Appeal allowed: No salary post-approval under I&B Code. Settled claims extinguished.

The tribunal allowed the appeal, setting aside the order directing the Resolution Professional to make payment of salary post-approval of the Resolution Plan under the I&B Code 2016. It was held that the settled claim of the Respondent had been extinguished by the approved Resolution Plan, which binds all stakeholders, including employees. The tribunal emphasized that post-approval, no new claims should burden the successful resolution applicant. The Adjudicating Authority erred in issuing directions to the erstwhile Resolution Professional, and the appeal was allowed without costs.

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Issues Involved:

1. Whether the Adjudicating Authority can issue directions to the erstwhile Resolution Professional once the Resolution Plan under Section 31 of the I&B Code 2016 has been approved and the Resolution Professional has been discharged of his duties.

Issue-wise Detailed Analysis:

1. Directions to Erstwhile Resolution Professional Post-Resolution Plan Approval:

The appeal emanates from an order directing the Resolution Professional (RP) to make payment of salary to the Respondent No.1 as per the amount acknowledged by the RP, in accordance with the I&B Code 2016 and its regulations. The core issue is whether such directions can be issued post-approval of the Resolution Plan under Section 31 of the I&B Code 2016.

The Adjudicating Authority had previously dismissed Respondent No.1's application for salary dues beyond the admitted amount, emphasizing that claims arising after the commencement of the Corporate Insolvency Resolution Process (CIRP) are not covered by forms B, C, and D, and should be claimed at an appropriate time and forum.

The appellant contended that the claim was settled by the order dated 19 July 2018, which was never challenged and had attained finality. The appellant also argued that the Adjudicating Authority erred in entertaining a subsequent application by Respondent No.1, which effectively sought to re-litigate the same settled claim.

The tribunal noted that the Supreme Court in Essar Steel India Ltd. Committee of Creditors v. Satish Kumar Gupta held that all claims must be submitted to and decided by the RP, and post-approval of the Resolution Plan, no undecided claims should burden the successful resolution applicant. This principle was reiterated in Standard Chartered Bank v. Satish Kumar Gupta, where it was held that claims decided on merits by the Adjudicating Authority or Appellate Tribunal are final and binding.

The tribunal found that the claim of Respondent No.1 had been settled by the order dated 19 July 2018, which upheld the rejection of part of the claim and admitted only a portion. The tribunal emphasized that the approved Resolution Plan is binding on all stakeholders, including employees, and extinguishes all prior claims not expressly provided for in the plan.

The tribunal concluded that the Adjudicating Authority erred in issuing directions to the erstwhile RP to make payment of the salary to Respondent No.1, as the claim had been settled and the Resolution Plan, which extinguished such claims, had been approved and implemented.

Order:

The appeal was allowed, and the impugned order was set aside. The tribunal held that no costs were to be imposed.

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