TaxTMI 
TaxTMI 
2024 (12) TMI 1151
X X X X Extracts X X X X
X X X X Extracts X X X X
....cating Authority (National Company Law Tribunal, New Delhi Bench-III) in I.A. Nos. 2260 of 2022 and I.A. No. 2943 of 2022 in C.P. (IB) No. 1554 of 2017. By the impugned orders, the Adjudicating Authority has admitted both the I.A.s claiming gratuity dues to the extent of admitted claims deserves to be paid. Aggrieved by the impugned orders, two separate appeals have been filed by the new management of the Corporate Debtor which is the common Appellant in both appeals. 2. I.A. Nos. 2260 of 2022 has been filed by Mr Ravindra Athavale on behalf of himself and 17 other similarly placed ex-employees while I.A. No. 2943 of 2022 has been filed by Mr. D. Namdeo Karanda on behalf of himself and 03 other similarly placed ex-employees. The surrounding facts, grounds raised, averments and pleadings made in both the IAs are largely identical including the prayers of the Respondents which are overlapping and common, hence, for reasons of convenience, we propose to take up IA No. 2260 for our consideration in deciding both the matters. 3. The salient dates and events in respect of the present case which are relevant to be noticed for consideration of the appeal are as below: The Co....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t finding sufficient grounds to interfere with the plan, the Appellate Tribunal's decision was subsequently affirmed by the Hon'ble Supreme Court. 5. It was also vehemently contended that the Adjudicating Authority had erroneously passed the impugned order on grounds of non-implementation of the resolution plan at a time when it has been nearly five years since the resolution plan of the SRA was approved and more than three years since the resolution plan stood implemented. The SRA had distributed all amounts proposed to be paid under the plan to all stakeholders, hence, all past liabilities of the Corporate Debtor stood extinguished. The Adjudicating Authority had therefore grossly erred in subscribing to the misconceived contention of the Respondent that there has been non-implementation of resolution plan. The Adjudicating Authority in the impugned order dated 19.01.2024 by directing the payment of gratuity to the Respondent had erroneously ended up reviewing its own order of 16.04.2019 which is impermissible in law. The plan approval order having once attained finality, it could not have been modified or reviewed by the Adjudicating Authority at its own level at such a belat....
X X X X Extracts X X X X
X X X X Extracts X X X X
....include amount payable towards gratuity. A lot of emphasis was placed on reading Clause 3.2 of the plan which provided that the total liability against gratuity was Rs 2.56 Cr. and that statutory liabilities towards workmen and employees will be paid in full. Clause 3.3 of the resolution plan recorded that gratuity would be paid as and when due, in accordance with applicable law, which will be full and final amount and one-time settlement of all workmen and employees. Argument was advanced that Respondents were to be paid in terms of Clause 3.3 of the resolution plan which had to be read alongwith with provisions of the Payment of Gratuity Act, 1972. However, the resolution plan had wrongly divided the employees and workmen into two categories viz. those who were on the payroll of the Corporate Debtor on 06.02.2018 and those who were not on payroll on that date. This discrimination could not have been made since all such workmen/employees who were eligible within the parameters specified in Section 4 of the Payment of Gratuity Act, 1972 were all entitled to the payment of gratuity dues. Hence, the clauses of the resolution plan which were not in accordance with applicable law have ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....solution plan, these Clauses cannot be read in isolation of the list of workmen and employees as placed at Annexure-7 of the resolution plan which was an integral adjunct to the resolution plan. The list at Annexure-7 clarifies that the workmen and employees who were to be paid in full was in respect of only those employees and workmen who were on the payroll as on the date of commencement of CIRP of the Corporate Debtor i.e. on 06.02.2018. It was emphatically asserted that the Respondent cannot read Clauses of the plan in a selective manner in isolation of Annexure-7. Annexure-7 to the resolution plan was an integral part of the resolution plan which clearly provided that payments were to be made only to those workmen and employees specified in Annexure-7. The copy of the list of the employees of the Corporate Debtor who were on the payroll as on 06.02.2018 and had submitted their claims were reflected at Annexure-7 of the resolution plan and these employees had already been paid Rs 4.83 Cr. against their admitted claim of Rs 6.29 Cr. Thus, the resolution plan already stood implemented. 13. If any stakeholder was aggrieved by the plan approval order, it ought to have filed an o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ction to entertain the present Application. It is observed that Regulation 39 (9) of IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 ('CIRP Regulations') allow a creditor, who is aggrieved by non - implementation of a Resolution Plan to seek directions of this Tribunal. The above provision read with the inherent powers of NCLT u/ s 60(5) of the Code confers jurisdiction on this Tribunal to entertain all applications relating to the implementation of Resolution Plan including the present Application. 