2021 (5) TMI 339 - Tri - Insolvency and Bankruptcy

Maintainability of application - impleadment of respondent - approval of resolution plan - HELD THAT - It is a matter of record that, the Applicant on approval of the Resolution Plan has failed to implement the Plan within the time frame as stipulated in the Resolution Plan. The order dated 27.02.2019 passed by this Adjudicating Authority has also been assailed before Hon'ble NCLAT, wherein Hon'ble NCLAT vide its order dated 19.12.2019 has partially modified the order. However, Resolution Applicant has preferred a Civil Appeal no. 1920 of 2020 before the Hon'ble Supreme Court against the impugned order dated 19.12.2019, so passed by Hon'ble NCLAT - by following the Doctrine of merger , the order passed by this Adjudicating Authority in IA 224 of 2018 stands finally merged with the common order of Hon'ble Supreme Court dated 20.05.2020. Hence, it reaches to the finality. In the case of State Bank of India vs. Moser Baer Karamchari Union 2019 (8) TMI 915 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI , the question whether the provident fund, pension fund, and gratuity fund come within the meaning of assets of 'corporate debtor' for distribution under Section 53 of the Insolvency and Bankruptcy Code, 2016, came for consideration and the Hon'ble NCLAT held that the appellant could not derive the meaning of 'workmen's dues' as assigned to it in section 326 of the Companies Act, 2013, which deals with the 'overriding preferential payments.' There is a difference between the distribution of assets and' priority of workmen's dues, as mentioned under Sec. 53(1)(b) of the I B Code and Sec. 326(1) (a) of the Companies At, 2013. The appellate Tribunal declined to interfere with the order of the NCLT holding that the provident funds do not come within the meaning of 'liquidation estate' for distribution of assets under Sec. 53 of the I B Code - the prayer so made by the Applicant is rejected as not maintainable.

Summary

Issues Involved:
1. Impleading Respondent No. 3 (Regional Provident Fund Commissioner-1 Ahmedabad).
2. Restraining Respondent No. 3 from taking coercive steps.
3. Recall of the order approving the Resolution Plan.
4. Return of amounts paid under the Resolution Plan.
5. Maintainability of the application in light of previous judgments.

Issue-wise Detailed Analysis:

1. Impleading Respondent No. 3 (Regional Provident Fund Commissioner-1 Ahmedabad):
The applicant sought to implead Respondent No. 3 in IA 230 of 2020, which was filed for recalling the order of approval of the Resolution Plan. The Tribunal noted that the application was not maintainable based on the precedent set by the Hon'ble NCLAT in Kundan Care Product Limited vs. Amit Gupta, which established that there is no provision in the IBC allowing a successful resolution applicant to withdraw after the Resolution Plan is approved by the CoC with the requisite majority. Consequently, the request to implead Respondent No. 3 was denied.

2. Restraining Respondent No. 3 from Taking Coercive Steps:
The applicant requested the Tribunal to restrain Respondent No. 3 from taking coercive steps for recovery of provident fund dues. The Tribunal observed that the Hon'ble Supreme Court had already dismissed the applicant's Civil Appeal No. 1920 of 2020, thereby upholding the NCLAT's order. Given this finality, the Tribunal found no grounds to grant interim relief to the applicant, emphasizing that any such restraint would be beyond its jurisdiction and would amount to sitting in appeal against the NCLAT's order.

3. Recall of the Order Approving the Resolution Plan:
The applicant argued that the Resolution Plan approval should be recalled due to alleged fraudulent misrepresentation and concealment of material facts. However, the Tribunal highlighted that the Hon'ble Supreme Court had dismissed the applicant's appeal, thereby finalizing the order. The Tribunal also referenced the "Doctrine of Merger," stating that the order approving the Resolution Plan had merged with the Supreme Court's dismissal, rendering the recall request untenable.

4. Return of Amounts Paid Under the Resolution Plan:
The applicant sought the return of ?30.50 crores paid under the Resolution Plan and CIRP costs of ?3.67 crores. The Tribunal reiterated that the applicant was estopped from withdrawing from the Resolution Plan obligations, as established in Kundan Care Product Limited vs. Amit Gupta. The Tribunal emphasized that allowing the applicant to withdraw would deplete the Corporate Debtor's value, adversely affecting all stakeholders. Consequently, the request for returning the amounts was rejected.

5. Maintainability of the Application in Light of Previous Judgments:
The Tribunal examined the maintainability of the application in light of the judgments by the Hon'ble NCLAT and the Hon'ble Supreme Court. The Tribunal noted that the NCLAT had clearly stated that a successful resolution applicant could not withdraw from an approved Resolution Plan. Additionally, the Supreme Court's dismissal of the applicant's appeal further solidified the finality of the order. The Tribunal concluded that the application was not maintainable and dismissed it accordingly.

Conclusion:
The Tribunal dismissed the application filed by the applicant, finding it not maintainable on multiple grounds, including the finality of the Supreme Court's order and the NCLAT's precedents. The Tribunal emphasized the binding nature of the approved Resolution Plan and the applicant's obligations under it, rejecting all prayers for interim relief and the return of amounts paid.