Tribunal Rejects Claim for Contract Breach Losses Post-Resolution Plan Approval

The Tribunal rejected the applicant's claim seeking relief for losses due to a contractual breach by the Corporate Debtor, amounting to Rs. 5,70,90,760. Despite the failure to supply the agreed stainless steel flat, the Tribunal emphasized that once the Resolution Plan was approved, all claims not part of the plan stand extinguished. As the applicant did not participate in the approval process and approached the Authority post-approval, the Tribunal ruled they had no standing to seek relief at that stage. Consequently, the application was rejected, and parties were directed to obtain a certified copy of the order.

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Issues:
Application under Section 60 (5) of the Insolvency and Bankruptcy Code, 2016 seeking relief for losses suffered due to contractual breach by Corporate Debtor.

Analysis:
1. The applicant filed an application seeking relief for losses suffered amounting to Rs. 5,70,90,760/- due to the failure of the respondent to supply stainless steel flat as agreed. The applicant communicated the claims and losses to the Corporate Debtor through various emails and letters, requesting compensation.

2. The applicant raised purchase orders during the Corporate Insolvency Resolution Process (CIRP) for a total quantity of 4323 MT of stainless steel flat. Despite assurances from the Resolution Professional, the full consignment was not delivered, leading to the applicant's financial losses.

3. The respondent informed the applicant that due to a plant shutdown, the debit note for losses could not be accepted. The applicant contended that the Corporate Debtor's breach of contract entitled them to compensation, which should be considered as part of the CIRP cost.

4. The Tribunal noted that the Resolution Plan was approved, and the applicant did not approach the Adjudicating Authority during the approval process. Referring to legal precedents, the Tribunal emphasized that once a Resolution Plan is approved, the role of the Resolution Professional ends, and all claims not part of the plan stand extinguished.

5. Citing relevant judgments, the Tribunal concluded that since the applicant did not participate in the approval of the Resolution Plan and approached the Authority after its approval, they had no standing to seek relief at that stage. Consequently, the application was rejected, and the parties were directed to comply with formalities for a certified copy of the order.

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