EBIX Singapore Pte. Limited vs Mr. Mahendar Singh Khandelwal

“A.2 Initiation of CIRP

3.

On 5 May 2017, Educomp filed a petition 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 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 2017. On 18 September 2017, the E-RP took over information, documents, reports and records pertaining to Educomp from the IRP.

5.

On an application 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.

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 2017, the E-RP provided access to the Virtual Data Room of Educomp to prospective Resolution Applicants who had submitted a confidentiality 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 to 20 January 2018. On 25 January 2018, 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 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.

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 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).

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, thus meeting the threshold under Section 30(4).

13.

The E-RP filed the CSEB Application under Section 60(5) to seek the directions of the NCLT in regard to CSEB’s late vote. NCLT 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 Application seeking NCLT’s approval to Ebix’s Resolution Plan under Section 30(6).

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 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 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 / 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 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 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 request you to ensure that the resolution process is completed in 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

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”. Another article titled “Educomp’s Insolvency Process Becomes Murkier as Ebix Buys Smartclass Educational Services” was published by The Wire on 26 April 2018.

16.

The E-RP has stated before this Court that based on these reports, IFC, a financial creditor of Educomp, filed the IFC Application under Section 60(5) of the IBC seeking investigation of the affairs/transactions of Educomp. On 4 May 2018, when the IFC Application 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 Application and SBI Application, under Section 60(5) of the IBC read with Section 213 of the 2013 Act 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 directed an SFIO investigation into its affairs.

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.

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:

“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:

(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;

(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 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;

(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;

(vii)

Distribution agreement with Digital Learning Solution 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

(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;

(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 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 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 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 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 Core Committee, comprising of SBI, IDBI Bank, Axis Bank, IFC, Yes Bank and J&K Bank"

"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 scanner".

[...]

3.

It is pertinent to note that BDO India LLP carried out transaction 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 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 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, 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 a false, motivated, fabricated data."

A.5 Applications for withdrawal of the Resolution Plan

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, 50 and 66 of the Insolvency and Bankruptcy Code, 2016 to the Resolution Professional forthwith;

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-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) 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, 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.

“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 made out.

The application is dismissed as such.”

“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;

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;

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 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 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 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.”

C.A. No. 1310(PB)/2019

In para ‘B (xii)’ under the caption ‘facts of the case’, the following averments have been made

[...]

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 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.”

“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;

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;

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;" 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 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, 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.

A.6 Orders of NCLT and NCLAT

“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 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 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 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 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 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) 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:

“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.

[...]

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 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 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 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 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 right to carry on business in its way under Article 19(1)(g) of the 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 out.” (emphasis supplied)

“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 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 of the present case has no power to grant /reserve liberty to bring a fresh application and hence, the subsequent application filed by the 1st Respondent /‘Resolution Applicant is barred by the principle of ‘Res Judicata’ notwithstanding the liberty to file fresh one.”

A.7 Present status of SFIO and CBI investigation

B Civil Appeal No 3560 of 2020 – the Kundan Care Appeal

B.1 The appeal

B.2 Initiation of CIRP

B.3 Invitation, submission and approval of Resolution Plan

B.4 Astonfield's dispute with GUVNL

"GUVNL had served notices to terminate the Agreement since the Company is undergoing the process of Insolvency. However 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 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, 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 Hon'ble NCLT."

'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 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 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 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 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 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

"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 Applicant;"

'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 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. [...]

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 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."

"a)

Set aside/quash the Notice dated 28.03.2019 issued by Gujarat Urja Vikas Nigam Limited to Astonfield Solar (Gujarat) Private 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 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 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;”

“55.

That Para 78 of the Reply is the Prayer Clause, which is 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”

“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 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 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."

'7. Be it seen that the CIRP process undertaken involves filing of Expression of Interest by the prospective Resolution Applicants 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, 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 (H1) eliminating the Resolution Plans of Resolution Applicants, which are ranked H2 and H3. The approval of a Resolution Plan by the Committee of Creditors with requisite majority has the effect of 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 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 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 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 Resolution Process. The argument advanced on behalf of the Appellant that there is no provision in the I&B Code compelling specific performance of Resolution Plan by the Successful Resolution Applicant has to be repelled on four major grounds:-

(i)

There is no provision in the I&B Code entitling the Successful Resolution Applicant to seek withdrawal after its Resolution Plan1 stands approved by the Committee of Creditors with requisite majority;

(ii)

The successful Resolution Plan incorporates contractual terms binding the Resolution Applicant but it is not a contract of personal service which may be legally unenforceable;

(iii)

The Resolution Applicant in such case is estopped from wriggling out of the liabilities incurred under the approved Resolution Plan and the principle of estoppel by conduct would apply to it;

(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."

5.

The catch points, we may notice from the conspectus of the case noticed by the Hon'ble Supreme Court (ibid) are: -

I. The CoC commenced e-voting on the Ebix's Resolution Plan on 21 February, 2021 at 7 p.m. and the voting lines were kept open till 7 p.m. of 22 February, 2018. 74.16% members of the CoC voted to approve the plan. 17.29% members voted to reject the plan and the remaining members having 8.55% vote shares cumulatively, abstained from voting on the Resolution Plan. Thus, the Resolution Plan failed to achieve the minimum percentage of vote share, as required in terms of the provisions of Section 30(4) of IBC, 2016 [in terms of the provisions of Section 6 of the Insolvency and Bankruptcy Code (Amendment) Act, 2018 i.e., Act No.8 of 2018, came into force w.e.f. 23.11.2017, the CoC might approve a Resolution Plan by a vote of not less than 75% of voting share of the Financial Creditors. Nevertheless, in terms of the provisions of Section 23(iii)(a) of the Act No.26 of 2018, which came into force on the 6^th day of June, 2018, Section 4 of the Code was further amended and for the word seventy-five, the word sixty-six was substituted. Thus, as on relevant dates i.e., 21 February, 2018 and 22 February, 2018 in order to be treated as approved by CoC, the Resolution Plan needed to muster 75% vote share].

II. A day later i.e., on 23 February, 2018, one of the members of the CoC (CSEB) informed the RP by e-mail that due to a technical error, it could not participate in the e-voting process and wanted its affirmative vote to be recorded on the Resolution Plan. The CSEB’s vote could enhance the voting share in favour of Ebix’s Resolution Plan to 75.35% i.e., the vote percentage required for approval of the plan. Thus, the RP filed CA No. 160 (PB) of 2018 under Section 60(5) of IBC, 2016 to seek the direction from this Tribunal in respect of CSEB’s late vote. Nevertheless, in terms of the order dated 28^th February, 2018, this Tribunal directed RP to file an application under Section 30(6) of IBC, 2016 for approval of Ebix’s Resolution Plan and made it clear that the issue of CSEB’s vote would be taken up along with the application for approval of Resolution 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 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 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 the scheme of IBC. In this regard, our attention was drawn to:

(a)

Section 31(1) of the IBC, which provides that the Resolution 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;

(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;

(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;

(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 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 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 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; - (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 acceptance for an indefinite period. Reliance was placed on the decision of this Court in Riya Travel & Tours (India) (P) Ltd. v. C.U. Chengappa to support this proposition; - (d) The CSEB Application for the approval of the resolution 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 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 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 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 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 prejudiced the commercial considerations underlying the 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 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 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. has held that "[i]t 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 debtor is to be driven into liquidation”;

(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 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 and intellectual property owned and operated by Educomp, which Ebix had sought to acquire, were no longer valid;

(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;

(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 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 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 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:

(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 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 such information if there is a substantial delay in the CIRP (beyond the period prescribed under Section 12 of the IBC) 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 resolution applicant, has been underlined in the BLRC Report; and

“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:

(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 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. and M/s Innoventive Industries Ltd. v. ICICI Bank & Anr. It does not envisage 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, as held by this Court in Gujarat Urja Vikas Nigam Limited v. Amit Gupta;

(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 held by this Court in Swiss Ribbons (P) Ltd v. Union of India. 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 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;

(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;

(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 to withdraw from a duly concluded contract;

(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;

(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 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 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-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 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 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 Plan shall be irrevocable; and - (c) Clause 1.10(l), which stipulated that the Resolution 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 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 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 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 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 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 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;

(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 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; 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 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 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 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 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 irrevocable, and Clause 1.10(l), which prohibits withdrawal of a submitted Resolution Plan, belies the 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 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 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; - (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 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 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 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 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 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;

(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

(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 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

(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 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.”

