2022 (7) TMI 50 - Tri - Insolvency and Bankruptcy

Joint and severable liability of respondent to make good the losses suffered by the applicant - losses as suffered by the applicant to be considered as part of the CIRP cost and be accordingly disbursed to the applicant or not - delivery of stainless steel flat in terms of the purchase orders immediately - seeking to set apart a sum of Rs. 5,70,90,760/- from the fund allocated for CIRP Cost till disposal of this instant application - HELD THAT - Admittedly the applicant in the present IA under consideration was not applicant before this Adjudicating Authority when the plan was filed by the Resolution Professional and was considered - It is an admitted position that the present applicant never approached the Adjudicating Authority when the Resolution Plan was pending approval. It is not understood in what capacity Resolution Professional could have addressed any communication after the approval of the Resolution Plan on 7th of April, 2022, thereby advising the applicant to do anything as stated in his e-mail dated 25th of April, 2022. It is an established position of law that once the Resolution Plan is approved the role of Resolution Professional comes to an end. It is thus opined that the role of the RP came to an end after the Resolution Plan was approved and therefore, he could not have addressed the communications being relied upon by the applicant in this application. In view of the admitted position the applicant did not approach this Adjudicating Authority when the Resolution Plan was under consideration and had come before this Adjudicating Authority after the approval of the plan, this Adjudicating Authority is of the opinion that he has no right to file any application or seek any relief at this stage - Application rejected.

Summary

Issues:
Application under Section 60 (5) of the Insolvency and Bankruptcy Code, 2016 seeking relief for losses suffered due to contractual breach by Corporate Debtor.

Analysis:
1. The applicant filed an application seeking relief for losses suffered amounting to Rs. 5,70,90,760/- due to the failure of the respondent to supply stainless steel flat as agreed. The applicant communicated the claims and losses to the Corporate Debtor through various emails and letters, requesting compensation.

2. The applicant raised purchase orders during the Corporate Insolvency Resolution Process (CIRP) for a total quantity of 4323 MT of stainless steel flat. Despite assurances from the Resolution Professional, the full consignment was not delivered, leading to the applicant's financial losses.

3. The respondent informed the applicant that due to a plant shutdown, the debit note for losses could not be accepted. The applicant contended that the Corporate Debtor's breach of contract entitled them to compensation, which should be considered as part of the CIRP cost.

4. The Tribunal noted that the Resolution Plan was approved, and the applicant did not approach the Adjudicating Authority during the approval process. Referring to legal precedents, the Tribunal emphasized that once a Resolution Plan is approved, the role of the Resolution Professional ends, and all claims not part of the plan stand extinguished.

5. Citing relevant judgments, the Tribunal concluded that since the applicant did not participate in the approval of the Resolution Plan and approached the Authority after its approval, they had no standing to seek relief at that stage. Consequently, the application was rejected, and the parties were directed to comply with formalities for a certified copy of the order.