The NCLAT affirmed the extinguishment of claims post-resolution plan approval under the IBC, upholding the clean slate principle.
The National Company Law Appellate Tribunal (NCLAT), Chennai Bench, comprising Justice Sharad Kumar Sharma (Judicial Member) and Mr. Jatindranath Swain (Technical Member), reviewed an appeal and held that claims excluded from an approved Resolution Plan under Section 31(1) of the Insolvency and Bankruptcy Code, 2016, stand extinguished and cannot be revived or pursued. This decision ensures a clean slate for the Resolution Applicant, aligning with the Code’s objective of finality and time-bound resolution.
In the case of M/s. Vikas Telecom Pvt. Limited v. M/s. Katerra India Private Limited & Ors., the NCLAT addressed issues related to the extinguishment of claims not included in a Resolution Plan under the Insolvency and Bankruptcy Code, 2016 (IBC). The appellant sought clarification through IA No. 545/2024, asserting that its claim of ₹78.16 crores should not be extinguished under an approved Resolution Plan. The claim had earlier been rejected by the Resolution Professional on the basis of a counterclaim of ₹160.46 crores raised by the Corporate Debtor, a decision that the appellant did not challenge, allowing it to attain finality.
The NCLAT reiterated the principle established in Ghanashyam Mishra and Sons Private Limited through Authorised Signatory v. Edelweiss Assets Reconstruction Company Limited Through the Director and Others, REEDLAW 2021 SC 04534, emphasizing that once a Resolution Plan is approved under Section 31(1) of the IBC, all claims not included therein are extinguished. The Tribunal upheld that the appellant's claim, being outside the Resolution Plan, could not be revived or pursued through the invocation of Section 60(5). The "clean slate" doctrine was reaffirmed to ensure the Corporate Debtor’s revival without unforeseen liabilities, aligning with the legislative objective of a time-bound and predictable insolvency resolution process.
The NCLAT further observed that disputes arising from contractual agreements, such as counterclaims or claims for damages, are more appropriately adjudicated in civil or arbitral forums. The Tribunal rejected the appellant's reliance on precedents allowing counterclaims in arbitral proceedings, holding that the relief sought was beyond the jurisdiction of the Adjudicating Authority under the IBC framework. Consequently, the appeal lacked merit and was dismissed, with connected interlocutory applications also closed.
This judgment underscores the binding nature of approved Resolution Plans and the necessity of resolving claims within the framework of the CIRP. By doing so, the NCLAT fortified the finality of insolvency resolutions and the legislative intent to protect the Successful Resolution Applicant from subsequent disputes or liabilities not accounted for in the Resolution Plan.
Mr. PH. Arvindh Pandian, Senior Advocate for Mr. Ashwin Shanbhag, Advocate represented the Appellant.
Mr. Dhyan Chinappa, Senior Advocate for Mr. R. Kiran, Advocate appeared for the Respondent.
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REEDLAW 2025 NCLAT Chn 01518
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