“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 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 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 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:

(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 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 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 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 this proposition is placed on the following English decisions: (1) Allied Domecq (Holdings) Ltd v. Allied Domecq First Pension Trust Ltd; (2) Reinwood Ltd v. L Brown & Sons Ltd; (3) Doleman v. Shaw; and (4) Standard Life Assurance Ltd v. Oak Dedicated Ltd; and

(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 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 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 the E-CoC/E-RP, arguing in its favor in the Approval Application and by extending the EMD. The First Withdrawal Application was filed only on 5 July 2019, after the expiry of 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 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;

(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 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, the Third Withdrawal 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.”

“104 To summarize the arguments of the parties, the appellants 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 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 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 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 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 CoC, 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 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 30(2) and submits only the eligible plans to the CoC. 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 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 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.

“12...The scheme when sanctioned does not merely operate 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 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)

“11.

Section 43 empowers the Electricity Board to enter into an 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 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 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 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 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 they contain provisions regarding determination of tariff and other statutory requirements of Section 43-A(2)..."

(emphasis supplied)

“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 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 hypothesis neatly and accurately makes clear that a CVA is different from, and is not in fact, a contract.” (emphasis supplied)

“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 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...”

“46 ... [...]

(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 court order, [and] not from the antecedent resolutions of members and creditors.”

12.

While commenting upon the statutory framework, governing the CIRP, the Hon’ble Supreme Court noted Section 23(1) of IBC, which provides that the RP is responsible for conducting the entire CIRP and managing the operation of the Corporate Debtor during the CIRP period. In para 132 of the judgment of Hon’ble Supreme Court observed that the intent of Section 23(1) is to ensure that the Corporate Debtor remains a going concern until the Resolution Plan is approved by the Adjudicating Authority. In para 139 of the judgment of Hon’ble Supreme Court takes note of the consequences of contravention of a Resolution Plan. Having analysed the statutory framework governing the CIRP, in para 141 of the judgment, Hon’ble Supreme Court viewed that the process is the one driven by the Creditors. Hon’ble Supreme Court also noted that the aim of the process in preferential order is to first, to enable resolution of the debt by maintaining the Corporate Debtor as a going concern, in order to preserve the business and the employment of the personnel; second, maximise the value of the assets of the Corporate Debtor and enable a higher pay back to its Creditors

“I Statutory framework governing the CIRP

"resolution applicant" means a person, who individually or jointly 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."

“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 of the corporate debtor, including by way of merger, amalgamation and demerger;”

“Section 30 - Submission of resolution plan

[...]

(2)

The resolution professional shall examine each resolution plan 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 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

(ii)

the amount that would have been paid to such creditors, if the amount to be distributed under the resolution plan had been distributed in accordance with the order of priority in subsection (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, which shall not be less than the amount to be paid to such creditors in accordance with subsection (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.

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—

(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 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 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;

(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 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.”

“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-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 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 subsection, satisfy that the resolution plan has provisions for its effective implementation.

“Section 74 - Punishment for contravention of moratorium or the resolution plan

[...]

(3)

Where the corporate debtor, any of its officers or creditors or 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 years, or with fine which shall not be less than one lakh rupees, but may extend to one crore rupees, or with both.”

“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:--

(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;

(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 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 54N, may be filed on grounds of material irregularity or fraud committed in relation to such a liquidation order.”

“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 commencement of the process and the time available is hundred and eighty days:

Section/Regulation	Description of Activity	Norm	Latest Timeline
Section 16(1)	Commencement of CIRP and appointment of IRP	...	T
Regulation 6(1)	Public announcement inviting claims	Within 3 Days of Appointment of IRP	T+3
Section 15(1)(c)/Regulations 6(2)(c) and 12 (1)	Submission of claims	For 14 Days from Appointment of IRP	T+14
Regulation 12(2)	Submission of claims	Up to 90th day of commencement	T+90
Regulation 13(1)	Verification of claims received under Regulation 12(1)	Within 7 days from the receipt of the claim	T+21
	Verification of claims received under Regulation 12(2)		T+97
Section 21(6A)(b)/Regulation 16-A	Application for appointment of AR	Within 2 days from verification of claims received under Regulation 12(1)	T+23
Regulation 17(1)	Report certifying constitution of CoC		T+23
Section 22/Regulation 19(2)	1st meeting of the CoC	Within 7 days of filing of the report certifying constitution of the CoC, but with five days' notice.	T+30]

Section 22(2)	Resolution to appoint RP by the CoC	In the first meeting of the CoC	T+30
Section 16(5)	Appointment of RP	On approval by the AA	...
Regulation 17(3)	IRP performs the functions of RP till the RP is appointed.	If RP is not appointed by 40th day of commencement	T+40
Regulation 27	Appointment of valuer	Within 7 days of appointment of RP, but not later than 47th day of commencement	T+47]
Section 12(A)/Regulation	Submission of application for withdrawal of	Before issue of Eol	W
30-A	application admitted
	CoC to dispose of the application	Within 7 days of its receipt or 7 days of constitution of CoC, whichever is later.	W+7
	Filing application of withdrawal, if approved by CoC with 90% majority voting, by RP to AA	Within 3 days of approval by CoC	W+10
Regulation 35-A	RP to form an opinion on preferential and other transactions	Within 75 days of the commencement	T+75
	RP to make a determination on preferential and other transactions	Within 115 days of commencement	T+115
Regulation 36-A	Publish Form G	Within 75 days of commencement	T+75
	Invitation of Eol
	Submission of Eol	At least 15 days from issue of Eol (Assume 15 days)	T+90
	Provisional List of RAs by RP	Within 10 days from the last	T+100

		day of receipt of EoI
	Submission of objections to provisional list	For 5 days from the date of provisional list	T+105
	Final List of RAs by RP	Within 10 days of the receipt of objections	T+115
Regulation 36-B	Issue of RFRP, including Evaluation Matrix and IM	Within 5 days of the issue of the provisional list	T+105
	Receipt of Resolution Plans	At least 30 days from issue of RFRP (Assume 30 days)	T+135
Regulation 39(4)	Submission of CoC approved Resolution Plan to AA	As soon as approved by the CoC	T+165
Section 31(1)	Approval of resolution plan by AA		T=180

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 for Resolution Plan.”

“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 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 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 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).”

J Withdrawal of the Resolution Plan by a successful Resolution Applicant under the IBC

J.1 The absence of a legislative hook or a regulatory tether to enable a withdrawal

“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 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.”

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 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 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 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 litigation which would cause the delay that the IBC seeks to disavow.

147 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 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. Justice GP Singh in his authoritative treatise, Principles of Statutory Interpretation, defines the rule of 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 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 accidentally 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. The relevant paragraph is extracted below:

“As already noticed it is not allowable to read words in a statute 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 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 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 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 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 (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 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 for enabling withdrawals or renegotiations 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 exercise would bring in the evils which the IBC sought to obviate through 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 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 plan. In fact, even the scope of negotiations between the Resolution Applicant and the CoC has to be specifically envisaged by the statute. Further, the UNCITRAL Guide envisages that amendments can be made to the 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 in part, and the specific problem can be remedied”. 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 amendments. The BLRC Report has relied on the UNCITRAL Guide while designing the IBC and it is a critical tool for ascertaining legislative choice and intent. Parliament has not introduced an explicit provision under the IBC 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 have adopted the critical safeguards highlighted by the UNCITRAL.”

“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 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 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 IA was not entertained. The Resolution Applicant had then sought to challenge the approval of the Resolution Plan under Section 61(3) of the 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, 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 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 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 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 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.”

“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 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 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 ‘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.

155 The Insolvency and Bankruptcy Law Committee in its report released in March 2018 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 report are reproduced below:

“16.1

Regulation 37(l) of the CIRP Regulations states that a resolution plan shall provide for obtaining necessary approvals from the Central and State Governments and other authorities. 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 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.

