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TMI Blog2024 (8) TMI 159X X X X Extracts X X X X X X X X Extracts X X X X ..... of the CPC may not apply on the facts of the case, however, the Court has ample power under Section 151 of the CPC to dismiss the Suit as having been rendered infructuous due to a subsequent development because of which relief claimed in the Suit cannot be granted. In my opinion, this Suit would be a fit case for the Court to exercise its powers under Section 151 of the CPC to scuttle such a suit as the relief prayed for in the present Suit, due to the subsequent development of the Resolution Plan passed by the learned NCLT, can no longer survive and be granted. The defendant/applicant succeeds in the application - Application allowed. - HON'BLE MR. JUSTICE NAVIN CHAWLA For the Plaintiff Through: Ms. Poonam, Mr. Atul Kumar, Ms. Yukti Gupta, Advs. For the Defendant Through: Mr. Ashim Sood, Mr. Mridul Yadav, Ms. Gunjan Mathur, Mr. A. Sengar, Ms. Pakavi Pratap, Ms. Kinjal, Advs. NAVIN CHAWLA, J. (ORAL) I.A. 11494/2022 1. This application has been filed by the plaintiff praying for directions to the defendant to produce on record the Resolution Plan, list of undisputed documents, and list of operational creditors; specify the names of the individuals and creditors who have been p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ancial Asset Reconstruction Company, JM Finance ARC March 2018-Trust. The said Resolution Plan was approved by the learned NCLT vide its Orders dated 08.03.2019 and 26.07.2019, respectively. 11. The defendant asserts that in terms of Clause 3.3.1 of the approved Resolution Plan, the defendant company was to make payment only to those Operational Creditors, as set out in Annexure 9 to the Resolution Plan, to whom the Company owed amount only upto Rs.3 lacs. For the remaining Operational Creditors, whether their claims were already admitted as on the Closing Day or are made or admitted thereafter, the claim was to be treated as NIL. The defendant claims that the plaintiff herein was not shown in the list of operational creditors of the defendant company and has not filed any claim till date. 12. The defendant claims that in terms of Clause 3.3.6 of the approved Resolution Plan, failure to submit claims during the period prior to the Closing Date would result in extinguishment of such claims on the Closing Date. The defendant asserts that therefore, the claim of the plaintiff herein is now barred and cannot proceed. SUBMISSIONS OF THE LEARNED COUNSEL FOR THE DEFENDANT/APPLICANT: 13. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3, 3.3.6 and 3.3.7 of the Resolution Plan are relevant to the adjudication of the present application, and are reproduced hereinunder: 3.3. Operational Creditors (including the Central Government, State Government or any local authority) 3.3.1. Amount to be paid to Operational Creditors pursuant to this Plan As per the Information Memorandum, the liquidation value of the Company is Rs 4433,00,00,000 (Rupees Four Thousand Four Hundred Thirty Three Crores only), which is less than the sum of Estimated CIRP Costs and Outstanding Financial Debt, therefore, the liquidation value available to Operational Creditors (other than employees and workmen who have been dealt with separately under Section 3.4 below) is NIL. Accordingly, no amounts are proposed to be paid under this Plan to the Operational Creditors (other than (i) employees and workmen who have been dealt with separately under Section 3.4 below; and (ii) the dues owed by the Company to certain Operational Creditors (to each of whom the Company, as on the Insolvency Commencement Date, owes up to Rs. 3,00,000 (Rupees Three Lakhs) and whose details are set out in Annexure 9), which dues aggregates to Rs. 4,83,47,321 (Rupees Four Cro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , each as defined under the IBC, and would consequently qualify as operational debt (as defined under the IBC). Accordingly, the full amount of such claims / amounts shall be deemed to be owed and due as of the Closing Date, the liquidation value of which is NIL and therefore, no amount is payable in relation thereto. 