CLAIMS AFTER THE APPROVAL OF RESOLUTION PLAN

[Mr. M. GOVINDARAJAN]

Claim

Section 3(6) of the Insolvency and Bankruptcy Code, 2016 (‘Code’ for short) defines the term ‘claim’ as-

• a right to payment, whether or not such right is reduced to judgment, fixed, disputed, undisputed, legal, equitable, secured or unsecured;
• right to remedy for breach of contract under any law for the time being in force, if such breach gives rise to a right to payment, whether or not such right is reduced to judgment, fixed, matured, unmatured, disputed, undisputed, secured or unsecured.

Public announcement

On admission of the application filed for the initiation of Corporate Insolvency Resolution Process (‘CIRP’ for short) the Adjudicating Authority, in its order, directs the Interim Resolution Professional to cause a public announcement within 3 days from the date of order.  The Interim Resolution Professional makes a publication in the leading newspapers, one in English and one in vernacular language calling for the claim from the creditors of the corporate debtors in the required form and to submit the same to the Interim Resolution Professional along with the documents on before the date prescribed in the advertisement. 

The IRP has the duty to collate the claims received. The claims before collation are also verified by the Interim Resolution Professional based on the proofs provided to them by the creditors. The Committee of Creditors is formed based on the collation of such claims.  The Adjudicating Authority (NCLT) has the power to adjudge claims or disputes relating to claims. 

Belated claim

The claims are to be filed within the last date mentioned in the public announcement.  The Creditors can now file claims within 90 days or until the request for resolution plan under the Code  is sought, whichever is later, according to the IBBI (Insolvency Resolution Process for Corporate Persons) (Second Amendment) Regulations, 2023.  However, creditors will have to offer credible reasons for the delay.

The claim cannot be made after the approval of the resolution plan by the Committee of Creditors and by the Adjudicating Authority. Once the Resolution Plan is approved the other outstanding dues whatever it may be will be extinguished.   The Supreme Court in M/S. RPS INFRASTRUCTURE LTD. VERSUS MUKUL KUMAR & ANR. [2023 (9) TMI 516 - SUPREME COURT] held that   after the acceptance of the resolution plan, the fresh claim cannot be admitted and the hydra-headed monster of undecided claims cannot be unleashed on the resolution applicant.

Different view

In  MRS. RANJU KUMARI, MR. UMASHANKAR SINGH VERSUS VALUE INFRACON INDIA PRIVATE LIMITED, VALUE INFRA BUYERS ASSOCIATION, DAIMLER FINANCIAL SERVICES PRIVATE LIMITED, CAPRI GLOBAL CAPITAL LIMITED - 2024 (2) TMI 569 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI  the National Company Law Appellate Tribunal followed the decision of the Supreme Court in dismissing the appeal in the belated claim after the approval of the resolution plan. The National Company Law Appellate Tribunal was of the view that the appellant may file claim to the Successful Resolution Applicant and he is to decide the claim.

In the above appeal the appellants were allotted a unit by the Corporate Debtor in September 2011 and have also made payments to the extent of Rs.23,54,675/-.  The corporate insolvency resolution process (‘CIRP’ for short) was initiated by the financial creditors against the Corporate Debtor. The resolution applicant submitted the resolution plan and the same was approved by the Committee of Creditors and by the Adjudicating Authority on 28.04.2022.   The appellants were not aware of the approval of resolution plan by the Adjudicating Authority.  The appellant came to know the above fact only on 21.05.2022 in a news article online on ‘Ghaziabad 365’.  The Appellants immediately made efforts to obtain other relevant information on the subject and it is then that they found out about the impugned order.

The appellants filed a claim in Form - CA for the principal amount of Rs. 24,02,705/- along with interest @18% per annum till the date of commencement of insolvency, i.e., 04.05.2018, i.e., for a total amount of Rs. 50,43,837/-  with the Resolution professional.  The said claim was rejected on the ground that the claim has been filed after the order much belatedly.  The Adjudicating Authority also rejected the claims of the appellants.   Therefore the appellants field the present appeal before the National Company Law Appellate Tribunal against the order of Adjudicating Authority rejecting the claim.

The appellants contended the following before the National Company Law Appellate Tribunal-

• The Appellants being unaware of the CIRP could not file their claim with the Resolution Professional.
• The Resolution Professional was obliged to reflect the amount paid by the Appellants in the Information Memorandum.
• The Information Memorandum did not contain any details regarding the unit of the Appellants. 

The Resolution Professional as well as the successful resolution applicant refuted the arguments put forth by the appellants.  The Resolution Professional contended that all claims which did not find part of the Resolution Plan stand extinguished in view of the judgment of the Supreme Court 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 , hence, no relief can be granted to the Appellants.  The Successful Resolution Applicant endorsed the arguments put forth by the Resolution Professional and prayed to dismiss the appeal since there was no merit in the appeal.

The National Company Law Appellate Tribunal observed that the Appellants have filed their claim belatedly.  The Appellants themselves have pleaded that they could know about the CIRP and approval of the Plan in May 2022 and could file the claim only on 09.06.2022.  

The National Company Law Appellate Tribunal held that the appellants had not filed their claims. Since no claim having been filed till the approval of the Resolution Plan, National Company Law Tribunal was unable to grant any relief to the Appellants in the present Appeal. It is pleaded on behalf of the Resolution Professional  that the Promoters of the Corporate Debtor has abandoned the project and no records were available and whatever records could be collected from the Flat Buyers, on that basis the Information Memorandum was prepared. The Plan having already been approved by the Adjudicating Authority, no new claim can be admitted.  The National Company Law Appellate Tribunal dismissed the appeal.  However the National Company Law Appellate Tribunal was of the view that the dismissal of the Appeal shall not preclude the Appellants to approach the Successful Resolution Applicant and to give details of payments given to the Corporate Debtor and it is for the Successful Resolution Applicant to take a call on the said claim.