Corporate debtor assets omitted from the information memorandum can still vest in the resolution applicant after plan implementation.

Assets of a corporate debtor discovered after approval and implementation of a resolution plan, but not disclosed in the information memorandum, are treated as the corporate debtor's assets where they pre-existed the insolvency commencement date. Regulation 36 requires disclosure of assets and liabilities, but does not expressly require disclosure of contingent assets, and Regulations 37 to 39 do not create a rule that omission from the information memorandum divests title. Applying the resolution-plan framework and the principle that unprovided claims stand extinguished while provided claims are frozen, fixed deposit receipts held as margin money for expired bank guarantees were held to belong to the corporate debtor and, after implementation, to the successful resolution applicant; banks had no right to retain or adjust them absent fraud or deliberate concealment.

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Issues: Whether assets of the corporate debtor discovered after approval of a resolution plan and not disclosed in the information memorandum (specifically fixed deposit receipts held as margin money) belong to the successful resolution applicant who implemented the plan or to the erstwhile committee of creditors.

Analysis: Regulation 36 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 requires the information memorandum to contain assets and liabilities including contingent liabilities, but does not expressly require disclosure of contingent assets. Regulations 37-39 set out the permissible content and obligations in a resolution plan and the approval process, without imposing a rule that assets omitted from the information memorandum vest outside the corporate debtor post-approval. The decision in Ghanashyam Mishra & Sons Pvt Ltd v. Edelweiss ARC establishes that claims not part of an approved resolution plan stand extinguished and the claims provided in the resolution plan stand frozen. Prior appellate authority recognises that margin money deposited as fixed deposits reverts to the borrower if bank guarantees expire uninvoked. Applying these principles, assets of the corporate debtor that pre-existed the insolvency commencement date but were not included in the information memorandum (such as fixed deposit receipts held as margin money against expired bank guarantees) are properly characterised as assets of the corporate debtor rather than property of the banks that had adjusted or retained them post-approval. The absence of disclosure in the information memorandum does not, by itself, operate to divest the successful resolution applicant of title in assets of the corporate debtor acquired upon implementation of the approved resolution plan. Fraudulent conduct or deliberate concealment to prejudice creditors remains actionable and will not sustain retention of such assets by third parties.

Conclusion: Assets of the corporate debtor discovered after approval and implementation of the resolution plan, which were created by the corporate debtor (including fixed deposit receipts held as margin money for bank guarantees that have expired), belong to the corporate debtor and, following implementation of the resolution plan, to the successful resolution applicant; respondent banks have no right to adjust or retain those amounts post-implementation. The impugned order is set aside and the matter is remanded to the Adjudicating Authority for further proceedings consistent with this conclusion.

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