2025 (11) TMI 1344 - AT - IBC

Appeal Rejected: No Proof of Financial Debt under Section 5(8)(f) IBC, Resolution Plan Stands Final

DR. ANUPAM JAIN Versus CS Chhaya Gupta and M/s. Devvrat Developers Pvt Ltd. (SRA of JSM Devcons India Pvt Ltd), Mumbai

NCLAT dismissed the appeal, upholding the order rejecting the appellant's claim as a financial creditor. It held that the appellant failed to prove any ... Seeking recognition of his claim as a Financial Creditor - Appellant has established any valid and verifiable financial disbursement so as to qualify as a Financial Creditor under Section 5(8)(f) of the IBC or not - Appellant’s claim can be entertained post- approval of the Resolution Plan or not - HELD THAT:- The Appellant’s claim hinges on alleged payments of ₹ 14,50,000/- by cheque and ₹ 7,69,983/- in cash. However, no documentary proof of cheque clearance, bank statement, or receipt has been filed. It is noted that the burden of proof lies upon the claimant to establish financial disbursement. The Resolution Professional’s duty is only to collate claims, not to adjudicate them beyond the documentary record. With respect to allegations of collusion and not coming with clean hands we note that the Respondent’s assertion regarding collusion with the absconding management finds support in the factual matrix. The Appellant’s unexplained possession of a flat in an abandoned project, coupled with absence of consideration paid, lends credence to the finding of unauthorized occupation. On the issue of the finality of the resolution plan we note that the Resolution Plan was approved by the NCLT on 05.04.2024, and the statutory time period for challenge under Section 61(2) of the IBC expired long before the present application was filed on 04.09.2024. It is also noted that from the materials placed on record that the Appellant’s name being shown in the list of claimants with “0% claim admitted” does not amount to admission, but rather indicates that the Resolution Professional had rejected the claim after due verification. In Essar Steel [2019 (11) TMI 731 - SUPREME COURT] and RPS Infrastructure [2023 (9) TMI 516 - SUPREME COURT], the Hon’ble Supreme Court held that claims not admitted prior to approval of the Resolution Plan cannot be reopened subsequently, as it would disturb the finality of the resolution process and the commercial wisdom of the CoC. The judgements of this Tribunal in Dipco [2020 (1) TMI 1743 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI] and Umesh Kumar [2024 (2) TMI 735 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, PRINCIPAL BENCH, NEW DELHI - LB] do not support the cause of the appellant as the facts in the present case are distinguishable and clearly allow us to come to a conclusion that there is no claim and even if it is so, it is filed belatedly without documentary proof and without evidence. Therefore, the Appellant’s attempt to revive his claim post-approval of the plan is legally untenable and contrary to settled jurisprudence. There are no error or illegality in the Impugned Order dated 11.11.2024 passed by the Adjudicating Authority - appeal dismissed. ISSUES PRESENTED AND CONSIDERED 1. Whether the claimant established valid and verifiable financial disbursement so as to qualify as a Financial Creditor under Section 5(8)(f) of the Code. 2. Whether the Adjudicating Authority erred in dismissing the claimant's application under Rule 11 of the NCLT Rules seeking recognition/relief despite earlier collated claim entries and material filed during CIRP. 3. Whether the claimant's claim can be entertained after approval and finality of the Resolution Plan, including whether post-plan or 'hydra-headed' claims are permissible. 4. Whether allegations of misrepresentation/unclean hands and collusion with erstwhile management preclude equitable relief and affect admissibility of the claim. ISSUE-WISE DETAILED ANALYSIS Issue 1: Proof of Financial Disbursement and Qualification as Financial Creditor Legal framework: Qualification as a Financial Creditor requires demonstration of financial disbursement as defined under Section 5(8)(f) of the Code; the burden of proof to establish such disbursement lies on the claimant. Precedent treatment: The Tribunal referred to established principle that the claimants must prove disbursement and that the Resolution Professional's role is to collate claims on documentary basis, not to adjudicate beyond available evidence. Interpretation and reasoning: The claimant alleged payments by cheques and cash but failed to produce conclusive documentary proof (cleared cheque entries, verifiable bank statements, receipts). Registered Agreement recorded 'without possession', contradicting possession letters relied upon by the claimant. Alleged cash payments coinciding with demonetisation period and undated NOC and inconsistent claim forms undermined credibility. The Tribunal considered these contradictions and lack of objective proof dispositive. Ratio vs. Obiter: Ratio - claimant's burden to prove disbursement was not discharged; lack of documentary proof justifies non-admission of claim. Observational/obiter - mention of demonetisation timing and specific documentary inconsistencies supporting credibility assessment. Conclusion: Claimant