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2021 (6) TMI 495 - Tri - Insolvency and BankruptcyFresh claim after approval of resolution plan - Power to recall the order or set aside the order by which the Resolution Plan was approved - power of review is not provided under the IBC - whether direction can be given to the RP to consider the claim filed by any of the creditors either financial or operational once Resolution Plan has been approved - HELD THAT - Admittedly, there is no provision for review of an Order under the Insolvency Bankruptcy Code (IBC) and the applicant has also not produced any provision/law to show that this Adjudicating Authority is empowered to review its own order - Also, reading of Section 420 of the Companies Act, 2013 shows that the Tribunal may, at any time within two years from the date of the order, with a view to rectify any mistake apparent from the record, amend any order passed by it, if the mistake is brought to its notice by the parties - In the light of that provision, when we consider the case in hand, we notice that Section 420 of the Companies Act, 2013 gives a limited power to the Adjudicating Authority i.e. to rectify any mistake apparent from the record only. Error/mistake in the order passed by the Adjudicating Authority, by which the Resolution Plan was approved - HELD THAT - Admittedly, the applicant has not raised any objection on the Resolution Plan. Therefore, they are not the necessary party in this proceeding. It is seen from the record that the applicant had filed the claim after the approval of the Resolution Plan by the CoC but before approval of the Resolution Plan by the Adjudicating Authority - From the perusal of the order passed by the Adjudicating Authority, we notice that all the facts and provisions of law, which are required to be considered while approving the Resolution Plan, have been taken note of and well discussed by this Adjudicating Authority before approving the plan. We do not see any mistake apparent from the record, which requires any rectification. Hence, Section 420 of the Companies Act, 2013 is not applicable in the case in hand - Thus, neither there is any justification nor there is any specific provision for review of an order passed by the Adjudicating Authority. Once the Resolution Plan has been approved by the CoC as well as the Adjudicating Authority, then in such a case, whether the law permits the Adjudicating Authority to give a direction to the RP to consider the claim filed by any of the creditors either financial or operational? - HELD THAT - The Hon'ble Supreme Court in the JAYPEE KENSINGTON BOULEVARD APARTMENTS WELFARE ASSOCIATION ORS. VERSUS NBCC (INDIA) LTD. ORS. 2021 (3) TMI 1143 - SUPREME COURT has reiterated the decision of COMMITTEE OF CREDITORS OF ESSAR STEEL INDIA LIMITED THROUGH AUTHORISED SIGNATORY VERSUS SATISH KUMAR GUPTA OTHERS 2019 (11) TMI 731 - SUPREME COURT and held that the claim, which was not submitted within the stipulated period, shall not be taken into consideration. In the present case, it is seen that the applicant had filed the claim after the approval of the Resolution Plan by the CoC and before the approval of the Resolution Plan by the Adjudicating Authority. Hence, once the Resolution Plan has been approved by the CoC as well as by the Adjudicating Authority or it is pending for consideration before the Adjudicating Authority, if the claim is not submitted within the time prescribed under the law, in such a case, the Adjudicating Authority cannot direct the RP to consider the claim filed by any of the creditors, either financial or operational. Application dismissed.
Issues Involved:
1. Whether the Greater Noida Industrial Development Authority (GNIDA) should be considered a Financial Creditor. 2. Whether the order dated 20.02.2020 should be recalled or set aside. 3. Whether the Resolution Professional (RP) should be replaced due to alleged misconduct. 4. Whether the Resolution Plan should be quashed and set aside. 5. Whether the National Company Law Tribunal (NCLT) has the power to review or recall its own orders. Detailed Analysis: Issue 1: Financial Creditor Status of GNIDA The GNIDA filed an application under section 60(5) of the Insolvency & Bankruptcy Code, 2016 (IBC) requesting to be considered as a Financial Creditor. GNIDA argued that it had leased land to the Corporate Debtor under a deferred payment plan, which included interest, making it a Financial Creditor. GNIDA claimed a higher charge/preference over other Financial Creditors due to the outstanding premium and interest on the lease. The GNIDA also cited breaches of the lease deed by the Corporate Debtor, which entitled GNIDA to cancel the lease and recover possession. Issue 2: Recall or Set Aside the Order Dated 20.02.2020 GNIDA filed another application seeking to recall and set aside the order dated 20.02.2020, claiming it was passed ex-parte without giving GNIDA an opportunity to defend itself. GNIDA cited precedents where courts held that orders passed without hearing the concerned party could be recalled. GNIDA argued that the Resolution Professional (RP) did not inform them of the Corporate Insolvency Resolution Process (CIRP), leading to their claim being submitted late. Issue 3: Replacement of the Resolution Professional GNIDA requested the replacement of the RP, Mr. Dinesh Chandra Agarwal, alleging misconduct and deliberate exclusion from the Committee of Creditors (CoC) meetings. GNIDA claimed the RP did not consider their status as a Financial Creditor, resulting in financial loss to GNIDA and unlawful financial gain to the Corporate Debtor and other creditors. Issue 4: Quashing the Resolution Plan GNIDA sought to quash and set aside the actions and decisions taken by the IRP/Resolution Professional and the CoC against GNIDA. They argued that the Resolution Plan could not be finalized without their consent, given their status as the landowner and Financial Creditor. Issue 5: Power of NCLT to Review or Recall Orders The Tribunal noted that there is no provision under the IBC for reviewing or recalling its own orders. Section 420 of the Companies Act, 2013, allows the Tribunal to rectify any mistake apparent from the record within two years. However, the Tribunal found no mistake apparent from the record in the order dated 20.02.2020, which had duly considered all relevant facts and provisions of law. Judgment: 1. Financial Creditor Status: The Tribunal observed that GNIDA had filed its claim after the approval of the Resolution Plan by the CoC but before its approval by the Adjudicating Authority. The Tribunal noted that the provision for payment of GNIDA's dues was included in the Resolution Plan based on the Information Memorandum. Therefore, GNIDA's claim was not reflected in the Resolution Plan, but the dues were acknowledged. 2. Recall or Set Aside the Order: The Tribunal found that there was no provision for review or recall under the IBC. The Tribunal also noted that the order dated 20.02.2020 did not have any apparent mistake that required rectification. Therefore, the Tribunal could not recall or set aside the order. 3. Replacement of the RP: The Tribunal did not find sufficient grounds to replace the RP. The Tribunal noted that the RP had included the provision for GNIDA's dues in the Resolution Plan. The allegations of misconduct were not substantiated to warrant the RP's replacement. 4. Quashing the Resolution Plan: The Tribunal referred to the Supreme Court's decision in the Essar Steel case, which stated that a successful resolution applicant should not be burdened with undecided claims after the resolution plan is accepted. The Tribunal held that once the Resolution Plan is approved by the CoC and the Adjudicating Authority, the RP cannot be directed to consider claims filed later. 5. Power to Review or Recall Orders: The Tribunal reiterated that there is no provision for review or recall under the IBC. The Tribunal's power under Section 420 of the Companies Act, 2013, is limited to rectifying mistakes apparent from the record, which was not applicable in this case. Conclusion: The Tribunal dismissed both applications filed by GNIDA, rejecting all prayers to recall or set aside the order dated 20.02.2020, replace the RP, and quash the Resolution Plan. The Tribunal emphasized the need for timely submission of claims and adherence to the IBC framework.
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