Appeals related to CIRP filed by trading companies dismissed

Appeals related to CIRP filed by trading companies dismissed

The Appellate Tribunal opined that it was manifestly clear that the timelines had not been adhered to in so far as preferring of claims and submitting of proof to establish such claims was concerned

In the three Appeals filed by Pawan Trading Company, Madanlal Trading Company and Madanlal Balmukund Karwa Company, the Hon'ble NCLAT has held that since the CIRP had crossed the culminating point with the approval of the Resolution Plan of 'ShriDutt India Pvt. Ltd.', the Appellants could not be allowed to reopen the CIRP and direct de novo exercise after the CIRP period came to an end.

In this case, the Order delivered by the Adjudicating Authority (National Company Law Tribunal/NCLT), Mumbai Bench, approving the Resolution Plan of 'ShriDutt India Pvt. Ltd.' in respect of the Corporate Insolvency Resolution Process of the Corporate Debtor namely 'New Phaltan Sugar Works Limited' which had been unanimously approved by all the Committee of Creditors' members by 100% voting had been assailed in all the three appeals. The Respondents were common to all the three appeals while the Appellants in all the three appeals had suffered rejection of their claims during the Corporate Insolvency Resolution Process.

Admittedly, Resolution Plan submitted by the sole Resolution Applicant received unanimous approval of the Committee of Creditors after the dissenting creditors fell in line and conveyed their assent to the Committee of Creditors. Thus, the approval by the Committee of Creditors was with 100% vote shares.

It was also not in controversy that the claims filed by the Appellants were rejected on grounds of delay before approval of the Resolution Plan. The only grievance projected on behalf of the Appellants was that the delay was occasioned due to payment of money by the Appellants to their lenders.

The Appellant earlier claimed to have been arrested as a sequel to the filing of criminal cases against him. It was submitted that the Appellants had been victimized for the wrongful acts of the Directors of the Corporate Debtor who kept on giving false assurances to the Appellants. It was also stated that the Appellants had taken a loan which was advanced to the Corporate Debtor and the private lenders had filed various criminal cases against the Appellants.

Lastly, it was submitted that the Corporate Insolvency Resolution Process (CIRP) period was extended by the Adjudicating Authority by 90 days in terms of its order dated 11th September, 2019 and the Appellants had requested the Interim Resolution Professional (IRP) to consider their claims before the approval of the Resolution Plan but the same was not considered.

The Appellate Tribunal was of the considered opinion that the Appellants had failed to adhere to the timelines prescribed under the 'I&B Code' and the relevant Regulations as regards filing of claims. It was observed that the IRP had rejected the claim of the Appellant which was not substantiated by documentary evidence. This was done on 21st May, 2019.

The prayer of the Appellant seeking direction from the Adjudicating Authority in the name of the Resolution Professional to accept the supporting document in support of the claim came to be turned down in the face of delay and lapses on the part of the Appellant. A similar situation obtaining in case of the other two Appellants was not disputed.

The Appellate Tribunal opined that it was manifestly clear that the timelines had not been adhered to in so far as preferring of claims and submitting of proof to establish such claims was concerned.

The fact that the CIRP period was extended by 90 days by the Adjudicating Authority at the instance of the Resolution Professional would not clothe the Appellants with a right to claim consideration of their claims which stage was admittedly over. Moreover, subsequent rejection of I.A.s declining to allow proof to be adduced support of claims at the hugely belated stage left no room for contending that the opportunity of submitting the claims and adducing proof in support thereof was not provided to the Appellants. Hence, there being no merit in these appeals, the same were dismissed at the very threshold stage.