Resolution Professional's Standing Post-Approval of Resolution Plan under Insolvency Code

The Tribunal held that the Resolution Professional (RP) lacked standing to file the application under Section 66(2) of the Insolvency and Bankruptcy Code post-approval of the Resolution Plan, as the RP's role ends upon plan approval. The application was deemed not maintainable, citing the RP as functus officio. Allegations of fraudulent transactions and liability of the Respondents were not addressed, and the application was dismissed solely on grounds of maintainability, without costs awarded.

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Issues Involved:
1. Maintainability of the Application by the Resolution Professional (RP) post-approval of the Resolution Plan.
2. Allegations of fraudulent transactions and fake invoices.
3. Liability of Respondents to contribute to the assets of the Corporate Debtor.

Issue-wise Detailed Analysis:

1. Maintainability of the Application by the Resolution Professional (RP) post-approval of the Resolution Plan:

The primary issue addressed in the judgment is whether the RP has the locus standi to file and maintain the application under Section 66(2) of the Insolvency and Bankruptcy Code (IBC), 2016, after the approval of the Resolution Plan by the Tribunal. The Respondents argued that the RP's role ceases once a Resolution Plan is approved, as per the legal precedent set by the Delhi High Court in the case of M/s. Venus Recruiters Private Limited Vs. Union of India & Ors. The Tribunal noted that "the role of a RP comes to an end" once the Resolution Plan is approved, and the RP becomes functus officio. Consequently, the RP cannot prosecute the present application under Section 66 of IBC, 2016. The Tribunal concluded that the application is not maintainable and dismissed it on these grounds.

2. Allegations of fraudulent transactions and fake invoices:

The RP alleged that the Corporate Debtor issued several Purchase Orders, and the 1st Respondent supplied materials under various invoices. However, upon reviewing the Corporate Debtor's records, the RP found discrepancies indicating that several invoices were fake, and no materials were supplied under those invoices. The RP claimed that the 1st Respondent, in connivance with other Respondents, raised fake invoices, fraudulently encashed the Letter of Credit, and siphoned off funds. The RP argued that the Respondents' actions constituted fraudulent transactions under Section 66(1) of the IBC.

3. Liability of Respondents to contribute to the assets of the Corporate Debtor:

The RP sought a direction for the Respondents to jointly and severally contribute Rs. 1,56,51,772/- along with 12% interest to the assets of the Corporate Debtor. The RP contended that the Respondents' fraudulent actions caused a loss to the creditors of the Corporate Debtor, and they should be held liable to make good the loss. The Respondents, however, denied the allegations, stating that the invoices were genuine and the materials were supplied. They argued that the RP failed to establish that the business of the Corporate Debtor was carried out fraudulently and that the Respondents were knowingly involved in such fraudulent activities.

Judgment:

After hearing the submissions of both parties, the Tribunal concluded that the application was not maintainable as the RP became functus officio post-approval of the Resolution Plan. The Tribunal noted that the cause title of the application was not amended to reflect the correct parties who could maintain the application post-approval. Consequently, the Tribunal dismissed the application on the grounds of maintainability, without delving into the merits of the allegations of fraudulent transactions and the liability of the Respondents. The application was dismissed with no order as to costs.

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