All claims which weren’t part of RP would stand extinguished on approval of the plan: NCLAT
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- Last Updated on 21 March, 2023
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Case Details: R.S Wire Industries v. Trans-Fab Power India (P.) Ltd. - [2023] 147 taxmann.com 555 (NCLAT-New Delhi)
Judiciary and Counsel Details
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- Anant Bijay Singh, Judicial Member & Ms Shreesha Merla, Technical Member
- Ms. Pratiksha Sharma, Kunal Kanungo, Atishay Jain & Ankit Acharya, Advs. for the Appellant.
- Saahil Memon & Pramod Nanasabheb Patil for the Respondent.
Facts of the Case
In the instant case, the CIRP was initiated u/s 9 of the IBC against the respondent no. 1 (i.e. the corporate debtor). The appellant filed its claim before the Resolution Professional. However, the Resolution Professional rejected the said claim. Aggrieved by aforesaid rejection, the appellant filed an application before the Adjudicating Authority (NCLT).
The NCLT dismissed the said application observing that during pendency of the said application, a resolution plan was approved and in view of the same, nothing survived in that application. Thereafter, an appeal was made to the National Company Law Appellate Tribunal (NCLAT) against the order passed by the NCLT.
NCLAT Held
The NCLAT observed that since the resolution plan was duly approved by the NCLT u/s 31 of the IBC, claims as provided in the resolution plan should stand frozen and would be binded on the corporate debtor.
The NCLAT held that on the date of approval of the resolution plan by the NCLT, all such claims which were not part of the resolution plan should stand extinguished. Further, no person would be entitled to initiate or continue any proceedings in respect of a claim, which was not part of the resolution plan. Therefore, the NCLT had rightly dismissed the application filed by the appellant.
List of Cases Reviewed
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- Order of NCLT – Mumbai in I.A. 417/2021, I.A. 424/2021, I.A. 578/2021, I.A. 896/2021, I.A. 899/2021 & I.A 902/2021 in CP (IB) 3641/MB/2018, 7-7-2021 (para 10) affirmed.
- Ghanashyam Mishra & Sons (P.) Ltd. v. Edelweiss Asset Reconstruction Co. Ltd. [2021] 126 taxmann.com 132/166 SCL 237 (SC) (para 9) followed.
List of Cases Referred to
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- Ghanashyam Mishra & Sons (P.) Ltd. v. Edelweiss Asset Reconstruction Co. Ltd. [2021] 126 taxmann.com 132/166 SCL 237 (SC) (para 4).
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