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TMI Blog2023 (3) TMI 70X X X X Extracts X X X X X X X X Extracts X X X X ..... is to the Impugned Order dated 24.06.2019, passed by the Learned Adjudicating Authority (National Company Law Tribunal, Ahmedabad Bench, Ahmedabad) in I.A. No. 236/2019 in C.P. (IB) No.190/NCLT/AHM/2018, whereunder the Adjudicating Authority has allowed IA 236/2019 filed by the Applicant/Resolution Professional of the 'Corporate Debtor'/M/s. Korba West Power Company Limited seeking approval of the 'Resolution Plan'. 2. Learned Counsel for the Appellant Mr. Abhijeet Sinha submitted that the first Respondent (hereinafter referred to as the 'Corporate Debtor') had itself triggered the Corporate Insolvency Resolution Process ('CIRP') by invoking Section 10 of the Insolvency and Bankruptcy Code, 2016, (hereinafter referred to as 'The Code'); that prior to the initiation of the CIRP, there were three Arbitration Proceedings pending between the Appellant and the 'Corporate Debtor' and the Adjudicating Authority vide Order dated 26.07.2018 had imposed Memorandum and the said Arbitration Proceedings could not proceed further and were stayed; that the Appellant submitted its collated 'Claim' of the ongoing Arbitrations amounting to Rs.45,22,52,428/- in 'Form-B' vide email dated 17.11.2018 b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... second Respondent/the former RP of the 'Corporate Debtor' submitted that the Appeal does not make out any grounds under Section 61(3) of the Code; that the proper remedy in such a purported grievance ought to be an Application under Section 60(5) of the Code; that the Appellant had never challenged the rejection of the 'Claim' by the RP, prior to the approval of the Resolution Plan; the Appellant was fully aware of the status of its 'Claims' as the RP had uploaded the information on the Website from time to time; despite being aware of the status of its 'Claim', the Appellant had filed this Appeal at a belated stage; that under Regulation 13(2)(c) of the Insolvency and Bankruptcy Board of India (Corporate Insolvency Resolution Process) Regulations, 2016, (hereinafter referred to as the 'CIRP Regulations') does not require any ''Individual Notice' to be served on the Creditors regarding Admission or non-Admission of their Claims; that the reliance of the Appellant that it was unaware about the status of its 'Claim' when the same was uploaded on the Website of the 'Corporate Debtor', is completely frivolous and is evident from a plain reading of the list of 'Claims' filed by the Appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Learned Sr. Counsel Mr. Nagesh appearing on behalf of Respondent No. 3/Successful Resolution Applicant ('SRA') submitted that the CIRP was conducted in a fair manner and the Resolution Plan was approved by an overwhelming majority of 69%; a perusal of the list of the 'Claims' by the 'Operational Creditors' dated 01.11.2018 clearly shows that the alleged 'Claim' by the Appellant is under the heading 'amount claimed' and 'amount under verification' and not 'amount verified'. Subsequently in the list dated 01.11.2019; the entire alleged 'Claim' of the Appellant was rejected. It is submitted that on 08.04.2019, the list of the 'Operational Creditors' was uploaded but the Appellant did not choose to approach the Adjudicating Authority under Section 60(5) of the Code and having failed to challenge the rejection, the Appellants cannot now at this belated stage challenge the Resolution Plan. Learned Counsel vehemently contended that the ratio of 'Fourth Dimensions Solution' (Supra) cannot be made applicable to the facts of this case, as the Resolution Plan explicitly deals with the treatment of the 'Claims' of the 'Operational Creditors' and drew our attention to the Additional Affidavit f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g economic matters, whether pending or threatened, (including without limitation, any investigation by any Governmental Authority) that have been initiated or are threatened ("Dispute") to be initiated against the Corporate Debtor (including those proceedings that relate to the Corporate Debtor) at any time till the CIRP Commencement Date"; ... "7.3 Any invocation or other enforcement action already undertaken against the Corporate Debtor in respect of any Encumbrance, guarantee or collateral or any other debt or obligation of the Corporate Debtor, at the Effective Date shall stand automatically revoked and cancelled and withdrawn and deemed null and void and all financial liabilities and obligations in relation to such Encumbrance or collateral shall be deemed to have been permanently extinguished by the NCLT order approving this Resolution Plan and the Corporate Debtor or the Resolution Applicant shall at no point of time be, directly or indirectly, held responsible or liable in relation thereto." 