Bharat Pipe Fitting Co. Vs. Prowess International Private Limited - (National Company Law Tribunal) (13 Jun 2022)
Application under Section 9 of the IBC after completion of the Corporate Insolvency Resolution Process against Corporate Debtor is not maintainable
Present is a Company Petition filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC) by Bharat Pipe Fitting Co. (Operational Creditor), seeking to initiate Corporate Insolvency Resolution Process ("CIRP") against Prowess International Private Limited ("Corporate Debtor").
The date of default mentioned by the Operational Creditor is 24th July 2013, and the instant petition was filed on 09 August 2019. It is to be noted that the Corporate Debtor had admitted into CIRP vide order dated 20 April 2017. Subsequently, a resolution plan also been approved by this Adjudicating Authority vide order dated 17 October 2017. The Operational creditor had not filed any claim with the Resolution Professional after the Corporate Debtor was admitted into CIRP and has filed the instant petition after the approval of the resolution plan. The same indicates gross negligence on part of the Operational Creditor.
The Hon'ble National Company Law Appellate Tribunal, in the matter of Sanjay Chemicals (India) Private Limited vs. Sharon Bio-Medicine Limited, held that since the outstanding dues were prior to the period of initiation of 'Corporate Insolvency Resolution Process' and the creditor had not filed the claim at that stage, the application under Section 9 of the IBC after completion of the 'Corporate Insolvency Resolution Process' against 'Corporate Debtor' was not maintainable.
Further, the judgment of the Hon'ble Supreme Court in Ghanashyam Mishra & Sons Pvt. Ltd. v. Edelweiss Asset Reconstruction Company Ltd. lays down that when the resolution plan is approved by the Adjudicating Authority, 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 and 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.
Present Adjudicating Authority is satisfied that, the right of the Operational Creditor to seek remedy under Section 9 of the IBC has been extinguished. Petition dismissed.
Tags : OPERATIONAL CREDITOR RIGHT CIRP