TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
When case Id is present, search is done only for this
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>NCLAT dismisses operational creditor's Section 9 appeal against corporate debtor with approved resolution plan</h1> <h3>Bharat Pipe Fitting Company Versus Prowess International Private Limited</h3> Bharat Pipe Fitting Company Versus Prowess International Private Limited - TMI Issues Involved:1. Whether the claims not filed with the Resolution Professional before the approval of the resolution plan stand extinguished.2. Whether the Operational Creditor can file a Section 9 application after the approval of the resolution plan.3. Whether the balance confirmations issued by the Corporate Debtor constitute an acknowledgment of debt.4. Whether the resolution plan was approved in conformity with Sections 30 and 31 of the IBC.Summary:Issue 1: Extinguishment of Claims Not Filed Before Resolution Plan ApprovalThe Adjudicating Authority held that the right of the Operational Creditor to seek remedy under Section 9 of the IBC stood extinguished as the claims were not part of the resolution plan. The Tribunal relied on the judgment of the Hon'ble Supreme Court in Ghanshyam Mishra & Sons Pvt. Ltd. v. Edelweiss Asset Reconstruction Company Ltd., which states that all claims not part of the resolution plan stand extinguished upon its approval.Issue 2: Filing Section 9 Application Post-Resolution Plan ApprovalThe Tribunal found that the Operational Creditor did not file their claims before the Resolution Professional during the CIRP and only filed the Section 9 application after the resolution plan was approved. The Tribunal emphasized that allowing a Section 9 application based on an extinguished claim is legally untenable, referencing the clean slate principle from the Hon'ble Supreme Court's judgment in Committee of Creditors of Essar Steel India Ltd v. Satish Kumar Gupta & Ors.Issue 3: Acknowledgment of Debt via Balance ConfirmationsThe Operational Creditor argued that the Corporate Debtor acknowledged the debt through balance confirmations issued from time to time, the last being on 01.04.2018. However, the Corporate Debtor refuted these claims, stating the balance confirmations were forged and that no such person (Sumit Kumar) was employed by them. The Tribunal did not delve into the authenticity of these documents, citing its summary jurisdiction.Issue 4: Conformity with Sections 30 and 31 of the IBCThe Operational Creditor contended that the resolution plan was not approved in conformity with Sections 30 and 31 of the IBC. However, the Tribunal noted that the resolution plan was approved by the Adjudicating Authority and that the Operational Creditor had not challenged this approval. The Tribunal found no evidence that the Appellant's claim was reflected in the Corporate Debtor's records prior to the termination of the CIRP.ConclusionThe Tribunal concluded that no error was committed by the Adjudicating Authority in rejecting the Section 9 application. The appeal was dismissed, and no costs were awarded.
TaxTMI 
TaxTMI 
