TaxTMI 
TaxTMI 
2022 (10) TMI 65
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.... Brief Facts: 2. The Appellant had filed an `Application', before the 'Adjudicating Authority' under Section 61(1) of the I & B Code, 2016, read with Rule 11 of the NCLT Rules, 2016, seeking the following reliefs: "A. Set aside the 'Impugned Order' dated 10.06.2022, passed by the 'Adjudicating Authority' in I.A/975(CHE)/2021 in CP/280/IB/2018 and consequently grant appropriate remedy to the Appellant. B. Respondent No. 1 to verify and settle the unresolved claim under the caption under verification and direct the 'Respondent No. 2' to consequently pass appropriate direction on the claim of the Appellant. C. Pass any such other order as may be deemed necessary in the interest of justice." 3. It is seen that the 'Resolution Plan' was approved by the 'Adjudicating Authority' on 20.01.2020. From the 'Impugned Order', it is evident that one `Contingency Fund' of Rs. 7 Crore was kept in the 'Resolution Plan' `for a period of 6 months from the Date of Approval of the 'Resolution Plan' which expired, on 20.07.2020 and dismissed the `Application', which was filed before the 'Adjudicating Authority', only on 29.07.2021. 4. It is further ascertained that ....
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....and Bankruptcy Board of India' (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 mandates preparation of Information Memorandum. Such an Information Memorandum having been preferred, the reasoning of the 'Resolution Professional' expressing inability to verify the `Claim' cannot be cited as `valid reasons' for `denying the legitimate dues of the Appellant'. 11. The Learned Counsel for the Appellant has assailed the 'Impugned Order' dated 10.06.2022, stating that when the Contingency Fund was available, the 'Adjudicating Authority' ought to have directed the 'Resolution Professional' to accept the `Claims' of the 'Appellant'. 12. Hence, this `Appeal'. Respondent's Submissions : 13. The Learned Counsel for the 1st Respondent stated that the 'Resolution Professional' of the 'Corporate Debtor' was appointed vide order dated 13.12.2018. The 'Corporate Insolvency Resolution Process' of the 'Corporate Debtor' had commenced on 01.11.2018 and completed on 20.01.2020 with the 'Resolution Plan', submitted by the '2nd Respondent' getting approved by the 'Adjudicating Authority'. The 'Monitoring Committee' was formed for ensuring the successful implementation o....
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.... on the date of approval of the 'Resolution Plan' by the 'Adjudicating Authority', all `Claims', which are not a part of the 'Resolution Plan', shall stand extinguished and no person shall be entitled to initiate proceedings in respect of a claim which is not a part of the 'Resolution Plan'. Relevant portion of the Judgment is extracted hereinbelow: "58. Bare reading of Section31 of the I &B Code would also make it abundantly clear, that one the resolution plan is approved by the Adjudicating Authority, after it is satisfied, that the resolution plan as approved by the CoC meets the requirements as referred to in sub-section (2) of Section 30, it shall be binding on the Corporate Debtor and its employees, members, creditors, guarantors and other stakeholders. Such a provision is necessitated since one of the dominant purposes of the I & B Code is, revival of the Corporate Debtor and to make it a running concern. 61.......The legislative intent of making the resolution plan binding on all the stake-holders after it gets the seal of approval from the Adjudicating Authority upon its satisfaction, that the resolution plan approved by the CoC meets the requirements ....
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....Resolution Plan'. All monies payable to all the `Creditors' were paid and 'no monies due' under the 'Resolution Plan' are pending. In other words, there is no money available or due to be paid by the 'Successful Resolution Applicant', under the 'Resolution Plan', which can be utilised to entertain the belated unverified claims of the 'Appellant'. For this reason alone, the `Appeal' is infructuous, ex facie, and deserves to be dismissed. Also, the 'Appellant' has been very late in filing the `Claims' as well as this `Appeal' is also badly delayed. 22. The Learned Counsel for the 2nd Respondent submitted that the 'Corporate Insolvency Resolution Process' had commenced on 01.11.2018. As per `Regulation 12 of the CIRP Regulations', the outer limit for filing of `claims' with the 'Resolution Professional' is 90 days from the 'Corporate Insolvency Resolution Process' commencement date with all documentary evidence. The claim was filed before the 'Resolution Professional' without sufficient documentation to establish his claims. 23. The Learned Counsel for 2nd Respondent brought out that this `Tribunal' in Mukul Kumar vs M/s RPS Infrastructure Ltd passed in Company Appeal (AT) (Inso....
