Post approval of resolution plan by CoC, no new claims should be entertained: NCLT Mumbai

Jai Kumar Rai Vs Arun Kapoor (NCLT Mumbai)

The case centers around an application filed by Jai Kumar Rai and another applicant seeking to condone the delay in filing their claim and to admit their claim of ₹98,83,932, against M/s Monarch Brookefields LLP, which is undergoing Corporate Insolvency Resolution Process (CIRP). The primary contention is whether their delayed claim should be considered despite the resolution plan being approved by the Committee of Creditors (CoC).

Facts of the Case:

1. Property Purchase and Payment: The applicants purchased Flat No. 101 in Navi Mumbai for ₹40,00,000 through a registered sale agreement dated July 24, 2013, and availed a mortgage loan from HDFC Ltd. They paid the full consideration amount.
2. Consumer Complaint and Police Report: The applicants filed a consumer complaint and lodged a police complaint against the directors of Monarch Brookefields LLP.
3. Initiation of CIRP: The CIRP against Monarch Brookefields LLP was initiated on September 27, 2019, and Mr. S Gopalakrishnan was appointed as the Interim Resolution Professional (IRP).
4. Public Announcement: The IRP issued a public announcement on November 24, 2019, inviting claims with a submission deadline of December 7, 2019.
5. Delayed Claim Submission: The applicants submitted their claim on November 18, 2021, which was rejected by the Resolution Professional (RP) due to the delay and the resolution plan already being approved by the CoC.
6. Replacement of IRP: Mr. Arun Kapoor replaced the initial IRP as the RP on August 3, 2021.
7. Approval of Resolution Plan: The CoC approved the resolution plan submitted by Planet Builders and Developers on November 19, 2021, and the application for its approval is pending before the tribunal.

Applicants’ Arguments:

1. Delay Justifications: The applicants cited several personal hardships, including job loss, family deaths, medical issues, and financial crises, as reasons for the delay in filing their claim.
2. Lack of Awareness: They claimed they were unaware of the CIRP proceedings until November 18, 2021.
3. Precedent: They relied on the NCLAT judgment in Puneet Kaur v/s. K.V. Developers Pvt Ltd to argue that claims can be admitted before the adjudicating authority approves the resolution plan.

Respondent’s Arguments:

1. Adherence to Deadlines: The respondent pointed out that the applicants had ample notice and opportunity to file their claim within the stipulated period, as public announcements were made and letters sent.
2. Impact on CIRP: Admitting the delayed claim would derail the CIRP process, create uncertainty, and affect other homebuyers who submitted claims on time.
3. Legal Precedents: The respondent cited Supreme Court judgments emphasizing that claims should not be admitted after the CoC has approved the resolution plan, as it would undermine the resolution process’s finality and certainty.

Tribunal’s Analysis and Decision:

1. Lack of Sufficient Evidence: The tribunal found that the applicants failed to provide sufficient documentary evidence to substantiate their reasons for the delay.
2. Public Notice and Deemed Knowledge: The tribunal held that the public announcement constituted deemed knowledge of the CIRP, dismissing the applicants’ claim of unawareness.
3. Finality of Resolution Plans: The tribunal emphasized the importance of finality in the resolution process, citing the Supreme Court’s rulings that once a resolution plan is approved by the CoC, no new claims should be entertained to avoid reopening the resolution process.
4. Rejection of Personal Hardship Pleas: The tribunal did not find the personal hardships cited by the applicants as valid grounds for condoning the delay.
5. Consistency with Supreme Court Precedents: The tribunal aligned with the Supreme Court’s decision in RPS Infrastructure Ltd v. Mukul Kumar & Anr., which clarified that claims must be decided within the CIRP’s timelines to ensure certainty and efficiency.

Conclusion:

The tribunal dismissed the application for condoning the delay and admitting the claim, underscoring the need for adherence to statutory timelines and the finality of the resolution process. The tribunal found no satisfactory reason to condone the delay and maintained that reopening the process would defeat the purpose of the Insolvency and Bankruptcy Code (IBC) to resolve corporate insolvency in a time-bound manner.