17....While sub-clauses 3.1 and 3.2 state that full admitted liabilities to the employees would be paid by the Resolution Applicants, sub clauses 3.3 to 3.5 give an impression that payment to workmen and employees is limited to those whose names appear in Annexure 7 i.e., the employees and workmen who were on the rolls as on 06.02.2018. It is pertinent to observe that there is no specific provision with respect to non-payment of admitted claims to the employees and workmen including the Applicants who were on the payroll before 06.02.2018. 18. The Respondent No. I has failed to substantiate that the Applicants are not entitled for a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....out under Section 30(2) of the IBC and also that the Resolution Plan can be carried out efficiently and satisfactorily as per Section 31(1) of the IBC. 19. Approval of a resolution plan by the Adjudicating Authority is statutorily recognized as a closure to all claims that creditors or other relevant entities may have against a Corporate Debtor unless it is challenged within the statutorily prescribed time-limit. It is significant to note that once the Adjudicating Authority approves the Resolution Plan, the plan becomes binding on Corporate Debtor, its employees, members, creditors, guarantors and other stakeholders involved in the resolution Plan. The plan can be challenged before the Appellate Tribunal by an aggrieved party within 30 plus 15 days and the decision of the Appellate Tribunal can thereafter be challenged before the Hon'ble Apex Court within 45 plus 15 days. In the present case, it remains an undisputed fact that the resolution plan was duly approved by the CoC with 77.8% voting share and approved by the Adjudicating Authority on 16.04.2019 and thereafter validated both by this Tribunal and the Hon'ble Apex Court on challenge. 20. The Adjudicating Authority in ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e Adjudicating Authority/Appellate Tribunal can now be decided by an appropriate forum in terms of Section 60(6) of the Code, also militates against the rationale of Section 31 of the Code. A successful resolution applicant cannot suddenly be faced with "undecided" claims after the resolution plan submitted by him has been accepted as this would amount to a hydra head popping up which would throw into uncertainty amounts payable by a prospective resolution applicant who successfully takes over the business of the corporate debtor. All claims must be submitted to and decided by the resolution professional so that a prospective resolution applicant knows exactly what has to be paid in order that it may then take over and run the business of the corporate debtor. This the successful resolution applicant does on a fresh slate, as has been pointed out by us hereinabove....." ( Emphasis supplied ) This judgment clearly held that SRA cannot be left open to entertain claims which have not been factored in the resolution plan. Therefore, no such claims which are not part of the plan can be enforced against the SRA after the approval of a resolution plan. No proceeding can be ini....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... as referred to in subsection (2) of Section 30 is, that after the approval of the resolution plan, no surprise claims should be flung on the successful resolution applicant. The dominant purpose is, that he should start with fresh slate on the basis of the resolution plan approved. 86. As discussed hereinabove, one of the principal objects of I&B Code is, providing for revival of the Corporate Debtor and to make it a going concern. I&B Code is a complete Code in itself. Upon admission of petition under Section 7, there are various important duties and functions entrusted to RP and CoC. RP is required to issue a publication inviting claims from all the stakeholders. He is required to collate the said information and submit necessary details in the information memorandum. The resolution applicants submit their plans on the basis of the details provided in the information memorandum. The resolution plans undergo deep scrutiny by RP as well as CoC. In the negotiations that may be held between CoC and the resolution applicant, various modifications may be made so as to ensure, that while paying part of the dues of financial creditors as well as operational creditors and other ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s would result in the reopening of the whole issue, particularly as there may be other similar person who may jump onto the bandwagon. As described above, in Essar Steel, the Court cautioned against allowing claims after the resolution plan has been accepted by the COC. 22. We have thus come to the conclusion that the NCLAT's impugned judgment cannot be faulted to reopen the chapter at the behest of the appellant. We find it difficult to unleash the hydra-headed monster of undecided claims on the resolution applicant." ( Emphasis supplied ) 26. In the present case, the plan having been approved by the Adjudicating Authority on 16.04.2019, the stage to challenge the plan approval came to an end long time back. Therefore, the Resolution Plan as approved by the Adjudicating Authority has become binding on the Corporate Debtor, creditors, guarantors and other stakeholders involved in the Resolution Plan. Having noticed the contours of IBC and settled jurisprudence, the derivative is crystal clear that no surprise claims should be flung on the SRA in a belated manner. Allowing any such recourse would amount to re-opening of the resolution plan which would run contra....