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 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 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)

“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 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 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 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 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 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 approvals considerably, which would lead to more value maximising 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 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 February 2020 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.

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. 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 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.

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 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.

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 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”. The effect of allowing the Adjudicating Authority to permit withdrawals of resolution plans that 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.

“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 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 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 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 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.

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:

“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 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 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.

[...]”

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 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 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 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.”

“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 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;

(iii)

The parties must have litigated under the same title in the 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 subsequent suit must have been heard and finally decided by the court in the first suit...

(emphasis supplied)

“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 made out. The application is dismissed as such.”

“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 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...” 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 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.”

(emphasis supplied)

“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 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 a summary dismissal is a dismissal on merits and as such constitutes a bar of res judicata against a similar petition filed under Article 32..."

'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 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." (emphasis supplied)

“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 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 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 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...” (emphasis supplied)

K.1.2 Analysis of the Resolution Plan of Ebix

“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 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.

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.”

“7. Term of the Resolution Plan

This Resolution Plan proposed by the Resolution Applicant is valid for a term of six months from the date of submission of this plan”

“1.3.7 Schedule of Resolution Plan Submission Process [...]” 11. Approval of NCLT regarding the Resolution Plan of Successful Resolution Applicant – As per NCLT.”

“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 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 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)

“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 Resolution Professional and coordinated by PwC in order to conduct a due diligence of the business and operations of the Company”

“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 sources, prior to making an assessment of the Company.”

“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 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 - (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:

[...]

(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 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 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 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 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.”

K.1.3 Duties of the RP

“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 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 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 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.”

“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 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 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 appointment to the IRP. If the information is not comprehensive, the RP must put out the information 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 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.

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 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 parties.”

“5. Duties and functions of the insolvency representative

[...]

(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..."

XXX

L Conclusion

"11.

Soon after the hearing, the Applicant examined the financial statements for FY 2020- 21 and FY 2021-22 of the Corporate Debtor to learn shocking and surprising details:

i.

Contrary to the submissions of the RP, it was learnt that the Financial Statements of the Corporate Debtor for FY 2020-21 ("FY 2020-21 Audited Statement") were approved at the AGM of 25.08.2023 (3 days before the hearing held on 29.08.2023). The Annual Report was uploaded on 31.07.2023. Copy of the Financial Statements of the Corporate Debtor for FY 2020-21 is annexed herewith as Annexure A-1 ii. The Statutory Auditors of the Corporate Debtor have subsequently resigned and the audited financial statements for FY 2021-22 and FY 2022-23 have not been published. The mere fact of resignation of the Statutory Auditors and inability of the RP to appoint any new auditor raises grave concerns on the affairs of the Corporate Debtor and management by the RP.

iii.

Separately, on 27.07.2023, the RP has published the unaudited financial statements of the Corporate Debtor for FY 2021-22 (“FY 2021-22 Unaudited Statement”). Interestingly however, the financial statements for FY 2018-19, 2019-20 have still not been prepared, audited and uploaded by the RP. A copy of the unaudited financial statements for FY 2021-22 is annexed herewith as Annexure A- 2.

iv.

The FY 2020-21 Audited Statement and the FY 2021-22 Unaudited Statement unequivocally prove the submissions of the Applicant that the Corporate Debtor is no longer a going concern. They also show that the RP has made false statements and misled this Hon’ble Tribunal as to the affairs of the Corporate Debtor.

	FY 2015- 16	FY 2016- 17	FY 2019- 20	FY 2020- 21	FY 2021- 22
Revenue from Operations	Rs. 1863.3 9 Million	1774.7 7 Million	Rs. 96.61 Million	Rs. 9.66 Million	Rs. 13.8 Million
Sale of educational products and technology equipment	Rs. 345.18 Million	Rs. 502.48 Million	Rs. 0.11 Million	NIL	NA
Assets of Subsidiaries	NA	Rs. 22347. 82 Million	NA	NA	NA
Revenues from Subsidiaries	NA	Rs. 1342.1 4 Million	Rs. 1.62 Million	NIL	NA

v.

A perusal of the FY 2020-21 Audited Statement, the FY 2021-22 Unaudited Statement and financial statements for FY 2016-17 (immediately prior to the commencement of CIRP) would reveal the following contrast in the financial affairs of the Corporate Debtor: A copy of the Financial Statements of the Corporate Debtor for FY 2016-17 is annexed herewith as Annexure A-3.

vi.

What is even more interesting is that the Statutory Auditor of the Corporate Debtor and the Corporate Debtor have stated that they have “lost control” of all the subsidiaries of the Corporate Debtor. The Corporate Debtor states “Despite regular follow-ups, we have not been able to get the financials from last 3-4 years and in absence of no communication, we are unable to control the subsidiaries located outside India.” At the time of commencement of CIRP, the total assets of the subsidiaries of the Corporate Debtor stood at Rs. 2234.78 Crores. Under Clause 6.1.5 of the Resolution Plan, all the interest of the Corporate Debtor in these subsidiaries is to accrue to the Applicant. Now, the Applicant has lot the benefit of these assets and in the absence thereof, the Resolution Plan is unviable.

vii.

Most importantly, the Statutory Auditor has observed in the FY 2020-21 Audited Statement:

“The Company, has incurred substantial losses, its net worth has been completely eroded, has defaulted in repayment of its loans and related interest, has negative working capital and has applied under the IBC for CIRP. All these conditions has raised substantial doubt about the Company’s ability to continue as a going concern.” (Emphasis supplied) This observation is ex-facie contrary to the statement made by the Resolution Professional before the Hon’ble Tribunal.”

i.

"That this Hon'ble Tribunal take on record the Audited Financial Statement for FY 2020-21 and the unaudited Financial Statement of FY 2021-22 of the Corporate Debtor. ii. That is view of these financial statements, declare that the Corporate Debtor is no longer a going concern. iii. Appropriate Directions to the IBBI under Section 218 of the Insolvency Code and the appropriate regulations for an investigation into the management and affairs of the Corporate Debtor by the Resolution Professional. iv. Appropriate proceedings be initiated against the Resolution Professional under Sections 195 and 340 of the Code of Criminal Procedure, 1973 for making false statements to the Hon'ble Tribunal about the affairs of the Corporate Debtor."

v.

Direct that the Applicant is no longer required to provide any Performance Bank Guarantee as directed by the Order dated 29.08.2023 passed by the Hon'ble Tribunal."

"16.

The Applicant further learnt that on 27.07.2023, the Resolution Professional has published the unaudited financial statements of the Corporate Debtor for FY 2021-22 (FY 2021-22 Unaudited Statement) in newspapers. A copy of the extract of the unaudited financial statements for FY 2021-22 along with the disclosure to the stock exchanges is annexed herewith as Annexure A-9. Despite the statement made by the Resolution Professional before the Hon'ble Appellate Tribunal, the Resolution Professional has not yet uploaded the audited financial statements of the Corporate Debtor for FY 2017-18, 2018-19, 2019-20.

XXX

18.

A perusal of the FY 2020-21 Audited Statement, the FY 2021-22 Unaudited Statement and financial statements for FY 2016-17 (immediately prior to the commencement of CIRP) would reveal the following contrast in the financial affairs of the Corporate Debtor:

“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 to note Clause 1.3.2 of the RFRP which directs prospective Resolution 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 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:

“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 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 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:”

“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 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 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.”

“36. Information memorandum.

...

(2)

...

(j)

company overview including snapshot of business performance, key contracts, key investment highlights and other factors which bring out the value as a going concern over and above the assets of the corporate debtor such as brought forward losses in the income tax returns, input credit of GST, key employees, key customers, supply chain linkages, utility connections and other pre-existing facilities.”

“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 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 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 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 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.”

“Whole doctrine of colourable legislation is based upon the maxim that you cannot do indirectly what you cannot do directly.”

“But can the respondent be assisted by a court of law to take advantage of the mischief committed by him? The maxim “Nullus commodum copere potest de injuria sua propria” (No man can take advantage of his own wrong) is one of thee salient tenets of equity Hence, in the normal course, respondent can not secure the assistance of a court of law for enjoying the fruit of his own wrong”. Such a view could also be taken by the Hon’ble Supreme Court in Eureka Forbes Limited vs. Allahabad Bank & Ors. in Civil Appeal No. 4029 of 2010 (@SLP © No. 3883 of 2008), the relevant excerpts of the Judgement read thus:

“36 ...The purpose was also to prevent wrong doers from taking advantage of their wrong/mistakes, whether permissible in law or otherwise. These preventive measures are required to be applied with care and purposefully in accordance with law to ensure that the mischief, if not entirely extinguished, is curbed.

