TMI Blog2021 (3) TMI 685X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 - The timelines prescribed under the Code aim at speedy and time-bound resolution. Thus, the impugned Order of the present nature, which allows a highly belated claim, mainly when the Claimant displays an overtly callous attitude, should be nibbed in the bud. Adjudicating such delayed claims could defeat the Code's purpose and cause unnecessary hurdle in the effective implementation of any Resolution Plan. Respondent No. 1 contended that erstwhile Directors are willing to cooperate with the Petitioner to sign the annual accounts if the Petitioner is ready to pay the legitimate claims of Respondent No. 1, such as salary dues to be paid to him and also to be other incidental expenses such as transport charges etc., as per law. Respondent No. 1 is not in Corporate Debtor's management. Only the Resolution Professional is competent to take any steps per law and cannot blame the erstwhile Directors for not signing the annual accounts. The erstwhile Directors, including Respondent No. 1, are not in the Corporate Debtor company's management since the financial statements are in the Resolution Professional's custody. The Respondent claims erstwhile directors cannot be b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat any payment to be made to the Appellant herein shall be made in accordance with the provisions of the IB code 2016 and Regulation thereunder. Accordingly, this adjudicating Authority hereby directs the RP to make payment of the salary to the Appellant as per amount acknowledged by him and as per provisions of the IB code 2016 and Regulations thereunder. (verbatim copy) 3. Brief facts of the case are as under; The Respondent No.1 Ex-Director of the Corporate Debtor, Sirpur Paper Mills Ltd, had filed IA No 208 of 2019 seeking the release of his claim towards payment of salary to the tune of ₹ 13,50,000/-, against the Resolution Professional (Appellant herein), feeling aggrieved by his Order of partial admittance of his claim about salary dues to the tune of ₹ 5,40,000/-. Upon submission of the claim by Respondent No1, the Resolution Professional evaluated the claim and partially admitted the claim to the tune of ₹ 5,40,000/-, based on the calculation of the salary dues up to the date of commencement of the Corporate Insolvency Resolution Process (in short CIRP), i.e. 18 September 2017. 4. By Order dated 19 July 2018, the Adjudicating Authority, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 31 (1) of the I B Code 2016. 7. It is further contended that the Corporate Debtor's Insolvency Resolution Process completed on 15 June 2018, and the Resolution Plan was approved vide Order dated 19 July 2020. The impugned order results from the concealment of material facts of the previous round of litigation by Respondent No 1. 8. Respondent No. 1, in pursuance to the commencement of CIRP of the Corporate Debtor, submitted its claim with the Appellant by email dated 28 February 2018, i.e. after almost 143 days beyond the deadline for submission of the claim as per the public announcement that too without any supporting documents. Upon evaluating the claim as on the date of commencement of CIRP of the Corporate Debtor, i.e. 18 September 2017, the Appellant RP partially admitted the claim of Respondent No 1 to the extent of ₹ 5,60,000/-, i.e. salary dues from June 2017 to 18 September 2017. 9. After that, Respondent, No 1 filed IA No. 208 of 2018 before the Adjudicating Authority and sought relief to admit and consider the entire claim of ₹ 13,50,000/- as salary dues up to February 2018. The Adjudicating Authority vide Order dated 19 July 2018 dismissed th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Authority by concealing material facts by which the impugned Order dated 4 August 2020 emanates. The payment of remuneration payable to Respondent No 1 was put to rest by the Adjudicating Authority by Order dated 19 July 2018 passed in IA No 208 of 2018. 17. The Adjudicating Authority by Order dated 19 July 2018 has decided the Application on merits wherein it is expressly held that Applicant/Respondent No. 1 is entitled from 19 September 2017 to 20 October 2017 for a salary but not by way of a claim filed during the CIRP period and further upheld that the rejection of the claim of the Applicant to the extent of ₹ 8.10 lakhs is sustainable. 18. Respondent No. 1, despite awareness of the aforesaid Order dated 19 July 2018, which squarely settled the claim, for which Respondent No. 1 was entitled, in utter disregard to the settled principle of Res-Judicata, had approached the Adjudicating Authority for release of alleged outstanding salary dues of ₹ 20,38,300/-. Respondent No. 1 had never challenged the Order dated 19 July 2018 before any authority attained finality. 19. The Learned Counsel for the Appellant further placed reliance on the Hon'ble Supreme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds satisfied to the extent of the guarantee, they cannot re-agitate such claim from the Principal Borrower. 21. The Application filed under Section 9 of the I B Code, 2016 was admitted by the Adjudicating Authority vide Order dated 18 September 2017. The Resolution Plan approved by the Committee of Creditors with a vote share of 80.66%, further approved by the Adjudicating Authority by Order dated 19 July 2018. Any claim that Respondent No. 1 is raising towards the provision of its services during the CIRP ought to form part of the CIRP costs, treatment of which has also been provided under the Resolution Plan. Therefore, all claims against the Corporate Debtor by any creditor for the past dues of CIRP have been duly considered and settled by the Resolution Plan. 22. Section 31 (1) of the Code in unequivocal terms provides that; the Resolution Plan shall be binding on the Corporate Debtor and its Employees, Members, Creditors, including the Central Government, any State Government or any Local Authority to whom a debt in respect of the payment of dues arising under any law for the time being in force, such as authorities to whom statutory dues are owned, guarantors and othe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... table for employees, a total sum of ₹ 67 lakhs has proposed further for payment to the employees other than workmen, after 3 months from the commencement of the production. It is further specified that all past dues of the employees other than workers stand paid and discharged, and the Resolution Applicant shall have no liability in respect of the same. 28. Given the law laid down by the Hon'ble Supreme Court in the case of Essar steel (supra), it is clear that an approved Resolution Plan is binding on all the stakeholders. The Successful Resolution Applicant acquired the Corporate Debtor on a clean slate and cannot be burdened with undecided claims from a period prior to the CIR process's commencement. 29. It is pertinent to mention that Respondent No. 1's Application IA No 208 of 2018 seeking identical relief was earlier dismissed by Order dated 19 July 2018, which is not considered by the Adjudicating Authority while passing the impugned Order. In the above-said Application, Respondent No. 1 had inter alia sought for release of salary to the tune of ₹ 13,50,000/- against the partial admittance of claim for an amount of ₹ 5,40,000/-. While dism ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rpose and cause unnecessary hurdle in the effective implementation of any Resolution Plan. 34. It is pertinent to mention that this Appellate Tribunal in case of the state of Haryana v Uttam Strips others Company Appeal (AP) (Ins) No.319 of 2020 while dealing with the similar issue where the State of Haryana did not properly file its claim before the Resolution Professional up to the prescribed time limit has held that since the Appellant failed to submit its claim before the Resolution Professional and the Resolution Plan submitted by Uttam Strips Private Limited was implemented. Therefore, given the law laid down by the Hon'ble Supreme Court in Essar steel (supra), the successful Resolution Applicant cannot be burdened with past dues after the Resolution Plan's approval and implementation. 35. The Order of the Adjudicating Authority dated 19 July 2018 regarding confirming rejection of the Appellant's claim to the tune of ₹ 8.10 lakhs was passed on merit and has attained finality. Regarding the dues of salary claim of Respondent No. 1 to the tune of ₹ 5.40 lakhs, which was admitted, the same is settled by the terms of the approved Resolution Plan. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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