Classification of claim as financial debt u/s5(8) IBC - RP's creditor list binding; plan upheld, appeal dismissed; DRT execution allowed

Whether the appellant's claim constituted "financial debt" under s.5(8) IBC and thus should have been classified as a financial creditor: the Tribunal held the RP's List of Creditors (which categorized the claim as "other creditors") was binding where the appellant never contested its non-inclusion in a creditor class during CIRP; on that legal basis the treatment in the approved resolution plan did not violate s.30(2) IBC, and the claim was properly treated as other creditor. Distinguishability of precedent cited by appellant: the Canara Bank decision was inapposite because there the creditor had filed as a financial creditor and challenged RP's rejection prior to plan approval; consequently, appeal dismissed, and appellant may nonetheless pursue execution of a DRT decree against the corporate debtor.

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Issues: Whether the Court should interfere with the Adjudicating Authority's order approving the resolution plan and the treatment of a claimant as an "other creditor" (rather than a financial creditor) when the claim was filed and admitted in the category of other creditors and the claimant did not earlier challenge its categorisation before the Adjudicating Authority.

Analysis: The Court examined whether the resolution plan complied with statutory requirements in Section 30(2) of the Insolvency and Bankruptcy Code and whether there were grounds to disregard the commercial wisdom of the Committee of Creditors in approving the plan. The Court noted that the claimant had filed its claim as an other creditor and that the List of Creditors published during CIRP did not include the claimant as a creditor in a class (financial creditors). The claimant's interlocutory application questioned only partial admission of the monetary claim and was not listed or decided prior to approval of the plan. The Court applied the principle of limited judicial scrutiny of a resolution plan, recognising that interference is permissible only where the plan fails to meet the specific requirements of Section 30(2) or otherwise contravenes law. The Court distinguished precedents where the claimant had timely challenged categorisation or where the plan omitted material information affecting a creditor's right to participate in CoC deliberations. In the present facts, the treatment of the claimant as an other creditor in the approved plan was based on the List of Creditors used by the resolution applicant and was not shown to violate Section 30(2) or other statutory requirements. The Court also observed that the claimant remained free to pursue execution of any decree obtained against the borrower outside the CIRP.

Conclusion: The appeal is dismissed and there is no interference with the Adjudicating Authority's order approving the resolution plan; the challenge to the claimant's categorisation as an other creditor is not sustained. The claimant is not prevented from pursuing execution of its decree against the borrower.

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