2022 (11) TMI 1125 - AT - Insolvency and Bankruptcy

Tribunal upholds 'Operational Creditor' status, dismisses appeal over delay. Commercial Wisdom supported.

The Tribunal dismissed the appeal, affirming the appellant's classification as an 'Operational Creditor' instead of a 'Financial Creditor. The delay in ... Maintainability of application preferred by the Appellant/Greater Noida Industrial Development Authority - application dismissed on the ground that Noida has not taken any action for seven long months when it is their case that the RP had not taken any decision over the ‘Claim Application’ filed by them and that the CoC had already approved the Plan and only subsequent to the approval, G. Noida has approached the Adjudicating Authority belatedly on 06.10.2020, whereas the CIRP had been initiated way back on 30.01.2020. HELD THAT:- There was an email which was sent by the Resolution Professional on 06.02.2020 informing the Appellant that they had been treated as an ‘Operational Creditor’ and to send their claim in Form-‘B’ and calculate their interest after the date of Admission of the CRP. There are no reasons given regarding the delay by G. Noida in filing the ‘Claim Application’ as a ‘Financial Creditor’. On perusal of New Okhla Industrial Development Authority’ Vs. ‘Anand Sonbhadra’ and ‘New Okhla Industrial Development Authority’ Vs. ‘Manish Gupta & Anr.’ [2022 (5) TMI 875 - SUPREME COURT], it is clear that the amount due to Noida be treated as an ‘Operational Debt’ and therefore the Noida is an ‘Operational Creditor’ and not a ‘Financial Creditor’. This issue has since attained finality. Noida did not exercise its right in filing its ‘Claim’ on time and has belatedly challenged the rejection after the approval of the Resolution Plan. On a query from the Bench, as to whether any provision was made in the Resolution Plan for the dues of Noida, the Counsel for the SRA submitted that the outstanding amount is reflected in the Books of Accounts of the ‘Corporate Debtor’ and shown in the Information Memorandum and were dealt with as per the provisions of the Code. It is also significant to mention that the cancellation Notice sent by Noida is dated 07.06.2019 which is subsequent to the commencement of the CIRP date 31.05.2019. In the instant case, there are no material irregularity in the approval of the provisions of the Resolution Plan and hence find no legal or substantial grounds to interfere with the decision of the CoC. Appeal dismissed. Issues Involved:1. Classification of the appellant's claim as a Financial Creditor or Operational Creditor.2. Delay in filing the claim by the appellant.3. Adjudicating Authority's dismissal of the appellant's applications.4. Treatment of the appellant's claim in the Resolution Plan.Detailed Analysis:1. Classification of the appellant's claim as a Financial Creditor or Operational Creditor:The appellant argued that their claim should be classified as a 'Financial Creditor' based on the nature of the lease, which they contended was a 'Financial Lease.' They emphasized that the lease's consideration, including premium and lease rent, represented a 'Financial Debt' as per the definitions provided by the Hon'ble Supreme Court in cases such as 'Anuj Jain, IRP for Jaypee Infratech Ltd. Vs. Axis Bank Ltd.' and 'Pioneer Urban Land and Infrastructure Ltd. & Anr. Vs. Union Bank of India & Ors.' The appellant also highlighted that the lease involved significant financial disbursements against the consideration for the time value of money.However, the Resolution Professional (RP) treated the appellant as an 'Operational Creditor' and requested them to file their claim accordingly. The Hon'ble Supreme Court in 'New Okhla Industrial Development Authority Vs. Anand Sonbhadra' and 'New Okhla Industrial Development Authority Vs. Manish Gupta & Anr.' concluded that the appellant is an 'Operational Creditor,' not a 'Financial Creditor.' Consequently, the Tribunal affirmed this classification, noting that the issue had attained finality.2. Delay in filing the claim by the appellant:The appellant delayed filing their claim as a 'Financial Creditor' until 24.09.2020, despite the Corporate Insolvency Resolution Process (CIRP) initiation on 30.01.2020 and the Resolution Plan's approval on 04.08.2020. The RP had informed the appellant on 06.02.2020 to submit their claim as an 'Operational Creditor' using Form-B. The appellant did not provide reasons for the delay, except that they were awaiting the Supreme Court's decision in a related matter.The Tribunal noted that the appellant did not exercise diligence in filing their claim on time and only challenged the rejection after the Resolution Plan's approval. This delay was deemed unjustified.3. Adjudicating Authority's dismissal of the appellant's applications:The Adjudicating Authority dismissed the appellant's applications (I.A.1380/2021 and I.A.344/2021) on the grounds of delay and lack of action by the appellant for seven months. The Tribunal supported this decision, emphasizing that the appellant approached the Adjudicating Authority belatedly and did not respond to the RP's email requesting them to file their claim as an 'Operational Creditor.'4. Treatment of the appellant's claim in the Resolution Plan:The Tribunal assessed whether the appellant's claim was adequately addressed in the Resolution Plan. It was confirmed that the outstanding amount was reflected in the Corporate Debtor's Books of Accounts and Information Memorandum and dealt with as per the Code's provisions. The Tribunal also noted that the cancellation notice sent by the appellant was subsequent to the CIRP's commencement.The Tribunal referenced the Hon'ble Supreme Court's observations in 'Committee of Creditors of Essar Steel India Limited Vs. Satish Kumar Gupta' and other cases, which emphasized that similarly situated creditors should be treated equally. However, the Tribunal found no material irregularity in the Resolution Plan's approval and upheld the Commercial Wisdom of the Committee of Creditors (CoC).Conclusion:The Tribunal dismissed the appeal, concluding that the appellant's claim should be treated as an 'Operational Creditor,' the delay in filing the claim was unjustified, and there were no substantial grounds to interfere with the CoC's decision. The appeal was dismissed with no order as to costs.