37.

Maxim Nullus commodum capere potest de injuria sua propria has a clear mandate of law that, a person who by manipulation of a process frustrates the legal rights of others, should not be permitted to take advantage of his wrong or manipulations. In the present case Respondent Nos. 2 & 3 and the appellant have acted together while disposing off the hypothecated goods, and now, they cannot be permitted to turn back to argue, that since the goods have been sold, liability cannot be fastened upon respondent Nos. 2 & 3 and in any case on the appellant.”

“106 ...It is a settled proposition that one cannot be permitted to take advantage of his own wrong. The doctrine “commodum ex-injuria sua Nemo habere debet” means convenience cannot accrue to a party from his own wrong. No person ought to have advantage of his own wrong. A litigant may be right or wrong. Normally merit of lis is to be seen on date of institution. One cannot be permitted to obtain unjust injunction or stay orders and take advantage of own actions. Law intends to give redress to the just causes; at the same time, it is not its policy to foment litigation and enable to reap the fruits owing to the delay caused by unscrupulous persons by their own actions by misusing the process of law and dilatory tactics.”

“3. OPERATING RESULTS AND BUSINESS:

On Standalone basis Company’s total income stands at Rs. 14.73 million as on March 31, 2021 as compared to Rs. 106.58 million as on March 31, 2020, a decline of 86.18%. The loss before taxes is Rs. 505.98 million as on March 31, 2021 as against loss before taxes of Rs. 1513.68 million as on March 31, 2020.

On Consolidated basis Company’s total income stands at Rs. 14.73 million as on March 31, 2021 as compared to Rs. 108.20 million as on March 31, 2020, registering a decline of 86.38 %. The loss before tax and exceptional items stands at Rs. 511.87 million as on March 31, 2021 as against loss of Rs. 1438.03 million as on March 31, 2020.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management’s Discussion and Analysis Report for the year under review detailing economic scenario and outlook, as stipulated under Schedule V of the SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015 (“SEBI LODR Regulations”) is presented in a separate section and forms integral part of this Report.”

“195.

Giving or fabricating false evidence with intent to procure conviction of offence punishable with imprisonment for life or imprisonment.—Whoever gives or fabricates false evidence intending thereby to cause, or knowing it to be likely that he will thereby cause, any person to be convicted of an offence which 1 [by the law for the time being in force in 2 [India]] is not capital, but punishable with 3 [imprisonment for life], or imprisonment for a term of seven years or upwards, shall be punished as a person convicted of that offence would be liable to be punished.

Illustration

A gives false evidence before a Court of Justice, intending thereby to cause Z to be convicted of a dacoity. The punishment of dacoity is 4 [imprisonment for life], or rigorous imprisonment for a term which may extend to ten years, with or without fine. A, therefore, is liable to 5 [imprisonment for life] or imprisonment, with or without fine.

“[195A. Threatening any person to give false evidence.—Whoever threatens another with any injury to his person, reputation or property or to the person or reputation of any one in whom that person is interested, with intent to cause that person to give false evidence shall be punished with imprisonment of either description for a term which may extend to seven years, or with fine, or with both; and if innocent person is convicted and sentenced in consequence of such false evidence, with death or imprisonment for more than seven years, the person who threatens shall be punished with the same punishment and sentence in the same manner and to the same extent such innocent person is punished and sentenced.]

196.

Using evidence known to be false. — Whoever corruptly uses or attempts to use as true or genuine evidence any evidence which he knows to be false or fabricated, shall be punished in the same manner as if he gave or fabricated false evidence.”

“6.

The mere fact that a person has made a contradictory statement in a judicial proceeding is not by itself always sufficient to justify a prosecution under Sections 199 and 200 of the Penal Code, 1860 (45 of 1860) (hereinafter referred to as “IPC”); but it must be shown that the defendant has intentionally given a false statement at any stage of the judicial proceedings or fabricated false evidence for the purpose of using the same at any stage of the judicial proceedings. Even after the above position has emerged also, still the court has to form an opinion that it is expedient in the interests of justice to initiate an inquiry into the offences of false evidence and offences against public justice and more specifically referred to in Section 340(1) CrPC, having regard to the overall factual matrix as well as the probable consequences of such a prosecution. (See K.T.M.S. Mohd. V. Union of India). The court must be satisfied that such an inquiry is required in the interests of justice and appropriate in the facts of the case.

7.

In the process of formation of opinion by the court that it is expedient in the interests of justice that an inquiry should be made into, the requirement should only be to have a prima facie satisfaction of the offence which appears to have been committed. It is open to the court to hold a preliminary inquiry though it is not mandatory. In case, the court is otherwise in a position to form such an opinion, that it appears to the court that an offence as referred to under Section 340 CrPC has been committed, the court may dispense with the preliminary inquiry. Even after forming an opinion as to the offence which appears to have been committed also, it is not mandatory that a complaint should be filed as a matter of course. (See Pritish Vs. State of Maharashtra).

8.

In Iqbal Singh Marwah V. Meenakshi Marwah, a Constitution Bench of this Court has gone into the scope of Section 340 CrPC. Para 23 deals with the relevant consideration: (SCC pp. 386-87).

“23.

In view of the language used in Section 340 CrPC the court is not bound to make a complaint regarding commission of an offence referred to in Section 195(1)(b), as the section is conditioned by the words “court is of opinion that it is expedient in the interests of justice”. This shows that such a course will be adopted only if the interest of justice requires and not in every case. Before filing of the complaint, the court may hold a preliminary enquiry and record a finding to the effect that it is expedient in the interests of justice that enquiry should be made into any of the offences referred to in Section 195(1)(b). This expediency will normally be judged by the court by weighing not the magnitude of injury suffered by the person affected by such forgery or forged document, but having regard to the effect or impact, such commission of offence has upon administration of justice. It is possible that such forged document or forgery may cause a very serious or substantial injury to a person in the sense that it may deprive him of a very valuable property or status or the like, but such document may be just a piece of evidence produced or given in evidence in court, where voluminous evidence may have been adduced and the effect of such piece of evidence on the broad concept of administration of justice may be minimal. In such circumstances, the court may not consider it expedient in the interest of justice to make a complaint.”

“11.

It has been submitted on behalf of the appellant that the statement made in the suit regarding the ownership and possession of the property in question being in the hands of the appellant was not incorrect. It was meant for the purposes of obtaining permanent/mandatory injunction against the respondent for not causing any interference in the peaceful enjoyment of the said property. True it is that the property was conveyed to one Mr. Shailesh Kumar Awasthi but the possession still remained with the appellant. The property in question was not conveyed to the respondent only on the ground that the balance consideration amount was not paid.”

XXX

In Chajoo Ram v. Radhey Shyam, (1971) 1 SCC 774: AIR 1971 SC 1367, the Supreme Court has held as hereunder: -

“7.

The prosecution for perjury should be sanctioned by courts only in those cases where the perjury appears to be deliberate and conscious and the conviction is reasonably probable or likely. No doubt giving of false evidence and filing false affidavits is an evil which must be effectively curbed with a strong hand but to start prosecution for perjury too readily and too frequently without due care and caution and on inconclusive and doubtful material defeats its very purpose. Prosecution should be ordered when it is considered expedient in the interests of justice to punish the delinquent and not merely because there is some inaccuracy in the statement which may be innocent or immaterial. There must be prima facie case of deliberate falsehood on a matter of substance and the court should be satisfied that there is reasonable foundation for the charge.

“14.

It is trite that to impute criminality, an element of mens rea has to be found. It is also well settled that it is sine qua non for initiation of criminal action by the court under Section 340 Cr.P.C. that satisfaction as to the expediency of such course is reached {Iqbal Singh Marwah vs. Meenakshi Marwah, (2005) 4 SCC 370}.”

> “175 ... 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 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 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 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 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 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."

