Status as on- 10/02/2020
The Hon’ble NCLAT in the matter of M/s. Prime Marketing Vs. Alok Industries Ltd. & Ors. was deciding a set of appeals from various orders of the National Company Law Tribunal, Ahmedabad Bench (“NCLT”) in connection with the Corporate Insolvency Resolution Process of M/s Alok Industries Ltd. (Corporate Debtor), which is summarized as follows:
- The Appellants (Operational Creditors) preferred these appeals against the order dated 18th November 2019 passed by the National Company Law Tribunal, Ahmedabad Bench, wherein their application for payment of ‘Corporate Insolvency Resolution Process Costs’ was rejected.
- The Operational Creditors supplied goods during the ‘Corporate Insolvency Resolution Process’ to keep the Company as a going concern. On 21st November 2018, Resolution professional through an email directed the settlement of payments made during the months of October-November, 2018 against the current invoices. But in the NCLT Order, the same email was erroneously dated 25th October 2018.
- On 8th March 2019, NCLT approved the said resolution plan and Appellants feared that the amounts due against the goods supplied during the ‘Corporate Insolvency Resolution Process’ period, ‘Interim Resolution Professional’ cost would not be paid to him and in fact, the payments made against ‘Pre-Corporate Insolvency Resolution Process’ invoices would be set-off against the same.
- Therefore, during the implementation of Resolution plan interlocutory applications were filed which were rejected by Hon’ble NCLT and hence this Appeal.
OBSERVATIONS OF THE COURT:
Once the resolution plan is approved and is implemented under IBC, no issue can be raised at a later stage when resolution Process Costs and fees of the ‘Resolution Professional’/ ‘Interim Resolution Professional has been taken care of by adjudicating authority. Moreover, the order through which the resolution plan was approved by NCLT was not challenged. Therefore, the resolution plan was implemented and the plan has reached finality. Hence, it is binding on all the stakeholders including the ‘Operational Creditors’, ‘Financial Creditors’ and others.
It was also observed that it is upon monitoring the committee to keep a check on the distribution as per the approved plan. No decision can be given either by the Adjudicating Authority or by this Appellate Tribunal based on an individual claim of one or other ‘Operational Creditors’, ‘Financial Creditors’ and others after such approval, once the ‘Corporate Insolvency Resolution Process Costs’ have been paid.
NCLAT HOLDING:
NCLAT in its order dated 22.01.2020, held that the ‘Resolution Plan’ once approved and reached finality, all the dues stand cleared in terms of the plan and now no issue can be raised before any Court of Law or Tribunal”.
Disclaimer– The above article is based on the personal interpretation of related laws, which may differ from person to person. The readers are expected to take expert opinion before relying on this article. For more clarification, the readers can be expected at shriya@centrik.in or support@centrik.in
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