Introduction

The National Company Law Appellate Tribunal (NCLAT) delivered a landmark judgment on September 20, 2021, in the case of Committee of Creditors Of Wind World India Limited Through State Bank Of India v. Suraksha Asset Reconstruction Ltd. This case centers around the Corporate Insolvency Resolution Process (CIRP) of Wind World (India) Ltd., where the Successful Resolution Applicant (SRA), comprised of Suraksha Asset Reconstruction Limited, Lakshdeep Investment and Finance Private Limited, and Suraksha Reality Limited, sought to withdraw their approved Resolution Plan post Committee of Creditors' (CoC) approval.

Summary of the Judgment

The NCLAT, while examining three concurrent appeals, upheld the principle that once a Resolution Plan is approved by the CoC, the SRA cannot unilaterally withdraw it. The Tribunal referenced the Supreme Court's decision in Ebix Singapore Private Limited v. Committee Of Creditors Of Educomp Solutions Limited, affirming that the Adjudicating Authority lacks the jurisdiction to permit such withdrawals under Section 60(5)(c) of the Insolvency and Bankruptcy Code, 2016 (IBC). Consequently, the Tribunal allowed the appeals filed by the CoC and the Resolution Professional, setting aside the order that permitted the SRA to withdraw the Resolution Plan. However, the appeal filed by the SRA to dismiss the CoC’s appeals was dismissed.

Analysis

Precedents Cited

The judgment extensively relied on key Supreme Court decisions that shape the interpretation of the IBC:

• Ebix Singapore Pvt. Ltd. v. Committee of Creditors of Educomp Solutions Limited: Affirmed that Resolution Applicants cannot withdraw approved Resolution Plans without adhering to explicit statutory provisions.
• Essar Steel India Ltd. v. Satish Kumar Gupta: Highlighted the IBC's emphasis on timely resolution and the judiciary's limited role in altering statutory timelines.
• K Sashidhar v. Indian Overseas Bank: Reinforced the notion that the judiciary should not extend beyond the statutory framework in insolvency proceedings.

Legal Reasoning

The Tribunal reasoned that the IBC, coupled with the CIRP Regulations, provides a comprehensive framework that does not contemplate the withdrawal of Resolution Plans by SRAs post-CoC approval. Key points include:

• Section 60(5)(c) of the IBC: Identified as insufficient for granting withdrawal requests, as it pertains to liquidation scenarios rather than Resolution Plan withdrawals.
• Principle of Casus Omissus: Emphasized that omissions in the statute cannot be rectified through judicial interpretation, thus preventing the creation of new remedies not envisioned by the legislature.
• Statutory Framework Consistency: The IBC’s primary objective is to ensure a speedy, predictable, and timely resolution, which would be undermined by allowing post-approval withdrawals.

The Tribunal also underscored the Supreme Court's stance on maintaining the sanctity of the IBC's procedural timelines and the irrevocability of Resolution Plans once approved by the CoC.

Impact

This judgment solidifies the inviolability of CoC-approved Resolution Plans, thereby enhancing the stability and predictability of the insolvency process in India. Key implications include:

• Creditor Confidence: Strengthens creditors' confidence in the resolution process, knowing that approved plans cannot be arbitrarily withdrawn.
• Process Finality: Ensures that once a Resolution Plan gains CoC approval, it moves towards finalization without unnecessary delays caused by withdrawals.
• Judicial Restraint: Reaffirms the judiciary's role in adhering strictly to statutory provisions, discouraging courts from creating remedies beyond legislative intent.
• Legislative Clarity: Highlights the need for explicit legislative provisions if withdrawals by SRAs are to be accommodated in future amendments to the IBC.

Complex Concepts Simplified

Conclusion

The NCLAT's judgment in Committee of Creditors Of Wind World India Limited Through State Bank Of India v. Suraksha Asset Reconstruction Ltd. serves as a pivotal affirmation of the IBC's structural integrity. By disallowing the withdrawal of CoC-approved Resolution Plans without explicit statutory provision, the Tribunal reinforces the IBC's objective of ensuring swift and predictable insolvency resolutions. This decision not only safeguards the interests of creditors but also streamlines the insolvency process, minimizing uncertainties and potential delays that can arise from unilateral withdrawals by SRAs. Moving forward, stakeholders in the insolvency ecosystem must recognize the binding nature of approved Resolution Plans, and any desired flexibility in this regard would necessitate legislative amendments to the IBC.