“153 ... 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 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 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.”

“30. Submission of resolution plan. –

(1)

...

(2)

The resolution professional shall examine each resolution plan 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 ³[payment] of other debts of the corporate debtor;

⁴[(b) provides for the payment of debts of operational creditors in 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

(ii)

the amount that would have been paid to such creditors, if the 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, 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 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.

Explanation 2. — For the purpose 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-

(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 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 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

(f)

confirms 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 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.]"

“4.2 Proposed Board of Directors for the Company

The Resolution Applicant proposes to reconstitute the current Board of Directors (BOD) of the Company immediately on transfer of management control, where it is selected as the Successful Resolution Applicant by CoC and same is approved by Hon’ble NCLT.

The Resolution Applicant proposes to induct people with significant experience in the area of financial and governance to ensure that there is strong oversight over the operations of the Company, and new management of the Company adheres to strict financial discipline.

Proposed Board of Directors by the Resolution Applicant are as follows:

Robin Raina

Mr. Raina is Chairman of the Board, President and CEO at Ebix, Inc. Mr. Raina serves as the Director on the Board of other Ebix group entities internationally. He has been leading the Ebix organization since 1999 and has been instrumental in playing the key role in the transformational growth of Ebix since 1,999. Proposed new management of the Company will directly report to Mr. Raina, and he will be personally involved in overseeing the operations of the Company (once Ebix group is awarded as successful applicant) to ensure quick turnaround of the Company.

Pavan Bhalla

Pavan Bhalla is an independent director on the Board of Ebix, Inc., He is also the Chairman of Audit Committee of Ebbs, Inc. Mr. Bhalla holds a master’s degree in business administration from the University of Chicago’s Booth School of Business,

	and has more than 25 years of experience in the area of finance, control and governance.The Resolution Applicant proposes to have Mr. Bhalla as independent director on the Board of the Company, to ensure that the Company follows strong financial discipline and has in place robust internal control mechanism.
Neil D. Eckert	Neil D. Eckert has been director on the Board of Ebix, Inc., since 2005. Mr. Eckert has significant experience in the area of business strategy, capital markets and technology. The Resolution Applicant proposes to have Mr. Eckert as independent director on the Board of the Company, and leverage his experience in area of business strategy, fund raising and expansion of operations in the international markets.
Gagan Sethi	Gagan is Group CTO of Elix, Inc. He has done Masters in Information Technology from University of Phoenix, and Bachelors in Computer Science from Delhi UniversityGagan has more than 20 years of experience in the field of technology, particularly in the area of enterprise solutions. He played significant role in turning around the upgrading products of A.DAM (Health S learning company, acquired by Boix in 2011) and ensured that A.D.A.M products keep pace with latest technology and are continuously evolving. His experience will help in re-energizing the R&D team of the Company, and coming with new products leveraging latest technology and tools.
Vikas Verma	Vikas Verma is professionally qualified in Finance with considerable expertise in the areas of Financial Planning & Analysis, General Accounting, Legal, Tax & Regulatory compliances, Mergers & Acquisitions,

Running Global Teams in Finance Functions serving multiple Jurisdictions.Since last 16 years, Mr. Vikas is working with Ebix Software India Private Limited and has held various senior and strategic roles within Global Finance Function. Prior to Epix. Mr. Vikas has worked with Word Bank, New Delhi for two years

4.3 New management structure for the Company

4.3.1

As mentioned in Section 3.5 above, Ebix group's well-defined acquisition and integration strategy, which has been consistently followed since 2004. The Resolution Applicant will follow the similar group strategy to ensure quick integration with overall Ebix organization.

4.3.2

Overall Responsibility - Mr. Raina (Group CEO) will have direct oversight on the new management of the Company, to ensure speedy recovery from the existing business affairs of the Company. High level management structure of the Company (once it is taken over by Ebix group) is outlined below:

4.3.3

Sumit Khadria is the CFO of Ebix India's operations. He will directly work with Ebix Group CEO - Mr. Raina, to ensure integration of the Company within overall Ebix organization. Sumit is a qualified Chartered Accountant from Institute of Chartered Accountants of India (ICAI) with more than 16 years of professional experience. Prior to joining Ebix group, Sumit was Partner with Ernst & Young India with subject matter expertise in the area of International tax & Regulatory matters,

4.3.4

The Resolution Applicant believes in the retention of existing sales and operational workforce of the Company (to the extent possible) for the successful revival of the business. Once the Resolution Applicant gets control of the management of the Company, it will start engaging with the existing Sales head (CBO) of the Company, who will directly report of Group CFO (Mr. Raina) and will come with new business plan and overall growth strategy for the Company. Sales and service delivery team will report into CBO

4.3.5

The Resolution Applicant also intends to recruit best of the talent from other e-learning companies in the country to further strengthen core operations of the Company. In addition, the Resolution Applicant is also looking for other e-learning targets in India, which will not only help in consolidation of e-learning market but would also bring in new talent to the Company and help in accelerating the revival of its business.

4.3.6

Chief Strategy Officer (CSO) The Resolution Applicant proposes to have in place C90, who will be responsible for organic and inorganic business growth, and operational efficiency. CSO will also be responsible for managing new product innovation and technology.

4.3.7

Chief Marketing Officer (CMO) The Resolution Applicant proposes to retain current marketing team of the Company, with direct oversight by Mr. Bhavik Vasa Chief Growth Officer of Ebix Cash (Financial Services exchange of Ebix group in India. Bhavik Vasa as Chief Growth officer at EbixCash, loads the charge as Business head alongside product, Alliances, and Marketing & Communication functions. He is a Business leader with over a decade of global experience across Digital Commerce, mobile technologies, financial platforms. At EbixCash, he has been instrumental for new business roll-outs of Incentives solutions. Prepaid card & Mobile wallet programs. Prior to EbixCash, Bhavik led the expansion and setup of Global Prepaid Exchange (UK) presence across the India & South Asia, Entrepreneurial at heart, Bhavik has been a founding member et Radical Payments and ISTS Worldwide US based bespoke technology solutions ventures across financial services, retail and mobile payments. Bhavik earned hist Bachelor's degree with honors in International Business & Management from Northwood University, Florida and has executive training in Entrepreneurship from Stanford University

4.3.8

Finance, HR, Legal, Internal Control, etc.-Once the acquisition of the Company and takeover of management is complete, the Resolution Applicant proposes to integrate functions such as Finance, HR, Legal, Internal Control, R&D with existing centralized functions of Ebix India. This will help in exercising better control over the operations of the Company, and have in place. consistent policies as applicable in case of other Ebix group entities. This will also help in cost optimization and improving efficiency by centralizing non-core business functions.

6.1.1 Payment of CIRP Costs

Amount attributable to the CIRP costs limited at Rs. 4 crores, are proposed to be paid from the free cash flows of the Company prior to take over of the control and management by the Resolution Applicant. If the CIRP costs to be paid are more than Rs. 4 crores, it is proposed to be paid from the Residual Amount

6.1.2

Resolution of Claims of Operational Creditors (other than employees and statutory dues)

At the outset, the Resolution Applicant will like to submit that it is not aware of the liquidation value of the Company and the amount assignable to Operational Creditors in the event of liquidation of the Company. Given this, for the purpose of this Resolution Plan, the underlying assumption of the Resolution Applicant is that the liquidation value assignable to the operational creditors is Nil

Having said the above, the Resolution Applicant proposes the following:

(a)

All related party liabilities (whether claimed or not) as of the cut-off date (e commencement of CIRP which is May 30, 2017) shall be extinguished without any payment;

(b)

The Resolution Applicant proposes that an amount equivalent to the liquidation value shall be paid to the operational creditors. However, in the event that the liquidation value is nil, then the admitted claims of the operational creditors, which is Rs. 1.06 Crores as on the date of commencement of CFRP, shall be settled on a pro-rata basis of 5% of the admitted amount. Such amount shall be paid from the residual Amount, however, in the event that the Residual Amount is not sufficient to pay the entire admitted claims, then the Residual Amount shall be distributed proportionately to settle the admitted claims. In respect of the claims which have not been admitted, the Resolution Applicant shall have no liabilities, whatsoever, presently or in future.

