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2021 (7) TMI 1263 - AT - Insolvency and BankruptcyAppellant seeks clearance of lease rent and maintenance bill for the year 2019-2020, alongwith Interest - seeking clearance of water bill dated 07.02.2020 as well - Resolution Plan approved by Adjudicating Authority - HELD THAT - In this case, there is apparent mistake that the lease rent and the electricity and water bill all are essential supply and should form part of Insolvency Resolution Process cost vide Chapter IX IBBI (Insolvency Resolution Process for Corporate Persons) Regulation 2016, Regulation 31 32 and R/w Section 5(13) (e) and 14(2) of the Code - The Adjudicating Authority has approved the Resolution Plan which is at Annexure-E page - 70 of the Appeal paper book vide Clause 6.2 has clearly stated that in case the actual CIRP is higher than the estimated CIRP cost the Resolution Applicant will pay the higher amount. The Resolution Applicant is liable to pay the principal amount due for the specified period of the bill i.e for the CIRP Period, without considering the interest components as part of Insolvency Resolution Process Cost which he is liable to pay - It is settled law that the Insolvency and Bankruptcy Code, 2016 is a complete Code. Hence, all concerned are required to comply with the express provisions of the Code without any deviation. Appeal allowed in part.
Issues Involved:
1. Non-payment of lease rent and maintenance bills by the Corporate Debtor. 2. Approval and compliance of the Resolution Plan. 3. Classification of lease rent and maintenance bills as Corporate Insolvency Resolution Process (CIRP) costs. Issue-wise Detailed Analysis: 1. Non-payment of lease rent and maintenance bills by the Corporate Debtor: The Appellant, M.P. Industrial Development Corporation, raised concerns about unpaid lease rent and maintenance bills for the year 2019-2020 amounting to ?5,41,142/- and a water bill dated 07.02.2020 amounting to ?11,52,646/-. Despite regular reminders, these dues were not cleared by the Corporate Debtor/Resolution Professional (RP). The Appellant argued that these dues, which relate to the period after the commencement of CIRP on 09.09.2018, should be considered as part of the Insolvency Resolution Process cost under Rule 31 and 32 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, and Section 5(13)(e) and Section 14(2) of the Insolvency and Bankruptcy Code, 2016. 2. Approval and compliance of the Resolution Plan: The Adjudicating Authority approved the Resolution Plan on 05.03.2020, which was duly approved by the Committee of Creditors (CoC) with 100% voting. The Resolution Plan included a provision of ?50 lacs for operational creditors, including statutory liabilities/government dues. The RP confirmed that the Resolution Plan complied with the latest judgment in the Committee of Creditors Essar Steel India Limited Vs. Satish Kumar Gupta & Ors. The RP argued that the Appellant's claim was considered as statutory dues and not part of the CIRP costs. However, the RP acknowledged that the Resolution Plan made provisions for the payment of the Appellant's claims. 3. Classification of lease rent and maintenance bills as CIRP costs: The Tribunal noted that lease rent and maintenance bills, including water and electricity charges, are essential supplies and should be considered as part of the Insolvency Resolution Process cost under Chapter IX of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulation, 2016, Regulation 31 and 32, and Section 5(13)(e) and 14(2) of the Code. The Resolution Plan explicitly stated that if the actual CIRP cost is higher than the estimated cost, the Resolution Applicant would pay the higher amount. Conclusion: The Tribunal held that the Resolution Applicant is liable to pay the principal amount due for the specified period of the bill during the CIRP period, excluding interest components, as part of the Insolvency Resolution Process cost. The appeal was partially allowed with the modification that the Resolution Applicant must pay the principal amount for the CIRP period. The Tribunal emphasized that the Insolvency and Bankruptcy Code, 2016, is a complete Code, and all concerned parties must comply with its express provisions without deviation. Pending IAs, if any, were disposed of, and interim orders, if any, passed by the Appellate Tribunal were vacated. No orders as to costs were issued.
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