failed to prove valid financial disbursement and therefore did not qualify as a Financial Creditor under Section 5(8)(f). Issue 2: Validity of NCLT's Dismissal of the Application under Rule 11 Legal framework: Adjudicating Authority's powers under Rule 11 are bounded by the Code and principles of natural justice; the Tribunal may interfere only if the Adjudicating Authority's order is arbitrary, perverse, or contrary to settled legal principles. The Resolution Professional's verification and the admitted/rejected status of claims on the IBBI portal are material. Precedent treatment: The Tribunal acknowledged its earlier statements that an Adjudicating Authority should not re-adjudicate collation decisions unless tainted by arbitrariness, but emphasised distinguishability where documentary proof is absent and the RP's records show non-admission. Interpretation and reasoning: The Adjudicating Authority dismissed the applications on ground of non-disclosure/contradictory material; the RP's records repeatedly displayed a zero admitted amount and zero voting percentage for the claimant. Given absence of credible evidence and internal inconsistencies in claimant's pleadings, the Tribunal found no arbitrariness in the Authority's dismissal and that the Authority did not usurp RP's administrative role. Ratio vs. Obiter: Ratio - where claim lacks documentary substantiation and RP's verified records reflect non-admission, the Adjudicating Authority's dismissal is not perverse or arbitrary. Obiter - observations on the limits of Rule 11 and interplay between RP's collation and judicial review. Conclusion: The Adjudicating Authority did not err in dismissing the application under Rule 11; dismissal upheld. Issue 3: Entertaining Claims Post-Approval of the Resolution Plan Legal framework: Finality of an approved Resolution Plan is a core principle; statutory timelines for challenging approval are limited and post-approval reopening of claims undermines commercial certainty and the CoC's commercial wisdom. Precedent treatment: The Tribunal relied on higher court principles protecting finality of plans and restricting post-plan claims that would amount to 'hydra-headed' re-litigation of claims. Interpretation and reasoning: The Resolution Plan was approved well before the present application and the statutory window to challenge had expired. The claimant's application was filed after plan approval and sought relief that, if entertained, would reopen settled distributions and possession arrangements. The RP's records indicating non-admission and the plan's provisions for treatment of homebuyers reinforced the conclusion that fresh claims could not be entertained at this stage. Ratio vs. Obiter: Ratio - once a Resolution Plan attains finality (statutory challenge period lapsed), belated or post-plan claims that were not crystallized during CIRP cannot be admitted so as to disturb the plan. Obiter - comments on the need to prevent 'hydra-headed' claims post-plan. Conclusion: Claim cannot be entertained after approval of the Resolution Plan; the application is barred by finality principles. Issue 4: Effect of Misrepresentation/Unclean Hands and Allegations of Collusion Legal framework: Equitable doctrines deny relief to parties who approach the forum with unclean hands or who conceal material facts; credibility and bona fides are relevant to discretion and admissibility. Precedent treatment: The Tribunal applied established equitable principles that misrepresentation or concealment disentitle a claimant to relief and support dismissal where factual matrix indicates bad faith or collusion. Interpretation and reasoning: Inconsistent averments (contradictory claim form entries, undated/contradictory documents, absence of bank proof), unexplained possession in an abandoned project, and failure to respond adequately to RP's repeated queries supported findings of lack of clean hands and possible collusion with erstwhile management. Those findings informed the credibility assessment and justified denial of relief. Ratio vs. Obiter: Ratio - material misrepresentations and failure to come with clean hands negate entitlement to equitable relief in the insolvency context. Obiter - factual observations on patterns suggestive of collusion in abandoned projects. Conclusion: Allegations and supporting record of misrepresentation/unclean hands justify preclusion of relief; claimant's credibility defects are material and fatal to the claim. Cross-References and Synthesis All four issues interrelate: failure to prove disbursement (Issue 1) underpins the permissibility of the NCLT's dismissal (Issue 2), reinforces the finalitybar to post-plan claims (Issue 3), and dovetails with equitable denial of relief where misrepresentation is established (Issue 4). The Tribunal treated RP's verified records, statutory timelines, and equities collectively to affirm the impugned order. Final Conclusion The Tribunal concluded that the claimant failed to establish financial disbursement, the Adjudicating Authority's dismissal was not erroneous or arbitrary, the Resolution Plan's finality precludes belated claims, and misrepresentation/unclean hands preclude equitable relief; the impugned order was therefore affirmed and the appeal dismissed.