(c)

All the litigations/ proceedings by such operational creditors, whether in relation to admitted claims or not (whether present or future litigations) against the Company for the period prior to the takeover of the control and management of the Company by the Resolution Applicant, shall stand quashed and the Company shall no longer be required to make any payments and have no liabilities in relation to such litigations/ proceedings.

6.1.5 Resolution of Claims of Financial Creditors

The Resolution Applicant proposes that the debt provided by the financial creditors should be such that cumulative outstanding debt shall reduce to Rs. 314 Crores. Thereafter, the financial creditors are proposed to be paid Rs 314 Crores (subject to adjustments in case an amount equivalent to the liquidation value is to be paid to the dissenting financial creditors) against the full and final settlement of their entire financial debts including but not limited to foreign currency convertible bonds and external commercial borrowings, to the Company (including contingent liabilities), against:

(a)

All the security interest created by the Company, its subsidiaries and/ or by any third party, in favour of the financial creditors in relation to such financial debts to the Company (including contingent liabilities), shall stand revoked, cancelled and reduced to zero. This is subject to the understanding that in respect of any other claims or liabilities other than the admitted claims, the Resolution Applicant or the Company shall have no obligatives. liabilities whatsoever.

(b)

All security interest (other than only pledge of shares of subsidiary Vidya Mandir Class Limited to ICICI Bank or any other entities) created by the Company to secure the loans availed by the subsidiaries of the Company or any other entity shall stand revoked, cancelled and reduced to zero. This includes any corporate guarantees, security interest (pledge other than pledge of shares of Vidya Mandir Classes Limited to ICICI Bank, mortgage, hypothecation, etc.) issued by the Company in favour of the financial creditors with respect to such loans taken by the subsidiaries or novated to the subsidiaries. In no event shall the Company, the Resolution Applicant and/ or Ebix E-Learning Ventures Pte. Ltd., shall have any obligations and/ or ability in relation to any of its subsidiaries or the Company itself, and the holders of any such security interest shall have no right to impose any such security interest against the Company, the Resolution Applicant and/ or Ebix E-Learning Ventures Pte. Ltd.

(c)

All the litigations/proceedings by such financial creditors, whether in relation to admitted claims or not (whether present or future litigations) against the Company for the period prior to the takeover of the control and management of the Company by the Resolution Applicant, shall stand quashed and the Company shall no longer be required to make any payments and have no liabilities in relation to such litigations/proceedings.

(d)

The personal guarantees issued by the existing promoters of the Company including but not limited to Mr. Shantanu Prakash and Mr. Jagdish Prakash may continue to subsist. The Company, the Resolution Applicant and/ or Ebix E-Learning Ventures Pte. Ltd shall not have any liabilities or obligations arising under or in relation to such personal guarantees. Further, there shall not be any rights of subrogation under or in relation to such personal guarantees against the Company and/ or the Resolution Applicant and/ or Ebix E-Learning Ventures Pte. Ltd.

(e)

Any pledge over the shares of subsidiaries/third parties created by the Company in favour of creditors of its subsidiaries/any other party, to secure the leans outstanding against the subsidiaries of the Company or any other third party entity shall continue unaffected However, the creditors would have no right to enforce any action against the Company to any extent whatsoever. Also, in relation to any such loans, the financial liability al the Company shall stand reduced to zero and the Company shall not be liable to make any payment to any such creditors or holders of such security interests or pledges Additionally, any obligations of the Company in this regard, shall also stand extinguished and the Company shall not have any obligations arising thereunder. The creditors must make all their realizations only by enforcing any actions available under the law to them with respect to the subsidiaries/any third party, without imposing any liability, demand for any payment or enforcing any action on the Company.

(d)

As per the Information Memorandum, the list of following corporate guarantees issued by the Company with respect to its subsidiaries which have yet not been revoked and hence shall stand revoked, cancelled and reduced to zero. In addition, if there are any other outstanding corporate guarantees (not mentioned below), then same should also stand revoked, cancelled and reduced to zero.

*	Particulars	Overall value of the guarantee (Rs. In Crores)
A	Educomp Infrastructure and School Management Limited
A.1	State Bank of Patiala	261.63
A.2	Axis Bank	270.22
A.3	Bank of India	108.09
A.4	Punjab National Bank	108.09
A.5	Andhra Bank	81.05
A.6	Corporation Bank	54.05
A.7	Karnataka Bank	54.05
A.8	Yes Bank	100.00
A.9	Sub- total (A.1 to A.8)	1,037.18
B	Educomp Learning Hour Private Limited
B.1	ICICI Bank	12.00
C	Edu Smart Services Private Limited
C.1	IndusInd Bank	50.00
C.2	DBS	67.50

C.3	Sub -total (C.1 + C.2)	117.50
Total (A.9 + B.1 + C.3)		1,274.68

(g)

Besides the above, there are certain corporate guarantees issued by the Company with respect to its subsidiaries to lenders (including the ones listed below), which have already been invoked by such lenders and forms part of the total admitted claims of the financial creditors and hence should stand revoked, cancelled and reduced to zero.

*	Particulars	Overall value of the guarantee (Rs. In Crores)
A	Educomp Asia Pacific Singapore	Pte. Ltd.
A.1	SBI Singapore	136.16
	Edu Smart Services Private Limited
	Standard Chartered Bank Loan (Assignee KB Educational Services Private Limited)	100.00
	SICOM Limited	7.50
	Punjab National Bank	*
	Sub-total (B.1 to B.3)	107.50
Total (A.1 to B.4)		243.66

6.1.7 Customers

The Resolution Applicant proposed to fulfil the existing obligations towards the customers of the Company in the normal course of business and in the interest of the continued operations of the Company.

The Resolution Applicant shall, in mutual agreement with the CoC and with the consent of Hon'ble NCLT, appoint a reputed monitoring agency Monitoring Agency") pursuant to the approval of the Hon'ble NCLT, which shall have the following responsibilities till the time of take-over of the management control of the Company by the Resolution Applicant:

(a)

To ensure implementation of the Resolution Plan as approved by the Hon'ble NCLT, by the new management of the Company:

(b)

To provide updates to the IBBI as and when required; and

(c)

To ensure disbursement of dues from the Settlement Account as per the approved Resolution Plan.

XXXX XXXX XXXX XXXX XXXX

8.5 Disbursement of Amounts

Simultaneously with steps envisaged in Section 84 above, the disbursement of the total amount. of Rs 325 Crores shall be carried out from the Settlement Account. The disbursement shall be carried out in accordance with the terms and conditions of this Resolution Plan and in the order of priority set out in the table below.

#	Particulars	Admitted dues (Rs Cr)	Proposal (Rs Cr)	% to be paid	Comments
1	CIRP Cost	N.A.	N.A.	N.A.	To be paid in accordance with Section 6.1.1
2	Operational Creditors	1.06	0.05	5%	To be paid in accordance with Section 6.1.1. CoC to decide the proportionate amount to be distributed among the operational creditors
3	Statutory Government dues	1.75	1.75	100%	To be paid in accordance

					with Section 6.1.3.
4	Dissenting CoC members	N.A.	N.A.	N.A.	To be paid in accordance with Section 6.1.3.
5	Employees	2.40	2.40	100%	To be paid in accordance with Section 6.1A.
6	Financial Creditors	3,003	314.00	10.46 %	To be paid in the ratio of 1:10 between unsecured and secured lenders in proportion to their respective share of the total financial claims (as per the list provided by the resolution professional and attached as Annexure A) (with the unsecured creditors being entitled to one-tenth) unless otherwise decided by the CoC and subject to Section 6.1.5
7	Non-Promoter shareholders	N.A.	6.80	Rs. 1/- per share	To be paid in accordance with Step 2 of Section 8.4.
	Total	3,008.3	325.00

XXXX XXXX XXXX XXXX XXXX

8.7 Management and Control of the Company

Once the Resolution Applicant takes over the management control of the Company, the Resolution Applicant proposes that the Company shall continue as a going concern and operate in its normal course of business upon implementation of the proposed Resolution Plan. The management of affairs of the Company after approval of the Resolution Plan would be carried out as follows:

(a)

Complete control of the Company and the business activities of the Company shall move to the Resolution Applicant. The Company shall continue its operations in the normal course of business. While the implementation of the Resolution Plan and settlement of the creditors shall happen in parallel, the newly appointed Board shall take up the responsibilities of the day to day affairs of the Company and manage it in its regular course.

