2022 (10) TMI 889 - AT - Insolvency and Bankruptcy

Tribunal restores Appellant's claim to Rs. 956.21 crores, directs Resolution Applicant to pay in full

Punjab National bank Versus Mr. Ashish Chhawchharia, Jalan Kalrock Consortium, Committee of Creditors of Jet Airways (India) Limited

The Tribunal allowed the appeal, directing the Appellant's claim to be restored to Rs. 956.21 crores. The Resolution Applicant was instructed to make ... Seeking approval of the Resolution Plan - entitlement for the distribution under the Resolution Plan as per their admitted claim - HELD THAT:- From the facts brought on record in the Application and replies filed thereto, it is clear that Applicant did not file any claim in the CIRP of Corporate Debtor till the approval of Resolution Plan. It is submitted that neither any claim nor proof of filing in the proceedings has been filed and hence, at this stage there is no occasion to admit the claim, which is brought on record as Exhibit-C to the Application, in the CIRP of the Corporate Debtor. Now coming to Clause-12 of Part-V, on much reliance has been placed by learned Counsel for the Applicant, it is clear from the Resolution Plan brought on record that Clause-12 is part of Part-V of Scheme of Arrangement. The Appellant is entitled to the relief as prayed, it is not necessary to issue any direction for modifying the Resolution Plan or modifying the order of Adjudicating Authority approving the Resolution Plan. The interest of justice will be served in issuing direction to the Resolution Applicant to make distribution to the Appellant as per its admitted claim of Rs.956.21 crores , which however, shall be without affecting distribution of amounts to other Financial Creditors both Assenting and Dissenting Financial Creditors and other stake holders. Appeal allowed. Issues Involved:1. Reduction of the Appellant's claim by the Resolution Professional (RP).2. Approval of the Resolution Plan by the National Company Law Tribunal (NCLT).3. Intervention by the Principal Commissioner of Income Tax Central-3 Mumbai.4. Entitlement of the Appellant to their full admitted claim.Detailed Analysis:1. Reduction of the Appellant's Claim by the Resolution Professional (RP):The Appellant, a Financial Creditor of Jet Airways (India) Limited, initially had their claim admitted at Rs. 956.21 crores by the RP. Subsequently, the RP reduced this claim to Rs. 747.94 crores, citing the invocation of pledged shares and the judgment in India Power Corporation Ltd. vs. Meenakshi Energy Ltd. The RP argued that the Appellant, having become the beneficiary owner of the pledged shares, must have their claim reduced by the fair market value of these shares. The Appellant contended that the RP lacked jurisdiction to revise an already admitted claim and that the reduction was based on a judgment that was later overturned by the Supreme Court in PTC India Financial Services Ltd. vs. Mr. Venkateshwaralu Kari.2. Approval of the Resolution Plan by the National Company Law Tribunal (NCLT):The NCLT, Mumbai Bench, approved the Resolution Plan submitted by the Jalan Fritesch Consortium. The Appellant, despite voting in favor of the Resolution Plan, objected to the reduction of their claim. The Appellant filed an IA No. 2480 of 2020 to restore their claim, which was not adjudicated by the NCLT when approving the Resolution Plan. The Appellant argued that their reduced claim caused significant prejudice and that their full debt should be recognized as per the Resolution Plan.3. Intervention by the Principal Commissioner of Income Tax Central-3 Mumbai:The Principal Commissioner filed an IA No. 2720 of 2021 seeking to intervene in the appeal and bring on record tax claims against Jet Airways. The Supreme Court had earlier noted the approval of the Resolution Plan and directed that the tax claims could be pursued against the resulting company, Airjet Ground Services Limited. The Tribunal allowed the intervention but did not grant the specific reliefs sought by the Principal Commissioner, stating that the clauses of the Scheme of Arrangement were self-explanatory and no further clarification was required.4. Entitlement of the Appellant to Their Full Admitted Claim:The Tribunal acknowledged that the Appellant consistently objected to the reduction of their claim and had filed an application to restore it. The Supreme Court's judgment in PTC India Financial Services Ltd. invalidated the basis for the RP's reduction of the claim. Consequently, the Tribunal held that the Appellant was entitled to their full admitted claim of Rs. 956.21 crores. The Tribunal directed the Resolution Applicant to make distribution under the Resolution Plan as per the full admitted claim of the Appellant without affecting the payments to other Financial Creditors and stakeholders.Conclusion:The appeal was allowed, and the Tribunal directed that the Appellant's claim be restored to Rs. 956.21 crores. The Resolution Applicant was instructed to make the necessary payments as per the full admitted claim, with the additional amount to be borne from the amount reserved under the Resolution Plan. The intervention application by the Principal Commissioner was disposed of with no further reliefs granted.