Case Law Details
Standard Chartered Bank Vs Satish Kumar Gupta R.P. of Essar Steel Ltd. & Ors ( National Company Law Appellate Tribunal)
During the submissions, Mr. Harish Salve, learned Senior Counsel appearing on behalf of ‘ArcelorMittal India Pvt. Ltd.’ submitted that once a ‘Resolution Plan’ is approved then under Section 31 of the ‘I&B Code’, it is binding on the ‘Corporate Debtor’ and its employees, members, creditors, guarantors and other stakeholders involved in the ‘Resolution Plan’. According to him, this is the most important change brought by the ‘I&B Code’, over its progenitor- the ‘Sick Industrial Companies Act’.
It was submitted that the availability of an additional period by way of limitation under sub-section (6) of Section 60 does not expand the exposure of the ‘Resolution Applicant’ to ‘Operational Creditors’, whose claims are in dispute. The extended period of limitation becomes necessary by virtue of the width of the ‘Moratorium’ under Section 14, whereby all actions in all pending suits, including non-monetary suits and in relation to contracts and properties, are put in freeze.
It was further submitted that once the ‘Resolution Process’ is complete, all non-financial claims and disputes would be resolved in pending proceedings or fresh proceedings. It is for the latter that the legislature has accommodated the period of the ‘Moratorium’. Therefore, according to him, after approval of the plan under Section 31, the claim of all the Creditors is extinguishing against the ‘Corporate Debtor’.
In the preceeding paragrapgh, we have noticed the suggestion made by Mr. Harish Salve, learned Senior Counsel that the ‘Operational Creditors’ having disputed claims can avail remedy under Section 60(6) of the ‘I&B Code’. Thereby, over a period of time as the figure of aggregate amount of debt payable to the ‘Operational Creditors’ (as shown to be ‘Y’) becomes final and stands reduced (by final rejection of disputed claims), additional distributions can be made of the incremental figure of ‘Z’, which is the percentage of distribution being arrived at the time.
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