Nishant Singhal vs. Hasti Mal Kachhara - (NATIONAL COMPANY LAW APPELLATE TRIBUNAL) (28 Feb 2023)

Once the resolution plan is finalized then all the claims get extinguished

MANU/NL/0144/2023

Insolvency

Case set up by the Appellant is that, he had purchased an immovable property from Narendra Solves Pvt. Ltd. vide sale deed dated 18th February, 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.

Present two appeals have 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 18th February, 2015 has been held to be illegal but also the rent note dated 12th April, 2018 was held to be a sham transaction.

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, the same Adjudicating Authority had observed that the Appellant is entitled to the amount of rent on the basis of the rent note.

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., held that, once the resolution plan is finalized then all the claims get extinguished.

The law is now well settled in the case of Ghanashyam Mishra and Sons Pvt. Ltd. Edelweiss Asset Reconstruction Company Limited through the Director and Ors. It is held that once a resolution plan is duly approved by the Adjudicating Authority, 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, 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 the claim of Appellant has also become infructuous and redundant.

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. Appeals dismissed.

Tags : RESOLUTION PLAN APPROVAL CLAIM