than requisite votes, shall be
considered as approved:
Provided that where two or more resolution plans receive equal votes, but not less than G
requisite votes, the committee shall approve any one of them, as per the tie-breaker
formula announced before voting:
Provided further that where none of the resolution plans receives requisite votes, the
committee shall again vote on the resolution plan that received the highest votes,
subject to the timelines under the Code……….”
90
available at < https://www.ibbi.gov.in/uploads/whatsnew/
fbe59358a8c440d001f3b950be4a1c67.pdf > accessed on 5 September 2021 H
442 SUPREME COURT REPORTS [2021] 14 S.C.R.

A has recommended the CIRP process to mandate Resolution Plans to
provide for the apportionment of the profit or loss accrued by the
Corporate Debtor during the CIRP91. These reports are periodically
commissioned by the parliament to review the functioning of the Code
and suggest amendments. However, if the intention was to view a CoC-
approved Resolution Plan as a contract, the principles of unjust enrichment
B
would have been sufficient to address the issue and an amendment may
not be considered necessary. A Resolution Applicant, as a third party
partaking in the insolvency regime, seeks to acquire the business of the
Corporate Debtor without the entirety of its debts, statutory liabilities
and avoiding certain transactions with third parties. These benefits are a
C function of the coercive mechanisms of the IBC which enable a third
party to acquire the assets of a Corporate Debtor without its liabilities,
for a negotiated amount of the debt that is owed by the Corporate Debtor.
Typically, resolution amounts envisage payment of a fraction of debt
that is owed to the creditors and the business is acquired as a going
concern with its employees. The Resolution Plan is drafted in a way that
D
it is implementable in the future and brings about a quietus to the CIRP.
Enabling Resolution Applicants to seek remedies that are not specified
by the IBC, by seeking recourse to the Contract Act would be antithetical
to the IBC’s insolvency regime. The elements of contractual interpretation
can be relied upon to construe the language of the terms of the Resolution
E Plan, in the event of a dispute, but not to re-fashion and distort the
mechanism of the IBC altogether. This Court in Laxmi Pat Surana v.
Union Bank of India92 has held that the IBC is a self-contained Code.
Thus, importing principles of any other law or a statute like the Contract
Act into the IBC regime would introduce unnecessary complexity into
the working of the IBC and may lead to protracted litigation on
F
considerations that are alien to the IBC. To give an example, the CoC
can forfeit the PBG furnished by the successful Resolution Applicant
under certain circumstances in terms of the RFRP and Resolution Plan
including, inter alia, on the ground that the Resolution Applicant has
failed to implement the resolution or has contributed to its failure.
G Regulation 36B (4A) of CIRP regulations provides for the furnishing of
such performance security once the plan is approved by creditors. The

91
Pages 55-56, Report of the Insolvency Law Committee (February 2020), Ministry
of Corporate Affairs, available at <http s://www.mca.gov.in/Ministry/pdf/
ICLReport_05032020.pdf> accessed on 20 August 2021
92
H (2020) SCC OnLine SC 1187
EBIX SINGAPORE PVT. LTD. v. COMMITTEE OF CREDITORS OF 443
EDUCOMP SOLUTIONS LTD. [DR DHANANJAYA Y CHANDRACHUD, J.]

Regulations do not provide that the performance security has to be a A
reasonable estimate of loss as is expected of penalty clauses under
contract law, rather the explanation provides that the performance security
should be of “such nature, value, duration and source, as may be specified
in the request for resolution plans with the approval of the committee,
having regard to the nature of resolution plan and business of the corporate
B
debtor”. Further, in the event that the CoC enters into a settlement with
the Corporate Debtor and withdraws from the CIRP under Section 12A,
Regulation 30A provides for only payment of insolvency costs and not
compensation or damages to Resolution Applicant for investing time and
money in the process. The parties may resort to invoking principles of
frustration or force majeure to evade implementation of the Resolution C
Plan leading to unnecessary litigation. This Court in Amtek Auto (supra),
had curbed a similar attempt by a successful Resolution Applicant who
had relied on a force majeure clause in its Resolution Plan to seek a
direction compelling the CoC to negotiate a modification to its Resolution
Plan. The Court held that there was no scope for negotiations between
D
the parties once the Resolution Plan has been approved by the CoC.
Thus, contractual principles and common law remedies, which do not
find a tether in the wording or the intent of the IBC, cannot be imported
in the intervening period between the acceptance of the CoC and the
approval by the Adjudicating Authority. Principles of contractual
construction and interpretation may serve as interpretive aids, in the E
event of ambiguity over the terms of a Resolution Plan. However, remedies
that are specific to the Contract Act cannot be applied, de hors the
over-riding principles of the IBC.
I Statutory framework governing the CIRP
126. The CIRP is a time bound process with a specific aim of F
maximizing the value of assets. IBC and the regulations made under it
lay down strict timelines which need to be adhered to by all the parties,
at all stages of the CIRP. The CIRP is expected to be completed within
180 days under Section 12(1) of the IBC. In terms of sub-Section (2)
and (3) of Section 12, an extension can be sought from the Adjudicating G
Authority for extending this period up to 90 days. The first proviso to
Section 12(3) clarifies that such an extension can only be granted once.
In Arcelor Mittal (India) (P) Ltd. v. Satish Kumar Gupta93, this
Court had held that the time taken in legal proceedings in relation to the
93
(2019) 2 SCC 1, para 86 H
444 SUPREME COURT REPORTS [2021] 14 S.C.R.

A CIRP must be excluded from the timeline mentioned in Section 12. Since
this could extend the CIRP indefinitely, the Insolvency and Bankruptcy
Code (Amendment) Act 2019, inserted a second proviso to Section 12(3)
with effect from 16 August 2019 to state that the CIRP in its entirety
must be mandatorily completed within 330 days from the insolvency
commencement date, including the time taken in legal proceedings. A
B
legislative amendment that takes away the basis of a judicial finding is
indicative of the strong emphasis of the IBC on its timelines and its
attempt to thwart the prospect of stakeholders engaging in multiple
litigations, solely with the intent of causing undue delay. Delays are also
a cause of concern because the liquidation value depletes rapidly,
C irrespective of the imposition of a moratorium, and a delayed liquidation
is harmful to the value of the Corporate Debtor, the recovery rate of the
CoC and consequentially, the economy at large. In Essar Steel (supra)
a three judge Bench of this Court, emphasized the rationale of the
Insolvency and Bankruptcy Code (Amendment) Act 2019, which
introduced the second proviso to Section 12(3). The court adverted to
D
the BLRC report which underscored delays in legal proceedings as the
cause of the failure of the previous insolvency regime under the SICA
and the recovery mechanism in SARFAESI. It also extracted a Speech
of the Union Minister in the Rajya Sabha to explain the proposal for the
amendment in 2019, which was to avoid the same pitfalls in the IBC.
E The Court, speaking through Justice R F Nariman, noted:
“119. The speech of the Hon’ble Minister on the floor of the House
of the Rajya Sabha also reflected the fact that with the passage
of time the original intent of quick resolution of stressed assets is
getting diluted. It is therefore essential to have time-bound
F decisions to reinstate this legislative intent. It was also pointed out
on the floor of the House that the experience in the working of
the Code has not been encouraging. The Minister in her speech
to the Rajya Sabha gives the following facts and figures:
“Now, regarding the Corporate Insolvency Resolution Process
G (CIRP), under the Code, I want to give you data again as of
30-6-2019. First, I will talk about the status of CIRPs. Number of
admitted cases is 2162; number of cases closed on appeal, which
I read out about, is 174; number of cases closed by withdrawal
under Section 12-A, is 101, I have given you a slightly later data;
number of cases closed by resolution is 120; closed by liquidation,
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475; and ongoing CIRPs are 1292. So, now, I would like to mention A
the number of days of waiting. I would like to mention here the
details of the ongoing CIRPs, along with the timelines. Ongoing
CIRPs are 1292, the figure just now I gave you. Over 330 days,
335 cases; over 270 days, 445 cases; over 180 days and less than
270 days, 221 cases; over 90 days but less than 180 days, 349
B
cases; less than 90 days, 277 cases. The number of days pending
includes time, if any, excluded by the tribunals. So, that gives you
a picture on what is the kind of wait and, therefore, why we want
to bring the amendments for this speeding up.”
[…]
C
123. As the speech of the Hon’ble Minister on the floor of the
House only indicates the object for which the amendment was
made and as it contains certain data which it is useful to advert to,
we take aid from the speech not in order to construe the amended
Section 12, but only in order to explain why the Amending Act of
2019 was brought about.” D

127. The decision in Essar Steel (supra) while reiterating the
rationale of the IBC for ensuring timely resolution of stressed assets as
a key factor, had to defer to the principles of actus curiae neminem
gravabit, i.e., no person should suffer because of the fault of the court
or the delay in the procedure. In spite of this Court’s precedents which E
otherwise strike down provisions which interfere with a litigant’s
fundamental right to non-arbitrary treatment under Article 14 by
mandatory conclusion of proceedings without providing for any exceptions,
this Court refused to strike down the second proviso to Section 12(3) in
its entirety. It noted that the previous statutory experiments for insolvency F
had failed because of delay as a result of extended legal proceedings
and chose to only strike down the word ‘mandatorily’, keeping the rest
of the provision intact. Therefore, the law as it stands, mandates the
conclusion of the CIRP – including time taken in legal proceedings, within
330 days with a short extension to be granted only in exceptional cases.
However, the Court has warned that this discretion must be exercised G
sparingly and only in the following situations:
“127…Thus, while leaving the provision otherwise intact, we strike
down the word “mandatorily” as being manifestly arbitrary under
Article 14 of the Constitution of India and as being an excessive
H
446 SUPREME COURT REPORTS [2021] 14 S.C.R.

A and unreasonable restriction on the litigant’s right to carry on
business under Article 19(1)(g) of the Constitution. The effect of
this declaration is that ordinarily the time taken in relation to the
corporate resolution process of the corporate debtor must be
completed within the outer limit of 330 days from the insolvency
commencement date, including extensions and the time taken in
B
legal proceedings. However, on the facts of a given case, if it can
be shown to the Adjudicating Authority and/or Appellate Tribunal
under the Code that only a short period is left for completion of
the insolvency resolution process beyond 330 days, and that it
would be in the interest of all stakeholders that the corporate debtor
C be put back on its feet instead of being sent into liquidation and
that the time taken in legal proceedings is largely due to factors
owing to which the fault cannot be ascribed to the litigants before
the Adjudicating Authority and/or Appellate Tribunal, the delay or
a large part thereof being attributable to the tardy process of the
Adjudicating Authority and/or the Appellate Tribunal itself, it may
D
be open in such cases for the Adjudicating Authority and/or
Appellate Tribunal to extend time beyond 330 days. Likewise,
even under the newly added proviso to Section 12, if by reason of
all the aforesaid factors the grace period of 90 days from the date
of commencement of the Amending Act of 2019 is exceeded,
E there again a discretion can be exercised by the Adjudicating
Authority and/or Appellate Tribunal to further extend time keeping
the aforesaid parameters in mind. It is only in such exceptional
cases that time can be extended, the general rule being that 330
days is the outer limit within which resolution of the stressed assets
of the corporate debtor must take place beyond which the corporate
F
debtor is to be driven into liquidation.”
128. The evolution of the IBC framework, through an interplay of
legislative amendments, regulations and judicial interpretation, consistently
emphasizes the predictability and timeliness of the IBC. The legislature
and the IBBI have been proactive to introduce amendments to the
G procedural framework, that respond to changes in the economy. For
instance, Regulation 40(c), which came into effect on 20 April 2020,
was inserted in the CIRP Regulations to take into account the delay that
may be caused to the CIRP on account of the lockdown being imposed
by the Central Government due to the COVID-19 pandemic. Regulation
H 40(c) provides that the delay in completing any activity related to the
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CIRP because of imposition of lockdown will not be counted for the A
purposes of the timeline that has been stipulated under the statutory
framework. If the CIRP is not completed within the prescribed timeline,
the Corporator Debtor is sent into liquidation. This understanding of the
evolution of the law is critical to our task of judicial interpretation. We
cannot afford to be swayed by abstract conceptions of equity and
B
‘contractual freedom’ of the parties to freely negotiate terms of the
Resolution Plan with unfettered discretion, that are not grounded in the
intent of the IBC.
129. The IBC and the regulations provide a detailed procedure
for the completion of CIRP. An application for initiation of CIRP is filed
either by the financial creditor, operational creditor or the Corporate C
Debtor itself under Sections 7, 9 and 10 of the IBC, respectively. Once
the application is admitted by the Adjudicating Authority, it passes the
following orders under Section 13(1) of the IBC: (i) declaration of a
moratorium for the purposes referred to in Section 14 of the IBC; (ii)
causing a public announcement to be made for the initiation of CIRP and D
issuing a call for submissions of claims as may be specified under Section
15 of the IBC; and (iii) appointing an IRP in accordance with Section 16
of the IBC.
130. Section 13(2) provides that the public announcement is to be
made immediately after the appointment of an IRP. The word E
‘immediately’ here means not later than three days from the date of
appointment as provided in the explanation to Regulation 6(1) of the
CIRP Regulations. Section 15 of the IBC lists down the information that
should be included in the public announcement of CIRP. It should specify
the last date up to which the claims, i.e., a right of payment or right to
remedy as defined under Section 3(6) of the IBC, can be made by F
creditors, workmen and employees. Regulation 6(2)(c) provides that the
last date of submission of claims shall be fourteen days from the date of
appointment of the IRP. The public announcement also specifies the
date on which the CIRP shall close, which is the one hundred and eightieth
day from the date of the admission of the application under Sections 7, 9 G
or 10, as may be applicable. Regulation 6 of the CIRP Regulations
stipulates additional requirements relating to how the public announcement
is to made.
131. On receipt of claims from the operational creditors, financial
creditors, workmen and employees, the IRP prepares a list of creditors H
448 SUPREME COURT REPORTS [2021] 14 S.C.R.

A after verifying the claims. Regulation 13(1) provides that the verification
of all the claims is to be done within seven days from the last date of
receipt of the claims. Thereafter, the IRP constitutes a CoC in accordance
with Section 21(1) of the IBC. Regulation 17 of the CIRP Regulations
stipulates that the IRP must submit a report certifying the constitution of
the CoC within two days of the claims being verified. The IRP is required
B
to hold the first meeting of the CoC within seven days of filing of the
report under the said regulation. If the appointment of the RP by the
CoC is delayed, the IRP is to perform the functions of the RP from the
fortieth day of the insolvency commencement date till the RP is appointed
under Section 22 of the IBC.
C 132. The CoC, in its first meeting, appoints the RP in terms of
Section 22(2) of the IBC. Section 23(1) provides that the RP is responsible
for conducting the entire CIRP and managing the operations of the
Corporate Debtor during the CIRP period. The RP continues to manage
the operations of the Corporate Debtor after the expiry of CIRP period
D until an order approving the resolution is passed by the Adjudicating
Authority under Section 31(1) of the IBC or a liquidator is appointed
under Section 34 of the IBC. The intent of this Section is to ensure that
the Corporate Debtor remains a going concern until the Resolution Plan
is approved by the Adjudicating Authority. The powers and duties of the
RP are listed under Section 23(2) of the IBC.
E
133. The significant, if not the most important, duty of the RP is to
solicit Resolution Plans. The RP is empowered to invite prospective
Resolution Applicants who fulfil the criteria as laid down by the RP and
approved by the CoC, considering the complexity and the scale of the
business operations of the Corporate Debtor and other such conditions
F specified by the IBBI, to submit a Resolution Plan or Plans under Section
25(2)(h) of the IBC. Further, a person should not be ineligible to be a
Resolution Applicant under Section 29A of the IBC. Section 5(25) defines
a Resolution Applicant in the following terms:
“resolution applicant” means a person, who individually or jointly
G with any other person, submits a resolution plan to the resolution
professional pursuant to the invitation made under clause (h) of
sub-section (2) of section 25; or pursuant to section 54K, as the
case may be.”

