Brief Overview:
Claims filed after the resolution plan has been approved by the CoC cannot be considered. The resolution plan was yet to be approved by the Adjudicating Authority did not matter.
Held by the Hon’ble Supreme Court (“Supreme Court”) in the matter of RPS Infrastructure Ltd. v Mukul Kumar & Anr (Civil Appeal Nos. 5590 of 2021).
Technical Details:
1) The Appellant had filed a claim of Rs. 35.67 crores arising from the arbitral award, which was under challenge before the High Court of Punjab and Haryana.
2) It was contended that the claim in terms of the award was a contingent claim, and the resolution plan ought to have a provision for contingent claims, as provided in Rainbow Papers judgment. However, this argument was not considered by the Supreme Court as the claim was filed post-approval of the resolution plan by the CoC, although the same was yet to be approved by the Adjudicating Authority.
3) The Supreme Court emphasised that a creditor should have been more diligent in determining if the Corporate Debtor was undergoing CIRP, particularly when the Creditor pursued litigation against the Corporate Debtor.
4) The Supreme Court noted that the public announcement of the CIRP in newspapers, as per the provisions of IBC, would constitute deemed notice to all creditors. In view of the same, the Court rejected the plea of the Appellant of not being aware of the newspaper announcements.
5) It was noted that allowing such claims at a belated stage, would put the time bound CIRP of the Corporate Debtor an endless process.
JC Takeaways:
Supreme Court has now settled that claims filed after the resolution plan is approved by the CoC will not be accepted. As such, the creditors will have to be vigilant regarding the admission of CIRP in respect of their debtors and ensure that their claims are filed on time.
Given that Rainbow Papers was cited, it does appear that the law will be the same even the delayed claim filing is by a government entity.
For further details, please see:
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● Mr. Saurabh Sharma (saurabh.sharma@jclex.com)
● Mr. Hafeez Patanwala (hafeez.patanwala@jclex.com)
