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2021 (7) TMI 135 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - Applicant has filed this petition under Section 9 of I B Code after 2 years of the Resolution Plan approved and Plan is under implementation - HELD THAT - Reliance placed in the Judgment of the Hon'ble Supreme Court in the cases of GHANASHYAM MISHRA AND SONS PRIVATE LIMITED THROUGH THE AUTHORIZED SIGNATORY VERSUS EDELWEISS ASSET RECONSTRUCTION COMPANY LIMITED THROUGH THE DIRECTOR ORS. 2021 (4) TMI 613 - SUPREME COURT , the present petition needs to be rejected as the Law is settled that once the Resolution Plan is approved by the Adjudicating Authority becomes binding on all stakeholders and all claims not dealt stand extinguished. There are no merit in the contention of the Petitioner that it could not know about the initiation of CIRP within 90 days from the date of initiation when the notice inviting claims was published by the IRP in the Newspapers and the Petitioner has been perusing the Civil Suit filed by it against the Respondent in the year 2014. Petition dismissed.
Issues Involved:
1. Initiation of Corporate Insolvency Resolution Process (CIRP) under Section 9 of the Insolvency and Bankruptcy Code (IBC), 2016. 2. Validity of claims post-approval of the Resolution Plan. 3. Timeliness of claim submission during CIRP. 4. Legal consequences of the approved Resolution Plan on pending claims. Detailed Analysis: 1. Initiation of Corporate Insolvency Resolution Process (CIRP) under Section 9 of the Insolvency and Bankruptcy Code (IBC), 2016: The Applicant filed a petition under Section 9 of the IBC, 2016, for the initiation of CIRP against the Corporate Debtor (CD), M/s. Kitply Industries Ltd. The Operational Creditor (OC) supplied plywood materials to the CD, which led to a substantial outstanding amount. Despite a civil suit decree in favor of the OC, the CD did not discharge the debt. The OC submitted Form No. 3 on 06.11.2020, but no reply or payment was made by the CD, leading to this application under Section 9 of the IBC, 2016. 2. Validity of claims post-approval of the Resolution Plan: The Respondent/CD argued that once a Resolution Plan is approved by the Adjudicating Authority under Section 31 of the IBC, 2016, it becomes binding on all stakeholders. This position was reaffirmed by the Supreme Court in "Ghanashyam Mishra and Sons Private Limited vs. Edelweiss Asset Reconstruction Company Limited" and "Committee of Creditors of Essar Steel India Limited vs. Satish Kumar Gupta." The judgment held that all claims not part of the Resolution Plan stand extinguished, and no further proceedings can be initiated regarding such claims. 3. Timeliness of claim submission during CIRP: The OC filed its claim on 20.11.2018, beyond the 90-day period stipulated under Regulation 12(2) of the IBC Regulations, 2016. The IRP/RP rejected the claim due to its late submission. The OC's subsequent application challenging this rejection was dismissed by the Tribunal, which upheld the IRP/RP's decision as legal and proper. The Tribunal noted that the Resolution Plan was approved on 07.12.2018, and the OC's claim was submitted after this approval, rendering it non-maintainable. 4. Legal consequences of the approved Resolution Plan on pending claims: The Tribunal emphasized that the law is settled: once a Resolution Plan is approved, it binds all stakeholders, and all unresolved claims are extinguished. The OC's failure to file its claim within the stipulated period and its subsequent non-challenge of the approved Resolution Plan further weakened its position. The Tribunal cited the Supreme Court's judgments to reinforce that the Resolution Plan's approval marks the end of all claims not included in the plan. Conclusion: The Tribunal rejected the present petition CP(IB) No. 8/GB/2021, stating that the law is settled regarding the binding nature of an approved Resolution Plan on all stakeholders and the extinguishment of claims not dealt with in the plan. The Tribunal found no merit in the OC's contention that it was unaware of the CIRP initiation within the stipulated 90 days, especially since public announcements were made and the OC had been pursuing a civil suit against the CD since 2014. Thus, the petition was dismissed without any cost.
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