In its ruling, the Supreme Court stated it did not find merit in Ebix’s arguments that the resolution professional (RP) of Educomp, Mahender Khandelwal, had failed to disclose information about investigations into the company by law enforcement agencies.
Listing a chronology events which resulted in information about investigations by the enforcement directorate and central bureau of investigation into Educomp becoming public through news reports and stock exchange disclosures, the supreme court noted that the RP could not have been aware of such investigations at the time he had provided information to prospective bidders about the company for them to make an informed bid.
Ebix has claimed that the RP withheld information about such investigations from it and has cited the investigations as one of the reasons for withdrawing its offer for the company.
The Supreme Court noted that Ebix had submitted its resolution plan for Educomp on 19 February 2018. Reports about alleged financial irregularities at the company and subsequent investigations by law enforcement agencies were events that took place later.
Based on this the court noted, “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”.
The ruling by the apex court is significant as it puts an end to speculation whether applicants can withdraw their offers made under the insolvency and bankruptcy code rules once these offers have been approved by the committee of creditors. Many applicants have attempted to either withdraw their offers or modify the terms of these offers citing multiple reasons over the past one year including the impact of covid 19. The court has ruled that such withdrawals are not permissible.