TMI Blog2023 (3) TMI 70X X X X Extracts X X X X X X X X Extracts X X X X ..... s mentioned in the list of Operational Creditors, that the RP had posted on the website that the Claims of the Operational Creditors are under verification, and that admittedly Pre-Arbitration Proceedings were pending prior to the invocation of the Section 10 Proceedings, and there was no Contingent Liability or any other provision made in the Resolution Plan, subject of course, to the result of the Arbitration Proceedings. There is no illegality in the Order of the Approval of the Resolution Plan by the Adjudicating Authority and there are no reason to set aside the Resolution Plan per se except for observing that the RP ought not to have made a Contingent Provision with respect to the Appellant herein having regard to the specific facts of this case, which would be subject to the result of the Arbitration Proceedings. Having observed so, liberty is being given to the Appellant herein to pursue all contentions available to them in the pending Arbitration Proceedings and the same be decided in the said proceedings on its own merits in accordance with law. Appeal disposed off. - COMPANY APPEAL (AT) (INSOLVENCY) NO. 816 of 2019 - - - Dated:- 23-2-2023 - [Justice Anant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to continuously check the Website, that the RP had orally communicated to the Appellant on 26.07.2019 after the approval of the Resolution Plan vide Order dated 24.06.2019; that the RP had sent an email to the other Operational Creditor namely M/s. Premco Rail Engineers, who seeks to intervene in this Appeal, deeming their Claims as not verifiable in the light of the pending Arbitration Proceedings; that the RP had never rejected their Claims in writing, that the RP does not have Adjudicatory Powers regarding rejection of the Claims and that the Appellant was treated in an unfair and unjust manner. 3. Learned Counsel for the Appellant submitted that the collated Claims of the ongoing Arbitration Proceedings amounts to Rs.45,22,52,428/- and out of the total Claims of all Operational Creditors amounting to Rs.2,91,32,49,223/-, an amount of Rs.104.28Crs./- i.e., 35.79% of the amounts claimed was provided for the Operational Creditors under the Plan. But the Claim made by the Appellant was paid NIL only on the basis of the rejection by the RP which has no basis in law. Learned Counsel in support of his submission that an Arbitration Proceeding cannot be exting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Liquidation Value of the Corporate Debtor was Rs.1,454.93Crs./- whereas the debt of the Financial Creditors was Rs.3,346.81Crs./- and therefore the minimum amount that the Operational Creditors are entitled to in this case is NIL as per Section 30(2)(b) read with Section 53 of the Code. Despite having no entitlement to any amount the Resolution Plan provides for ex-gratia payment of Rs.104.28Crs./- towards admitted dues of Operational Creditors . The approved Resolution Plan is binding all the Stakeholders including the Appellant and the same has been reiterated by the Hon ble Supreme Court in a catena of Judgements namely the following: Ghanshyam Mishra and Sons Private Limited Vs. Edelweiss Asset Reconstruction Company Limited Civil Appeal No.8129/2019 . Committee of Creditors of Essar Steel India Limited Vs. Satish Kumar Gupta Ors. Civil Appeal No.8766-67/2019 . The Dy. Commissioner of Customs DEEC (Monitoring Cell) Vs. Vandana Garg Comp. App. (AT) (Ins.) No.964/2020 . Harish Polymer Product Vs. George Samuel, RP for Jason D cor Pvt. Ltd. Comp. App. (AT) (Ins.) No.420/2021 . 7. It is submitted by the Learned Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... demand for any losses or damages, principal, interest, compound interest, penal interest, liquidated damages, and other charges already accrued/accruing or in connection with any third party claims) have been submitted to the Resolution Professional or not, whether admitted by the Resolution Professional or not, and whether or not set our in the Investor On-boarding Deck, the Virtual Data Room, the balance Sheets of the corporate Debtor or the profit and loss account statements of the Corporate Debtor, being due or contingent, asserted or unasserted, crystallized or uncrystallized, known or unknown, disputed or undisputed, till the CIRP Commencement Date shall be deemed to be permanently extinguished with effect from the NCLT Approval Date, by virtue of the order of the NCLT approving this Resolution Plan. The Resolution Applicant shall at no point of time, directly or indirectly, have any obligation, liability