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2024 (9) TMI 1255 - AT - IBCApproval of the Resolution Plan - Section 30(6) and Section 31 of the IBC - HELD THAT - The statutory protection granted to the operational creditor in Section 30(2)(b) is that they shall not be paid any amount less than as mentioned in (i) and (ii). Appellant case in the Appeal is not that the Appellant was entitled for any payment as per Section 30(2)(b) which has been denied in the Resolution Plan. The issue raised by the Appellant is fully covered by the recent judgment of this Tribunal in Rajat Metaal Polychem Pvt. Ltd. vs. Mr. Neeraj Bhatia and Anr. 2024 (9) TMI 411 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI - LB where this Tribunal while dealing with the similar claim of the operational creditors has laid down that ' It is true that Operational Creditors as the law stands now are denied any payment when the amount payable to them in the event of Liquidation is NIL, but till the Legislature comes to the aid of the claim of Operational Creditor by amending the Legislative Scheme hands of the Courts are tied to take any other view in the matter.' Appeal dismissed.
Issues:
Challenge to order approving Resolution Plan with nil payment to Operational Creditor under IBC Section 30(2)(b). Detailed Analysis: The judgment involves an Appeal by an Operational Creditor challenging the approval of a Resolution Plan with nil payment to the Operational Creditor under Sections 30(6) and 31 of the Insolvency and Bankruptcy Code (IBC). The Adjudicating Authority had approved the Resolution Plan, leading to the filing of this Appeal. The Appellant's claim was admitted during the Corporate Insolvency Resolution Process (CIRP), but the Resolution Plan proposed zero payment to the Operational Creditor, which was the primary contention raised in the Appeal. The key argument put forth by the Counsel for the Appellant was that despite the admission of the operational claim, the Resolution Plan did not offer any payment to the Operational Creditor, contravening the requirement to consider all stakeholders' claims. On the other hand, the Respondents contended that the Resolution Plan was compliant as the liquidation value would have resulted in no payment to the Appellant even in a liquidation scenario. The Respondents argued that the Resolution Plan adhered to Section 30(2) of the IBC and did not violate the operational creditor's entitlement. The Tribunal examined the submissions from both parties and reviewed the record, noting the admission of the Appellant's operational claim alongside other operational creditors. The Resolution Plan proposed nil payment to all operational creditors, including government dues. Section 30(2)(b) of the IBC stipulates that operational creditors should receive not less than the amount in a liquidation scenario. The Tribunal referenced a previous judgment to support its decision, emphasizing that current laws do not mandate payment to operational creditors if the amount in a liquidation scenario is nil. The Tribunal cited a specific case to reinforce its decision, highlighting that until legislative amendments address the issue, courts are bound by existing laws. The judgment emphasized the need for potential legislative changes to ensure equitable treatment of operational creditors, including government dues. Ultimately, the Tribunal dismissed the Appeal, aligning with the previous judgment's stance and affirming the approval of the Resolution Plan with nil payment to the Operational Creditor. In conclusion, the Tribunal's decision was based on the existing legal framework and precedents, underscoring the limitations imposed by current legislation regarding the payment to operational creditors in Resolution Plans. The judgment highlighted the necessity for legislative review to address the concerns raised by operational creditors, emphasizing the need for equitable distribution in insolvency proceedings.
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