Resolution plan finality under insolvency law extinguishes unfiled pre-CIRP claims, while limited security deposit relief may still be granted.

An operational creditor that failed to submit its pre-CIRP claim within the claim period could not challenge resolution plan approval on the basis of inadequate payment or exclusion from the CIRP process, because claims not lodged and not incorporated in the approved plan stand extinguished. Electricity dues were treated as pre-CIRP liabilities required to be pursued through the IBC mechanism, and Section 238 of the IBC prevailed over inconsistent rights under the Electricity Act and supply code. The resolution plan was therefore sustained, with only limited relief granted by directing payment of the forfeited security deposit and restoration of the electricity connection on that basis.

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Issues: (i) whether an operational creditor that did not file its claim during the CIRP could challenge approval of the resolution plan on the ground of inadequate payment and non-inclusion in the CoC process; (ii) whether electricity dues and the connected security deposit claim survived approval of the resolution plan in view of the Insolvency and Bankruptcy Code overriding the Electricity Act; (iii) whether limited relief could still be granted in relation to the forfeited security deposit.

Issue (i): whether an operational creditor that did not file its claim during the CIRP could challenge approval of the resolution plan on the ground of inadequate payment and non-inclusion in the CoC process.

Analysis: The claim asserted was a pre-CIRP operational debt, but no claim was submitted to the resolution professional within the claim period. The approval process was completed on the basis of claims actually lodged and considered in the CIRP, and the resolution plan had already been approved and implemented. The governing scheme of Sections 30 and 31 of the Insolvency and Bankruptcy Code, 2016 makes an approved resolution plan binding on stakeholders, and claims not forming part of the approved plan stand extinguished. The operational creditor also could not insist on notice of the CoC meeting where its admitted dues did not cross the statutory threshold.

Conclusion: The challenge to the resolution plan on these grounds was rejected and the creditor was not permitted to raise a belated claim.

Issue (ii): whether electricity dues and the connected security deposit claim survived approval of the resolution plan in view of the Insolvency and Bankruptcy Code overriding the Electricity Act.

Analysis: The plan proposed treatment of operational creditors and statutory liabilities on a pro rata basis, which fell within the commercial wisdom of the CoC. The non obstante clause in Section 238 of the Insolvency and Bankruptcy Code, 2016 prevailed over inconsistent requirements under the Electricity Act, 2003 and the supply code. The tribunal treated the electricity dues as pre-CIRP dues that had to be asserted through the CIRP mechanism, and not as a separate enforceable claim after plan approval. The tribunal also followed the settled principle that a successful resolution applicant is not to be saddled with unresolved past liabilities beyond the approved plan.

Conclusion: The objection based on electricity law and the demand for full payment of electricity dues was rejected.

Issue (iii): whether limited relief could still be granted in relation to the forfeited security deposit.

Analysis: While the appeal failed on the principal challenge, the successful resolution applicant expressed willingness to pay the forfeited security deposit and sought restoration of the electricity connection upon such payment. That limited request was accepted, and a direction was issued accordingly.

Conclusion: Limited relief was granted by directing payment of the security deposit to the appellant.

Final Conclusion: The resolution plan approval was sustained, the belated operational claim was not entertained, and only the limited direction concerning the security deposit was allowed to stand.

Ratio Decidendi: Once a resolution plan is approved under Section 31 of the Insolvency and Bankruptcy Code, 2016, claims not lodged and not forming part of the plan stand extinguished, and inconsistent rights under other laws cannot be enforced against the resolution process.

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