or duty in relation thereto. For the removal of doubt, it is clarified that any Claim (as determined and verified in accordance the Code) in respect of any debt that is in the nature of Operational Debt (as defined under Section 5(21) of the Code), whether claimed or unclaim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ral Proceedings. Learned Counsel placed reliance on the Judgement of the Hon ble Supreme Court in Committee of Creditors of Essar Steel India Ltd. Vs. Satish Kumar Gupta Ors. (2020) 8 SCC 531 , in paragraph 107, wherein it was expressly held that claims that existed apart from those decided on merits by the RP and by the Adjudicating Authority/Appellate Tribunal can now be decided by an appropriate forum in terms of Section 60(6) of the Code: 107. For the same reason, the impugned NCAT judgment Standard Chartered Bank v. Satish Kumar Gupta, 2019 SCC OnLine NCLAT 388 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 ove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rejected on account of the pending Arbitration Proceeding between the Appellant and the Corporate Debtor . It is seen from the record that the list of Operational Creditors dated 08.04.2019 was uploaded on the website of the Corporate Debtor and thereafter the Plan was approved on 24.08.2019 by the Adjudicating Authority. It is the case of the Appellant that they have no knowledge of the list of Operational Creditors which was uploaded on website as there was no communication to them regarding the same. It was only on 26.07.2019 after the approval of the Resolution Plan that the Appellant had come to know regarding the rejection of the claims. The Hon ble Supreme Court in Swiss Ribbons Private Limited Anr. Vs. Union of India Ors. (2019) 4 SCC 17, has observed as follows: 77.NCLAT has, while looking into viability and feasibility of resolution plans that are approved by the Committee of Creditors, always gone into whether operational creditors are given roughly the same treatment as financial creditors, and if they are not, such plans are either rejected or modified so that the operational creditors' rights are safeguarded. It may be seen that a resolution pl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Corporate Debtor was Rs.1,454.93Crs./- and as the admitted debt of the Secured Financial Creditor was about this value, the minimum amount that the Operational Creditors are entitled to in this case is NIL as per Section 30(2)(c) read with Section 53 of the Code. Despite this, the Resolution Plan provides for Rs.104.28Crs./- towards the admitted dues of the Operational Creditors in the manner provided for in the Plan. 14. In this factual matrix, the main point which arises for consideration in this Appeal is whether the Appellant/ Operational Creditor can be allowed to pursue the Arbitration Proceedings in the light of the ratio laid down by the Hon ble Apex Court in Fourth Dimension Solutions (Supra). It is the case of the Learned Sr. Counsel Mr. P. Nagesh appearing for the SRA that once the Resolution Plan is approved as per the precedents laid down by the Hon ble Apex Court in Ghanshyam Mishra and Sons Private Limited (Supra), K. Shashidhar Vs. Indian Overseas Bank Anr. (2019) 12 SCC 150 , Maharashtra Seamless Ltd. Vs. Padamanabhan Venkatesh Ors. (2020) 11 SCC 467 and in Kalpraj Dharamshi Anr. Vs. Kotak Investment Advisors Ltd. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... RP published updated list of Creditors of the Corporate Debtor, wherein the admitted claims of the Appellant was indicated as 'Nil' with an appended note: 2. The claims pertaining to FDSL have been disputed and are proceedings before the Arbitrators/Appellate Authorities. The liability is subjected to outcome of these proceedings . In light of this factual position, in our opinion, the appeal needs to be disposed of by restating the said fact with liberty to the parties to pursue all contentions available to them in the proceedings pending at the relevant time, if any. It is stated that some arbitration proceedings were pending between the parties. If so, all contentions available to both sides be decided in the said proceedings on its own merits in accordance with law. The civil appeal is disposed of accordingly. Pending applications, if any, stand disposed of. (Emphasis Supplied) 17. In the aforenoted Judgement in Civil Appeal No.5908/2021, the Resolution Plan was approved by the Committee of Creditors and also upheld by the Hon ble Apex Court vide Judgement dated 10.03.2021 in Kalparaj Dharamshi Ors. Vs. Kotak Investment Advisors ..... 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