(b)

Erstwhile promoters and other shareholders will not be in control or promoters to the Company

(c)

Please refer to Section 4.2 and Section 43-of this document for the proposed Board of Directors and management structure of the Company, once the Resolution Applicant gets control over the management of the Company.

(d)

Under the new management and execution team, the affairs of the Company shall be carried out in compliance with all applicable laws. Employee head count can be increased or reduced based on the operational performance and growth of the Company.

(e)

In line with the Resolution Applicant's corporate policies and control processes, the Resolution Applicant shall appoint its existing Ebix India auditors to audit the Company or the consolidated merged entity under which the Company might be placed.

(f)

All undertakings and declarations submitted by the Resolution Applicant along with the Resolution Plan shall be incorporated herein by reference and shall be deemed to be a part of the Resolution Plan.”

“8.9 Other considerations

“2. Overview of the Resolution Plan

Set out below is an overview of the Resolution Plan, which is to be read along with the detailed terms and conditions as set out in Section 6 and Section 8 of the Resolution Plan, below.

2.1

The Ebix Group through the Resolution Applicant puts forth a Rs. 400 Crores (including Rs. 75 Crores towards the revival of the business operations of the Company) proposal in which the Resolution Applicant or its wholly owned subsidiary i.e., Ebix E-Learning Ventures Pte. Ltd. proposes to take management control of the Company by acquiring up to 100% shareholding of the Company in a manner detailed in the Resolution Plan herein below.

2.2

The Resolution Applicant proposes that the debt provided by the financial creditors should be such that cumulative outstanding debt shall reduce to Rs. 314 Crores. Thereafter, the financial creditors are proposed to be paid Rs 314 Crores against the full and final settlement of their entire financial debts to the Company (including contingent liabilities), against: (a) release of all security interest created by the Company to secure such financial debts to the Company (including contingent liabilities); (b) release of all security interest or other obligations including the corporate guarantees issued by the Company with respect to debts) taken by subsidiaries/ affiliates of the Company (as set out in Section 6.1.5 of the Resolution Plan); and (c) waiver of subrogation rights of the guarantors with respect to personal guarantees issued by the existing/ erstwhile Promoters of the Company

The above is subject to the understanding that in respect of any other claims or liabilities other than the admitted claims, the Resolution Applicant or the Company shall have no obligations, liabilities whatsoever.

Notwithstanding anything to the contrary contained herein, it is clarified that nothing herein shall affect the rights of the financial creditors in relation to the guarantees or securities provided by the existing promoters of the Company in their personal capacity or any third party, provided that such guarantees or securities do not create any claims or liabilities in any manner whatsoever against the Company and/ or the Resolution Applicant and/ or the Resolution Applicant's affiliates, including no entitlement to any subrogation rights.

2.3

The Resolution Applicant proposes that the admitted claims of the employees, which amount to Rs 2.4 Crores, shall be settled from the basket of Rs. 11 Crores (over and above Rs. 314 Crores proposed to be paid to the financial creditors) ("Residual Amount") in full. However, in the event that the Residual Amount is not sufficient to pay the entire admitted claims, then the Residual Amount shall be distributed proportionately to settle the admitted claims. In respect of the claims which have not been admitted, the Resolution Applicant shall have no liabilities, whatsoever, presently or in future.

2.4

The Resolution Applicant proposes that all employee liabilities of any kind, including but not limited to gratuity, bonuses, past salaries, leave rollovers, etc., shall be settled in full from the Residual Amount. However, in the event that the Residual Amount is not sufficient to pay such liabilities, then the Residual Amount shall be distributed proportionately to settle such liabilities

2.5

The Resolution Applicant proposes that an amount equivalent to the liquidation value shall be paid to the operational creditors. However, in the event that the liquidation value is nil, then the admitted claims of the operational creditors, which is Re 1.06 Crores as on the date of commencement of CIRP, shall be settled on a pro-rata basis of 5% of the admitted amount. Such amount shall be paid from the Residual Amount. However, in the event that the Residual Amount is not sufficient to pay the entire admitted claims, then the Residual Amount shall be distributed proportionately to settle the admitted claims, in respect of the claims which have not been admitted, the Resolution Applicant shall have no liabilities, whatsoever, presently or in future.

2.6

The Resolution Applicant proposes that the outstanding statutory claims/ dues of the government authorities, if any, related to the period prior to the takeover of the control and management of the Company by the Resolution Applicant and which couldn't be paid due to insufficiency of funds with the Company prior to the takeover of the management and control of the Company, shall be paid in full from the Residual Amount.

2.7

The Resolution Applicant proposes that any new claims filed by any operational creditors or otherwise before the date on which the Resolution Plan is approved by the CoC, shall be paid proportionately from the Residual Amount. If any claims are submitted after this Resolution Plan is approved by the CoC, the same shall not be eligible for any payment.

2.8

The Resolution Applicant proposes that the Company will set a bad debt reserve for any receivable (from customers, ICT, Skilling business partners etc.) that is pending for a period of 90 days or more as of 31 March 2018 or resolution award date, whichever is earlier.

2.9

The Resolution Applicant proposes that the Company will write-off any capitalization or amortization amounts in its books as of 31 March 2018 or the date on which the Honorable National Company Law Tribunal ("Hon'ble NCLT") approves the Resolution Man, whichever is earlier.

2.10

The Resolution Applicant expects that all cash flows of the Company as on the date of takeover of the management control of the Company shall continue to be left in the Company and the Resolution Applicant shall be free to utilize such cash towards the future revival of the business of the Company.

2.11

The Resolution Applicant expects that no changes would be made to the business other than normal ongoing operational business matters, that would have the effect of reducing Company's cash or have the effecting of creating new expenses for the resolution Applicant.

2.12

The Resolution Applicant proposes to fulfill all the existing contracts of the existing customers of the Company.

2.13

The Resolution Applicant believes in the retention of existing sales and operational workforce of the Company (that fit to into its turnaround plans) for the successful revival and turn-around of the business. The Resolution Applicant also aims to recruit best of the talent from other e learning companies to strengthen the existing sales force of the Company, In addition, the Resolution Applicant is also looking for other e-learning targets in India, which will not only help in consolidation of e-learning market but would also bring in new talent to the Company and help in accelerating the revival of its business.

2.14

Neither of the Restricted Persons (as defined in the RFRP) shall form part of the management of the Company.

2.15

The terms of the offer by the Resolution Applicant and the obligation of the Resolution Applicant to proceed with the Proposed Transaction (as defined in the RFRP), is conditional upon the acceptance of the proposed Resolution Plan in its entirety by the Hon'ble NCLT. In the event that the Resolution Plan is not accepted in its entirety, the Resolution Applicant reserves the right to withdraw the Resolution Plan and not proceed with the Proposed Transaction (as defined in the RFRP)."

“5.3 Summary of Admitted Claims

#	Particulars	Admitted Claims (Rs. Crore)
1.	Financial Creditors	3,003
2.	Operational Creditors	1.06
3.	Employee Dues	2.4
	Total	3,006.5

5.4 Details of Claims

5.4.1 Workmen dues

The Company does not have any workmen, as defined in the industrial Disputes Act, 1947.

5.4.2 Financial Creditors

The total admitted claims of financial creditors are Rs 3,003 Crores. The details and break-up of the financial creditors along with the nature of security interest is set out in Annexure 6.2.

5.4.3 Guarantees

The Company has provided certain corporate guarantees and the existing promoters of the Company have provided certain personal guarantees with respect to the debt taken by the Company and/ or its subsidiaries. The details of such guarantees have been provided in Annexure 6.3.

5.4.4 Employee wages and unpaid dues

The total claims of employees are Rs 2.6 Crores and the admitted claims amount to Rs 2.4 Crores. The detailed list is enclosed as Annexure 64.

