Appellant’s claim that couldn’t be substantiated before approval of RP can’t be entertained later

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  • Last Updated on 24 December, 2022

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Resolution Professional

Case Details: S.C. Brothers Lorry Transport Service v. Resolution Professional of Empee Distilleries Ltd. - [2022] 145 taxmann.com 387 (NCLAT-Chennai)

Judiciary and Counsel Details

    • M. Venugopal, Judicial Member & Naresh Salecha, Technical Member
    • I. Dinesh, Advocate for the Appellant.
    • Ms Savitha, Advocate & Avinash Krishnan Ravi for the Respondent.

Facts of the Case

In the instant case, the CIRP was initiated against the corporate debtor and R1 was appointed as Resolution Professional (RP). The Resolution Plan submitted by the R2-Successful resolution applicant (SRA) was approved by the Adjudicating Authority (NCLT) by its impugned order.

Thereafter, the appellant-operational creditor filed an application before the NCLT seeking direction to respondents to make a payment towards the appellant’s claim from contingency funds. The RP submitted that he had requested the appellant to submit supporting documents to establish claims and had also listed the documents required.

However, the appellant had failed to furnish documents and, therefore, RP was not able to admit the claim of the appellant. The National Company Law Tribunal (NCLT) dismissed the application filed by the appellant. Thereafter, an appeal was made to the National Company Law Appellate Tribunal (NCLAT) against the order passed by the NCLT.

The appellant submitted that when a contingency fund was available, the NCLT ought to have directed the RP to accept the claims of the appellant and therefore, the NCLT had erred in rejecting the appellant’s claim.

NCLAT Held

The NCLAT held that the Adjudicating Authority (NCLT) rightly rejected a claim of the appellant on the ground that claims couldn’t be substantiated by furnishing the necessary supporting documents.

The NCLAT, further held that a claim couldn’t be entertained after the resolution plan was fully implemented and new management of SRA had taken over. Therefore, on qualitative and quantitative rumination of facts, the appeal was to be dismissed.

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