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....accounts of the operational creditor confirming that there is no payment of an unpaid operational debt 1[by the corporate debtor, if available;] 2[(d) a copy of any record with information utility confirming that there is no payment of an unpaid operational debt by the corporate debtor, if available; and (e) any other proof confirming that there is no payment of any unpaid operational debt by the corporate debtor or such other information, as may be prescribed." (b) This `Tribunal' has noted that during the `pleadings and averments' made by the Rs. 1st Respondent' that the 'Appellant' had failed to furnish / supply the required documents, to establish his claims, as requested by the '1st Respondent'. The approval of a 'Resolution Plan' gives the 'Corporate Debtor' a fresh start and resolves, once and for all, the financial position of the 'Corporate Debtor' as it stood on the day of approval of the 'Resolution Plan', in order to allow it to have a clean slate for the future. (c) Section 31 of I & B Code, 2016, as it stands after 2019 amendment, is as follows- Section 31 I & B Code 2016: Approval of Resolution Plan. "31. (1) If the Adjudicating Au....
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.... "58. Bare reading of Section 31 of the I&B Code would also make it abundantly clear, that once the resolution plan is approved by the Adjudicating Authority, after it is satisfied, that the resolution plan as approved by CoC meets the requirements as referred to in subsection (2) of Section 30, it shall be binding on the Corporate Debtor and its employees, members, creditors, guarantors and other stakeholders. Such a provision is necessitated since one of the dominant purposes of the I&B Code is, revival of the Corporate Debtor and to make it a running concern. 60. Perusal of Section 29 of the I&B Code read with Regulation 36 of the Regulations would reveal, that it requires RP to prepare an information memorandum containing various details of the Corporate Debtor so that the resolution applicant submitting a plan is aware of the assets and liabilities of the Corporate Debtor, including the details about the creditors and the amounts claimed by them. It is also required to contain the details of guarantees that have been given in relation to the debts of the corporate debtor by other persons. The details with regard to all material litigation and an ongoing invest....
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....e entitled to initiate or continue any proceedings in respect to a claim, which is not part of the resolution plan; ii. 2019 amendment to Section 31 of the I&B Code is clarificatory and declaratory in nature and therefore will be effective from the date on which I&B Code has come into effect; iii. Consequently, all the dues including the statutory dues owed to the Central Government, any State Government or any local authority, if not part of the resolution plan, shall stand extinguished and no proceedings in respect of such dues for the period prior to the date on which the Adjudicating Authority grants its approval under Section 31 could be continued." (e) This `Tribunal'[ also would like to consider its own earlier Judgment in case of Santanu T. Ray vs Tata Capital Financial Services in CA(AT)No. 951 of 2021 on the same issue: "Para 12(vii) The Regulation 12(2) contemplates a scenario where claim is not filed within the time stipulated in the public announcement. It is in this scenario this regulation permits filing of the claim on or before 90th day of insolvency commencement date. Prior to amendment, the extended term to file claim was till the ap....
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....ant' on the basis that claims are `unsupported' and `documentary evidence' furnished by the 'Appellant' were not proper and do not find any error in the 'Impugned Order' on this issue. Issue No. (II) Whether the relief sought by the 'Appellant' for the payment of Rs. 18,30,894/- towards claim from the `Contingency Fund' admissible? (a) `Contingency Fund' means a provision created in a 'Resolution Plan' to avoid `inevitable losses of creditors'. It is made to include `Liabilities' arising which are `uncertain' and `inevitable in nature' or pending under `verification'. (b) The I & B Code 2016, provides for collective Resolution Mechanism and is a Time Bound 'Corporate Insolvency Resolution Process'. No wonder, `Speed' is the essence of I & B Code 2016. The Code 2016 is enacted for the sole purpose of reviving the 'Corporate Debtor' and help it, to get back on its Feet, and was not meant for recovery enforcement purpose/procedure. Maintaining a `Claim' does not necessitate or carry any nexus between the commission of a `Default' and the submission of a `Claim'. A Creditor can exercise his right to payment or to remedy for the matured, unmatured, secured, unsecured, Disputed ....
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....n' "A resolution plan shall provide for the measures, as may be necessary, for insolvency resolution of the corporate debtor for maximization of value of its assets, including but not limited to the following: - (a) transfer of all or part of the assets of the corporate debtor to one or more persons; (b) sale of all or part of the assets whether subject to any security interest or not; (c) the substantial acquisition of shares of the corporate debtor, or the merger or consolidation of the corporate debtor with one or more persons; (d) satisfaction or modification of any security interest; (e) curing or waiving of any breach of the terms of any debt due from the corporate debtor; (f) reduction in the amount payable to the creditors; (g) extension of a maturity date or a change in interest rate or other terms of a debt due from the corporate debtor; (h) amendment of the constitutional documents of the corporate debtor; (i) issuance of securities of the corporate debtor, for cash, property, securities, or in exchange for claims or interests, or other appropriate purpose; (j) change in po....