Naresh Salecha ORDER
Rakesh Kumar Jain, Member (J)
Company Appeal (AT) (Ins) No. 485 of 2022
1. This appeal has been filed by Naval Kumar D. Bhoot against the order dated 11.03.2022, passed by the Adjudicating Authority (National Company Law Tribunal, Mumbai Bench, Court-II).
No one has put in appearance on behalf of the Appellant despite a pass over. We have also perused the previous order dated 03.02.2023 and found that no one had appeared on behalf of the Appellant. It appears to us that the Appellant is no more interested in pursuing this appeal, therefore, neither the Appellant is present today nor his counsel. In view thereof, the present appeal is hereby dismissed for non-prosecution.
Company Appeal (AT) (Ins) No. 502 of 2022 & 503 of 2022
This appeal is directed against the order dated 11.03.2022, passed by the Adjudicating Authority (National Company Law Tribunal, Mumbai Bench) by which two applications bearing I.A. No. 1699 of 2020, allegedly filed by the Appellant 'Nishant N. Singhal' has been dismissed and I.A. No. 2094 of 2020 filed by Naval Kumar Bhoot (One of the Ex-Directors) of the Corporate Debtor has been partly allowed.
2. The brief facts of this case are that M/s. Phoenix ARC Pvt. Ltd. (Financial Creditor) filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (in short 'Code') for resolution of a debt against Deegee Cotsyn Pvt. Ltd. (Corporate Debtor). The said application was assigned CP (IB) 2285/MB/C-II/2018 and was admitted on 26.02.2029.
3. Shorn of unnecessary details, case set up by the Appellant is that he had purchased an immovable property from Narendra Solves Pvt. Ltd. vide sale deed dated 18.02.2015 and let it out to the Corporate Debtor on 12.04.2018 by way of a rent note on a monthly rent of Rs. 1.55 Lakhs.
4. After the initiation of the Corporate Insolvency Resolution Process (CIRP), the Appellant filed his claim in Form-B for recovery of the amount of rent of Rs. 18,56,348.00/-. The said claim was rejected by the Resolution Professional (RP) on 23.04.2019.
5. Aggrieved against the said decision of the RP, the Appellant filed M.A. No. 1993 of 2019 before the Adjudicating Authority. The said application was allowed on 03.09.2019. Thereafter, the Appellant requested the RP to make the payment in terms of the order dated 03.09.2019 but the RP offered to give a set off to his claim against the recoveries to be made by the Corporate Debtor from the Appellant herein. However, the Appellant denied its liability for the purpose of any kind of set off and then filed M.A. No. 3693 of 2019 against the decision of the RP to seek the payment of amount of rent in terms of the order dated 03.09.2019. The said application was allowed on 10.02.2020 as stated and RP was directed to admit the claim and reconcile the accounts.
6. It is further submitted that the order dated 10.02.2020 was challenged by Naval Kumar Bhoot by way of an appeal i.e. CA (AT) (Ins) No. 753 of 2020, however, the said appeal was dismissed on 04.09.2020. The Appellant again requested the RP for the payment and when he did not get any favorable answer, filed I.A. No. 1699 of 2020 and at the same time Naval Kumar Bhoot also filed I.A. No. 2094 of 2020. Both the applications were taken up together by the impugned order dated 11.03.2022 and I.A. No. 1699 of 2020 filed at the instance of the Appellant was dismissed and I.A. No. 2094 of 2020 filed by Naval Kumar Bhoot was partly allowed.
7. The present two appeals have thus been filed by the Appellant to challenge the decision of the Adjudicating Authority by which not only the sale deed executed in his favour on 18.02.2015 has been held to be illegal but also the rent note dated 12.04.2018 was held to be a sham transaction.
8. Counsel for the Appellant has though raised an issue that the Adjudicating Authority has erred in its order dated 11.03.2022 holding that he is not entitled to claim any amount as rent as the sale deed was a fraudulent transaction but in the previous two orders dated 03.09.2019 and 10.02.2020 the same Adjudicating Authority had observed that the Appellant is entitled to the amount of rent on the basis of the rent note.
9. At this stage, Counsel for the SRA has submitted that the present appeal has become infructuous because the Appellant is not entitled to any claim. In this regard, he has submitted that the resolution plan was approved by the CoC and was further approved by the Adjudicating Authority on 11.03.2022 (same day) when the impugned order in the present two appeals was passed. It is submitted that on 01.04.2022, the management of the Corporate Debtor was handed over by the RP to the SRA i.e. 'M/s. Manjeet Cotton Pvt. Ltd.'. It is further submitted that on 02.06.2022 the Monitoring Committee was dissolved as the plan was fully implemented. Counsel for the SRA has submitted that now it is well settled by the Hon'ble Supreme Court in the case of Ghanashyam Mishra and Sons Pvt. Ltd. Through the Authorized Signatory Vs. Edelweiss Asset Reconstruction Company Limited through the Director and Ors., MANU/SC/0273/2021 : (2021) 9 SCC 657, that once the resolution plan is finalized then all the claims get extinguished. In this context regard may be had to Para 102.1 of the aforesaid decision which read as under:-
"102.1. That once a resolution plan is duly approved by the Adjudicating Authority under sub section (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"
10. Counsel for the SRA has also relied upon a decision of the Hon'ble Supreme Court rendered in the case of Committee of Creditors of Essar Steel Limited vs. Satish Kumar Gupta and Ors., MANU/SC/1577/2019 : (2020) 8 SCC 531, to further support his contention.
11. We have heard Counsel for the parties and after examining the record, are of the considered opinion, that the law is now well settled in the case of Ghanashyam Mishra and Sons Pvt. Ltd. (Supra), as has been held in the aforesaid quoted para 102.1, that once a resolution plan is duly approved by the Adjudicating Authority under sub section (1) of Section 31, the claims as provided in the resolution plan shall stand frozen and 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. Even if, for the sake of argument, the Appellant may fall within the definition of other stakeholders, it has been held that if on the date of approval of the resolution plan all such claims which are not part of the resolution plan shall stand extinguished. The claim which has been set up by the Appellant was not a part of the resolution plan. No person is entitled to initiate and continue any proceedings in respect of the claim which is not part of the resolution plan, therefore, as per the aforesaid decision, no proceedings can be continued in respect of the claim and as such the claim of Appellant has also become infructuous and redundant.
12. In view of the aforesaid facts and circumstances, we have no hesitation to hold that the present appeals have become infructuous. The Appellant did not even challenge the order approving the resolution plan dated 11.03.2022 which was passed on the same day when the impugned order was passed.
13. In view of the aforesaid discussion, the present appeals are hereby dismissed as infructuous.
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