9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (12) TMI 316 - AT - Insolvency and BankruptcyMaintainability of Section 9 application in respect of extinguished claims - Seeking initiation of Corporate Insolvency Resolution Process against Corporate Debtor - extinguishment of right of the Operational Creditor in respect of their claims - resolution plan of the Corporate Debtor already been approved - the claims of the Operational Creditor is being part of the resolution plan or not - HELD THAT - Having come to the finding that the Appellant had not filed their claims before the Resolution Professional before approval of the resolution plan by the Adjudicating Authority and that there is no unambiguous proof that the claim of the Appellant was reflected in the records of the Corporate Debtor we now make a foray into the question whether the claims which did not constitute part of the resolution plan stood extinguished and, if so, whether the Appellant can file a Section 9 application at this stage in respect of such extinguished claims. It is undisputed that the Corporate Debtor had started its operations with a clean slate after settlement of dues with the creditors in terms of the orders of the Adjudicating Authority dated 17.10.2017. It is also a well settled legal precept that a resolution applicant cannot be expected to make a provision in relation to any creditor who has failed to make a claim within the stipulated time-line. It logically follows therefore that there is no legitimate scope in the IBC framework for agitating or initiating any proceeding in respect of a claim which was not part of the resolution plan or was not preferred at the relevant time - in the present case, when CIRP has been terminated way back in 2017 and the Corporate Debtor is already in saddle after following the due process, allowing a Section 9 application to proceed on the basis of an extinguished claim which had not been preferred before the Resolution Professional within the stipulated time cannot be countenanced. The Operational Creditor has endeavoured to indirectly assail the approval of a resolution plan after more than 5 years by initiating a separate Section 9 proceeding which is legally not tenable. Thus, no error has been committed by the Adjudicating Authority in rejecting the Section 9 application - appeal dismissed.
Issues Involved:
1. Whether the claims not filed with the Resolution Professional before the approval of the resolution plan stand extinguished. 2. Whether the Operational Creditor can file a Section 9 application after the approval of the resolution plan. 3. Whether the balance confirmations issued by the Corporate Debtor constitute an acknowledgment of debt. 4. Whether the resolution plan was approved in conformity with Sections 30 and 31 of the IBC. Summary: Issue 1: Extinguishment of Claims Not Filed Before Resolution Plan Approval The Adjudicating Authority held that the right of the Operational Creditor to seek remedy under Section 9 of the IBC stood extinguished as the claims were not part of the resolution plan. The Tribunal relied on the judgment of the Hon'ble Supreme Court in Ghanshyam Mishra & Sons Pvt. Ltd. v. Edelweiss Asset Reconstruction Company Ltd., which states that all claims not part of the resolution plan stand extinguished upon its approval. Issue 2: Filing Section 9 Application Post-Resolution Plan Approval The Tribunal found that the Operational Creditor did not file their claims before the Resolution Professional during the CIRP and only filed the Section 9 application after the resolution plan was approved. The Tribunal emphasized that allowing a Section 9 application based on an extinguished claim is legally untenable, referencing the clean slate principle from the Hon'ble Supreme Court's judgment in Committee of Creditors of Essar Steel India Ltd v. Satish Kumar Gupta & Ors. Issue 3: Acknowledgment of Debt via Balance Confirmations The Operational Creditor argued that the Corporate Debtor acknowledged the debt through balance confirmations issued from time to time, the last being on 01.04.2018. However, the Corporate Debtor refuted these claims, stating the balance confirmations were forged and that no such person (Sumit Kumar) was employed by them. The Tribunal did not delve into the authenticity of these documents, citing its summary jurisdiction. Issue 4: Conformity with Sections 30 and 31 of the IBC The Operational Creditor contended that the resolution plan was not approved in conformity with Sections 30 and 31 of the IBC. However, the Tribunal noted that the resolution plan was approved by the Adjudicating Authority and that the Operational Creditor had not challenged this approval. The Tribunal found no evidence that the Appellant's claim was reflected in the Corporate Debtor's records prior to the termination of the CIRP. Conclusion The Tribunal concluded that no error was committed by the Adjudicating Authority in rejecting the Section 9 application. The appeal was dismissed, and no costs were awarded.
|