9. Learned Sr. Counsel Mr. P. Nagesh argued that by virtue of the approval of the Resolution Plan by the Adjudicating Authority, the claims of the Appellant in the Arbitral Proceed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the resolution plan shall stand frozen and will be binding on the corporate debtor and its employees, members, creditors, including the Central Government, any State Government or any local authority, guarantors and other stakeholders. On the date of approval of resolution plan by the adjudicating authority, all such claims, which are not a part of resolution plan, shall stand extinguished and no person will be entitled to initiate or continue any proceedings in respect to a claim, which is not part of the resolution plan." 11. It is brought to the notice of this Tribunal that the Resolution Plan has been duly implemented in 2019 and the SRA cannot now be faced with 'Claims' which were not part of the Resolution Plan. Assessment: 12. It is an admitted fact that the CIRP was initiated by the 'Corporate Debtors' themselves by invoking Section 10 of the Code and that there were three Arbitration Proceedings pending between the Appellant and the 'Corporate Debtor' prior to the initiation of the CIRP. It is also not in dispute that the RP did not communicate in writing regarding the rejection of the claims of the Appellant but instead, as per Regulation 13(2)(c) of the CIRP Regula ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thority; and (c) liquidation value due to dissenting financial creditors and provide that such payment is made before any recoveries are made by the financial creditors who voted in favour of the resolution plan." Post amendment, Regulation 38 reads as follows: "38. Mandatory contents of the resolution plan.- (1) The amount due to the operational creditors under a resolution plan shall be given priority in payment over financial creditors. (1-A) A resolution plan shall include a statement as to how it has dealt with the interests of all stakeholders, including financial creditors and operational creditors, of the corporate debtor." The aforesaid Regulation further strengthens the rights of operational creditors by statutorily incorporating the principle of fair and equitable dealing of operational creditors' rights, together with priority in payment over financial creditors." 13. It is the case of the Appellant only because the Arbitration Proceedings were pending, the RP though did not have any Adjudicatory Powers, rejected their claims. It is the case of the RP that there is no provision in the Code to give any communication in writing regarding the rejectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 076/2019 based on the submissions of the Learned Counsel for the proposed Intervener that he does not want to press the said IA. 16. At this juncture, we find it relevant to reproduce the Judgement of the Hon'ble Apex Court in 'Fourth Dimension Solutions' (Supra) which is detailed as hereunder: "Heard learned counsel for the parties. It is indisputable that the Resolution Plan approved by the Committee of Creditors has been finally upheld by this Court vide judgment dated 10.03.2021 in Civil Appeal Nos. 2943-2944 of 2020 titled as "Kalpraj Dharamshi & Anr. vs. Kotak Investment Advisors Ltd. & Anr." and connected cases, reported in 2021 (10) SCC 401. During the hearing of the stated appeal, it was brought to the notice of the Court that the appellant had preferred some appeal before the National Company Law Appellate Tribunal (in short "NCLAT") and it was still pending at the relevant time. This Court, in paragraph 160 of the judgment, therefore, directed that the said appeal shall proceed on merits. Pursuant to that liberty, the concerned appeal has now been decided by the NCLAT vide impugned judgment. In our opinion, it was sufficient for the NCLAT to dispose of the appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of time. 18. The ratio of this Judgement is applicable to the facts of this case, keeping in view that the CIRP Proceedings were invoked under Section 10 of the Code, that the name of the Appellant was mentioned in the list of 'Operational Creditors', that the RP had posted on the website that the 'Claims' of the 'Operational Creditors' are 'under verification', and that admittedly Pre-Arbitration Proceedings were pending 'prior to the invocation of the Section 10 Proceedings', and there was no 'Contingent Liability' or any other provision made in the Resolution Plan, subject of course, to the result of the Arbitration Proceedings. 19. For all the foregoing reasons, we are of the considered view that there is no illegality in the Order of the 'Approval of the Resolution Plan' by the Adjudicating Authority and we do not see any reason to set aside the Resolution Plan per se except for observing that the RP ought not to have made a 'Contingent Provision' with respect to the Appellant herein having regard to the specific facts of this case, which would be subject to the result of the Arbitration Proceedings. 20. Having observed so, liberty is being given to the Appellant herein to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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