Goltens India Pvt. Ltd. Vs. Sudip Bhattacharya, RPof Reliance Naval and Engineering Ltd. - In the event the suit of the Appellant is decreed, the claim being contingent, the Appellant shall be entitled claim from the Successful Resolution Applicant.

NCLAT (16.08.2022) in Goltens India Pvt. Ltd. Vs. Sudip Bhattacharya, RPof Reliance Naval and Engineering Ltd. [Company Appeal(AT) (Insolvency) No. 571 of 2022] held that;

• In the event the suit of the Appellant is decreed, the claim being contingent, the Appellant shall be entitled claim from the Successful Resolution Applicant. 

Excerpts of the order;

16.08.2022 Heard learned Counsel for the Appellant as well as learned Counsel for the Respondent.

# 2. This appeal has been filed against an order dated 30.03.2022 in so far as I.A. No. 135 of 2021 filed by Appellant has been disposed of. CIRP against Corporate Debtor commenced on 15.01.2020. The Appellant in the CIRP has filed his claim on 29.09.2020. The Appellant had filed a Commercial Suit bearing No. COMS/1218/2019 before Bombay High Court for recovery of outstanding amount from the Corporate Debtor, which Suit is still pending. The Resolution Professional has accepted the claim of the Appellant as ‘Contingent Claim’. Resolution Plan was approved by the CoC where a sum of Re. 1 was earmarked to the claim of the Appellant as a contingent claim. I.A. No. 135 of 2021 was filed by the Appellant before the Adjudicating Authority seeking direction against the Resolution Professional for rejecting his claim and also to include the name of the Applicant in the list of the creditors of the Corporate Debtor.

# 3. It has been submitted by the learned Counsel for the Resolution Professional that during pendency of the I.A., on direction of the Adjudicating Authority, the claim was re-verified and additional documents were filed brining on record before the Adjudicating Authority that the claim of the Appellant was admitted as a ‘Contingent Claim’. This is also reflected in the Resolution Plan. 

# 4. Adjudicating Authority in the impugned order has noticed the aforesaid facts:

• …… “Learned Senior Counsel Mr. Pahwa states that in reply page No. 24, the e-mail communication sent to the Applicant on 16.03.2021, the RP has mentioned that in the light of the pendency of the suit being COMS/1218/2019 before the Hon’ble Bombay High Court, the said amount claimed by the Applicant will be treated as contingent claimed until any judgment pronounced in the said suit, but admitting nominal amount of INR 1 as the claim of Applicant which is reflected on the website, in view of above, we consider that nothing survives in this Application.” …

# 5. The Adjudicating Authority having already observed and noticed that the claim of the Applicant is to be treated as contingent till the judgment is pronounced in the suit, the claim shall remain contingent. 

# 6. We see no reason to take any other view of the matter. In the event the suit of the Appellant is decreed, the claim being contingent, the Appellant shall be entitled claim from the Successful Resolution Applicant. 

With these observations, the Appeal is disposed of.

 

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Blogger’s Comments; In my opinion unless provision has been created in the approved Resolution Plan for contingent liabilities/claims, Successful Resolution Applicant can not be asked to entertain any such claim, in view of the “Doctrine of Clean slate”.

i). SCI (15.11.2019) in CoC of Essar Steel India Limited vs. Satish Kumar Gupta & Ors. (Civil Appeal No. 8766-67 OF 2019) held that;

• # 67. For the same reason, the impugned NCLAT judgment in holding that claims that may exist apart from those decided on merits by the resolution professional and by the Adjudicating Authority/Appellate Tribunal can now be decided by an appropriate forum in terms of Section 60(6) of the Code, also militates against the rationale of Section 31 of the Code. A successful resolution applicant cannot suddenly be faced with “undecided” claims after the resolution plan submitted by him has been accepted as this would amount to a hydra head popping up which would throw into uncertainty amounts payable by a prospective resolution applicant who successfully take over the business of the corporate debtor. All claims must be submitted to and decided by the resolution professional so that a prospective resolution applicant knows exactly what has to be paid in order that it may then take over and run the business of the corporate debtor. This the successful resolution applicant does on a fresh slate, as has been pointed out by us hereinabove. For these reasons, the NCLAT judgment must also be set aside on this count.

ii). Supreme Court (13.04.2021) in Ghanashyam Mishra and Sons Pvt. Ltd. Vs. Edelweiss Asset Reconstruction Company Ltd.  [CIVIL APPEAL NO.8129 OF 2019] held that,

• # 94.  . . . .We also hold, that even if 2019 amendment was not effected, still in light of the view taken by us, the Central Government, any State Government or any local authority would be bound by the resolution plan, once it is approved by the Adjudicating Authority (i.e. NCLT).

• # 95. In the result, we answer the questions framed by us as under:

• (i) That once a resolution plan is duly approved by the Adjudicating Authority under subsection (1) of Section 31, the claims as provided in the resolution plan shall stand frozen and will be binding on the Corporate Debtor and its employees, members, creditors, including the Central Government, any State Government or any local authority, guarantors and other stakeholders. On the date of approval of resolution plan by the Adjudicating Authority, all such claims, which are not a part of resolution plan, shall stand extinguished and no person will be entitled to initiate or continue any proceedings in respect to a claim, which is not part of the resolution plan;

• (ii) 2019 amendment to Section 31 of the I&B Code is clarificatory and declaratory in nature and therefore will be effective from the date on which I&B Code has come into effect;

• (iii) Consequently all the dues including the statutory dues owed to the Central Government, any State Government or any local authority, if not part of the resolution plan, shall stand extinguished and no proceedings in respect of such dues for the period prior to the date on which the Adjudicating Authority grants its approval under Section 31 could be continued.

• # 130.  . . . .As such, when the resolution plan is approved by NCLT, the claims, which are not part of the resolution plan, shall stand extinguished and the proceedings related thereto shall stand terminated. . . . .

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