NCLAT declines to entertain appeal against NCLT-approved Resolution Plan

NCLAT declines to entertain appeal against NCLT-approved Resolution Plan

The tribunal allowed Appellant to raise admissible issues before NCLT in the interim application

The National Company Law Appellate Tribunal (NCLAT) dismissed an appeal filed by a third party against the order of the National Company Law Tribunal (NCLT) at Mumbai, which approved the Resolution Plan submitted by the Respondent who is the Successful Resolution Applicant.

The matter titled Prudential International Insurance Holdings Ltd v. The Administrator, Dewan Housing Finance Corporation Ltd & Ors, was placed before the Division Bench of the NCLAT at New Delhi comprising of Justice A.I.S. Cheema and Dr Alok Srivastava.

The factual scenario of the matter was that the Appellant was a third party unconnected with the Corporate Insolvency Resolution Process (CIRP) of the Corporate Debtor. The Appellant was admittedly neither a Financial Creditor nor an Operational Creditor of the Corporate Debtor.

The Appellant claimed that it had certain pre-existing and continuing contractual arrangements with the Corporate Debtor and was 49 per cent shareholder of the Joint Venture Company –'Pramerica Life Insurance Limited', in which the Corporate Debtor was shareholder till 31 March 2017. It further claimed that the Resolution Applicant sought certain reliefs and waivers under the Resolution Plan which impact the rights of the Appellant because the Corporate Debtor continues to be bound by obligations of its shareholding under the Shareholder's Agreement dated 25 July 2013 and as per the Articles of the Joint Venture Company.

The Appellant had filed an Interim Application claiming the same before the NCLT at Mumbai but the Resolution Plan was approved by the NCLT before deciding the Interim Application. The Respondent – Successful Resolution Applicant submitted that once the Resolution Plan has been approved, such interim application would be deemed to be rejected.

The Division Bench observed that the parties had raised issues with regard to the rights claimed by the Appellant and whether or not the Appellant had a right to question the Resolution Plan. The Bench further chose not to comment on the same as the Interim Application was coming up for hearing before NCLT on 30 June 2021. However, it made the following observation:

"Without rights claimed by Appellant being adjudicated before Adjudicating Authority, Appellant cannot maintain challenge to approval of Resolution Plan by way of Appeal."

The appeal was, therefore, disposed of as premature with liberty to the Appellant to raise admissible issues before NCLT in the interim application.