2021 (7) TMI 1420 - AT - Insolvency and Bankruptcy

Claim of outstanding GST dues - Appellant submits that the amount approved for the Appellant Operational Creditor is too insufficient considering the claim which was outstanding - HELD THAT - Hon ble Supreme Court in Ghanashyam Mishra and Sons Private Limited vs. Edelweiss Asset Reconstruction Company Limited . Others 2021 (4) TMI 613 - SUPREME COURT has held that once a resolution plan is duly approved by the Adjudicating Authority under subsection (1) of Section 31, the claims as provided in the resolution plan shall stand frozen and will be binding on the Corporate Debtor and its employees, members, creditors, including the Central Government, any State Government or any local authority, guarantors and other stakeholders. Considering the judgment of the Hon ble Supreme Court, the Resolution Plan approved is binding on the Central Government, State Government, any local authority, Guarantors and other stakeholders. Sufficiency or insufficiency of the amount is matter of Commercial Decision of the Committee of Creditors. It would not be appropriate on our part to interfere in the same. As such, the appeal does not make out any ground to admit the same. There are no reason to admit the Appeal. The Appeal is disposed of as not admitted.

Summary

Issues:
Challenge to Resolution Plan Approval based on insufficient provision for outstanding GST dues recoverable from Corporate Debtor.

Analysis:
The appeal was filed against an order approving a Resolution Plan by the Adjudicating Authority in a Corporate Insolvency Resolution Process (CIRP). The Appellant, a creditor for CGST, claimed outstanding GST dues from the Corporate Debtor. The claim was partially admitted but the Resolution Plan provided only a minimal amount for settlement, which the Appellant argued was insufficient given the outstanding claim amount. The Appellant contended that the approved Resolution Plan needed interference due to the inadequate provision for their dues.

The Tribunal considered the arguments presented and referred to a judgment by the Supreme Court in a similar context. The Supreme Court's judgment stated that once a Resolution Plan is approved, the claims provided in the plan are binding and any claims not included in the plan stand extinguished. The Tribunal emphasized that the Resolution Plan, once approved, is binding on various stakeholders, including the Central Government and other creditors. The Tribunal highlighted that the sufficiency or insufficiency of the amount provided in the Resolution Plan is a commercial decision of the Committee of Creditors, and it is not within their purview to interfere unless there are valid grounds.

Based on the Supreme Court's judgment and the principles outlined, the Tribunal concluded that the approved Resolution Plan was binding on the stakeholders, and the Tribunal did not find grounds to admit the appeal. Consequently, the Tribunal declined to admit the appeal and disposed of it as not admitted, without imposing any costs on either party.