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TMI Blog2023 (4) TMI 413X X X X Extracts X X X X X X X X Extracts X X X X ..... al has held in several judgments that pre-CIRP dues cannot be recovered unless the creditor files a claim with the IRP/RP - It may be mentioned that once the resolution plan is approved, the said plan attains finality and becomes binding on all the stakeholders and after the approval of resolution plan, no fresh claim can be entertained. This Appellate Tribunal notes that the very intent of the I B Code, 2016 is for the revival of the Corporate Debtor and the matter has been greatly amplified by the Hon ble Supreme Court of India in the matter of Ghanshyam Mishra [ 2021 (4) TMI 613 - SUPREME COURT ] as well as catena of the other Judgments where it has been settled, loud and clear, that no claim remains/ sustains after the Resolution Plan is approved. If such claims are to be entertained at later stage then no Resolution Plan will ever be successful since uncertain, unclaimed and non- admitted claims will be keep on pouring in and subsequently the implementation of the Resolution Plan would be almost impossible. This Appellate Tribunal is of the opinion that after the implementation of the Resolution Plan, no subsequent claim can be entertained. This Appellate Tribunal h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... after adjusting the Security Deposit of Rs. 15,66,267.99. There were outstanding dues of Rs.20,24,789/- against the premises of the Corporate Debtor at Meghnagar even after Permanent disconnection of its HT Connection. 5. Vide letter dated 26.06.2018, the Corporate Debtor acknowledged its liability to the extent of Rs. 19,99,792/- and expressed its inability to immediately pay the said amount. 6. The Corporate Insolvency Resolution Process (in short CIRP ) was initiated in respect of the Corporate Debtor and the Interim Resolution Professional (in short IRP ) was appointed on 11.09.2018. The IRP issued a public announcement on 14.09.2018 in daily newspaper, website and invited claims from the creditors of the Corporate Debtor . Two Financial Creditors, namely PNB and SIDBI submitted their claims for an amount of Rs. 31,98,62,548/- and Rs.7,79,52,965/- respectively and the Committee of Creditors (in short CoC ) was constituted with 80.51% voting share of PNB and 19.49% voting share of SIDBI. In the tenth meeting of CoC held on 06.03.2019, the CoC unanimously passed the resolution for approval of the final Resolution Plan of the Resolution Applicant , ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ata basis to all Operational Creditors . 11. The Appellant is aggrieved that against admitted claims of Operational Creditors of Rs. 5.50 crores, the Resolution Plan provide merely Rs. 40 lakhs, i.e., 7.27% whereas the Financial Creditors were proposed to be paid 45.67% of the financial debt due. As per the Appellant , this is very disappropriate and against the intent of the I B Code, 2016. The Appellant is aggrieved that the Adjudicating Authority did not consider that there should not be a substantial difference (of many times the present case) between the payment made to Financial Creditors and Operational Creditors , in terms of percentage of their admitted dues. 12. The Appellant , stated that the Resolution Plan did not consider that the electricity dues of the Corporate Debtor cannot be waived and has to be provided in full. 13. As per the Appellant , the Adjudicating Authority has erred in not considering that without clearing the dues of the Appellant , the electricity connection of the Corporate Debtor cannot be restored and also the Appellant could not have been directed by way of the Resolution Plan to restore the deposit of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eed to be set aside. 18. The Appellant took pains to emphasise that electricity dues takes precedence in view of Section 56 of the Electricity Act, 2003 and Regulation 4.12 of the Madhya Pradesh Electricity Supply Code, according to which, in case of any pending dues, supply of electricity to a premises, independent of change of its ownership, may be refused. The Appellant submitted that therefore, a Resolution Plan mandating supply of electricity to a premises despite the previous electricity dues not having been paid contravenes the law. 19. Concluding his arguments, the Appellant assailed the impugned order which has been approved in violation of the provisions of the I B Code, 2016. 20. The Respondent No. 1 denied all the averments of the Appellant to be misleading, mischievous and devoid of any merit and urged that the Appeal need to be dismissed. 