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2022 (11) TMI 566 - AT - Insolvency and BankruptcyConsideration of claim of appellant, after the resolution plan is approved - time limitation - contention of the Appellant is that the Appellant being an Operational Creditor of the Corporate Debtor filed its claim and is entitled to claim from the Corporate Debtor, while the stand of the Respondent is that the Appellant has not filed its claim within the time as prescribed under the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, therefore, the claim is barred by limitation, accordingly, the claim has not been considered. HELD THAT - It is an admitted fact that the Appellant filed its claim on 24.07.2019 whereas the public announcement was made on 06.12.2018 and it has been widely circulated in the English and Hindi newspapers and also posted on the IBBI website. The last date for submission of claim was 17.12.2018, however, the Appellant has not filed its claim within the time. From Rule 12 of IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, the claim has to be submitted on or before 90th day of the insolvency commencement date i.e. in this case the insolvency commencement date is 03.12.2018 and the 90th day expires on 03.03.2019, however, the appellant admittedly filed its claim on 24.07.2019, which is beyond the period prescribed under the Rules. Whilst the facts leading to passing of the order (impugned) dated 02.01.2020 is that the Respondent (RP) filed an application under Section 30(6) read with Section 60(5) of the I B Code, 2016 seeking approval of the Resolution Plan under Section 31 of the Code read with Regulation 39 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 in respect of the Corporate Debtor. The Adjudicating Authority after satisfying that the plan is in compliance of sub-section (2) of Section 30 and meets the requirement and as approved by the Committee of Creditors under sub-section (4) of Section 30 approved it vide its order dated 02.01.2020 - The ground for rejection is limited to the matter specified under Section 30(2). It is however reiterated that the resolution plan in question meets the requirements specified in Section 30(2) of the Code and the reasoned commercial decision of Committee of Creditors is neither discriminatory nor perverse with the aforesaid observations the plan has been approved. Once the plan is approved by the Adjudicating Authority under Section 31(1) of the Code, it shall be binding on the Corporate Debtor and its employees, members, creditors (including the Central Government, any State Government or any local authority to whom a debt in respect of the payment of dues arising under any law for the time being in force, such as authorities to whom statutory dues are owed,) guarantors and other stakeholders involved in the Resolution Plan. It is well settled that the commercial wisdom of the Committee of Creditors is paramount and cannot be interfered with by the Adjudicating Authority or this Tribunal - Admittedly, the Appellant has not filed its claim within the time and the claim is time barred. The plan has been approved by the Adjudicating Authority on 02. 01. 2020 and this Tribunal in the judgment in CA ( AT ) ( Ins ) No. 143 of 2020 upheld the plan approved by the Adjudicating Authority. Thus, it is settled proposition of law that the commercial wisdom of the Committee of Creditors in approving or rejecting a Resolution Plan is essentially based on a business decision which involves evaluation of Resolution Plan based on its feasibility and viability of the Corporate Debtor - this Tribunal comes to an irresistible and inescapable conclusion that the Appellant has failed to make out any case either on law or on facts. Appeal dismissed.
Issues Involved:
1. Timeliness of the Appellant's claim submission. 2. Admissibility of the Appellant's claim as an Operational Creditor. 3. Binding nature of the approved Resolution Plan on the Appellant. 4. Commercial wisdom of the Committee of Creditors (CoC). Issue-wise Detailed Analysis: 1. Timeliness of the Appellant's Claim Submission: The Appellant, a Department of Customs, filed its claim on 24.07.2019, significantly after the stipulated deadline. The public announcement for claim submission was made on 06.12.2018, with a submission deadline of 17.12.2018. Under Regulation 12 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, claims must be submitted within 90 days from the insolvency commencement date, which expired on 03.03.2019. The Appellant's claim, filed much later, was deemed time-barred and not considered. 2. Admissibility of the Appellant's Claim as an Operational Creditor: The Appellant argued that it should be recognized as an Operational Creditor due to the unpaid customs duty by the Corporate Debtor. Despite filing a claim for Rs. 47,97,465/- along with interest of Rs. 66,91,478/-, the claim was not included in the Resolution Plan due to its late submission. The Respondent highlighted that the claim was listed under "pending litigation" in the Resolution Plan but was not admitted as an Operational Creditor due to the delayed filing. 3. Binding Nature of the Approved Resolution Plan on the Appellant: The Resolution Plan, approved by the Adjudicating Authority on 02.01.2020, is binding on all stakeholders, including the Central Government and local authorities, as per Section 31(1) of the Insolvency and Bankruptcy Code, 2016. The Appellant's claim, not being part of the approved Resolution Plan, stands extinguished. This binding nature was reiterated in the Respondent's letter dated 02.02.2021, which emphasized that liabilities not covered under the Resolution Plan are extinguished. 4. Commercial Wisdom of the Committee of Creditors (CoC): The commercial wisdom of the CoC in approving the Resolution Plan is paramount and not subject to judicial review. The CoC unanimously approved the plan with a 100% voting share, meeting the statutory requirement. The Supreme Court's rulings in cases like K. Shashidhar Vs. Indian Overseas Bank and Maharashtra Seamless Ltd. Vs. Padmanabhan Venkatesh underscore that the CoC's decisions on the feasibility and viability of the Resolution Plan are final and not open to interference. Conclusion: The Tribunal concluded that the Appellant failed to submit its claim within the prescribed time, rendering the claim time-barred and not part of the approved Resolution Plan. The commercial wisdom of the CoC in approving the Resolution Plan is upheld, and the Appellant's appeal is dismissed. The binding nature of the Resolution Plan on all stakeholders, including government authorities, is reaffirmed, and the Tribunal found no merit in the Appellant's case. The appeal is dismissed without any order as to costs.
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