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2024 (1) TMI 303 - AT - Insolvency and BankruptcyRejection of claim by Resolution Professional - Resolution Plan was duly approved by the CoC - HELD THAT - The Resolution Plan of the Corporate Debtor was approved by the CoC on 13.08.2021 and the Applications/ IA Nos.721 and 722 of 2023 were filed by the Appellant(s) in February 2023, i.e., more than one and a half year after approval of the Resolution Plan. The Adjudicating Authority has rightly taken the view that no good reasons have been explained by the Appellant(s) in filing the Application(s) with great delay of more than one and a half year. Resolution Plan having been approved by the CoC on 13.08.2021, the Adjudicating Authority rightly rejected the Application(s). The mere fact that Application for approval of Resolution Plan is pending for consideration by the Adjudicating Authority does not entitle the Appellant(s) to file an Application for acceptance of their Claim after more than one and a half year of the approval of the Resolution Plan by the CoC. The Resolution Plan of the Corporate Debtor, which was approved by the CoC on 13.08.2021 has now been approved by the Adjudicating Authority by order dated 23.06.2023, as has been pleaded by the Appellant in his additional affidavit. The Resolution Plan having been approved, the order approving the Resolution Plan dated 23.06.2023 has also been brought on record as Annexure A7 in IA No.5941 of 2023 filed by the Appellant in Company Appeal (AT) (Ins.) No.923 of 2023. The Resolution Plan has already been approved, which order has also not been challenged by the Appellant. In any view of the matter, after considering the facts and the sequence of event in the present Appeal(s), the Adjudicating Authority has rightly rejected IA Nos.721 and 722 of 2023, refusing to accept the prayer of the Appellant(s) to issue a direction to admit their claim. No grounds have been made out to interfere with the order - Appeal dismissed.
Issues Involved:
1. Whether the claims filed by the Appellants were substantiated with sufficient documents. 2. Whether the delay in filing the claims after the approval of the Resolution Plan was justified. 3. Whether the claims qualify as financial debt under the Insolvency and Bankruptcy Code, 2016. Summary of Judgment: Issue 1: Sufficiency of Documents to Substantiate Claims The Appellants, D.S. Kulkarni & Associates and D.S. Kulkarni & Company, filed claims in Form CA and Form F. The Resolution Professional (RP) requested additional documents to substantiate these claims, which were not provided despite multiple reminders. The RP rejected the claims due to insufficient documentation. The Tribunal noted that the Appellants only submitted a Memorandum of Understanding (MoU) and Ledger extracts, which were deemed inadequate to prove financial debt. Issue 2: Delay in Filing Claims The claims were initially filed on 09.10.2019, but the Appellants failed to provide the necessary supporting documents until much later. The Resolution Plan was approved by the Committee of Creditors (CoC) on 13.08.2021, and the Appellants filed IA Nos. 721 and 722 of 2023 in February 2023, more than one and a half years after the Plan's approval. The Tribunal found the delay unjustified and rejected the applications on this basis. Issue 3: Qualification as Financial Debt The Tribunal examined the MoUs submitted by the Appellants. The MoU dated 01.01.2011 indicated that the transactions were for purchasing or jointly developing properties, not for financial debt as defined under Section 5(8) of the Insolvency and Bankruptcy Code, 2016. Similarly, the MoU dated 13.04.2013 referred to the purchase of units in a township, which does not qualify as financial debt. The Tribunal concluded that the RP correctly rejected the claims based on the documents provided. Conclusion The Tribunal upheld the RP's decision to reject the claims due to insufficient documentation and unjustified delay. The MoUs and Ledger extracts submitted did not qualify as evidence of financial debt. Consequently, the appeals were dismissed, and no grounds were found to interfere with the Adjudicating Authority's order dated 31.03.2023.
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