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Dues of operational creditors are to be made in the manner as Insolvency & Bankruptcy Code lays down

The National Company Law Appellate Tribunal (NCLAT), New Delhi bench comprising Justice Rakesh Kumar Jain, Judicial Member and Dr. Alok Srivastava, Technical Member was hearing an appeal and held that Section 30(2)(b) of the IBC lays down the manner in which ‘debts’ of operational creditors are to be made.

The Appellant Company is an operational creditor of the corporate debtor and is in the Corporate Insolvency Resolution Process (CIRP). The Appellant is aggrieved by the Impugned Order of the Adjudicating Authority which approves the resolution plan filed by Respondents 3 & 4 that discriminates between the operational creditors who are similarly placed and also discriminates between the operational creditors and the financial creditors in respect of payments under the approved resolution plan. The two issues that arose for consideration in the present Appeal were:—(i) Whether the Appellant can raise the issue of admission of the reduced amount of his claim, at a much-belated stage, after the approval of the resolution plan? And (ii) Whether the approval of the resolution plan can be challenged on the basis of discrimination between the financial creditors and operational creditors based on payments to be made to them under the approved resolution plan.

The Appellate Authority observed that the Appellant had been informed without any ambiguity and with clarity that since the power plant was closed w.e.f. 30.06.2020, only an amount of Rs. 1,13,63,918/- was admitted against his submitted claim. It is thus clear that after the RP had finally informed the Appellant vide email dated 02.09.2020 that only an amount of Rs.1,13,63,918/- was admitted, the Appellant did not take any further action about either preferring an appeal before the Adjudicating Authority on the matter of admission of reduced claim, nor took up the matter with the RP, and it is, therefore, logical and safe to presume that he accepted the admission of his claim at Rs. 1,13,63,918/-. It is a well-settled opinion that once the resolution plan has been approved vide the Impugned Order the issue of any claim could not be agitated or brought up at this late stage.

The Appellate Authority further noted that through email dated 15.10.2021, the RP informed the Appellant that NCLT, Ahmedabad had approved the resolution plan for the corporate debtor vide its order dated 07.10.2021 and his admitted claim has received ‘NIL’ allocation as per the approved resolution plan. Regarding the allocation of payments to various classes of creditors, the Liquidation Value of the Corporate Debtor was assessed as Rs. 34,22,46,797/-, whereas the debt of the financial creditors itself is Rs. 593,68,95,085/-. After taking into account the waterfall mechanism envisaged under Section 53 of the IBC, the entire amount of Rs. 34,22,46,797 /- would be exhausted in the payment of the CIRP costs, workmen dues, and dues owed to the secured financial creditors which are much in excess of Rs. 34,22,46,797 /- and no amount would remain for payment to the operational creditors as required by section 30(2)(b) and the waterfall mechanism of section 53.

In light of the above, the Appellate Tribunal didn’t see any reason why the resolution plan approved by the Impugned Order should be interfered with, and therefore, dismissed the appeal.

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