Despite the company’s earlier strike-off, the NCLAT confirmed the validity of the Resolution Plan.
The NCLAT reiterated that even Corporate Debtor’s earlier strike-off did not invalidate the CIRP or the Resolution Plan approval since the company was operational when the insolvency application was filed.
The National Company Law Appellate Tribunal (NCLAT), Principal Bench comprising Justice Ashok Bhushan (Chairperson) and Barun Mitra & Arun Baroka (Technical Members) was hearing an appeal and observed that the approval of the Resolution Plan was valid despite the company's earlier strike-off, as the company was operational at the time of the insolvency application, and claims filed after the plan’s approval by the Committee of Creditors were properly rejected.
Three appeals were filed challenging an order dated October 12, 2023, by the National Company Law Tribunal (NCLT), New Delhi Bench, which approved a Resolution Plan for the Corporate Debtor submitted by ACAIPL Investment and Financial Services Private Limited. The appeals were filed by Protima Arora, a former director of the Corporate Debtor (Company Appeal (AT) (Ins.) No. 72 of 2024), Pooja Film Company (Company Appeal (AT) (Ins.) No. 129 of 2024), and Pooja Entertainment and Films Limited (Company Appeal (AT) (Ins.) No. 204 of 2024), each contesting the approval of the Resolution Plan.
The background to the appeals involved the initiation of the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor on July 19, 2019, following a default claim by Easy Trip Planners Limited. The Debtor contested the application, arguing that it was non-existent due to being struck off by the Registrar of Companies. Despite this, the NCLT admitted the application and appointed a Resolution Professional. The Resolution Plan was subsequently approved by the Committee of Creditors (CoC) on November 4, 2022, and the final approval was given on October 12, 2023.
Protima Arora contended that the Corporate Debtor was no longer in existence at the time of the Resolution Plan’s approval and challenged the jurisdiction to approve the plan. The other appellants, Pooja Film Company and Pooja Entertainment and Films Limited argued that their claims as financial creditors, submitted after the approval of the Resolution Plan, were unjustly rejected.
The NCLAT upheld the NCLT's decision, rejecting the claims made by the appellants. It determined that the Corporate Debtor’s earlier strike-off did not invalidate the CIRP or the Resolution Plan approval since the company was operational when the insolvency application was filed. The Tribunal also observed that the claims by Pooja Film Company and Pooja Entertainment and Films Limited were submitted too late to be considered. Additionally, it was noted that the company’s revival and the compliance actions taken thereafter by the Resolution Professional were adequate.
The appeals were dismissed, affirming the validity of the Resolution Plan and the NCLT’s order.
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