Tribunal Upholds Finality of Approved Resolution Plan, Dismisses Late Homebuyer's Application
In a significant ruling, the National Company Law Tribunal (NCLT) Indore Bench, comprising Shri Brajendra Mani Tripathi and Shri Man Mohan Gupta, dismissed an application by homebuyer Nishkarsh Kumar, seeking inclusion of his claim after the approval of a resolution plan for JSM Devcons Private Limited. The tribunal underscored the inviolability of the finality of a resolution plan once approved, highlighting the importance of adhering to timelines in the Corporate Insolvency Resolution Process (CIRP).
The applicant, Nishkarsh Kumar, argued that his claim for a unit in the Pinnacle 'D' Dreams project was unjustly excluded from the resolution plan, despite having paid the full consideration. He cited unawareness of the ongoing insolvency proceedings due to residing outside Indore and pointed to a previous legal engagement involving the corporate debtor as justification for his belated claim.
The tribunal meticulously analyzed the case, emphasizing that the resolution plan approved on April 5, 2024, by the adjudicating authority, binds all stakeholders and extinguishes any claims not submitted during the CIRP. The bench referenced several Supreme Court judgments, including the landmark case of Essar Steel, to affirm that the introduction of new claims post-approval would disrupt the resolution process and undermine the plan's finality.
Respondent Devvrat Developers Pvt. Ltd., the successful resolution applicant, contended that the CIRP was conducted transparently, with public announcements made as required, which the applicant failed to heed. The tribunal reiterated the legal principle that the law aids the vigilant, not those who sleep on their rights, thereby dismissing the application as time-barred and legally untenable.
The NCLT's decision reinforces the integrity of the insolvency process, ensuring that the sanctity of approved resolution plans is maintained, providing certainty and closure to corporate debtors and stakeholders alike.
Bottom Line :
Insolvency and Bankruptcy Code - Claims not submitted during the Corporate Insolvency Resolution Process (CIRP) cannot be entertained after the resolution plan has been approved by the Adjudicating Authority. Finality of the resolution process is sacrosanct.
Statutory provision(s): Insolvency and Bankruptcy Code, 2016 Sections 31, 60(5); National Company Law Tribunal Rules, 2016 Rule 11
Nishkarsh Kumar v. Chaya Gupta, (NCLT)(Indore Bench) : Law Finder Doc id # 2969161
