2024 (1) TMI 1265 - AT - Insolvency and Bankruptcy

Application seeking direction to release payment as an Operational Creditor, for the services rendered during the CIRP period, dismissed - right to appeal in terms of Section 61(3) of the Code - HELD THAT - The application filed under Section 60(5) was filed by the Appellant on 01.06.2019. At that time the proceedings in regard to approval of the Resolution Plan was not over. The Appellant did not file any application for staying the approval of the Resolution Plan till the disposal of his application. The Resolution Plan was approved on 27.06.2019 itself and the same has ultimately been approved by the Hon'ble Supreme Court on 28.02.2020. It is also a matter of fact that the Plan has also been implemented. In such circumstances, the application filed under Section 60(5) had lost its sheen as a new right of appeal become available to the Appellant to pursue its remedies in terms of Section 61(3)(iii) and (iv) of the Code before the Appellate Authority. The said procedure was not followed by the Appellant and therefore, in our considered opinion, the application filed under Section 60(5) was not maintainable. In view of the aforesaid discussion and the fact that Resolution plan was approved way back on 28.02.2020 by the Hon ble Supreme Court and has been implemented, there are no merit found in the present appeal - appeal dismissed.

Summary

Issues:
The judgment involves the dismissal of an appeal against the order dated 24.02.2021 regarding the release of payment to an Operational Creditor under section 60(5) of the Insolvency & Bankruptcy Code, 2016.

Details of Judgment:

Issue 1: Application under Section 60(5) of the Code
The appellant filed an application under section 60(5) seeking payment for services rendered during the CIRP period, which was dismissed. The Resolution Professional admitted only a portion of the claim, leading to a dispute regarding the amount owed. The Tribunal noted that the application filed under Section 60(5) became redundant once the Resolution Plan was approved and implemented, as the appellant had the right to appeal under Section 61(3) of the Code. The failure to follow the proper appeal procedure rendered the Section 60(5) application not maintainable.

Issue 2: Rights of the Appellant
The appellant argued that the application under Section 60(5) falls within the power of the Adjudicating Authority, while the Resolution Professional contended that the appellant had the statutory right to appeal under Section 61(3) of the Code. The Tribunal highlighted the relevant provisions of Section 61, emphasizing the grounds on which an appeal against an order approving a resolution plan can be filed. The Tribunal also referenced Section 60, specifically Section 60(5), which outlines the jurisdiction of the National Company Law Tribunal to entertain or dispose of applications or proceedings by or against corporate debtors.

Conclusion:
Considering that the Resolution Plan had been approved and implemented, the Tribunal found the appeal lacking merit and dismissed it. The Tribunal emphasized that the appellant had the opportunity to appeal under Section 61(3) of the Code but failed to pursue this avenue, making the application under Section 60(5) redundant. As a result, the appeal was dismissed without costs.