CIRP proceedings are initiated with Public Notice and Resolution Plan takes its own time to get passed

CIRP proceedings are initiated with Public Notice and Resolution Plan takes its own time to get passed

In the matter of Kotak Mahindra Bank Ltd Vs. Committee of Creditors of Jaihind Projects Ltd & Ors, the National Company Law Appellate Tribunal (NCLAT) has dismissed the Appeal.

Herein, the Appellant claimed to be Secured Creditor/Financial Creditor of L&T Finance under deed of assignment and also claimed that the Appellant had to recover dues from the Corporate Debtor – Jai Hind Projects Ltd.

The Appellant submitted that the Insolvency Resolution Professional (IRP) was informed that Corporate Insolvency Resolution Process (CIRP) has been initiated and L&T Finance Ltd. was one of the Financial Creditors. It was informed that L&T Finance Ltd. had assigned the loan pertaining to the Corporate Debtor – Jai Hind Projects Ltd. in favour of the Appellant. The IRP was asked to confirm details of claim, if any, filed by L&T Finance against Jai Hind Project Ltd.

In response, it was stated that the IRP informed by e-mail that Mr. Parthiv Parikh –Insolvency Professional had taken over the charge of Resolution Professional with effect from 23rd January, 2019 and the Appellant may contact the Resolution Professional. It was stated that then an e-mail was sent to Mr. Parthiv Parikh informing that L&T has assigned loan to the Appellant and to confirm details of claim, if any, filed by L&T Finance against the Corporate Debtor in the insolvency proceedings.

On the other hand, the Appellant claimed that the RP had not been fair in communication as the RP did not inform that the Resolution Plan was already approved. Referring to another order, it was submitted that the RP in another incident had entered into settlement agreement when Resolution Plan was pending which had been criticised in that Order. It was stated that the said Application was still pending before Adjudicating Authority.

The Appellate Tribunal opined that considering the fact that the Resolution Plan was already approved on 19th March, 2020 and the Appellant filed claim on 15th June, 2020, keeping in view the provisions of IBC (Insolvency and Bankruptcy Code, 2016), it was not a matter where things could be undone.

The NCLAT observed that proceedings for CIRP are proceedings which are initiated with Public Notice and Resolution Plan takes its own time to get passed. The claims are to be filed in response to Public Notice which RP/IRP issued. In such contingency, after the Resolution Plan had already been approved in March, 2020, fresh claim could not be entertained in June, 2020.

As regards the Orders passed by the Hon'ble High Court in June, 2018 when Section 7 Application was admitted on 2nd November, 2018, as per the provisions of Section 14 moratorium would get invoked. The party aggrieved has been held to be required to follow the procedure under the provisions of IBC. The Appellant appeared to have filed claim after much delay and so the Appellate Tribunal did not find that the Appellant could be granted the relief as was being sought.