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134. The first step in the process of soliciting a Resolution Plan is A
the preparation of an IM containing relevant information as specified by
the IBBI for formulating a Resolution Plan in accordance with Section
29(1) of the IBC. The contents of the IM are specified under Regulation
36(2) of the CIRP Regulations. Regulation 36(1) of the CIRP Regulations
specifies the timelines within which the RP must submit the IM to members
B
of the CoC, which is within two weeks of his appointment but not later
than the fifty-fourth day from the insolvency commencement date,
whichever is earlier. Thereafter, the RP issues an invitation of EOI not
later than the seventy-fifth day from the insolvency commencement date
to seek expressions of interest from eligible prospective Resolution
Applicants in terms of Regulation 36A of the CIRP Regulations. A C
prospective Resolution Applicant is required to submit an unconditional
EOI within the time stipulated under the invitation, which shall not be
less than fifteen days from the date of the issue of invitation. The RP
conducts a due diligence of the Resolution Applicant based on material
available on record in terms of Regulation 36A(8) of the CIRP
D
Regulations. Thereafter, the RP issues a provisional list of eligible
prospective Resolution Applicants within ten days of the last date for
submission of EOIs to the CoC and to all the prospective Resolution
Applicants who had submitted the EOI. Regulation 36A also specifies
the timeline within which any objection can be made against the inclusion
or exclusion of a prospective Resolution Applicant on the list, which is E
five days from the issue of the list. The RP is required to publish a final
list of prospective Resolution Applicants within ten days of the last date
for the receipt of objections by the CoC.
135. Under Regulation 36B of the CIRP Regulations, the RP has
to issue the IM, evaluation matrix for consideration of the Resolution F
Plan and an RFRP within five days of the date of issue of the provisional
list of Resolution Applicants to every prospective Resolution Applicant
on the list and any other prospective Resolution Applicants who have
contested their non-inclusion in the list. Regulation 36B stipulates that
the RFRP shall contain detailed steps of each process and the manner
and purposes of interaction between the RP and the prospective resolution G
applicant along with the corresponding timelines. A minimum of thirty
days is given to the prospective Resolution Applicant to submit a Resolution
Plan. A Resolution Plan is defined under Section 5(26) of the IBC:

H
450 SUPREME COURT REPORTS [2021] 14 S.C.R.

A “resolution plan” means a plan proposed by resolution applicant
for insolvency resolution of the corporate debtor as a going concern
in accordance with Part II;
Explanation.—For the removal of doubts, it is hereby clarified
that a resolution plan may include provisions for the restructuring
B of the corporate debtor, including by way of merger, amalgamation
and demerger;”
136. The timeline for the submission of Resolution Plans can be
extended by an RP with the approval of the CoC. The RFRP must require
the resolution applicant to furnish a performance security in case their
C Resolution Plan is approved by the CoC under Regulation 36B(4A).
The performance security shall stand forfeited if, after the approval of
the Resolution Plan by the Adjudicating Authority, the Resolution Applicant
fails to implement or contributes to the failure of implementation of the
plan. Under the regulation, a performance security is defined as “security
of such nature, value, duration and source, as may be specified in the
D request for resolution plans with the approval of the committee, having
regard to the nature of resolution plan and business of the corporate
debtor”. Regulations 37 and 38 list down the mandatory contents of the
Resolution Plan.
137. The RP is required to review the Resolution Plan submitted
E in terms of Section 30(2) of the IBC, which provides that:
“Section 30 - Submission of resolution plan
[…]
(2) The resolution professional shall examine each resolution plan
F received by him to confirm that each resolution plan—
(a) provides for the payment of insolvency resolution process costs
in a manner specified by the Board in priority to the payment of
other debts of the corporate debtor;
(b) provides for the payment of debts of operational creditors in
G such manner as may be specified by the Board which shall not be
less than—
(i) the amount to be paid to such creditors in the event of a liquidation
of the corporate debtor under section 53; or

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(ii) the amount that would have been paid to such creditors, if the A
amount to be distributed under the resolution plan had been
distributed in accordance with the order of priority in sub-section
(1) of section 53, whichever is higher and provides for the payment
of debts of financial creditors, who do not vote in favour of the
resolution plan, in such manner as may be specified by the Board,
B
which shall not be less than the amount to be paid to such creditors
in accordance with sub-section (1) of section 53 in the event of a
liquidation of the corporate debtor.
Explanation 1.—For the removal of doubts, it is hereby clarified
that a distribution in accordance with the provisions of this clause
shall be fair and equitable to such creditors. C

Explanation 2.—For the purposes of this clause, it is hereby
declared that on and from the date of commencement of the
Insolvency and Bankruptcy Code (Amendment) Act, 2019, the
provisions of this clause shall also apply to the corporate insolvency
resolution process of a corporate debtor— D

(i) where a resolution plan has not been approved or rejected by
the Adjudicating Authority;
(ii) where an appeal has been preferred under section 61 or section
62 or such an appeal is not time barred under any provision of law E
for the time being in force; or
(iii) where a legal proceeding has been initiated in any court against
the decision of the Adjudicating Authority in respect of a resolution
plan;
(c) provides for the management of the affairs of the F
Corporate debtor after approval of the resolution plan;
(d) the implementation and supervision of the resolution
plan;
(e) does not contravene any of the provisions of the law for
the time being in force; G

(f) conforms to such other requirements as may be specified
by the Board.
Explanation.— For the purposes of clause (e), if any approval of
shareholders is required under the Companies Act, 2013 (18 of H
452 SUPREME COURT REPORTS [2021] 14 S.C.R.

A 2013) or any other law for the time being in force for the
implementation of actions under the resolution plan, such approval
shall be deemed to have been given and it shall not be a
contravention of that Act or law.”
(emphasis supplied)
B Sub-Section (3) of Section 30 of the IBC provides that the RP
shall present Resolution Plans which conform to the above requirements
before the CoC for approval. Sub-Section (4) of Section 30 stipulates
that the CoC may approve a Resolution Plan by a vote of not less than
sixty-six per cent after considering the feasibility and viability of the plan
C and any such requirements specified by the IBBI.
138. The CoC has been given wide powers under the IBC. It can
direct the Corporate Debtor into liquidation any time before the approval
by the Adjudicating Authority, under Section 33(2) of the IBC. Further,
under Section 12A of the IBC the Adjudicating Authority may allow
D withdrawal of the application submitted under Sections 7, 9 or 10 of the
IBC for initiation of the CIRP (i.e., initiation of the CIRP by the financial
creditor, operational creditor and the corporate applicant, respectively)
if the withdrawal is approved by ninety per cent of the voting share of
the CoC. Dealing with the question whether a successful Resolution
Applicant can retreat through the route provided under Section 12A of
E the IBC, a three-judge Bench of this Court in Maharashtra Seamless
v. Padmanabhan Venkatesh 94 observed that, “[t]he exit route
prescribed in Section 12A is not applicable to a Resolution Applicant.
The procedure envisaged in the said provision only applies to applicants
invoking Sections 7, 9 and 10 of the code”. However, this Court left the
F question whether a successful Resolution Applicant “altogether forfeits
their right to withdraw from such process [CIRP] or not”, open for
subsequent judicial determination95.
139. In terms of Regulation 39(4), the RP shall endeavour to submit
the Resolution Plan approved by the CoC before the Adjudicating Authority
G for its approval under Section 31 of the IBC, at least fifteen days before
the maximum period for completion of CIRP. Section 31(1) provides
that the Adjudicating Authority shall approve the Resolution Plan if it is
satisfied that it complies with the requirements set out under Section
30(2) of the IBC. Essentially, the Adjudicating Authority functions as a
94
(2020) 11 SCC 467
H 95
Para 29, Ibid.
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check on the role of the RP to ensure compliance with Section 30(2) of A
the IBC and satisfies itself that the plan approved by the CoC can be
effectively implemented as provided under the proviso to Section 31(1)
of the IBC. Once the Resolution Plan is approved by the Adjudicating
Authority, it becomes binding on the Corporate Debtor and its employees,
members, creditors, guarantors and other stakeholders involved in the
B
Resolution Plan. Section 31(1) of the IBC is extracted below:
“Section 31 - Approval of resolution plan
(1) If the Adjudicating Authority is satisfied that the resolution
plan as approved by the committee of creditors under sub-section
(4) of section 30 meets the requirements as referred to in sub- C
section (2) of section 30, it shall by order approve the resolution
plan which shall be binding on the corporate debtor and its
employees, members, creditors, including the Central Government,
any State Government or any local authority to whom a debt in
respect of the payment of dues arising under any law for the time
being in force, such as authorities to whom statutory dues are D
owed, guarantors and other stakeholders involved in the resolution
plan.
Provided that the Adjudicating Authority shall, before passing an
order for approval of resolution plan under this sub-section, satisfy
that the resolution plan has provisions for its effective E
implementation.”
(emphasis supplied)
A contravention of a Resolution Plan binding under Section 31 is
punishable under Section 74 (3) of the IBC. Section 74 (3) of the IBC F
provides thus:
“Section 74 - Punishment for contravention of moratorium or the
resolution plan
[….]
(3) Where the corporate debtor, any of its officers or creditors or G
any person on whom the approved resolution plan is binding under
section 31, knowingly and wilfully contravenes any of the terms
of such resolution plan or abets such contravention, such corporate
debtor, officer, creditor or person shall be punishable with
imprisonment of not less than one year, but may extend to five H
454 SUPREME COURT REPORTS [2021] 14 S.C.R.

A years, or with fine which shall not be less than one lakh rupees,
but may extend to one crore rupees, or with both.”
140. If the Resolution Plan is rejected by the Adjudicating
Authority, the Corporate Debtor goes into liquidation in accordance with
Section 33(1) of the IBC. The order of the Adjudicating Authority rejecting
B a Resolution Plan and directing liquidation under Section 33 of the IBC
can be appealed only on the grounds of material irregularity or fraud, as
stipulated under Section 61(4) of the IBC. The order of the Adjudicating
Authority approving a Resolution Plan can be appealed before the NCLAT
under Section 61(3) of the IBC only on the grounds specified in that
section. The grounds of appeal are as follows:
C
“Section 61 - Appeals and Appellate Authority
[….]
(3) An appeal against an order approving a resolution plan under
section 31 may be filed on the following grounds, namely:—
D
(i) the approved resolution plan is in contravention of the provisions
of any law for the time being in force;
(ii) there has been material irregularity in exercise of the powers
by the resolution professional during the corporate insolvency
resolution period;
E
(iii) the debts owed to operational creditors of the corporate debtor
have not been provided for in the resolution plan in the manner
specified by the Board;
(iv) the insolvency resolution process costs have not been provided
F for repayment in priority to all other debts; or
(v) the resolution plan does not comply with any other criteria
specified by the Board.
(4) An appeal against a liquidation order passed under section 33,
or sub-section (4) of section 54L, or sub-section (4) of section
G 54N, may be filed on grounds of material irregularity or fraud
committed in relation to such a liquidation order.”
141. Under Regulation 39(5) of the CIRP Regulations, the RP is
required to send a copy of the order of the Adjudicating Authority accepting

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or rejecting the Resolution Plan on a ‘forthwith basis’. Regulation 39(5A) A
specifies that within fifteen days of the date of the order of Adjudicating
Authority approving the Resolution Plan, the RP must inform each
claimant about the principle or formulae for the payment of debts under
the Resolution Plan.

142. As noted above, Section 12 of the IBC stipulates the timeline B
within which the CIRP is to be completed. The RP on the instructions of
the CoC may make an application for extension of the CIRP. 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. Regulation 40A is extracted C
below:

“40-A. Model time-line for corporate insolvency resolution
process.—The following Table presents a model timeline of
corporate insolvency resolution process on the assumption that
the interim resolution professional is appointed on the date of D
commencement of the process and the time available is hundred
and eighty days:

E

F

G

H
456 SUPREME COURT REPORTS [2021] 14 S.C.R.

A

B

C

D

E

F

G

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A

B

C

D

E

F

G

H
458 SUPREME COURT REPORTS [2021] 14 S.C.R.

A Provisional List Within 10 days T+100
of RAs by RP from the last
day of receipt
of EoI
Submission of For 5 days T+105
objections to from the date
provisional list of provisional
B list
Final List of Within 10 days T+115
RAs by RP of the receipt
of objections
Regulation 36-B Issue of RFRP, Within 5 days T+105
including of the issue of
C Evaluation the provisional
Matrix and IM list
Receipt of At least 30 T+135
Resolution days from issue
Plans of RFRP
(Assume 30
days)
D Regulation 39(4) Submission of As soon as T+165
CoC approved approved by
Resolution Plan the CoC
to AA
Section 31(1) Approval of T=180
resolution plan
by AA
E
AA: Adjudicating Authority; AR: Authorised Representative;
CIRP: Corporate Insolvency Resolution Process; CoC: Committee
of Creditors; EoI: Expression of Interest; IM: Information
Memorandum; IRP: Interim Resolution Professional; RA:
Resolution Applicant; RP: Resolution Professional; RFRP: Request
F
for Resolution Plan.”
143. The statutory framework governing the CIRP seeks to create
a mechanism for resolving insolvency in an efficient, comprehensive
and timely manner. The IBC provides a detailed linear process for
undertaking CIRP of the Corporate Debtor to minimize any delays,
G uncertainty in procedure and disputes. The roles and responsibilities of
the important actors in the CIRP are clearly defined under the IBC and
its regulations. In Innoventive Industries Ltd v. ICICI Bank96 a
three judge Bench of this Court observed that “one of the important
objectives of the Code is to bring the insolvency law in India under a
H 96
(2018) 1 SCC 407, para 13.
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single unified umbrella with the object of speeding up of the insolvency A
process”. Recently, in Gujarat Urja97 (supra) a three judge Bench of
this Court observed that a “delay in completion of the insolvency
proceedings would diminish the value of the debtor’s assets and hamper
the prospects of a successful reorganization or liquidation. For the success
of an insolvency regime, it is necessary that insolvency proceedings are
B
dealt with in a timely, effective and efficient manner”. The stipulation
of timelines and a detailed procedure under the IBC ensures a timely
completion of CIRP and introduces transparency, certainty and
predictability in the insolvency resolution process. The UNCITRAL Guide
also states that the insolvency law of a jurisdiction should be transparent
and predictable. It notes the value of such predictability in the following C
terms98:
“11. An insolvency law should be transparent and predictable.
This will enable potential lenders and creditors to understand how
insolvency proceedings operate and to assess the risk associated
with their position as a creditor in the event of insolvency. This D
will promote stability in commercial relations and foster lending
and investment at lower risk premiums. Transparency and
predictability will also enable creditors to clarify priorities, prevent
disputes by providing a backdrop against which relative rights and
risks can be assessed and help define the limits of any discretion.
Unpredictable application of the insolvency law has the potential E
to undermine not only the confidence of all participants in
insolvency proceedings, but also their willingness to make credit
and other investment decisions prior to insolvency. As far as
possible, an insolvency law should clearly indicate all provisions
of other laws that may affect the conduct of the insolvency F
proceedings (e.g. labour law; commercial and contract law; tax
law; laws affecting foreign exchange, netting and set-off and debt
for equity swaps; and even family and matrimonial law).”
This Court should proceed with caution in introducing any element
in the insolvency process that may lead to unpredictability, delay and G
complexity not contemplated by the legislature. With this birds’-eye view
of the framework of insolvency through the CIRP, we proceed to answer
the question of law raised in this judgement - whether a Resolution
97
(2021) SCC OnLine 194, para 71.
98
Page 13, UNCITRAL Guide, supra 56 H
460 SUPREME COURT REPORTS [2021] 14 S.C.R.

