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TMI Blog2025 (3) TMI 630X X X X Extracts X X X X X X X X Extracts X X X X ..... held that 'Timely resolution of a corporate debtor who is in the red, by an effective legal framework, would go a long way to support the development of credit markets. Since more investment can be made with funds that have come back into the economy, business then eases up, which leads, overall, to higher economic growth and development of the Indian economy. What is interesting to note is that the Preamble does not, in any manner, refer to liquidation, which is only availed of as a last resort if there is either no resolution plan or the resolution plans submitted are not up to the mark. Even in liquidation, the liquidator can sell the business of the corporate debtor as a going concern.' The entire code is consolidated to foresee the effective implementation of the Resolution Plan by provisioning various principles that have to be satisfied to the CoC before the approval of a Resolution Plan. The burden shifts to the commercial wisdom of a COC to foresee any contingency and to satisfy the 'feasibility and viability' of the plan. Once the Plan has been approved by the CoC, we do not find it legally tenable to direct any such changes in the plan that will be effective on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Project vide the Notice of Award/Letter of Intent/Purchase Order No. 4900016856 dated 16 May 2019 (as amended from time to time) including but not limited to the Change Order dated 23 December 2021 (collectively referred to as the Contract). On 23 December 2020, by way of a deed of assignment read with the Contract, (Embassy Commercial Projects (Whitefield) Private Limited) ECPWPL, the Applicant herein was appointed as a co-developer by VTPL for undertaking the development, operation and maintenance of Block 3 & Block 4 of the Embassy Tech Village including the Project with effect from 28 December 2020. ii) Katerra failed to meet the project deadline, leading to a change order and extended timelines for structural top-out, structural completion, and glazing completion. Despite these extensions, Katerra failed to fulfill its obligations, resulting in losses and long-delays. ECPWPL issued notices, citing non-performance, long-delays, and losses incurred due to descoping, additional costs, and additional costs. ECPWPL had to descope work, provide advances, and make direct payments to Katerra's vendors. iii) Katerra was admitted into insolvency in September 2023, and ECPWP ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (AT) (Insolvency) No. 285 of 2018 @ Para 3] viii) In addition, it is submitted that any attempt to extinguish ECPWPL's Claim through the resolution plan would be unjust and detrimental as it would, while keeping RP's claim alive, nullify ECPWPL's rights and deprive it from asserting its claim and formulate necessary defences in the arbitration proceedings after the CIRP of the Katerra is complete. [Shapoorji Pallonji & Co. (P) Ltd. v. Kobra West Power Co. Ltd., 2023 SCC OnLine NCLAT 968 @ Paras 14&20]. Further, if ECPWPL's Claim is extinguished, then it would prevent ECPWPL from not only asserting ECPWPL's Claim independently of Katerra's Claim (which are also not legally tenable) but also from claiming a set off against Katerra's Claim to the extent, if both Katerra and ECPWPL's Claim are allowed by an arbitral tribunal. ix) It is settled law that no claim which is disputed and has not been admitted on account of such dispute, can be extinguished (under a resolution plan) without it being adjudicated upon by a competent forum, which in the present case is the arbitral tribunal, to be constituted pursuant to the correspondence exchanged between the parties. [NTPC v. Rajiv Chakr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Professional and hence the Applicant herein is not entitled to any prayers that they have sought for. d) It is pertinent to note that the applicant in the present application has not sought directions from this Hon'ble Tribunal thereby calling upon the Resolution Professional to reconsider their claims, but on the contrary they have sought not to extinguish their claims. Such prayers would not fall in line with the essence of Insolvency and Bankruptcy Code but would run contrary to the same. Further if such players are allowed then a Pandora's Box would be open where, all the creditors would seek such reliefs as is sought for by the Applicant in the present application, which would make the corporate insolvency resolution process a never-ending exercise. e) It is submitted that all eventualities pertaining to all the creditors and stakeholders are taken care in the resolution plan submitted by the Successful Resolution Applicant. Further, considering and allowing the prayers that is short for by the Applicant in the present application would seriously prejudice the rights of the successful resolution applicant as the Insolvency and Bankruptcy Code and corporate insolvency ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... endure following its approval. 8) In this regard reliance is placed on the judgement of Hon'ble Supreme Court in the case of Ghanshyam Mishra & Sons Private Limited v. Edelweiss Asset Reconstruction Company Ltd (2021) 9 SCC 657 wherein it was held that, "23 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 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;" [Emphasis Supplied] Hence, the legal principle is clear that once the Resolution Plan is approved, no claim that is not a part of the Resolution Plan can exist or continue. This was laid in view of providing a "Clean Slate" to the Resolution Applicant to revive the Corporat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the judgment of Hon'ble Apex Court in the case of Swiss Ribbons Pvt. Ltd. and Anr. v. Union of India and Ors (2019) ibclaw.in 03 SC, order dated 25/01/2019, "11. As is discernible, the Preamble gives an insight into what is sought to be achieved by the Code. The Code is first and foremost, a Code for reorganization and insolvency resolution of corporate debtors. Unless such reorganization is effected in a time-bound manner, the value of the assets of such persons will deplete. Therefore, maximization of value of the assets of such persons so that they are efficiently run as going concerns is another very important objective of the Code. This, in turn, will promote entrepreneurship as the persons in management of the corporate debtor are removed and replaced by entrepreneurs. When, therefore, a resolution plan takes off and the corporate debtor is brought back into the economic mainstream, it is able to repay its debts, which, in turn, enhances the viability of credit in the hands of banks and financial institutions. Above all, ultimately, the interests of all stakeholders are looked after as the corporate debtor itself becomes a beneficiary of the resolution scheme - workers a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Co. Pvt. Ltd. has been categorized by the Resolution Professional as a 'contingent liability'. Respondent no. 1 - -Shapoorji Pallonji and Co. Pvt. Ltd. may continue with the arbitration proceedings for adjudication of its claim and quantification thereof, if they so wish and choose to do so.
However, the claim even if allowed in favour of M/s Shapoorji Pallonji and Co. Pvt. Ltd. will have no bearing on the rights and obligations of the appellant - M/s. Adani Power Limited, which are in terms of the Resolution Plan. It has been held by the judgment dated 23.02.2023, that the appellant cannot be saddled with any liability except what is mentioned in the Resolution Plan."
[Emphasis Supplied]
6. Accordingly, considering the ratio of the above judgment of the Hon'ble Apex Court including the latest judgment in the case of Adani Power Ltd. v. Shapoorji Pallonji and Co Pvt. Ltd. and Ors (supra), we are of the opinion that the prayer of the Applicant that the claim should not be allowed to be extinguished is not tenable in law, hence is not acceptable. In view of the above, the instant Application bearing I.A. No.545/2024 is not maintainable and is hereby dismissed. X X X X Extracts X X X X X X X X Extracts X X X X
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