Tribunal dismisses Application due to unapproved dues in Resolution Plan

The Tribunal dismissed the Application under Section 60(5) of the Insolvency and Bankruptcy Code, 2016, as the Applicant's dues were not admitted in the approved Resolution Plan. The claims not included in the plan were extinguished, following the Supreme Court's precedent that approved claims become binding. The Tribunal emphasized the significance of the Information Memorandum in determining liabilities, holding that only dues specified in the plan are enforceable. Consequently, the Applicant's claims outside the plan were rejected, and no further action could be taken on those claims.

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Issues:
Application under Section 60(5) of the Insolvency and Bankruptcy Code, 2016 seeking payment of dues from Resolution Plan.

Analysis:
1. The Application was filed by an Operational Creditor seeking relief for payment of dues as per the proportion for employees and workmen stated in the Resolution Plan approved by the Adjudicating Authority. The Applicant, a Workmen/Employee of the Corporate Debtor, filed a claim for a specific amount, which the Resolution Professional (RP) updated on the website but did not pay after the approval of the Resolution Plan.

2. The Tribunal reviewed the Application and noted that the claim of the Applicant was not admitted by the RP and was rejected in full as per the Information Memorandum published. Referring to the Supreme Court's judgment, it emphasized that once a resolution plan is approved, claims provided in the plan become binding on the Corporate Debtor and all stakeholders. Any claims not part of the approved plan stand extinguished.

3. The Tribunal highlighted the importance of the Information Memorandum, which must contain details of liabilities, including those towards workers and employees, to ensure revival of the Corporate Debtor. It clarified that the Resolution Applicant can be held liable only for dues forming part of the Information Memorandum and approved Resolution Plan. Claims not part of the plan are extinguished upon approval by the Adjudicating Authority.

4. In this case, since the Applicant's dues were not admitted as part of the Resolution Plan and were rejected by the RP, the Tribunal dismissed the Application based on the principle established in the Supreme Court's judgment. The Applicant's claims not forming part of the approved plan were extinguished, and no further proceedings could be initiated for those claims.

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