21. The Respondent reiterated the facts of the case and stated that the CIRP commenced vide the impugned order dated 11.09.2018 and therefore the IRP published Form-A on 14.08.2018 to invite claims of the creditors of the Corporate Debtor . However, the Appellant did not file any claim with t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his Appellate Tribunal has held that if a creditor does not file claim with the IRP/RP during the CIRP, and a Resolution Plan is passed then in such case, after the approval of the Resolution Plan , the claim cannot be entertained and the Resolution plan approved by the Adjudicating Authority shall be binding upon all the stakeholders. 28. The Respondent No. 1 submitted that the present appeal is not maintainable as the Applicant has failed to bring the claim before the IRP at the time of invitation of claims from creditors by the IRP Dated 14.09.2018 wherein the last date for submission of claims was 28.09.2018, hence the appellant has lost its right to enforce its claim. 29. The Respondent No. 1 concluding his pleadings, urged to dismiss the appeal. 30. In order to examine the issue raised in the appeal, it will be necessary to examine Section 18, 30 31 of the I B Code, 2016, which read as under:- 18. Duties of interim resolution professional. - The interim resolution professional shall perform the following duties, namely: - (a) collect all information relating to the assets, finances and operations of the corporate debtor for determining th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall examine each resolution plan received by him to confirm that each resolution plan (a) provides for the payment of insolvency resolution process costs in a manner specified by the Board in priority to the 3 [payment] of other debts of the corporate debtor; [(b) provides for the payment of debts of operational creditors in such manner as may be specified by the Board which shall not be less than- (i) the amount to be paid to such creditors in the event of a liquidation of the corporate debtor under section 53; or (ii) the amount that would have been paid to such creditors, if the amount to be distributed under the resolution plan had been distributed in accordance with the order of priority in sub-section (1) of section 53, whichever is higher, and provides for the payment of debts of financial creditors, who do not vote in favour of the resolution plan, in such manner as may be specified by the Board, which shall not be less than the amount to be paid to such creditors in accordance with sub-section (1) of section 53 in the event of a liquidation of the corporate debtor. Explanation 1. For removal of doubts, it is hereby clarified that a dist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7), where the resolution applicant is ineligible under section 29A and may require the resolution professional to invite a fresh resolution plan where no other resolution plan is available with it: Provided further that where the resolution applicant referred to in the first proviso is ineligible under clause (c) of section 29A, the resolution applicant shall be allowed by the committee of creditors such period, not exceeding thirty days, to make payment of overdue amounts in accordance with the proviso to clause (c) of section 29A: Provided also that nothing in the second proviso shall be construed as extension of period for the purposes of the proviso to sub-section (3) of section 12, and the corporate insolvency resolution process shall be completed within the period specified in that subsection]: [Provided also that the eligibility criteria in section 29A as amended by the Insolvency and Bankruptcy Code (Amendment) Ordinance, 2018 shall apply to the resolution applicant who has not submitted resolution plan as on the date of commencement of the Insolvency and Bankruptcy Code (Amendment) Ordinance, 2018.] (5) The resolution applicant may attend the meeting of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Competition Act, 2002, the resolution applicant shall obtain the approval of the Competition Commission of India under that Act prior to the approval of such resolution plan by the committee of creditors.] (emphasis supplied) 31. This Appellate Tribunal takes into account that the Resolution Plan provides for all creditors as approved by the CoC in their Commercial Wisdom. 32. This Appellate Tribunal also observes that the electricity was disconnected since July 1, 2019 by the Appellant and due to the same, will not form part of essential service as they are forming part of the dues prior to the initiation of the CIRP . 