2024 (5) TMI 422 - AT - Insolvency and Bankruptcy

Approval of the resolution plan - Classification of the claim - Claim as contingent due to pending litigation - treatment meted out to the operational creditors in the resolution plan which has been approved by the Adjudicating Authority - HELD THAT - As per the chart as against the admitted claim of the secured financial creditors of Rs. 120,129,831,567/- the amount provided in the resolution plan is Rs. 2500 Cr. which is only to the extent of 20.098 %, therefore, the claim of the unsecured creditors or operational creditors has rightly been provided as Nil because the amount which has been offered in the resolution plan is to be first appropriated towards the CIRP costs and dues owed to the secured financial creditors and then nothing would come to the kitty of the operational creditors, therefore, even the unsecured creditors have also been given as NIL. As regards admitting the claim of the Appellant as contingent against Rs. 1 is concerned, this is not in dispute that the claim is based upon an order of the statutory authority against which an appeal is pending and it is not crystallised as such so far, thus in view of the decision of the Hon ble Supreme Court in the case of COMMITTEE OF CREDITORS OF ESSAR STEEL INDIA LIMITED THROUGH AUTHORISED SIGNATORY VERSUS SATISH KUMAR GUPTA OTHERS 2019 (11) TMI 731 - SUPREME COURT in which it has been held that we therefore hold that this part of the impugned order judgment deserves to be set aside on the ground that the resolution professional was correct in only admitting the claim at a notional value of Rs. 1 due to the pendency of disputes with regard to these claims. There are no merit in the present appeal and the same is hereby dismissed.

Summary

Issues Involved:
1. Approval of the resolution plan submitted by Respondent No. 3 (Adani Power Ltd.).
2. Dismissal of the appellant's claim of Rs. 2643,54,00,000/- as Rs. 1, treating it as a contingent claim.

Summary:

Issue 1: Approval of the Resolution Plan
The appeal was directed against the order dated 01.11.2021 by the National Company Law Tribunal, New Delhi, which approved the resolution plan submitted by Adani Power Ltd. (Respondent No. 3) and dismissed the objections raised by the appellant. The financial creditor (ICICI Bank Ltd.) initiated the Corporate Insolvency Resolution Process (CIRP) against Essar Power M.P. Ltd. (Corporate Debtor) u/s 7 of the Insolvency and Bankruptcy Code, 2016. The Interim Resolution Professional (IRP) made public announcements and constituted the Committee of Creditors (CoC). The CoC approved the resolution plan with 100% votes in the 11th meeting held on 21.05.2021. The liquidation value of the Corporate Debtor was disclosed as Rs. 1733.4 Cr., and the fair market value was Rs. 2657.2 Cr. The Adjudicating Authority approved the resolution plan, stating that it was not in violation of Section 30(2)(b) of the Insolvency and Bankruptcy Code, 2016, as the liquidation value for the operational creditors was NIL.

Issue 2: Dismissal of Appellant's Claim
The appellant, a statutory body under the Electricity Act, 2003, claimed Rs. 2643,54,00,000/- as operational debt due to relinquishment charges. The Corporate Debtor's appeal against this claim was pending before the Appellate Tribunal for Electricity (APTEL). The Adjudicating Authority dismissed the appellant's claim, treating it as contingent due to the pending appeal. The appellant argued that the claim should not be estimated at Rs. 1, but the court held that the Resolution Professional (RP) was correct in admitting the claim at a notional value of Rs. 1 due to the pendency of disputes, referencing the Supreme Court decision in Essar Steel India Ltd. Committee of Creditors Vs. Satish Kumar Gupta & Ors. (2020) 8 SCC 531.

Conclusion:
The appeal was dismissed, upholding the approval of the resolution plan and the treatment of the appellant's claim as contingent, with no costs awarded.