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2020 (8) TMI 423 - AT - Insolvency and BankruptcyReview or modification of Resolution Plan after its approval - Appeal has filed mainly on the ground by the Adjudicating Authority has no power to review its Order - HELD THAT - It is clear that at the time of substitution of the names of the legal heirs of Late Mukanchand Bothra, counsel for the Resolution Professional has given his consent and has stated that RP has no objection to the same - It is also on record that the Resolution Plan was finally approved by the Adjudicating Authority vide its Order dated 27th August 2019. Thus, it is clear that out of the claim of ₹ 15 Crores submitted by Mukanchand Bothra, only claim of ₹ 4,12,95,002/- was allowed to his share. It is undisputed facts after the death of Mukhanchand Bothra his legal heirs, i.e. Appellants had been substituted in place of Late Mukhanchand Bothra. As per approved Resolution Plan ₹ 4,12,95,002/- comes to the shares of Late Mukhanchand Bothra. Therefore, all the appellants are entitled to one-third share, from the amount which was allotted in favour of Late Mukhanchand Bothra - the resolution professional has no right to again raise the issue of succession from the appellants at the time of distribution of amount. On perusal of entire record; it remains undisputed that the Resolution Plan was approved by the Adjudicating Authority and the names of legal heirs of late Mukanchand Bothra was already substituted by Order of the Adjudicating Authority, with the consent of the Resolution Professional. Therefore there was no occasion to demand succession certificate, Probate Order from the Appellants at the time of distribution of money as per approved Resolution Plan - It is thus clear that the Appellants are entitled to the share allotted to Late Mukanchand Bothra. No further proof of succession is needed by the Resolution Professional from the legal heirs, whose names had been substituted in place of Mukanchand Bothra. Appeal allowed.
Issues Involved:
1. Whether the Adjudicating Authority has reviewed or recalled or modified its earlier Order without any authority? 2. Whether the Adjudicating Authority was correct in directing the appellants to cause individual newspaper publications to receive the claim amount when the appellants were already impleaded in the case as legal heirs of Late Mukunchand Bothra? Issue 1: Authority to Review, Recall, or Modify Earlier Order The appeal was filed mainly on the ground that the Adjudicating Authority has no power to review its Order. The Appellant contends that the Adjudicating Authority cannot review the earlier Order or reopen the case unless it appears that there is an arithmetical error apparent in the previous Order. The Adjudicating Authority had issued directions for paper publications in the newspaper, which was challenged by the Appellant. The Tribunal clarified that the Order passed by the Adjudicating Authority on 11th September 2019 cannot be treated as a modification, review, or recall of the earlier Order. The Tribunal noted that the Order for publication of notice in the newspaper was without any justification because the legal heirs of Late Sri Mukanchand Bothra were already on record. Therefore, the Tribunal concluded that the Adjudicating Authority did not modify or review its earlier Order. Issue 2: Direction for Newspaper Publications The Adjudicating Authority directed the appellants to cause individual newspaper publications to receive the claim amount. The Appellants argued that they were already impleaded in the case as legal heirs of Late Mukunchand Bothra and thus, such a direction was unnecessary. The Tribunal found that the Resolution Plan was approved by the Adjudicating Authority, and the names of legal heirs of late Mukanchand Bothra were already substituted by Order of the Adjudicating Authority with the consent of the Resolution Professional. Therefore, there was no occasion to demand a succession certificate, Probate Order from the Appellants at the time of distribution of money as per the approved Resolution Plan. The Tribunal held that the appellants are entitled to the share allotted to Late Mukanchand Bothra, and no further proof of succession is needed by the Resolution Professional from the legal heirs whose names had been substituted in place of Mukanchand Bothra. Thus, the Appeal was allowed, and the Resolution Professional was directed to comply with the conditions of the approved Resolution Plan without asking for any proof of succession from the legal heirs of Late Mukanchand Bothra. Separate Judgment: Appeal No. 844 of 2019 This Appeal emanates from the Order dated 02nd July 2019, whereby the Adjudicating Authority directed the applicants to treat them at par with other unsecured financial creditors and make appropriate provisions for payment. The Resolution Professional filed an Appeal against this Order on 13th August 2019. However, the Tribunal noted that the approved Resolution Plan dated 27th August 2019 was not under challenge, and the Appeal had become infructuous. The Tribunal also noted that the Resolution Professional cannot be termed as an aggrieved person and dismissed the Appeal as not maintainable. Therefore, the Appeal No 844 of 2019 was rejected. Order: Appeal No. 1275 of 2019 is allowed. Resolution Professional is directed to comply with the conditions of the approved Resolution Plan without asking for any proof of succession from the legal heirs of Late Mukanchand Bothra. The Order of the Adjudicating Authority is modified to this extent. Appeal No 844 of 2019 is rejected. No order as to costs.
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