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TMI Blog2025 (4) TMI 636X X X X Extracts X X X X X X X X Extracts X X X X ..... hereinafter referred to as 'Impugned Order') passed by the Adjudicating Authority (National Company Law Tribunal, Mumbai Bench-III) in I.A. No. 4898 of 2023 in CP (IB) No. 315 (MB) of 2019. By the impugned order, the Adjudicating Authority has dismissed the IA No. 4898 of 2023 filed by the Appellant seeking admission of additional claim in the Corporate Insolvency Resolution Process ("CIRP" in short) of the Corporate Debtor. Aggrieved by the impugned order, the present appeal has been preferred by the Appellant-Employee Provident Fund Organization ("EPFO" in short) for not having taken into cognizance of the additional claims filed by them in respect of the Provident Fund and allied dues. 2. The chronological sequence of events of the present case which are necessary to be noticed for consideration of the matter by us is as hereunder: On 04.08.2005, a Development Agreement was entered into between M/s Ralliwolf Ltd. and M/s Nirmal Lifestyle Realty Pvt. Ltd. by which M/s Nirmal Lifestyle Realty Pvt. Ltd. assumed all liabilities and financial obligations of M/s Ralliwolf Ltd. On 06.12.2021, the Corporate Debtor-M/s Nirmal Lifestyle Realty Pvt. Ltd. was admitted to the Corporate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ings. The Appellant has placed reliance on the judgement of the Supreme Court in Maharashtra State Co-operative Bank Ltd. v. APFC (AIR 2010 SC 868) which confirm that statutory obligations must be fulfilled in insolvency proceedings. The Appellant has relied on Supreme Court rulings in Sunil Kumar Jain v. Sundaresh Bhatt in Civil Appeal 5910 of 2022 which reaffirm that PF contributions must be protected and cannot be compromised during insolvency resolutions. 4. Explaining the genesis of the additional claims, submission was pressed that the wage claims of the workmen amounting to Rs 62.44 Cr. was approved on 11.11.2022 and hence the additional claims of corresponding PF liability arose thereafter. Delay in raising the additional claim subsequent to the approval of the resolution plan by the CoC on 01.09.2022 was therefore neither deliberate nor attributable to any negligence on the part of the Appellant. The additional claim was submitted on 08.06.2023 which date was admittedly after the CoC had approved the plan but before the final approval of the Resolution Plan by the Adjudicating Authority on 09.08.2024. Since CoC's approval of a Resolution Plan does not constitute final acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted to muster up an additional claim of Rs 34,31,98,854 which was justifiably rejected by the RP by way of a detailed communication citing grounds for rejection. The Adjudicating Authority also rightly dismissed the Appellant's I.A. seeking admission of these additional claims at such a delayed stage. It has been further contended by the Respondent that the Appellant was seeking to introduce this additional claim without any proper determination or authoritative computation of the liability under the EPF & MA Act. The additional claim is unsubstantiated by any proof or evidence in the form of supporting documents. The claim is based on mere arithmetical calculations basis an order from the Industrial Court dated 19.11.2013 relating to compensation for violation of Section 25F of Industrial Dispute Act without proper inquiry. Such claims cannot be entertained when they lack a legal foundation and are filed at an advanced stage of the CIRP. 8. In support of their contention, the Respondent No.1 adverted attention to the impugned order wherein the Adjudicating Authority has placed reliance on the judgements of the Hon'ble Supreme Court in Committee of Creditors of Essar Steel vs. Sat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant. 10. We have duly considered the arguments advanced by the Learned Counsels for all the parties and perused the records carefully. 11. The short issue before us for consideration is whether sufficient reasons/grounds existed to admit the belated additional claim filed by the Appellant on 08.06.2023 after the approval of the resolution plan by the CoC on 01.09.2022. 12. Coming to the scheme of IBC, the statutes of IBC provide that once a CIRP application is admitted under Sections 7, 9 or10 of IBC, the RP issues a public announcement inviting claims from all the stakeholders of the Corporate Debtor. Section 18(1)(b) of IBC provides that the IRP shall receive and collate all the claims submitted by creditors to him, pursuant to the public announcement made by him in compliance with Sections 13 and 15 of the IBC read with Regulation 6 of CIRP Regulations. Thereafter the RP is to collate the claims and update the same in the Information Memorandum, basis which potential resolution applicants are expected to submit their resolution plan for consideration of the CoC. The plans are deliberated and eventually approved by the CoC in exercise of their commercial wisdom. After the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, the filing of additional claims entailed a delay of nearly one year and three months. Viewed from the perspective of last date for submission of claims as per public announcement which was 03.01.2022, there was a clear delay of 521 days from the last date of submission of the claim. When counted from the date of approval of the plan by the CoC, nearly 09 months had elapsed since then. That there was delay on the part of the Appellant in the submission of the additional claims is therefore well established. 