Absence Of Separate Notice Rejecting Claim No Ground To Reopen CIRP Or Alter Resolution Plan: NCLT Kochi

The National Company Law Tribunal (NCLT) at Kochi has ruled that even if a claimant was not separately informed that their claim had not been finally admitted, that alone does not permit the court to reopen a concluded Corporate Insolvency Resolution Process (CIRP) or modify an approved resolution plan.

A coram of Judicial Member Vinay Goel and Technical Member Ravichandran Ramasamy was dealing with two applications filed by homebuyers of Nucleus Premium Properties Private Limited challenging rejection of their claims and seeking inclusion in the approved Resolution Plan.

The CIRP commenced in November 2021. After no resolution plan was approved, the Tribunal ordered liquidation of the company. The NCLAT subsequently kept liquidation in abeyance and permitted reconsideration of a revised resolution plan, which was approved by the Tribunal in February 2024.

One of the applicants, Nawfal claimed ₹30.41 lakh paid towards an apartment in Nucleus Aura Apartments, and had submitted a Form CA claim in February 2022. The other applicant, Nazeema Cholayil claimed to have paid the entire ₹1.19 crore consideration for a villa in Nucleus Raymount Villa, and also submitted a Form CA claim in February 2022. Both claimed that their claims were accepted and reflected in the Information Memorandum.

After approval of the resolution plan, both applicants submitted Form D claims which were subsequently rejected. They alleged that their earlier claims had been excluded without notice or an opportunity to cure deficiencies and sought restoration of their claims and benefits under the resolution plan.

The respondents, however, contended that the claims were incomplete and never finally admitted, as the applicants had failed to furnish documents and proof of payment despite being asked to do so. They also argued that the Form D claims were filed after approval of the Resolution Plan and could not be entertained.

The Tribunal noted that the applicants relied upon emails dated February 19, 2022, describing their claims as “provisionally accepted.” It however observed that the emails made the final admission subject to reconciliation with the Corporate Debtor's books and verification of relevant records.

"…the said communications only indicate that the claims were taken on record for further examination and cannot be treated as conclusive proof that the claims stood finally admitted during the CIRP” it held

The Tribunal also noted that while earlier versions of the Information Memorandum reflected the applicants as allottees, the final Information Memorandum recorded their claims as rejected/not admitted.

Referring to precedents, the Tribunal observed that allowing the applicants to revive their claims after approval of the Resolution Plan would unsettle the Plan and expose the Successful Resolution Applicant to previously undecided claims.

On the applicants' contention that they had never been separately informed about the rejection of their claims, the Tribunal held:

“Even assuming that there was no separate communication informing them of such rejection, the same would not empower this Adjudicating Authority to reopen the CIRP process or alter the terms of a Resolution Plan which has already been approved by this Adjudicating Authority and has attained finality.”

The Bench observed that the March 12, 2024 communication was not a fresh adjudication of the applicants' claims, but merely informed them that the CIRP had concluded and further claims could not be entertained.

“This Adjudicating Authority is not required, in the present proceedings, to render any conclusive finding regarding the status of the Applicants as homebuyers or otherwise.” it added

The Tribunal clarified that although the applicants had made payments, the technical requirements of the IBC did not favour them at that stage. However, it observed that this would not prevent them from pursuing any other remedy available in law.

During the proceedings, the Successful Resolution Applicant had also expressed willingness to accommodate the applicants on the condition that they pay the remaining construction cost as on the date of approval of the Resolution Plan. The Tribunal permitted the parties to negotiate independently.

Accordingly, the Tribunal dismissed the applications.

For Petitioner: Advocate Terry V James

For Respondents: Krishnan Unni, PCS