A Applicant is entitled to withdraw or modify its Resolution Plan, once it
has been submitted by the Resolution Professional to the Adjudicating
Authority and before it is approved by the latter under Section 31(1) of
the IBC.
J Withdrawal of the Resolution Plan by a successful
B Resolution Applicant under the IBC
J.1 The absence of a legislative hook or a regulatory tether
to enable a withdrawal
144. The analysis of the statutory framework governing the CIRP
and periodic reports of the Insolvency Law Committee indicates that it
C is a creditor-driven process. The aim of the process, in preferential order,
is to: first, enable resolution of the debt by maintaining the corporate
debtor as a going concern, in order to preserve the business and
employment of the personnel; second, maximize the value of the assets
of the corporate debtor and enable a higher pay-back to its creditors
D than under liquidation; and third, enable a smoother and faster transition
to liquidation in the event that a time bound CIRP fails, in a bid to avert
further deterioration of value.
145. Since the aim of the statute is to preserve the interests of the
corporate debtor and the CoC, it was recognized that settlements
E between the corporate debtor and the CoC may be in the best interests
of all stakeholders since insolvency is averted. Two decisions of two
judge Benches of this Court, in Lokhandwala Kataria Construction
(P) Ltd v. Nisus Finance and Investment Managers LLP 99 and
Uttara Foods and Feeds (P) Ltd v. Mona Pharmachem100, (prior to
the insertion of Section 12A which enabled withdrawal of the CIRP on
F account of settlement between the parties), had refused to effectuate
this remedy by exercising inherent powers of the Adjudicating Authority
under Rule 11 of the NCLT Rules 2016 or the power of parties to make
applications to the Adjudicating Authority under Rule 8 of the Insolvency
and Bankruptcy (Application to Adjudicating Authority) Rules 2016. In
G Uttara Foods (supra) this Court had granted a one-time relief under
Article 142 of the Constitution since all the parties were present before
it and had presented it with signed consent terms. This course of action,
in refraining from the exercise of inherent powers to effect procedures
99
(2018) 15 SCC 589
100
H (2018) 15 SCC 587
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and remedies that were not specifically envisaged by the statute, was A
explicitly affirmed by the Insolvency Law Committee Report dated March
2018101 which proceeded to suggest amendments to the IBC and
recommended a ninety per cent voting threshold by the CoC for
withdrawals of a CIRP and a specific amendment to Rule 8 of the then
existing CIRP Rules to enable parties to file such applications. This report
B
led to the insertion of Section 12A which vested the CoC with the power
to withdraw the CIRP or vote on such withdrawal, if sought by the
Corporate Debtor. This provision was introduced with retrospective
effect on 6 June 2018. Significantly, no such exit routes have been
contemplated for the Resolution Applicant. It is relevant to note that the
newly inserted and then unamended Regulation 30A (w.e.f. 4 July 2018) C
of the CIRP Regulations stipulated that withdrawal under Section 12A
can be allowed through submitting an application to the IRP or RP (as
the case maybe) before the invitation for EOI is issued to the public.
The CoC was to consider the application within seven days of its
constitution and an approval for such application required approval of
D
the ninety per cent of the voting share of the CoC. However, on 14
December 2018, a two judge Bench of this Court, held in Brilliant Alloys
(P) Ltd v. S Rajagopal102 that Regulation 30A is directory, and not
mandatory in nature since Section 12A of the IBC does not stipulate a
deadline by which a withdrawal from the CIRP can be made. Thus, in
exceptional cases withdrawals from the CIRP under Section 12A of E
IBC could be permitted even after the invitation of EOI has been issued.
Regulation 30A of the CIRP Regulations was then amended by the IBBI
(Insolvency Resolution Process for Corporate Persons) (Second
Amendment) Regulations 2019, w.e.f. 25 July 2019 to reiterate the decision
of this Court. The newly amended provision allows for withdrawals even
F
after the invitation for expression of interest has been issued, provided
that the applicant states the reasons justifying such withdrawal. Similarly,
on 25 January 2019, a two judge Bench of this Court in Swiss Ribbons
(supra) interpreted the true import of Section 12A and clarified that if
the CoC is not yet constituted, a party can approach the Adjudicating
Authority, which may in exercise of its inherent powers under Rule 11 of G
the NCLT Rules 2016, allow or reject an application for withdrawal or

101
Pages 5 and 101, Report of the Insolvency Law Committee, Ministry of Corporate
Affairs (March 2018) available at < https://ibbi.gov.in/uploads/resources/
ILRReport2603_03042018.pdf > accessed on 20 August 2021
102
(2018) SCC OnLine SC 3154 H
462 SUPREME COURT REPORTS [2021] 14 S.C.R.

A settlement. On 25 July 2019, the IBBI (Insolvency Resolution Process
for Corporate Persons) (Second Amendment) Regulations, 2019 amended
Regulation 30A in terms of this decision in interpreting Section 12A and
now specifically provides the procedure under the IBC that relates to
affecting a withdrawal under Section 12A before the constitution of the
CoC. The applicant submits an application for withdrawal through the
B
IRP, directly before the Adjudicating Authority, since the CoC is not yet
constituted to consider such an application. To ensure that the process
for withdrawal is timely and efficient, the present Regulation 30A provides
that the IRP shall submit an application for withdrawal of the CIRP prior
to the constitution of the CoC to the Adjudicating Authority on behalf of
C the applicant within three days of the receipt. Alternatively, if the
application for withdrawal is made after the constitution of the CoC,
such application will be considered by the CoC within seven days of its
receipt. If the CoC approves such an application with ninety per cent
voting share, it is to be submitted to the Adjudicating Authority within
three days of approval. Further, the application for withdrawal has to be
D
accompanied by a bank guarantee towards estimated expenses relating
to costs of the IRP (in case of a withdrawal prior to constitution of the
CoC) or insolvency resolution process costs (where withdrawal is after
constitution of the CoC). It is clear that withdrawal of the CIRP is allowed
only if it upholds the interests of the CoC, is time-bound, and takes into
E consideration how the expenses relating to the insolvency process up to
withdrawal shall be borne. Thus, even the exit under Section 12A of the
CoC, which is not available to the Resolution Applicant, is regulated by
procedural provisions indicating that the legislature has applied its mind
to the timelines and costs involved in the CIRP. Pertinently, the regulations
do not provide for any costs that are payable to the prospective Resolution
F
Applicants or a successful Resolution Applicant, who must have incurred
a significant expense in participating in the process. This Court, in
Maharashtra Seamless (supra) had denied relief to a Resolution
Applicant who had sought to invoke Section 12A to resile from its
Resolution Plan. The nature of the statute indicates the clarity of its
G purpose – primacy of the interests of the creditors who are seeking to
cut their losses through a CIRP. Traditional models and understandings
of equity or fairness that seek reliefs which are misaligned with the
goals of the statute and upset the economic coordination envisaged
between the parties, cannot be read into the statute through judicial
interpretation. While parties have the freedom to negotiate certain
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commercial terms of the Resolution Plan to gain wide support, their A
ability to negotiate is circumscribed by the governing statute. A court
cannot interpret the negotiated arrangements that are represented in the
Resolution Plan in a manner that hampers the objectives of the IBC
which is a speedy, predictable and timely resolution. The Resolution
Applicant is deemed to be aware of the IBC and its mechanisms before
B
it steps into the fray and consents to be bound by its underlying objectives.
A Resolution Applicant, after obtaining the financial information of the
Corporate Debtor through the informational utilities and perusing the
IM, is assumed to have analyzed the risks in the business of the Corporate
Debtor and submitted a considered proposal. It cannot demand vesting
of certain powers and rights which have been conspicuously omitted by C
the legislature under the statute, in furtherance of the policy objectives
of the IBC. A court may not be able to lay down such detailed guidance
on how a mechanism for withdrawal, if any, may be provided to a
successful Resolution Applicant without disturbing the statutory timelines
and adequately evaluating the interests of creditors and other
D
stakeholders, which is ultimately a matter of legislative policy. In Essar
Steel (supra), a three judge Bench of this Court, affirmed a two judge
Bench decision in K Sashidhar103 (supra), prohibiting the Adjudicating
Authority from second-guessing the commercial wisdom of the parties
or directing unilateral modification to the Resolution Plans 104. These are
binding precedents. Absent a clear legislative provision, this court will E
not, by a process of interpretation, confer on the Adjudicating Authority
a power to direct an unwilling CoC to re-negotiate a submitted Resolution
Plan or agree to its withdrawal, at the behest of the Resolution Applicant.
The Adjudicating Authority can only direct the CoC to re-consider certain
elements of the Resolution Plan to ensure compliance under Section
F
30(2) of the IBC, before exercising its powers of approval or rejection,
as the case may be, under Section 31105. In Government of Andhra
Pradesh v. P Laxmi Devi106, while determining the constitutionality of
a statute, this Court observed that it should be wary of transgressing into
the domain of the legislature, especially in matters relating to economic
and regulatory legislation. This Court observed: G

103
Para 62, supra note 35
104
Paras 64-73, supra note 35
105
Para 73, Essar Steel supra note 34
106
(2008) 4 SCC 720 H
464 SUPREME COURT REPORTS [2021] 14 S.C.R.

A “80. As regards economic and other regulatory legislation judicial
restraint must be observed by the court and greater latitude must
be given to the legislature while adjudging the constitutionality of
the statute because the court does not consist of economic or
administrative experts. It has no expertise in these matters,
and in this age of specialisation when policies have to be
B
laid down with great care after consulting the specialists in
the field, it will be wholly unwise for the court to encroach
into the domain of the executive or legislative (sic
legislature) and try to enforce its own views and
perceptions.”
C (emphasis supplied)
146. Judicial restraint must not only be exercised while adjudicating
upon the constitutionality of the statute relating to economic policy but
also in matters of interpretation of economic statutes, where the
interpretative maneuvers of the Court have an effect of transgressing
D into the law-making power of the legislature and disturbing the delicate
balance of separation of powers between the legislature and the judiciary.
Judicial restraint must be exercised in such cases as a matter of prudence,
since the court neither has the necessary expertise nor the power to
hold consultations with stakeholders or experts to decide the direction of
E economic policy. A court may be inept in laying down a detailed procedure
for exercise of the power of withdrawal or modification by a successful
Resolution Applicant without impacting the other procedural steps and
the timelines under the IBC which are sacrosanct. Thus, judicial restraint
must be exercised while intervening in a law governing substantive
outcomes through procedure, such as the IBC. In this case, if Resolution
F Applicants are permitted to seek modifications after subsequent
negotiations or a withdrawal after a submission of a Resolution Plan to
the Adjudicating Authority as a matter of law, it would dictate the
commercial wisdom and bargaining strategies of all prospective
Resolution Applicants who are seeking to participate in the process and
G the successful Resolution Applicants who may wish to negotiate a better
deal, owing to myriad factors that are peculiar to their own case. The
broader legitimacy of this course of action can be decided by the legislature
alone, since any other course of action would result in a flurry of litigation
which would cause the delay that the IBC seeks to disavow.

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147. The IBC is silent on whether a successful Resolution A
Applicant can withdraw its Resolution Plan. However, the statutory
framework laid down under the IBC and the CIRP Regulations provide
a step-by-step procedure which is to be followed from the initiation of
CIRP to the approval by the Adjudicating Authority. Regulation 40A
describes a model-timeline for the CIRP that accounts for every
B
eventuality that may arise between the commencement of the CIRP
and approval of the Resolution Plan by the Adjudicating Authority,
including the different stages for pressing a withdrawal of the CIRP
under Section 12A. Even a modification to the RFRP is envisaged by
the CIRP Rules and is subject to a timeline. The absence of any exit
routes being stipulated under the statute for a successful Resolution C
Applicant is indicative of the IBC’s proscription of any attempts at
withdrawal at its behest. The rule of casus omissus is an established
rule of interpretation, which provides that an omission in a statute cannot
be supplied by judicial construction. Justice GP Singh in his authoritative
treatise, Principles of Statutory Interpretation107, defines the rule of
D
casus omissus as:
“It is an application of the same principle that a matter which
should have been, but has not been provided for in a statute
cannot be supplied by courts, as to do so will be legislation
and not construction. But there is no presumption that a casus
omissus exists and language permitting the court should avoid E
creating a casus omissus where there is none.”
(emphasis supplied)
The treatise further discusses that a departure from this rule is
only allowed in cases where words have been accidently omitted or the F
omission has an effect of making any part of the statute meaningless.
Further, only such words can be supplied to the statute which would
have certainly been inserted by the Parliament, had the omission come
to its notice. The relevant paragraph is extracted below:
“As already noticed it is not allowable to read words in a statute G
which are not there, but “where the alternative lies between either
supplying by implication words which appear to have been
accidentally omitted, or adopting a construction which deprives
certain existing words of all meaning, it is permissible to supply
107
GP Singh, Principles of Statutory Interpretation (1st edn., Lexis Nexis 2015) H
466 SUPREME COURT REPORTS [2021] 14 S.C.R.