33. This Appellate Tribunal in State of Haryana Through Excise Taxation Vs. Uttam Strips Ltd. Ors. held as follows:- 9. Based on the above case, the law laid down by Hon'ble Supreme Court; it is clear that a Successful Resolution Applicant is not to be burdened with undecided claims at the stage of implementation of the Resolution Plan. The Successful Resolution Applicant is to be provided with a company free from past liabilities. It has been rightly understood that a Successful Resolution Applicant cannot be saddled w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave resulted in the CIRP and approval of successful Resolution Plan to continue for an indefinite period of time, which is certainly not the intention of IBC. A real hazard in such an event could be liquidation, and corporate death, of an otherwise functional and corporate debtor, with which Resolution Plan approved is set to come out of the Red (emphasis supplied) 36. This Appellate Tribunal takes into account that the Hon'ble Supreme Court of India in Ghanashyam Mishra Sons Pvt. Ltd. v. Edelweiss Asset Reconstruction Company Ltd [2021 9 SCC 657]. decided on 13.04.2021 that on approval of the Resolution Plan . 102.1. That once a resolution plan is duly approved by the adjudicating authority under sub-section (1) of Section 31, the claims as provided 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ear, that no claim remains/ sustains after the Resolution Plan is approved. If such claims are to be entertained at later stage then no Resolution Plan will ever be successful since uncertain, unclaimed and non- admitted claims will be keep on pouring in and subsequently the implementation of the Resolution Plan would be almost impossible. 41. In light of the discussion in the preceding paragraphs, this Appellate Tribunal is of the opinion that after the implementation of the Resolution Plan , no subsequent claim can be entertained. 42. As regard the averments of the Appellant about ratio of Essar Steels (Supra) it is noted that the payment of electricity dues are required to be suitably claimed in response to public announcement of the IRP/RP . It is significant to note that in 2019, an amendment was carried out in Regulation of IBBI (Resolution Process for Corporate Persons) Regulation, 2016 wherein the word has been prescribed claim with proof in place of earlier stipulated word proof of claim . As per Regulation 12(1) of the IBBI (Resolution Process for Corporate Persons) Regulation, 2016, a creditor has to submit claims with proof on or before the last date me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dues stand on completely different footing based on Section 66 of the Electricity Act, 2003 and Regulation 4.12 of the Madhya Pradesh Electricity Supply Code according to which notwithstanding provisions of any act, in case of any pending dues, supply of electricity to a premises may be refused. 47. The contention of the Appellant cannot be sustained in view of non obstante clause as provided in Section 238 of the I B Code, 2016 which reads as under: 238 The provisions of this Code shall have effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force or any instrument having effect by virtue of any such law . (emphasis supplied) After reading the Section 238 as above, it is clear that even if any other Act is in contravention to the provisions of I B Code, 2016, the provision of I B Code, 2016 shall prevail, hence the appellant plea based on the electricity Act and Madhya Pradesh Electricity Supply Code stand rejected. 48. This Appellate Tribunal has no hesitation in recording that the present appeal is not maintainable since the appellant has failed to submit its claim before the IRP at the time ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lation 6(2)(ii) and (iii), since the publication was uploaded on the website of the Corporate Debtor as well on the website of the Board. We, thus, do not find any error in the publication made by the IRP under Section 15 read with Regulation 6(1) of 2016 Regulations. The Appellant, who has not filed any claim before the IRP cannot be allowed to challenge the order approving the Resolution Plan by the Adjudicating Authority. No error has been committed by the Adjudicating Authority in approving the Resolution Plan submitted by Respondent No.2, which had received the approval of CoC by requisite majority. 15. In view of the foregoing, we do not find any ground to interfere with the impugned order passed by the Adjudicating Authority approving the Resolution Plan. There is no merit in the Appeal, the appeal is dismissed. No costs. (emphasis supplied) 51. Based on above detailed examination, in qualitative and quantitative manner, along with provisions of I B Code, 2016, cited Judgments of the Hon ble Supreme Court of India as well as this Tribunal earlier orders, we do not find any error in the impugned order dated 05.03.2020. 52. With regard to payment back by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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