NCLAT dismisses appeals challenging Resolution Plan approval in insolvency case

The National Company Law Appellate Tribunal dismissed three appeals challenging the approval of the Resolution Plan for 'New Phaltan Sugar Works Limited' in the Corporate Insolvency Resolution Process of 'Shri Dutt India Pvt. Ltd.' The Tribunal upheld the rejection of claims by the Appellants, emphasizing their failure to adhere to timelines for filing claims and provide sufficient documentary evidence. The Appellants' requests for consideration of claims post-CIRP approval were denied, as they missed the prescribed deadlines during the insolvency process. The appeals were dismissed due to lack of merit, as the CIRP had concluded with the Resolution Plan's approval.

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Issues: Delay in re-filing appeals, rejection of claims during Corporate Insolvency Resolution Process, non-adherence to timelines for filing claims, rejection of supporting documents, extension of CIRP period, denial of consideration for claims after CIRP approval

In this judgment by the National Company Law Appellate Tribunal, the delay in re-filing the appeals was condoned, and the Order delivered by the Adjudicating Authority approving the Resolution Plan of 'Shri Dutt India Pvt. Ltd.' in the Corporate Insolvency Resolution Process of 'New Phaltan Sugar Works Limited' was challenged in three appeals. The Resolution Plan had received unanimous approval from the Committee of Creditors with 100% voting. The Appellants in all three appeals had their claims rejected during the Corporate Insolvency Resolution Process. The Tribunal decided to pass a common order for all three appeals.

The Appellants contended that the delay in filing their claims was due to a financial crisis caused by non-payment of money to their lenders and other reasons, such as criminal cases filed against them. They argued that they were victimized by the Directors of the Corporate Debtor. The Appellants requested the consideration of their claims before the approval of the Resolution Plan, but their requests were not entertained. The Tribunal noted that the Appellants failed to adhere to the timelines prescribed under the Insolvency and Bankruptcy Code and relevant Regulations for filing claims. The rejection of the Appellants' claims was upheld as they did not provide sufficient documentary evidence to substantiate their claims within the stipulated timelines.

The Tribunal emphasized that the Appellants had enough opportunity to submit their claims and supporting documents during the Corporate Insolvency Resolution Process but failed to do so within the prescribed period. The extension of the CIRP period did not entitle the Appellants to belatedly submit their claims. As the CIRP had culminated with the approval of the Resolution Plan, the Appellants could not reopen the process for a fresh consideration of their claims. Consequently, the appeals were dismissed at the initial stage due to the lack of merit.

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