NCLAT held that the Resolution Plan may be revised as per the parameters established by the Supreme Court in REEDLAW 2024 SC 02527.
The National Company Law Appellate Tribunal (NCLAT), Principal Bench comprising Justice Ashok Bhushan (Chairperson) and Barun Mitra & Arun Baroka (Technical Members) was hearing a bunch of appeals and emphasized procedural fairness and statutory compliance in insolvency proceedings, directing the CoC to revise the Resolution Plan as per the Supreme Court guidelines in the case of Greater Noida Industrial Development Authority v. Prabhjit Singh Soni and Another, REEDLAW 2024 SC 02527. The NCLAT Bench further noted that while maintaining that previously rejected creditor claims should not be reconsidered to uphold principles of finality and res judicata.
In the appeals before the National Company Law Appellate Tribunal (NCLAT), the primary issue revolved around challenging the order dated March 5, 2024, issued by the National Company Law Tribunal (NCLT), New Delhi. This order pertained to three interrelated applications concerning the insolvency proceedings of M/s Today Homes Noida Pvt. Ltd. Specifically, IA No. 2518/2021 sought the approval of a Resolution Plan submitted by One Group, while IA No. 3615/2022 and IA No. 4172/2022 were filed by the Noida Authority, seeking rejection of the Resolution Plan and directions for payment of outstanding dues, respectively.
Each appellant in the appeals presented unique factual backgrounds:
In Company Appeal (AT) (Insolvency) No. 795 of 2024, SP Probuild LLP contested the rejection of their claims for 41 out of 50 flats purchased in the Ridge Residency project, despite claims being listed on the corporate debtor’s website. Following the remittance of the Resolution Plan by the NCLT to the Committee of Creditors (CoC) for resubmission under specific Supreme Court mandates, SP Probuild LLP sought reconsideration.
Company Appeal (AT) (Insolvency) No. 816 of 2024, brought by Yashveer Singh, focused on the rejection of his claim for Unit J-0606 due to late filing and the subsequent approval of the Resolution Plan by the CoC. Singh requested a reassessment of his claim in light of the NCLT’s decision to remit the Plan back to the CoC.
Similarly, in Company Appeal (AT) (Insolvency) No. 817 of 2024, Reena contested the rejection of her claim for Unit I-1406 and sought reconsideration under the same grounds as Yashveer Singh.
The NCLT’s order dated March 5, 2024, stemmed from its decision to send the Resolution Plan back to the CoC for resubmission in accordance with parameters established by the Supreme Court in Civil Appeal Nos. 7590-7591/2023. The Supreme Court had determined that the initially approved Resolution Plan did not meet statutory requirements under Section 30(2) of the Insolvency and Bankruptcy Code due to errors in claim treatment and failure to secure necessary approvals. As a result, the NCLT disposed of IA Nos. 2518/2021, 3615/2022, and 4172/2022, and directed other pending applications to be listed for further consideration.
The appellants argued that the NCLT’s decision provided an opportunity to revisit their previously rejected claims, which were dismissed under the original Resolution Plan approved by the CoC. They contended that the remittance of the Plan back to the CoC necessitated reconsideration of their claims as legitimate creditors. Conversely, the SRA (Successful Resolution Applicant) and the Noida Authority argued against revisiting claims already adjudicated, citing principles of res judicata and the limited scope of the NCLT’s order, which primarily addressed the Noida Authority’s claims as a secured creditor.
Ultimately, the NCLAT carefully examined these contentions and the implications of the NCLT’s order dated March 5, 2024. The Tribunal emphasized the importance of adhering to the Supreme Court’s directives regarding the resubmission of the Resolution Plan by the CoC. The NCLAT refrained from delving into the merits of pending applications before the Adjudicating Authority and upheld the decision to defer their consideration until April 30, 2024. The Tribunal directed the SRA to await these decisions before resubmitting the Resolution Plan to the CoC.
This case underscores the complexities involved in insolvency proceedings, particularly regarding creditor claims and the approval of Resolution Plans under the Insolvency and Bankruptcy Code, 2016. The NCLAT’s judgment aimed to ensure procedural fairness and compliance with legal standards set by higher courts, thereby facilitating a just resolution of the ongoing dispute.
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