Case Law Details
Regional Provident Commissioner Vs Vandana Garg (NCLAT Chennai)
Conclusion: Once a resolution plan is duly approved by the Adjudicating Authority under subsection (1) of Section 31, the claims as provided in the resolution plan shall stand frozen and will be binding on the Corporate Debtor and its employees, members, creditors, including the Central Government, any State Government or any local authority, guarantors and other stakeholders. No person is entitled to initiate or continue any proceeding regarding a claim that was not part of the Resolution Plan.
Held: In the instant case, the corporate debtor M/s GVR Infra Projects Limited had defaulted in payment of dues/damages/interest, including employees share of contributions, since April 2014, which were deducted from their wages. The total EPF dues up to the date were to the tune of ₹ 2,84,69,797/-. Adjudicating Authority had initiated CIR Process against the Corporate Debtor. Under the same, a public announcement was made inviting claims pending against Corporate Debtor. Appellant submitted its claims in Form ‘F’, as suggested by the IRP. RP asked the appellant to submit its claim and the supporting documents in Form ‘B’ again. In response to that, appellant submitted the claim in Form ‘B’, under protest to RP, along with all supporting documents. RP informed that the claim in form ‘B’ for the period from April 2014 to October 2017 amounting to ₹ 1,95,01,301/- was admitted to be paid when the prospective bidder took over M/S GVR Infra Projects Limited. Appellant, despite filing a claim of ₹1,95,01,301/- had raised a claim of ₹ 2,84,69,797/-,i.e. much higher than the amount claimed by appellant in its claim before RP. Appellant had not provided any reason or justification for raising the enhanced claim of ₹ 2,84,69,797/-, which is much higher than the amount claimed. It was held that once a resolution plan is duly approved by the Adjudicating Authority under subsection (1) of Section 31, the claims as provided in the resolution plan shall stand frozen and will be binding on the Corporate Debtor and its employees, members, creditors, including the Central Government, any State Government or any local authority, guarantors and other stakeholders. On the date of approval of the resolution plan by the Adjudicating Authority, all such claims, which are not a part of the resolution plan, shall stand extinguished and no person will be entitled to initiate or continue any proceedings in respect to a claim, which is not part of the resolution plan. NCLAT held that all the dues including the statutory dues owed to the Central Government, any State Government or any local authority, if not part of the resolution plan, shall stand extinguished and no proceedings in respect of such dues for the period prior to the date on which the Adjudicating Authority grants its approval under Section 31 could be continued. Thus, appellants claim about Provident Fund dues amounting to ₹1,95,01,301/-, which was earlier raised at the time of initiation of CIRP and was later admitted, stood frozen and would be binding on all the Stakeholders, including the Central Government. After approval of RP by Adjudicating Authority, all such claims that were not part of RP should stand extinguished. No person was entitled to initiate or continue any proceeding regarding a claim that was not part of the Resolution Plan.
FULL TEXT OF THE NCLAT JUDGMENT/ORDER
This Appeal emanates from the Order dated July 20, 2020, passed by the National Company Law Tribunal, Chennai Bench, Chennai in MA No.1433 of 2019 in CP/941/IB/2018, whereby the Adjudicating Authority/NCLT approved the Resolution Plan, which waves off a major portion of the Provident Fund dues owed by the Corporate Debtor. The original parties status in the Company Petition represents them in this Appeal for the sake of convenience.
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