3.3.3. Treatment of Claims by Operational Creditors on matters that are Sub-Judice As per the information set out in Annexure H of the Information Memorandum, we understand that the list of claims of Operational Creditors as set out in Annexure D of the Information Memorandum does not include claims submitted by certain persons relating to certain matters which we understand are sub judice before various judicial fora, details of which have been set out in Annexure H of the Information Memorandum. The matters set out in Annexure H of the Information Memorandum (and the corresponding claims against the Company), together with all other claims against the Company which may be pending or sub judice before any forum as on the Closing Date (whether or not such claims are Included in the list of claims of Operational Creditors as set out in Annexure D of the Information Mem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pany in the years ended March 31, 2016, March 31, 2017 and March 31, 2018) have all filed their claims and all verifiable claims as on the date of approval of this Plan by the CoC, have been admitted by the Resolution Professional and are disclosed in the Information Memorandum, provided that nothing contained herein shall result in an increase in the Total Financial Outlay proposed under this Plan. (ii) In the event any person that has any claim(s) against the Company (including Financial Creditors, Operational Creditors, Other Creditors, Governmental Authorities, or otherwise), has not submitted its claim(s) (whether or not it was aware of such claim at such time), or if the claim(s) filed by any person has been rejected and/or not been admitted by the Resolution Professional (including any claim against the Company from GAIL (India) Limited arising directly or indirectly under, out of, or in relation to the gas sale agreement dated May 27, 2013 entered into between GAIL (India) Limited and the Company), then: (a) all such obligations, claims and liabilities of the Company (whether final or contingent (whether crystallized or not), whether disputed or undisputed, and whether or n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erest and/or guarantee, over the assets of the Company /Corporate Debtor, shall immediately, irrevocably and unconditionally stand withdrawn, abetted, settled and/or extinguished. Provided however, any rights or claims of the financial creditors with respect to Existing Promoters Guarantees shall continue against such guarantors . Approval of the Resolution Plan does not mean automatic waiver or abetment of any legal proceedings which are pending by or against the Company/Corporate Debtor as those are the subject matter of the concerned Competent authorities having their proper /own jurisdiction to pass any appropriate order as the caws may be. The Resolution Applicants on approval of the Plan may approach the Competent Authorities /Courts/Legal Forums/Offices-Govt. or Semi Govt. /State or Central Govt. for appropriate relief(s) sought for in Clause No.3.2.3 (iii) of the Resolution Plan at Page No.19. 22. Clause 3.2 of the Resolution Plan deals with the Financial Creditors of the defendant company. The plaintiff herein would not qualify as the Financial Creditor of the defendant company, but at best would have been its Operational Creditor . Therefore, the plaintiff would fall unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g 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. 102.2. The 2019 Amendment to Section 31 of the I B Code is clarificatory and declaratory in nature and therefore will be effective from the date on which the I B Code has come into effect. 102.3. Consequently, all the dues including the statutory dues owed to the Central Government, any State Government or any local authority, if not part of the resolution plan, shall stand extinguished and no proceedings in respect of such dues for the period prior to the date on which the adjudicating authority grants its approval under Section 31 could be continued. (Emphasis supplied) 24. The Supreme Court has, therefore, clarified that on the approval of the Resolution Plan, all claims which were not part of the Resolution Plan stand extinguished and the plaintiff will not be entitled to initiate or co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to promote substantial justice subject, of course, to the absence of other disentitling factors or just circumstances. Nor can we contemplate any limitation on this power to take note of updated facts to confine it to the trial court. If the litigation pends, the power exists, absent other special circumstances repelling resort to that course in law or justice. Rulings on this point are legion, even as situations for applications of this equitable rule are myriad. We affirm the proposition that for making the right or remedy claimed by the party just and meaningful as also legally and factually in accord with the current realities, the court can, and in many cases must, take cautious cognizance of events and developments subsequent to the institution of the proceeding provided the rules of fairness to both sides are scrupulously obeyed. 24. Almost similar is the view taken by this Court in the case of J.M. Biswas v. N.K. Bhattacharjee, (2002) 4 SCC 68 wherein this Court held: (SCC p. 71, para 10) [T]he dispute raised in the case has lost its relevance due to passage of time and subsequent events which have taken place during the pendency of the litigation. In the circumstances, con ..... 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