Challenged Resolution Plan under Insolvency Law upheld, equal treatment for Financial Creditors emphasized

The Appellant challenged the Resolution Plan approved under the Insolvency and Bankruptcy Code, citing non-compliance and failure to address their claims as Financial Creditors. The Appellate Tribunal found a revised plan offered by the Successful Resolution Applicant justified. The Appellant was given the opportunity to accept the revised offer, with the Applicant agreeing to consider their claims similar to other Financial Creditors. The Tribunal directed equal treatment for the Appellant as Financial Creditors, emphasizing that once a Resolution Plan is approved, stakeholders cannot pursue alternative remedies like Arbitration. The appeals were disposed of with no further relief granted and no costs awarded.

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Issues:
Challenge to impugned order dated 7th December, 2018 under common question of law.

Analysis:
1. The Appellant(s) entered into a 'Term Loan Agreement' with the 'Corporate Debtor' for a sum of Rs. 6.03 Crore, which was to be repaid by 13th December, 2009. After the failure of the 'Corporate Debtor' to repay the loan, the Appellant(s) sent Demand and Statutory Notices for the outstanding debt.

2. A suit was filed by the 'Corporate Debtor' in the High Court of Kolkata seeking conversion of the outstanding amount into equity shares based on an alleged oral Agreement. The Appellant(s) invoked the Arbitration clause under the Term Loan Agreement, leading to a series of legal actions culminating in Arbitration proceedings.

3. While Arbitration was pending, an application under section 7 of the Insolvency and Bankruptcy Code, 2016 was filed by 'IDBI Bank' against the 'Corporate Debtor', resulting in the admission of Corporate Insolvency Resolution Process. The Arbitration proceedings were adjourned due to this development.

4. The Appellant(s) filed claims with the Resolution Professional, which were rejected for not meeting the timeline specified by regulations. An Interlocutory Application was filed to challenge this rejection.

5. The Committee of Creditors approved a 'Resolution Plan' submitted by 'SREI Multiple Asset Investment Trust' with 92.74% voting shares, which was subsequently approved by the Adjudicating Authority under the I&B Code.

6. The Appellant(s) challenged the 'Resolution Plan' citing non-compliance with section 30(2) of the I&B Code and the plan's failure to address their claims as Financial Creditors.

7. The Appellant(s) sought to either pursue Arbitration proceedings under section 60(6) of the I&B Code or challenge the Resolution Plan.

8. The 3rd Respondent, the 'Successful Resolution Applicant,' offered a revised plan, which the Appellate Tribunal found justified. The Appellant(s) were given the opportunity to accept the revised offer.

9. The 3rd Respondent agreed to consider the Appellant(s)' claims and provide treatment similar to other Financial Creditors. The Appellant(s) expressed a desire to continue with Arbitration, while the Resolution Applicant aimed for final settlement during the Resolution process.

10. The Tribunal directed the 3rd Respondent to provide the Appellant(s) with treatment similar to other Financial Creditors, emphasizing that once a Resolution Plan is approved under the I&B Code, stakeholders cannot pursue alternative remedies like Arbitration or legal proceedings.

11. The Tribunal disposed of the appeals with the above directions, stating that no further relief could be granted, and no costs were awarded.

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