5.4.5 Government dues and other secured creditors

As per the Information Memorandum, no claims have been filed by the Government Authorities in relation to statutory dues, however, the total statutory dues payable as on March 31, 2017 is Rs 1.75 Crores. The details of such dues are as follows:

Particulars	Amount-Rs	Remarks
VAT/Sales Tax payable	2,385,975	For the month of March, 17
TDS payable	7,807,634	For the month of March, 17
PF Payable	6,010,473	For the month of March, 17
ESI Payable	1,231,178	For the month of March, 17
Emp. Cont to Lab. Welfare Payable	5,300
Professional Tax Payable	90,908	For the month of March, 17
Total	17,531,468	For the month of March, 17

5.4.6 Any other debts and dues

As per the information memorandum, there are no other debts or dues outstanding against the Company.

5.4.7 Operational Creditor Claims

The total amount claimed by the operational creditors is Rs 16.3 Crores out of which the admitted amount of the claims is Rs 1.06 Crores. The detailed list is enclosed as Annexure 6.5.”

“While the Adjudicating Authority cannot interfere on merits with the commercial decision taken by the Committee of Creditors, in limited judicial review it needs to see that the Committee of Creditors has taken into account the fact that the Corporate Debtor needs to keep going as a going concern during the Insolvency Resolution Process; it needs to maximize the value of its assets; and the interest of all stakeholders including Operational Creditors has been taken care of.”

“46.

This is the reason why Regulation 38(1A) speaks of a resolution plan including a statement as to how it has dealt with the interests of all stakeholders, including operational creditors of the corporate debtor. Regulation 38(1) also states that the amount due to operational creditors under a resolution plan shall be given priority in payment over financial creditors. If nothing is to be paid to operational creditors, the minimum, being liquidation value - which in most cases would amount to nil after secured creditors have been paid - would certainly not balance the interest of all stakeholders or maximise the value of assets of a corporate debtor if it becomes impossible to continue running its business as a going concern. Thus, it is clear that when the Committee of Creditors exercises its commercial wisdom to arrive at a business decision to revive the corporate debtor, it must necessarily take into account these key features of the Code before it arrives at a commercial decision to pay off the dues of financial and operational creditors. There is no doubt whatsoever that the ultimate discretion of what to pay and how much to pay each class or subclass of creditors is with the Committee of Creditors, but, the decision of such Committee must reflect the fact that it has taken into account maximising the value of the assets of the corporate debtor and the fact that it has adequately balanced the interests of all stakeholders including operational creditors. This being the case, judicial review of the Adjudicating Authority that the resolution plan as approved by the Committee of Creditors has met the requirements referred to in Section 30(2) would include judicial review that is mentioned in Section 30(2)(e), as the provisions of the Code are also provisions of law for the time being in force. Thus, while the Adjudicating Authority cannot interfere on merits with the commercial decision taken by the Committee of Creditors, the limited judicial review available is to see that the Committee of Creditors has taken into account the fact that the corporate debtor needs to keep going as a going concern during the insolvency resolution process; that it needs to maximise the value of its assets; and that the interests of all stakeholders including operational creditors has been taken care of. If the Adjudicating Authority finds, on a given set of facts, that the aforesaid parameters have not been kept in view, it may send a resolution plan back to the Committee of Creditors to re-submit such plan after satisfying the aforesaid parameters. The reasons given by the Committee of Creditors while approving a resolution plan may thus be looked at by the Adjudicating Authority only from this point of view, and once it is satisfied that the Committee of Creditors has paid attention to these key features, it must then pass the resolution plan, other things being equal.”

“7.

The amount provided for the stakeholders under the Resolution Plan is as under:

(Amount in Rs. Crores)

S. No.	Category of Stakeholder*	Sub-Category Stakeholder of	Amount Claimed	Amount Admitted	Amount Provided under the Plan#	Amount Provided to the Amount Claimed (%)
(1)	(2)	(3)	(4)	(5)	(6)	(7)
1.	Secured Financial Creditors	(a) Creditors not having a right to vote under sub-section (2) of section 21	N.A.	N.A.	N.A.	N.A.
		(b) Other than (a) above:
		(i) who did not vote in favour of the resolution Plan	(i) 817.13**	(i) 743.83	(i) 64.02	(i) 7.83%
		(ii) who voted in favour of resolution plat the	(ii) 2740.50	(ii) 2254.34	(ii) 249.75	(ii) 9.11%
		Total [(a) + (b)]	3,557.63	2998.17	313.77	16.94%
2.	Unsecured Financial Creditors	Creditors not having a right in vote under sub-section (2) of section 21	NA	NA	NA	NA
		(b) Other (a) than above:
		(i) who did not vote in favour the resolution Plan	(i) 1.48**	(i) 1.48	(i) 0.01	(i) 0.78%
		(ii) who voted in favour of the	(ii) 24.62	(ii) 24.62	(ii) 0.22	(ii) 0.91%

		resolution plan
		Total [(a)+(b)]	26.10	26.10	0.23	1.69%
3.	Operational Creditors	(a) Related Party of Corporate Debtor (6) Other than (a) above	NIL	NIL	NIL	NIL
		(b) Other (a) than above:	(i) NIL	(i) NIL	(i) 1.75	(i) 0
		(i) Government	(ii) NIL	(ii) NIL	(ii) NIL	(ii) NIL
		(ii) Workmen	(iii) 7.75	(iii) 3.09	(iii) 0.05	(iii) 0.22
		(iii) Employees**	(iv) 21.98	(iv) 16.41	(iv) 0.05	(iv) 0.22
		(iv) OC ***
		(Other than Workmen, Employees and Government dues)
		Total [(a)+(b)]	29.72	19.50	4.20	14.13%
4.	Other debts and dues
Grand Total			3,613.45	3,043.77	318.20	8.80%

** Dissenting Creditors include those creditors who abstained from the voting.

*** The amounts disbursed between Unsecured and Secured Financial Creditors under the Resolution Plan is in the ratio of 1:10 in terms of Clause 8.5 of the Resolution Plan.

*** The claims of the Employees as stated in the Information Memorandum and also as stated in the Plan is INR 2.40 crores, however, certain claims which were under verification were duly verified and accordingly the claim of the employees before the Plan was voted upon was INR. 3.09 crores.

*** As per the IM, the amount claimed by Operational Creditors increased in view of the order dated 10.01.2019 and 25.01.2019 passed by the Hon'ble NCLT, in terms of which the Resolution Professional was directed to verify the claim of IBM India Pvt Ltd which was for an amount of INR 14.89 Crores. Accordingly, the claim amount for Operational Creditors has increased to INR 21.98 crores and admitted amount has increased to INR 16.41 crores

“In reference to the receipt of resolution Plan from EBIX Singapore Pte. Ltd., pursuant to the Request for Resolution Plan Submission document dated December 5, 2017 (amended on January 17, 2018 and January 20, 2018) (“RFRP”) issued by Educomp Solutions Limited (“ESL”) (as represented by the Resolution Professional) and the CoC of ESL. I, the undersigned, to the best of my knowledge and on the basis of information submitted by the resolution applicant and other publicly accessible information, hereby confirm that:

1.

As per information, communications and explanations received and relied upon by me, in 2016, a company by the name of Ebix Education Learning Pvt. Ltd. was formed to bid for Govt. tenders, with 51% ownership with Ebix Group. Thereafter, the company has gone inactive and no filings of financials or ownership data were made with MCA as no business was conducted, though the company is yet to be deleted from records, and remains 'active' for MCA filing.

2.

As per information, communication and explanations received by me and relied upon by me, neither EBIX Singapore Pte Ltd. nor EBIX E-Learning Ventures Pte. Ltd. (wholly owned subsidiary of EBIS Singapore Pte. Ltd.) are bared from submitting their Resolution Plan, under the provisions of Section 29A of the Insolvency and Bankruptcy Code, 2016.

3.

As per information and explanations received by me and relied upon by me, the Resolution Plan is in compliance with the requirements prescribed under Section 30(2) of the Insolvency and Bankruptcy Code.

Provided that the Resolution Plan including its provisions thereof is subject to approval of the Hon'ble NCLT (subsequent to the approval by the CoC members) and Hon'ble NCLT shall have the right to strike off any provision of the Resolution Plan, in the event it is of the opinion that the same is contrary to the provisions of applicable law."

“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 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 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’. 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:

“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 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 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)