NCLAT dismisses challenge to resolution plan approval after appellant failed to contest non-admission of claim timely

NCLAT dismissed appellant's challenge to resolution plan approval. Appellant failed to contest non-admission of claim by Resolution Professional despite being listed as "not admitted" in four updated creditor lists. No grievance was raised before Adjudicating Authority at relevant time. Resolution plan treated statutory authority claims as nil and was fully implemented by March 2021. NCLAT held appellant cannot raise grievance for non-allocation after failing to agitate claim timely. No error found in Adjudicating Authority's approval order dated 28.11.2019.

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Issues Involved:

1. Non-admission of the appellant's claim by the Resolution Professional.
2. Approval of the Resolution Plan by the Adjudicating Authority.
3. The appellant's challenge to the Resolution Plan approval.
4. Implementation of the Resolution Plan and subsequent legal proceedings.

Detailed Analysis:

1. Non-admission of the appellant's claim by the Resolution Professional:

The appellant, a State Tax Officer, filed a claim amounting to Rs. 510,636,046/- under CST, VAT, and Sales Tax during the Corporate Insolvency Resolution Process (CIRP) of Ricoh India Ltd. The Resolution Professional (RP) acknowledged the claim but did not admit it, citing that the claims were under dispute and pending before various authorities or under appeal. Despite being listed in the updated lists of creditors, the claim remained unadmitted. The appellant argued that they were not informed about the non-admission and believed the claim would be addressed in the CIRP. The appellant contended that the pendency of appeals should not negate their right to have the claim admitted, referencing the Supreme Court's judgment in "State Tax Officer vs. Rainbow Papers Ltd."

2. Approval of the Resolution Plan by the Adjudicating Authority:

The Resolution Plan submitted by Respondent Nos. 2 and 3 was approved by the Committee of Creditors (CoC) with an 84.36% vote share and subsequently by the Adjudicating Authority on 28.11.2019. The plan treated the statutory claims, including the appellant's, as 'nil,' proposing no payments to statutory authorities. The appellant's claim was acknowledged in the plan but not admitted due to its disputed status. The Adjudicating Authority's approval was challenged by the appellant, who argued that their claim was submitted in time and should have been considered.

3. The appellant's challenge to the Resolution Plan approval:

The appellant did not take any steps to challenge the non-admission of their claim before the Adjudicating Authority during the CIRP. The Resolution Professional had published four updated lists of creditors, clearly indicating the non-admission of the appellant's claim. The appellant's failure to act at the relevant time barred them from challenging the Resolution Plan's approval later. The Tribunal emphasized that the appellant's inaction regarding the non-admission of the claim precluded them from contesting the Resolution Plan's approval, which was in compliance with Section 30(2) of the Insolvency and Bankruptcy Code.

4. Implementation of the Resolution Plan and subsequent legal proceedings:

The Resolution Plan approved by the Adjudicating Authority was challenged up to the Supreme Court, which upheld the plan's approval in "Kalpraj Dharamshi & Anr. vs. Kotak Investment Advisors Limited." The Supreme Court emphasized the commercial wisdom of the CoC in approving the plan and noted that the plan had been fully implemented by March 2021. The Tribunal concluded that no grounds existed to interfere with the Adjudicating Authority's order approving the Resolution Plan, as the appellant had not taken timely action to contest the non-admission of their claim. Consequently, the appeal was dismissed, affirming the Resolution Plan's approval and implementation.

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