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2023 (5) TMI 199 - AT - Insolvency and BankruptcyApproval of Resolution Plan - Resolution Plan can be challenged on the ground that it discriminates between the operational creditors who are similarly placed and also discriminates between the operational creditors and the financial creditors in respect of payments under the approved resolution plan - Appellant can raise the issue of admission of reduced amount of his claim at a much belated stage after the approval of resolution plan or not? - HELD THAT - After the RP had finally informed the Appellant vide email dated 02.09.2020 that only an amount of Rs.1, 13, 63, 918/- was admitted the Appellant did not take any further action about either preferring an appeal before the Adjudicating Authority on the matter of admission of reduced claim nor took up the matter with the RP and it is therefore logical and safe to presume that he accepted the admission of his claim at Rs.1, 13, 63, 918/- - Once the resolution plan has been approved vide the Impugned Order the issue of any claim could not be agitated or brought up at this late stage. The Judgement of the Hon ble Supreme Court in the matter of Jaypee Kingston Boulevard Apartments Welfare Association Ors. 2021 (3) TMI 1143 - SUPREME COURT is followed where it was held that once the Appellant did not challenge the admission of a reduced amount against the submitted claim the same cannot be challenged after approval of the resolution plan. Allocation of payments to various classes of creditors - HELD THAT - It is seen that the resolution plan proposed payments to the operational creditors including Appellant as NIL which was in accordance with the liquidation value of the corporate debtor. Thus the payments to operational creditors in the approved resolution plan is in consonance with Section 30(2)(b) of the IBC and hence it has been correctly approved by the CoC by the Adjudicating Authority and does not require any interference. Discrimination in payments inter se between the financial creditors and operational creditors - HELD THAT - Reliance placed in the judgment of Hon ble Supreme Court in the matter of Pratap Technocrats (P) Ltd. Ors. Vs. Monitoring Committee of Reliance Infratel Limited Anr. 2021 (8) TMI 553 - SUPREME COURT wherein it is held that the Section 30(2)(b) is to be looked into with regard to the payments to operational creditors - the judgement make it quite clear that the CoC has to adequately balance the interest of all the stakeholders including the operational creditors and the NCLT/NCLAT have to only see whether the resolution plan meets with the requirements of Section 30(2) and Section 31 of the Code and there is no residual jurisdiction to examine the business decision of the CoC - This has clearly been done in the present case by the CoC and the Adjudicating Authority while approving the resolution plan. It is also noted that in the grounds stated by the Appellant in the appeal there is no pleading as to how the resolution plan goes against the requirement of Section 30(2) and Section 31 of the Code and hence there is no reason for the Adjudicating Authority to have interfered with the decision of the CoC in approving the resolution plan. There are no reason why the resolution plan approved by the Impugned Order should be interfered with - appeal dismissed.
Issues Involved:
1. Whether the Appellant can raise the issue of admission of reduced amount of his claim at a much belated stage, after the approval of the resolution plan? 2. Whether the approval of the resolution plan can be challenged on the basis of discrimination between the financial creditors and operational creditors based on payments to be made to them under the approved resolution plan? Summary: Issue 1: Admission of Reduced Claim Amount The Appellant, an operational creditor, submitted a claim of Rs. 2,53,85,908/- during the Corporate Insolvency Resolution Process (CIRP) of the corporate debtor, Vadraj Energy (Guj) Limited. The Resolution Professional (RP) admitted only Rs. 1,13,63,918/- of this claim, citing inadequate proof of verification for the remaining amount and the cessation of services after 30.06.2018. The Appellant did not challenge this reduced admission at the time and only raised the issue after the resolution plan was approved by the Adjudicating Authority. The Tribunal held that the Appellant's delayed challenge was not permissible, referencing the Supreme Court's judgment in Ghanshyam Mishra and Sons Private Limited Vs. Edelweiss Asset Reconstruction Company Limited, which states that no further claims can be considered once a resolution plan is approved. Issue 2: Discrimination Between Financial and Operational Creditors The Appellant argued that the resolution plan discriminated against operational creditors by allocating 'NIL' payment to them while financial creditors received more than 18% of their claimed amounts. The Tribunal noted that the resolution plan's allocation was in accordance with Section 30(2)(b) of the Insolvency and Bankruptcy Code (IBC), which mandates that operational creditors receive at least the liquidation value, which in this case was 'NIL'. The Tribunal referenced the Supreme Court's judgment in Committee of Creditors of Essar Steel India Limited Vs. Satish Kumar Gupta & Ors., which upheld the discretion of the Committee of Creditors (CoC) in deciding the distribution of payments. The Tribunal found no violation of Section 30(2) or Section 31 of the IBC in the approved resolution plan and dismissed the appeal. Conclusion: The Tribunal dismissed the appeal, holding that: 1. The Appellant could not raise the issue of the reduced claim amount at a belated stage after the resolution plan's approval. 2. The resolution plan did not discriminate unfairly between financial and operational creditors, as it complied with the relevant provisions of the IBC.
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