Post-resolution plan rent arrears claim against corporate debtor rejected, as s.31(1) approval extinguished unlisted claims.

A rent-related claim sought to be enforced after approval of a resolution plan raised the issue whether such claim survives. Applying SC precedent, the Appellate Tribunal held that upon approval of a resolution plan under s.31(1) IBC, all claims are frozen and binding on the corporate debtor and all stakeholders, and any claim not forming part of the approved plan stands extinguished. Since the claimant's rent claim was not included in the resolution plan, no proceedings could be initiated or continued in respect of it, rendering the claim infructuous; the appeals were therefore dismissed.

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1. ISSUES PRESENTED AND CONSIDERED

(i) Whether, after approval of a resolution plan under Section 31(1) of the Insolvency and Bankruptcy Code, 2016, an appeal seeking enforcement of a rent-related claim (not forming part of the approved resolution plan) can be continued, or whether such claim stands extinguished, rendering the appeal infructuous.

(ii) Whether an appeal should be dismissed for non-prosecution where the appellant and counsel repeatedly remain absent, indicating lack of interest in pursuing the matter.

2. ISSUE-WISE DETAILED ANALYSIS

Issue (i): Effect of approval of resolution plan on pending claims/appeals not forming part of the plan

Legal framework: The Court examined the consequence of approval of a resolution plan by the Adjudicating Authority under Section 31(1) of the Code, as applied through the settled legal position that, upon such approval, claims are "frozen" as provided in the plan and claims not included in the plan stand extinguished and cannot be pursued through continuing proceedings.

Interpretation and reasoning: The Court found that the resolution plan had been approved on the same date as the impugned order, management was handed over to the successful resolution applicant, and the plan was fully implemented with dissolution of the monitoring mechanism. Applying the settled position, the Court held that even assuming the claimant could be treated as an "other stakeholder", any claim not included in the approved plan cannot be pursued, and no proceedings may be initiated or continued in respect of such excluded claim. The Court specifically noted that the rent claim advanced in the appeals was not part of the approved resolution plan, and the appellant also did not challenge the order approving the resolution plan.

Conclusion: Since the asserted claim was not part of the approved resolution plan, it stood extinguished upon plan approval; consequently, continuation of proceedings for that claim was impermissible, and the appeals were dismissed as infructuous.

Issue (ii): Dismissal of appeal for non-prosecution due to non-appearance

Interpretation and reasoning: The Court recorded repeated non-appearance of the appellant despite a pass over and noted that no appearance had been made even on an earlier date. From this, the Court inferred that the appellant was no longer interested in pursuing the appeal.

Conclusion: The appeal was dismissed for non-prosecution due to the appellant's continued absence and failure to pursue the matter.

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