NCLAT dismisses creditor appeal seeking different payment method than approved resolution plan for pre-CIRP dues

NCLAT Principal Bench dismissed appeal where creditor sought different payment method for pre-CIRP dues than specified in approved resolution plan. Corporate debtor's insolvency commenced 18.05.2017, resolution plan approved 12.12.2017 providing payment of appellant's pre-CIRP dues in 8 quarterly instalments from June 2022-March 2024. Tribunal held payments made post-CIRP commencement could only be appropriated towards current CIRP costs, not pre-CIRP dues. Resolution plan terms were binding on all stakeholders including appellant who hadn't filed claims during CIRP. Any deviation from resolution plan's payment schedule would constitute infraction and cannot be permitted.

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Issues Involved:
1. Entitlement of the Appellant to the payment of pre-CIRP dues in a manner different from the resolution plan.
2. Appropriation of payments made post-CIRP commencement towards pre-CIRP or CIRP dues.
3. Validity of LPS levied on pre-CIRP dues.
4. Reconciliation of dues between the Appellant and the Respondent.

Issue-wise Detailed Analysis:

1. Entitlement of the Appellant to the payment of pre-CIRP dues in a manner different from the resolution plan:
The main issue was whether the Appellant was entitled to receive payment of its pre-CIRP dues from the Respondent in a manner different from what was provided in the resolution plan approved on 12.12.2017. The resolution plan stipulated that pre-CIRP dues were to be paid in 8 quarterly installments commencing from June 2022 to March 2024. The Tribunal held that the Appellant could not insist on a different manner of payment, as the resolution plan had attained finality and was binding on all stakeholders. The Corporate Debtor's voluntary payment of pre-CIRP dues in May-June 2017 did not alter the binding nature of the resolution plan.

2. Appropriation of payments made post-CIRP commencement towards pre-CIRP or CIRP dues:
The Tribunal noted that any payment made by the Corporate Debtor after the insolvency commencement date (18.05.2017) could not be appropriated towards pre-CIRP dues. Instead, such payments had to be appropriated towards CIRP dues arising during the CIRP period. The Tribunal emphasized that this was in line with the moratorium provisions under Section 14 of the IBC, which prohibits the alienation of the Corporate Debtor's assets during the CIRP. Therefore, the payments made by the Corporate Debtor after the insolvency commencement date were correctly appropriated towards CIRP dues.

3. Validity of LPS levied on pre-CIRP dues:
The Tribunal upheld the Adjudicating Authority's finding that no LPS (Late Payment Surcharge) was due and payable up to the date of the approval of the resolution plan in respect of pre-CIRP dues. LPS could only be levied in accordance with the payment structure and timeline set out in the resolution plan. The Adjudicating Authority rightly directed that LPS should be computed in relation to pre-CIRP dues to the extent such dues were not paid in accordance with the approved resolution plan.

4. Reconciliation of dues between the Appellant and the Respondent:
The Tribunal affirmed the directions of the Adjudicating Authority for the Appellant and Respondent to reconcile their dues. The Tribunal emphasized that the Respondent must pay the legitimate electricity dues to enjoy the benefit of electricity supply. The reconciliation of accounts and determination of the quantum of electricity dues payable was to be completed within two weeks from the date of the Tribunal's order. Any dues determined were to be paid by the Respondent within 30 days from the date of determination. In the event of non-payment, the Appellant was granted the liberty to take legal recourse.

Conclusion:
The Tribunal dismissed the appeals, upholding the Adjudicating Authority's order that payments made post-CIRP commencement should be appropriated towards CIRP dues, and pre-CIRP dues should be paid as per the resolution plan. The Tribunal also affirmed the directions for reconciliation of dues and payment of outstanding amounts by the Respondent.

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