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2022 (4) TMI 264 - AT - Insolvency and BankruptcyChallenge to approved Resolution Plan - applicability of Section 31 of I B Code - HELD THAT - Considering the facts that the Resolution Plan was approved and also been executed, no merits are found in the Impugned Order - the Appeal is hereby dismissed.
Issues Involved:
1. Dismissal of Interlocutory Applications (I.A.s) by the National Company Law Tribunal (NCLT). 2. Approval and binding nature of the Resolution Plan under Section 31 of the Insolvency & Bankruptcy Code, 2016 (I&B Code). 3. Alleged failure to consider pending applications before the approval of the Resolution Plan. 4. Disputed claims and partial rejection by the Resolution Professional. 5. Applicability of the Supreme Court judgment in 'Ghanashyam Mishra and Sons Private Limited vs. Edelweiss Asset Reconstruction Company Limited'. Detailed Analysis: 1. Dismissal of Interlocutory Applications (I.A.s) by the NCLT: The Appellant, M/s R.S Wire Industries, through its Proprietor, filed an appeal against the order dated 07.07.2021 by NCLT, Mumbai Bench, which dismissed multiple I.A.s (I.A. 417/2021, I.A. 424/2021, I.A. 578/2021, I.A. 896/2021, I.A. 899/2021 & I.A 902/2021) in CP (IB) 3641/MB/2018. The dismissal was based on the assertion that nothing survives in these applications following the approval of the Resolution Plan dated 25.03.2021. 2. Approval and Binding Nature of the Resolution Plan: The Respondent argued that the NCLT correctly dismissed the applications as infructuous due to the approval of the Resolution Plan on 25.03.2021. Section 31 of the I&B Code stipulates that once a Resolution Plan is approved, it becomes binding on the Corporate Debtor and all stakeholders, including creditors and guarantors. This was supported by the Supreme Court's judgment in 'Ghanashyam Mishra and Sons Private Limited vs. Edelweiss Asset Reconstruction Company Limited', which emphasizes that all claims not part of the approved Resolution Plan stand extinguished. 3. Alleged Failure to Consider Pending Applications: The Appellant contended that the Impugned Order was unsustainable as it was passed without considering the pending applications against the rejection of claims by the Resolution Professional. The Appellant argued that the Resolution Plan was approved without hearing their objections, rendering the applications infructuous without fault on their part. 4. Disputed Claims and Partial Rejection by the Resolution Professional: The Appellant had sold and supplied copper wire to the Corporate Debtor, who partially paid and issued dishonored cheques. The Appellant filed claims before the Resolution Professional, which were partially rejected. The Appellant's claim was for ?1,48,95,497, but only ?84,50,000 was acknowledged. The Respondent argued that the claims were disputed and that the Appellant did not provide sufficient details or object to the claim verification process in a timely manner. 5. Applicability of the Supreme Court Judgment: The judgment in 'Ghanashyam Mishra and Sons Private Limited vs. Edelweiss Asset Reconstruction Company Limited' was pivotal. It states that once a Resolution Plan is approved, all claims not included in the plan are extinguished. This was used to justify the dismissal of the Appellant's applications as the Resolution Plan had already been approved and executed. Conclusion: After considering the submissions from both parties and the facts that the Resolution Plan was approved and executed, the Tribunal found no merits in the appeals. The NCLT's dismissal of the I.A.s was upheld, and the appeals were dismissed. The judgment emphasized the binding nature of the approved Resolution Plan and the extinguishment of claims not included in it, aligning with the Supreme Court's ruling. Final Orders: 1. The appeals (Company Appeal (AT) (Ins.) No. 599 of 2021, Company Appeal (AT) (Ins.) No. 602 of 2021 & Company Appeal (AT) (Ins.) No. 603 of 2021) were dismissed. 2. The Impugned Order dated 07.07.2021 was affirmed. 3. The Registry was directed to upload the judgment on the Appellate Tribunal's website and send a copy to the NCLT, Mumbai Bench.
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