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2022 (10) TMI 65 - AT - Insolvency and BankruptcyRejection of claims of appellant - enough documents to establish the claim, is present or not - Verification and settlement of unresolved claim under the caption under verification - seeking direction to Respondent No. 2 to consequently pass appropriate direction on the claim of the Appellant - payment towards claim from the contingency fund admissible. HELD THAT - In the instant Appeal, before this Tribunal, the Adjudicating Authority approved the Resolution Plan on 20.01.2020, and has taken umbrage of the ratio laid down by the Hon ble Supreme Court of India in 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 Hon ble Supreme Court of India had made the observations on the Clean Slate Theory and stated that if additional liabilities are allowed to be imposed on the Successful Resolution Applicant after the approval of the plan, the entire plan would become unworkable . The Hon ble Supreme Court had mentioned that such surprise Debts cannot be put upon the Resolution Applicant, which were not laid down in its Resolution Plan. If that is allowed, the very calculations on which the Resolution Applicants rely to submit their Resolution Plans, would go awry. This Tribunal also notices that the amended provision as contained in Section 31 of I B Code, 2016 makes the Successful Resolution Plan binding on all concerned, including the Government . It is held in the judicial pronouncement that this particular Amendment to be clarificatory in nature and hence, retroactive / retrospective in operation. Therefore, any Claim, even if it pertains to a date, prior to the effective date of this Amendment, would not be entertained after the Resolution Plan is so approved. This Tribunal upholds the decision of the Resolution Professional adjudicated by the Adjudicating Authority to reject the Claims of the Appellant on the basis that claims are unsupported and documentary evidence furnished by the Appellant were not proper - there are no error in the impugned order. Whether the relief sought by the Appellant for the payment of Rs. 18,30,894/- towards claim from the Contingency Fund admissible? - HELD THAT - This Tribunal pertinently points out that the Contingency Fund is for the specific purpose to cater for Claims which were not Determined and settled finally, at the time of the Resolution Plan. There is a stipulated time frame as provided in the Resolution Plan and the Fund after meeting out the requirements of the Claims, ceased to exist. By no stretch of imagination, it can be inferred that any Claim can be entertained after the Resolution Plan, was fully implemented and the new management of the Successful Resolution Applicant had taken over. On a qualitative and quantitative rumination of the entire conspectus of the instant Appeal, this Tribunal is in agreement with the decision arrived at by the Adjudicating Authority, (National Company Law Tribunal, Chennai Bench-II), and the Impugned Order is sustained - Appeal dismissed.
Issues Involved:
1. Whether the 'Resolution Professional' was right in rejecting claims of the 'Appellants' with reasoning that the documents were not enough to establish their claim? 2. Whether the relief sought by the 'Appellants' for payment of Rs. 18,30,894/- towards claim from the contingency fund is admissible? Issue-wise Detailed Analysis: Issue No. (I): Whether the 'Resolution Professional' was right in rejecting claims of the 'Appellants' with reasoning that the documents were not enough to establish their claim? (a) The Appellant objected to the 'Resolution Professional's' reasoning for rejecting claims due to the unavailability of proper documents necessary to prove an 'Operational Debt' as per Section 9(3) of the I & B Code, 2016. (b) The Tribunal noted that the Appellant failed to furnish the required documents to establish his claims, as requested by the 'Resolution Professional'. The approval of a 'Resolution Plan' resolves the financial position of the 'Corporate Debtor' as it stood on the day of approval, allowing it to have a clean slate for the future. (c) Section 31 of I & B Code, 2016, as amended in 2019, makes the 'Resolution Plan' binding on the corporate debtor and other stakeholders. (d) The Tribunal considered the Supreme Court's decision in Ghanashyam Mishra and Sons Private Limited vs. Edelweiss Asset Reconstruction Company Limited, which emphasized that once a resolution plan is approved, all claims not part of the plan shall stand extinguished. (e) The Tribunal also referenced its earlier judgment in Santanu T. Ray vs Tata Capital Financial Services, which held that claims filed beyond 90 days cannot be entertained by the 'Resolution Professional'. (f) The Tribunal upheld the decision of the 'Resolution Professional' and the 'Adjudicating Authority' to reject the Appellant's claims due to insufficient documentary evidence. Issue No. (II): Whether the relief sought by the 'Appellants' for the payment of Rs. 18,30,894/- towards claim from the 'Contingency Fund' is admissible? (a) The 'Contingency Fund' is a provision in a 'Resolution Plan' to cover inevitable and uncertain liabilities. (b) The I & B Code, 2016, emphasizes a collective and time-bound resolution process, with speed being essential. (c) During the 'Corporate Insolvency Resolution Process', claims are assessed and verified by the 'Resolution Professional' and included in the 'Resolution Plan'. Regulation 14 of the IBBI 2016 mandates the 'Resolution Professional' to make the best estimate of claims and create a provision for the 'Contingency Fund'. (d) The 'Resolution Plan' is a rehabilitation plan for the 'Corporate Debtor', prepared based on the 'Information Memorandum' provided by the 'Resolution Professional'. (e) The Tribunal noted that the 'Contingency Fund' was maintained for six months from the approval date of the 'Resolution Plan'. The Appellant failed to substantiate his claims with necessary supporting documents. (f) The Tribunal observed that the 'Resolution Plan' was successfully implemented, the 'Successful Resolution Applicant' had taken over the management, and the 'Monitoring Committee' had ceased to exist. (g) The Tribunal emphasized that the 'Contingency Fund' is for claims not determined and settled at the time of the 'Resolution Plan'. Claims cannot be entertained after the 'Resolution Plan' is fully implemented and the new management takes over. (h) The Tribunal upheld the decision of the 'Adjudicating Authority' on this issue. Conclusion: The Tribunal agreed with the decision of the 'Adjudicating Authority' (National Company Law Tribunal, Chennai Bench-II) and sustained the 'Impugned Order' passed in IA(IBC)/975/CHE/2021 in CP/280/IB/2018. Consequently, the appeal was dismissed, and connected pending 'Interlocutory Applications' were closed.
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