A the words”. A departure from the rule of literal construction may
be legitimate so as to avoid any part of the statute becoming
meaningless. Words may also be read to give effect to the intention
of the Legislature which is apparent from the Act read as a whole.
Application of the mischief rule or purposive construction may
also enable reading of words by implication when there is no doubt
B
about the purpose which the Parliament intended to achieve. But
before any words are read to repair an omission in the Act, it
should be possible to state with certainty that these or similar
words would have been inserted by the draftsman and approved
by Parliament had their attention been drawn to the omission before
C the Bill passed into law.”
In the wake of the COVID-19 pandemic, several Resolution Plans
remained pending before Adjudicating Authorities due to the lockdown
and significant barriers to securing a hearing. An Ordinance was swiftly
promulgated on 5 June 2020 which imposed a temporary suspension of
D initiation of CIRP under Sections 7, 9 and 10 of the IBC for defaults
arising for six months from 25 March 2020 (extendable by one year).
This was followed by an amendment through the IBC (Second
Amendment) Act 2020 on 23 September 2020 which provided for a
carve-out for the purpose of defaults arising during the suspended period.
The delays on account of the lockdown were also mitigated by the IBBI
E (Insolvency Resolution Process for Corporate Persons) (Third
Amendment) Regulations 2020, which inserted Regulation 40C on 20
April 2020, with effect from 29 March 2020, and excluded such delays
for the purposes of adherence to the otherwise strict timeline. Recently,
the IBC (Amendment) Ordinance 2021 was promulgated with effect
F from 04 April 2021 providing certain directions to preserve businesses
of MSMEs and a fast-track insolvency process. There has been a clamor
on behalf of successful Resolution Applicants who no longer wish to
abide by the terms of their submitted Resolution Plans that are pending
approval under Section 31, on account of the economic slowdown that
impacted every business in the country. However, no legislative relief
G for enabling withdrawals or re-negotiations has been provided, in the
last eighteen months. In the absence of any provision under the IBC
allowing for withdrawal of the Resolution Plan by a successful Resolution
Applicant, vesting the Resolution Applicant with such a relief through a
process of judicial interpretation would be impermissible. Such a judicial
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exercise would bring in the evils which the IBC sought to obviate through A
the back-door.
148. It is pertinent to note that even the UNCITRAL Guide does
not contain any provisions for withdrawal of a submitted Plan. It only
discusses the possibilities of amending a Resolution Plan. The
UNCITRAL Guide indicates that it contemplates that the Legislature B
should choose if it wants to allow any amendments to a submitted
Resolution Plan. In the event, it does, it should lay down the detailed
steps of proposing amendments to a submitted resolution plan108. In fact,
even the scope of negotiations between the Resolution Applicant and
the CoC has to be specifically envisaged by the statute109. Further, the
UNCITRAL Guide envisages that amendments can be made to the C
Resolution Plan after it is approved by the creditors only in limited
circumstances. It mentions that, “[a]n insolvency law may include limited
provision for a plan to be modified after it has been approved by creditors
(and both before and after confirmation) if its implementation breaks
down or it is found to be incapable of performance, whether in whole or D
in part, and the specific problem can be remedied”110. If permitted by
the statute, the recommendations strongly urge the establishment of a
mechanism for amendment after approval by creditors which details
requirements of, inter alia, approval by creditors of the modification
and consequences of failure to secure approval to the amendments111.
The BLRC Report has relied on the UNCITRAL Guide while designing E
the IBC112 and it is a critical tool for ascertaining legislative choice and
intent. Parliament has not introduced an explicit provision under the IBC
108
IV.A.52., page 225, and Recommendation 155: “155. The insolvency law should
permit amendment of a plan and specify the parties that may propose amendments and
the time at which the plan may be amended, including between submission and approval,
F
approval and confirmation, after confirmation and during implementation, where the
proceedings remain open.” of the UNCITRAL Guide, supra note 56
109
Ibid.
110
IV. A. 66, page 230 of the UNCITRAL Guide, supra note 56
111
Recommendation 156: “The insolvency law should establish the mechanism for
approval of amendments to a plan that has been approved by creditors. That mechanism G
should require notice to be given to the creditors and other parties affected by the
proposed modification; specify the party required to give notice; require the approval
of creditors and other parties affected by the modification; and require the rules for
confirmation (where confirmation is required) to be satisfied. The insolvency law
should also specify the consequences of failure to secure approval of proposed
amendments.”, UNCITRAL Guide, supra note 56
112
3.3.1, supra note 55 H
468 SUPREME COURT REPORTS [2021] 14 S.C.R.

A for allowing any amendment of the Resolution Plan after approval of
creditors, let alone a power to withdraw the Resolution Plan at that
stage. At the same time, the Corporate Debtor and the CoC have been
empowered to withdraw from the CIRP. If it intended to permit parties
to amend the Resolution Plan after submission to the Adjudicating
Authority, based on its specific terms of the Resolution Plan, it would
B
have adopted the critical safeguards highlighted by the UNCITRAL.
J.2 Terms of the Resolution Plan are not sufficient to
effect withdrawals or modifications after its submission
to the Adjudicating Authority
C 149. It has been contended by the three appellants that a Resolution
Plan only becomes binding when it is approved by the Adjudicating
Authority under Section 31(1) of the IBC. Further, since Section 74(3)
of the IBC, provides that a person can be prosecuted or punished for
contravening the Resolution Plan only after its approval by the
Adjudicating Authority, the successful Resolution Applicant is entitled to
D withdraw the Plan, on the terms of its contractual provisions, as long as
it is not made binding under Section 31(1) of the IBC. We have held in
Section H that a CoC-approved Resolution Plan is a creature of the IBC
and cannot be construed as a pure contract between two consenting
parties, prior to its approval under Section 31 of the IBC. In this section,
E independent of the above finding, we proceed to examine the contention
that the terms of a Resolution Plan can reserve the right to modify or
withdraw its contents after submission to the Adjudicating Authority.
150. The approval of the Adjudicating Authority under Section
31(1) of the IBC has the effect of making the Resolution Plan binding on
F all stakeholders. These stakeholders include the employees of the
corporate debtor whose terms of employment would be governed by the
Resolution Plan, the Central and State Governments who would receive
their tax dues on the basis of the terms of the Resolution Plan and local
authorities to whom dues are owed. These stakeholders are not direct
participants in the CIRP but are bound by its consequence by virtue of
G the approval of the Resolution Plan, under Section 31(1) of the IBC.
Section 31(1) ensures that the Resolution Plan becomes binding on all
stakeholders after it is approved by the Adjudicating Authority. The
language of Section 31(1) cannot be construed to mean that a Resolution
Plan is indeterminate or open to withdrawal or modification until it is
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approved by the Adjudicating Authority or that it is not binding between A
the CoC and the successful Resolution Applicant. Regulation 39(4) of
CIRP Regulations mandates that the RP should endeavour to submit the
Plan at least fifteen days before the statutory period of the CIRP under
Section 12 is due to expire along with a receipt of a PBG and a compliance
certificate as Form H. It is pertinent to note that sub-Section (3) to
B
Section 12 mandates that the CIRP process, including legal proceedings,
must be concluded within 330 days. This three-hundred-and-thirty-day
period can be extended only in exceptional circumstances, if the process
is at near conclusion and serves the object of the IBC, as held by a three
judge Bench of this Court in Essar Steel (supra). Therefore, after
accounting for all statutorily envisaged delays which the RP has to explain C
in its Form H and otherwise through Regulation 40B, the procedure
envisages a fifteen-day window between submission of Resolution Plan
and its approval or rejection by the Adjudicating Authority. This clearly
indicates that the statute envisages a certain level of finality before the
Resolution Plan is submitted for approval to the Adjudicating Authority.
D
Even the CoC is not permitted to approve multiple Resolution Plans or
solicit EOIs after submission of a Resolution Plan to the Adjudicating
Authority, which would possibly be in contemplation if the Resolution
Applicant was permitted to withdraw from, or modify, the Plan after
acceptance by the CoC. Regulation 36B(4A) requires the furnishing of
a performance security which will be forfeited if a Resolution Applicant E
fails to implement the Plan. This is collected before the Adjudicating
Authority approves the Plan. Notably, the regulations also direct forfeiture
of the performance security in case the Resolution Applicant “contributes
to the failure of implementation”, which could potentially include any
attempts at withdrawal of the Plan.
F
151. The report of the BLRC also notes that the negotiations in
the CIRP must be time bound and it envisages that one of the ways in
which the CIRP comes to a close is that the RP is able to obtain a
binding agreement from the CoC113. Such a binding agreement is placed
before the Adjudicating Authority, which orders the closure of the CIRP.
If the Adjudicating Authority does not receive a binding agreement, it G
can send the Corporate Debtor into liquidation. The relevant paragraphs
are extracted below:

113
5.3.4, BLRC Report, supra note 55 H
470 SUPREME COURT REPORTS [2021] 14 S.C.R.

A “5.3.4 Rules to close the IRP
The Committee agrees that it is critical for the Code to preserve
the time value of the entity by ensuring that negotiations in the
IRP are time bound. The Code states that the IRP has a default
maximum time limit that is strictly adhered to, regardless of whether
B the creditors committee has identified a solution. On the other
side, the Committee is also of the view that, if a solution can be
identified within a shorter time frame, the process must
accommodate closing the IRP in a shorter time period also. The
Committee proposes that the IRP can come to a close in
either of two ways. Either the RP is able to get a binding
C agreement from the majority of the creditors committee or
the calm period reaches the default maximum date set by the
Adjudicator at the start of the IRP. If either condition is met, the
Adjudicator will issue an order to close the IRP. However, the
orders will vary depending upon the condition. If the RP submits
D a binding agreement to the Adjudicator before the default
maximum date, then the Adjudicator orders the IRP case
to be closed. If the Adjudicator does not receive a binding
agreement by this date, the Adjudicator issues an order to
close the IRP case along with an order to liquidate the
entity.”
E
(emphasis supplied)
152. The binding nature, as between the CoC and the successful
Resolution Applicant, of the Resolution Plan submitted for approval by
the Adjudicating Authority is further evidenced from the fact that the
F CoC issues a LOI to a successful Resolution Applicant stating that it has
been selected as the successful Resolution Applicant and its Plan would
be submitted to the Adjudicating Authority for its approval. The successful
Resolution Applicant is typically required to accept the LOI unconditionally
and submit a PBG. Sequentially, the issuance of an LOI is followed by
its unconditional acceptance by the successful Resolution Applicant. In
G Amtek Auto (supra), this court thwarted a similar attempt by a successful
Resolution Applicant who had relied on certain open-ended clauses in its
Resolution Plan to seek a direction compelling the CoC to negotiate a
modification to its Resolution Plan. The Resolution Plan had been
approved by the Adjudicating Authority and the Resolution Applicant’s
H IA was not entertained. The Resolution Applicant had then sought to
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challenge the approval of the Resolution Plan under Section 61(3) of the A
IBC by seeking the same relief. This Court rejected the claim and
observed that, “[t]o assert that there was any scope for negotiations
and discussions after the approval of the resolution plan by the CoC
would be plainly contrary to the terms of the IBC”.
153. Regulation 38(3) mandates that a Resolution Plan be feasible, B
viable and implementable with specific timelines. A Resolution Plan whose
implementation can be withdrawn at the behest of the successful
Resolution Applicant, is inherently unviable, since open-ended clauses
on modifications/withdrawal would mean that the Plan could fail at an
undefined stage, be uncertain, including after approval by the Adjudicating
Authority. It is inconsistent to postulate, on the one hand, that no C
withdrawal or modification is permitted after the approval by the
Adjudicating Authority under Section 31, irrespective of the terms of the
Resolution Plan; and on the other hand, to argue that the terms of the
Resolution Plan relating to withdrawal or modification must be respected,
in spite of the CoC’s approval, but prior to the approval by the Adjudicating D
Authority. The former position follows from the intent, object and purpose
of the IBC and from Section 31, and the latter is disavowed by the
IBC’s structure and objective. The IBC does not envisage a dichotomy
in the binding character of the Resolution Plan in relation to a Resolution
Applicant between the stage of approval by the CoC and the approval
of the Adjudicating Authority. The binding nature of a Resolution Plan E
on a Resolution Applicant, who is the proponent of the Plan which has
been accepted by the CoC cannot remain indeterminate at the discretion
of the Resolution Applicant. The negotiations between the Resolution
Applicant and the CoC are brought to an end after the CoC’s approval.
The only conditionality that remains is the approval of the Adjudicating F
Authority, which has a limited jurisdiction to confirm or deny the legal
validity of the Resolution Plan in terms of Section 30 (2) of the IBC. If
the requirements of Section 30(2) are satisfied, the Adjudicating Authority
shall confirm the Plan approved by the CoC under Section 31(1) of the
IBC.
G
154. If the appellants’ claim were to succeed, a clause enabling a
Resolution Applicant to withdraw/seek modification for reasons such as
a ‘Material Adverse Event’ could also be set up by a Resolution Applicant
when it is being prosecuted under Section 74 (3). It was contended
before us that Form H, which is a compliance certificate that is to be
H
472 SUPREME COURT REPORTS [2021] 14 S.C.R.

A submitted by the RP to the Adjudicating Authority along with the
Resolution Plan, mentions that the RP can enter details as to whether
the Resolution Plan is subject to any conditionalities under Clause 12.
Thus, the argument goes that this permits the Resolution Applicant to
stipulate in the Resolution Plan certain contingencies under which it can
withdraw the Plan, for instance if there is an occurrence of an ‘Material
B
Adverse Event’. A form is subservient to the statute. The conditionalities
contemplated in Form H could be those which do not strike at the root of
the IBC. They can include commercial conditions and business
arrangements with the CoC. However, conditions for withdrawal or re-
negotiation of the Resolution Plan cannot pass the test of ‘viability’ and
C ‘implementability’ as they would make the resolution process
indeterminate and unpredictable. A two judge Bench of this Court in
K Sashidhar (supra), while discussing the jurisdiction of the Adjudicating
Authority under Section 31 to evaluate a Resolution Plan, has observed
that the Resolution Plan should “be an overall credible plan, capable of
achieving timelines specified in the Code generally, assuring successful
D
revival of the corporate debtor and disavowing endless speculation”114.
Section 30(2)(d) of the IBC and Regulation 38 of the CIRP Regulations
also provide that the Resolution Plan should be implementable. In the
absence of specific statutory language allowing for withdrawals or even
modifications by the successful Resolution Applicant, it would be difficult
E to imply the existence of such an option based on the terms of the
Resolution Plan, irrespective of, and especially when they do not form a
part of Clause 12 in Form H, as is the case in all the three Resolution
Plans that are in dispute in this present appeal.
155. The Insolvency and Bankruptcy Law Committee in its report
F released in March 2018115 noted that many conditional Resolution Plans
were being approved by the Adjudicating Authority on account of the
uncertainty on statutory clearances, such as by the Competition
Commission of India, and the approval by the Adjudicating Authority
was being regarded as a “single window approval”. This was in
contravention of the intent of the IBC. The relevant extracts of the
G report are reproduced below:
“16.1 Regulation 37(l) of the CIRP Regulations states that a
resolution plan shall provide for obtaining necessary approvals

114
Para 60 supra note 35
H 115
supra note 100
EBIX SINGAPORE PVT. LTD. v. COMMITTEE OF CREDITORS OF 473
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from the Central and State Governments and other authorities. A
However, the timeline within which such approvals are required
to be obtained, once a resolution plan has been approved by the
NCLT, has not been provided in the Code or the CIRP Regulations.
The Committee deliberated that as the onus to obtain the final
approval would be on the successful resolution applicant as per
B
the resolution plan itself, the Code should specify that the timeline
will be as specified in the relevant law, and if the timeline for
approval under the relevant law is less than one year from the
approval of the resolution plan, then a maximum of one year will
be provided for obtaining the relevant approvals, and section 31
shall be amended to reflect this. C
16.2 Further, the Committee noted that there is no provision
in the Code on the requirement to obtain an indication on
the stance of the concerned regulators or authorities, if
required, on the resolution plan prior to the resolution plan
being approved by the NCLT. It was brought to the D
attention of the Committee that this was resulting in several
conditional resolution plans being approved by the NCLT,
and that the approval by the NCLT was being regarded as
a ‘single window approval.’ This not being the intent of the
Code, the Committee deliberated on introduction of a
mechanism for obtaining preliminary observations from the E
concerned regulators and authorities in relation to a
resolution plan approved by the CoC and submitted to the
NCLT for its approval, but prior to the NCLT’s approval.”
(emphasis supplied)
F
The Insolvency and Bankruptcy Law Committee in its report dated
February 2020 116 stated that the current practice of obtaining
governmental approvals after the approval of the Resolution Plan has
created an uncertainty about the implementation of the Resolution Plan.
The committee suggested that this uncertainty can be mitigated if
amendments are made to the IBC to provide that once the Resolution G
Plan is approved by the CoC, it will be shared with the governmental
and regulatory authorities, for approvals that are necessary for running
the business of the Corporate Debtor. If no objections are raised within
forty-five days, it would be deemed that they have granted an approval.
116
supra note 90 H
474 SUPREME COURT REPORTS [2021] 14 S.C.R.

