EBIX SINGAPORE PRIVATE LIMITED v. COMMITTEE OF CREDITORS OF EDUCOMP SOLUTIONS LIMITED & ANR.

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

(Civil Appeal No. 3224 of 2020)

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EBIX SINGAPORE PVT. LTD. v. COMMITTEE OF CREDITORS OF 323 EDUCOMP SOLUTIONS LTD.

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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 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 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 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 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 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 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 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 H

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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 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 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 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 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 H

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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

EBIX SINGAPORE PVT. LTD. v. COMMITTEE OF CREDITORS OF 329 EDUCOMP SOLUTIONS LTD.

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 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 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

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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

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EBIX SINGAPORE PVT. LTD. v. COMMITTEE OF CREDITORS OF 331 EDUCOMP SOLUTIONS LTD.

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 H

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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 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 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 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 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 H

EBIX SINGAPORE PVT. LTD. v. COMMITTEE OF CREDITORS OF 333 EDUCOMP SOLUTIONS LTD.

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 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 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 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 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 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 H

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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 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 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 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 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 H

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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 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 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 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 H

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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 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 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 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

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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 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 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

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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 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 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 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 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 submission of a CoC-approved Resolution Plan, by judicial

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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, 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, 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 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 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 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 H

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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 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 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. H

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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 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 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 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 H

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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 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, 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 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 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 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 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 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 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 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 H

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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 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 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 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 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 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, 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 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 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 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 H

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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 H

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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 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 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 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 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

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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 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 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 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 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 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

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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

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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

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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.

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EBIX SINGAPORE PVT. LTD. v. COMMITTEE OF CREDITORS OF 355 EDUCOMP SOLUTIONS LTD.