17. The explanation which has been offered by the Appellant for belated filing of the additional claim was that the Appellant became aware of the order passed by the Industrial Court only after it was served with an application filed by Association of Engineering Workers. We are not satisfied with this explanation since the Industrial Court's order was passed on 21.11.2019 whereas the CIRP had commenced on 06.12.2021. It does not appeal to reason that it could have taken two years from the date of passing of the order by the Industrial Court to compute the additional claims. The Adjudicating Authority in its impugned order has therefore rightly observed that there was suffici ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 53 of the IBC, the RP was bound to accept the additional claims. No approved Resolution Plan can lawfully exclude PF dues, which are legally protected and remain outside the purview of insolvency proceedings. Hence the additional claims deserved to be admitted. Per contra, it is the case of both the Respondents that keeping in view the fact that the objective and intent of the IBC is time-bound resolution of the Corporate Debtor to maximize value, if new and additional claims are allowed to crop up and are entertained much after the CoC has already approved the resolution plan, the CIRP would be put to jeopardy and the intent of IBC would stand frustrated. Hence the RP cannot be faulted for rejecting the belated claims. 20. At this juncture, it may be useful to notice how the Adjudicating Authority has viewed this delay in the filing of belated additional claims. After adverting reference to the judgements of the Hon'ble Supreme Court in Essar Steel and in RP Infrastructure Limited judgements supra, the Adjudicating Authority has returned the following findings as reproduced hereunder: '23. Therefore, the settled law on this issue is that no claims can be submitted at a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he requirements as are provided in subsection (2) of Section 30 of the I&B Code. Only thereafter, the Adjudicating Authority can grant its approval to the plan. It is at this stage, that the plan becomes binding on Corporate Debtor, its employees, members, creditors, guarantors and other stakeholders involved in the resolution Plan. The legislative intent behind this is, to freeze all the claims so that the resolution applicant starts on a clean slate and is not flung with any surprise claims. If that is permitted, the very calculations on the basis of which the resolution applicant submits its plans, would go haywire and the plan would be unworkable." 22. In the facts of the present case, there is no dispute with the facts that the additional claims made by the Appellant were placed before the RP by the Appellant after approval of the resolution plan by the CoC. In terms of the Ghanashyam Mishra judgment, the additional claim not being part of the resolution plan stood extinguished and therefore no proceedings could be continued in respect of such claims as allowing such belated additional claims would come in the way of the SRA in reviving the operations of the Corporate Debtor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt in Committee of Creditors of Essar Steel India Limited Vs. Satish Kumar Gupta and Ors 2019 SCC Online SC 1478 has articulated the fresh slate theory and held : "105. Section 31(1) of the Code makes it clear that once a resolution plan is approved by the Committee of Creditors, it shall be binding on all stakeholders including guarantors. This is for the reason that this provision ensures at the successful resolution applicant starts running the business of the corporate debtor on a fresh slate as it were. 107. For the same reason, the impugned NCLAT judgment in holding that claims that may exist apart from those decided on merits by the resolution professional and by the Adjudicating Authority/Appellate Tribunal can now be decided by an appropriate forum in terms of Section 60(6) of the Code, also militates against the rationale of Section 31 of the Code. A successful resolution Applicant cannot suddenly be faced with "undecided" claims after the resolution plan submitted by him has been accepted as this would amount to a hydra head popping up which would throw into uncertainty amounts payable by a prospective resolution Applicant who would successfully take over the busin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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