A If objections are raised or conditional approvals are granted, the
Resolution Applicant should attempt to clear the objections or meet the
conditions before placing the Resolution Plan before the Adjudicating
Authority. This Plan would thereafter be placed before the Adjudicating
Authority for its approval. The committee further suggested that this
timeline of forty-five days should be excluded from calculating the
B
timelines under Section 12 of the IBC. The relevant extract is reproduced
below:
“14.8. To enable approvals or no-objections to be taken within the
scheme of the Code, the Committee decided that amendments
should be made to the Code such that once a resolution plan is
C approved by the CoC, it should be sent to all concerned
government and regulatory authorities whose approvals are
core to the continued running of the business of the
corporate debtor, for their approvals or objections. If they
do not raise their objections within forty-five days, they will
D be deemed to have no objections. This plan would then be
placed before the Adjudicating Authority for its approval.
If the government and regulatory agencies raise any
objections or grant conditional approvals, the resolution
applicant can attempt to clear the objections or meet the
conditions for approval before placing the plan for the
E approval of the Adjudicating Authority, where this can be
done within the time limit provided under Section 12.
However, where this is not possible, the plan may still be placed
before the Adjudicating Authority for its approval, and the
successful resolution applicant should clear the objections or comply
F with the conditions for approval within a period of one year from
the approval of the resolution plan.
14.9. To ensure that this aligns with the time-line for
resolution provided in the Code, the Committee
recommended that the window of forty-five days given to
G government and regulatory agencies should be excluded
from the computation of the time limit under Section 12 of
the Code. Although some members of the Committee were of
the view that this time-line should ideally run concurrently with
the CIRP period, the Committee felt that this exclusion would be
justified since it would streamline the process of gaining government
H
EBIX SINGAPORE PVT. LTD. v. COMMITTEE OF CREDITORS OF 475
EDUCOMP SOLUTIONS LTD. [DR DHANANJAYA Y CHANDRACHUD, J.]

approvals considerably, which would lead to more value maximising A
resolutions, offsetting value lost, if any, in this forty-five day period
in which the corporate debtor will be run as a going concern.”
(emphasis supplied)
The aim to tighten timelines for receiving regulatory approvals
through the provision of in-principal approvals, prior to the approval of B
the Adjudicating Authority, indicates that the statutory framework under
the IBC has consistently attempted to avoid situations which may
introduce unpredictability in the insolvency resolution process and has
sought to make the process as linear as it can be. Further, the
recommendations made in the Insolvency Law Committee Report of C
February 2020117 discussed above indicate that the aim is to ensure that
the Resolution Plan placed before the Adjudicating Authority should reach
a certain finality, even in the context of governmental approvals. A
conditionality which allows for further negotiations, modification or
withdrawal, once the Resolution Plan is approved by the CoC would
only derail the time-bound process envisaged under the IBC. D

156. Regulation 40A envisages a model-time line for the CIRP.
Any deviation from this timeline needs to be specifically explained by
the RP in Clause 10 of Form H. Regulation 40B imposes a time-limit on
the RP for filing the requisite forms at different stages of the CIRP,
including forms seeking extensions on account of delays at any stage. E
The failure to fill these forms within the stipulated deadline results in
disciplinary action against the RP by the IBBI. Further, as discussed in
Section I of the judgement, various mandatory timelines have been
imposed for undertaking specific actions under the CIRP. If the legislature
intended to allow withdrawals or subsequent negotiations by successful F
Resolution Applicants, it would have prescribed specific timelines for
the exercise of such an option. The recognition of a power of withdrawal
or modification after submission of a CoC-approved Resolution Plan, by
judicial interpretation, will have the effect of disturbing the statutory
timelines and delaying the CIRP, leading to a depletion in the value of the
assets of a Corporate Debtor in the event of a potential liquidation. Hence, G
it is best left to the wisdom of the legislature, based on the experiences
gained from the working of the enactment, to decide whether the option
of modification or withdrawal at the behest of the Resolution Applicant
should be permitted after submission to the Adjudicating Authority; if so,
117
supra note 90 H
476 SUPREME COURT REPORTS [2021] 14 S.C.R.

A the conditions and the safeguards subject in which it can be allowed and
the statutory procedure to be adopted for its exercise.
157. Based on the plain terms of the statute, the Adjudicating
Authority lacks the authority to allow the withdrawal or modification of
the Resolution Plan by a successful Resolution Applicant or to give effect
B to any such clauses in the Resolution Plan. Unlike Section 18(3)(b) of
the erstwhile SICA which vested the Board for Industrial and Financial
Reconstruction with the power to make modifications to a draft scheme
for sick industrial companies, the Adjudicating Authority under Section
31(2) of the IBC can only examine the validity of the plan on the anvil of
the grounds stipulated in Section 30(2) and either approve or reject the
C plan. The Adjudicating Authority cannot compel a CoC to negotiate
further with a successful Resolution Applicant. A rejection by the
Adjudicating Authority is followed by a direction of mandatory liquidation
under Section 33. Section 30(2) does not envisage setting aside of the
Resolution Plan because the Resolution Applicant is unwilling to execute
D it, based on terms of its own Resolution Plan.
158. Further, no such power can be vested with the Adjudicating
Authority under its residuary jurisdiction in terms of Section 60 (5)(c). In
a decision of a three judge Bench of this Court in Gujarat Urja (supra),
it was held that, “the NCLT’s residuary jurisdiction [under Section
E 60(5)(c)] though wide, is nonetheless defined by the text of the IBC.
Specifically, the NCLT cannot do what the IBC consciously did not
provide it the power to do”. Further, the court observed that “this Court
must adopt an interpretation of the NCLT’s residuary jurisdiction which
comports with the broader goals of the IBC”118. The effect of allowing
the Adjudicating Authority to permit withdrawals of resolution plans that
F are submitted to it, would be to confer it with a power that is not envisaged
by the IBC and defeat the objectives of the statute, which seeks a timely
and predictable insolvency resolution of Corporate Debtors.
159. After the amendment to Section 12 in 2019 which mandate a
330 days outer-limit for conclusion of the CIRP (which can be breached
G only under exceptional circumstances as held in Essar Steel (supra)), it
would be antithetical to the purpose of the IBC to allow the Adjudicating
Authority to use its plenary powers under Section 60(5)(c) to potentially
extend these timelines to enable the CoC to either issue a fresh RFRP if

118
H Para 163-164, supra note 38
EBIX SINGAPORE PVT. LTD. v. COMMITTEE OF CREDITORS OF 477
EDUCOMP SOLUTIONS LTD. [DR DHANANJAYA Y CHANDRACHUD, J.]

the Resolution Plan is withdrawn by a successful Resolution Applicant A
or direct further negotiations with the Resolution Applicant who is seeking
a modification of the plan, whose failure could result in withdrawal as
well. The likely consequence of a withdrawal by a successful Resolution
Applicant after going through the stages of the CIRP for nearly 180
days (provided all statutory timelines have been strictly followed) would
B
inevitably be a delayed liquidation after the value of the assets has further
depreciated. In the event of intervening delays on account of litigation or
otherwise, the delay would be even more severe. If a CoC, could be
compelled by the Adjudicating Authority to negotiate with the successful
Resolution Applicant, it would have to resign itself to a commercial bargain
at a much lower value. If Parliament intended to permit such withdrawals/ C
modifications sought by successful Resolution Applicants as being
beneficial to the economic policy, which it has sought to pursue while
enacting the IBC, it would have prescribed timelines for setting the clock-
back or directing immediate liquidation if the withdrawals occur after a
certain period. For instance, under Regulation 36B (5) any modification
D
to the RFRP or the evaluation matrix is deemed as a fresh issue of the
RFRP and the timeline for submission of Resolution Plan starts afresh.
Parliament has not legislated to provide for the eventuality argued by the
appellants.
160. Permitting the Adjudicating Authority to exercise its residuary
powers under Section 60(5) to allow for further modifications or E
withdrawals at the behest of the successful Resolution Applicant, would
be in the teeth of the decision of this Court in Essar Steel (supra) which
held that “[s]ection 60(5)(c) cannot be used to whittle down Section
31(1) of the IBC, by the investment of some discretionary or equity
jurisdiction in the Adjudicating Authority outside Section 30(2) of the F
Code, when it comes to a resolution plan being adjudicated upon by the
Adjudicating Authority”119.
K Factual Analysis
161. We have held in Section H of this judgement that Resolution
Plans are not in a nature of a traditional contract per se, and the process G
leading up to their formulation and acceptance by the CoC is
comprehensively regulated by the insolvency framework. In Section J,
we have further held that the IBC framework, does not enable
withdrawals or modifications of Resolution Plans, once they have been
119
Para 68-69, supra note 34 H
478 SUPREME COURT REPORTS [2021] 14 S.C.R.

A submitted by the RP to the Adjudicating Authority after their approval by
the CoC. In any event, and without affecting the legal position formulated
above, we will also deal with the submissions of the parties that the
contractual terms of their respective Resolution Plans enabled withdrawal
or re-negotiation of terms. We will be undertaking an analysis on whether
the individual Resolution Applicants before us had specifically negotiated
B
with the respective CoCs for a right of modification or withdrawal and
are contractually entitled to the same in the present case.
K.1 The Ebix Appeal
162. Before we begin our analysis on the factual matrix pertaining
C to Ebix’s Appeal, we must deal with the preliminary issue alleged by the
respondents during the course of the Ebix Appeal- whether the Third
Withdrawal Application by Ebix was barred by res judicata; while this
will not have a bearing on the final outcome of the appeal, we shall
analyze it briefly.

D K.1.1 Res Judicata
163. To begin our inquiry, it is important to first consider the
contours of the principle of res judicata. In Indian law, the principle has
been recognized in Section 11 of the Code of Civil Procedure 1908.
Section 11, in so far as is relevant, reads as follows:
E “11. Res judicata.—No Court shall try any suit or issue in which
the matter directly and substantially in issue has been directly and
substantially in issue in a former suit between the same parties, or
between parties under whom they or any of them claim, litigating
under the same title, in a Court competent to try such subsequent
F suit or the suit in which such issue has been subsequently raised,
and has been heard and finally decided by such Court.
[…]
Explanation IV.—Any matter which might and ought to have been
made ground of defence or attack in such former suit shall be
G deemed to have been a matter directly and substantially in issue
in such suit.
Explanation V.—Any relief claimed in the plaint, which is not
expressly granted by the decree, shall, for the purposes of this
section, be deemed to have been refused.
H
EBIX SINGAPORE PVT. LTD. v. COMMITTEE OF CREDITORS OF 479
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[…]” A
120
164. In Satyadhyan Ghosal v. Deorajin Debi , a three judge
Bench of this Court, speaking through Justice KC Das Gupta, explained
the doctrine of res judicata in the following terms:
“7. The principle of res judicata is based on the need of giving a
finality to judicial decisions. What it says is that once a res is B
judicata, it shall not be adjudged again. Primarily it applies as
between past litigation and future litigation. When a matter —
whether on a question of fact or a question of law — has been
decided between two parties in one suit or proceeding and the
decision is final, either because no appeal was taken to a higher C
court or because the appeal was dismissed, or no appeal lies,
neither party will be allowed in a future suit or proceeding between
the same parties to canvass the matter again. This principle of res
judicata is embodied in relation to suits in Section 11 of the Code
of Civil Procedure; but even where Section 11 does not apply, the
principle of res judicata has been applied by courts for the purpose D
of achieving finality in litigation. The result of this is that the original
court as well as any higher court must in any future litigation
proceed on the basis that the previous decision was correct.”
From the above extract, it is clear that while res judicata may
have been codified in Section 11, that does not bar its application to other E
judicial proceedings, such as the one in the present case.
165. Before proceeding further, it is important to compare the
reliefs sought by Ebix in the First, Second and Third Withdrawal
Applications. They have been tabulated below, for an easy comparison:
F

G

120
(1960) 3 SCR 590 H
480 SUPREME COURT REPORTS [2021] 14 S.C.R.

