2022 (10) TMI 811 - AT - Insolvency and Bankruptcy

Adjudicating Authority Upholds Resolution Plan Approval

The Adjudicating Authority's approval of the Resolution Plan in Company Appeal (AT) (Insolvency) No. 572 of 2021 was upheld, with the Tribunal finding no ... Seeking approval of Resolution Plan - Appellant submitted that the Appellant is aggrieved by the impugned order on the ground that the claim of the Appellant has not been considered by the RP and the RP included the Appellant in Category ‘L’ and has agreed to pay only 2% of admitted claim - Section 30(6) of the I&B Code, 2016 - HELD THAT:- Admittedly, the application filed by the Resolution Professional under Section 30(6) of the I&B Code, 2016 seeking approval of the Adjudicating Authority. The Adjudicating Authority after satisfying that the plan is incompliance of sub-section (2) of Section 30 and meets the requirement and as approved by the Committee of Creditors under sub-section (4) of Section 30. If the above, compliance is met, the Adjudicating Authority shall by order approve the Resolution Plan which shall be binding on the Corporate Debtor and its employees, members, creditors, (including the Central Government, any State Government or any local authority to whom a debt in respect of the payment of dues arising under any law for the time being in force, such as authorities to whom statutory dues are owed,) guarantors and other stakeholders involved in the Resolution Plan. Once the plan has been approved by the CoC and by the Adjudicating Authority it binds upon the creditors and other stakeholders as per Section 30(1) of the Code - From the documents, it is evident that the RP vide its letter dated 22.05.2020 requested the Appellant to submit the claim in Form-B and also sent a reminder dated 25.05.2020 to the Appellant whereby it is stated that the RP has not received the claim with documents for verification and acceptance of claim - The claim of the Appellant has been settled in the plan under the category ‘L’ and the plan has been approved with 100% voting share of the CoC members and also approved by the Adjudicating Authority in compliance of Section 31 of the I&B Code. Once the plan is approved it shall bind on the creditors and other stakeholders. This Tribunal comes to an irresistible and inescapable conclusion that the order passed by the Adjudicating Authority in approving the Resolution Plan vide order dated 16.04.2021 is in accordance with law and no interference is called for - Appeal dismissed. Issues Involved:1. Approval of the Resolution Plan by the Adjudicating Authority.2. Consideration of the Appellant's claim by the Resolution Professional (RP).3. Compliance with the procedures for submitting claims during the Corporate Insolvency Resolution Process (CIRP).4. Binding nature of the approved Resolution Plan on creditors and stakeholders.Issue-wise Detailed Analysis:1. Approval of the Resolution Plan by the Adjudicating Authority:The Present Appeal was filed against the Order dated 16th April 2021, passed by the Adjudicating Authority (National Company Law Tribunal, Mumbai Bench-I, Mumbai) in I.A. No. 07/MB/2021 in Company Petition (IB) No.3448/MB/2018, whereby the Adjudicating Authority approved the Resolution Plan submitted by the Successful Resolution Applicant (SRA).2. Consideration of the Appellant's Claim by the Resolution Professional (RP):The Appellant contended that its claim was not considered by the RP and was included in Category 'L', agreeing to pay only 2% (Rs. 46,595) of the admitted claim of Rs. 23,29,773. The Appellant had initiated arbitration proceedings against the Corporate Debtor for recovery of Rs. 1,33,62,369, which was at the stage of cross-examination of Respondent's witnesses. The RP included the Appellant in Category 'L' and agreed to pay only 2% of the admitted claim of Rs. 23,29,773, whereas other creditors in Category 'K' were fully paid. The Appellant's claim was pending for consideration, and despite reminders, the Appellant failed to submit its claim in Form-B with proof as required under Regulation 12(1) & (2) of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016.3. Compliance with the Procedures for Submitting Claims During the CIRP:The Appellant was required to submit its claim in Form-B with relevant documents for acceptance. Despite multiple reminders from the RP, the Appellant did not comply with the procedure laid down in the Code. The RP requested the Appellant to submit the claim in Form-B on 22.05.2020 and sent a reminder on 25.05.2020. The Appellant did not submit its claim, resulting in the claim being categorized under 'L' (other creditors). The Adjudicating Authority dismissed the Appellant's application (M.A. No. 3228/2019) seeking inclusion as an Operational Creditor on 25.11.2019 and directed the Appellant to approach the RP.4. Binding Nature of the Approved Resolution Plan on Creditors and Stakeholders:The Adjudicating Authority approved the Resolution Plan after satisfying that it complied with Section 30(2) of the I&B Code, 2016, and was approved by the Committee of Creditors (CoC) with 100% voting share. Once approved, the Resolution Plan binds the Corporate Debtor, its employees, members, creditors, guarantors, and other stakeholders. The plan was in compliance with Regulation 38 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, and Section 30(2)(f) of the Code. The RP ensured the Resolution Plan fell within the ambit of Section 30(2) of the Code, and the CoC's decision was final.Conclusion:The Tribunal concluded that the order passed by the Adjudicating Authority in approving the Resolution Plan on 16.04.2021 was in accordance with the law and required no interference. The Appellant's failure to submit its claim in the prescribed form and within the stipulated time led to its categorization under 'L'. The Company Appeal (AT) (Insolvency) No. 572 of 2021 was dismissed, with no order as to costs, and any pending applications were closed.