Pratap Technocrats P Ltd & Ors Vs. Monitoring Committee of Reliance Infratel Ltd & Anr (NCLAT)
Brief Facts: The version of appellants says that they were kept unaware of the Corporate Insolvency Resolution Process qua the Corporate Debtor, thus being wholly unaware of the progress of Resolution Process with no details provided by the Resolution Professional as regards disbursal of fund towards their claims and that their claims have not received a fair and equitable treatment. And the Appellants have been made to suffer a reduction of around 90% of their total claims while substantial claims of Appellants of around Rs.120 crores have been rejected.
On the other hand, the respondents have been claiming that the Appellants have been treated fairly and allocated 19.62% as against 10.32% allocated to Financial Creditors out of an upfront payment of Rs.3,720 crores under the approved Resolution Plan. And the Appellants have participated in the Resolution Process and their being unaware of the CIRP and its outcome is factually incorrect.
Reason: The NCLAT observed that the Appellants, admittedly being Operational Creditors cannot claim that they have been treated unfairly or inequitably as regards the distribution of funds provided under the approved Resolution Plan. It is not the case of the Appellants that they have been completely ignored or left out of consideration while distributing the upfront money provided under the plan approved by the Committee of Creditors with the requisite majority and finally passing the muster under Section 30(2) of the Insolvency and Bankruptcy Code, 2016, which stands approved by the Adjudicating Authority.
The Appellants are also not justified in claiming that they have been excluded from the Resolution Process proceedings. Admittedly they have filed claims during CIRP proceedings and their claims have been partly admitted. In the face of this factual position, it is of no avail on their part to allege being excluded from CIRP proceedings.
FULL TEXT OF THE NCLAT JUDGMENT/ORDER
Appellants are the ‘Operational Creditors’ of the Corporate Debtor – Reliance Infratel Limited. They are aggrieved of the impugned order dated 3rd December, 2020 passed by the Adjudicating Authority (National Company Law Tribunal, Court-I, Mumbai Bench) by virtue whereof Resolution Plan in respect of Corporate Debtor submitted by the Resolution Applicant Reliance Projects and Property Management Services Limited (formerly known as Reliance Digital Platform and Project Services Limited) came to be approved. The impugned order is assailed primarily on the ground that the Appellants were kept unaware of the Corporate Insolvency Resolution Process (for short the ‘CIRP’) qua the Corporate Debtor, thus being wholly unaware of the progress of Resolution Process with no details provided by the Resolution Professional as regards disbursal of fund towards their claims and that their claims have not received a fair and equitable treatment.
2. It is contended that the fair market value as also the liquidation value of the Corporate Debtor has not been taken into account and such amount consisting of Rs.800 crores does not form part of the corpus of payments to the Operational Creditors. It is further contended on behalf of the Appellants that the Adjudicating Authority approved the Resolution Plan of Successful Resolution Applicant overlooking the material irregularities in the accumulation and disbursal of funds constituting the corpus of the Corporate Debtor for the purpose of making distribution to the creditors. It is submitted that the Appellants have been made to suffer a reduction of around 90% of their total claims while substantial claims of Appellants of around Rs.120 crores have been rejected.
3. Heard Ms. Ankita Singhania, learned Counsel representing the Appellants, Mr. Anoop Rawat, learned Counsel representing Respondent Nos.1 and 2 and perused the record of Appeal paper-book.
4. Mr. Anoop Rawat, learned Counsel representing Respondent Nos.1 and 2 submits that the Appellants have been treated fairly and allocated 19.62% as against 10.32% allocated to Financial Creditors out of an upfront payment of Rs.3,720 crores under the approved Resolution Plan. It is further pointed out that the Appellants have participated in the Resolution Process and their being unaware of the CIRP and its outcome is factually incorrect.
5. After hearing learned Counsel for the parties and going through the impugned order we find that the Appellants, admittedly being Operational Creditors cannot claim that they have been treated unfairly or inequitably as regards distribution of funds provided under the approved Resolution Plan. It is not the case of the Appellants that they have been completely ignored or left out of consideration while distributing the upfront money provided under the plan approved by the Committee of Creditors with the requisite majority and finally passing the muster under Section 30(2) of the Insolvency and Bankruptcy Code, 2016 (for short the ‘I&B Code’), which stands approved by the Adjudicating Authority. Infact what emerges from the record and is borne out from page 45 of the Appeal paper-book (Financial Terms of the approved Resolution Plan) is that the Operational Creditors other than related parties and Statutory Creditors (the Class to which the Appellants belong) have been allocated 19.62% of the upfront payment of Rs.3,720 crores while the Financial Creditors have been paid only 10.32% of the upfront payment. The relevant portion of the page 45 (supra) is reproduced below: –
