Tribunal upholds creditors' decision in appeal dismissal, reaffirms binding nature of Resolution Plan

The Tribunal dismissed the appeal by the Department of Customs, as its claim was time-barred and not included in the approved Resolution Plan. The commercial wisdom of the Committee of Creditors in approving the plan was upheld, emphasizing that their decisions are final and not subject to judicial review. The binding nature of the Resolution Plan on all stakeholders, including government authorities, was reaffirmed. The Tribunal found no merit in the Appellant's case and dismissed the appeal without any order as to costs.

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Issues Involved:
1. Timeliness of the Appellant's claim submission.
2. Admissibility of the Appellant's claim as an Operational Creditor.
3. Binding nature of the approved Resolution Plan on the Appellant.
4. Commercial wisdom of the Committee of Creditors (CoC).

Issue-wise Detailed Analysis:

1. Timeliness of the Appellant's Claim Submission:
The Appellant, a Department of Customs, filed its claim on 24.07.2019, significantly after the stipulated deadline. The public announcement for claim submission was made on 06.12.2018, with a submission deadline of 17.12.2018. Under Regulation 12 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, claims must be submitted within 90 days from the insolvency commencement date, which expired on 03.03.2019. The Appellant's claim, filed much later, was deemed time-barred and not considered.

2. Admissibility of the Appellant's Claim as an Operational Creditor:
The Appellant argued that it should be recognized as an Operational Creditor due to the unpaid customs duty by the Corporate Debtor. Despite filing a claim for Rs. 47,97,465/- along with interest of Rs. 66,91,478/-, the claim was not included in the Resolution Plan due to its late submission. The Respondent highlighted that the claim was listed under "pending litigation" in the Resolution Plan but was not admitted as an Operational Creditor due to the delayed filing.

3. Binding Nature of the Approved Resolution Plan on the Appellant:
The Resolution Plan, approved by the Adjudicating Authority on 02.01.2020, is binding on all stakeholders, including the Central Government and local authorities, as per Section 31(1) of the Insolvency and Bankruptcy Code, 2016. The Appellant's claim, not being part of the approved Resolution Plan, stands extinguished. This binding nature was reiterated in the Respondent's letter dated 02.02.2021, which emphasized that liabilities not covered under the Resolution Plan are extinguished.

4. Commercial Wisdom of the Committee of Creditors (CoC):
The commercial wisdom of the CoC in approving the Resolution Plan is paramount and not subject to judicial review. The CoC unanimously approved the plan with a 100% voting share, meeting the statutory requirement. The Supreme Court's rulings in cases like K. Shashidhar Vs. Indian Overseas Bank and Maharashtra Seamless Ltd. Vs. Padmanabhan Venkatesh underscore that the CoC's decisions on the feasibility and viability of the Resolution Plan are final and not open to interference.

Conclusion:
The Tribunal concluded that the Appellant failed to submit its claim within the prescribed time, rendering the claim time-barred and not part of the approved Resolution Plan. The commercial wisdom of the CoC in approving the Resolution Plan is upheld, and the Appellant's appeal is dismissed. The binding nature of the Resolution Plan on all stakeholders, including government authorities, is reaffirmed, and the Tribunal found no merit in the Appellant's case. The appeal is dismissed without any order as to costs.

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