A iii. Withhold approval of the of Creditors to refund the of Creditors to refund the
Resolution Plan sanctioned by Earnest Money Deposit of Rs. Earnest Money Deposit of Rs.
the Committee of Creditors of 2,00,00,000/- furnished by the 2,00,00,000/- furnished by the
the Corporate Debtor, as filed Resolution Applicant in respect Resolution Applicant in respect
before this Hon'ble Tribunal on of the Resolution Plan; of the Resolution Plan;
11.04.2018, pending detailed
consideration of the same by iii. Withhold approval of the iii. Withhold approval of the
the Resolution Applicant; Resolution Plan sanctioned by Resolution Plan sanctioned by
the Committee of Creditors of the Committee of Creditors of
B iv. Grant the Resolution the Corporate Debtor, as filed the Corporate Debtor, as filed
Applicant sufficient time to re- before this Hon'ble Tribunal on before this Hon'ble Tribunal on
evaluate its proposals 07.03.2018 and recorded vide 07.03.2018 and recorded vid
contained in the Resolution order dated 1.1.04.2018, order dated 11.04.2018,
Plan, and also to suitably pending detailed consideration pending detailed consideration
revise/modify and/or withdraw of the same by the Resolution of the same by the Resolution
its Resolution Plan; Applicant; Applicant;

C From the above table, it is clear that the prayers in the Second
and Third Withdrawal Applications were identical. Further, prayer (iii)
of both corresponds to prayer (iii) of the First Withdrawal Application, in
almost identical terms, while prayer (ii) was not present in the First
Withdrawal Application at all. At the same time, prayers (i) and (ii) in the
First Withdrawal Application have not been repeated in the Second and
D Third Withdrawal Applications. However, what is at issue is prayer (iv)
of the First Withdrawal Application and prayer (i) of the Second and
Third Withdrawal Applications. Through the former, Ebix sought
permission to re-evaluate its Resolution Plan and to suitably “revise/
modify and/or withdraw” it, while through the latter, Ebix sought permission
E to withdraw its Resolution Plan. Now we must analyse whether this
would attract the principle of res judicata.
166. In a judgment of this Court in Sheodan Singh v. Daryao
Kunwar121, a four judge Bench of this Court elaborated on the various
conditions which must be satisfied before the doctrine of res judicata
F can apply in a given case. Justice KN Wanchoo, speaking for the Court,
held:
“9. A plain reading of Section 11 shows that to constitute a matter
res judicata, the following conditions must be satisfied, namely—
(i) The matter directly and substantially in issue in the
G subsequent suit or issue must be the same matter which
was directly and substantially in issue in the former suit;
(ii) The former suit must have been a suit between the same
parties or between parties under whom they or any of them
claim;
H 121
(1966) 3 SCR 300
EBIX SINGAPORE PVT. LTD. v. COMMITTEE OF CREDITORS OF 481
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(iii) The parties must have litigated under the same title in the A
former suit;
(iv) The court which decided the former suit must be a court
competent to try the subsequent suit or the suit in which such
issue is subsequently raised; and
(v) The matter directly and substantially in issue in the B
subsequent suit must have been heard and finally decided
by the court in the first suit…”
(emphasis supplied)
167. In the present case, conditions (i) is not in dispute since the C
parties were the same. As regards (ii), in the First Withdrawal Application,
the prayer was to enable Ebix to re-evaluate its proposals and to revise/
modify and also withdraw its Resolution Plan. A prayer for withdrawal
of the Resolution Plan was raised in the Second and Third Withdrawal
Applications. Conditions (iii) and (iv) are also not in issue. What remains
to be assessed is compliance with condition (v), i.e., whether Ebix’s D
prayer in the First Withdrawal was in fact “heard and decided finally”.
While dismissing the First Withdrawal Application, the NCLT had held:
“This is an application filed by one Ebix Singapore Ptd. Limited
seeking re-valuation of the Resolution Plan submitted by it before
the Resolution Professional. E
No ground for considering the prayer sought in the application is
made out.
The application is dismissed as such.”
NCLT dismissed the First Withdrawal Application in a summary F
manner. Further, the order does not make mention of the prayer to “revise/
modify and/or withdraw” of the Resolution Plan, but only refers to its
re-evaluation.
168. The meaning of the phrase “heard and finally decided” was
considered by a judgment of a two judge Bench of this Court in Krishan G
Lal v. State of J&K122, where it was held that the matter must have
been heard on merits to have been “heard and finally decided”. Justice
BL Hansaria, speaking for the Court, held:

122
(1994) 4 SCC 422
H
482 SUPREME COURT REPORTS [2021] 14 S.C.R.

A “12. Insofar as the second ground given by the High Court
— the same being bar of res judicata — it is clear from
what has been noted above, that there was no decision on
merits as regards the grievance of the appellant; and so,
the principle of res judicata had no application. The mere
fact that the learned Single Judge while disposing of the Writ
B
Petition No. 23 of 78 had observed that:
“This syndrome of errors, omissions and oddities, cannot be
explained on any hypothesis other than the one that there is
something fishy in the petitioner’s version….”
C which observations have been relied upon by the High Court in
holding that the suit was barred by res judicata do not at all make
out a case of applicability of the principle of res judicata. The
conclusion of the High Court on this score is indeed baffling
to us, because, for res judicata to operate the involved issue
must have been “heard and finally decided”. There was no
D decision at all on the merit of the grievance of the petitioner
in the aforesaid writ petition and, therefore, to take a view
that the decision in earlier proceeding operated as res
judicata was absolutely erroneous, not to speak of its being
uncharitable.”
E (emphasis supplied)
169. In Daryao v. State of U.P.123, a Constitution Bench of this
Court held that orders dismissing writ petitions in limine will not constitute
res judicata. It was noted that while a summary dismissal may be
considered as a dismissal on merits, it would be difficult to determine
F what weighed with the Court without a speaking order. Justice PB
Gajendragadkar, speaking for the Court, held:
“26...If the petition is dismissed in limine without passing a speaking
order then such dismissal cannot be treated as creating a bar of
res judicata. It is true that, prima facie, dismissal in limine even
G without passing a speaking order in that behalf may strongly
suggest that the Court took the view that there was no substance
in the petition at all; but in the absence of a speaking order it
would not be easy to decide what factors weighed in the mind of
the Court and that makes it difficult and unsafe to hold that such
H 123
(1962) 1 SCR 574
EBIX SINGAPORE PVT. LTD. v. COMMITTEE OF CREDITORS OF 483
EDUCOMP SOLUTIONS LTD. [DR DHANANJAYA Y CHANDRACHUD, J.]

a summary dismissal is a dismissal on merits and as such constitutes A
a bar of res judicata against a similar petition filed under Article
32…”
170. Another two judge Bench of this Court, in its judgment in
Erach Boman Khavar v. Tukaram Shridhar Bhat124, has held that
the doctrine of res judicata can only apply when there has been a B
conscious adjudication of the issue on merits. Justice Dipak Misra,
speaking for the Court, held:
“39. From the aforesaid authorities it is clear as crystal that to
attract the doctrine of res judicata it must be manifest that
there has been a conscious adjudication of an issue. A plea C
of res judicata cannot be taken aid of unless there is an
expression of an opinion on the merits. It is well settled in
law that principle of res judicata is applicable between the two
stages of the same litigation but the question or issue involved
must have been decided at earlier stage of the same litigation.”
D
(emphasis supplied)
171. Res judicata cannot apply solely because the issue has
previously come up before the court. The doctrine will apply where the
issue has been “heard and finally decided” on merits through a conscious
adjudication by the court. In the present case, the NLCT’s order E
dismissing the First Withdrawal Application makes it clear that it had
only considered only that part of prayer (iv) which related to re-evaluation
of the Resolution Plan, possibly because Ebix had hoped to re-evaluate
the Resolution Plan on the basis of the information received as a
consequence of prayers (i) and (ii) and those prayers were rejected
since such information was not available. F
172. In the impugned judgment, the NCLAT has relied upon
Explanation (V) to Section 11 to state that since withdrawal was also
prayed for as a relief in prayer (iv) of the First Withdrawal Application,
it would have also been assumed to have been rejected. Mulla’s The
Code of Civil Procedure states that Explanation V can only apply upon G
the fulfilment of two conditions: (i) the relief claimed must have been
substantial, and not merely auxiliary; and (ii) the relief claimed must

124
(2013) 15 SCC 655 H
484 SUPREME COURT REPORTS [2021] 14 S.C.R.

A have been one which the Court is bound to grant, and not one which it is
discretionary for the Court to grant125.
173. In Jaswant Singh v. Custodian of Evacuee Property126,
a two judge Bench of this Court held that res judicata will only apply if
the cause of action the same and that the party also had an earlier
B opportunity to apply for the relief it is now seeking. Justice ES
Venkataramiah held:
“14…It is well-settled that in order to decide the question whether
a subsequent proceeding is barred by res judicata it is necessary
to examine the question with reference to the (i) forum or the
C competence of the Court, (ii) parties and their representatives,
(iii) matters in issue, (iv) matters which ought to have been made
ground for defence or attack in the former suit, and (v) the final
decision…A cause of action for a proceeding has no relation
whatever to the defence which may be set up, nor does it depend
upon the character of the relief prayed for by the plaintiff or the
D applicant. It refers entirely to the grounds set forth in the plaint or
the application as the case may be as the cause of action or in
other words to the media upon which the plaintiff or the applicant
asks the court to arrive at a conclusion in his favour. In order
that a defence of res judicata may succeed it is necessary
E to show that not only the cause of action was the same but
also that the plaintiff had an opportunity of getting the relief
which he is now seeking in the former proceedings. The
test is whether the claim in the subsequent suit or proceedings is
in fact founded upon the same cause of action which was the
foundation of the former suit or proceedings…”
F
(emphasis supplied)
174. The prayer for withdrawal of the Resolution Plan in the First
Withdrawal Application was not substantial and one that the Court was
bound to grant, since it was contingent upon a re-evaluation, which in
G itself was contingent upon receiving the information sought in prayers (i)
and (ii). Since the latter two contingencies never arose, the NCLT did
not apply its mind to the prayer for withdrawal independently. When it
filed the Second Withdrawal Application, it was dismissed on a technical

125
Sir Dinshaw Fardunji Mulla, The Code of Civil Procedure (18 th edn, LexisNexis)
H 126
(1985) 3 SCC 648
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ground and not on its merits. When a revised Third Withdrawal Application A
was filed, the NCLT then adjudicated it on its merits and allowed it.
Hence, since the NCLT did not adjudicate Ebix’s prayer for withdrawal
of their Resolution Plan on its merits while dismissing the First Withdrawal
Application, the opportunity to seek the relief was not available to Ebix
in a real sense. Therefore, we reverse the finding of the NCLAT on this
B
issue and hold that Ebix’s Third Withdrawal Application was not barred
by res judicata.
K.1.2 Analysis of the Resolution Plan of Ebix
175. To briefly recount the relevant facts for determination of the
dispute over the terms of the resolution plan – the CIRP of Educomp C
commenced on 30 May 2017. After consultation with the E-CoC, the
E-RP invited EOIs on 18 October 2017. The RFRP was issued on 5
December 2017, and was revised on 17 January 2018 and 20 January
2018. Ebix submitted its draft Resolution Plan after the last date of
27 January 2018, and after securing an extension from the Adjudicating
Authority, on 29 January 2018. Ebix took the benefit of an extension of D
time which was granted to it to submit its Resolution Plan. In the absence
of an extension of time, it would not have been permitted to enter the
fray. After multiple rounds of negotiations, on 9 February 2018, Ebix
was declared the successful Resolution Applicant and a LOI was issued
by the E-CoC. On 17 February 2018, Ebix’s Resolution Plan was E
approved by a 74.16 per cent voting share of the E-CoC, which was
subsequently upgraded to 75.35 per cent by CSEB’s vote being added
belatedly on 23 February 2018. While it is true that the votes of CSEB
were received in favour of the Resolution Plan on a later date, all the
parties including Ebix proceeded on the notion that the Resolution Plan
has been approved by the requisite majority of seventy-five per cent of F
the voting share of the E-CoC as was required then (now the requisite
percentage has been reduced to sixty-six per cent pursuant to an
amendment). Thus, the CSEB Application filed before the NCLT seeking
a clearance of its delayed vote was a mere formality and there was no
controversy raised in relation to that application at that stage. In fact, the G
Approval Application for the approval of the Resolution Plan was filed
before the NCLT on the basis that the Plan has been duly approved by
the requisite majority of the CoC. No objections were raised against the
Approval Application on the ground that the threshold of seventy-five
per cent of votes was not met. The Resolution Plan dated 19 February
H
486 SUPREME COURT REPORTS [2021] 14 S.C.R.

A 2018 and the addendum dated 21 February 2018 for a total bid amount
of Rs 400 crores were then submitted by the E-RP to the Adjudicating
Authority for approval on 7 March 2018.
176. Owing to the intervening applications for investigation into
the accounts of Educomp (pertinently, no internal special audit has been
B conducted till date), Ebix filed the First Withdrawal Application on 5 July
2019, on account of a delay in approval of seventeen months. Thereafter,
it filed the Second and Third Withdrawal Applications.
177. Ebix has alleged before this Court that it is entitled to withdraw
its Resolution Plan by relying on: (i) the terms of the RFRP, which indicates
C that the Resolution Plan is binding on the Resolution Applicant only after
approval by the Adjudicating Authority under Section 31; (ii) the terms
of the Resolution Plan which indicate that the Plan was valid for six
months; and (iii) the principles of contract law to urge frustration on
account of fraud and an erosion of the commercial substratum.

D 178. Clause 1.8.3 of the RFRP, produced below, invited Resolution
Plans with a validity of not less than six months:
“1.8.3 A Resolution Plan once made/submitted must be valid for a
period not less than 6 (six) months from the Resolution Plan
Submission Date including any revisions to such Resolution plan
E Submission Date (“Resolution Plan Validity Period”). In case of
extension of the Resolution Plan Submission Date by the Resolution
Professional, the validity period of the Resolution Plan shall also
be deemed to be valid for a period of 6 (six) months from such
revised Resolution Plan Submission date.

F If any Resolution Plan as approved by the CoC and submitted to
the Adjudicating Authority is rejected by the Adjudicating Authority,
then the Resolution Professional and the CoC shall act in
accordance with the instructions/directions issued by the
Adjudicating Authority.”
Ebix urges that in compliance with the above clause of the RFRP,
G
Clause 7 of its Resolution Plan specified that it shall be valid for a term
of six months from the date of submission:
“7. Term of the Resolution Plan
This Resolution Plan proposed by the Resolution Applicant is valid
H for a term of six months from the date of submission of this plan”
EBIX SINGAPORE PVT. LTD. v. COMMITTEE OF CREDITORS OF 487
EDUCOMP SOLUTIONS LTD. [DR DHANANJAYA Y CHANDRACHUD, J.]

Ebix urges that these matching terms of the offer (the RFRP) A
and the acceptance (the Resolution Plan) are binding on the E-CoC and
the Resolution Plan is voidable and revocable at the instance of Ebix,
upon the failure to seek timely approval under Section 31.
179. This submission of Ebix cannot be accepted since the terms
of the RFRP or the Resolution Plan relate to the validity of the Resolution B
Plan for the period of negotiation with the E-CoC and not for a period
after the Resolution Plan is submitted for the approval of the Adjudicating
Authority. The time which may be taken before the Adjudicating Authority
is an imponderable which none of the parties can predict. In fact, this is
emphasized by Clause 1.3.7 of the RFPF which contains a schedule of
the Resolution Plan submission process. As regards the approval of the C
Adjudicating Authority, it provides clearly that there is no time-line:
“1.3.7 Schedule of Resolution Plan Submission Process
[…]
11. Approval of NCLT regarding the Resolution Plan of Successful D
Resolution Applicant – As per NCLT.”
Parties cannot indirectly impose a condition on a judicial authority
to accept or reject its Plan within a specified time period, failing which
the CIRP process will inevitably come to an end. In this case, the draft
Resolution Plan of Ebix was submitted on 29 January 2018 and remained E
valid for the term of the multiple rounds of negotiations with the E-CoC,
until its submission to the Adjudicating Authority on 7 March 2018, which
was within the six-month period envisaged in the Plan.
180. Even if it were to be assumed, for the sake of argument, that
the term in the submitted Resolution Plan was in the nature of a qualified F
offer which would expire after six months of its submission, failing the
imprimatur of the Adjudicating Authority under Section 31 which would
make it binding on all parties, the surrounding terms of the RFRP and the
subsequent legal materials including the LOI and the Compliance
Certificate (Form H) under CIRP Regulations make it clear that there
G
was no scope to resile from the implementation of the Resolution Plan,
once it had been submitted to the Adjudicating Authority, except in the
event of a rejection. Clause 1.9.3 of the RFRP required Ebix to replace
its EMD with a PBG equivalent to ten per cent of the Resolution Plan
value, if it were to be declared as the ‘successful Resolution Applicant’.
H
488 SUPREME COURT REPORTS [2021] 14 S.C.R.

