Successful Resolution Applicant Cannot Oppose Its Own Resolution Plan: NCLT Delhi
The National Company Law Tribunal (“NCLT”), New Delhi Bench, comprising of Shri Ashok Kumar Bhardwaj (Judicial Member) and Shri L.N. Gupta (Technical Member), while adjudicating a petition filed in Educomp Solutions Limited., has held that a Successful Resolution Applicant cannot oppose the approval of its own resolution plan before NCLT. “Even otherwise also, the SRA/Ebix...
The National Company Law Tribunal (“NCLT”), New Delhi Bench, comprising of Shri Ashok Kumar Bhardwaj (Judicial Member) and Shri L.N. Gupta (Technical Member), while adjudicating a petition filed in Educomp Solutions Limited., has held that a Successful Resolution Applicant cannot oppose the approval of its own resolution plan before NCLT.
“Even otherwise also, the SRA/Ebix had submitted the Resolution Plan consciously and the exercise of submission of plan by it excluded many financial and legal situation from the process. Even if as per the thought of the SRA/Ebix, there are infirmities in the Resolution Plan, which should be ground to reject the same, it is not open for the SRA/Ebix to take such plea. It is stair decisis that no man can advantage of his own wrong (Nullus commodum copere potest de injuria sua propria)”, the Bench observed.
Background Facts
Educomp Solutions Limited (“Corporate Debtor”) is one of India’s oldest education technology companies with its operations in India, USA and Singapore. On 30.05.2017, the NCLT admitted the Corporate Debtor into Corporate Insolvency Resolution Process (“CIRP”).
Ebix Singapore Pte. Ltd. (“Successful Resolution Applicant/SRA”) submitted a Resolution Plan for the Corporate Debtor, which was approved by the Committee of Creditors (“CoC”) with a majority voting share. Accordingly, the Resolution Professional filed an application under Section 30(6) of IBC before the NCLT, seeking approval of the SRA’s Resolution Plan.
However, the SRA filed three Withdrawal Applications before NCLT seeking withdrawal of its Resolution Plan with the following prayer:
“Grant the Resolution Applicant sufficient time to reevaluate its proposals contained in the Resolution Plan, and also to suitably revise/modify and/or withdraw its Resolution Plan;”
The first two applications were dismissed by the NCLT, but the third one was allowed. The NCLT order was set aside by NCLAT. Thereafter, in appeal the Supreme Court ruled that SRA cannot withdraw its resolution plan.
Thereafter, the SRA opposed the application filed by Resolution professional under Section 30(6) of IBC and contended that its resolution plan should not be approved.
NCLT Verdict
The Bench noted that what SRA could not achieve directly i.e., by withdrawing the Resolution Plan, it is trying to achieve indirectly i.e., by opposing the application filed by the Resolution Professional for approval of the plan.
It was opined that even if the resolution plan contains infirmities, it is not for the SRA to raise plea for its rejection on such ground. No man can take advantage of his own wrong.
“Even otherwise also, the SRA/Ebix had submitted the Resolution Plan consciously and the exercise of submission of plan by it excluded many financial and legal situation from the process. Even if as per the thought of the SRA/Ebix, there are infirmities in the Resolution Plan, which should be ground to reject the same, it is not open for the SRA/Ebix to take such plea. It is stair decisis that no man can advantage of his own wrong (Nullus commodum copere potest de injuria sua propria).”
It was held that the SRA cannot be permitted to vouch for rejection of its own Plan. Having submitted a Plan, the SRA cannot argue that the same does not deserve to be approved.
The Bench approved the Resolution Plan of Ebix Singapore Pte. Ltd. for the Corporate Debtor.
Case Title: Educomp Solutions Limited
Case No.: Company Petition No. (IB)-101/(PB)/2017
Counsel for Applicant: Sr. Adv. Arvind Nayyar, Adv. Aditya Swarup, Adv. Akshay Joshi, Adv. Shubham Pandey, Adv. Mehaq Rao in IA. No. 4845/2023, Adv. Rajat Sehjal, Adv. Mehaq Rao for SRA.
Counsel for Respondents: Sr. Adv. Neeraj Malhotra, Adv. Abhishek Sharma, Adv. Gaurav Arora, Adv. Kritya Sinha, Adv. Nimish Kumar, Adv. Himanshu Kohli on behalf of R-1 (RP), Adv. Siddhant Kant, Adv. Moulshree, Adv. Gayatri, Adv. Ankur Mittal and Adv. Bhaskar