2021 (3) TMI 557 - Tri - Insolvency and Bankruptcy

Approval of Resolution Plan - Renewal of lease of land - clearance of past dues - section 60(5)(c) of IBC - HELD THAT - Presently the R3 has made a claim of ₹ 3.50 crores approximately, after the approval of Resolution Plan without giving any details thereof. It should have claimed the same before the Resolution Professional as an operational debt if it related to the pre-CIRP or as CIRP costs if it was incurred during the CIRP. No explanation is forthcoming for not claiming the same as indicated. In any case, since no claim has been made at the appropriate stage, this cannot be fastened to the Applicant after the approval of Resolution Plan - The Resolution Plan has been approved by the Committee of Creditors under Section 30(4) of the Code. Upon its approval by this Authority under section 31(1) of the Code, the same becomes binding on all the stakeholders of the Corporate Debtor. R3 is also a stakeholder being the lessor of the Corporate Debtor and had also filed claim in the CIRP as an Operation Creditor. It is also not in doubt that required approvals have to be given by the concerned authorities under the relevant laws and rules framed thereunder. However, no authority can deny the renewal of licence or lease, on the ground that past dues are not paid, even without making a claim (water charges) during CIRP. In respect of Transfer and Renewal fees, we have adduced reasons how the belated claim made is not in consonance with the provisions of the Code. Prayer for issue of no objection certificate and no dues certificate for creation of mortgage by the Applicant - HELD THAT - Snce R3 is the owner of the property, it is purely within its prerogative to decide on the issue. We are conscious that jurisdiction under 60(5) of the Code is not so elastic to grant this relief sought for by the Applicant. Application allowed in part.

Issues Involved:

1. Claim of Maharashtra Industrial Development Corporation (MIDC) for additional dues post-approval of the Resolution Plan.
2. Jurisdiction of the Tribunal to decide on post-CIRP claims.
3. Validity of MIDC’s demand for renewal and transfer fees.
4. Issuance of 'No Due Certificate' and 'No Objection Certificate' by MIDC.
5. Compliance with the Insolvency and Bankruptcy Code (IBC) provisions regarding CIRP costs.
6. Binding nature of the approved Resolution Plan on statutory authorities.

Issue-wise Detailed Analysis:

1. Claim of Maharashtra Industrial Development Corporation (MIDC) for additional dues post-approval of the Resolution Plan:
The Tribunal noted that MIDC (R3) had initially filed a claim of ?2.92 Crores as an Operational Creditor, which was settled in the approved Resolution Plan. However, MIDC later claimed additional dues amounting to ?22.88 Crores, including renewal fees, transfer fees, and water bills, which were not claimed during the CIRP. The Tribunal held that since these claims were not submitted at the appropriate stage, they could not be enforced against the Successful Resolution Applicant post-approval of the Resolution Plan.

2. Jurisdiction of the Tribunal to decide on post-CIRP claims:
The Tribunal asserted its jurisdiction under Section 60(5) of the IBC, which allows it to entertain or dispose of any application or proceeding by or against the corporate debtor or any question of law or facts arising out of or in relation to the insolvency resolution or liquidation proceedings of the corporate debtor. The Tribunal concluded that it had the jurisdiction to decide on the claims made by MIDC post-approval of the Resolution Plan.

3. Validity of MIDC’s demand for renewal and transfer fees:
The Tribunal found that the demand for renewal and transfer fees by MIDC was untenable. It was noted that the leasehold rights were not transferred to any third party; only the shareholding of the Corporate Debtor had changed. The Corporate Debtor remained the same legal entity, and thus, there was no transfer of leasehold rights. The Tribunal held that the change in shareholding due to the approval of the Resolution Plan could not be termed as a transfer of leasehold rights, making the demand for these fees invalid.

4. Issuance of 'No Due Certificate' and 'No Objection Certificate' by MIDC:
The Tribunal declined to compel MIDC to issue 'No Due Certificate' and 'No Objection Certificate' for the creation of a mortgage by the Applicant. It was emphasized that MIDC, as the property owner, had the prerogative to decide on this issue. The Tribunal referred to its earlier order, which stated that the Resolution Applicant should apply to relevant regulatory authorities for such reliefs and concessions, and the authorities may consider them as per applicable laws.

5. Compliance with the Insolvency and Bankruptcy Code (IBC) provisions regarding CIRP costs:
The Tribunal examined whether the additional claims made by MIDC could be considered as CIRP costs under Section 5(13) of the IBC and Regulation 31 of the CIRP Regulations. It concluded that the claims made by MIDC did not fall within the definition of CIRP costs. The Tribunal noted that the claims were related to pre-CIRP dues and were not incurred during the CIRP, thus could not be classified as CIRP costs.

6. Binding nature of the approved Resolution Plan on statutory authorities:
The Tribunal reiterated that under Section 31(1) of the IBC, the approved Resolution Plan is binding on all stakeholders, including statutory authorities like MIDC. The Tribunal referred to the Supreme Court's judgment in the case of Committee of Creditors of Essar Steel India Limited vs. Satish Kumar Gupta, which emphasized that a successful resolution applicant cannot be faced with undecided claims post-approval of the Resolution Plan. The Tribunal held that MIDC, being a stakeholder and having filed a claim during the CIRP, was bound by the terms of the approved Resolution Plan.

Conclusion:
The Tribunal allowed the application in part, declaring that no amount was due to MIDC over and above the amount set out in the Resolution Plan and that the demand raised by MIDC was illegal and contrary to the IBC provisions. The Tribunal, however, refused to compel MIDC to issue 'No Due Certificate' and 'No Objection Certificate', stating that it was within MIDC's prerogative to decide on such matters.

← Previous Next →