Once CoC And Adjudicating Authority Approve Resolution Plan, Payment Terms Are Final: NCLAT New Delhi

Background

The Greater Noida Development Authority, the operational creditor, made a claim for Rs. 21Cr. in the corporate debtor's CIRP. But only the Rs. 18 Cr. claim was accepted by the Resolution Professional (RP). GNIDA later objected this and moved an challenging the partial admission of the claim.

The Committee of Creditors (CoC) approved the Resolution Plan that proposed a payout of Rs. 6.79 Cr. to GNIDA. Dissatisfied with the amount, GNIDA filed the appeal against the order passed by the Adjudicating Authority. The Successful Resolution Applicant (SRA) also filed an application seeking a direction to the appellant to accept the said amount.

Contention of the Parties

GNIDA argued and contended that it should be treated as a secured creditor, and it is entitled to a higher payout under the approved Resolution Plan. It was also highlighted that the amount of Rs. 6.79 Cr. proposed to it was insufficient. The ruling of the Hon'ble Supreme Court in the case of Greater Noida Industrial Development Authority v. Prabhjit Singh Soni & Anr., which affirmed GNIDA's status as a secured creditor, was cited by the appellant in support of its contention.

The respondent contended that the Resolution Plan had already been approved by the Committee of Creditors (CoC) and Adjudicating Authority, making the terms final. SRA emphasized that the payment of Rs. 6.79 Cr. had been made in accordance with the approval plan. SRA also contended that the objections of the GNIDA are without merit, as the plan's approval had attained finality.

NCLAT's Judgment

The NCLAT disposed of the application moved by the appellant and upheld the validity of the Resolution Plan and its payment terms. The Tribunal laid down that the order has become final following the approval by the CoC and the Adjudicating Authority. The tribunal observed that the appellant, having unsuccessfully challenged the said order subsequent to the approval of the resolution plan, which has become final, cannot be allowed to question the payout to the appellant. The tribunal lastly clarified that the objections of GNIDA regarding the amount deposited in the escrow account were beyond the scope of its proceedings, as they were already part of the earlier decisions that had attained finality.

Case Title: Greater Noida Industrial Development Authority Through Its Manager (Institution) v. Sandeep Gupta & Anr.

Case Number: Company Appeal (AT) (Insolvency) No. 320 of 2025

Tribunal: National Company Law Appellate Tribunal, Principal Bench, New Delhi

Judge: Justice Ashok Bhushan (Chairperson), and Arun Baroka (Member (Technical))

For Appellant: Mr. U.N. Singh, Advocate.

For Respondent: Mr. Sumesh Dhawan, Ms. Vatsala Kak and Mr. Raghav Dembla, Advocates for R-1. Mr. Iswar Mohopatra, Advocate for R-2/RP.

Date of Judgement: 10.03.2025

Click Here To Read/Download The Order