IBC – Inclusion of claim in CIRP at a belated stage and after approval of RP by COC but before approval of Adjudicating Authority is not permissible.
IBC – Inclusion of claim in CIRP at a belated stage and after IBC Resolution Plan approved by COC but before approval of Adjudicating Authority is not permissible.
On 2.8.2006 there was agreement between the appellant with one M/s. KST Infrastructure Pvt Ltd (Corporate Debtor) for development of 8 acres land in residential housing complex at Faridabad.
The said Corporate Debtor is not party to the Civil Appeal before the Supreme Court.
On 2.5.2011, the appellant sought reference to arbitration being aggrieved by the Corporate Debtor’s alleged misconduct in advertising the project in its name and without mentioning its name.
On 1.8.2016 the arbitral award for monetary claim was passed in favour of the appellant and also directed the CD to apply for transfer of requisite licences to the appellant.
On 26.9.2016, the CD filed section 34 petition challenging the award.
It appears that on the same date, the appellant filed proceedings for execution of the award.
However, on 22.12.2017, the execution proceedings were adjourned sine die on account of pendency of section 34 proceedings.
On 25.4.2019, the award was upheld with some modifications.
Appeal under Section 37 challenging the order dated 25.4.2019 and the award is pending.
On 27.3.2019, the application under Section 7 of IBC by the home buyers was admitted and CIRP was initiated against CD in respect of three real projects.
On 30.3.2019, IRP issued public notice inviting claims from creditors.
On 11.7.2020, COC approved the RP and it was submitted to the NCLT for approval on 8.9.2020.
On 19.8.2020, the appellant had sent email of pending claim of Rs.35,67,05,337 against the Corporate Debtor arising from the arbitral award dated 1.8.2016.
However, on 25.8.2020, the respondent no.1 Resolution Professional rejected the claim of the appellant on the ground of delay and the Resolution Plan was already passed by the Committee of Creditors in favour of the respondent no.2.
On 3.11.2020, the NCLT granted relief to the appellant in its application under Section 60(5) of IBC.
By the order dated 30.7.2021, the NCLAT set-aside the order of NCLT on five grounds summarised in para 9 of the judgment.
HELD that the mere fact that the Adjudicating Authority has yet not approved the plan does not imply that the plan can go back and forth, making CIRP an endless process. This would result in the reopening of whole issue and cautioned against allowing claims after resolution plan has been accepted by the COC.
Civil Appeal No.5590 of 2021 – M/s. RPS Infrastructure Ltd Vs. Mukul Kumar & Anr – Judgment dated 11.9.2023 of the Supreme Court of India.