A This PBG can be invoked under Clause 1.9.5 of the RFRP if the
Resolution Applicant fails to implement the Resolution Plan. Further,
Clause 1.8.4 of the RFRP states that “[a] Resolution Plan submitted by
a Resolution Respondent shall be irrevocable”. Clause 1.10(l) of the
RFRP also provides that a successful Resolution Applicant is not permitted
to withdraw an approved Resolution Plan:
B
“Clause 1.10 of the RFRP
“By procuring this RFRP and obtaining access to the Data room
and Information Memorandum, in accordance with the terms of
this RFRP, the Resolution Respondent is deemed to have made
C the following acknowledgements and representations:
[...]
(l) The Resolution Respondent upon declaration as
Successful Resolution Respondent shall remain responsible
for the implementation and supervision of the Resolution
D Plan from the date of approval by the Adjudicating Authority,
and will not be permitted to withdraw the Resolution Plan
and the Resolution Professional, PwC or the CoC assume no
responsibility or liability in this respect.”
(emphasis supplied)
E
Ebix’s submission that Clause 1.10(l) is applicable only upon
approval of the Adjudicating Authority is not plausible since the Resolution
Plan becomes binding on all stakeholders as a consequence of the
approval under Section 31. The E-RP’s argument holds much weight
when it is argued that Clause 1.10(l) cannot be construed to infer that
F the Adjudicating Authority would declare Ebix as the ‘Successful
Resolution Applicant’ once again, which would then impose the obligation
of barring withdrawals for the first time. Mr Nakul Dewan, learned
Senior Counsel for the E-RP, has also submitted before us that the validity
of the Resolution Plan being six months was not mentioned as a specific
conditionality in Form H that was submitted by the E-RP along with the
G
Resolution Plan to the Adjudicating Authority, which evinces that the
six-month validity was only vis-à-vis the acceptance by the E-CoC.
181. Ebix has also tried to argue that its position has changed
manifestly because of new allegations which have come up in relation to
the financial conduct of Educomp. However, in this regard, it is pertinent
H
EBIX SINGAPORE PVT. LTD. v. COMMITTEE OF CREDITORS OF 489
EDUCOMP SOLUTIONS LTD. [DR DHANANJAYA Y CHANDRACHUD, J.]

to note Clause 1.3.2 of the RFRP which directs prospective Resolution A
Applicants to conduct their own due diligence. In so far as is relevant, it
reads:
“1.3.2 The Resolution Applicant(s) shall be provided access to
the electronic as well as physical data room (“Data Room”)
established and maintained by the Company acting through the B
Resolution Professional and coordinated by PwC in order to
conduct a due diligence of the business and operations of the
Company”
Similarly, Clause 1.13.6 also requires prospective Resolution
Applicants to conduct independent investigations: C
“1.13.6 This RFRP does not purport to contain all the information
required by the Resolution Applicant. The Resolution Applicant
should conduct independent investigations and analysis and should
check the accuracy, reliability and completeness of the information
in this RFRP and obtain independent advice from appropriate D
sources, prior to making an assessment of the Company.”
Ebix was responsible for conducting their own due diligence of
Educomp and could not use that as a reason to revise/modify their
approved Resolution Plan. In any event, Section 32A of the IBC grants
immunity to the Corporate Debtor for offences committed prior to the E
commencement of CRIP and it cannot be prosecuted for such offences
from the date the Resolution Plan has been approved by the Adjudicating
Authority under Section 31, if the Resolution Plan results in a change of
management or control of the Corporate Debtor subject to certain
conditions. Section 32A reads as follows:
F
“32A. (1) Notwithstanding anything to the contrary contained in
this Code or any other law for the time being in force, the liability
of a corporate debtor for an offence committed prior to the
commencement of the corporate insolvency resolution process
shall cease, and the corporate debtor shall not be prosecuted for
such an offence from the date the resolution plan has been G
approved by the Adjudicating Authority under section 31, if the
resolution plan results in the change in the management or control
of the corporate debtor to a person who was not-
(a) a promoter or in the management or control of the corporate
debtor or a related party of such a person; or H
490 SUPREME COURT REPORTS [2021] 14 S.C.R.

A (b) a person with regard to whom the relevant investigating
authority has, on the basis of material in its possession, reason to
believe that he had abetted or conspired for the commission of
the offence, and has submitted or filed a report or a complaint to
the relevant statutory authority or Court:
B […]
(2) No action shall be taken against the property of the corporate
debtor in relation to an offence committed prior to the
commencement of the corporate insolvency resolution process of
the corporate debtor, where such property is covered under a
C resolution plan approved by the Adjudicating Authority under
section 31, which results in the change in control of the corporate
debtor to a person, or sale of liquidation assets under the provisions
of Chapter III of Part II of this Code to a person, who was not –
(i) a promoter or in the management or control of the corporate
D debtor or a related party of such a person; or
(ii) a person with regard to whom the relevant investigating authority
has, on the basis of material in its possession, reason to believe
that he had abetted or conspired for the commission of the offence,
and has submitted or filed a report or a complaint to the relevant
E statutory authority or Court.
[…]
(3) Subject to the provisions contained in sub-sections (1) and (2),
and notwithstanding the immunity given in this section, the corporate
debtor and any person, who may be required to provide assistance
F under such law as may be applicable to such corporate debtor or
person, shall extend all assistance and co-operation to any authority
investigating an offence committed prior to the commencement
of the corporate insolvency resolution process.”
Thus, in any case even if it is found that there was any misconduct
G in the affairs of Educomp prior the commencement of the CIRP, Ebix
will be immune from any prosecution or punishment in relation to the
same. The submission that Ebix has been placed in a prejudicial position
due to the initiation of investigation into the affairs of Educomp by the
CBI and SFIO is nothing but a red herring since such investigations
have no bearing on Ebix.
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EBIX SINGAPORE PVT. LTD. v. COMMITTEE OF CREDITORS OF 491
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182. Finally, it is also important to note that no clause of Ebix’s A
own Resolution Plans provides them with a right to revise/withdraw
their Resolution Plan after its approval by the E-CoC, but before its
confirmation by the Adjudication Authority. Clause 9.1 permits withdrawal
in the event the Resolution Plan is not approved in its entirety by the
NCLT, while Clause 9.7 allows for an amendment for the purposes of
B
implementation of the Resolution Plan but only when the E-CoC approves
it with a seventy-five per cent vote. Hence, Ebix did not have any right
under their own Resolution Plan to revise/withdraw it.
183. It is also pertinent to note that Ebix did not stop pursuing their
Resolution Plan after the expiry of six months, if the true import of the
commercial bargain was a withdrawal of the Resolution Plan after six C
months of its submission. The First Withdrawal Application was filed on
10 September 2019, which was after one year of the alleged expiry of
the six-month period. Therefore, even if the submitted Resolution Plan
was considered as a conditional offer the terms did not enable a
withdrawal of the Resolution Plan in the event that the Adjudicating D
Authority does not approve it under Section 31 within six months of its
submission.
184. Before we conclude our analysis on the substantive arguments
raised by Ebix, we will be briefly dealing with its arguments that the RP
had failed in its obligation to provide information under Section 29 of the E
IBC.
K.1.3 Duties of the RP
185. Appearing on behalf of Ebix, Mr KV Vishwanathan has
argued before this Court that the E-RP failed in its duties under Section
29 of the IBC when it failed to inform Ebix about the ongoing investigations F
against Educomp. While this argument was made in order to justify Ebix’s
withdrawal of its Resolution Plan, which we have already rejected, we
shall assess it nonetheless. On behalf of the E-RP, Mr Nakul Dewan
has appeared and argued that the obligation on an RP to provide
information under Section 29 has to be understood on a “best effort G
basis”.
186. Section 29 of the IBC places a duty upon the RP to provide
an IM to the Resolution Applicant, containing such information which
may be relevant to the Resolution Applicant to draft its Resolution Plan.
It states:
H
492 SUPREME COURT REPORTS [2021] 14 S.C.R.

A “29. Preparation of information memorandum.—(1) The resolution
professional shall prepare an information memorandum in such
form and manner containing such relevant information as may be
specified by the Board for formulating a resolution plan.
(2) The resolution professional shall provide to the resolution
B applicant access to all relevant information in physical and
electronic form, provided such resolution applicant undertakes—
(a) to comply with provisions of law for the time being in force
relating to confidentiality and insider trading;
(b) to protect any intellectual property of the corporate debtor it
C may have access to; and
(c) not to share relevant information with third parties unless
clauses (a) and (b) of this sub-section are complied with.
Explanation.—For the purposes of this section, “relevant
D information” means the information required by the resolution
applicant to make the resolution plan for the corporate debtor,
which shall include the financial position of the corporate debtor,
all information related to disputes by or against the corporate debtor
and any other matter pertaining to the corporate debtor as may be
specified.”
E
187. The BLRC Report elucidates the duties of the RP:
“1. The RP must provide the most updated information about
the entity as accurately as is reasonably possible to this
range of solution providers. In order to do this, the RP has to
be able to verify claims to liabilities as well as the assets disclosed
F
by the entity. The RP has the power to appoint whatever outside
resources that she may require in order to carry out this task,
including accounting and consulting services.
2. The information collected on the entity is used to compile
an information memorandum, which is signed off by the
G debtor and the creditors committee, based on which
solutions can be offered to resolve the insolvency. In order
for the market to provide solutions to keep the entity as a going
concern, the information memorandum must be made available to
potential financiers within a reasonable period of time from her
H appointment to the IRP. If the information is not
EBIX SINGAPORE PVT. LTD. v. COMMITTEE OF CREDITORS OF 493
EDUCOMP SOLUTIONS LTD. [DR DHANANJAYA Y CHANDRACHUD, J.]

comprehensive, the RP must put out the information A
memorandum with a degree of completeness of the
information that she is willing to certify.
For example, as part of the information memorandum, the RP
must clearly state the expected shortfall in the coverage of the
liabilities and assets of the entity presented in the information B
memorandum. Here, the asset and liabilities include those that the
RP can ascertain and verify from the accounts of the entity, the
records in the information system, the liabilities submitted at the
start of the IRP, or any other source as may be specified by the
Regulator.
C
3. Once the information memorandum is created, the RP must
make sure that it is readily available to whoever is interested to
bid a solution for the IRP. She has to inform the market (a) that
she is the RP in charge of this case, (b) about a transparent
mechanism through which interested third parties can access the
information memorandum, (c) about the time frame within which D
possible solutions must be presented and (d) with a channel through
which solutions can be submitted for evaluation. The Code does
not specify details of the manner or the mechanism in which this
should be done, but rather emphasises that it must be done in a
time-bound manner and that it is accessible to all possible interested E
parties.”
(emphasis supplied)
188. Similarly, the UNCITRAL Guide notes:
“5. Duties and functions of the insolvency representative F
[…]
(e) Obtaining information concerning the debtor, its assets, liabilities
and past transactions (especially those taking place during the
suspect period), including examining the debtor and any third
person having had dealings with the debtor…” G
189. Under the IBC, there is a duty upon the RP to collect as
much information about the Corporate Debtor as is accurately possible
to do. When such information is communicated through an IM to the
Resolution Applicant, the RP must be careful to clarify when its
information is not comprehensive and what factors may cause a change. H
494 SUPREME COURT REPORTS [2021] 14 S.C.R.

A 190. In the present case, Ebix has alleged that the E-RP did not
inform it of the financial investigations into the conduct of Educomp in a
timely fashion. To assess this claim, it is important to underline a few
dates:
(i) 5 December 2017 – E-RP provided Virtual Data Room access
B to Ebix and other prospective Resolution Applicants in relation to
Educomp, and the final RFRP was issued;
(ii) 7 March 2018 – E-RP filed the Approval Application before
NCLT in relation to Ebix’s Resolution Plan, after its approval by
the E-CoC;
C (iii) 3 April 2018 and 26 April 2018 – two articles are published in
The Wire in relation to financial mismanagement of Educomp;
(iv) 4 May 2018 – the IFC Application came up before NCLT,
having been filed by a financial creditor of Educomp seeking
investigation of the affairs/transactions, in which the E-RP was
D directed file its reply and IFC was directed to serve a notice on
Ebix;
(v) 12 June 2019 – Educomp made regulatory disclosures to the
BSE and NSE in relation to the ongoing investigations by SFIO
and CBI; and
E
(vi) 5 July 2019 – Ebix filed the First Withdrawal Application.
191. Ebix cannot dispute that E-RP had provided it the relevant
information required under Section 29 to formulate its Resolution Plan.
The issues in relation to financial investigations into the conduct of
Educomp arose when the two articles were published by The Wire, both
F
of which were after the Approval Application had been filed by the
E-RP. Further, Ebix was aware of all the proceedings before the NCLT
since the various applications were often listed along with the Approval
Application, in which it continued to appear. Finally, Ebix has brought
nothing on record to prove that E-RP knew of the SFIO and CBI
G investigations before a regulatory disclosure was made by Educomp.
Hence, it cannot be stated that the E-RP had faltered in its duty to provide
relevant information to Ebix.
K.2 The Kundan Care Appeal
192. The CIRP of Astonfield commenced on 27 November 2018.
H On 1 May 2019, GUVNL issued a default notice under Article 9.3.1(e)
EBIX SINGAPORE PVT. LTD. v. COMMITTEE OF CREDITORS OF 495
EDUCOMP SOLUTIONS LTD. [DR DHANANJAYA Y CHANDRACHUD, J.]

of the PPA, taking the initiation of the CIRP as an event of default for A
the termination of the PPA. The validity of the default notice was
adjudicated upon by the NCLT in a judgment dated 29 August 2019. The
NCLT set aside the default notice on the ground that the termination of
the PPA would adversely affect the “going concern” status of Astonfield.
On 15 October 2019, the NCLAT dismissed an appeal filed by GUVNL.
B
On 29 October 2019, Kundan Care submitted a Resolution Plan for
being considered by the A-CoC, which was followed by a final version
on 12 November 2019. On 14 November 2019, the Resolution Plan
submitted by Kundan Care was approved by the A-CoC with a vote of
99.28 per cent. On 15 November 2019, a Letter of Award was issued by
the A-RP to Kundan Care, and the Resolution Plan was submitted to the C
NCLT for approval to under Section 31 of the IBC.
193. On 27 November 2019, GUVNL moved this Court in appeal
against the order of the NCLAT dated 15 October 2019 (this Court
eventually dismissed the appeal). During the pendency of the appeal,
the appellant moved an application before the NCLT for withdrawal of D
its Resolution Plan and for return of its PBG. In view of the pendency of
the appeal before this Court, NCLT deferred consideration of the
Resolution Plan till the disposal of the appeal. On the request of Kundan
Care, their application was listed for hearing and dismissed on 3 July
2020 for want of jurisdiction to enable withdrawals. This decision of the
NCLT was confirmed by the NCLAT on 30 September 2020. While E
Kundan Care’s appeal against this decision of the NCLAT was pending
before this Court, Gujarat Urja (supra) was decided by this Court on 8
March 2021.
194. Kundan Care had initially sought to rely on Clause 5.1 of
their Resolution Plan to argue that it had reserved the right to modify or F
withdraw its submitted Resolution Plan in the event of a ‘material adverse
change’ which affects Astonfield. Clause 5.1 reads as follows:
“5.1 Basis of Preparation
The preparation of the Resolution Plan is based on the Information G
Memorandum provided to the Resolution Applicant by the
Resolution Professional. If at any time before or after submission
of this Resolution Plan, should the information on the basis of
which this Resolution Plan has been prepared, change, or new
information becomes available, or if there is a material adverse
H
496 SUPREME COURT REPORTS [2021] 14 S.C.R.

A change i.e. shall there have occurred any fact, matter, event,
circumstance, condition or change which materially and adversely
affects, or could reasonably be expected to materially and adversely
affect: individually or in aggregate, the business, operations, assets,
liabilities, conditions (whether financial, trading or otherwise),
prospects or operating results of the Corporate Debtor, the
B
Resolution Applicant shall have the right to reconsider, revise and/
or withdraw the Resolution Plan on assessment of such additional
information and/or make a fresh submission of resolution plan at
its sole discretion”
However, the A-RP has pointed out to the court that the LOI
C awarded to Kundan Care clearly stipulated that the submitted Resolution
Plan is irrevocable and there were no conditionalities mentioned in the
Form H that was submitted to the Adjudicating Authority. Clause 9 of
Kundan Care’s Resolution Plan confirms this position, since it states:
“9 Condition Precedent
D
THERE ARE NO CONDITION PRECEDENT FOR
APPROVAL OF THIS RESOLUTION PLAN”
This is also reaffirmed by the fact that Clause 1.6.2 of the RFRP
issued by the A-RP, specifically indicated that the A-CoC may reject a
E Resolution Plan if it did not agree with any of the conditions precedent in
the nature of “walk away conditions”. Clause 1.6.2 states:
“1.61 The CoC reserves the right to reject the Resolution Plan, if
any of the Conditions Precedent (as defined in Format VA -
Resolution Plan), are not acceptable to the CoC. The Conditions
F Precedent, if any, in a Resolution Plan would mean the ‘walk-
away conditions’ and shall be required to be specifically mentioned
as such in the said Plan, with a conspicuous heading and placement
of a paragraph in the Plan, and all such conditions shall be placed
in a consolidated manner in the said paragraph.”
This indicates that the condition of a material adverse event could
G
be exercised only until the A-CoC was considering the Resolution Plan,
and not after it had been submitted to the Adjudicating Authority.
195. During the course of the hearing of the present appeal, the
compilation of additional documents has been filed by Kundan Care. On
5 July 2021, Kundan Care had addressed a communication to EXIM
H
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Bank and PFCL “seeking a revision/renegotiation of the resolution A
amount/financial proposal” of Kundan Care for the resolution of
Astonfield. Responding to the above communication, EXIM Bank has
addressed a letter dated 12 July 2021 stating that a meeting was held by
“the lenders” (EXIM Bank and PFCL) on 9 July 2021, on a without
prejudice basis to deal with the issues raised by Kundan Care in their
B
letter dated 5 July 2021. Responding to the request of Kundan Care, it
has been stated that:
“4… lenders were prima facie agreeable to deliberate the financial
proposal seeking revision in resolution plan amount in the COC
convened by the RP post the directions of the Hon’ble Supreme
Court in accordance with the processes laid down by the IBC”. C

Pursuant to the above exchange of communications, a joint request
has been made by Mr Ramji Srinivasan, learned Senior Counsel appearing
on behalf of Kundan Care and Mr V Giri, learned Senior Counsel
appearing on behalf of the A-CoC in the following terms:
D
“In view of the letter dated 12 July 2021 issued by the lenders
who are members of the CoC, the appellant may be permitted to
withdraw Civil Appeal 3560/2020 with liberty to the RA and the
CoC to file the revised plan (in terms of the letter dated 12 July
2021) before the NCLT (through the RP) for approval. The CoC
shall convene and take a call on the revised plan within one week E
and the NCLT shall dispose of the matter within two weeks upon
receiving IA from RP for approval of revised plan.”
196. This Court had been informed that EXIM Bank and PFCL
represent 98 per cent of the financial creditors of Astonfeld. In view of
the above agreement which has been arrived at, we deem it appropriate F
to exercise our jurisdiction under Article 142 of the Constitution of India
for a one-time relief and direct that:
(i) The A-CoC shall convene and take a decision on the
proposal submitted by Kundan Care on 5 July 2021, and
the response by EXIM Bank and PFCL dated 12 July 2021; G
(ii) In the event, that a revised Resolution Plan is agreed upon
by the A-CoC, it shall be submitted through the A-RP for
the approval of the NCLT within a week thereafter. In the
event that a revised Resolution Plan is not agreed upon, the
H
498 SUPREME COURT REPORTS [2021] 14 S.C.R.

A original Resolution Plan, as submitted before the NCLT on
15 November 2019, shall prevail; and
(iii) The NCLT shall dispose of the application with the revised
Resolution Plan expeditiously, and preferably within a period
of two weeks from the date of receipt of an application
B from the A-RP for the approval of the revised Resolution
Plan.
197. We clarify that the above directions have been issued in
view of the submission which has been urged as noted, and shall not
amount to any finding by this Court on the issues raised with regard to
C modification or withdrawal of Resolution Plans at the behest of the
Resolution Applicant.
K.3 The Seroco Appeal
198. The CIRP of Arya Filaments, an MSME, was instituted on
17 August 2018. Seroco submitted a draft Resolution Plan on 13 March
D 2019 for an amount of Rs 6.79 crores (approx.). Subsequent to meetings
with the Arya-CoC and revisions to the Resolution Plan, Seroco’s plan
was approved by the Arya-CoC on 10 May 2019. On 15 May 2019, the
Arya-RP filed the Resolution Plan for approval before the NCLT. Form
H was filed by Arya-RP on 5 June 2020.
E 199. Seroco addressed a letter to Arya-RP and Arya-CoC on
9 June 2020 seeking a modification of the Resolution Plan and the
resolution amount to Rs 5.29 crores (approx.) on account of the economic
slowdown caused by the COVID-19 pandemic, and subsequently filed
applications before the NCLT and an appeal before the NCLAT seeking
F a modification of the Resolution Plan on account of the original being
filed over eighteen months ago.
200. Seroco has relied on the terms of its Resolution Plan which
envisage payment to the Arya-CoC by sale of land and building, and old/
unusable/spare plant and machineries to urge that there has been a
frustration of the contract because of the economic slowdown which
G
must have impacted the value of these assets. The proposed revised
solution envisages a further haircut to the Arya-CoC where Rs 1.5 crores
less would be paid, over an extended timeline. There are no terms in the
Resolution Plan or the Form H submitted by Arya-RP that could provide
such a benefit to Seroco. To the contrary, Clause 19(vii) of the Resolution
H
EBIX SINGAPORE PVT. LTD. v. COMMITTEE OF CREDITORS OF 499
EDUCOMP SOLUTIONS LTD. [DR DHANANJAYA Y CHANDRACHUD, J.]

Plan provides that the preliminary approval of the Resolution Plan by the A
Arya-CoC is binding on Seroco:
“19. Others:
[…]
(vii) We understand that the preliminary approval of the resolution B
pian is the prerogative of the Committee of Creditors and the final
approval of the same lies with the Hon’ble Adjudicating authority
i.e. NCLT and we undertake that the decision of the Committee
of Creditors and NCLT will be final and binding on us.”
Therefore, there is no scope to grant reliefs even on the terms of C
the Resolution Plan. As held in Section H of this judgement, common
law remedies available under the Contract Act are not available to the
parties since a submitted Resolution Plan is not a contract which can be
otherwise voidable on account of frustration, force majeure or other
such instances. Hence, parties can only seek reliefs that are specifically
envisaged in the IBC. D
L Conclusion
201. This Court is cognizant that the extraordinary circumstance
of the COVID-19 pandemic would have had a significant impact on the
businesses of Corporate Debtors and upon successful Resolution
E
Applicants whose Plans may not have been sanctioned by the
Adjudicating Authority in time, for myriad reasons. But the legislative
intent of the statute cannot be overridden by the Court to render outcomes
that can have grave economic implications which will impact the viability
of the IBC.
F
202. The residual powers of the Adjudicating Authority under the
IBC cannot be exercised to create procedural remedies which have
substantive outcomes on the process of insolvency. The framework, as
it stands, only enables withdrawals from the CIRP process by following
the procedure detailed in Section 12A of the IBC and Regulation 30A of
the CIRP Regulations and in the situations recognized in those provisions. G
Enabling withdrawals or modifications of the Resolution Plan at the behest
of the successful Resolution Applicant, once it has been submitted to the
Adjudicating Authority after due compliance with the procedural
requirements and timelines, would create another tier of negotiations
which will be wholly unregulated by the statute. Since the 330 days
H
500 SUPREME COURT REPORTS [2021] 14 S.C.R.

A outer limit of the CIRP under Section 12(3) of the IBC, including judicial
proceedings, can be extended only in exceptional circumstances, this
open-ended process for further negotiations or a withdrawal, would have
a deleterious impact on the Corporate Debtor, its creditors, and the
economy at large as the liquidation value depletes with the passage of
time. A failed negotiation for modification after submission, or a
B
withdrawal after approval by the CoC and submission to the Adjudicating
Authority, irrespective of the content of the terms envisaged by the
Resolution Plan, when unregulated by statutory timelines could occur
after a lapse of time, as is the case in the present three appeals before
us. Permitting such a course of action would either result in a down-
C graded resolution amount of the Corporate Debtor and/or a delayed
liquidation with depreciated assets which frustrates the core aim of the
IBC.
203. If the legislature in its wisdom, were to recognize the concept
of withdrawals or modifications to a Resolution Plan after it has been
D submitted to the Adjudicating Authority, it must specifically provide for a
tether under the IBC and/or the Regulations. This tether must be coupled
with directions on narrowly defined grounds on which such actions are
permissible and procedural directions, which may include the timelines
in which they can be proposed, voting requirements and threshold for
approval by the CoC (as the case may be). They must also contemplate
E at which stage the Corporate Debtor may be sent into liquidation by the
Adjudicating Authority or otherwise, in the event of a failed negotiation
for modification and/or withdrawal. These are matters for legislative
policy.
204. n the present framework, even if an impermissible
F understanding of equity is imported through the route of residual powers
or the terms of the Resolution Plan are interpreted in a manner that
enables the appellants’ desired course of action, it is wholly unclear on
whether a withdrawal of a CoC-approved Resolution Plan at a later
stage of the process would result in the Adjudicating Authority directing
G mandatory liquidation of the Corporate Debtor. Pertinently, this direction
has been otherwise provided in Section 33(1)(b) of the IBC when an
Adjudicating Authority rejects a Resolution Plan under Section 31. In
this context, we hold that the existing insolvency framework in India
provides no scope for effecting further modifications or withdrawals of
CoC-approved Resolution Plans, at the behest of the successful
H
EBIX SINGAPORE PVT. LTD. v. COMMITTEE OF CREDITORS OF 501
EDUCOMP SOLUTIONS LTD. [DR DHANANJAYA Y CHANDRACHUD, J.]

Resolution Applicant, once the plan has been submitted to the Adjudicating A
Authority. A Resolution Applicant, after obtaining the financial information
of the Corporate Debtor through the informational utilities and perusing
the IM, is assumed to have analyzed the risks in the business of the
Corporate Debtor and submitted a considered proposal. A submitted
Resolution Plan is binding and irrevocable as between the CoC and the
B
successful Resolution Applicant in terms of the provisions of the IBC
and the CIRP Regulations. In the case of Kundan Care, since both, the
Resolution Applicant and the CoC, have requested for modification of
the Resolution Plan because of the uncertainty over the PPA, cleared
by the ruling of this Court in Gujarat Urja (supra), a one-time relief
under Article 142 of the Constitution is provided with the conditions C
prescribed in Section K.2.
205. It would also be sobering for us to recognize that whilst this
Court has declared the position in law to not enable a withdrawal or
modification to a successful Resolution Applicant after its submission to
the Adjudicating Authority, long delays in approving the Resolution Plan D
by the Adjudicating Authority affect the subsequent implementation of
the plan. These delays, if systemic and frequent, will have an undeniable
impact on the commercial assessment that the parties undertake during
the course of the negotiation. The thirty-second report of the Ministry of
Corporate Affairs’ Standing Committee on Finance (2020-2021) on the
‘Implementation of Insolvency and Bankruptcy Code- Pitfalls and E
Solutions’127 represented a despondent state of affairs with regard to
pendency of applications before the Adjudicating Authority. It noted 128:

15. The age-wise pending cases in NCLT under IBC as on
31 May, 2021 are as under: F

G
6

127
Standing Committee on Finance, Seventeenth Lok Sabha, Ministry of Corporate
Affairs, ‘Implementation of Insolvency and Bankruptcy Code- Pitfalls and Solutions:
Thirty-second Report’ (August 2021) <available at https://www.ibbi.gov.in/uploads/
whatsnew/fc8fd95f0816acc5b6ab9e64c0a892ac.pdf> accessed on 20 August 2021
128
Ibid., page 6 H
502 SUPREME COURT REPORTS [2021] 14 S.C.R.

A In its observations, the Report noted that a delay in the resolution
process with more than seventy-one per cent cases pending for more
than 180 days is in deviation of the original objective and timeline for
CIRP that was envisaged by the IBC129. The delays were attributable
to: (i) the NCLT taking considerable time in admitting CIRPs; (ii) late
and unsolicited bids by Resolution Applicants after the original bidder
B
becomes public upon passage of the deadline for submission of the Plan;
and (iii) multiplicity of litigation and the appellate process to the NCLAT
and the Supreme Court130. Such inordinate delays cause commercial
uncertainty, degradation in the value of the Corporate Debtor and makes
the insolvency process inefficient and expensive. We urge the NCLT
C and NCLAT to be sensitive to the effect of such delays on the insolvency
resolution process and be cognizant that adjournments hamper the efficacy
of the judicial process. The NCLT and the NCLAT should endeavor, on
a best effort basis, to strictly adhere to the timelines stipulated under the
IBC and clear pending resolution plans forthwith. Judicial delay was one
of the major reasons for the failure of the insolvency regime that was in
D
effect prior to the IBC. We cannot let the present insolvency regime
meet the same fate.
206. In light of the above, the appeals preferred by Ebix (Civil
Appeal 3224 of 2020) and Seroco (Civil Appeal 295 of 2021) stand
dismissed. The parties to the appeal preferred by Kundan Care (Civil
E Appeal 3560 of 2020) shall abide by the directions issued by this Court in
exercise of its Article 142 powers as a one-time relief, as specified in
paragraph 196 (Section K.2) of this judgement.
207. Pending application(s), if any, shall stand disposed of.

F
Ankit Gyan Appeals disposed of.

G

129
Ibid., Page 20-21
130
H Ibid., Page 23-25